Guidance on Using SOFI Funds to Clear Deficits


Overview


This article discusses potential resolutions to Financial Unit - Fund deficits. Please note, the current UCSD Financial Deficit Policy specifies that; generally, operating deficits must be examined and corrected at the Financial Unit and Fund level.

Essential Information


Next Steps


Consider the Fund Type

When working to resolve a Financial Unit-Fund in deficit, first consult existing policies and procedures applicable to the type of Fund.

Selected information and links to relevant resources are provided below: 

Gift Funds

  1. Per Advancement’s UC San Diego Gift Acceptance and Processing Online Handbook it states, “Gift funds should never be in deficit.”
  2. STAR online dashboard provides access to view Gift information, including available Expendable balances held at UCSD Foundation.
  3. Information on Financial Administration of Gift Funds.

Sponsored Funds/Contracts & Grants

  1. Departments should follow Office of Post Award Financial Services (OPAFS) guidance on financial responsibilities, Cost Transfers, Final Award closeout, etc
  2. Information on Managing Sponsored Project Funds.

Self-Supporting Funds

  1. Generally, self-supporting activities, including Recharges and Auxiliary Enterprises, are operated on a no-gain/no-loss.
  2. Any surplus or deficit is to be corrected by adjusting rates in the next year to achieve break-even.
  3. A Renewal & Replacement fund (17000/17001) for inventorial equipment is not allowed to have a deficit balance.
  4. At the discretion of the activity’s VC, Unrestricted Funds may be used to subsidize an Auxiliary Enterprise activity.
  5. Information on Accounting for SSAs.
  6. UCOP Policy on Establishment of Auxiliary Enterprises.
  7. Self-Supporting Graduate Professional Degree programs: UCOP policy provides guidance regarding the handling of deficits using Non-Disallowed Funds.

Other Considerations


Transaction Options to Clear Deficits

Expense Transfer (Most preferred, for transactions within the same fiscal year)

Transfer Salary (Direct Retro) or Non-Salary (Cost Transfers) Expenses between chart strings

  1. Review the KB0033191: Cost Transfer Guide on Services & Support.
  2. Functional nature of the Expenses should not change i.e. costs properly coded as Academic Support should stay coded as Academic Support (Function 430).
  3. In some cases, especially those involving non-recharge self-supporting Funds where tracking the true cost of an activity is important, it may be more appropriate to clear a deficit by processing a Financial Journal to transfer Fund balance, using a 7xxxxx Account Code, to clearly identify the Transfer as a subsidy to the activity rather than a true Expense.

Resource Transfer (If cost transfer is not available and/or balance is from prior fiscal year)

Transfer Financial Resources between chart strings by submitting a Journal with a 7xxxxx Transfer Account Code such as 774009-Fund Balance Transfer

  1. Review the KB0034341: Guidance on Resource Allocation Process for Departments.
  2. Review the KB0033213: Resource Allocation Transfer Account Guidance for best practices on which 774xxx account code to use.
  3. If balance is on a legacy fund no longer being used due to the implementation of SOFI in FY16, contact the Campus Budget Office via Services & Support for a fund swap.

Questions

  1. Please consult with your VC and/or Department Business Office on deficit resolution strategies as many Fund sources were created for specialized use within a particular VC.
  2. If no suitable option is identified, the VC Office may contact CBO to discuss additional options.

Questions?


If you need any additional assistance, please submit a ticket here.