Office of Procedures, Records, and Forms Business Policies and Procedures Manual

FINANCE
30.21
Revised 1-21

For more information contact:
   Controller’s Office
   509-335-2013
   Budget Office
   509-335-9681

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Overdrafts


Responsibility

Budget administrators are responsible for ensuring that total expenditures remain within budgeted amounts. If expenditures exceed budgeted amounts and/or actual revenue, budget administrators are responsible for promptly initiating procedures to clear overdrafts.

Each department chair is responsible for establishing internal departmental policy for resolving overdrafts. Departmental policy is to conform to University overdraft policies and procedures included in this section.

Prevention

Overdrafts can be prevented or minimized by careful account monitoring. See BPPM 30.07 for guidelines on how to use monitor account balances. See BPPM 85.33 for instructions on how to obtain access to online financial information.

Procedures

Differing overdraft procedures apply to various types of WSU accounts. Review the section below that applies to the account in question.

Core Fund Overdraft Functions

The following applies to core fund accounts. (Core fund accounts are the central dollars budgeted to departments, funds FD001, FD076, and FD080.)

The cost center administrator (usually a dean or their designee) has the responsibility of ensuring that the cost center hierarchy as a whole is not overdrawn.

A budget administrator (usually a chair) who is faced with a potential overdraft is responsible for consulting with their cost center administrator.

Clearing Overdrafts

The cost center administrator has at least two options for dealing with overdrawn accounts:

  • The budget administrator may transfer expenditures off of the account to another appropriate account with a sufficient balance.
      
  • The cost center administrator may reallocate funds from an appropriate account under their jurisdiction by submitting a Budget Amendment request in Workday. (See the applicable Workday Budgets reference guides for instructions.)
      
    NOTE: Both accounts must be within the same fund hierarchy. In most cases both accounts must be within the same function. Consult with the Budget Office before making transfers between functions. 

Plan and Timeline
The cost center administrator may work with the unit on a plan and timeline to clear the overdraft. The responsible dean and the Provost must approve of the plan and timeline prior to implementation.

The dean sends a copy of the approved plan and timeline to the Executive Director Budget, Planning, and Analysis.

Grant/Award Overdraft (Sponsored Accounts)

The following applies to sponsored programs in Workday functions FN017 and funds FD035, FD048, and FD085. 

Grant managers and principal investigators (PIs) are responsible for ensuring that expenditures on all award lines under an award header do not exceed the amount awarded by the sponsor at the time the award is closed. If an overdraft occurs (or is anticipated), the administrator must initiate an accounting adjustment in Workday to transfer expenditures to a nonsponsored cost center within 45 days of the award’s end date. (See the Workday Accounting Adjustment—Cost Transfer reference guide.)

Sponsored Programs Services (SPS) may transfer overdrafts that remain on awards more than 45 days past the award’s end-date to the applicable cost center hierarchy’s finance and administrative (F&A) recovery cost center in order to facilitate timely reporting and closure. Areas may choose to initiate further accounting adjustments to remove overdraft expenses to the appropriate cost center of their choice.

Conditions

Occasionally an award line is overdrawn because one of the following conditions exists (this list is not all inclusive):

  • Receipt of supplemental funding is imminent;
      
  • An accounting adjustment to clear an overdraft has already been initiated but not yet finalized;
      
  • An accounting adjustment to transfer a charge from one award line to another within the same award has been initiated but not yet finalized; or
      
  • An advance expenditure authorization or guarantee exists in Workday (see the Workday Create Sponsored Account reference guide).

When one of the above conditions occurs, the condition meets acceptable standards of internal controls and accountability if corrected:

  • Within 60 days of the end of the month in which the transaction took place; or
      
  • Within 45 days after the end of the award, whichever is sooner.

(NOTE: A sponsor’s deadline may require earlier correction.)

Classes of Sponsored Awards

Within the scope and context of this section, short-term overdrafts (up to 90 days) may occur in the following types of awards. SPS monitors the following classes of awards and issues overdraft notices to departmental personnel when appropriate:

  • Awards and award lines with open-ended termination dates, i.e., 12/31/2050
      
  • Awards for which there is additional funding imminent and award is pending in the MyResearch database
      
  • Awards supported by intermittent funding that increases allocation.
      
  • Awards in an award lifecycle status of Guarantee (Guarantee award when funding is pending)