INDEX
PURPOSE
REASON FOR POLICY
ENTITIES AFFECTED
DEFINITIONS
POLICY STATEMENT
ROLES AND RESPONSIBILITIES
COMPLIANCE AND TRAINING REQUIREMENTS
EXCEPTIONS
APPROVALS
RELATED DOCUMENTS
REVIEW AND REVISION HISTORY
This Budgetary Policy governs the authorization and appropriate use of all fund groups within the Kentucky Community and Technical College System (“KCTCS” or “System”). It establishes the fundamental requirements by which budgets are developed, authorized, allocated, transferred, revised, and managed to ensure proper oversight and responsible stewardship of all financial resources under the System’s control.
The purpose of this policy is to mitigate institutional risk by implementing consistent and transparent budgeting practices; to uphold the System’s mission and strategic priorities through sound financial planning; and to ensure adherence to all applicable state, regulatory, and system requirements. This policy ensures that KCTCS fulfills its responsibilities and accountabilities under state law, regulatory mandates, and system-level governance requirements related to the planning, authorization, and management of institutional funds. As a public postsecondary institution, KCTCS maintains proper stewardship of public resources and budgeting practices that support transparency, accountability, and compliance. The budget allocates resources in such a way that translates the KCTCS four-year strategic plan, the six-year capital plan, and other strategic and operating plans into action. This policy applies to all employees, units, and departments of KCTCS. Biennial Budget - The Kentucky Constitution requires the state legislature to pass a balanced budget every other year. As part of the legislative process, KCTCS must create a biennial budget request that is approved by the Board of Regents, then submitted to the Council on Postsecondary Education (CPE), the coordinating agency for state higher education. CPE then submits budget requests to the legislature to make final appropriations as part of the state biennial budget. Capital budgets are also considered, and appropriations are made during this process.
Capital Budgets - Capital budgets are those that include budget for physical facilities projects and equipment.
Capital projects - are capital construction and major renovation projects to physical facilities with a scope of $1,000,000 or more which have approval in the current biennium by the legislature for state appropriations, debt service, or agency funding (as defined with the Budget of the Commonwealth); or are of an emergency nature or are funded by private or federal sources. These projects require prior review from the KCTCS Board of Regents, approval from the Council on Postsecondary Education, and approval from the legislature.
Other renovation projects - are those projects with a scope of less than $1,000,000 and the capital budget as pooled projects within defined categories.
Major equipment items - are those with a scope of $200,000 or more which have legislative approval in the current biennium or are funded from private or federal sources.
Other equipment items - are those with a scope of less than $200,000 which are included in the capital budget as pooled equipment items within defined categories.
Fund Groups - The budget procedure of KCTCS and the annual operating budget of KCTCS cover three major fund groups: general, auxiliary, and restricted.
General Fund - Expenditures are supported by revenue from state appropriations, student fees, sales and services, fund balances, and those gifts and grants, endowment incomes, investment incomes, and federal and county appropriations that are not restricted as to purpose by a person or an agency external to KCTCS.
Auxiliary Funds - Expenditures are supported by income from the respective components of auxiliary operations, including grills, college-operated vending, and housing and dining operations.
Restricted Funds - Expenditures are supported by income restricted for a specific purpose by a person or an agency external to KCTCS. KCTCS shall develop, authorize, manage, and monitor all budgets in accordance with established System budgeting standards, applicable statutes, and regulatory requirements. All fund groups are subject to this policy.
Business units must prepare budgets using the financial management system, timelines, and assumptions, and must provide supporting documentation as required. Resources should be allocated and distributed in a manner that supports the achievement of objectives and priorities established during the planning process. Budget authorization shall occur only through designated officials with delegated financial authority.
All budget revisions, reallocations, and transfers of funds must follow prescribed procedures and may not be executed without proper approval. Business units are responsible for ongoing monitoring of budget-to-actual performance and for taking corrective action when variances occur.
KCTCS shall maintain consistent budgeting practices across the System to ensure transparency, accountability, and alignment with System priorities.
All budgetary matters follow the general organizational structure of the Kentucky Community and Technical College System (KCTCS). All funds within the general fund, auxiliary fund, and restricted fund groups are subject to this policy and may be expended only for the approved programs and objectives of the respective fund groups. No revenue shall be expended except upon the establishment of an expenditure authorization reviewed by the KCTCS Board of Regents.
Recurring expenditures are to be supported by recurring revenue. Approved nonrecurring plans must have any recurring costs identified and adequate recurring financial support ensured. -
- Budget Allocation and Use
Funds will be allocated based upon specific objectives agreed upon for a given fiscal year. Funds may be allocated to the colleges for specific expenditure categories (personnel services, current expenses, and capital). However, other policies, procedures, and provisions may affect the use of funds within the total allocation. Annual budgetary allocations shall be made within the biennial budget appropriations made by General Assembly.
The KCTCS President is responsible for the allocation of funds on a systemwide basis. The College Chancelor is responsible for the allocation of funds at their college within the approved budget. After approval by the KCTCS President, the breakdown by account and expenditure category is the basis for the KCTCS college operating budgets which are identified in the KCTCS budget and must be submitted to the KCTCS Board of Regents for review.
Each College Chancellor is responsible for submission of necessary documents to implement the July 1 payroll for their college each year according to policy and procedure.
Expenditures for each account must be used for the intended purpose. Expenditures will not be reduced for any other reason except correction of an error or in the case of a refund, which occurs during the fiscal year in which the expenditure occurred. Expenditure of funds from nonrecurring sources must be limited to nonrecurring purposes unless prior approval by the KCTCS President has been received. Expenditure of funds within a given fiscal year must be for services rendered during that fiscal year. -
- Budget Reserve
The KCTCS Chief Financial Officer shall provide the KCTCS President with a recommended budget reserve amount annually. The KCTCS President will seek approval for the reserve amount from the Board of Regents. The Board-required budget reserve amount is to be included in the annual operating budget for each KCTCS college, KCTCS System Office, and other KCTCS unit(s). The required budget reserve amount will be set as a percentage of net public funds budgets (State Appropriation budget and Tuition & Fees budget). Any use of the required reserve must be approved by the KCTCS President. -
- Revenue Generation
Funds allocated in the annual operating budget will be based on estimates of revenue by source including recharges. Any changes during the year in the planned revenue amounts will require submission of a revised plan of expenditures to the Office of the KCTCS President which sets forth the actions proposed to address the revenue changes.
In the event actual annual revenues exceed estimated revenues, the KCTCS President may authorize an increase in the current funds’ expenditure budget in accordance with the Annual Budget Adoption resolution adopted annually by the KCTCS Board of Regents.
The KCTCS Board of Regents delegates to the KCTCS President the authority to approve contracts and grant agreements between KCTCS and an outside agency and authorizes expenditures. If delegated, the KCTCS President must report to the KCTCS Board of Regents the authorization of such expenditures. -
- Budget Changes
Changes to approved budget priorities or reallocations of funds that materially alter previously approved priorities must be approved by the same authority that approved the original budget.
Requests involving additional expenditure authority, redistribution of funds between organizational units, or increases or decreases in revenue must include a statement describing the programmatic and operational implications. Requests submitted by a College Chancellor must address the impact of the proposed change on the overall operations of the college.
The KCTCS Chief Financial Officer has delegated to the KCTCS Budget Office responsibility for reviewing, documenting, and processing approved fund transfers and budget revisions in accordance with delegated approval thresholds and applicable fiscal controls. Administrative processing does not supersede required approval authority.
Budgetary changes are classified and approved as follows: -
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- Intra-Unit Transfers
An intra-unit transfer is the reallocation of funds within a single college or system unit. Intra-unit transfers that do not alter approved institutional priorities and remain within established approval thresholds are within the authority of the College Chancellor (or designated unit head). Such transfers do not require approval outside the unit’s delegated authority. All transfers remain subject to established fiscal controls and administrative processing requirements. -
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- Inter-Unit Transfers
An inter-unit transfer is the reallocation of funds between colleges or between system units. Because these transfers represent a redistribution of resources across organizational business units, they require approval in accordance with established system budget authority, regardless of amount. -
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- Budget Revisions
A budget revision is a request to increase or decrease expenditure authority resulting from changes in revenue projections, receipt or reduction of external funding, adjustments in support from other KCTCS units (including recharges), requests involving changes in revenue or expenditure authority will be evaluated based on programmatic need and material changes in circumstances since the original budget was adopted. -
- Budget Savings
The KCTCS President is responsible for the management of budget savings within KCTCS. Savings must be used in a manner consistent with established plans and program objectives. Savings which are nonrecurring should be used only for nonrecurring purposes. Current expense savings are those which result from under expenditure in a particular expense category. Salary savings, either actual or potential, are those funds which have accrued, or will accrue, in a given budgeted position as a result of a position being vacant for any period of time, a portion of the salary of an incumbent being transferred to another fund source, or a position being filled at less than the budgeted salary amount. -
- Fund Balances
The responsibility for projecting and managing all fund balances generated within KCTCS rests with the KCTCS President. The responsibility for projecting and managing fund balances generated within the college rests with the College Chancellor. -
- Budget Monitoring
Budget evaluation is the assessment of the achievement of established goals and objectives for which funds have been made available. Budget evaluation will be conducted in terms of the effective implementation of approved plans and accomplishment of the agreed-upon program objectives, activity indicators, and outcome indicators; and adherence to KCTCS budget policies.
Timely, accurate, and comprehensive financial information critical to budget monitoring includes but is not limited to:
Systemwide and College-level: - Budget summaries
- Revenue and expenditure reports
- Fund balances and reserve
- Cash flow projections
- Financial risks, variances, and material changes
- Any other financial information necessary for informed executive decision -making or requested by the president; and
- Any other information requested by the KCTCS President.
Board of Regents Level - Quarterly or more often at the request of the President or the Board of Regents
- In a standardized format that allows comparison across colleges and over time and
- In writing and in person at a regularly scheduled meeting
- Immediately disclose any material misstatements omissions or financial concerns upon discovery to the President and the Board of Regents.
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- KCTCS Board of Regents
The Board of Regents for KCTCS shall: - Review the president’s biennial budget request
- Review the budget planning and implementation processes to ensure consistency with the adopted strategic agenda and biennial budget and within the missions of the colleges within the system.
- KCTCS President
The KCTCS President is responsible for oversight and management of the system, including but not limited to - The supervision of all administrative and managerial aspects of KCTCS’s operations, including fiscal management
- Delegation to a Chief Financial Officer who shall be responsible for the development, administration, and oversight of the systemwide operating and capital budgets.
- KCTCS Chief Financial Officer
The Chief Financial Officer is responsible for the development, administration, and oversight of the systemwide operating and capital budgets. This includes but is not limited to: - Development and implementation of systemwide budget policies
- Development and submission of the KCTCS budget request in alignment with the strategic plan
- Evaluation of the effectiveness of budget implementation in coordination with achievement of program objectives
- Coordination of the submission and justification of the annual operating budget to the KCTCS Board of Regents
- Coordinate the biennial budget request in alignment with the strategic plan to the KCTCS Board of Regents, the Council on Postsecondary Education, and the executive and legislative branches of state government.
They shall provide the President with timely, accurate, and comprehensive financial information, including but not limited to systemwide and college-level: - Budget summaries
- Revenue and expenditure reports
- Fund balances and reserve
- Cash flow projections
- Financial risks, variances, and material changes
- Any other financial information necessary for informed executive decision -making or requested by the President; and
- Any other information requested by the President.
They shall provide financial information to the Board of Regents: - Quarterly or more often at the request of the president or the Board of Regents
- In a standardized format that allows comparison across colleges and over time and
- In writing and in person at a regularly scheduled meeting the chief financial officer shall certify the accuracy of financial reports provided to the President or the Board of Regents.
- The Chief Financial Officer shall immediately disclose any material misstatements, omissions, or financial concerns upon discovery to the president and the Board of Regents.
The Chief Financial Officer shall oversee and ensure cooperation with all required audits and financial reviews of the KCTCS. -
- College Chancellors
The Chancellor of each college under KCTCS shall be responsible for creating an annual budget request for his or her college and submitting it to the KCTCS President for consideration in the creation of the systemwide budget request to be submitted to the General Assembly.
Each College Chancellor shall create and implement an operational plan and implement his or her college’s budget within the system budget as reviewed by the KCTCS Board of Regents under KRS 164.350.
Each College Chancellor shall be responsible for the day-to-day operations of his or her college including but not limited to: - Develop and recommend plans for the effective use of resources.
- Manage programs within allocated resources including the management of contract and grant overruns and cost sharing (less than full cost recovery).
- Operate within approved budget allocations.
- Allocate funds consistently within approved plans.
- Ensure that expenditures are consistent with established objectives.
- Realize estimated revenue or adjust expenditures in order not to exceed revenue available.
- Maintain the integrity of revenue and expenditures by fund group (including provisions to ensure that revenue generated by activities in each fund group is deposited to that same fund group and used with generally accepted accounting practices).
- Require that nonrecurring funds in addition to those approved in the budget process are not used for recurring purposes without prior approval of the KCTCS President.
- Ensure conformity with state and KCTCS rules and procedures applicable to the expenditure of funds generally and for purchasing and payment of goods and services specifically.
Managers are accountable to ensure that their staff hired with budget responsibilities are trained on this policy at-hire by the respective subject matter experts at the System Office or College level. Staff with budget responsibilities typically include Cabinet Members, Vice Presidents, College Chancellors and college business office staff. Those with training responsibilities include the budget and financial planning team or college business office staff. Process and procedure training is developed and implemented by the budget and financial planning team. College business office staff may also train faculty and staff involved in the budget process as needed.
Compliance with this policy is demonstrated through successful completion of the annual budget process.
Policy compliance is also monitored via the system controls in PeopleSoft which contain workflow approvals for budget creation and modification.
Failure to comply with the provisions of this policy may result in corrective action consistent with KCTCS policies and applicable state or system requirements. Exceptions to this policy must be reported to, and approved by, the KCTCS President and must include a plan to bring exceptions into compliance with this policy. Approved by Executive Leadership Team – June 22, 2026
Approved by President’s Leadership Team – June 25, 2026
Signed by KCTCS President – June 25, 2026 Not applicable This policy shall be reviewed every three (3) years from the date of the original adoption.
Original Adoption – April 20, 1999.
Revised - November 7, 2006, May 1, 2023, November 30, 2023, June 25, 2026.
Next Scheduled Revision, on or before June 25, 2029.
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