Carry Forward and Fund Balances
A brief description
February 2014
What is carry forward?
The purpose of the carry forward process is to enable activities to span multiple fiscal years.
When a commitment is made to fund a program or activity in one fiscal year, and that program
or activity cannot be completed during that fiscal year, carry forward allows the funds
designated to pay for that program or activity to ‘follow’ the program or activity.
This process requires that a purchase order, inter/intra-agency agreement or contract was
established, and the funds to fulfill that purchase order, inter/intra-agency agreement or
contract were encumbered. The amount that is ‘carried forward’ is the amount remaining on
the order/agreement/contract that is needed to complete the agreed upon activity.
It is important to note that this process has several steps to it, and involves both the Business
Office (for encumbering and executing) and System Office budget director (for funding and
planning).
What about fund balances that are the result of unspent dollars?
Divisions generally have fund balances that have not been spent or committed at the end of the
fiscal year. Divisions may request authorization to spend this fund balance in the following
year.
Exceptions include budget generated through other revenue (e.g. include Luoma Leadership
participant fees, construction fees, etc.), grants and most enterprise funds.
As a general rule, such requests are denied. In rare instances, divisions have been able to
demonstrate a compelling need to continue this fund balance into the next fiscal year, but such
permission requires a distinctly unique activity or special circumstance.
The process mirrors that of the prior year encumbrance process, but does not require
involvement by the Business Office.