02 - 043 Inter-fund Transfers - Mandatory


This statement defines a mandatory transfer and provides specific procedures for processing mandatory transfer transactions in Banner.

1. Definition of a mandatory transfer. See Procedure 2-044, Inter-fund Transfers, Non-mandatory, for the definition of an non-mandatory inter-fund transfer.

a. Mandatory transfers arise out of binding legal agreements. They are required transfers of resources to other funds for the purpose of meeting these legal agreements. Examples include:
b. Transfers to Plant funds due to legal obligations specified in bond resolutions or indenture agreements, and Transfers to Plant funds for payments on capital leases (see Procedure 8-115, Leases and Rental Agreements.)


Generally it is not recommended that a mandatory transfer be created outside the Controller's Office. Please contact the USNH Accounting Services if you have any questions regarding new transactions which may require mandatory transfer codes.

1. Responsibility for recording mandatory transfers. The Controller's Office generally handles mandatory transfers for bonded debt service. Lease payments are generally initiated by departments directly. It is the department's responsibility to properly record payments as an operating lease expense or a capital lease mandatory transfer, after consultation with the USNH Accounting Services (see Procedure 8-115, Leases and Rental Agreements.) Persons responsible for entering and authorizing mandatory transfer transactions are also responsible for using proper Banner account codes.

2. Reporting requirements. Generally Accepted Accounting Principles (GAAP) require that all funds expended for repayment of debt related to property and equipment (including capital leases) be recorded as expense in the Plant fund. The source of funds for the payment of principal and interest is through normal current fund operations. The movement of these funds to Plant funds from Current funds for this purpose is a mandatory transfer. Mandatory transfers are reported separately from operations and non-mandatory transfers in the campus. These transactions are required by GAAP to be separate line items in calculating changes in fund balances. The financial statements required for monthly, quarterly and annual reporting in accordance with GAAP are totally dependent on the proper coding of inter-fund transfer transactions in Banner.

3. How to read the transfer code listing The proper codes are determined by the purpose of the transfer. Locate the purpose on the table. The account code listed under the first column labeled "DEBIT ACCOUNT CODE" is the  code you will use for the debit side of the entry. The account code listed under the second column labeled "CREDIT ACCOUNT CODE" will be used for the credit side of the entry - REGARDLESS OF THE FUND AFFECTED.

4. All entries for transfers must balance. Mandatory transfer debits must equal mandatory transfer credits and all lines must be valid mandatory transfer codes. The exception to this rule is capital lease payments generated by departments on INVs. The INV debits a valid mandatory transfer code and credits cash because it is generating a check. The credit side of the transfer code and the debits in the Plant fund will be recorded by the Controller's Office on a quarterly basis.

5. Banner documents to use for mandatory transfers. Most inter-fund transfers are processed on a JV document in Banner. Exceptions to this rule are mandatory transfers for debt service and capital lease payments, which can be processed on a INV.

The official version of this information will only be maintained in an on-line web format. Any and all printed copies of this material are dated as of the print date. Please make certain to review the material on-line prior to placing reliance on a dated printed version.

This page last updated Monday, June 22, 2015. For information on the adoption and effective dates of policies please see explanation on the OLPM Main Menu.