Vice President for Finance Policy/Procedure

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1 Subject: Program Assignment Effective Date: May 2015 Last Revision: Contact Name: Anne Rademaker Author: Anne Rademaker Last Review Date: Approved By: Controller's Office Page 1 of 12 Revised By: Anne Rademaker Vice President for Finance Policy/Procedure Contact atrade02@louisville.edu Program types should be chosen based on the purpose and type of activity that will be recorded in the program code. If there are questions about the type of program that should be created, contact the Controller's Office or the Budget and Financial Planning Office. Sponsored Programs and Contracts are managed by the Executive Vice-President for Research and Innovation Office. For more information, see guidelines at: Guide to EVPRI Offices General Fund Program Code: 01xxx, 02xxx, 3xxxx Funds: 1000 Programs supported by State Appropriation or Tuition revenues. These programs are considered public funds. Budgets are prepared by Budget and Financial Planning each year and approved by the University of Louisville Board of Trustees. The funds are unrestricted as to purpose, but must be used in accordance with all Commonwealth of Kentucky guidelines. Each department has one main public supported program, which starts with 0. All other public supported programs for the department start with 3.!t the end of the fiscal year, all cash is moved to the University s main reserve program. udget balances are carried forward based on the carryover code assigned by the Budget Office. Generally, the programs carry forward any surplus or deficit in the supply and salary pools. Fringe benefits are closed to central administration regardless of status. Self-Supporting Entity (Program Budgets) Program Code: 1xxxx Funds: 1000, 1010 Program Budgets are required to produce their own revenue, which is generally fees or other public revenues. Expenses are budgeted only to the level of estimated revenue. Budgets are developed by the departments in conjunction with the Office of Budget and Financial Planning. Anticipated activity must be over $5,000 in order to request a new program.

2 Page 2 Programs in Fund 1010 are restricted by a third party external to the University, for example State Appropriation restricted for use by the Equine Program. The expenses associated with these funds must relate to purpose designated by the third party. Budget surplus or deficits are not included in Year End Carryover and cash balances at the end of the fiscal year remain with the Program. Programs in Fund 1000 are not restricted as the purpose of use, beyond normal University Policy. Budget surplus or deficits are included in Year End Carryover and cash balances at the end of the fiscal year are closed to the General University. Translational Research Program Code: 2xxxx Funds: 1010 Responsible: EVP for Research and Innovation Programs supported by specific State Appropriation allocation for translational research. Funds are administered through the Executive Vice President for Research and Innovation office. All appropriations have been awarded as of fiscal year 2012 and should be used before June 30, If there are any cash or budget balances, they will be carried forward to the new year. Auxiliary Program Code: 4xxxx Funds: 1000 Auxiliary enterprises are self-supporting activities which provide non-instructional support in the form of goods and services upon payment of a specific user charge or fee to students and faculty. The general public may also be served incidentally by some auxiliary enterprises. Auxiliary services include, but are not limited to: Residence Halls, Parking, some Information Technology At year end, cash balances in auxiliaries, excluding Housing, itech, and Parking, are moved to the University s main surplus program. Housing, itech, and Parking maintain their cash balances. Budget balances are carried forward based on the carryover code assigned by the Budget Office.

3 Page 3 IRIG Program Code: 50xxx, 54xxx, Funds: 1000 Responsible: EVP for Research and Innovation Intramural Research Incentive Grants are awarded on a competitive basis by the EVPRI Office. There are several types of grants including Multidisciplinary Research Grants (MRG); Undergraduate Research Scholar Grants (URS); Project Completion Grants (PCG); Research Initiation Grant (RIG); Research on Women Grants (ROW); Undergraduate Research Grants (URG). For more information and Forms click here SUN/SoTL Grants Program Code: 57xxx Funds: 1002 Responsible: Delphi Center Supporting Undergraduate Innovation (SUN): Ideas to Action (i2a) Implementation grants up to $12,500 for individual and teams of faculty and staff to develop, implement and assess projects that will directly and significantly support the sustained incorporation of selected i2a outcomes. These grants are awarded by the Delphi Center. For more information and forms click here Athletics Program Code: Axxxx Funds: 1200, 1201, 1202, 1210, 1241, 1242, 1255, 1260 Responsible: ontroller s Office /!thletic!ssociation Programs related to the University of Louisville Athletic Association supported by athletic revenues. The Athletic Business Office must approve all program requests and is responsible for reconciling the programs. Budgets are created in conjunction with the Office of Budget and Financial Planning. During the year end close process, the cash from programs in Fund 1200 is moved to the Athletic Reserve Program and the budget is closed. Programs in all other funds maintain their cash and budget at To determine proper fund code, see Financial Responsibility Matrix - Finance Responsibility Matrix

4 Page 4 Clinics Program Code: Cxxxx Funds: 1120 Responsible: ontroller s Office Programs related to clinical departments and activity, including the billing and collection of patient receivables. Expenses relate to providing clinical services to the public and university community. Budgets are developed by the departments, in conjunction with the Office of Budget and Financial Planning. Budget surpluses and deficits are considered when establishing the budget for the next fiscal year; however, they are not carried forward automatically. Cash is maintained at the program level. Residual Grant Funds Program Code: Dxxxx Funds: 1100 Responsible: ontroller s Office / EVP Research and Innovation Programs to maintain any surplus funds from sponsored programs (grants and contracts) that are not required to be returned to the sponsor. Programs are maintained at a department or Principal Investigator level. These residual funds should be used to support research activities, as directed by the Department/Principal Investigator. Endowment Program Code: Exxxx Funds: 1264, 1265, 1266, 1267, 1020, 1021, 1023 Responsible: ontroller s Office/VP University Advancement Programs funded from gifts that consist of both a principal and spending portion. There are two types: Donor Restricted The third party donor directs the university to maintain the principal in perpetuity, consisting of the original gift and any additional gifts. This principal is held by the University of Louisville Foundation (Foundation) and is not on the University's general ledger system. The earnings on the principal are either directed to a specific purpose (Fund 1023) or undesignated (Fund 1021). The appropriated spending is maintained on the University in the designated fund codes. Quasi-Endowment The Foundation s oard of Directors designates the gift, or accumulated gifts, to be treated like an endowment, where only the earnings are spent. This principal is held by the Foundation and is not on the University's general ledger system. Quasi-endowments are generally

5 Page 5 established at the request of a department, and require at least $10,000 in principal. The Foundation has a policy to designate all unrestricted gifts of $100,000 or more as quasiendowments. The earnings on the principal are either directed to a specific purpose (Fund 1020) or undesignated (1021). The appropriated spending is maintained on the University in the designated fund codes. Funds held in Trust for Others The Athletic Association invests funds in the Foundation. These funds are segregated into separate funds (1264, 1265, 1266, 1267) in order to maintain proper accounting records. The budget for the spending programs (Funds 1020, 1021, or 1023) is determined by the spending policy approved by the Foundation s oard of Directors. This is adjusted based on any accumulated cash surplus. Cash is maintained on the individual endowments, with an offset to a Control Program maintained by the Controller's Office for carryover funds not received. Separately Held Investments Program Code: E78xx Funds: 1023 Responsible: Foundation Operations The University has been designated the income beneficiary of various trusts and financial entities which are held and controlled by others (also known as Funds Held in Trust by Others). These programs record the income activity and spending is allowed to the extent income is received from the investments. The principal is managed outside the endowment pool (example: PNC). Faculty Start-Up Program Code: F1xxx Funds: 1002, 1100 Responsible: ontroller s Office Programs hold funds from various sources used to support the faculty start-up plans approved when new faculty are hired. Funding sources must be identified when the program is requested. Programs must be linked to a specific Faculty hire, have anticipated expenses of at least $5,000 and cannot be departmentally maintained. The Faculty Start-Up programs operate on a revenue/appropriation link for budget purposes. Cash is maintained at

6 Page 6 Gifts Program Code: Gxxxx Funds: 1020, 1021 Responsible: ontroller s Office/VP University!dvancement Programs funded from current use gifts. In most programs, the type of expenses allowed is restricted by the donor. New gift programs must be coordinated with University Advancement to ensure proper designation and recognition for the donor. Spending occurs in the 102x fund codes, on the University. Hospital Program Code: Hxxxx, HAxxx, HBxxx, HCxxx Funds: 1010 Responsible: ontroller s Office / EVP Health!ffairs Hospital programs track activity in Medical School departments related to UofL Hospital. Funding comes from the University Medical Center, Inc. and Kentucky One Health, Inc. Joint Operating Agreement and is restricted to activity as described in agreement. Programs are monitored by the Office of the Dean of Medicine, and can only be requested by that department. Budgets are developed by the Dean of Medicine, in conjunction with the Office of Budget and Financial Planning. Budget surpluses and deficits are considered when establishing the budget for the next fiscal year; however, they are not carried forward automatically. Cash balances for the H0xxx programs are swept to the central Hospital Program, H9000, at the end of each fiscal year. Capital Projects Program Code: Jxxxx Funds: 1041, 1042, 1241, 1242 Programs track activity for construction projects or other capital asset activity. Construction projects are generally done in conjunction with University Planning, Design, and Construction (UPDC). Programs must be funded in advance, unless an exception is made by Budget and Financial Planning. Requests for new programs and transfers of funding to/from existing programs must be sent to Budget and Financial Planning for approval. Capital Project budgets are determined at the beginning of the project and maintained at the program until completion of the project. Funds ending in 41 have an appropriation link budget and must be funded in advance. Funds ending

7 Page 7 in 42 have a budget at the beginning of the project and are funded during or after project completion. Loans Program Code: Lxxxx Funds: 1035 Responsible: ontroller s Office / ursar s Office Programs track activity for institutional and federal loan programs. Funds loaned to students from these programs are to be repaid, with interest. The ursar s Office maintains the programshowever, individual processing (billing and collection) is outsourced to a third party. Academic Program Support Program Code: Pxxxx, P1xxx Funds: 1100 Programs receive!cademic Support from the Medical School s Departmental Entities and Physician Practice Groups, part of University of Louisville Physicians (ULP). Programs are created for each department, and the funds are to be used to support the academic mission of the department. P1xxx programs are specialized programs established to receive payments from Medicaid and other third parties on behalf of the Physician Practice Group, and are then transferred to the Pxxxx program to satisfy the required contribution from the Practice Group. Budgets for the general Academic Support programs (Pxxxx) are developed by the departments, in conjunction with the Office of Budget and Financial Planning. Budget surpluses and deficits are considered when establishing the budget for the next fiscal year; however, they are not carried forward automatically. Cash is maintained at The specialized programs (P1xxxx) operate on a revenue/appropriation link for budget purposes. Cash is maintained at

8 Page 8 RIF (includes Individual, and Departmental) Program Code: R1xxx (CEG), R3xxx (Department), R5xxx & R6xxx (Individual) Funds: 1100 Responsible: EVP Research and Innovation Research Infrastructure Funds (RIF) are to provide funds to invest in the infrastructure that supports efforts to secure and maintain extramurally funded research programs. The fund is equivalent to 10% of facilities and administrative costs expended on extramural grants & contracts. Individual (Principal Investigators and Co-Principal Investigators) and Departmental allocations are made by transferring funds to the departmental RIF speed type at the close of the month in which the grant expenditures are made. Funds may be used for any expenditure related to the pursuit of research and scholarship except for faculty and staff salaries derived from "hard money." Appropriate expenditures include nonrecurring commitments to the following: items not covered as direct costs on grants and contracts, as well as "soft money" salaries for research personnel, research administrative support, supplies, travel, costs for equipment and maintenance. Summer salary may be paid from these funds if approved, in advance, by the departmental chair and unit dean, and if all parties agree to the research or scholarly product from the recipient's summer activities. Expenditure of funds must comply with all applicable laws, regulations, statutes and University policies. Questions about the appropriate use of these funds or the establishment of the accounts for these funds should be addressed to the Office of the Executive Vice President for Research and Innovation. For more information: Individual RIF Departmental RIF The RIF programs operate on a revenue/appropriation link for budget purposes. Cash is maintained at Service Centers Program Code: Sxxxx Funds: 1000 Service centers are organizational units or activities that perform specific technical or administrative services for internal University operations and potentially external users, and charges the users for these services. The three basic types of service centers, Recharge Centers, Service Facilities, and Specialized Service Facilities, are described below: Recharge Center: A service center providing goods and/or services that do not represent the major purpose of the generating department. The services are intended as a convenience to faculty, staff, and students. Rates are based on direct costs only, and will include the internal service center support costs. These operations will generate less than $50,000 of revenue per fiscal year. Service Facility: Also providing goods and/or services as a convenience to faculty, staff, and students, but generating between $50,000 and $499,999 of revenue per fiscal year. Specialized Service Facility: A service center providing highly complex and technical services, not

9 Page 9 usually available from outside vendors. The service may be available to a select group of users or to the University in general. Annual revenue will exceed $500,000, and the cost may include both internal service center support costs and institutional facilities and administrative costs. To make certain that University service centers are charging appropriate rates, each service center will prepare an annual cost analysis and rate proposal that will be submitted to Budget and Financial Planning (BFP) for review and approval. This rate proposal will include all appropriate direct costs related to the service center. BFP is also responsible for approving any new Service Center Requests. For more information, see Research Handbook: Chapter 10 Budgets are developed by the departments, in conjunction with the Office of Budget and Financial Planning. Budget surpluses and deficits are considered when establishing the budget for the next fiscal year; however, they are not carried forward automatically. Cash is maintained at the program level. Foundation Administration Program Code: Uxxxx Funds: 1020 Foundation Administrative programs include departmental expenses for the President s Office and Vice President of University Advancement administration. These programs are generally funded from endowment earnings, as approved by the University of Louisville Foundation Board of Directors. Programs are approved and monitored by Budget and Financial Planning. Budgets are developed by the departments, in conjunction with the Office of Budget and Financial Planning. Budget surpluses and deficits are considered when establishing the budget for the next fiscal year; however, they are not carried forward automatically. Cash is maintained at the program level. Cardiovascular Innovation Institute Program Code: Vxxxx Funds: 1500 Activity related to the Cardiovascular Innovation Institute, a joint-venture with the Jewish Fund for Excellence. These programs include the administration and research support; however, all sponsored program grants and contracts are handled through the University of Louisville Research Foundation. Budgets are developed by the departments, in conjunction with the Office of Budget and Financial Planning. Budget surpluses and deficits are considered when establishing the budget for the next fiscal year; however, they are not carried forward automatically. Cash is maintained at the program level.

10 Page 10 General Institution Expense Program Code: X0xxx, X4xxx, X5xxx Funds: 1000, 1002, 1055, 1060, 1266 / ontroller s Office Includes institutional expenses and liabilities that are not directly attributable to individual programs. Examples include audit fees, student receivable bad debt, payroll and benefit liabilities, bond and debt service, etc. Programs are monitored by department responsible for activity, including Budget and Financial Planning, ontroller s Office, Payroll, and Human Resources. Budgets for are developed by the departments, in conjunction with the Office of Budget and Financial Planning. Budget surpluses and deficits are considered when establishing the budget for the next fiscal year; however, they are not carried forward automatically. Cash for all programs in Fund 1000 is moved to the University s general reserve program at the end of each fiscal year. All other funds maintain cash at To determine proper fund code, see Financial Responsibility Matrix - Finance Responsibility Matrix. University Scholars Program Code: X3xxx Funds: 1100 Responsible: EVP for Research and Innovation Includes expenses related to the University of Louisville Scholar and Distinguished Scholar Program. This program rewards faculty who significantly exceed the scholarship necessary for promotion and tenure and achieve a national or international reputation. This program is administered by the EVP for Research and Innovation. For more information click here. The Scholar programs operate on a revenue/appropriation link for budget purposes. Cash is maintained at Investments Program Code: X8xxx, X9xxx Funds: 1000 Responsible: ontroller s Office Maintains short-term investments held by the University (Fund 1000) as allowed by policy. Programs are monitored by the ontroller s Office. Budgets for are developed by the departments, in conjunction with the Office of Budget and Financial Planning. Budget surpluses and deficits are considered when establishing the budget for the

11 Page 11 next fiscal year; however, they are not carried forward automatically. Cash is maintained at the program level. Metropolitan College Program Code: Y0xxx Funds: 1065 Responsible: Metropolitan College Programs related to the administration and support of the Metropolitan College agreement between the University, Jefferson County Technical and Community Schools, and UPS. This is a subset of the overall Agency type of programs, as the funds do not belong to the University. Budgets are developed by the departments, in conjunction with the Office of Budget and Financial Planning. Budget surpluses and deficits are considered when establishing the budget for the next fiscal year; however, they are not carried forward automatically. Cash is maintained at the program level. Agency Programs Program Code: Y1xxx Funds: 1065 Responsible: ontroller s Office Programs for activity related to the University, but not owned by the University. Examples include Recognized Student Organizations and their sponsored activities, conference activity organized by a University employee for another organization, etc. The distinguishing feature is that the funds do not belong to the University. However, all programs must follow general University procedure for procurement, reconciliation, etc.

12 Page 12 Dental Faculty Practice Plans Program Code: Y2xxx Funds: 1065 Responsible: ontroller s Office Programs for activity related to the Dental School s Private Practice dental operations. The distinguishing feature is that the funds do not belong to the University. However, all programs must follow general University procedure for procurement, reconciliation, etc. Other Program Code: Zxxxx Funds: 1002, 1100, 1164, 1265 Responsible: ontroller s Office Includes programs which do not fall into any other category. Generally, activity must be ongoing and expect revenues in excess of $5,000. Some examples include repeating conferences hosted/supported by a department or ongoing initiatives outside of instructional or clinical activities.!ll programs must be approved by the ontroller s Office. Expenses are limited to the amount of revenue recognized. The fund code is assigned based on the entity supporting the activity University (Fund 1002), Research Foundation (Funds 1100), or Athletics Association (Fund 1265.