Key Terms and Definitions

The Operating Budget Cycle


An estimate of revenue and expense across all sources of funding, used for comprehensive planning, resource utilization, and stewardship. Plans are generally prepared before the fiscal year commences, and are not posted to Information Warehouse (IW) reports.


An approved plan to spend a certain amount of money in a given fiscal year or project period. The budget sets the spendable balance on centrally managed and sponsored funds.

  • Centrally Managed Funds (A0000 and A0018): Budgets are posted at the beginning of the fiscal year, with several updates later in the year. 

  • Sponsored Projects: Budgets are updated when awards change.


A revised prediction or projection of the amount of fiscal year expense or revenue, created after the budget or plan is prepared. The main goal of the forecast is to inform University officials of projected year-end variances. Forecasts are not posted to IW reports and do not have any impact on spendable authority of the funds.

  • Overall University Operating Total:Prepared by the Office of Planning, Budget and Analysis in the early spring each year.

  • Individual Units: Prepared as an internal fund management and stewardship analysis on a regular base and as requested.

Major Operating Budget Fund Groups

Centrally Managed Funds

The majority of activity in the University’s operating budget falls in two centrally managed funds, the General Fund (A0000) and Institutional Expense Fund (A0018). Year-end balances on these funds do not roll forward to the following fiscal year.

General Fund (A0000)

The type of activity and budgeting conventions differ according to whether the General Fund activity is in an academic or administrative department:

  • In academic departments, the General Fund is the primary place to record centrally supported teaching and graduate student-related expenses. See Budgeting for Academic Departments for additional details about costs expected on the General Fund in academic departments.
  • In administrative departments, expense budgets are the source of General Fund spendable balance, including both non-personnel and personnel expenses.  A0000 revenue budgets, and any changes to them, do not control and, therefore, have no impact on A0000 spending authority of the department. See Budgeting for Administrative Departments for additional details, or contact your analyst in the Office of Planning, Budget and Analysis.

Institutional Expense Fund (A0018)

The Institutional Expense Fund is used to record non-discretionary institutional costs, such as property taxes and central utilities, that are not under the direct control of administrative organizations. 

Departmentally Managed Funds

Departmentally managed funds (see sub-groups below) represent the second largest source after centrally managed funds that supports the University’s operating budget activity. Spendable balances for departmental funds, such as endowments, term gifts and designated general funds (A0001, A0002, etc.) are driven by revenue allocations and assignments.  Unencumbered year-end balances on these funds roll forward as the beginning balances to the following fiscal year.

Academic Allowance Fund (A0001)

The Academic Allowance is an annual General Fund allocation for academic departments that is intended to help offset staff and other costs that support faculty, students, and research. Academic departments may use the Allowance for administrative costs and other departmental priorities. In late spring, the Provost’s Office sends a memo to announce the next fiscal year’s academic administrative allowance. In July, the Office of Planning, Budget, and Analysis posts the academic allowance as a transfer into each department in fund A0001, Program GU181. Departments can then make fund assignments as necessary to move the lump sum allocation to other departments and programs within their organization or to other organizations if needed.

Research Rebate Fund (A0002)

Research Rebates are an annual allocation of unrestricted General Funds to academic departments and principal investigators (PIs) based on the prior year’s indirect cost collections from sponsored projects that carry the eligible federal overhead rate (62% and over). The departmental share of rebates is posted to each department in Fund A0002, Program GU188. The PI share of rebates are posted to each PI’s designated department in Fund A0002, in their respective person-specific Program (i.e., FA###). Research Rebate postings occur in September, because the Office of Planning, Budget, and Analysis needs to review activity in the closed prior year in order to calculate these allocations.

Other centrally designated funds (A0006-Special Purpose Fund, A0050-IAC Rebate Fund, etc.)

These are allocations of unrestricted General Funds to departments for specific purposes and/or projects. The allocations might be annual or term, depending on the type of commitment. 

Expendable Gift Funds (B####)

An expendable gift (also known as a “term gift”) is one in which the whole gift amount can be expended for a donor-specific purpose. This contrasts with endowment gifts, in which principal is invested, not spent. Term gifts are posted by Advancement as revenue when they are received. Term gifts can have varying levels of donor restrictions which should be reviewed and understood before expending funds. To view restrictions and gift documents for term gift funds, please use “Fund Restriction with Spendable Balance” report in Prime Financial Information Warehouse.

Endowment funds (E####)

A true endowment gift establishes a permanently invested fund. While income from the fund may be spent, the principal of the fund must remain intact. In some cases, donor stipulations allow for principal expenditures. These funds are known as quasi-endowment gifts. In the case of both true and quasi-endowment gifts, a donor will generally restrict the purposes for which the endowment income can be spent. Endowment gifts typically are received and processed through the Advancement Office. The Office of Planning, Budget, and Analysis posts the full-year estimated payout distribution for endowment funds on Account 4471 in July. Distributions are updated quarterly (late October, late January, late April, June close) to reflect new gifts to endowment, liquidations of quasi-endowment, and changes in distribution formulas for Princeton operating departments. See Endowment Payout Calculation and Distribution page for more information.

External Trust Funds (F####)

External trust funds record income and expense supported by trusts whose investments are managed outside of the University. Typically, the University will receive a periodic income payment from a trust to be used by the University in accordance with the donor's wishes. External trust fund income is posted on a quarterly basis on Account 4472, reflecting any net trust income received during that quarter. Due to the unpredictable timing and size of these payments, whole- year estimates are not posted for external trust funds.

Sponsored Research Funds (G0001 and G0002)

These are federal and non-federal grant and contract funds awarded to the University for a specific project. Spendable balances are determined by inception-to-date budgets, and must be spent per sponsor restrictions. Expense budgets typically are posted annually, by project period based on sponsored terms and conditions.