1. Purpose of policy
This policy is intended to provide a framework for financial control with respect to under-expenditure and over-expenditure of budget funds.
2. Application of policy
This policy applies all staff and members of University decision-making or advisory bodies.
In this policy the following definitions apply:
Budget Reforecast means the University’s revised budget for the current year as approved by the University Council.
Carryover means the positive or negative balance of the operating budget of an organisational unit at December 31 (the financial year end of the University). Commitments remaining at year end for orders placed but not yet paid are not taken into consideration.
Council Approved Budget means the University’s official triennial Budget as approved by the University Council.
Organisational unit means a faculty or a management or support service or administrative area or sub-section that is specifically identified for allocation of funding within the University’s budget framework.
Unadjusted means the current year budget allocation as approved by Council excluding any carryover from prior years or any other internal transfer or allocations.
4. Retained funds (carryovers)
4.1 Organisational units will be allowed to retain cumulative carryover operating funds equating to a maximum of 10 per cent of the Council Approved Budget (unadjusted) for the current year, for allocation in the following year budget.
4.2 Funds in excess of the threshold in 4.1 will be redeployed by the University to either strategic or operational funding priorities.
4.3 As part of annual planning and budget negotiations, an organisational unit must make application to the Chief Operating Officer for approval to retain carryovers in excess of 10 percent.
4.4 For funds such as research-specific funds, capital funds, faculty-derived research and consultancy income and other restricted funds the University will monitor expenditure as part of the budget development and review process and usually will redeploy unspent funds where practical and feasible (subject to any such redeployment being in full recognition of obligations and commitments related to those funds).
4.5 The use of carryover funds would normally be used to support strategic initiatives, major capital and research projects or can be used to “bank” funds for the purchase of large expensive equipment that requires periodic replacement. It would not be intended that the carryover funds be used for core operating requirements. An organisational unit may make application to the Chief Operating Officer for approval of requested expenditure.
5. Budget expenditure
5.1 All organisational units will operate within the level of expenditure approved in the Council Approved Budget (or a subsequent formal Budget Reforecast).
5.2 Organisational unit budgets within the Council Approved Budget will be developed on at least a basis of ‘budget neutrality’ whereby deficit budgets will not be supported, unless specifically justified and approved.
5.3 Expenditure in excess of the level approved under5.1 will be outside of delegations unless the Vice-Chancellor and President, on the recommendation of the Chief Operating Officer, has given written approval for a specific variation of the level.
5.4 In the context of triennial budgets, deficits will not be supported or approved for operating budgets. However one-off deficits for major institutional initiatives or strategic project-related commitments within the Council Approved Budget may be supported and approved.
5.5 Where a deficit is incurred in a Council Approved Budget, any budgeted carryover will be reduced by the amount of the deficit.
5.6 Where there are insufficient funds in the budgeted carryover to meet any deficit, the budget for the following year will be reduced by the amount of the deficit.