Terminology



THE UNIVERSITY OF TENNESSEE SYSTEM
 ACCOUNTING AND BUDGET TERMINOLOGY

Budget Entity - the campuses and units of The University of Tennessee System are referred to as budget entities. 

Current Funds - funds available to the university for use in achieving any of its authorized institutional purposes.  These funds may be either:

a.     Unrestricted - funds which the university retains full control of their use, or

b.     Restricted - funds which are externally restricted and may be used only in accordance with the purposes established by the provider

There are three different categories of current funds used by The University of Tennessee System:

Educational and General - consists of all core functions of the university necessary to support the teaching, research, and public service missions of the university

Auxiliary Enterprises - self-supporting enterprises which furnish services to students, faculty, and staff.  Examples include housing, bookstores, food service, and UT Knoxville Men’s Athletics.

  Hospital - consists of all activities associated with the operations of a hospital

 

CURRENT FUND REVENUE SOURCES:

Tuition and Fees - funds collected from students for educational purposes

Appropriations - primarily funding received from the State of Tennessee to support current operations of the university.  Appropriations may also be received from the federal government and from local (city and county) governments.

Grants, and Contracts - funds received from governmental (federal, state, local) or non-governmental (private organizations or individuals) entities resulting from grants or contracts entered into to furnish goods or services

Sales and Services of Educational Activities - revenues from the sale of goods or services related to educational activities.  Examples include the sale of literary publications, testing services, the sale of agricultural products, and band and sports camps.

Investment Income – interest earnings derived from the investment of funds

Other Revenues - revenues not included in the above classifications.  Includes gifts from private organizations or individuals, income from endowments (funds which principal must be maintained inviolate but which interest income may be expended) not dedicated to a specific expenditure, miscellaneous rentals and sales, and conference revenues.

EDUCATIONAL AND GENERAL EXPENDITURES:

I.  Supporting Functions

Academic Support - funds expended to provide support for the university’s primary mission of instruction, research and public service; includes libraries, academic computing support, museums, and academic administration

Student Services - reflects expenditures which contribute to the welfare of students outside the context of the formal instruction program; includes student activities, intramural athletics, student-aid administration, admissions, and student health services

Institutional Support - costs associated with executive management, fiscal operations, personnel services, and administrative computing
Operation and Maintenance of Physical Plant - costs associated with the operation and maintenance of buildings and grounds, utilities, custodial services, and campus security

Scholarships and Fellowships - expenditures for aid to students in the form of monetary grants

II.  Transfers

Mandatory - transfers from the current fund to another fund group arising from a legal binding agreement.  The retirement of debt obligations for buildings is an example.

Non-mandatory - transfers from the current fund to another fund group made at the discretion of the university.  An example of a non-mandatory transfer is the set aside of funds for the replacement of equipment.

 

III.  Natural Classifications

Cost objects by expenditure category, e.g. salaries, fringe benefits, scholarships, fellowships, utilities, supplies, other services and depreciation.

 

UNRESTRICTED NET ASSETS

These funds have been designated or reserved for specific purposes such as working capital, revolving funds, encumbrances, unexpended gifts, and reappropriations.  In addition, a portion of these funds are maintained as unallocated funds at a level that falls within a certain percent range of total expenditures and transfers. 

Working capital - a measurement of liquid assets and includes such items as accounts receivable, petty cash, and inventories.

 Encumbrances – the reserving of funds for a specific purpose; most commonly used to set aside funds for purchases made in one fiscal year where the goods and/or services are not received until the next fiscal year.

 Revolving funds – a continuous fund used to support self-sustaining activities such as loan or trust funds, or service center activities like a telephone center operation.

 Unallocated – unallocated fund balance functions as the university’s “rainy day” fund.

 Reappropriations – the carry forward of unspent state appropriations from one fiscal year to the next.