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POL 2.100 Budget Preparation and Administration

The college shall prepare for board consideration a budget prior to the June board meeting of each year. This budget, after board approval, shall serve as the authorization for expenditures beginning July 1, the start of the fiscal year.

It shall be the responsibility of the chief financial officer to coordinate the development and preparation of the budget. It is a requirement of the board of trustees that a balanced budget be presented for their consideration. A budget may be considered balanced with the use of the fund balance reserves – reference Fund Balance Reserve section below.  The chief financial officer shall resolve all issues pertaining to the budget prior to final preparation and presentation to the board. The President shall review all figures in the budget.

Budget officers shall have the responsibility to monitor their respective budgets.  The appropriate budget officer and/or administrator shall authorize all expenditures for their budget areas as outlined in POL 2.000 Purchasing Policy.  When a budget center and/or line item is in danger of being over spent, the chief financial officer shall notify the departmental and/or divisional head of such and proceed to take steps to restrict further spending in the area.

It is the intent of the board of trustees that once the budget is adopted, budgeted amounts remain the same within the fund, site, function, and classification.  Transfer of funds less than $5,000 may be authorized by budget officers.  Transfer of funds greater than $5,000 and less than $10,000 must be authorized by the president.  Transfers greater than $10,000 or transfers that result in a change of budgeted amounts in fund, site, function, or classification shall require prior approval by the board of trustees.  A list of all transfers over $5,000 will be provided to the board of trustees on a monthly basis.

  1. Funds
    Funds are account groups created for the purpose of segregating specific activities in accordance with special regulations, restrictions, or limitations.  For accounting purposes, the fund is designated by the first two digits in a budget number (xx-x-xxxx-xxxxx).

    1. General fund (01)
    2. Designated Fund (02)
    3. Auxiliary Fund (03)
    4. Restricted Fund (04)
    5. Endowment fund (06)
    6. Unexpended Plant Fund (07)
    7. Maintenance/Repair Fund (08)
    8. Debt Service Fund (09)
    9. Physical Properties Fund (10)
    10. Agency Fund (11)
  2. Site
    For accounting purposes, the site is designated by the second digit in the budget number (xx-x-xxxx-xxxxx)

    1. Central Campus (1)
    2. M-TEC (2)
  3. Functions
    Functions are the unique programs or departments under whose authority the activity is performed.  For accounting purposes, the function is designated by the third group of four digits in the budget number (xx-x-xxxx-xxxxx).

    1. Instruction (1xxx)
    2. Public Service (3xxx)
    3. Instructional Support (4xxx)
    4. Student Services (5xxx)
    5. Institutional Administration (6xxx)
    6. Physical Plant (7xxx)
  4. Classifications (object code range)
    Classifications are the specific categories where expenditures are being made.  For accounting purposes, the classification is designated by the final five digits of the budget number (xx-x-xxxx-xxxxx).

    1. Salaries and fringes (21000-21999)
    2. Professional and contracted services (22000-22199)
    3. Materials and supplies (22200-23999)
    4. Rentals, leases, utilities, and insurances (24000-24499)
    5. Miscellaneous (24500-25999)
    6. Bonds, interest and depreciation (26000-26999)
    7. Transfers (27000-27999)
    8. Capital and equipment (28000-28999)

If a presidential discretionary fund is established in the budget, the president shall have the ability to transfer funds to any budget center without prior board approval.

Fund Balance Reserve
The maintenance of an appropriate fund balance is essential to the financial security of the college.  Available fund balance dollars are not intended to be spent for recurring operating expenses; to do so would greatly spend down all college reserves.

Examples of times when the use of the fund balance may be considered include:

  • Emergency repairs to infrastructure of the college
  • An investment in a project designed to produce revenue
  • Replacement of state appropriation cuts in the year of the reduction
  • Start-up costs for new college programs and initiatives (two year maximum)
  • Planned future expenditures for which a fund balance has been accumulating

Any considerations for the use of the fund balance will be brought to the board for approval prior to the occurrence.

In the event the budget is in danger of deficit spending, the chief financial officer shall report to the president with recommendations, and the president shall take such steps as are necessary to maintain a balanced budget and will directly report such action to the board.

Additional authority for spending will be found in the policy on purchasing.

Revised April 16, 2009

Revised September 17, 2009