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Business and Financial Policies and Procedures

Avoiding Problems with Your Self-Supporting Fund

Perform Monthly Reconciliations

Financial activity recorded in a self-supporting fund must be reconciled regularly to ensure the Banner record accurately reflects the activity's financial position, and that its financial position is sound. Consult Monitor a Self-Supporting Fund for a list of tasks.

Reduce the Occurrence of Rogue (Misclassified) C-FOAPALs

  • Submit a Banner Fund, Program, and Index Code Request form to:
    • Assign default Organization and Program codes to unit self-supporting funds, to automatically populate them when keying the Fund code number into Banner forms.
    • Establish an Index code with no overrides for the C-FOP to populate Chart, Fund, Organization, and Program codes, when keying the Index code into Banner forms.
  • Create a reference list of valid C-FOPAL strings used by your unit. Maintain the list centrally and update it regularly.
  • Use the Banner Journal Voucher Quick Form (FGAJVCQ) because it displays segment code descriptions to verify that the intended codes are actually keyed. Neither the Journal Voucher Entry Form (FGAJVCD) nor the Journal Voucher Mass Entry Form (FGAJVCM) display these descriptions.
  • When you enter C-FOAPAL strings into Banner forms, verify that the first three digits of the Program code belonging to the self-supporting fund match the first three digits of the Organization code.
  • When charging other units for goods or services, key the transactions yourself rather than relying on the other units to post them. This provides greater control to ensure correct C-FOAPALs are used.
  • Create internal procedures to verify correct input and submission of Banner transactions, such as saving documents "In Process" for review and submission by another party.

Avoid Excess Funds

In addition to the steps in Avoid a Build-up of Excess Cash Balances, follow these best practices:

  • Refer to Excess Cash Balance Computation to understand how excess funds are computed so you can eliminate them before year-end.
  • Ensure that only revenue earned in the current year is recorded as revenue, and any receipts or receivables not earned until the following year are recorded as deferred income.
  • Ensure that all expenses related to revenue in the current year are recorded in the current year, and any disbursements or payables related to the following year are recorded as prepaid.
  • Include salaries and wages of individuals involved in the activity.
  • Review rates regularly as outlined in Establish and Monitor Rates for Goods and Services Sold to Customers.
  • Report all payables, accrued expenses, prepaid expenses, and deferred income as required in Report on Self-Supporting Activities in the Year-End Fact Sheet.

Monitor Unencumbered Fund Balances

Periodically review the unencumbered balance, taking into account expected revenues and expenditures not encumbered. This helps anticipate whether a fund is likely to have a future surplus or deficit. To ensure the integrity of encumbrance balances, consult Reconcile General Ledger (GL) and Operating Ledger (OL) Balances and Reconcile Encumbrance Balances.

The unencumbered fund balance is determined by subtracting the amounts in the self-supporting fund encumbrance control (88nnn) and commitment control (89nnn) account codes from its fund balance. The encumbrance control includes amounts you are legally required to pay (obligations). Examples of obligations include:

  • Purchase orders with vendors, added to Banner whenever a purchase order is created.
  • Amounts due to employees in future pay periods, added to Banner when appointments are added to the Banner payroll system.
  • Other required future payments, which are referred to as general encumbrances that you must manually add to Banner.

The commitment control includes any amounts related to a purchase requisition. Since commitments, unlike purchase orders, have not been issued to an external vendor, they are not legal obligations for future payments.

Collect and Report Sales Tax on Taxable Sales

Follow the steps outlined in Collect and Report Sales and Use Tax. Consult Section 18.6, Sales and Use Tax/Goods and Services Tax for additional information.

Determine if a Self-Supporting Activity Generates Unrelated Business Income

Follow the steps outlined in Report Unrelated Business Income (UBI). Consult Section 18.13, Unrelated Business Income Tax (UBIT) for additional information.

Maintain Accurate Banner Financial Manager Information

The Banner Financial Manager field identifies individuals responsible for managing each Fund, Organization, and Program segment. Keep this information current so that other units who need to contact you regarding rogue C-FOAPALs, departmental statements, or other financial questions can do so. OBFS uses Financial Manager information to contact units regarding their self-supporting activities, such as the annual requirement to complete year-end Fact Sheets. To update the Financial Manager, send an email request with the Banner chart and fund code and the new Financial Manager to cfoapalmaintenance@uillinois.edu.

Avoid the Misuse of Self-Supporting Funds

Ensure that revenue from self-supporting funds is used only to support, maintain, and develop the self-supporting activity that generated the revenue. Therefore, you may only expend this revenue in support of the revenue generating activity. It cannot be used for discretionary purposes. Consult Determine the Need for a Self-Supporting Fund.

Last Updated: August 2, 2016 | Approved: Senior Associate Vice President for Business and Finance | Effective: January 2013

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