Financial Stewardship

Although the dean is ultimately responsible for the entire budget, the College of Fine and Applied Arts is organized under a decentralized budgeting system. Each unit head/director is responsible for managing the resources assigned to his or her unit. These include, but are not limited to, financial accounts, inventory, and space. The only exception to this decentralization is the appointment of personnel.

Within each FAA unit, the unit head/director may be assisted in these stewardship tasks by assigned personnel. It is the responsibility of the unit head/director to ensure that these personnel receive the necessary training available on campus and within the college to complete these duties accurately and in a timely fashion.

The college business office is responsible for coordinating budget activities across the college and for advising unit heads/directors and their staff on campus and college budgetary and financial policies and changes. It is also responsible for providing guidance on procedures and answering questions regarding policies.

General Financial Responsibility

Each unit head/director is responsible for ensuring that each account (state, gift, indirect cost recovery, grant, self-supporting) in his/her unit ends each fiscal year without a deficit.

State Accounts

A unit’s state account is made up of tuition and general revenue (state allocation) and is adjusted annually to reflect changes related to the salaries of departing and newly hired employees.

The unit head/director must ensure that all state accounts end the fiscal year without a deficit. If a unit projects a substantial positive state balance at the end of a fiscal year, it is responsible for notifying the college business office of that forecast by late spring so that appropriate actions can be taken to ensure that these funds are retained.

In the rare circumstance that a state account incurs a deficit, the unit head/director must ensure that there are funds available to cover the deficit at year-end closing. If there are insufficient funds to cover this deficit, the college will cover the deficit. However, the unit’s budget will be charged to repay the college for covering the deficit, which may occur within a multiyear plan.

The dean and members of the college staff will meet annually (usually in January) with each unit director/head and staff to review the status of all accounts to ensure proper stewardship of unit resources.

Indirect Cost Recovery Accounts

Indirect cost recovery (ICR) accounts usually provide a unit head/director with a small amount of discretionary funds for expenditures not permitted from other university accounts. There are, however, certain restrictions placed upon expenditures from ICR accounts (principally that they may not be used to pay for instruction). Unit heads/directors are responsible for ensuring that expenditures meet campus policies. Year-end balances in ICR accounts are sometimes used to cover any state account deficits.

Self-Supporting Accounts

A self-supporting account is created for a specific function that generates revenue and expends that revenue for activities in direct support of the original function. The unit head/director is responsible for ensuring that all revenues are collected, controlled, and deposited in a timely fashion under campus policy. He or she is also responsible for ensuring that all expenditures from a self-supporting account are in direct support of the activity that generates the funds. The general policy of ensuring that no deficit exists at year end holds for this type of account as well; however, these accounts are not intended to be set up for profit-making entities either.

Grants and Contracts Accounts

These accounts are usually very restrictive in nature, and allowable expenditures are fully detailed in the budget that has been funded by an outside granting agency. The unit head/director and the principal investigator of the grant are responsible for ensuring that funds are expended according to the original grant agreement (or any subsequently approved revisions) and within the time frame specified by the grant award. The unit head/director and principal investigator are also responsible for complying with all policies and procedures set by the Office of Sponsored Programs and Research Administration.

Gift Accounts

As a steward of gift funds, each unit head/director must be knowledgeable about the donor agreements to ensure that expenditures from these accounts are authorized. It is very important that the units and the college comply with the wishes of the donor and use gift funds only in accordance with the legal agreements. If changes are desired subsequent to the original donor agreements, units are responsible for coordinating with the college development office prior to contacting the donor. Units may not proceed with charging expenditures under proposed changes to donor agreements until the donor (or designee) has approved the revised agreement. These accounts usually involve a substantial amount of money, and the unit must be particularly diligent in spending the funds only in the manner prescribed by the donor. Failure to comply with donor intent not only breaks good faith with the donor but may also jeopardize future gifts and relationships. The unit head/director is also responsible for any annual reporting requirements that are included in the donor agreement.

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