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Executive Policy 8.210 Executive Policy 8.210



Title

Systemwide Financial Reserves

Header

Executive Policy Chapter 8, Business and Finance
Executive Policy EP 8.210, Systemwide Financial Reserves
Effective Date:  November 2014
Prior Dates Amended:  July 2014
Responsible Office: Vice President of Budget and Finance/Chief Financial Officer
Governing Board of Regents Policy:  RP 8.203  Operating Reserves; Non-General Funds
Review Date:  August 2018

I. Purpose

In November 2013, Board of Regents (BOR) Policy 8.203 was amended to establish system-wide operating reserves from non-general fund revenues. The policy recommends maintaining reserves sufficient to provide for continued operations for two months (16 percent).  The execution and implementation of the reserve policy was delegated to the University President in consultation with the Chief Financial Officer. The policy further instructs that the development of the biennium budget shall include consideration of unrestricted non-general funds.

II. Definitions

For the purposes of this Executive policy, “unit” is defined as the major program budget units, including Mānoa (UOH 100, 110 & 881), Hilo (UOH 210 & 220), West O‘ahu (UOH 700), the Community Colleges (UOH 800), and Systemwide Support (UOH 900).

III. Executive Policy

A.    Each unit shall maintain minimum operating reserves from non-general funds in each fiscal year, as follows:

    1.     A minimum of five percent in unencumbered cash from all tuition and fee funds, including regular session tuition, summer session tuition, outreach program tuition, and fee revenues, to be calculated based upon recurring expenditures from those funds and general funds in the previous fiscal year; and

    2.    A minimum of five percent in unencumbered cash from all other special and revolving funds, to be calculated based upon recurring expenditures from those funds in the previous fiscal year, and in addition to reserves for bond system projects required by bond resolutions or university policies.


B.    If a unit cannot achieve these minimum operating reserves, the applicable Chancellor or Vice President shall develop a plan to attain a minimum operating reserve as part of their biennium budget request.

C.    If a unit has operating reserves greater than 16 percent, the Chancellor or Vice President shall justify the need for such additional reserves as part of their biennium budget request.  Any reserves greater than 16 percent that lack such justification may be subject to reallocation by the President, in consultation with the BOR.

D.    The status of operating reserves shall be reported quarterly to the BOR for tuition and fee funds, and annually at a minimum for other special and revolving funds.

IV. Delegation of Authority

Authority for execution of this policy is delegated to the respective Chancellors or Vice President with responsibility for implementation of their respective annual operating budgets.

V. Contact Information

Howard Todo, Vice President of Budget and Finance/Chief Financial Officer
htodo@hawaii.edu  808-956-8903

VI. References

    A. Board of Regents Minutes of November 2013 Meeting (pp.6-7,11-12) related to Adoption of BOR Policy 8.203 on Operating Reserves; Non-General Funds. http://www.hawaii.edu/offices/bor/regular/minute/201311210000.regular.pdf

VII. Exhibits and Appendices

    A. Link to superseded Executive Policies in old format https://www.hawaii.edu/policy/archives/ep/
    B. Link to Administrative Procedures in old format https://www.hawaii.edu/policy/archives/apm/sysap.php

Approved

    Signed    
    David Lassner    
    November 26, 2014    
    Date    
    signedPresident

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