Operating Budget Surpluses
Introduction
The University allocates budget resources to academic and administrative units on an annual basis. This policy establishes the principles and requirements governing the treatment of operating surpluses (positive carryforward amounts) as of April 30, at the end of the University’s fiscal year.
The treatment of overspent operating budget allocations (negative carryforward amounts) is governed separately under GOV-090-035 Budgetary Limits on Spending.
Scope
This policy applies to all University units that receive operating budgets from the central operating budget. It applies exclusively to unrestricted funds and does not apply to the following:
• Ancillary operations;
• Accountable Professional Expense Accounts (APEA);
• Internally funded research, trust, endowment, or capital funds; or
• Restricted funds governed by external agreements.
Policy
Operating budget surpluses are a University resource. Units may retain limited carryforward balances to support short-term priorities, one-time initiatives, and prudent financial management, while ensuring overall institutional financial balance.
Allowable Carry Forward
• Units may carry forward up to 4% of approved annual operating budget surpluses into the subsequent fiscal year.
• Any amount exceeding 4% automatically reverts to the central operating budget at fiscal year-end, except where an approved exception has been granted under the Requests Above the Maximum provisions of this policy.
• Carried-forward funds must be used for one-time, non-recurring expenditures that align with University strategic, academic, or operational priorities
Use Restrictions
• Carry forward balances may not be used to:
o Fund permanent or recurring salaries and benefits.
o Create recurring operating obligations.
o Create ongoing funding commitments that have not been approved through the annual budget process.
Requests Above the Maximum
• Units may request approval to carry forward amounts exceeding the 4% limit where the funds support multi-year planning for a one-time initiative.
• All requests must be supported by strategic rationale and expenditure plans sufficient to create an auditable record of decision-making and fund usage.
• Requests must be submitted in writing to the responsible executive as part of the annual budget submission process and must include supporting rationale, implementation timelines, and spending plans.
Approval will be based on alignment with institutional priorities, financial capacity, and the strength of the supporting strategic rationale.
Treatment of Excess Surpluses
Surpluses exceeding approved carryforward limits will revert to the central operating budget and may be allocated to:
• Balancing the current-year operating fund.
• Reducing accumulated operating deficits.
• One-time funding for institutional priorities.
• Strategic one-time allocations to units through the annual budget process.
The University will ensure that sufficient funds are available to meet approved carryforward commitments.
Exemptions
The following budgets are exempt from the percentage-based carryforward limit and may carry forward up to 100% of unspent balances into the subsequent fiscal year. This exemption recognizes the unique timing and funding requirements associated with these activities. Such carryforwards remain subject to review by Financial Services through the annual budget process and include but are not limited to:
• Library acquisitions budget;
• Graduate and undergraduate scholarship budgets; and
• Operating fund budgets supported by external contract-like funding arrangements with specific spending requirements.
The School of Professional and Continuing Education (SPaCE) is exempt from this policy. As a cost-recovery unit, SPaCE operates under a mandate to recover costs and generate revenues sufficient to support its activities.
The University Budget Committee may approve adjustments to the carryforward allocation formula for a particular fiscal year where institutional financial circumstances warrant. Units will be notified of any changes approved before annual budget submissions are due.