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2020/21 General Budget Guidelines January 15, 2020 These guidelines are intended to provide information to support the annual campus budget development process. This document will be updated as new information becomes available.

I. Operating Budget Overview In the context of total campus revenues, the focus of the campus budget process is on the allocation of the $1.5 billion Core Operating Budget. As shown below, UC San Diego’s total revenues are projected at approximately $6.1 billion. The $1.5 billion core funded operating budget is approximately 25% of the total and represents a partnership with the state. The recurring state educational appropriation is just over $330 million, or 5% of the total and 22% of core operating revenues. The balance of core revenues comes from student tuition and fees, research and administrative overhead income and other miscellaneous revenues. For a glossary of revenues streams by funds group, and specifically those that make up the Core Budget, please refer to Appendix A and take note of fund changes.

1. Projected revenues are shown gross (without offset by scholarship allowance) to better reflect full impact of campus managed operations. This treatment differs from standard financial reporting where scholarship allowance offsets revenue. 2. Private gifts includes only campus gifts to The Regents, excluding Foundation. 3. Reflects direct C&G, excludes $260M of ICR which is reclassified to Core Operating Revenues.

The core operating budget is what funds essential components of campus operations such as faculty, lecturers, TAs, libraries, student services, student financial aid, graduate student support, general instructional support, administrative infrastructure and facility maintenance, etc. A unit’s total unrestricted budget is reviewed during the budget development process, including campus allocated core budget and activity based revenues, to ensure the unit is financially balanced. Recurring costs should be covered with recurring revenues, and one‐time costs with one‐time funds or prior year reserves if available. Core operating budget decisions are made in this overall financial context. There continues to be significant financial risk ahead resulting primarily from basic inflationary increases

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that continue to outpace projected revenue growth, from our need to invest in our academic enterprise, and general global economic risk. With this as background, key budget objectives for this upcoming year include:

Operational Effectiveness: Academic divisions and administrative departments must continually create financial capacity within existing budgets and demonstrate that spending aligns with campus strategic priorities. Departments should leverage our investments in information technology to maximize efficiencies and periodically revisit business practices, proactively identify opportunities to simplify and standardize processes.

External Revenue Expansion: Academic divisions and revenue generating departments must continue to pursue additional external revenues and generate net business income from operations whenever appropriate.

II. Budget Development Process As noted in the January budget planning letter, the 2020/21 budget development process and meeting timeline will be modified to accommodate the Oracle UCSDPLAN budget and planning system soft launch. UCSDPLAN will soft launch this February 2020 with a Pilot Group of users who will be given access for direct input of data into the new UCSDPLAN. Full system launch to all campus is planned for the 2021/22 budget cycle. This years’ budget development process includes two user groups: Pilot and Non-Pilot. Both groups will prepare budgets based on the same planning assumptions. Pilot users will complete their budget development in the UCSDPLAN system while Non-Pilot users will be provided a Non-Pilot budget development template for entry. There are important changes concerning the level of budget detail that will be requested as we move to implement a new chart of accounts and a bottom-up department budget development model. The Campus Budget Office (CBO) will be providing communication, training and guidance to both groups to complete this department budget detail requirement. To accommodate the time commitment needed to prepare budgets at a much more granular level than ever before as UCSD moves to department bottoms-up budget development, the number of budget meetings have been reduced.

The general 2020/21 Budget Meeting timeline is as follows:

Budget Planning Letter: January

Senate Priorities Leadership meeting: February

Academic Strategy Meetings: Late January – February (materials due 2 days prior to meeting)

Phase I Tactical Reviews with the CFO: April (materials due 5 days prior to meeting)

Phase II Strategic Reviews with the Chancellor: May (materials due 2 days prior to meeting)

Cabinet and Senate Leadership Meetings: June

Final Resource Allocations: July

Academic Strategy meetings in late January are part of the budget planning cycle, with specific guidance separately distributed by EVC office. Standard Unit budget reviews are conducted in two phases as outlined in the January budget letter. Phase I meetings are largely Tactical and Financial focused. Key objectives are:

having a clear view of the units’ financial position,

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an understanding of reserves and planned uses,

if department is in a deficit position, ensuring that the unit has a clear, written and quantified path to a more sustainable position,

driving strategic alignment with campus strategic plan and priorities, and

looking for opportunities where cross‐portfolios can operate more synergistically and expand collaborations.

In Phase II, the Chancellor and other campus leaders focus on the more critical and Strategic conversations regarding campus priorities and how to best deploy overall resources to support them. Section V of this document outlines additional details on required budget templates, the Pilot and Non-Pilot group timelines, training and deliverables required including the materials for the Phase I Tactical Budget Review meetings with the CFO.

III. Planning Parameters and Assumptions

A. Enrollment Assumptions The following table summarizes enrollment FTE for the 2020/21 budget planning purposes. These figures represent FTE enrollment and will be updated as new information becomes available.

2020/21 Planning Guidelines - Enrollment FTE

2018/19 Actual FTE

2019/20 Projection

2020/21 Projection

2021/22 Projection

FWS

Undergraduate 28,987 29,412 29,940 30,100

Graduate - General Campus 5,338 5,563 5,721 6,001

Graduate - Health Sciences 1,964 1,953 1,992 2,022

Subtotal 36,289 36,928 37,653 38,123

Summer

Undergraduate 1,902 2,007 2,120 2,200

Graduate 70 72 65 75

Subtotal 1,972 2,079 2,185 2,275

Self-Support Programs 744 798 899 929

Total 39,005 39,805 40,737 41,327

Notes: Prelim Q2'20 CFO update (as of 1-3-2020) based on IRO and CBO input. FTE: 45 units = 1 Undergraduate; 36 units = 1 Graduate Health Sciences Graduate FTE includes Clinical Residents

B. Compensation and Other Related Cost Increases

Campus will fund inflationary compensation costs for employees budgeted on eligible Core funds.

1. Salary Increase Programs Salary costs include the University’s annual academic merit program, collectively bargained wage increases and merit or range increases approved by OP for policy covered faculty and staff. On

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average, plan for a 3% salary program.

2. CA Minimum Wage Increase Two years ago, Governor Brown signed into law a minimum wage increasing our student employee wages to $15 per hour over the next several years. This year’s minimum is $13 per hour and this January will increase by $1 per hour per calendar year over the remaining 2 years. The CBO will continue to fund the required bring-to-minimum increased cost on budgeted Core funds, and units on non‐Core funds should plan for funding own costs. Units with many student employees are most impacted, including Housing, Student Services and various Auxiliary Services, among others. These units need to continue to budget accordingly.

3. Benefit Planning Rates – CBR Last year, our campus began to plan for shift to composite benefit rate (CBR). This year, with Go Live to UCPath, the campus will begin charging with CBRs. CBR expenses recorded on the ledgers will align to CBR category rates, set within UCPath and based on an employee’s Title/Job Code and benefits eligibility. Costs not in CBR will continue to be direct charged and must be planned for including GAEL, NGN, Vacation Leave, Tuition Remission, among these. For more information on the CBR application, please visit the CBR webpage. https://blink.ucsd.edu/finance/costing-analysis/cbrs/index.html

Benefit Planning Rates

Category Description Campus Rate 2020-21 2021-22

HCOMP Faculty & Doctors 1 27.1% 27.6%

Faculty, Leadership, & Professionals 2 34.5% 35.2%

Service Professionals 3 57.2% 58.3%

Campus Support 4 49.3% 50.2%

General Staff & All Other 5 43.8% 44.7%

Faculty Summer Salary A 8.5% 8.6%

Post Doc Scholars B 22.0% 22.3%

Partial Eligibility C 9.5% 9.6%

Students & No Eligibility D 2.3% 2.3% Preliminary rates based on known salary projections and benefit increases. These are subject to change. Final rates will be available after campus receives Federal approval. These rates are applicable to Main Campus employees only. Medical Center is not subject to Federal approval and has separate CBR categories.

4. UCRP Plan Supplement Represents a portion of our retirement liability that is not allowed in the CBR and will continue to be

assessed separately.

In the spring of 2017/18, changes were communicated regarding UCRP Supplement Assessment and the splitting of this cost into principal assessment rate and interest assessment rate. The primary objective of this exercise was to delineate the UCRP Supplement interest assessment rate which is unallowable on federal funds. It cannot be included in the Composite Benefit Rate; rather it will be

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assessed on non‐federal funds only and should be planned for in addition to CBR. Given approved STIP note and external borrowing assumptions, the UCRP Supplement Interest planning rates are as follows:

2019-20 2020‐21 2021‐22

UCRP Plan Supplement 0.77% 0.77% 0.77%

5. General, Automobile and Employment Liability (GAEL) For FY 2020/21, the GAEL program rate is projected to stay consistent at $0.81 per $100 of payroll. For multi‐year planning, use following rates:

Per $100 of payroll expenses 2019-20 2020‐21 2021‐22

General, Auto, and Employee Liability $0.81 $0.81 $0.81

6. Vacation Leave Usage and Accrual Planning The mechanism to account for Vacation Leave will not change for this year’s budget cycle. Under ideal

circumstances, Vacation leave usage (taken) and vacation leave accrual (earned) combined should

offset each other on an annual basis. However, actual earn rates may differ when vacation time is

actually taken. To align with the implementation of the UCPath, the vacation leave usage

methodology will be updated and communicated for inclusion the 21/22 Budget Cycle. Please

continue your current practices to account for this when planning your 20/21 budget.

7. Next Generation Network (NGN) Communication User Rates A flat monthly charge is levied automatically for each campus employee who qualifies as a Communication User, as determined by the employee's payroll title/job code. See the following approved rates by Communication User Group for FY20/21. For more details and a complete list of Communication User title codes, visit https://blink.ucsd.edu/technology/network/NGN/billing/ .

Communication User Groups 2019‐20 2020‐21

On-Campus $96.37 $98.49

Off-Campus $48.19 $49.25

Med Center $34.57 $35.33

Graduate Students $28.91 $29.55

Public Computer Labs $25.14 $25.69

C. Operational Assessments

1. Auxiliary and Self‐Supporting Activities – ASSA Assessment The campus sales and services enterprise is a significant and growing component on campus. It is comprised of auxiliary and self‐supporting activities (ASSA) such as, housing and dining, parking, bookstore, Extension, space rentals, clinical service agreements, the medical center, clinical practices, conferences, and athletic events among others. These units are expected to set market‐based rates that recover both direct and indirect costs to ensure the activities are “fully self‐supporting” and without incurring institutional subsidy.

These activities are grouped under 3 self‐supporting categories to better distinguish the different

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types of business income: Academic/Educational, Auxiliaries, and Primary Care. The Clinical Practice is part of Primary Care and reflects business and financial integration with the Medical Center. The campus charges these activities an assessment so that it can recover a portion of indirect expenses for units such as accounting, cashiers, human resources, information systems, and payroll, among many others. The assessment is set as a percentage of revenues and rates are as follows:

Primary Care = 0.7%

Academic/Educational = 3.4%

Auxiliaries = 5.5% (increase .5%/yr. growing to 6.5%, at which time rate will be reviewed). A rate increase will extend through fiscal year 2022/23 to 6.5%, as a result of the CBR changes that will impact Auxiliaries.

These assessments make up part of overall Core budget and help defray inflationary costs and much needed academic investments. 2. Differential Income

Differential Income are those indirect costs related to outside sales by self‐supporting activities, largely recharges, that are primarily housed in institutionally supportable space and do not pay their own facilities costs like construction, debt service, building maintenance, and utilities costs. Self‐supporting activities should set outside sales rates such that they are market informed and fully recover costs (direct and indirect). The campus charges these activities an assessment so that it can recover a portion of indirect expenses incurred by the campus, with any excess retained by the generating unit. This assessment is set as a % of revenues. The following are 2020/21 rates:

On Campus Activities = 16%

Off Campus Activities = 8%

Ship Use = 6% 3. OP Assessment

The UCOP assessment is an annual system‐wide assessment to fund UCOP operations along with a

few priority initiatives. The assessment is comprised of two components: UCOP operations and UC

Path. The UCOP operations includes central administrative services, academic, and public service

programs housed and administered at the UCOP offices. UC Path funds a new system to deliver and

standardize payroll, benefits, human resources, and academic personnel services. In addition, UCSD

is charged for legal services from Office of General Counsel, audit fees, and certain system‐wide

priority items. UCSD’s share of the UCOP Assessment is projected to grow over time from $70M in

2020/21 to over $75M in the next few years, largely driven by costs associated with UC Path.

Plan on a 10% increase per year for the next two years.

Since 2017/18, both the OP budget and UC Path have been directly funded by the State. This resulted in an equivalent state general fund reduction to the campus budget. Income from the OP assessment is then used to offset that reduction at the campus level.

Additional detailed assessment information by VC unit will be provided in the coming month. 4. Utility Rates

In order to maintain reliable and efficient campus utility services, a new utility model was implemented effective July 1, 2018. The new market‐based rate structure uses San Diego Gas and Electric (SDGE) as a benchmark and enables UC San Diego to recover both operational and capital

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investment costs to support long term campus growth. The campus will fully transition to new electric rates structure over the next three years, and will continue to fully pass through vendor commodity rates. Planning rates and % increases are reflected in the following tables.

Rates FY20/21 FY21/22 FY22/23 FY23/24 FY24/25

Electricity $0.13 $0.17 $0.21 $0.24 $0.24

Chilled water $11.27 $11.83 $13.02 $14.32 $15.75

Hi temp water $11.27 $11.83 $13.02 $14.32 $15.75

Natural gas $0.84 $0.88 $0.92 $0.95 $0.98

Potable water $10.74 $11.28 $11.84 $12.20 $12.56

Reclaimed water $2.33 $2.44 $2.56 $2.64 $2.72

% Increase FY20/21 FY21/22 FY22/23 FY23/24 FY24/25

Electricity 30% 30% 30% 10% 3%

Chilled water 5% 5% 10% 10% 10%

Hi temp water 5% 5% 10% 10% 10%

Natural gas 5% 5% 5% 3% 3%

Potable water 5% 5% 5% 3% 3%

Reclaimed water 5% 5% 5% 3% 3%

5. Student Financial Aid

Systemwide policy requires that a portion of incremental revenues generated from core Tuition and Fee be set‐aside for financial aid. The Return‐to‐Aid (RTA) table on the following page reflects those set-asides. Please use these rates when calculating tuition and fee revenues available for operations.

Return-to-Aid Percentage by Fee Source & Student Type

Tuition

Student Services Fee

[1] Summer Tuition

Professional Degree

Supplemental Tuition

Nonresident Supplemental

Tuition [2]

FWS FWS Summer FWS FWS

Undergraduate 33% 33% 33% n/a 10%

Graduate Academic 50% 50% 47% n/a 0%

Graduate Professional 33% 33% 47% 33% 0%

[1] RTA is calculated only on increases beginning Fall 2011. No RTA prior to that date.

Campus Based Fees: At least 25% of the new fee or fee increase is to be set aside as return to aid for the

student population the fee supports (Graduate, Undergraduate or both).

IV. Campus Policies and Guidelines

A. Funds Management Overdraft Policy – PPM 300‐2

Fund deficits must be resolved within the fiscal year, before June 30, unless under exceptional circumstances, granted advance approval by the CFO to carry forward into the subsequent fiscal year. In those cases, a written overdraft resolution plan must be in place and the unit must be in

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compliance.

If deficits are not resolved within the department/unit by fiscal year end, by direction of the CFO, the CBO will transfer unrestricted funds sources from within the unit or cognizant VC, or will withhold future allocations to clear deficit.

PPM‐300‐2 Funds Management (Overdraft) Policy is provided in the attached Appendix B.

B. Reserves Guidelines

The intent of these guidelines is to establish a baseline of financial resources to reasonably protect the university against disruption in the event of unexpected revenue shortfalls or unanticipated expenditures.

The “days fund balance” metric will be used to determine the suitability of an organization’s carryforward balance.

The following guideline applies for unrestricted fund balances:

No more than 30 days, net of commitments, for administrative units on a fixed base budget and academic units with limited extra‐mural support

30‐90 days, net of commitments, for administrative or auxiliary units with significant reliance on self‐support or external revenues

30‐90 days, net of commitments, for clinical units with significant reliance on patient revenues 30‐180 days, net of commitments, for academic units with significant reliance on extra‐ mural

support and are expected to provide bridge funding to their investigators

These guidelines are provided in the attached Appendix C.

V. Budget Templates Instructions, Materials Submission Requirements and Timelines To provide structure to the 2020/21 budget review discussions, both Pilot and Non-Pilot groups are required to prepare materials for review in advance of the Phase I Tactical Budget Review of the process with the CFO. Detailed instructions and deadlines for distribution and collection of these required materials will be sent out in early February to the VC Financial Officers. As in past budget development years, the following templates will be required for Phase I Tactical Budget Review with the CFO: 1. Template A: Program Narrative Summary – intended to guide presentation deck 2. Template B: Unit’s Proposed Budget and Financial Summary – intended to provide clear view of unit’s

financial position and proposed budget.

Please note that template B will be modified for this budget development cycle with additional details and guidance to be provided during early February timeframe. The proposed budget summary data will be generated from budget preparation completed in UCSDPLAN (Pilot group) and from the Non-Pilot budget templates (Non-Pilot group).

Template B will continue, as in past planning years, to provide a framework for discussing units’ income statement and reserves balance. A unit’s total unrestricted budget model will be reviewed during the budget process, including the campus allocated core budget and activity based revenues, to ensure recurring costs are covered and that the unit is in a solid financial position.

Restricted Contract and Grant resources will remain excluded for now.

Materials Submission Guidelines: It is essential that campus units meet materials submission deadlines in order to provide sufficient time for other meeting participants to review the materials ensuring well‐informed discussions and productive use of time and avoid the need for additional meetings. Each unit must bring hard copies of their

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materials to each Phase I and Phase II meetings. The following are basic expectations for materials submitted:

Phase I Tactical Budget Review w/the CFO Submission Requirements:

1. Ensure page numbers are included in all presentation decks for ease of reference. 2. Provide soft copies of materials to Alexandra Leziy-Miller (aleziymiller@ucsd.edu) in the Campus

Budget Office 5 business days in advance of your Phase I Tactical budget review meeting with the CFO.

3. Bring hard copies of your presentation materials, for all participants, to your meeting.

Phase II Strategic Budget Review w/the Chancellor Submission Requirements:

1. Ensure page numbers are included in all presentation decks for ease of reference. 2. Provide soft copies of materials to Rosie Goldberg (m1goldberg@ucsd.edu) in the Chancellors Office

with cc: Alexandra Leziy-Miller (aleziymiller@ucsd.edu) in the Campus Budget Office 2 business days in advance of your Phase II Strategic Budget Review meeting with the Chancellor.

3. Bring hard copies of your presentation materials, for all participants, to your meeting.

The following table is a listing of the Pilot and Non-Pilot groups: UCSDPLAN - Pilot Group Non-Pilot Group

Chancellor’s Office: ALL VC-Research Affairs

VC-Chief Financial Officer: ALL VC-Student Affairs

VC-Advancement: ALL VC-Equity, Diversity and Inclusion

VC-Marine Sciences: SIO Institute of Geophysics and Planetary Physics (IGPP) ONLY

VC-Marine Sciences excluding Institute of Geophysics and Planetary Physics (IGPP)

VC-Academic Affairs: Electrical & Computer Engineering (ECE) & JSOE Dean’s Office ONLY

VC-Academic Affairs excluding Electrical & Computer Engineering (ECE) & JSOE Dean’s Office

VC-Health Sciences: Orthopedic Surgery & VCHS Dean’s Office ONLY

VC-Health Sciences excluding Orthopedic Surgery & VCHS Dean’s Office

VC-Resource Management & Planning: Parking & Transportation ONLY

VC-Resource Management & Planning excluding Parking & Transportation

The following is a timeline with key dates and deliverables for both the Pilot and Non-Pilot groups. As noted, additional guidance will be provided in the training sessions and support resources will be available through the Campus Budget Office (CBO). Support will be provided via in-person, Zoom and a video recording will be sent out to support the entry process of the Non-Pilot budget templates.

UCSDPLAN Pilot Group Key Dates/Deliverables

Dates/Deadlines Non-Pilot Group Key Dates/Deliverables

Dates/Deadlines

Training - UC Learning 551: Software Training for Oracle UCSDPLAN Budget 2020/21 Pilot

2/10/20 - 2/21/20 Training - UC Learning 555: Budget Cycle 2020/21 for Non-Pilot Group

1/27/20 – 1/31/20

UCSDPLAN System Budget Entry - System Opens 2/10/20 - System Closes 3/18/20

2/10/20 - 3/18/20 Budget Template Entry - Template Release via SharePoint

(Projected 1/24/20) - Template Submission Deadline to

SharePoint 3/18/20

2/3/20 – 3/18/20

UCSDPLAN Supported Office Hours (Zoom and In-Person)

2/10/20 - 3/18/20 Supported Office Hours (Zoom and In-Person)

2/10/20 - 3/18/20

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*There may be modifications to this timeline and deliverables. As needed, this timeline will be updated and posted on the CBO webpage.

Non-Pilot budget template training will be provided by CBO 1/27/20 – 1/31/20. A link to register via UC Learning was sent directly to budget preparer contacts provided by the VC office.

Specific instructions for the Oracle UCSDPLAN system entry will be provided by CBO through separate communications to the Pilot users. For additional information including timeline details relevant to UCSDPLAN and budget development, please refer to the ESR UCSDPLAN webpage, https://esr.ucsd.edu/projects/fis/ucsdplan/index.html.

UCSDPLAN System Final Submitted Department Budget Deadline

3/18/20 Non-Pilot Budget Template Final Submission Deadline to SharePoint Site

3/18/20

Budget Review Period, VC-CBO Template B Iteration, Review & Final Sign-Off

3/31/20 - 4/6/20 Budget Review Period, VC-CBO Template B Iteration, Review & Final Sign-Off

3/19/20 - 4/6/20

Version 1 Template B Distributed to SharePoint Site

4/6/20 Version 1 Template B Distributed to SharePoint Site

4/6/20

Materials Submission Deadline to Campus Budget Office for Phase I Tactical Budget Review w/CFO - 5 Business Days in advance to CBO - Template A Narrative - Template B Financial Summary

(CBO accesses final version on SharePoint)

- Presentation Decks

4/6/20 Materials Submission Deadline to Campus Budget Office for Phase I Tactical Budget Review w/CFO - 5 Business Days in advance to CBO - Template A Narrative - Template B Financial Summary

(CBO accesses final version on SharePoint)

- Presentation Decks

4/6/20

Phase I Tactical Budget Review w/CFO 4/13/20 – 4/17/20

Phase I Tactical Budget Review Changes in UCSDPLAN – CBO System Entry and Iteration with VC

4/20/20 – 4/24/20

Phase I Tactical Budget Review Changes in UCSDPLAN – CBO System Entry and Iteration with VC

4/20/20 – 4/24/20

Version 2 Template B Distributed to SharePoint Site

4/27/20 Version 2 Template B Distributed to SharePoint Site

4/27/20

Materials Submission Deadline for Phase II Strategic Review w/Chancellor - 2 business days in advance to Chancellors Office and cc: CBO

5/6/20 Materials Submission Deadline for Phase II Strategic Review w/Chancellor - 2 business days in advance to Chancellors Office and cc: CBO

5/6/20

Phase II Strategic Budget Review w/Chancellor 5/8/20 – 5/15/20

Phase II Strategic Review Changes in UCSDPLAN - CBO System Entry and Iteration with VC

5/15/20 – 5/17/20

Phase II Strategic Review Changes in UCSDPLAN - CBO System Entry and Iteration with VC

5/15/20 – 5/17/20

Version 3 Template B Distributed to SharePoint Site

5/20/20 Version 3 Template B Distributed to SharePoint Site

5/20/20

Final Cabinet & Senate Approval 6/4/20 – 6/5/20

F U N D G L O S S A R Y

Fund Category Fund Subcategory Fund Description Fund Ranges/NumbersCORE FUNDS

Core Funds State Appropriations "formerly General Funds"

Specifically general funds that support core campus operations 19900 - 19999 (Excludes 19931, 19933-34, 19940-44) 18019, 18022-24, 18049-51, 18082-86, 18118

UCOP Assessments Systemwide assessments 69085A

UC Miscellaneous General Funds

Funds generated from Application Fees, portion of Patent Income and various miscellaneous student fees

19931 & 19940-41

Tuition & Fees University mandatory fees collected from registered students 19942, 20000, 20094-96, 20223-26, 20290, 20222, 20228-34, 20320

Contract & Grant Overhead Funds allocated to the Campus from the indirect cost reimbursement for expenses related to the administration of contract and grant activity

05397, 07427, 19933-34, 69750, 69753

Investment Income (STIP/TRIP) "formerly STIP Income Funds"

Income distributed to the campus from the Short-Term Investment Pool managed by the University Controller's Office

69899 - 69903, 69987, 69988, 69991-96, 99998

Patent Income University's intellectual property income and other related resources 60506

Auxiliary Dividends Administrative Overhead/Differential Income/Emp Support Programs 67531/75451/69741

Fundraising Resources Gift Fees & Endowment Cost Recovery 39998/46250 & 68606-7

University Core Funds Fund created for Simplified Operating Fund Initiative (SOFI I) 99100

Campus Core Funds Fund primarily used by VC Advancement and Central Offices (SOFI II) 99200

NON-CORE FUNDSOther Unrestricted Funds Special State Appropriations Other General and State funds allocated for a specific purpose 18000 - 181ZZ (Excludes 180XX funds listed in State Appropriations)

Expanded Category: Student Fees - Other Other Student Fees 20000 - 20299 (Excludes 20XXX funds listed in Tuition & Fees)

Operating Not in Funds 75XXX or 76XXX University Extension Self-supporting operations of University Extension & Extended Studies 20300 - 20399

Reserves Reserves Funds accumulated for a specific purpose 75000 - 75999 (Excludes ICR: 75451 and other specific reserves listed below) Fund 75XXX

Auxiliary Reserves Funds accumulated for a specific purpose within the Auxiliary Enterprises operations

75024, 75050-52, 75070, 75100, various 76XXX funds

Renew/Replace Fund 76XXX Medical Center & Reserves Operating funds related to the UCSD Medical Center and Thornton

Hospital and funds accumulated for the UCSD Medical Center63000 - 63999, 75480-83, 75655

Renewal & Replacement Reserve Funds Provide the resources for the renewal and replacement of plant assets as

distinguished from additions and improvements to plant76000 - 76999

Auxiliary Enterprises Auxiliary Enterprises revenue is largely income generated from non-instructional services provided to students, faculty and staff upon payments of a specific user charge or fee

70000 - 74999

Sales & Services Educational Activities

Funds derived from sales of products or services to organizations outside the University in connection with educating students

60000 - 62999, 64000 - 65999 (Excludes Patent Income 60506)

Property/Rental Faculty Income Funds Revenue from the rental of University facilities/property 67900 - 68499

Other Funds Other sources of income not included in the other fund groupings 00001 - 00299, 66000 - 69999 (Excludes: Property/Rental 67900-68499, UCOP Assessments 69085A, Emp Supp Prog 69741, ICR 69750, 69753, STIP 69987-88, 69899, 69899-69903, 69991-96, Endowment Cost Recovery 68606-7)

Restricted Funds Loan Funds Consist of monies designated for loans to students, faculty and staff 02000 - 03999

Plant Funds Funds to be used for the construction, alteration or purchase of physical property of the University

00300 - 01999

Private Gifts (restricted or otherwise)

Restricted and unrestricted gifts to the University Level 3 Fund Hierarchies 'B14010' & 'J11020'

Endowment Funds Endowment funds consist of endowments, funds functioning as endowments, and annuity and life income funds

04100 - 09599, 13000 - 13999, 34100 - 39805 (Excludes ICR 05397 & 07427)

UC Foundation Funds Charitable donations managed separately by the UCSD Foundation Data extracted from UCSD Foundation system

Contract & Grant Funds Federal, State, CIRM, Private, Local and Other

Federal, State, CIRM, Private and Local sponsored projects 14002 - 16999, 18200 - 189ZZ, 20600 - 33999, 40000 - 599ZZ, 78000 - 89999, 91005, 93000 - 96ZZZ (fund range includes alpha characters, excludes Gift Fees 39998 & 46250 and Private Gifts with specific Level 3 Fund Hierarchy)

Clinical Trial Funds used to administer clinical trials at the University Level 3 Fund Hierarchy 'J11030' & 'J14030'

Jan 7, 2020 12:36:50 PM

Appendix A

UC San Diego Policy & Procedure Manual _________________________________________________

Search | A–Z Index | Numerical Index | Classification Guide | What’s New

ACCOUNTING PROCEDURES – GENERAL Section: 300 - 2 Effective: 09/19/2017 Supersedes: 02/23/2017 Review Date: 09/19/2020 Issuance Date: 09/21/2017

Issuing Office: Business & Financial Services, General Accounting Division

Page 1 of 5

FUNDS MANAGEMENT (OVERDRAFT) POLICY

I. SCOPE

All employees at UC San Diego, excluding Medical Center employees.

II. POLICY SUMMARY

This policy defines Overdrafts and management responsibilities for resolving and reporting Overdrafts across the UC San Diego campus.

III. DEFINITIONS

Administrative Official - For this policy, the term Administrative Official refers to any UC San Diego employee or faculty member who holds one of the following positions with delegated financial, administrative, or management responsibility, also see Administrative Responsibilities Handbook:

Associate Chancellor Assistant Chancellor Associate & Assistant Vice Chancellors Chief of Staff Deans Department Business Officers Department Chairs Directors Managers Principal Investigators Provosts Unit/Department Heads Vice Chancellors

Fund – A source of funding for a transaction or expenditure identified by a specific code used in the Integrated Financial Information System. For further detail, please see Fund Overview.

Organization - A department or functional unit within a department identified by a specific Organization Code in the Integrated Financial Information System. For further detail, please see Organization Codes.

Overdraft - A deficit in a Fund caused when an Organization spends more than is authorized or available.

Overdrafts may be measured by testing balances at any of several levels within the accounting hierarchy; the appropriate level depends on the nature of the Funds and is typically identified by funding source limitations. The measurement of a deficit largely depends on the financial activity

Appendix B

University of California San Diego Policy – PPM 300 - 2 PPM 300 - 2 Funds Management (Overdraft) Policy

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within a particular fund. To effectively and consistently identify and remediate fund deficits, fund balances are measured in three business practice categories: General Campus, Sponsored Project Awards, and Self-Supporting Funds.

IV. POLICY STATEMENT

It is in the best interest of the campus for Administrative Officials to identify and remedy the circumstances creating an Overdraft and to prevent a misuse of resources. This policy is structured to:

• Define Overdrafts and management responsibilities for their resolution, and

• Facilitate Administrative Officials’ efforts to remedy circumstances creating an Overdraft.

V. RESPONSIBILITIES

A. Principal Investigators or Fund Managers

1. For sponsored projects, the person(s) named as the Principal Investigator, manager, ordirector in an award of a contract or grant accepted by UC San Diego, has primaryresponsibility for adherence to the conditions of the award and for ensuring thatexpenditures made are appropriate, allowable, and within the budgetary limitations of theaward. Thus, the Principal Investigator is responsible for:

a. Avoiding Overdrafts, cost over-runs, and unallowable, unreasonable, or unauthorizedcost-transfers or expenditures;

b. Identifying the need for additional funds;

c. Immediately resolving any Overdraft or developing and implementing a written actionplan to eliminate the Overdraft within the current fiscal year when the Fund’scumulative expenses exceed the authorized funding from the sponsor for longer than30 days.

2. For Funds other than sponsored projects’ Funds and Recharge Activities (seeProcedures below), the Fund Manager is responsible for:

a. Avoiding Overdrafts, cost over-runs, and unallowable, unreasonable, or unauthorizedcost transfers or expenditures;

b. Identifying the need for additional funds;

c. Immediately resolving any Overdraft or developing and implementing written actionplans to eliminate Overdrafts larger than $25,000 or five percent of the Fund’s fiscalyear budget, whichever is more within the current fiscal year.

B. Responsibilities of Department Chair and Department Business Officer (or EquivalentOfficers)

Department Chairs, Department Business Officers, and Equivalent Business Officers shall:

1. Identify, avoid and, if necessary, resolve Overdrafts.

2. Ensure that sponsored projects’ expenses do not exceed the cumulative amount of theaward, allocation, or budget and, if Overdrafts do occur, ensure that corrective action istaken to eliminate the Overdraft. In the case of Overdrafts lasting over 30 days, ensurethat an overdraft resolution plan is in place to resolve the Overdraft before the end of thecurrent fiscal year or before the award’s end date, whichever is sooner.

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3. Ensure that Principal Investigators or Fund Managers develop a written plan under whichOverdrafts larger than $25,000 or five percent of the Fund’s fiscal year budget, whicheveris more, will be eliminated within six months of approval of the written plan or before thefiscal year end, whichever is sooner. Any longer period for resolution of an Overdraftmust be approved by the appropriate Vice Chancellor or Dean and any rollover of anOverdraft to the next fiscal year must be approved by the Chief Financial Officer (seeProcedures below).

C. Responsibilities of Vice Chancellors and Deans

For the Organizations under their purview, the Vice Chancellors/Deans are responsible forensuring that:

1. Overdrafts are routinely monitored at the level of the Department Chairs and BusinessOfficers;

2. Written plans to resolve Overdrafts are prepared and submitted to the DepartmentChair/Designee and Vice Chancellor/Dean for review and approval when deficit balancesare larger than $25,000 or five percent of the funds fiscal year budget, whichever is more;and

3. Actions specified in approved overdraft resolution plans are realistic and effectivetowards timely resolution of the targeted Overdraft within the current fiscal year.

4. If any Overdraft cannot be resolved by fiscal year end, forward written requests to rollover deficits to the next fiscal year to the CFO through the Controller. All such requestsshall be submitted before March 31 and shall include justification for the roll over.

D. Responsibilities of the Controller

If an Overdraft occurs, the Controller is responsible for ensuring that prompt and finalresolution is effectively achieved. As such, the Controller’s duties include monitoring financialand budget data for Overdrafts to ensure that:

1. System support tools are providing timely information required to effectively report andremedy Overdrafts;

2. The Overdraft remediation process satisfies the University’s policy requirements and thesponsors’ terms and conditions when applicable;

3. There is support for the development of written action plans to discharge Overdraftswhen they are larger than $25,000 or five percent of the Fund’s fiscal year budget,whichever is more;

4. For Overdrafts that remain unresolved for more than 180 days or after March 31, theController shall partner with the appropriate Administrative Official(s) to ensure thatappropriate corrective actions are taken; and

5. The Controller shall also:

i. Review requests to roll over Overdrafts to the next fiscal year from Vice Chancellorsand/or Deans and make a recommendation for approval or disapproval to the CFO;and

ii. Ensure that this policy is maintained to incorporate current regulations and supportoperating requirements.

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VI. PROCEDURES

A. Timely Resolution and Roll Overs

i. Overdrafts typically must be resolved within the fiscal year, i.e., before June30th. Under extenuating circumstances and with the approval of the ChiefFinancial Officer (CFO), fund Overdrafts may be carried forward to the nextfiscal year if an authorized Overdraft resolution plan is in place and the unit is incompliance with the plan or if the unit is in compliance with the campusrecharge policy.

ii. All approved Overdraft resolution plans must be in place before the end of thethird quarter of the fiscal year in order to be carried forward to the next fiscalyear. All rollovers of Overdrafts to the next fiscal year must be formallysubmitted to the Controller for initial review and approved by the CFO.

iii. Requests and approvals to carry forward Overdrafts to the next fiscal year areexpected to be rare and will be approved only under exceptionalcircumstances. Approved Overdraft resolution plans should resolveoverspending by the end of the third quarter or for deficits remaining oraccumulating in the last quarter, by the fiscal year-end.

iv. Any Overdrafts remaining or accumulating in the last quarter of the fiscal yearmust be resolved by fiscal year end. Vice Chancellors will consolidate all suchfund Overdrafts and apply their available unrestricted funds to resolve thembefore fiscal year end.

v. If Overdrafts are not resolved within the department by fiscal year end, bydirection of the CFO, the Campus Budget Office will transfer funds and/orexpenses from unrestricted funds sources within the department/unit orcognizant Vice Chancellor area and will withhold future budget appropriationsfrom the Vice Chancellor to clear the Overdraft.

B. Recharge Activities

i. Recharge activities are operated on a no-gain/no-loss basis. Any surplus or deficitoccurring in any one year shall be corrected by timely management of expenses oradjustment of rates in the succeeding year to achieve a break-even balance at thesucceeding year end. Every effort should be made to ensure that year-end surplusesdo not exceed two months of the recharging unit's activity. The adjustment of rateswill generally be based on estimates since actual performance data for the year willnot be available prior to the development and publication of the succeeding year'srecharge rates. In exceptional cases when such an adjustment would create a severefluctuation in rates from one year to the next, achievement of a break-even balancecan be extended for a reasonable period beyond the succeeding year upon approvalby the local campus recharge review committee. The local campus recharge reviewcommittee may also approve the maintenance of surpluses in excess of two monthsof the recharging unit’s activity when appropriate.

C. Electronic Deficit Reporting System

i. An electronic deficit reporting system is available to help administrative officialsmeet their fund management responsibilities. It provides a view of currentoverdrafts by Vice Chancellor with drill-down capabilities for various levels ofaccounting and organizational hierarchies. Although the use of the report isdiscretionary, it is an effective report for monitoring current overdrafts. As such,Administrative Officials, Fund Managers, and Principal Investigators are urgedto make appropriate use of it. The deficit report can be accessed on Blink.

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VII. FORMS

None.

VIII. RELATED INFORMATION

A. Board of Regents Standing Order 100. Officers of the University

100.1 Designation and To Whom Responsible

100.4 Duties of the President of the University

B. Academic Personnel Manual

C. UCOP Accounting Manual, D-224-17, Delegation of Authority-Signature Authorization,Section II.B., Responsibility Attendant to Delegated Authority

D. UCOP Contract and Grant Manual

6-440 Responsibilities of the Principal Investigator

6-450 Responsibilities of Department Chair (or Equivalent Officers)

6-460 Responsibilities of Campus Controllers

E. UC San Diego Administrative Responsibilities Handbook

IX. FREQUENTLY ASKED QUESTIONS (FAQ’S)

See blink: Deficit Balance Analytics

X. REVISION HISTORY

2017-09-19 First revision regarding administrative actions and accountability for overdraft resolution..

2017-02-23 New Policy published.

Issue Date: 06/18/2018 Effective: 07/01/2018

Issuing Office: Vice Chancellor and Chief Financial Officer

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GUIDELINES ON MANAGEMENT OF CARRYFORWARD FUND BALANCES

1. SCOPE

These guidelines apply to all UC San Diego employees administering university resources, excluding Medical Center employees.

2. SUMMARY

UC San Diego receives financial support from a number of stakeholders and has an important stewardship responsibility to its students, patients, and donors, as well as federal and state granting agencies. Part of that stewardship involves ensuring to our stakeholders that the university is prudently managing their money.

UC San Diego has a disciplined approach to budgeting and financial management with strong oversight over its carryforward fund balance. The campus will build on its existing review process by providing guidance on carryforward balances defined by Days Fund Balance, which consider

units’ revenue volatility and expense profile, including whether it has responsibility for self‐funding its own capital and infrastructure needs.

3. DEFINITIONS

Carryforward balance (or carryforward funds) – The positive or negative balance of the operating budget of a unit at the close of the fiscal year.

Committed Obligations ‐ Obligated use of funds tied to specific and documented commitments for an identified organization or individual, and could be considered legally binding

Days Fund Balance (DFB) – proxy for Days Cash on Hand; calculated as June 30th Ending FundBalance ÷ (Annual Operating Expenses / 365)

Fund – A source of funding for an expenditure or transaction identified by a specific code used in the Integrated Financial Information System. For further detail, please see Fund Overview.

Operating budget – Annual operating budgets are completed in advance of each fiscal year, and represent approved projected revenues/sources and expenses over the course of a year.

Organization – A department or functional unit within a larger department identified by a specific Organization Code in the Integrated Financial Information System. For further detail, please see Organization Codes.

Planned Expenditures ‐ Tied to planned expenses for operating items/purposes or potential

future one‐time investments, but costs and timing are estimated.

Reserves – Operating reserves are liquid unrestricted assets that can be used to support operations in the event of an unanticipated loss of revenues or increase in expenses. Net balance generated in a given operating year where revenue exceeds operational expense for the intended purpose. Also, a specific fund category recognized in the accounting system, generally used by self-supporting and auxiliary activities.

Appendix C

Guidelines on Management of Carryforward Fund Balances

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4. GUIDELINES STATEMENT

These guidelines establish a baseline of financial resources to reasonably protect the university

against disruption in the event of unexpected revenue shortfalls or unanticipated expenditures,

while confirming to UC San Diego’s stakeholders that their resources are being used prudently.

Generally, for unrestricted carryforward fund balances, the following guidelines should be applied:

No more than 30 days, net of commitments, for administrative units on a fixed base budget and academic units with limited extra-mural support

30‐90 days, net of commitments, for administrative or auxiliary units with significant reliance on self-support or external revenues

30‐90 days, net of commitments, for clinical units with significant reliance on patient revenues

30‐180 days, net of commitments, for academic units with significant reliance on extra‐mural support and are expected to provide bridge funding to the investigators

Restricted funds such as Contract & Grant Funds, Endowment Funds, Loan Funds, Plant Funds and Private Gifts are excluded from this guidance as they are earmarked for specific purposes and are not generally available to support core operations.

For fund balances being set aside for specific future commitments, whether they are department

or faculty generated, units may be asked to identify obligations (for example: faculty start‐up

package, renovation, equipment, bridge funding for PIs, one‐time investments, etc) tied to these balances and classify future carryforward spending into one of two main categories: Committed Obligations or Planned Expenditures.

Possible outcomes may include requests to deploy and invest carryforward funds to:

match or cost‐share specific activities or programs,

advance high priority needs in lieu of a core funding allocation (full or partial), or

invest (spend‐down) funds within a specific time period or conversely direct units to slow

expenditures to build balances within a specific time period.

5. RESPONSIBILITIES A. Department Financial Personnel: Monitor fund balances and use at least quarterly for

adherence to these guidelines. Coordinate with Division and/or Vice Chancellor office to segregate and classify those funds with committed or planned expenditures tied to them for reporting and tracking.

B. Vice Chancellors and Deans: Review plans for expenditure in conjunction with financial

personnel and assist with adherence to these guidelines. Provide direction to departments regarding number of days balance that is appropriate within the range depending on unique and specialized circumstances of individual departments.

C. Campus Budget Office: Provide reporting and assist in review and problem resolution as

necessary for adherence to guidelines.

Guidelines on Management of Carryforward Fund Balances

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6. PROCEDURES A. Department financial personnel should access various standard reports that the Campus

Budget Office has created to assist units with overall funds management.

Each Vice Chancellor organization currently has access to a ‘Carryforward Balances’ report

by major fund group, available in 1‐year and 6‐year views. In addition, new reports will be made available for division/department organization views and will include Days Fund Balance ‐ DFB metric calculated as June 30th Ending Fund Balance ÷ (Annual Operating Expenses / 365)

B. Annual department and faculty budgets should include carryforward fund use plans. Budget

discussions will include a unit’s projection of anticipated carryforward balances, expected

cash‐flow from operations and planned one‐time investments. After close of each fiscal year, during the Fall quarter, units will be asked to report on actual

final fund balances as of June 30th and Divisions and/or Vice Chancellor offices will coordinate with the Campus Budget Office to segregate and classify those funds with committed or planned expenditures tied to them for reporting and tracking.

C. Training needs, questions, and issues of non-compliance should be referred to the Campus

Budget Office for assistance. Additional implementation information, templates, and Frequently Asked Questions (FAQs) may be provided via the Campus Budget Office at a later date.

7. RELATED INFORMATION

A. UCSD PPM 410‐05 Policy on Timely Expenditure of Endowment Payout and Expendable Gifts

B. UCSD PPM 300‐2 Funds Management/Overdraft Policy C. Regents Policy 5307: University of California Debt Policy – Debt Affordability Model

requirement of ≥ 60 days cash on hand for Medical Centers D. Overview of Self Supporting Activities – Information on Recharge Rate Review Committee

approval process for up to two months surplus balance and Procedures for establishing reserve funds for equipment renewal/replacement and differential income