| Policy Title | Cash Reserve and Deficit Policy |
|---|---|
| Responsible Office | Business Affairs |
| Policy Type | Business Affairs |
| Policy Number | 226 |
| Last Revision Date | 2/13/2026 |
This policy applies to IFR, DIFR-IFR and SUTRA funds. (DIFR funds are excluded).
Summary
Maintaining adequate reserves is essential to establishing financial stability. The level of current unrestricted net assets is reviewed by the Middle States Commission on Accreditation as part of the fiscal component of the accreditation process. However, while it is critical that a campus maintain adequate fund balances to ensure the long-term viability of the campus and the sustainability of the programs it provides, maintaining excessive reserves for future needs without having a specific plan for those funds does not optimize university resources, can damage an organization’s reputation, and makes it difficult for campus and SUNY to advocate for additional funding and/or make a strong argument that the University cannot sustain cuts to State financial support.
Within campus, the ability to generate reserves varies, making the application of a blanket reserve policy challenging. However, the reserve policy outlined below is based on a comprehensive review of SUNY policy and guidelines, policies and procedures from other educational and business sources including NACUBO (National Association of College and University Business Officers) and GFOA (Government Financial Officers Association).
Reserves – Establishment
Unit reserves may be established for:
- Equipment Replacement and Repairs
- Facilities Rehabilitation and Renovation
- Scholarships
- Program Initiatives
- Research
Development of Reserve Plans
A plan for the establishment and management of reserves must be completed, maintained, and shared with the Central Budget Office annually. (This plan may be submitted to System Administration on demand, considered as part of annual budget development and SUNY’s Campus Financial Management Strategy process.)
Reserve Plans must be developed to include the following:
- A detailed description of the project, initiative, or items for which the reserve is being established and the relationship to the campus strategic plan and the reimbursable program.
- The current and desired estimated value of the reserve
- The anticipated periodic payments to be committed to the reserve, if any.
- A disbursement plan, with timeline, describing when and how the expenditures will be made from the reserve fund.
The Campus Budget Office will monitor actual activity in reserve compared to plan and review related results with the CFO after which units will be asked to explain large discrepancies in the actual versus planned amounts.
Excess Reserves
Any unit with reserves in excess of approved plans at the end of the fiscal year (June 30) is subject to a central campus charge up to the excess and must submit a plan for approval to the Central Budget Office to reduce the reserve. The excess reserve will be deposited into a University-wide pool to fund investment in the campus Strategic Plan.
Deficits
Unit IFR/SUTRA fund balances (the total of all accounts) must have a positive cash balance at all times. IFR and SUTRA accounts should generate revenue sufficient to cover costs incurred and be managed to a positive cash position. Many of these accounts generate revenue through contracts and other entities. In some cases, these contracts require an initial outlay of funds before reimbursement can be requested. For these and other accounts with like circumstances where revenue follows expenditures, an accrual basis can be used to assure a break-even status at fiscal year-end.
Any accounts with cash deficit balances should be structured to correct the negative cash conditions through the rate process, revenue and expenditure projections or allocation decisions within the following fiscal year. If a deficit is of a size that prohibits a solution through the traditional budgeting techniques, vice presidential area representatives must identify other resources that can be appropriately used to resolve the deficit. Other resources may include the VP area's state carry-forward surplus. If there is no carry-forward surplus or the surplus is insufficient, then the Division, as part of the annual budget process, may submit a request for state allocation for the following fiscal year to cover the shortfall.
Deficits must be resolved in one year. The only exception to this policy concerns the management of campus chargebacks whose rates are reviewed every two years. If a deficit develops in such an account, the elimination of that deficit must be addressed as part of the next rate development exercise. The revised chargeback rate in those accounts should be established to eliminate the existing deficit and prevent the development of a new deficit.
| Date | Description | Responsible Party |
| 2/13/2026 | Approved by Senior Officers Group on 2/11/2026. | Senior Associate Vice President for Budget and Business Affairs |