7.2 USG Budget
The University System of Georgia (USG) Budget shall be comprised of all funds received by USG institutions, the University System Office, and pass-through and other attached organizations used to provide services to support the goals, objectives, and mission of the System.
7.2.1 Educational and General Revenues and Expenditures
Education and general revenues and expenditures shall be defined as revenues received and expenditures made to support the teaching, research, and public service missions of USG institutions. Revenue and expenditures are classified as outlined in the USG Business Procedures Manual Section 2 in accordance with guidelines developed by the National Association of College and University Business Officers.
7.2.2 Auxiliary Enterprises Revenues and Expenditures
Auxiliary enterprises revenues and expenditures shall be defined as all revenues received and expenditures made for functions and activities that are related to the mission of USG institutions including, but not limited to:
- Food Services;
- Student Health Services;
- Student Activities;
- Intercollegiate Athletics (excluding intercollegiate athletics activity which are is operated under the authority of a separately incorporated athletic association);
- Stores and Shops; and
- Vending and Other Services.
Refer to Section 15.0, Auxiliary Enterprise Funds, of the Business Procedures Manual for more information on auxiliary enterprise funds.
Auxiliary enterprise operations shall operate on a self-supported basis with revenues derived from student fees and other non-state sources, except as provided below. Each auxiliary enterprise operation shall be charged for its share of plant operations and maintenance expense as a direct expense, and/or charged on the basis of an allocation methodology, such as share of total institutional square footage. USG institutions may choose also to charge administrative overhead to recoup general costs expended on behalf of each operation. USG institutions shall, notwithstanding the above, allocate at least all direct expenses to the respective auxiliary. In no instance may Fund 10000 state appropriations be used to fund athletic auxiliary operations.
Each institution shall develop and update annually a five-year plan for each auxiliary enterprise operation that defines the level and manner of service to be provided, planned expenditures and sources of revenue, including projected fee requirements. The format and content of each plan shall be determined by the USG chief fiscal officer, but must minimally contain the following:
- A statement regarding the role of the enterprise in the context of the institution’s academic mission.
- A statement of goals and objectives to be achieved over the course of the five-year plan.
- A statement on operating strategy, including services to be provided and sources of revenue, including student fees.
- A financial pro forma that projects future revenues and expenditures consistent with stated goals and objectives. The method used to allocate plant operations costs and other indirect costs, if charged, also shall be described in the five-year plan.
- The plan shall provide for an adequate reserve to cover anticipated renewals and replacements and other contingencies, as necessary. (BoR Minutes, January 2010)
Exceptions to the requirement that institutions operate their auxiliary enterprises on a self-supporting basis shall be recognized as follows:
- Institutions may choose to operate some auxiliary enterprise activities on a loss basis, but must indicate in their five-year plans how the costs of such activities will be covered by revenues generated through other auxiliary operations and must also provide an alternative plan reflecting the elimination or privatization of the auxiliary. The Board of Regents may, upon recommendation of the Chancellor, direct the institution to eliminate or privatize the auxiliary.
- Institutions may apply Education & General fund resources, excluding Fund 10000 state appropriations for athletics, to auxiliary enterprise operations where such expenditures can be justified as supporting the primary mission of the institution; however, use of general fund resources for auxiliary enterprise operations is strongly discouraged and must be approved in advance by the Chancellor under procedures established by the USG chief fiscal officer. The Board of Regents has determined that intercollegiate athletics supports the overall mission of the institution and has authorized the use of Education & General Fund resources in support of intercollegiate athletics as outlined in Board Policies 4.5 and 7.2.2. Use of Education & General fund resources for intercollegiate athletics, excluding Fund 10000 state appropriations, is authorized as outlined in Board Policy 4.5 and as further defined in the USG Business Procedures Manual. In no instance may Education & General fund resources be used to support athletic scholarships. The use and amount of Education & General fund resources applied to the support of auxiliary enterprise operations shall be included in the five-year plan. (BoR Minutes, October 2013)
Accounting records for auxiliary enterprises will be maintained on the full accrual basis. Therefore, funded depreciation will be required for all auxiliary enterprise service equipment, buildings, infrastructure and facilities, and other improvements. The reserve for depreciation will be used for repair and replacement of auxiliary assets according to guidelines provided in Section 7.0, Capitalization, of the Business Procedures Manual. The funds collected will be left with the institutions. (BoR Minutes, February 2007)
7.2.3 Operating Budgets
Each USG institution shall prepare and submit to the Chancellor an annual operating budget within the limit of funds allocated by the State plus estimated internal revenue of the institution from all other sources. Operating budgets of separately incorporated athletic organizations are specifically excluded from this process, although the transfer of student fees to those separately incorporated organizations must be reflected as a single item in the budget submitted to the Chancellor.
7.2.4 Budget Amendments
Each USG institution is authorized to maintain and update its annual operating budgets throughout the fiscal year. Such updates may be made without prior approval of the Board of Regents.
Institutions shall report all budget amendments to the USG chief fiscal officer on a quarterly basis under procedures developed by his or her staff. The Chancellor and the USG chief fiscal officer reserves the right to require prior approval of the budget amendments at any USG institution that he or she determines has failed to manage its budget within available resources or in a manner consistent with Board of Regents’ goals and priorities. The Chancellor or the USG chief fiscal officer may direct that the institution develop a remediation plan to assure more appropriate decisions on future budget changes.
7.2.5 Liability for Expenditure of Budgets
Bonds of public officials authorizing expenditures for any purpose whatsoever that are in excess of budget amounts approved by the Board shall be liable for such unauthorized expenditures.