University Policy
Title
University of North Carolina at Chapel Hill Policy on Year End Balances for Core Research Facilities
Introduction
Purpose
This policy establishes requirements for the financial oversight and sustainability of research Core Facilities at the University of North Carolina at Chapel Hill (“University” or “UNC-Chapel Hill”). Core Facilities may experience significant or long-term financial deficits, which create operational and budgetary challenges for the units responsible for them.
The policy addresses these challenges by setting clear criteria for allowable year-end deficits, defining when administering units must develop financial sustainability plans, and outlining the conditions under which units are not required to cover a core facility’s year-end deficit. This framework supports responsible financial management and promotes the long-term viability of core facilities across the university.
Scope
This policy applies to all departments, schools, centers, and units that administer or financially support research core facilities at UNC-Chapel Hill.
Policy
Policy Statement
Research Core Facilities play an essential role in supporting the University’s research mission. To ensure these facilities remain financially stable and accessible, units that administer core facilities are responsible for monitoring financial performance and addressing deficits when they occur.
Administering units are required to develop a strategic financial sustainability plan when a core facility maintains a Large or Long-Term Deficit. These plans must include:
- Defined additional department funds to cover the remainder or an off-cycle review to include the new deficit
- Any plans to streamline the core for reduced expenses;
- A realistic budget aligned with anticipated revenues and expenses;
- Appropriate rate-setting practices;
- Projections of user demand; and
- A timeline for reducing the existing deficit
At fiscal year close, an administering unit will not be required to cover a Core Facility’s deficit if any of the following conditions are met:
- The Core Facility’s year-end deficit does not exceed 10 percent of its annual expenses, which constitutes the maximum allowable negative carryforward.
- If the deficit exceeds 10 percent of its annual expenses, the deficit may be reduced for year-end reporting when any of the following apply:
- The core has Accounts Receivable that offset the deficit, and all receivables are fewer than six months old.
- The core has unbilled project-specific supply costs that will bring the balance under maximum allowable negative carryforward.
- The most recent Rate Review included a fund balance adjustment that applies to the current deficit.
- A large, one-time expense, posted within six months of the deficit date and supported by proper documentation, reduces the deficit into the allowable range.
If the Core Facility has a deficit greater than the maximum allowable negative carryforward calculated above, they must create a strategic financial sustainability plan which would include, , The department is not permitted to remove funds from the recharge fund balance with the intention of reversing the journal at the beginning of the next fiscal year. All funds that are removed from the recharge fund should be clearly documented in the strategic financial sustainability plan and/or any repayment structure submitted in its strategic financial sustainability plan.
The Office of the Vice Chancellor for Research (“OVCR”) will provide guidance, review sustainability plans, and collaborate with financial and operational staff to promote consistent financial stewardship across all core facilities.
Definitions
Research Core Facility: A shared research resource, administered by a department or center, that provides specialized services, instrumentation, equipment, or expertise in support of research and operates through a dedicated fee-based account to recover the costs of providing those services, with rates subject to university review under 2CFR 200.468.
Examples include shared laboratories or service centers that charge for access to equipment or technical services. Centrally funded research-support services are not considered core facilities under this policy.
Large or Long-Term Deficit: A financial deficit that is either substantial in size or persistent across multiple fiscal periods and is projected to continue growing without intervention based on current rates, utilization, or subsidy levels
Negative Carryforward: A year-end deficit that is carried into the next fiscal year. This policy allows a maximum negative carryforward of 10 percent of the core’s annual expenses.
Accounts Receivable (AR): Revenue billed but not yet collected. For deficit-reduction purposes under this policy, AR must be less than six months old.
Rate Review: A formal evaluation of a core facility’s service rates, fund balance, expenses, and projected usage.
Related Requirements
External Regulations
University Policies, Standards, and Procedures
Contact Information
Primary Contact
Name: Meghan Kraft
Title: Director of Research Core Facilities, Office of Vice Chancellor for Research
Email: kraftmeg@unc.edu