Budget Guideline: 5-Year Reserve Utilization Plan

Effective Date: February 2, 2026 (see revision log for what changed on this date)

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GuidelineÌý

  • Units will maintain a documented strategy for planned reserve utilization.
  • Leaders should understand how to develop a 5-year Reserve Utilization plan to create long-term forecasts. The goal is to ensure reserves are being used effectively and proactively to support institutional priorities while maintaining financial stability. Ìý
  • Prioritize reserve utilization before making new one-time budget requests and develop a clear reserve plan to help units and campus leadership align priorities and expected use of funds across the institution.

Key Details

  • Each fall, Budget and Fiscal Planning (BFP) will distribute a standardized reserve utilization template to all units, org level 4 or org level 5. Units must complete the provided reserve template to communicate their planned use of reserves to executive leadership. Ìý
  • Ensure strategic use of reserves and management of revenue/expense volatility.

Planning Considerations

  • Be sure to consider what is needed to cover expected one-time expenses.
  • Monitor and manage reserve growth. Review unplanned vacancy savings or unexpected surpluses—are reserves growing faster than expected? If reserves are accumulating beyond anticipated needs, establish a plan to strategically reinvest those funds. Ìý
  • Ensure alignment with unit and the campus strategic plans. Identify upcoming strategic priorities, program expansions, or operational enhancements that may require reserve funding for your unit. Before submitting a one-time funding request, assess whether reserves can be used to cover the need. If the expense is ongoing, determine whether an internal adjustment of continuing budget is required. Ìý
  • If a unit leverages vacancy savings in budget planning, ensure that reserve planning includes a contingency for unmet vacancy savings.

FAQ for 5-Year Reserve Utilization Plan

Expenses should be covered using the most restrictive dollars first and then applying less restrictive dollars thereafter. Contact BFP@colorado.edu for guidance tailored to your specific reserves.

Reserves should generally be used for one-time costs rather than ongoing expenses. If a need is recurring, work with your executive leader to identify a long-term funding strategy.

A 5-Year Reserve Utilization Plan should be reviewed and updated at least annually during the fall submission process to reflect changes in priorities, funding needs, and unexpected financial shifts.

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Revision Log

  • February 2, 2026: Original publication