Office of Budget and Finance

Definitions of Current Sponsored
and Nonsponsored Funds

Current funds can be categorized as either sponsored or nonsponsored.

Sponsored funds consist of grants and contracts administered through the Sponsored Project Administration (SPA). All sponsored research funds are restricted and are generally subject to special grant reporting procedures. Restricted funds are subject to legally binding limits established by the person or organization providing these funds for specific purposes, programs, departments, or schools.

Within the nonsponsored grouping, funds can be classified as unrestricted or restricted. Unrestricted current funds include all funds over which the University retains full control to use in achieving its institutional purposes. Most of the current nonsponsored funds are considered unrestricted – the exceptions include the State Specials and Other Restricted categories. Externally restricted funds may be used only in accordance with the purposes established by the source of such funds.




Operations and Maintenance: Operations and maintenance funds consist primarily of the general appropriation from the State of Minnesota and tuition revenues. Other sources contributing to the fund include a transfer of funds from the central reserves fund, student application fees, and parking fines.

State Specials: State Specials funds consist of restricted-purpose appropriations from the State. The University receives State Special allocations in four categories: 1) Agriculture and Extension Services, 2) Health Sciences, 3) Institute of Technology, and 4) System Specials, including support for Student Loan Matching Program, Industrial Relations Education, Natural Resources Research Institute, Center for Urban and Regional Affairs, the Bell Museum of Natural History, and the Humphrey Exhibit.

Indirect Cost Recoveries: Indirect Cost Recovery funds consist of partial reimbursements to the University based on a percentage of sponsored grant and contract direct costs and are provided for the indirect costs of research. Indirect costs of research are those expenses (often referred to as overhead) that cannot be readily and exclusively identified directly to each specific research grant or contract. Components of the indirect cost rate include departmental administration, sponsored projects general administration, building and equipment depreciation, operations and maintenance and libraries.

Central Reserves: Central Reserve funds consist of non-dedicated investment earnings and unrestricted proceeds from University property and settlements. This fund is a true central reserve fund and operates as a contingency funding source, i.e., no recurring funding activity occurs in this fund.


Auxiliary Enterprises: The University operates a number of self-sustaining operations called auxiliary enterprises. Their primary mission is to provide goods and/or services to individuals within the University including students, faculty, and staff. Residence halls, student unions, bookstores, parking and transit, health services, and intercollegiate athletics are the University’s primary auxiliary enterprises. Auxiliary enterprises operate as freestanding entities, responsible for covering all of their operating costs with fees charged.

Internal Service Organizations: Internal Service Organizations (ISOs) are institutional service departments established for reasons of convenience, cost, or control. Their primary mission is to provide foods and/or services to other University departments. Examples of major internal service organizations include Networking and Telecommunications Services, University Stores, Printing and Graphic Arts, and Facilities Management.

Other Unrestricted Accounts including Central Pools: The resources in these funds are primarily miscellaneous external sales and services. The central fringe benefit recovery pools are also included in this classification.

Other Restricted Accounts: Nonsponsored restricted funds consist of funds from business and industry, foundations including the University of Minnesota Foundation and Minnesota Medical Foundation, federal and state work-study, SEOG and PELL grants, private practice, and restricted funds from federal, state, and local government agencies, individuals and others.


Federal Research: These funds are composed of expendable research grants, appropriations, and contracts received from the federal government.

Other Sponsored Research: Other sponsored research funds include grants, appropriations, and contracts from non-federal sources including state and local government and private sources.

Page URL:
This page was last updated on: Tuesday December 12 2006

Error processing SSI file

View our online
Privacy Statement.

The University of Minnesota is an equal opportunity educator and employer.
© 2006 by the Regents of the University of Minnesota.