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Fund Groups Used at U of T

The accounts of the University are maintained in accordance with the principles of fund accounting in order that limitations and restrictions placed on the use of available resources may be observed. Under fund accounting, resources for various purposes are classified for accounting and reporting purposes into fund groups in accordance with specified activities or objectives.

This section provides a general description of what comprises each fund group and the major sources of revenues and expenses.

The University manages using four fund groups:

Operating Fund

Ancillary Operations

Capital Fund

Restricted Funds

 

Operating Fund

The operating fund includes teaching and administrative activities supported mainly by government operating grants, student fees and sales of supplies and services. This is a single fund allocated to the various faculties and divisions through the University’s budgeting process.

The operating fund includes all the day-to-day activities of a department that are not included in ancillary operations, the capital fund or restricted funds.

With the exception of conference activity, all divisional operating fund financial activity is recorded in fund center accounts set up in FIS and tracked on a fiscal year basis. Given the nature of conference activity (i.e. it can span multiple fiscal years) the financial activity is recorded in a fund account set up in FIS. Refer to the Financial Information System (FIS) section on Funds Management in this guide for more information on the use of fund centers and funds.

Major Sources of Funds: Revenues

  • Government operating grant *
  • Tuition fees *
  • Overhead recoveries from research grants and contracts *
  • Miscellaneous revenues generated from departmental activities;
  • Investment income.

* Note that departments do not normally receive these sources of revenue directly; these sources of funds are allocated through the budget process.

Application of Funds: Expenses

  • Ongoing costs of departmental operations: salaries, supplies, equipment, minor renovations;
  • Salaries and benefits, which comprise over 76% of operating costs;

Significant Policies/Guidelines

Ancillary Operations

Ancillary operations fund group include residences, food and beverage services, parking, Hart House, Real Estate Division and U of T Press. All ancillary assets, liabilities, net assets, revenues and expenses are recorded in this fund.

All financial activity of ancillary operations, with the exception of UofT Press, is recorded in fund center accounts set up in FIS and is tracked on a fiscal year basis. Refer to the Financial Information System (FIS) section on Funds Management for more information on the use of Fund Centers and Funds.

Major Sources of Funds: Revenues

  • User fees (i.e. residence or parking fees)
  • Sale of products

Application of funds: Expenses
To provide the following services:

  • Student residences
  • Food and beverage services
  • Parking
  • Hart House
  • University of Toronto Press

Significant Policies/Guidelines

  • Fiscal policies for ancillary operations, the most significant of which is responsibility for indirect as well as direct costs of operation. Refer to Ancillary Operations in the Budgeting section for an overview of approval processes for ancillary operations.
  • Guide to Financial Management

 

 

Capital Fund

The capital fund is typically used to manage major construction over $2 million and renovations over $500,000. From an external reporting perspective, the capital fund is used to record and manage financial activity relating to all U of T capital assets – land, buildings, furnishings, computers, etc.

The capital fund has characteristics of both of a single fund and a number of funds:

  • It is governed by a single set of restrictions – the University’s Policy on Capital Planning and Capital Projects.
  • Donations and grants may be received for specific projects and, therefore, each capital project is accounted for as a separate fund.

Capital fund financial activity is recorded in FIS using fund accounts. Refer to the Financial Information System (FIS) section on Funds Management for more information on the use of fund centers and funds.

Major Sources of Funds: Revenues

  • Capital grants from government
  • Donations
  • Transfer of funds from departments

Application of funds: Expenses

  • Capital construction and major renovations
  • Interim financing costs

Significant Policies/Guidelines

 

 

Restricted Funds

The restricted funds fund group is used to report on and manage monies received by the University which have specific restrictions regarding the intended use. These monies include donations (including endowments), research grants and contracts. Each restricted fund source will usually be supported by a written agreement between the University and the donor, granting agency, etc. and is managed in accordance with the agreement.

Restricted funds financial activity is recorded in FIS using fund accounts. Refer to the Financial Information System (FIS) section in Funds Management for more information on the use of funds.

Major Sources of Funds: Revenues

  • Awards: grants, contracts, contribution agreements
  • Donations
  • Investment income

Application of funds: Expenses

  • Specific projects, the majority of which are research projects
  • Student aid

Significant Policies/Guidelines

  • The specific terms and conditions associated with each fund as set out by the external funding sources.
  • Guidelines for restricted funds can found in the following GTFM sections:

For more information on how the U of T’s Financial Information System (FIS) is used to support the management using the four fund types described above, refer to the section Introduction to FIS.

Last revision August 2007