Budgets are an integral part of fund accounting systems used by universities. Budgets are statements of available funds and anticipated expenditures for a definite future time period, usually a fiscal year. Each budget request is based on estimates of expenditures and revenues for a budget period. Information used to support these financial statements should be obtained from reliable sources. Once the budget is approved, funds are then made available in an appropriate account, and may be encumbered and/or expended as set forth in the approved budget proposal. However, each account must have an approved budget before such commitments and expenditures can be made from that account. Total commitments and expenditures cannot exceed the current modified budget within an account. Budgeted funds are requested for a particular purpose; therefore, they must be utilized for that purpose.

Accounts are grouped into fund types that are primarily determined by the source of funds. The principal fund types are identified and described below:

• State Funds - public funds (general and local) appropriated by the State Legislature for the support of the UTHSC.
  
• Designated Funds - accounts that receive funds from the sale of mission related goods and services to individuals or entities outside of the UTHSC community. Practice plan accounts and continuing education accounts are designated funds.
  
• Service Department Funds - (Auxiliary Enterprise Fund Accounts) - funds generated by operating entities within the University and the Dental Branch that furnish services to students, faculty, or staff.
  
• Contracts and Grants Funds - funds awarded to the UTHSC and the Dental Branch to support sponsored projects.
  
• Gift Funds - cash, checks, real estate, securities, gifts-in-kind, annuities, trusts, memorial gifts, insurance, and corporate matching gifts that have been given to UTHSC and the Dental Branch.
  
• Endowment Funds - funds that donors have given to the University with the stipulation that the corpus remains intact. Only income from the endowment fund may be spent.