Policy on Use of University Funds

Policy Number: 305

Business and Financial Affairs

The permanent link for this policy is: https://policies.northeastern.edu/policy305/

I. Purpose and Scope

The purpose of this policy is to establish standards for the use and monitoring of university funds. Funds must be spent in accordance with university policy and procedures and must be used solely for university business purposes.
This policy also reflects Northeastern’s commitment to compliance with applicable regulations, including cost principles, and provides guidance for the appropriate budgeting and expenditure of costs on sponsored projects.
This policy applies to faculty, staff and others who have oversight of, access to and/or use university funds.

II. Definitions

For purposes of this policy:

Deficit occurs when expenses exceed the authorized budget or available funding.

Fund Administrators in charge of oversight of the Fund include, but are not limited to, the College Dean, Associate Dean of Administration & Finance, Department and Program Administrators of the College and Student Financial Services.

Funds available for use by the university include, but are not limited to, operating and designated funds, sponsored research funds, restricted and endowment funds, loan funds and capital/plant funds.

Reconciliation means the process of comparing information that exists in two systems or locations, analyzing differences and making corrections so that the information is accurate, complete and consistent in both locations.

Restriction refers to the mandatory use of a gift required by a donor. A restriction is considered to be legally binding and cannot be changed without the consent of the donor, the Board of Trustees where terms allow, the State Attorney General, and/or by court order.

Restricted Fund refers to a fund available to the University that is to be used for a specific purpose as described by the fund terms. These terms are defined by the donor at the time of the fund’s creation.

III. Policy

University funds must be spent in accordance with university policy and procedures, applicable laws and regulations and/or donor intentions and restrictions. Only those persons with authorization or permission may spend university funds.

Budgeting provides a mechanism for the university to manage and align its strategic goals and objectives with financial resources. Employees with budgetary responsibility are expected to monitor revenues and expenses, conduct reconciliations, and conform their budgets with approved budget plans.

Employees with spending authority are expected to review and reconcile budgets on a periodic and timely basis (no less than quarterly; monthly is strongly encouraged) to verify that all revenues and expenses charged to the accounts are authorized, accurate, properly documented and appropriate. It is expected that deficits will be addressed and funded throughout the year with final resolution no later than the close of the fiscal year. Departments are responsible for covering all deficit balance for all fund types within the department.

Unit heads are responsible for making adjustments in their budgets so that account balances will cover remaining expenses and encumbrances for the fiscal year. Unit heads and others with budgetary responsibility and/or spending authority are expected to properly monitor budgets and other resources under their control. Unit heads remain accountable for funds within their units even if they have delegated budget and accounting responsibility to others.

Transactions recorded in restricted funds must conform to the terms set forth in the supporting documentation and funds must be appropriately stewarded. The University Advancement Department, the Controller’s Office, Fund Administrators, and other stakeholders of restricted funds are deemed responsible parties for ensuring restricted funds are used in accordance with the fund terms and restrictions as well as university policies and procedures. Please refer to the Related Procedures section for more information.

Faculty discretionary funds are institutional funds available to enhance university teaching, scholarly or service capabilities. These funds include, but are not limited to, start-up funding supplied to new faculty; research support funds allocated by colleges and/or departments to continuing faculty; research or instructional grants made from institutional sources; and overhead return funds. Equipment or materials purchased with these funds are the property of the university and will remain within the university if a faculty member separates from the university.

Violators of this policy may be subject to appropriate disciplinary action up to and including termination, including for cause.

Additionally, a person who uses funds in violation of this policy or other applicable university procedure will be obligated to repay such funds to the university.