Chapter 2. Accounting Services
Section 2.2. Fund Principles

2.2.4. Expendable Restricted Fund

Expendable Restricted Fund: A fund maintained to account for all special programs financed by separate special-purpose state appropriations, income from endowment funds, federal contracts and grants and other gifts, grants, and contracts. In all cases, the use of the funds is restricted for specific purposes stated by the supporting agencies or donors except for any balance retained for working capital.

Most expendable restricted funds are in the nature of deposits by the donor or supporting agency with a responsibility on the part of the institution to carry out the specific provisions of the gift, grant, or contract. Accordingly, no revenue will be recognized until such obligation has been discharged by the appropriate disbursement. Revenues from billable contracts are to be recognized when expenditures are made.

1. Gifts

If only the income of the gift can be expended, the principal amount will be recorded in the Expendable Restricted Fund. Gifts and grants to be used only for student loans are to be recorded in the Student Loan Fund. Gifts and grants received for capital outlay purposes such as a new research facility or alumni gifts for special buildings are recorded directly in the Plant Fund.

2. Indirect Cost

The handling of restricted purpose contracts and grants requires the use of University facilities, utilities, and administrative services, and most such arrangements allow a charge to enable the University to recover these indirect costs. The charges to individual contracts to recover allowable indirect costs will be shown separately in the schedule of Expendable Restricted Funds. In the Statement of Current Funds Revenues, Expenditures, and Transfers, the amount of indirect cost recoveries earned will be shown as revenue of the General Fund and a reduction of reported revenues in the Expendable Restricted Fund.