Use of Discretionary Account Balances

Date: April 30, 2025
Number: 1.511
Status: Final

Contact Office:
Controller
Box 800796
Charlottesville, VA 22908
Phone: 434-924-8412
Fax: 434-924-8173

Oversight Executive:
Chief Operating Officer
PO Box 800793
Charlottesville, VA 22908
Phone: 434-297-7492
Fax: 434-982-0874

Applies to:
All funds available to departments and centers which report to the Dean (or designee) (hereafter referred to as “unit”) within the School of Medicine.

Reason for Policy:
The Rector and Visitors of the University of Virginia control and have fiscal oversight for all funds held at the University. University funds do not belong to any individual, regardless of the source of the funding or restrictions placed on a gift, grant or any other account, and therefore, all expenditures are subject to an approval process.

This policy outlines the responsibilities of the unit within the School of Medicine where these fund balances are held.

Policy Statement:
Department chairs and center directors have discretion over the utilization of unit fund balances with consideration for documented fund restrictions. Units are expected to develop internal procedures for administering and overseeing unit fund balances and the approval of commitments made against them. These procedures should address the appropriate recording and monitoring of commitments and ensure that the unit has adequate projected cash flows to fulfill these commitments in the current and future fiscal years. The department chair or center director may delegate approval authority to the division chief(s) or the unit administrator, however, the delegated authority cannot make an allocation or commitment of funds for their benefit without chair approval.

Delegated authority includes appropriate stewardship of these funds. Units are expected to adhere to the School of Medicine standards for fund utilization – the most restrictive funds should be used first and in accordance with sponsor and donor requirements. Adhering to this standard ensures sponsored funds and donor gift funds are spent within the specified timeframe and within the specified intent or vision of the sponsor or donor, allowing for impact reporting that meets the expectations of the sponsor and donor.

Units are responsible for ensuring that donor funds are utilized in a timely manner and in accordance with donor restriction language. The use of restricted donor funds must be in accordance with the language and intent of the gift agreement. If there are discrepancies between this policy and a gift agreement, the language of the gift agreement shall rule. Should donor language be in question, units should coordinate with Health System Development to navigate these restrictions.

To ensure appropriate stewardship of University resources and validity of School of Medicine financial reporting, units are responsible for ensuring that fund balances at the department/center and Gift/Designated level are maintained in accordance with University policy FIN-033 Maintaining Fund Balances.

Definition of Terms:
Fund balance: A school’s or unit’s available cumulative net position, inclusive of operating surplus/deficit and any carryforward. Fund balances appear in the general ledger and may also be referred to as “Expendable Fund Balances.”

Next Scheduled Review: May 2028

Revision History: Implemented 7/25/12; administrative updates 2/25/15; 4/30/25

Approved:
Melina Kibbe, MD
Dean