Does your unit receive state budget (such as within the 100025 state fund or any other special state appropriated fund)? If so, keep the following points in mind to ensure compliance with state reporting requirements:
- The current fiscal year’s state fund (i.e., 100025 for FY25) can only be utilized for expenses from the current fiscal year.
- Thus, units cannot utilize the current fiscal year’s state fund for excess expenses that may have posted to another fund type during a previous fiscal year.
- For example, a unit may have a fund (such as a grant, self-supporting, or gift fund) which is in a deficit due to excess expenses that were incurred in a prior fiscal year.
- When the unit is trying to determine a way to clear that deficit, they must remember that they cannot reclassify the excess expenses from a prior fiscal year to the current fiscal year’s state fund. They would need to find another funding source instead.
- Refer to Section 22.3 (Self-Supporting Fund Deficits) for further information which partially relates to this example.
- However, if a unit has an annual expense which crosses fiscal years (such as a membership or subscription renewal), then the unit is technically allowed to charge the entirety of that expense to the current fiscal year’s state fund, if the start date of the renewal period begins in the current fiscal year.
- For example, if a unit is paying for a membership renewal which begins on 1/1/25 (in FY25) and ends on 12/31/25 (in FY26), then that unit is technically allowed to charge the entirety of the renewal expense to the current fiscal year’s state fund, since the start date of the services received began in the current fiscal year.
- However, while this is allowable, many units actually choose to charge expenses like this to a local fund (such as an ICR fund or an unrestricted gift fund), and then reclassify the expense for the first six months of the renewal period to the current fiscal year’s state fund and reclassify the expense for the remaining six months of the renewal period to the subsequent fiscal year’s state fund when it opens for business on July 1. While this is not required, it does provide better matching of the expense to the fiscal year it applies to, which some units prefer.
Contact
For further details on this topic, refer to UAFR’s State Funds resource page. In addition, feel free to reach out to the applicable subject matter experts who can be found by searching on “State Funds” within the Business and Finance Who to Ask list.
