CARRY FORWARD RULES Unrestricted Funds

Carry Forward Balances – from Fiscal Year 2015/2016

An Information Bulletin from Office of the Budget and Financial Services – April 30, 2016

Table of Contents

Carry Forward Rules - QUICK REFERENCE:

1A – OPERATING/UNIVERSITY ALLOCATION FUNDS

1B – OPERATING/SELF-FINANCING FUNDS:

1C, 1E, 1F - UNRESTRICTED NON-GRANT FUNDS:

1D - CLEARING FUNDS:

1E & 1F - UNRESTRICTED SELF-FINANCING GRANT-RELATED FUNDS:

2 - RESTRICTED FUNDS NOT LINKED TO GRANTS (all 2’s except 2L):

2 - RESTRICTED GRANT-RELATED FUNDS:

TRUST FUNDS (all 8’s except 8A, 8L, 8M):

9A – BASE CAPITAL EQUIPMENT FUNDS:

Appendix A – Legend of Abbreviations and Glossary of Terms

Appendix B – Example of a Carry Forward based on Cumulative Fund Balance

Appendix C – Organization codes for faculties and libraries

Appendix D – Funds excluded from the faculty and libraries transfer (step4)

A “Carry Forward Balance” or “Cumulative Surplus/Deficit” is an amount that is posted as a budget in the new fiscal year, representing the prior year’s cumulative results. This budget appears each May in account code 700421, 700422 or 700428 (depending on the Fund Type), and carries a document number starting with ‘CF’. The budget carry forward is usually posted at the end of May (after final cut off).

A positive budget will increase your current year spending power due to past accumulated surplus. A negative budget will decrease your current year spending power due to a past over-expenditure.

The rules used to calculate the balance forwards differ by Fund Type. If you do not know the fund type of your fund, it is located at the top of your Monthly Fund/Grant Details report under Minerva > Finance (Fund) Administration menu > Financial Statements, or use form FTMFUND in Banner INB.

Carry Forward Rules - QUICK REFERENCE:

(Click on any link to see details specific to the fund type selected)

1A: Operating/University Allocation Funds
9A: Base Capital Equipment Funds / Fund Types that do receive a carry forward budget, calculated as:
Budget less Actuals
1C, 1E, 1F Unrestricted Non-Grants
2: Restricted Funds not linked to Grants (i.e. all 2’s except 2L)
8: Trust Funds (i.e. all 8’s except 8A, 8L, 8M) / Fund Types that do receive a carry forward budget, calculated as:
Cumulative surplus / deficit
1B: Operating/Self-Financing Funds
1D: Clearing Funds / Fund Types that do not receive a carry forward budget.

The rest of this document elaborates on these fund types, shows the calculation details with examples, and contact information should you have questions.

Appendix A shows a Legend of Abbreviations and a Glossary of Terms for your convenience.

1A – OPERATING/UNIVERSITY ALLOCATION FUNDS

Fund description:

1A funds represent a unit’s fundamental and ongoing operations funded by the University budget allocation. For more details, refer to the Fund Type Overview.

All Operating Funds are affected by items 1 and 2 below however only Faculty and Libraries’ funds are affected by item 3 and only Administrative Units are affected by item 4.

1) The carry forward is calculated as Budget less Actuals.

2) There is no supplementary budget roll for prior year encumbrances.

3) Faculties and Libraries:

Any resulting surplus budget carry forward, calculated at the Faculty level is eliminated and a corresponding amount is setup in specific Faculty Reserve Funds. Any resulting annual deficit budget carry forward, calculated at the Faculty level is consolidated in one fund under the responsibility of the Dean. Appendix C lists all organizational units affected by this step.

4) Administrative Units

All free balance carry forwards, at the major unit level are applied towards the University’s operating deficit.

Steps in the 1A Carry Forward Calculation:

The budget carry forward is done in a series of steps. In all steps, a fund population is extracted and then the requisite calculation is made and posted before moving on to the next step. The summarized steps are shown here followed by a more detailed explanation.

1) Calculate Budget Carry Forward and post to each fund – Budget less Actuals.

2) Backoff surplus/deficit in benefits accounts.

3) Backoff all carry forwards to funds under fund predecessor 1010 - “Central University Allocation Funds”

Carry forward is complete at this point for all units not identified as Faculties/Libraries in Appendix C and for funds explicitly excluded from the Faculty/Libraries calculation in Appendix D.

4) Determine net surplus/deficit for Faculty/Libraries.

Surplus: Backoff all carry forwards and post consolidated surplus amount to account 400010 in Surplus Reserve Fund.
Deficit: Backoff all carry forwards and post consolidated deficit amount to account 700421 in Deficit Fund.

5) Administrative units with a free balance carry forward will have that carry forward applied to the University deficit.

Step 1: How the carry forward is calculated & posted:

Budget Carry Forward = Budget less Actuals

(Cents >= $0.50 are rounded up, otherwise dropped)

This calculation is applied to each FOAPAL combination and will be recorded as a temporary budget. A free balance is posted as a positive number and an over expenditure is posted as a negative number.

The Budget Module will carry a separate record for every FOAPAL combination, each with a description indicating the original Organization/Account/Program codes it relates to. For example: “BUD C/F 12345/500001/1000” where 12345 = organization code, 500001 = account code, 1000 = program code. These records are ultimately posted as a consolidated entry in the operating ledger to Account code 700421 and to the fund’s default Organization and Program codes, with an Activity and Location code of 000000.

To illustrate:

Prior Year (Ending Balance):

Fund / Org / Account / Prog / Activity / Location / Budget / YTD Activity / Commit / Balance
151901 / 12345 / 500001 / 1000 / 000000 / 000000 / 700.00 / 400.00 / 0.00 / 300.00
151901 / 12345 / 700004 / 1000 / 001234 / 000000 / 0.00 / 500.00 / 0.00 / -500.00
151901 / 12345 / 700004 / 1000 / 000000 / 567890 / 0.00 / 100.00 / 0.00 / -100.00
151901 / 12345 / 700004 / 1000 / 000000 / 000000 / 1,000.00 / 180.40 / 0.00 / 819.60
151901 / 12345 / 700006 / 1000 / 000000 / 000000 / 0.00 / 11,225.30 / 0.00 / -11,225.30
151901 / 12345 / 700006 / 1000 / 001234 / 000000 / 0.00 / 4,000.00 / 0.00 / -4,000.00
151901 / 12345 / 700007 / 1000 / 000000 / 000000 / 4,050.00 / 0.00 / 4,050.00 / 0.00
151901 / 12345 / 700421 / 1000 / 000000 / 000000 / 22,500.00 / 0.00 / 0.00 / 22,500.00
Total / 26,850.00 / 15,605.70 / 4,050.00 / 7,194.30

In the New Year, the Prior Year Carry Forward Balance is represented in the Budget Module as follows:

Fund / Org / Account / Prog / Activity / Location / Budget / Description
151901 / 12345 / 700421 / 1000 / 000000 / 000000 / -300 / BUD C/F 12345/500001/1000
151901 / 12345 / 700421 / 1000 / 000000 / 000000 / -500 / BUD C/F 12345/700004/1000
151901 / 12345 / 700421 / 1000 / 000000 / 000000 / -100 / BUD C/F 12345/700004/1000
151901 / 12345 / 700421 / 1000 / 000000 / 000000 / 820 / BUD C/F 12345/700004/1000
151901 / 12345 / 700421 / 1000 / 000000 / 000000 / -11,225 / BUD C/F 12345/700006/1000
151901 / 12345 / 700421 / 1000 / 000000 / 000000 / -4,000 / BUD C/F 12345/700006/1000
151901 / 12345 / 700421 / 1000 / 000000 / 000000 / 4,050 / BUD C/F 12345/700007/1000
151901 / 12345 / 700421 / 1000 / 000000 / 000000 / 22,500 / BUD C/F 12345/700421/1000
Total / 11,245

The above Budget Module records are posted to the Operating Ledger in the New Year as two consolidated entries (sum of account free balances, and sum of account over-expended balances), using a document number starting with ‘CF’:

Fund / Org / Account / Prog / Activity / Location / Budget / Description
151901 / 12345 / 700421 / 1000 / 000000 / 000000 / 27,370.00 / 151901 BUDGET CARRY FORWARD ROLL
151901 / 12345 / 700421 / 1000 / 000000 / 000000 / -16,125.00 / 151901 BUDGET CARRY FORWARD ROLL
Total / 11,245.00

Step 2: Backoff surplus/deficit in benefits accounts

In 1A funds, benefit expenditures are automatically covered by a budget provided by the University and posted to account 600125. As such, any resulting surplus or over expenditure in the benefit account codes is removed from the Budget Carry Forward calculation. The description for these postings reads as “REV. C/F BENEFITS” in the Budget Module, and “BUDGET CARRY FORWARD ROLL” in the Operating Ledger.

Step 3: Backoff all carry forwards to funds under fund predecessor 1010 - “Central University Allocation Funds”

Funds classified as Central University Allocation Funds are not entitled to a budget carry forward. The carry forward is calculated and posted for these funds and then removed entirely.

In rare cases, some faculties have funds in this category however most do not.

Step 3 marks the end of the Budget Carry Forward calculation for Administrative units (units not listed in Appendix C).

Step 4: Determine net surplus/deficit for Faculty/Libraries.

This step is exclusive to the organizational units listed in Appendix C; the list consists of all Faculties and the Libraries.

The total of all carry forward amounts for a given Faculty will be calculated to determine a net surplus (positive amount) or net deficit (negative amount). In either case, the carry forwards for each fund are backed out and the corresponding amount posted to a Surplus Reserve Fund in the case of a net surplus or a Deficit Fund in the case of a net deficit.

a) James McGill, William Dawson, TALIF, Chantier II and IRDC funds are excluded from the consolidated calculation. If these funds have a carry forward, it is not backed out. See Appendix D for further information.

b) Fund affiliation to a given Faculty or to the Libraries is determined by the organization code default of the fund.

c) Funds rolling up to predecessor fund code 1010 are excluded from the consolidated calculation because these funds do not get a carry forward. Most Faculties aren’t affected by this. See Step 3 above for more information.

Surplus amounts will be posted to account 400010 in the Faculty’s Surplus Fund. Deficit amounts will be posted as a budget to account 700421 of the Faculty’s Deficit Fund.

Query/Reporting tips:

Use the Budget Module form FZIBLFP to query budget transactions by FOAPAL (in this case the account code would be 700421) and to drill down to the document details. Conversely, from a document number on FGIDOCR in Finance, you may select “Budget Document Drill Down” from the Options menu to see the corresponding Budget Module details.

The consolidated Operating Ledger posting(s) can be viewed using Banner forms FGIBDST (How to query the balance of a fund in FGIBDST) or FGITRND (How to view transaction detail activity in FGITRND). They will appear as transactions on your Monthly Fund Details report for May and easily identified by looking for document codes starting with ‘CF.’

To see your funds in the context of the 4 steps laid out above, use Crystal Web Template entitled “Budget Carry Forward” in the Summary Reports section of the Financial Services website. The report must be run for fiscal year 16.

Questions?

Please direct all questions to your fund administrator in the Unrestricted Accounting Office. Contact information is displayed in the Summary of Free Balances by User Security (FZRG0055) report under Minerva > Finance (Fund) Administration menu > Financial Statements, or in form FTMFUND in Banner INB.

1B – OPERATING/SELF-FINANCING FUNDS:

Fund description:

1B funds represent a unit’s fundamental and ongoing self-funded operations. These funds are required to submit a formal budget each year. For more details, refer to the Fund Type Overview.

Why a carry forward is not calculated:

These funds do not automatically receive a budget carry forward amount. The fund holder must request permission (by email to the Office of the Budget indicating the amount and the purpose) to use the free balance of a previous year. A repayment plan is imposed in cases of accumulated deficits. The accumulated profit or loss of each fund is found in the fund balance (account code 400003).

Query/Reporting tips:

To view fund balance accounts, you may use the Web report template “Trial Balance Summary” in the General Ledger Reports section of the Financial Services website. Alternatively, one may consult the Banner form FGITBSR to view this balance.

Questions?

1C, 1e, 1f - UNRESTRICTED NON-GRANT FUNDS:

How the carry forward is calculated & posted:

Budget Carry Forward = Fund Balance (i.e. cumulative profit or loss) as found on the General Ledger under account code 400003 @ April 30th. Note: this calculation only considers “Actuals”.

The Fund Balance is determined by Fund code and will be recorded as a temporary budget. A cumulative Surplus is posted as a positive number and a cumulative Deficit is posted as a negative number.

A single record is posted to the Fund on the Operating Ledger, using that Fund’s Org and Prog, and the account code 700422. The description is “C/F CUM SURPLUS/DEFICIT.”

See Appendix B for an example of how Cumulative Fund Balances Carry Forwards are calculated.

Query/Reporting tips:

This single entry can be viewed from Banner form FGIBDST (How to query the balance of a fund in FGIBDST) or FGITRND (How to view transaction detail activity in FGITRND). It will appear as a transaction on your Monthly Fund Details report for May as a document code starting with ‘CF.’

Questions?

1D - CLEARING FUNDS:

Fund description:

1D funds are clearing funds and therefore all balances must be cleared at the end of every fiscal year. Hence there should be no carry forward generated in the first place. For more details, refer to the Fund Type Overview.

Questions?

1E & 1F - UNRESTRICTED SELF-FINANCING GRANT-RELATED FUNDS:

Fund description:

1E and 1F are unrestricted funds linked to a grant code for inception-to-date reporting. For more details, refer to the Fund Type Overview.

Why a carry forward is not required:

Grant balances are calculated from inception-to-date. That is, a grant balance incorporates all transactions from the beginning of the grant to the present day regardless of how many fiscal years the grant may span. Regular funds without a grant work on the year-to-date principle and so they “close” at the end of each fiscal year and start the new fiscal year at zero necessitating a carry forward to be posted from the previous year to the current year.

Due to the inception-to-date concept, balance forward amounts need not be posted to grants. However, to allow for systematic ‘budget availability checking’, an entry is processed to reflect the grant’s status. This entry does not impact the balances depicted on grant queries or reports because it does not post to the grant ledger.

Query/Reporting tips:

Use Minerva “Budget Query for Fund Holders” or Banner form FRIGITD (Grant Inception to Date) to view the cumulative results for a fund (How to query a grant balance in FRIGITD). As the name suggests, it shows all activity on a Grant from the date the grant is created to the present. As an alternative use the report “Monthly Grant Details” from Minerva Reports (Financial Statements) or the Web report template “Monthly Grant Details” located in the Month End Reports section of the Financial Services website.

Questions?

Please direct all questions to your fund administrator in the Unrestricted Accounting Office. For inquiries relating to 1F funds, you may contact your fund administrator in the Research Financial Management Services. Contact information is displayed in the Summary of Free Balances by User Security (FZRG0055) report under Minerva > Finance (Fund) Administration menu > Financial Statements, or in form FTMFUND in Banner INB.

2 - RESTRICTED FUNDS NOT LINKED TO GRANTS (all 2’s except 2L):

Fund description:

Fund types starting with a ‘2’ that are not linked to a grant code represent restricted activity for which inception-to-date reporting is not required. These funds typically receive a budget to spend as revenues are recorded. For more details, refer to the Fund Type Overview.

How the carry forward is calculated & posted:

Budget Carry Forward = Fund Balance (i.e. cumulative profit or loss) as found on the General Ledger in account code 400006 @ April 30th. Note: this calculation only considers “Actuals”.

The Fund Balance is determined by Fund code and will be recorded as a temporary budget. A cumulative Surplus is posted as a positive number and a cumulative Deficit is posted as a negative number.

A single record is posted to the Operating Ledger for that Fund, using the Org and Prog defaults for that fund, and the account code 700422. The description is “C/F CUM SURPLUS/DEFICIT.”

See Appendix B for an example of how Cumulative Fund Balances Carry Forwards are calculated.

Query/Reporting tips:

This single entry can be viewed from Banner form FGIBDST (How to query the balance of a fund in FGIBDST) or FGITRND (How to view transaction detail activity in FGITRND) as a document number starting with ‘CF.’ It will appear as a transaction on “Monthly Fund Details” from Minerva Reports (Financial Statements), or use the Web report template “Monthly Fund Details” located in the Month End Reports section of the Financial Services website.

Questions?

Please direct all questions to your fund administrator in the Research Financial Management Services. Contact information is displayed in the Summary of Free Balances by User Security (FZRG0055) report under Minerva > Finance (Fund) Administration menu > Financial Statements, or in form FTMFUND in Banner INB.

2 - RESTRICTED GRANT-RELATED FUNDS:

Fund description:

Fund types starting with ‘2’ and are linked to a grant code to support inception-to-date reporting. For more details, refer to the Fund Type Overview.

Why a carry forward is not required:

Grant balances are calculated from inception-to-date. That is, a grant balance incorporates all transactions from the inception of the grant to the present day regardless of how many fiscal years the grant may span. Regular funds without a grant work on the year-to-date principle and so they “close” at the end of each fiscal year and start the new fiscal year at zero necessitating a carry forward to be posted from the previous year to the current year.

Query/Reporting tips: