Account Authorization: Act 971 of 1985; R.S. 17:3386
Act 971 of 1985 states that any public college or university or any consortium of colleges and universities which adopts a building and facility preventative maintenance program approved by the Board of Regents may retain any funds appropriated or allocated to such college, university, or consortium from the state general fund which remain unexpended and unobligated at the end of the fiscal year, provided that not less than fifty percent of such retained funds shall be maintained by the college, university, or consortium in a preventative maintenance reserve fund. Monies from such reserve fund shall be used solely for preventative maintenance purposes in accordance with the approved plan. Retained funds shall only be spent on nonrecurring projects and such expenditures are subject to approval by the appropriate higher education management board, the Board of Regents, and the Joint Legislative Committee on the Budget.
SOURCE OF FUNDING
The source of funding for this account is fees and self-generated revenues. Under the terms of R.S. 17:3386(A) (Act 971 of 1985), higher education institutions which adopt a building and facility preventative maintenance account approved by the Board of Regents may retain any state general fund monies which remain unexpended and unobligated at the end of the fiscal year, provided that not less than fifty percent of the retained funds be used solely for preventative maintenance. The remaining funds may be spent on non-recurring projects and are subject to approval by the higher education management boards, the Board of Regents, and the Joint Legislative Committee on the Budget. Historically, institutions have been allowed to retain no more than $200,000 in general fund monies for the preventative maintenance and non-recurring projects. Act 1478 of 1997 further limits the monies and amounts which may be retained. Act 1478 provides that: (1) unexpended, unobligated general fund appropriations which were made for a specific purpose in the General Appropriations Act shall not be retained; and (2) the retained monies that public higher education institutions may carry forward are limited to no more than two percent (2.0%) of their prior year's state general fund appropriation or allocation. Since the retained funds are deposited in a reserve fund before they are utilized, the funds are treated as self-generated revenues for budgetary purposes.
ANALYSIS OF RECOMMENDATION
The total means of financing for this account is recommended at 101.7% of the existing operating budget. It represents 101.7% of the total request ($200,000) for this account. The reason for the increase from the existing operating budget is the adjustment made to place this account in compliance with Act 1478 of 1997. The total recommended funding for this account is derived from this agency's prior year state general fund appropriation or allocation ($10,170,340), which is then multiplied by 2.0% to yield the total recommended funding ($203,407).
ACQUISITIONS AND MAJOR REPAIRS
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