1.2 Budget Allocations and Expenditures for Funds Receiving Support from State Appropriations

(Amended 9/17)

Effective September 2017, this policy has been revised. For individual changes, see the redlined version

Salary, Equipment, and Supplies and Services Accounts. Allocations to these accounts are available for the fiscal year beginning July 1 each year and are based on annual budgets approved by the Board of Regents, State of Iowa, and supplemental allocations recommended through regular administrative channels. Supplemental allocations are made with the approval of the Budget Officer in the Budget Management (Web Budget) application.

Charges to salary expense categories are based on payrolls in accordance with approved appointments. Under the fringe benefits pool method, fringe benefits are budgeted and expensed as a percentage of salary or wage costs. All University employees have certain fringe benefits entitlements that are associated with their University appointments. The fringe benefits pool method is a concept involving the establishment of different employee groups, each of which includes employees with similar fringe benefits entitlements. Once the various employee groups are established, the fringe benefits costs of each group are pooled to determine the fringe benefits rate for each group to be used in budgeting and accounting for University fringe benefits.

Charges to equipment and supplies and service expense categories are based on requisitions and vouchers approved by departmental executive officers (and other administrative officers as required) and on University-wide contracts for services (such as telephone service and equipment maintenance service). Requisitions for items to be charged to the current year's budgets must be filed in the Purchasing Department according to the annual close calendar.

In general, free balances in these accounts are not carried forward to the following year but are lapsed as of June 30 each year. A free balance is the balance remaining after deducting the expenditures and outstanding orders (encumbrances) from the departmental allocation(s). Amounts encumbered for outstanding orders as of June 30 each year are carried forward to the following year, with permission, to the extent that June 30 balances are available and providing that delivery and payment is completed prior to October of the following year. Expenditures and commitments are not authorized in excess of the amounts allocated. If, by reason of unforeseen expense, or otherwise, an account is overdrawn on June 30 of any year, the overdraft becomes a first charge against the account for the following year. Amounts are not encumbered for orders outstanding to University stores and service departments as of June 30 each year..