01.01 We at Texas State are committed to providing sound financial stewardship through accounting, budgeting, monetary management systems, and fundraising activities which maximize the institution's fiscal posture. This procedure contributes to the implementation of this policy.
01.02 This UPPS describes the relationship of "income", "expenditure", and "reserve" accounts in the auxiliary non-pledged area.
01.03 Income producing activities in the auxiliary non-pledged area receive a direct benefit from generating "surplus" income (i. e., income which exceeds the expenditures), because a portion of this surplus income is put into a reserve account when the accounts are closed at the end of the fiscal year. Normally this reserve account is earmarked for the use of the activity that generated the surplus income.
02.01 Income accounts are accounts which record the receipt of cash. Expenditure accounts (e. g., departmental budget) are accounts which record disbursements. Expenditure accounts also define the dollar limits to which an account manager may expend for a specific activity. Each year a budget is made for both income (i. e., estimated income) and expenditure accounts (e. g., departmental budgets). An account manager is appointed to authorize expenditures from expenditure accounts. Reserve accounts are accounts which hold funds that have not yet been allocated (i. e., approved) for expenditure.
02.02In the auxiliary non-pledged area, there are four (4) types of income accounts:
a. Type I -- "Student Fees" which is income from student service fees, bus fees, and medical services fee in Designated Funds.
b. Type II -- Income from Operations, which is income (e. g., advertising income from University Star) directly generated by the operation of one (1) specific expenditure account (e. g., operating budget for University Star) and this income is a dedicated source of funds for the support of that expenditure account.
c. Type III -- Other Auxiliary Non-Pledged Income Accounts - income not directly dedicated to the support of one (1) single expenditure account but rather is used to generally support a number of auxiliary activities (e. g., parking violations).
d.Type IV -- General Property Deposit - Interest and Forfeits Account - Section 51.052 of the Texas Education Code states that the interest on the investment of general property deposits or of forfeited general property deposits may be used for scholarship awards to needy and deserving students. The income from this account is to be applied to need-based scholarships, as determined by the Director of Financial Aid and the Vice President for Student Affairs.
02.03 In the auxiliary non-pledged area there are six (6) types of reserve accounts. Reserve accounts are used to hold funds which have not yet been allocated (approved) for expenditure. The VPFSS (i. e., the chief fiscal officer) is the account manager for reserve accounts. The approval process to expend from a reserve account is explained in Section 04.
a. Student Service Fee Reserve -- This reserve account contains the unallocated student service fees.
b. Bus Fee Reserve -- This reserve account contains the unallocated bus fees.
c. Income from Operation Reserve -- There is one (1) reserve account for each major income account (e. g., advertising income from the University Star) for which the income is directly generated by the operation of one (1) specific expenditure account (e. g., University Star operating budget), and this income is dedicated to the support of that expenditure account.
d. Interest and Forfeits - General Property Deposits (GPD) -- This account contains unallocated interest earned on GPD investments and forfeits of GPD's.
e. Unallocated money from parking permits is maintained in a separate reserve.
f. Unappropriated Balance -- This is the one (1) general reserve for the auxiliary non-pledged area. Student service fees, student bus fees, and medical services fees are not held in this reserve (see "a", "b", and "c" of this section).
g. Medical Service Reserve -- This reserve account contains the unallocated medical services fees.
02.04 In the auxiliary non-pledged area, there are three (3) categories of expenditure accounts (expenditure accounts are used to record expenditures for a specific activity, and also represent an authorized spending level for the account manager):
a. Category I: Student Fees -- These expenditure accounts are funded from Type I income (student service fees, bus fee, and medical services fee).
b. Category II: Income Generating Accounts -- These expenditure accounts are funded from Type II income (refer to section 03.01 a).
c. Category III: Other Expenditure Accounts -- These expenditure accounts are funded from Type III income (refer to section 03.01 b).
03.01 When an auxiliary activity has "income from operations" directly created by that activity and dedicated to the support of that activity (as authorized by the VPFSS), the activity can benefit from surplus income which is generated. The surplus income is accumulated in an individual reserve account (an "Income from Operation Reserves") for that specific activity. The balance to be transferred to each account is calculated at the end of the fiscal year:
a. The balances for Category I (student service fee, medical services fee and bus fee) are transferred to the appropriated reserve (account number 4-3987 - Reserve--Student Service Fee, account number 4-3957 - Reserve--Bus Fee, account number 4-3995 - Reserve--Medical Services Fee). Balances in Category I will be reported quarterly by the VPFSS to President's Cabinet.
b. For Category II expenditure accounts, the end-of-year balances for "Income from Operation Reserves" are calculated as follows:
New reserve balance (to start the next fiscal year) = reserve balance at beginning of year - any transfers during the year from the reserve + actual income - actual expenditures - encumbrances (end - beg.).
c. The balance in the "General Auxiliary Income" Category III will be closed to account 2610 Unappropriated Balances.
d. The balance in General Property Deposits - Interest & Forfeits account is transferred to the Reserve account number 4-3963.
03.02 Income accounts will normally be set up only for those activities in which the "income from operations" will be at least $1,000 per year. Lesser amounts will go under Miscellaneous Income and will be handled on an individual basis by the VPFSS.
04.01 Funds may be used from the reserve accounts by requesting an RBC during the year to meet an unforeseen emergency, or a planned expenditure. If an expenditure is planned, it will be included in the departmental Strategic Plan/Request for Funds.
04.02 Except for financial statement preparation purposes, a request for the use of reserve funds is made by the department head (account manager of the appropriate auxiliary account who is requesting funds) by (1) requesting the use of the funds during the annual budget cycle, or (2) submitting an RBC through the appropriate administrative channels to the VPFSS. An RBC requesting to use the funds from the Student Service Fee Reserve must be initialed by both the Vice President for Student Affairs and the Vice President for Academic Affairs prior to submittal to the VPFSS.
05.01 For financial statement preparation purposes, accounts will be closed and deficits covered with appropriate intrafund transfers. The Director of Accounting will prepare the required RBC to close the auxiliary non-pledged accounts. President's Cabinet will be given the year-end summary data. This data will be sufficient to explain reserve balance changes made as a result of the year-end accounting adjustments.
05.02 The divisional vice president will fund from another account any deficit where expenditures exceed budget or exceed actual income, unless waived by President's Cabinet. Before granting a waiver, President's Cabinet must identify a source of funds to cover the deficit.
06.01 Major responsibilities for routine assignments associated with this UPPS include the following:
Position
DateSection Comptroller
December E5YReview Dean of StudentsDecember E5Y Review Director of Budget
December E5YReview Athletic Business Manager
December E5YReview
This UPPS has been approved by the following individuals in their official capacities, and represents Texas State policy and procedure from the date of this document until superseded.
Mr. Stanley Naumann, Comptroller; senior reviewer of this UPPS
Dr. John Garrison, Assistant Vice President for Student Affairs and Dean of Students; reviewer of this UPPS
Mr. Gordon Thyberg, Director of Budget; reviewer of this UPPS
Mr. Duane Beals, Athletic Business Manager; reviewer of this UPPS
Mr. Bill Nance, Vice President for Finance and Support Services
Dr. Jerome Supple, President