Revenues
Policy
FIACCT 07-04_00 College and University Draws- Overview
Effective: July 1, 1994
Revised: N/A
Purpose
This policy provides guidelines in accordance with state law for colleges and universities (institutions) to deposit dedicated credits, draw dedicated credits, and receive the institutions’ general fund appropriations from the State.
Policy
A.
The Division of Finance will pay each institution General Fund Appropriations semi-monthly. The payments will be made on the 1st and the 15th of each month and will be based on a draw schedule prepared by the institutions as authorized by the Utah Code Annotated, 1953, as amended, Section 63-38-7.
The institutions will prepare the semi-monthly draw schedule based on cash flow needs. Cash flow needs should be calculated assuming dedicated credits are expended by the institutions prior to expending state general funds as provided in the Utah Code Annotated, 1953, as amended, Section 63-38-9.
B.
Daily, but not less often than every three days, institutions will deposit dedicated credits into an institution- State Treasurer joint bank account. The institutions are responsible for the cost and accounting of these bank accounts and monthly the institutions will submit a bank reconciliation to the Division of Finance. The dedicated credits will be deposited and drawn from this account. In addition, institutions will prepare a Journal Voucher transaction form monthly to submit to the Division of Finance to record the deposits and withdrawals of the bank account and submit it to the State Treasurer.
Background
The State institutions are subject to legislative controls on funding from the State’s General Fund or dedicated credits. State statute defines institutional collections such as tuition and fees as dedicated credit funding sources,
therefore, institutions must include these types of dedicated credits as budgeted revenues from the State. Because institutions’ dedicated credits are defined as State Funds, they must be deposited with the State Treasurer at least every three days (Utah Code Annotated, 1953, as amended, Sections 51-4-1 and 63-38-9(1)). The dedicated credits are then returned to the institutions by the Legislature as a source of appropriated state funds. In addition, the Budgetary Procedures Act requires that the institutions dedicated credits be expended before appropriated general funds (Utah Code Annotated, 1953, as amended, Section 63-38-9(7)).
The State’s General Fund appropriations allocate State Tax revenues collected in the current fiscal year.
However, the revenues do not come into the State at the same rate as expenditures are being made by the institutions. This means cash is not always available for appropriations until tax collections are received. Therefore, even if payments of General Fund appropriations to the institutions need to be spread throughout the year to match the institutions’ spending patterns, we may need to consider the constraints of state revenue cash flows. The institutions’ cash needs are considered in this policy as provided for in the Utah Code Annotated, 1953, as amended, Section 63-38-7.