ctcLink Accounting Manual | 30.10 Types of Funding

30.10 Types of Funding

2022-06-30

30.10.10 Appropriated Capital Funding

State capital funds are provided by legislative appropriation and must have approved electronic allotments by OFM prior to expenditure. Appropriations are also approved by the SBCTC prior to allocation and expenditure. The electronic allotment process is done by the SBCTC using documentation prepared by the college. When the allotments are approved by OFM the SBCTC allocates funds to the colleges for expenditure. The expenditures must be consistent with the SBCTC Capital Budget Request as approved and/or modified by the Legislature.

An appropriation is spending authority for one biennium only. Expenditure of remaining state capital funds in any biennium following an initial appropriation requires re-appropriation by the Legislature, re-allotment by OFM, and re-allocation by the SBCTC.

Funding for Minor projects can only be re-appropriated once.

The most common funding provided by the Legislature is from state general obligation (GO) bonds within the state’s debt ceiling and building/tuition fees (Fund 060) collected by the colleges and sent to the Treasurer’s office. Other funds may be identified by the Legislature for use by the community and technical colleges. Fund sources are defined in the appropriations bill.

30.10.20 Non-Appropriated Capital Funding

Non-appropriated funds are local funds. There are several types of non-appropriated fund sources that may be identified for local capital purposes:

Proprietary funds

These are funds generated by the various college auxiliary enterprises such as the Associated Student Body, parking, bookstore, and food services. They can also be generated by fee based activities such as voluntary student fees or the Services and Activities (S & A) fee.

Local operating funds

These are funds generated by college uncommitted grants/contract balances, fees, and interest income (i.e., Fund 145 and 148).

Local capital funds

These funds are almost exclusively generated by interest income on fund balances and transfers of fund balances from other local and proprietary funds for capital purposes.

External sources of funds

External source of funds come from gifts, grants, bequests, Certificates of Participation (COP), revenue bond proceeds, loan proceeds and other similar sources external to the college.

Once the college identifies funds to be used for a capital purpose, a “recommendation to approve” must be made. Recommendations to approve are made through an explicit resolution by the college district board of trustees, or by college staff under an authority clearly delegated by the college district board for that project or category of capital expenditure. The “recommendation to approve” is forwarded to the SBCTC via completion of the Local Capital Expenditure Request Authority form. Authority has been delegated to the SBCTC Executive Director for projects up to $1,000,000. Requests for approval of projects over $1,000,000 are submitted to the State Board for consideration at a regularly scheduled meeting.

Upon approval by the SBCTC, funds may be spent directly from a proprietary fund for capital purposes. At the end of the biennium in which the local capital funds have been approved for expenditure, the SBCTC should be notified as to the status of projects so that the SBCTC staff can remove any remaining authority from the allocation tables or re-authorize the balance of the funds for the next biennium. The transfer of revenue/resources into fund 147 does not require SBCTC approval. However, the expenditure of funds from Fund 147, or any other fund, for a capital purpose does require SBCTC approval.

Upon approval by the SBCTC, funds may be spent directly from a proprietary fund for capital purposes. If the project is funded by governmental type funds, a revenue transfer should be made from the source fund (e.g. 145, 148) to Fund 147.

At the end of the biennium in which the local capital funds have been approved for expenditure, the SBCTC should be notified as to the status of projects so that the SBCTC staff can remove any remaining authority from the allocation tables or re-authorize the balance of the funds for the next biennium.

The transfer of revenue/resources into fund 147 does not require SBCTC approval. However, the expenditure of funds from Fund 147, or any other fund, for a capital purpose does require SBCTC approval.

30.10.30 Financed Capital Funding

Any loan from the State Treasurer or other financing contract for real property acquisition or improvement requires explicit prior approval by the Legislature and the State Finance Committee (see RCW 39.94). Loans arranged through the State Treasurer’s Energy Conservation Project, managed by Department of Enterprise Services, do not require additional legislative or State Board approval. Once funds are borrowed they become local to the college and expenditures are approved and tracked as described in Section 30.10.20. Twenty years is considered the maximum term to pledge student fee income to repay a loan made for capital purposes.

Alternatively financed capital projects are normally approved by the SBCTC through the capital budget process or if necessary by separate resolution. The expenditure of the proceeds of such an alternative financing is approved by the SBCTC in accordance with the rules for local fund expenditures.

Certificates of Participation (COP) are funding in which the State Treasurer obtains revenue bonds on behalf of state agencies. The combined bond issue generally results in more favorable rate for the colleges.

Certificates of Participation (COP) require coordination with the State Treasurer to ensure the intent letter to use a COP and supporting documentation are properly prepared and filed in a timely manner. There are other restrictions in the use of COPs that need to be understood if the intended COP funded project includes both public and private use. COP proceeds are expected to be spent in eighteen months for compliance with IRS rules on tax exempt bonds.

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