Business Procedures Manual

Fiscal Affairs Division

21.2 Budgeting and Accounting

(Last Modified on February 21, 2019)

Budgeting

The budget for study abroad programs should be based on a reasonable projection of operating costs in the host country, including consideration of projected currency exchange rates. The program budget is designed to help institutions and program faculty plan and set a fair charge for students and to help students plan their finances for the semester. Final program budget information should also be shared with the institution’s Financial Aid office so these costs can be included in determining participants’ cost of attendance for the term they will be abroad.

Study abroad student costs generally consist of two components:

  1. Tuition and mandatory student fees related to course registration (see section 21.3 )
  2. Program Charge

The Program Charge is the amount charged to students, separate from tuition and fees, to pay for the study abroad trip. Each program should consider the following costs in developing its overall budget and an appropriate Program Charge. The list below reflects general categories for the types of costs that may be included in the Program Charge:

  1. Transportation costs such as airfare, transportation to and from the airport on-site, transportation to field experiences, or between program locations
  2. Housing
  3. Meals
  4. Health insurance (BOR negotiates this insurance for all USG programs. See for current policy information)
  5. Costs for classrooms, guest lecturers, tickets for academic and cultural field experiences and similar activities
  6. Visa fees
  7. Costs for providers or on-site guides
  8. Administrative costs such as promotional materials, orientation supplies and related items
  9. Reserve amount to cover unanticipated contingencies/emergencies (See Emergency Reserve Fund section below)
  10. The Program Charge may include costs to cover travel-related expenses for faculty and staff participants (i.e. housing, per diems, transportation, field experiences) however, institutions are encouraged to pay for faculty and staff expenses from state and tuition funds in order to keep student costs low. Payments and/or reimbursements for faculty and staff travel should follow Business Procedures Manual section 4.0. Faculty and staff travel costs must be presented in the inaugural budget approved by the president or his/her designee, and be reviewed and re-approved each year in the annual review. Under no circumstances should personal services (salary and fringe benefits) be included in the Program Charge.

Specific programs may need to include additional items in order to deliver the experiential academic content in their discipline. Some items may not be applicable for all programs, and programs may choose to include or exclude others. If programs do not include critical items (like airfare or meals) in their Program Charge, students must be informed of this exclusion so that they can plan how they will cover these costs separately.

The costs incurred by an institution for staffing and operating a study abroad office must be paid from state funds, tuition, and/or general fees. Faculty and instructional staff salaries must also be paid from state, tuition and general fee fund sources, as should faculty travel to the fullest extent possible. Other direct costs that are specific to study abroad programs may be paid from the study abroad Program Charge.

Program Charges should be assessed in the student information system whenever practical. The payment deadlines and refund schedules for these charges will vary from program to program. Payment due dates and refund dates can be earlier, but should not be later than the due dates and refund dates for students taking campus-based courses. Program Charges are considered elective fees that do not require BOR approval. As such, institutions should follow concepts found in the BOR Policy Manual section 7.3.3.2 and in the Business Procedures Manual section 24.3.2, namely that the fee should be specific in scope and set at the lowest rate possible to cover specific costs in order to maintain affordability. This is achieved by following the budgeting guidelines in this section. The Office of Fiscal Affairs does not require study abroad Program Charges be submitted along with other elective fees during the annual reporting process.

To mitigate currency fluctuations, careful review of markets should be followed during budget creation. Bank accounts in foreign countries may be opened under very limited circumstances and are subject to BOR Policy Manual section 7.5.1 and Business Procedures Manual section 9.1. The purchase of currency exchange futures contracts, which establish a fixed rate of foreign currency exchange for specified U.S. dollar amounts at designated dates, is not allowed.

Required Program Emergency Reserve Fund (Fund 20XXX)

Maintaining a reserve fund allows programs to manage unanticipated costs that may arise between the budget planning phase and actual travel. The Emergency Reserve Fund must be maintained in a restricted account (Fund 20XXX) and must sustain a balance of at least 5% of the total of all study abroad program charge budgets, but no more than 15%. For example, if an institution’s overall budget for 10 programs equals $50,000, the Emergency Reserve Fund must maintain at least $2,500 (5%), but no more than $7,500 (15%). An institution may distinguish separate Emergency Reserve Funds for each program, however, a single fund is recommended for this purpose. Instances where withdrawal from the Emergency Reserve Fund is warranted include, but are not limited to:

  1. Currency fluctuations that raise costs for items that need to be paid in the local currency
  2. Changes to published rates for transportation, such as airfare or local transit
  3. Changes to published transit schedules that may require re-routing for the group
  4. Incidents at the local site that require alterations to the program (such as quarantines, strikes, emergencies not immediately covered by insurance) or extends the time students spend overseas

Emergency Reserve Funds are initially established through additional amounts being added to the program charge fee. The collection of the Emergency Reserve Fund should be spread over a period of no more than 5 years to maintain student affordability. The 5 year period applies to both new programs and for existing programs that withdrew money from the emergency reserve fund for a documented emergency. Once the desired emergency reserve fund amount is collected (between 5% and 15%), collection of the Emergency Reserve Fund should be removed from the program charge fee. If monies are withdrawn from the Emergency Reserve Fund account due to an emergency instance described above, collection of the funds should be included in the program charge fee until the 5% to 15% reserved is replenished through non-mandatory transfers from Fund 14000 to Fund 20000.

Accounting

Financial activity attributable to study abroad programs is recorded in multiple funds:

  1. Tuition for credit hours related to study abroad programs is recorded in Fund 10500
  2. Mandatory fees are recorded in the appropriate funds as outlined in Section 24 of the Business Procedures Manual.
  3. Effective July 1, 2019 the study abroad Program Charge is recorded as a Department Sales and Service (DS&S) fund, which is Fund 14XXX. Program Charge revenue and related expenses are recorded in a DS&S account specific to the responsible program or office. Student-specific expenses must be paid from the DS&S account. Typical student specific costs include travel, lodging, tours, meals, event fees, and student supplies.
  4. Emergency Reserve Fund is recorded in Fund 20XXX.

Supporting documentation that shows revenue, expense and fund balances (14XXX and 20XXX), must be maintained for audit purposes and provided for the required annual institutional budget review. Excess funds realized at the end of a program in Departmental Sales and Services fund must be used first to replenish the required Emergency Reserve Fund, if applicable. Once the Emergency Reserve Fund is replenished, additional excess funds may be encumbered via purchase orders, with acceptable documentation, for payment of future deposits, site visits or other known future costs. Final excess funds remaining (other than nominal amounts) must be refunded to students. When excess funds occur, institutions should review program charge budgets in order to reduce the Program Charge the following year to prevent over collection of funds from students.

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