[NicoleCOS]

Our nonprofit organization has an accumulated surplus. The Board would like to use this surplus for a specific purpose. Is there a way to designate the surplus funds for use as a budget line item or is it necessary to run a deficit in order to use surplus funds?
Thanks.
NicoleCOS

[ebaines]

Assuming you are using fund accounting, and this surplus has built up in your operating fund, next fiscal year you can budget an operating deficit and pull the cash from the built-up funds in the operating fund. Or if you're in mid-year the board could vote to approve an extraordinary expense. Or the board could vote to transfer funds from the oprerating fund to a separate fund, then vote to spend it from there. In any event you will end up with a deficit in operations, but the important thing is that the deficit is in line with the approved budget.

[NicoleCOS]

Assuming you are using fund accounting, and this surplus has built up in your operating fund, next fiscal year you can budget an operating deficit and pull the cash from the built-up funds in the operating fund. Or if you're in mid-year the board could vote to approve an extraordinary expense. Or the board could vote to transfer funds from the oprerating fund to a separate fund, then vote to spend it from there. In any event you will end up with a deficit in operations, but the important thing is that the deficit is in line with the approved budget.

Thank you - this is what I told the Board, but they were reluctant to accept that answer. I appreciate the affirmation.