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Inter-fund Loans
Revised: 10/09
FSS/PPS No. 03.01.05
Issue No. 3
Reviewer: Associate VP Financial Services
Effective Date: 11/10/96 (E4Y)
Review Date: 01/12
01. POLICY STATEMENTS
| 01.01 | The purpose of this PPS is to establish policies and procedures for the approval and annual status reporting of intra/inter-fund loans. |
| 01.02 | The administration of Texas State University-San Marcos utilizes intra/inter fund loans as a method to provide bridge financing for operations or capital improvement projects. All accounts should rely on regular sources of their own income, appropriations or regular allocations from specific capital funds as a primary and permanent source of financing. |
| 01.03 | Intra/inter-fund loans are permissible in certain circumstances in order to advance the strategic plan of the University and require i. An authorized Intra/inter-fund Loan Note, and ii. Approval of the Treasurer, Associate Vice President for Financial Services and the Vice President for Finance and Support Services. |
| 01.04 | Inter-fund loans of state-appropriated monies from the Educational & General (E&G) fund group are prohibited. |
| 01.05 | Intra-fund loans between bond funds e.g., Unexpended Plant-TSUS Series 2008 and Unexpended Plant-TSUS Series 2009 are generally prohibited and/or subject to bond counsel review. |
02. DEFINITIONS
| 02.01 | Intra/inter-fund loan: The movement of cash from one fund group (e.g., Designated) to another fund or fund group (e.g., Auxiliary) with a definite plan to repay the money within a specified, short-term (3 years or less) period of time. |
| 02.02 | Long-term intra/inter-fund loan: Covers a time period that is greater than 3 (three) years. |
| 02.03 | Transfer: A movement of cash that is intended to be permanent and recorded as a Non-Mandatory Transfer. |
| 02.04 | State appropriated - General Revenue (Fund 001) monies. |
03. PROCEDURES FOR APPROVING INTRA/INTER-FUND LOANS
| 03.01 | Long-term intra/inter-fund loans, covering a period greater than 3 years, are to be submitted to the Board of Regents as an agenda item for approval. The motion must clearly state the i. Recipient of the loan ii. Source of funding iii. Purpose for which the funds are to be expended and iv. Repayment terms. |
| 03.02 | Board of Regents' approval of a Capital Improvement Program (CIP) constitutes authorization to expend institutional funds up to 4% (four percent) of the project cost to hire a project A/E, develop documents and a detailed cost estimate. Funds expended may be reimbursed subject to a Board of Regent's reimbursement resolution related to subsequent release of external financing (e.g., TSUS revenue bond issuarnce). Refer to the Texas State University System (TSUS) Policies and Procedures Manual for Planning andConstruction. http://www.tsus.edu/publication/PolicyProManualFinalMay%202008.pdf |
| 03.03 | Intra/inter-fund loans may bear interest at a rate computed at the time of the loan and based on Texas State's total composite yield on its "Operating Fund Investment Pool" as of the most recent quarterly investment report. Interest will be calculated and recorded monthly. In certain strategic circumstances the Vice President may choose to waive interest. |
| 03.04 | A written agreement detailing the terms of the loan is required and must have the signed approval of the Treasurer, Associate Vice President for Financial Services and the Vice President for Finance and Support Services. A copy of each agreement is to be provided to the Associate Vice President for Financial Services, or designee, for record keeping purposes ( Attachment I). |
| 03.05 | In the event that an intra/inter-fund loan cannot be repaid by the end of the period specified in the loan agreement, a new loan agreement must be executed to extend the loan. Terms of the loan agreement may be evaluated and adjusted as appropriate. In the event that the cumulative period of any previous loans plus the agreed upon extension exceed 3 years, the new loan will be subject to the requirements of Section 03.01 concerning Board of Regent approval, regardless of the term of the extension. |
04. PROCEDURE FOR REVIEW AND DISCLOSURE AT FISCAL YEAR-END
| The following financial system transactions are recorded by Accounting and Budget staff when the loan is made: i. 'Inter-fund Loan Transfer Out' for the amount loaned (Accounting) ii. 'Inter-fund Loan Transfer In' for the amount borrowed (Accounting) iii. Funds Management document to adjust budgetary spending authority (Budget) | |
| 04.02
04.03 | The following financial system transactions are recorded by Accounting and Budget staff when the interest payments are made: i. 'inter-fund Interest Transfer Out' for the finance charge (Accounting) ii. 'Inter-fund Interest Transfer In' for the finance revenue (Accounting) iii. Funds Management document to adjust budgetary spending authority (Budget)
Cash transactions, including internal cash reimbursements between local bank accounts, are handled exclusively by the Treasurer (or designee). |
05. MAJOR RESPONSIBILITIES ASSOCIATED WITH THIS PPS
| Major responsibilities for routine assignments associated with this PPS include the following:
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06. CERTIFICATION OF STATEMENT
This FSS/PPS has been approved by the following individuals in their official capacities, and represents FSS policy and procedure from the date of this document until superseded.
Associate VP, Financial Services, Reviewer
Director, Accounting, Reviewer
Vice President for Finance and Support Services
| Approved: | ____________________________ Reviewer |
| Approved: | ____________________________ Reviewer |
| Approved: | ____________________________ Vice President for Finance and Support Services |