Lapsing Policy for Fiscal Year End Balances

Purpose

The goal of this policy is to promote strategic spending for priority needs and to give Dean/Vice President (VP) offices more control and responsibility. Each Dean or VP office may decide to institute a college or Vice President-specific lapsing policy. 

Intended Audience

Business officers in Dean or Vice President's offices that manage accounts.

Abbreviations & Terms

• AUF: Available University Fund
• E&G: Educational & General
• ARP: Advanced Research Program
• ATP: Advanced Technology Program
• TEC: Texas Education Code
• THECB: Texas Higher Education Coordinating Board
• Account Free Balances: Funds left in an account after accounting for current year activities.

Previous Policy

Starting with the fiscal year ending August 31, 2009, institutional lapsing will no longer occur. 

Previously, any remaining balances at the end of the fiscal year were cleared for the following types of accounts: 

• E&G accounts (14 and 20), with some exceptions.
• Centrally funded non-E&G accounts (19, 29 and 30), except for flat-rate funded accounts.
• Plant funds (36 accounts), following specific policies. 

This change means balances in these accounts will now carry over instead of being reset. 

New Policy

E&G

• All E&G (including AUF) account balances will carry over into the sub-account where the balance remained. 

Exceptions

The following exceptions ensure certain balances and grants are handled according to their specific requirements. 

1. Instructional and Instructional Reserve sub-accounts: These balances will transfer to the Dean’s Excellence account for each Dean’s office.
2. ARP/ATP accounts (14-97xx-xx): These accounts will still follow the policies and guidelines set by the Texas Education Code (TEC) and the Texas Higher Education Coordinating Board (THECB), which determine expiration dates, conditions, and restrictions.
3. Special Research Grants: Managed by the Vice President for Research, these will keep their existing lapsing rules.

Non-E&G

• All non-E&G account free balances  will carry over to either the income sub-account or the expenditure account where the balance remained, based on the chosen rule for carrying balances forward. Departments can select which rule applies to each non-E&G budget group. 

Unexpended Plant Project Accounts

• All unused balances in 36-Account Unexpended Plant project accounts will carry over to the sub-account in which the balance ended. Once the project is ready to close, any remaining funds will be returned to the original funding source.
  • Exception: Some construction projects cannot use state funds (14 fund group) due to legal restrictions. If funds were exchanged to avoid using state funding, returning the funds may be complicated. These transactions will be managed manually by the Budget Office and must meet a minimum threshold of $1,000.