Deficit Funds

A fund is in a deficit status if the commitments exceed the resources. Specific application of this definition varies by the type of fund.

• Budget-based funds: The budget at the fund level represents the total resources of the fund. If encumbrances plus expenditures exceed the budget, the fund is in deficit.
• Cash-based funds: The primary resource for these funds is cash. If the cash balance becomes negative, the fund is in deficit.

Business managers are responsible for reviewing fund balances on a regular basis. Two Insight reports are available to assist in the monitoring of the deficit fund balances.

• FIN028 - Cash Deficit report - Reports cash-based funds with deficit balances
• FIN029 - General Fund Budget Deficit report - Reports budget-based funds with deficit balances

The General Accounting office will review these reports for all University funds on the 10th day of each month and will send an email notification to business managers with a fund(s) in deficit status. The business manager is required to provide an explanation, written or email, to the University Controller within 7 days of the date of the notice. The written explanation should address the reason for the deficit position and the plan for eliminating the deficit within the next 30-day reporting period.

If deficit balances are the result of internal budget or timing issues, an explanation along with the expected date of resolution should be provided by the business manager.

If the deficit cannot be eliminated within the required period, it will be considered an internal loan. Interest will be charged on the deficit balance at the current State Treasury Rate.

The repayment of the deficit and interest shall be made within the shortest time feasible, but in no event past the end of the applicable fiscal year, unless otherwise authorized in writing by the Assistant Vice President of Finance.

In the case of amounts owed to the University to which interest is traditionally not charged, such as scholarship and financial aid commitments paid through the UNC Foundation, or other sources at the disposal of the organization, the deficit must be eliminated within 30 days following the written report to the Controller, unless expressly waived in writing by the Assistant Vice President of Finance.