Definition of Local Income
Local income refers to revenues collected by the college for various items such as theater ticket sales, sale of catalogs, student material fees, duplicating fees and bookstore sales. It is sometimes referred to as dedicated revenue.
Accounting for Local Income
Each fiscal year during budget development, the College Fiscal Office in coordination with the respective divisions prepares a forecast of local income based on prior year actual collections. An expenditure budget is then created based on estimated revenues. After spring registration in March, actual receipts together with anticipated income through the end of the fiscal year is calculated. Revenues to be estimated through the year end includes eight-week classes, bookstore sales, ticket sales, and other sources of local income. The results of this new estimate is then compared to the original estimate. Budgets are adjusted to reflect the updated revenue projections.
Budgeted local income has corresponding expenditure budget items allocated to the division generating the income. Most local income is budgeted in accounts with spend categories ending with a number 4. Examples are SP4344 (supplies), SP4584 (duplicating), SP5174 (guest speaker), and SP5814 (contract services).
For material fees collected from students, the College is required to completely spend these fees on materials that are used, consumed or kept by students in accordance with State guidelines. A separate section on Student Fees is on Section 1.9.
Budget Transfers
Depending on the type of local income, the related fee-based expenditure budget may or may not be transferred to other non-fee-based expenditure budgets. For example, expenditure budgets related to proceeds from ticket sales can be expended on any items relating to the Theater, and can be transferred to different spend categories within the Theatre Division. Expenditure budgets based on proceeds from student fees, however, can only be expended on items for which the income was collected. Funds collected as student fees cannot be transferred into any other account, unless the purpose is to purchase items to give to the students. Material fees collected from students must be expended on items that become the personal property of the students. A separate section on Student Fees is on Section 1.9.
Carry-Over of Unspent Local Income
At the end of the fiscal year, unspent funds generated by local income will not be carried over to the following year. These funds will roll to the ending fund balance of the College.
Student fees should all be expended on materials for students in accordance with State guidelines. In the event that income is not sufficient to cover for expenditures related to these materials, then the fee level should be reviewed and possibly increased. If the division is not expending all the income received on materials for students, the fee level should also be reviewed and possibly reduced.