5.2 Budget Planning

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This online version is for convenience; the official version of this policy is housed in the University Secretariat. In case of discrepancy between the online version and the official version held by the Secretariat, the official version shall prevail.

Approving Authority: Board of Governors

Original Approval Date: February 28, 1995

Date of Most Recent Review/Revision: June 1, 2023

Office of Accountability: Vice-President: Finance and Administration

Administrative Responsibility: Financial Resources

1.00 Purpose

1.01 The University’s Board of Governors has the authority to establish the annual budgets of the University and approve the commitment of resources to support the University’s strategic objectives. Through the annual budget development process, and with consideration of internal and external factors, the budget context and principles are set each year. The purpose of this policy is to articulate the fiscal objective of consistent, annual contributions from operating and ancillary fund budgets to support investments in capital assets, facilities renewal, and to support a strong balance in the University’s internally restricted net assets.

1.02 The policy is established to support the University’s achievement of Financial Sustainability.

2.00 Definitions

2.01 Capital Asset: A capital asset is any asset which has been acquired, constructed or developed with the intention of being used on a continuous basis, with a useful life longer than a year, and is not intended for sale in the ordinary course of business. Capital assets include Capital Projects. They also include other types of assets which are not covered in this policy including but not limited to: movable assets, research equipment, library books, land, etc.

2.02 Facilities Renewal: Also referred to as deferred maintenance, is capital expenditures that are required to maintain University Facilities’ functionality over their useful life.

2.03 Financial Sustainability: the ability of an organization to sustain itself over the long term so that it is able to continue to support its mission; the balance between the revenues available to institutions to support their academic activities and the expenses they incur in delivering their mission.

2.04 Internally Restricted Net Assets: are those assets (net of liabilities) that the Board of Governors has designated for certain purposes and do not have any external restrictions imposed on them. Such amounts include, but are not limited to, sinking fund contributions, capital reserves, and carryforward of unspent amounts.

2.05 Operating Fund: The operating fund includes tuition, grant and other typically unrestricted revenue, covers the core academic and administrative operations of the university, investments in new programs and services, and resources required to maintain current operations.

2.06 Ancillary Fund: The ancillary fund includes the revenues and expenses associated with services, materials and activities that distinct from academic programming and are not support by operating grants or tuition fees.

3.00 Jurisdiction/Scope

3.01 This policy applies to all aspects of financial planning and budgeting across the university, including but not limited to operating fund and ancillary fund budgeting.

4.00 Policy

4.01 The University’s fiscal policy is a surplus operating fund budget where total cash revenues are to exceed total cash expenses. Surplus revenues exceeding budget will be used to strengthen University reserves to support financial sustainability (through strong balance sheet performance), provide risk mitigation for future fiscal challenges, and provide a source of funding for capital projects and facilities renewal requirements.

4.02 The University’s fiscal policy is a surplus ancillary fund budget where total cash revenues are to exceed total cash expenses. For purposes of clarity, the aggregate of all ancillary budgets are to be at a surplus on a cash basis recognizing that individual budgets may not be in a balanced position from time to time. Appropriations to the operating fund and to the capital fund are permissible whereas the reverse is not.

4.03 Notwithstanding parts 4.01 and 4.02, should an operating fund or aggregate of all ancillary funds deficit occur as a result of extraordinary circumstances, any draws from reserves to address such deficits must be replenished either in the following fiscal year, or over a multiple-year period, subject to a plan submitted by administration that has been approved by the Board of Governors.

4.04 Operating fund or ancillary fund budgets that are developed with a planned deficit for a fiscal year must be accompanied by a multi-year plan to return to surplus position as well as replenishment of any draw from reserves and approved by the Board of Governors.

Related Policies, Procedures and Documents

5.16 Risk Management Policy
4.15 Capital Budgeting Policy
4.16 Capital Debt Policy