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Business and Financial Policies and Procedures

Address a Self-Supporting Fund Deficit

Policy Statement 

The State Finance Act (30 ILCS 105/6d) mandates that self-supporting income not necessary for the support, maintenance, or development of that activity must be credited to the University Income Fund. Therefore, to avoid transfers of excess revenues to the Income Fund, units must ensure their self-supporting activities break even over time.

Funds that operate at a deficit are in effect borrowing from the University of Illinois System's pool of funds to help finance their operation. In addition, the Fiscal Control and Internal Auditing Act (30ILCS 10/) mandates standards of fiscal accountability. To ensure compliance, deficit reporting should be conducted pursuant to 1.4 University and System Offices Deficit Reporting. If the deficit is more than is allowed by the system or applicable university a plan to eliminate the deficit must be submitted.

Determine if you have a deficit fund balance in your self-supporting activity by following the procedures in Monitor a Self-Supporting Fund. For information on how to find your fund balance, consult Finding Your C-FOP Balance.


To address a self-supporting fund deficit:

  1. Determine the cause of the deficit by asking the following questions:
  • Have you recorded expenses unrelated to this activity in this fund?
  • Have you recorded expenses in the wrong fiscal year?
  • Have revenues intended for this fund been recorded elsewhere?
  • Have you recorded revenue earned but not collected?
  • Does the current deficit represent a low point in the normal annual business cycle?
  • Did the fund incur significant, one-time costs, such as major equipment purchases or start-up costs that will be recovered over multiple years?
  • Is there a multi-year trend that indicates the deficit is diminishing over time?
  1. If the deficit cannot be explained by any of the circumstances in Step 1, modify the rate to generate more revenue. If the rate cannot be modified because of competition or customer commitments, your unit must subsidize the operation by regularly transferring costs to a different fund source so that revenue generated from the operation will fully fund the remaining costs charged to the self-supporting fund.

Expenditures may not be made from or transferred to other self-supporting funds unrelated to the activity, nor may auxiliary activity expenditures (Fund Types 3J and 3M) be made from or transferred to state funds. If you are unsure what funds may be used to subsidize your activity, contact University Accounting and Financial Reporting (UAFR).

  1. If the deficit is more than is allowed by the system or applicable university, you must submit a business plan to recover the deficit to your college or administrative unit office.
  2. If the deficit is such that it will not be recovered within two or three years of normal operation, or cannot be otherwise subsidized, contact your university OBFS Budget Office for assistance.

Related Policies and Procedures

Monitor a Self-Supporting Fund
Establish and Monitor Rates for Goods and Services Sold to Customers
Address a Self-Supporting Fund Surplus
1 Fiscal Environment
1.4 University and System Office Deficit Reporting

Additional Resources

Self-Supporting Funds FAQs
Finding Your C-FOP Balance
Fiscal Control and Internal Auditing Act
State Finance Act (30 ILCS 105/6d)
Fiscal Control and Internal Auditing Act (30ILCS 10/)

Last Updated: September 2, 2022 | Approved: Senior Associate Vice President for Business and Finance | Effective: January 2013

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