Fund Policies – Frequently Asked Questions

Fund Policies

University Funds Overview

In the Georgetown Management System (GMS) there are different codes called worktags that help distinguish different accounts. Worktags include the cost center, fund, program, purpose, assignee, gift, grant, ledger account, and category codes.

The fund type distinguishes the source of the funds. Some funds carry forward and have a fund balance. The fund balance is separate from the budget, although it should be taken into account during the annual budgeting process.

Funds can be temporarily restricted, permanently restricted, or unrestricted. The university does not carry forward unrestricted funds. The fund balances are visible at the cost center level because the accounting entry to sweep the unrestricted funds is not done at the detailed (cost center) level by Financial Affairs.

Departments that have multiple sources of funds designated for the same purpose should generally spend those funds in the order set below.

1. Sponsored funds

2. Gifts

a. with donor restrictions

b. without donor restrictions

3. Operating funds

Below are commonly used funds. To see the full list of funds, see the Chart of Accounts website.

Sponsored FundsGifts with Donor RestrictionsGifts without Donor RestrictionsOperating Funds
1802280217031701
1804280318011702
18052601  

Frequently Asked Questions

A: No, the Office of the Provost does not sweep fund balances for faculty accounts.

A: Yes, if your unit does not receive annual operating funds (1701 funds).

A: No, fund balances and budgets are different. Please consult with your Senior Business Manager if you have any questions about your budget.

A: Transferring university funds from 1701 to 1702 is only allowable for certain instances such as student activity fees. Any requests to carry forward should be submitted in writing to your Senior Business Manager who will review and forward any approved requests to the Office of the Provost, Finance & Business Services for approval.

A: The University needs units to spend according to a plan so that the University can manage cash flows.

A: In general the school and department share of IDC may not rollover. Departments that do not receive annual operating funds may carry their share of IDC forward. A journal entry may be required.

Sponsored Funds

Sponsored funds refers to external sponsored awards and contracts. The Office of Research Services provides support for faculty in their pursuit and management of sponsored research opportunities.

Sponsored activity is coded to 1802 except for GU-Qatar (GU-Q) which uses 1805. GU-Q’s equivalent of 1701 is 1804, but it is included in sponsored funds for Main Campus management reporting purposes.

Revenue from sponsored funds is recognized either on a cost reimbursable or fixed price basis. Revenue from cost reimbursable awards is recognized as expenses are incurred. Fixed price revenue is recognized as a lump sum. If a PI does not spend a fixed price grant in full and the award allows, SPFO will transfer the remaining balance to the worktags provided by the PI. Spending the remaining balance should be planned during the annual budgeting process.

Gifts

There are several types of gifts. The two most common are current use gifts and endowments. Revenue is recognized when the gift is received. Departments may not defer contribution revenue per GAAP.

Current use gifts are also known as spendable gifts and do not earn interest. Any positions funded by current use gifts (in part or in whole), may not be ongoing, regular positions since the funding source is not permanent.

An endowment is a gift that is invested in perpetuity and generates interest. The invested gift is permanently restricted and not spendable. The interest generated from the investment is spendable and should be budgeted during the annual budgeting process. Any positions funded by endowed gifts (the interest generated by the endowment) may be ongoing regular positions.

Both current use gifts and endowments can be given with or without restrictions. Restrictions are specified by the donor in the gift agreement. If a gift agreement is not required, communications with the donor, fundraising materials, etc. will be used to determine if a gift is restricted or unrestricted.

Gifts with Donor Restrictions

Per University Policy, funds with donor restrictions should be spent before gifts without donor restrictions.

Most restricted current use gifts are recorded to 2802. An exception is current use gifts designated for the operation and maintenance of Georgetown facilities, which are coded to 2601.

Interest generated from a restricted endowed gift is recorded to 2803. Generally, departments do not receive the interest until the gift has been made in full. Please refer to the specific gift agreement, which will determine how the interest will be treated.

Gifts without Donor Restrictions

Current use gifts without donor restrictions are currently coded to 1703. From a GAAP perspective, unrestricted gifts offset operating funds and are not carried forward. As noted in the overview section, the accounting entry is not done at the cost center level, so historical fund balances have accumulated and remain visible at the cost center level. Spending from 1703 funds counts toward the unrestricted budget target. Starting in FY21, Schools/Units who receive annual operating funds (1701) are expected to clear historical balances in 1703.

Interest income from endowments, which do not have donor imposed restrictions, are coded to 1801. Unspent 1801 funds have a rolling fund balance. Spending from 1801 funds counts toward the unrestricted budget target.

Annual Operating Funds

Annual operating funds are primarily composed of tuition and fees revenue. Annual operating funds are coded to 1701, and because they are unrestricted, the fund balance does not rollover.

Tuition and fee revenue (1701) is recognized over the course of the semester it was earned. Students generally make payments in the beginning of the semester, and Financial Affairs books journal entries to spread the revenue across the semester to be in compliance with GAAP. Unused tuition revenue cannot be deferred to the following fiscal year because it must be recognized in the period it was earned per GAAP.

Some schools or administrative support units have additional revenue generating activity that is managed through revenue generating agreements (aka customer contracts in GMS). This activity is also coded to 1701.

The revenue should be recorded as services are performed on a percentage of completion basis. In other words, revenue can and should be deferred if the services were not performed in the fiscal year the payment was received.


Operating Funds with Rollover

As of FY19, increasing 1702 funds requires approval from the Office of the Provost, Finance & Business Services. Starting in FY21, Schools/Units who receive annual operating funds (1701) are expected to clear historical balances in 1702. Spending from 1702 counts toward the unrestricted budget target.

Because 1702 fund balances roll over, the fund is used for tracking purposes when funds should be made available in the next year. Approved use cases for 1702 include:

  • student group accounts funded by the student activity fee
  • funds raised by students
  • the PI’s share of IDC
  • Department’s share of IDC for departments who do not receive annual operating funds
  • faculty research funds and start up funds, unless stated otherwise in an appointment letter
  • revenue generating agreements if the department does not receive annual operating funds (1701) from the university.

Those who wish to increase their 1702 fund balances must obtain approval from the Office of the Provost to do so. GMS was reconfigured over the summer of 2019 so that journal transfers using 1701 and 1702 will route to the Office of the Provost (GMS Finance CFO) for approval. Transfers that increase a 1702 fund balance should include a reasonable justification in the supporting documentation.