Longwood University     Chief Administration and Finance Officer: Budget Office 201 High Street, Lancaster 336, Farmville, VA  23909            Phone: 434.395.2282       Fax: 434.395.2635

Policy 4201   
BUDGET DEFICITS

I.    PURPOSE

This policy is designed to avoid budget deficits, generally, and manage them if they occur.  

II.    POLICY

The University's policy is that all budgetary units must have a positive cash balance. Budget deficits are prohibited unless the deficit is authorized.

III.    DEFINITIONS

A. Unauthorized Cash Deficit: budgetary unit that is in deficit without authorization of the Budget Office for that deficit. The only authorized deficits are those that are created to facilitate the year end cash management plan for the University.

IV.    PROCEDURE

A.  Unauthorized Deficits: For all unauthorized deficits, the department will be asked to identify funds that will be used to eliminate the deficit. Funds can come only from other accounts that are approved for similar expenditures.

B.  Transfers:  Vice Presidents, Deans and Budget managers may transfer funds within or between budgets under their control, with the exception of salary lines or funds budgeted for a specific purpose.

C.  Year-end Deficits Policy: For any budgetary unit that has a deficit balance at the end of the fiscal year, the budget for the next fiscal year will be reduced by a corresponding amount.

D.  Notification: Notification of accounts with a deficit balance will be sent to appointed representatives monthly.

Revised and approved by the Board of Visitors, September 7, 2002.

Revised and approved by the Board of Visitors, December 10, 2005.

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