Office of Planning & Budgeting

UW Budget Overview

This webpage provides an overview of the functional pieces of the University’s budget (university operating resources, research, restricted funds, etc.) and funding sources (General Operating Fund, Designated Operating Fund, etc.).

Functional Pieces of the University’s Budget

University Operating Resources:The core of university operations. These are the funds employed to hire and pay faculty, enhance the student experience, support service efforts, and run the administrative infrastructure that supports the University. These budgets are governed by the principles of ABB.

  • State Appropriations make up approximately 5 percent of the total budget
  • Tuition Operating Fee revenue makes up approximately 8percent of the total budget
  • Designated Operating Funds make up approximately 5percent of the total budget

Research Enterprise: Includes grant expenditures from federal, state,
and other non-federal grants.

  • Approximately 18 percent of the total budget

Restricted Funds: Gift income, endowment distributions and state
restricted funds from state accounts, or funds, that are not general fund state or
education legacy trust (e.g. medical aid, accident, geoduck, shellfish bio toxin,
economic development strategic reserve, and ocean acidification accounts).

  • Approximately 4 percent of the total budget

UW Medicine Health System: The revenue and expenses from the
University’s hospitals and clinics, which currently include UW Medical Center, Valley
Medical Center, Harborview Medical Center (though HMC is run by the UW and reports its
finances to King County), Northwest Hospital, Airlift NW, UW Physicians and UW
Neighborhood Clinics.

  • Approximately 48 percent of the total budget

Auxiliary Activities: These activities include the University’s
large, self-sustaining business enterprises such as Educational Outreach, Housing and
Food Services, Intercollegiate Athletics, and Parking & Transportation Services.

  • Approximately 12 percent of the total budget

UW Fund Types

The University of Washington classifies fund sources into four major fund types (GOF,
DOF, ROF, and OOF). Each type varies in the degree of discretion for its use, ranging
from restricted to essentially full discretion. GOF and DOF are University’s operating
Funds and ROF and OOF are restricted funds. These fund types are defined below along
with examples of the sources used to support them.

  1. General Operating Funds (GOF): Funds over which UW has significant discretion. Composed of:

    • State appropriations (tax support)
    • Operating fee revenue (a portion of tuition)
  2. Designated Operating Funds (DOF): Funds over which the UW has unlimited discretion, though the university, as a matter of internal policy, may restrict their use. Composed of:

    • Indirect Cost Recovery (ICR) – Indirect Cost Recovery (ICR) is the allocation of funds back to units that generate indirect costs from grants and contracts. ICR is a component of activity based budgeting and is taxed at 65 percent. Units retain 35 percent of the indirect cost recovery generated. The remaining 65 percent is used by the Provost to allocate out to units based on initiatives and other criteria. Calculation of ICR is based on the grant activity of the prior twelve-month period April 1 – March 31. Once the allocation is made to the unit, internal policies in the unit dictate how departments and employees receive ICR funding.
    • Interest Income – DOF revenue derived from the investments funds.
    • Summer Quarter Revenue – Educational Outreach manages the summer quarter program for the university. There is no state support for summer quarter, and it is not part of the ABB model. Educational Outreach submits a budget for summer quarter to the Provost each year which is approved before the start of the quarter. Based on this budget, all three campuses pay estimated expenses to EO via a revenue transfer. These funds are used to manage the quarter. At the end of the quarter, any remaining revenue is refunded to the campus which originated the funds.
    • Institutional Overhead – calculated by the Budget Office to reimburse the University for costs paid centrally such as maintenance of buildings, roads and grounds; custodial services; utilities and support services such as data processing, risk management, human resources; and others. All Seattle fee-based programs are charged UW institutional overhead unless the activity has been awarded an exemption. More details on institutional overhead policy are explained in later sections.
    • Administrative Overhead – equivalent of institutional overhead but is charged to UW Bothell and UW Tacoma. This overhead is also calculated by the Budget Office to reimburse the University for costs paid centrally on behalf of these two campuses.
    • Student Technology Fees – The student technology fee is a fee charged to provide funds for the improvement of technology used by students. A student-led committee allocates money for technology resources for general student use.
    • Miscellaneous Fees – Miscellaneous fees are a group of fees which contribute to the DOF revenue base. Some of these fees are charged directly to students such as application fees, library fines, late registration fees and others. Other fees are for things such as trademarks and licensing, insufficient funds for return check fees, staff registration fees, etc.
  3. Restricted Operating Funds (ROF): Restricted operating funds are funds over whose use the University has little or no discretion. Examples of various ROF Funds are explained below:

    • Grant Funds: – The UW receives various grants and contracts. Use of those funds is heavily restricted to the purposes outlined in the grantor contract.
    • Gifts, Endowment: – UW schools, colleges and units receive gifts and earnings from endowment funds whose use is limited to the donor’s intent. Schools and colleges have local gift funds which allow more flexibility in terms of their use.
    • Discretionary Funds: – Most units have discretionary funds which are given to the Dean to be used at their discretion. These funds are less restricted than gift funds, and are typically used for hosting and entertaining.
    • Self-Sustaining and Fee-Based Funds: – Many UW units have self-sustaining operations and fee-based programs whose revenues may derive from services provided both internally and externally to the UW.
    • Royalties: Many units have developed patented discoveries that have resulted in royalties andotherincome through UW CoMotion, which may have various restrictions.
  4. Other Operating Funds (OOF): OOF is a mixture of other funds that do not fit into the other categories listed above. Examples of certain other funds that cannot be categorized are listed below:

    • True Agency
    • Deposits
    • Internal lending/Investments
    • Depreciation
    • Capital Projects
    • Other