Higher Education Fund Guidelines

Higher Education Funds (HEF) are provided to Texas Woman's University in accordance with Article VII, Section 17(a) of the Texas Constitution for Higher Education Institutions. Appropriated from General Revenue funds, the money resides in and must be expended from the State Treasury and are authorized for the following purposes:

  • Acquisition of land, with or without permanent improvements;
  • Construction and equipping of buildings or other permanent improvements;
  • Major repair or rehabilitation of buildings or other permanent improvements;
  • Acquisition of capital equipment, library books, and library materials; and,
  • Payment of principal and interest on bonds issued under this authority.

These guidelines cover the allocation, management, budgeting, expenditures, and related restrictions of these funds.

TWU General Ledger Structure

Accounts funded with HEF will have “150” as the funding source (this is the second segment of the general ledger structure):     xx.150.xx.xxxx.xxxx.7xxxxxxx.

Definitions

Operating Expenses: Costs incurred for services or items with a useful life of less than one year.

Consumable Supplies: A category of operating expenses for items which likely will be consumed within one year. These are expensed, rather than being capitalized as assets. Some items may have an expected useful life of more than one year, but are of nominal value and are expensed. This would include paper products, toner, paper clips, pens, pencils, and other similar items.

Capital Equipment: Fixed or movable tangible assets to be used for operations, the benefits of which extend over more than one fiscal year.

Restrictions

HEF funds are to be used only for Educational and General (E&G) purposes and may not be used for:

  • Student housing
  • Intercollegiate athletics
  • Auxiliary enterprises

Note: In the case of building renovations used in part for auxiliary enterprises, HEF may be used proportionally for the Education and General portion of the building.

HEF funds may not be utilized for operating expenses or consumable supplies, except for when associated with the acquisition of capital expenditures.

HEF funds must be maintained in segregated HEF accounts and may not be co-mingled with non-HEF accounts.

Authorized HEF Expenditures

Acquisition of land, with or without permanent improvements

Land: The surface or crust of the earth which can be used to support structure and which may be used to grow crops, grass, shrubs, and trees.

Cost of land may include:

  • Purchase price
  • Commissions
  • Fees for examining and recording titles
  • Surveying
  • Appraisal costs
  • Drainage costs
  • Land clearing
  • Demolition of existing improvements (less salvage)
  • Landfilling
  • Grading
  • Interest on mortgages accrued at date of purchase
  • Accrued and unpaid taxes at the date of purchase
  • Other costs incurred in acquiring the land

Construction and equipping of buildings or other permanent improvements

The following definitions and guidelines apply:

Constructing and equipping: The process of erecting buildings and providing equipment to assure the buildings can be used for the purposes intended and the constructing and equipping of other permanent improvements. This category includes additions to and equipping of existing buildings. It does not include consumable supplies.

Buildings: Roofed structures (conventional or underground) that house operations. This category includes storage structures and additions to buildings meeting this definition.

Other permanent improvements: Assets that enhance the quality of land or buildings or facilitate the use of land or buildings. Permanency is relative and should be interpreted in terms of the periods of usefulness. Only land can be considered permanent in any absolute sense. (Examples: paving, lighting, fences, sewers, electrical distribution systems, water systems, sewer systems, landscaping, air conditioning, elevators, vent hoods, energy management systems, mechanical, plumbing, and electrical systems, voice-and-data systems, computing systems, and the like.) Note: Systems that in normal usage could be moved from building to building or from room to room are not considered permanent improvements.

Cost of buildings may include:

  • Original contract price or cost of construction
  • Expenses for remodeling, reconditioning, or altering a building to make it suitable for the purpose for which it was acquired
  • Payment of unpaid or accrued taxes on the building to the date of purchase
  • Cancellation or buy-out of existing leases
  • Other costs related to placing the asset into operation

Construction costs of buildings and other permanent improvements may include:

  • The completed project
  • Excavation, grading, or filing of land for a specific building
  • Preparation of plans, specifications, blueprints, etc.
  • Building permits
  • Architectural, Engineering, or Management fees for design and supervision
  • Legal fees
  • Temporary buildings used during construction
  • Drainage costs
  • Land clearing
  • Demolition of existing improvements
  • Maintenance agreements purchased as part of the original acquisition (such as those for software application programs and operation systems or for energy management systems)

Equipping costs may include:

  • Original contract or invoice of the furnishings or equipment
  • Freight-in, import duties, handling, and storage
  • Specific in-transit insurance
  • Sales, use, and other taxes imposed on the acquisition
  • Site preparation
  • Installation
  • Testing and preparation for use
  • Reconditioning used items when purchased
  • Maintenance agreements purchased as part of the original acquisition
  • Development of the software application programs and operating systems

Major repair or rehabilitation of buildings or other permanent improvements

May include the following categories:

  • Repairs
  • Renovations
  • Replacements
  • Improvements

These enhancements are normally expected to:

  • Extend the useful life in excess of one year
  • Improve operating efficiency
  • Eliminate health and safety hazards
  • Correct structural or mechanical defects
  • Upgrade the quality of existing facilities
  • Convert these assets to more useful functions

Acquisition of capital equipment, library books, and library materials

Capital equipment: Fixed or movable tangible assets which have a useful life greater than one year. Computer software operating systems and application programs are considered capital under this definition.  Routine maintenance is not an allowable HEF expenditure. Equipment costs may include:

  • Original contract or invoice of the furnishings or equipment
  • Freight-in, import duties, handling, and storage costs
  • Specific in-transit insurance
  • Sales, use, and other taxes imposed on the acquisition
  • Site preparation costs
  • Installation and associated training costs
  • Costs for testing and preparation for use
  • Costs of reconditioning used items
  • Maintenance agreements purchased as part of the original acquisition
  • Development costs of computer software
  • Consumable items only when required for equipment start-up
  • Equipment parts if the parts materially extend or increase the useful life of an existing piece of equipment. HEF may also be used for the purchase of parts or accessories for incorporation into a newly purchased piece of equipment.

Library books: These acquisitions are allowed only from the TWU University Library.

Library materials: These acquisitions are allowed only from the TWU University Library.

Payment of principal and interest on bonds issued under this authority

See Article VII, Section 17(a) of the Texas Constitution for Higher Education Institutions for information related to the issuance of bonds under this authority.