University of Minnesota
University Relations
University of Minnesota
University of Minnesota
University of Minnesota
University M logo on red background
Home : Finance : Budget

Budget Development and Oversight for Current Non-Sponsored Funds

Effective Date: June 2012
Last Update: June 2012
Responsible University Officer:
  • Vice President and Chief Financial Officer/Treasurer
Policy Owner:
  • Vice President and Chief Financial Officer/Treasurer
Policy Contact:

Printed on: . Please go to for the most current version of the Policy or related document.


Budget Development

Departments must develop annual fiscal year operating budgets for current, non-sponsored funds that:

  • identify annual financial plans for all applicable funds
  • include all anticipated resources and planned uses for the resources
  • ensure that planned uses are supported by identifiable resources (revenues, transfers-in and balances)

Units must finalize and enter their budgets into the University financial system before the fiscal year begins.

Budgeted deficits at the Resource Responsibility Center (RRC) level should be avoided if possible. Any anticipated deficits at the RRC level or Fund-"Z" DeptID combination levels must be reviewed with and approved by University Budget and Finance before being incorporated into the final budget.

The Board of Regents has final approval authority for the current operating budget.

Budget Oversight

RRC managers, other University financial managers, and the University Budget and Finance budget officers are responsible for overseeing current non-sponsored funds, and ensuring that:

  • year-to-date resources and expenditures are occurring in a manner consistent with the budget plans
  • resource shortfalls and/or expenditure overruns are identified and addressed as soon as possible
  • emerging or incurred deficits are identified, elimination plans are established, and incurred deficits are actively resolved
  • appropriate budget adjustments are reviewed and entered into the University financial system

Throughout the fiscal year, financial managers must monitor resources and expenditures to determine whether the financial status for their chartstrings is on target or is changing significantly. If significant changes are detected, the underlying reasons for the changes must be identified and, if needed, appropriate corrective action must be taken.


The University is committed to effective resource management and accountability. Budgeting is not an end, in and of itself; it is a way to help the University achieve its strategic goals by managing its financial resources more effectively.

All potential resources (including carry-forward, expected revenue for the fiscal year and transfers in) and all planned uses (including expenditures and transfers out) must be included in the budget for budget planning to be comprehensive and effective. By requiring that all current, non-sponsored funds be included for planning and budgeting, the University can better manage its resources and hold itself to a consistent standard of accountability regardless of the source of funding or category of expenditure.

Regents' approval enhances accountability, provides proper financial oversight and helps align the University's financial resources with its strategic goals.

Ongoing budget oversight ensures that resources and expenditures are occurring in general conformity with the budget plan.



FY Budget Instructions can be found at



  1. Will deficits be assessed a “TIP charge” as has been done in previous years?

    The process of assessing a TIP (Temporary Investment Pool) charge on deficits was intended to provide an incentive for units to properly fund expenses and refrain from deficit spending. However, in some instances, counter-productive behavior, such as processing auto-reversing journal entries solely for the purpose of avoiding TIP charges, resulted.

    We are expecting fiscal monitors and RRC managers to perform their responsibilities as outlined in this policy, and based on this understanding no charges will be assessed on deficits that would be posted in FY2013, beginning with any deficits existing at June 30, 2012. If expectations are not met and deficits increase from currently managed levels, revision to this policy will be considered.



Direct any general questions about this policy to your RRC manager. If you have specific questions, contact University Budget and Finance.

Primary Contact(s)
Budget Development and Oversight
University Budget & Finance


Academic/Administrative Unit Head
Individuals who provide overall leadership for the unit and the University in general. They participate in policy formation and ensure policy implementation for their unit. They are also responsible for their unit’s overall financial management.
Approver Role
Individuals who review and approve sponsored and non-sponsored accounting transactions to ensure compliance with University policies and procedures and funding agency restrictions, and who identify problems and ensure resolutions.
Available Balance Deficit Report
Provides a list of deficits, prior to encumbrances, at the University fund and "Z" DeptID level as of the period end date specified each time it is run. The available balance calculation excludes accrual-based accounting entries except for Vouchers Payable; thus the balance approximates a cash balance for the fund - “Z” DeptID.
Values used to classify financial transactions entered into the general ledger.
Chartfield value that identifies the organization at the University where budgets, staff, or academic programs are managed.
DeptID Trees
Reflect the management structure of the University and rollup information required for reporting, fiscal responsibility and oversight, and/or physical location. The University currently maintains two trees: UM_DEPTID_FISCAL and UM_DEPTID_BUDGET.
Nodes on the budget tree are managed by University Budget and Finance. In the budget tree, each level 4 node is identified by a budget-only DeptID beginning with a "Z," sometimes referred to as the Z-level deptID.
Financial Managers (also known as Fiscal Monitors)
Individuals who are responsible for policy interpretation and implementation for a department (or collegiate unit or higher). They manage the sponsored and non-sponsored accounting and fiscal operations of a department (or collegiate unit or higher) in compliance with University policies and procedures and funding agency restrictions.
Non-Sponsored Funds
Funds which are not administered by Sponsored Projects Administration (SPA), but either can 1) be used by the University at its own discretion because there are no external restrictions, or 2) may be used only in accordance with the purpose established by the funding source.
Resource Responsibility Center (RRC)
Organizational/management groups within the offices of the vice presidents. They are generally management units, colleges, or administrative organizations.
"Z" Level DeptID
Predetermined grouping of one or more deptIDs that represents a budget level within a RRC whose aggregate total by fund is used as the level at which deficits are monitored by the fiscal monitor and RRC Manager. (See DeptID tree).


Academic/Administrative Unit Head
  • understand and effectively manage the unit budget
  • foster open and transparent financial processes
  • ensure that units under their management are aware of the sources and uses of funds at their disposal
  • routinely review unit financial activity with their RRC manager
  • work with their RRC manager to resolve anticipated and actual financial issues
  • communicate with their unit staff about financial status and expectations including avoiding deficit spending
Financial Manager
  • ensure that budgets entered are complete and represent planned activity for the fiscal year for their deptIDs;
  • monitor deptids across all funds to identify areas of concern;
  • maintain positive balances at the Fund-"Z" Deptid;
  • transfer funds from University foundations on a regular basis to prevent deficits in University chartstrings from occurring;
  • identify and implement necessary corrective actions on deficits.
RRC Manager
  • ensure that budgets entered are complete and represent planned activity for the fiscal year for their RRC;
  • monitor all funds at the RRC level to ensure that positive balances are maintained;
  • ensure that funds are transferred from University foundations on a regular basis to prevent deficits in University chartstrings.
  • identify deficits at organization levels below the RRC level, establish deficit elimination plans, and work with appropriate academic/unit leadership to resolve them;
  • identify ongoing issues/challenges to determine where deficits could occur within the RRC;
  • provide recommendations and/or solutions to fiscal managers within their RRC to help resolve budgeting and/or spending issues;
  • work with University Budget and Finance to resolve deficit spending issues and/or develop deficit elimination plans;
  • meet at least annually with University Budget and Finance to review the RRC's finances.
University Budget and Finance
  • coordinate the budget and the allocation processes;
  • monitor entered budgets to ensure budgeting is complete and consistent with University policies/procedures;
  • monitor funds at the fund-Z-level deptID and identify RRCs that have outstanding issues/challenges within their units;
  • work with the RRC managers to resolve deficit spending issues and/or develop deficit elimination plans;
  • meet at least annually with the RRC manager to review the finances of the respective RRC.



June 2012 - New Policy, Comprehensive Review. 1. Combines three policies (Budget Development for Non-Sponsored Funds, Budget Oversight for Non-Sponsored Funds, and Allocating Temporary Investment Pool Income (TIP)) into one. 2. Suspends the charging of interest on deficits incurred. 3. Incorporates increased communications and monitoring by the Budget Office and units.
Budget Development for Non-Sponsored Funds, Budget Oversight for Non-Sponsored Funds, Allocating Temporary Investment Pool Income

Document Feedback

Did this document successfully answer your questions?

Additional comments: (2000 character limit)

Email Address: (so we can respond to your questions)

© 2013 Regents of the University of Minnesota. All rights reserved.
The University of Minnesota is an equal opportunity educator and employer.
Last modified on January 16, 2013