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Inter-fund Loans
Revised: 06/08
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 status reporting of inter-fund loans. |
| 01.02 | The administration of Texas State University-San Marcos discourages the use of inter-fund loans as a method of financing 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 source of financing. |
| 01.03 | Inter-fund loans are, however, permissible in certain circumstances. |
| 01.04 | This policy does not apply to intra-fund (i.e., same fund group) loans. |
| 01.05 | Inter-fund loans of state-appropriated monies from the Educational & General (E&G) fund group are prohibited. |
02. DEFINITIONS
| 02.01 | Inter-fund loans - The movement of cash from one fund group (e.g., Designated) to another fund group (e.g., Auxiliary). |
| 02.02 | Long-term loans - Covering a time period that crosses from one fiscal year to the next. |
| 02.03 | State appropriated - General Revenue (Fund 001) monies. |
03. PROCEDURES FOR APPROVING INTER-FUND LOANS
| 03.01 | Long-term inter-fund loans are to be submitted to the Board of Regents as an agenda item for approval. The motion must clearly state the recipient of the loan, the source of funding, the purpose for which the funds are to be expended and the repayment terms. |
| 03.02 | Long-term inter-fund loans will bear interest at a rate computed at the time of the loan and based on Texas State's total composite yield on its investment as of the most recent quarterly investment report. |
04. PROCEDURE FOR REVIEW AND DISCLOSURE AT FISCAL YEAR-END
| 04.01 | Prior to closing the fiscal year-end, the Director of Accounting shall review with the Associate VP Financial Services the status of any inter-fund loans. Generally, all inter-fund loans should be repaid before the fiscal year is closed. |
| 04.02 | The annual status of all inter-fund loans will be disclosed in the University's annual financial report in the Notes to the Financial Statements. The status report will include the principal amount repaid during the year as well as the amount of interest paid. The report will also include the principal balance remaining to be paid. |
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 |