1. Administrative Forum: Institutional Trust Funds Use Thursday, May 26, 2011 Julie Harman, Sonja Austin and Julie Hughes

2. Definition of Institutional Trust Funds (ITFs) ITFs are non-appropriated funds on deposit with the NC Dept of State Treasurer ITFs are not general (state) funds or capital funds Although they are not bound by the restrictions of the state Budget Manual, many of the same guidelines are used as the basis for management decisions ITFs must follow the rules for the “color of money” i.e. the source determines the available use(s) of the funds

3. ITFs by Categories Restricted Operating Unrestricted Operating Discretionary Overhead Research Residuals Millennial Campus Recharge Units Agency

4. ITFs by Categories ITFs also include: Auxiliary & Student Fee Funds (300001- 399999) Contract & Grant Funds (500000-599999) These ranges will not be discussed in this presentation

5. Restricted Operating Funds Range of numbers is 600000-699999 Restrictions are donor-driven and are for a particular purpose Most non-endowed scholarships are in this range

6. Unrestricted Operating Funds Range of numbers is 137000-138999 and139001- 139699 Largest group of the ITFs People tend to confuse “unrestricted” and “discretionary”

7. Unrestricted Operating Funds cont. Donor allows more leeway with how gifts are used- many specify a preferred dept/program, etc., but the donor doesn’t restrict how the gift is spent within those parameters Provide greater flexibility in accomplishing the existing program and research goals and in pursuing and developing new ones

8. Discretionary Funds Range of numbers is 139701-139999 Source is totally unrestricted donor gift(s) made directly to the fund (or allocations made by Academic Affairs from unrestricted Foundation funds) Most desirable type of fund because of greatest flexibility

9. Discretionary Funds cont. This range of funds does however run the risk of legislative recall in times of severe economic hardship Expenditures should still pass the “prudent person” test

10. Overhead Funds Range of number is 120001-120999 Source is the 10% of the F&A cost recovery monies on grants and contracts that the departments get to keep Type of expenditures allowed is governed by Policy 500.5 of the UNC Board of Governors and must support the scholarly development of faculty, staff, and students, or campus infrastructure to enhance scholarly activities

11. Research Residual Funds No separate fund range, but are a part of the Unrestricted Operating fund range (139001- 139699/137000-138999) Source of funds is the residual balances of fixed- fee contracts (5XXXXX) Expenses should follow “the color of money” and be research related

12. Recharge Unit Funds No separate fund range, but are a part of the Unrestricted Operating fund range Expenses must support the operation of the recharge unit and revenues must be reinvested in the recharge unit Must work with Research Cost Management (currently Sandra Haynes) to establish and maintain a recharge unit Title of the fund must end in “RU”

13. Millennial Campus Funds No separate fund range These are specific funds related to the research function and CRI (Charlotte Research Institute) Millennial Campus Financing Act provides the guidance on how funds in this category are to be used

14. Agency Funds Fund Range is 830001-839999 University does not own the funds, we merely serve as the “banker” Can be used for any legal purposes as long as the authorized signatory approves When researching fund balance must look at balance in G11000

15. New Fund Form Requirements Internal Control requires separation of duties. The form needs to be completed so that the departmental contact and authorized signer must be different

16. Utilizing Trust Funds Transfer funds for deficit cash coverage or program support To process payment follow Accounts Payable guidelines (49er Mart, DPR, Scholarship form) Request for payments go to Accounts Payable and those paying from Trust Fund numbers come to us (Treasury Services) for fund use approval We verify fund availability and proper use of the fund (based on the established fund purpose) approve it, and then return it to AP/Travel for processing

17. Transfer of Funds Deficit cash coverage/support for a program from another department Transfer from another trust fund must also follow the rule of the “color money” You cannot decrease the restrictions of the money when transferring it (i.e. from an unrestricted to a discretionary) You have to keep within the guidelines of the fund purpose

18. To Speed Up the Expense Approval Process: Link the expense to the fund purpose Food Beverage and Amenity form completed and attached (if required) Provide additional supporting documentation requested to meet Treasury Services internal control standards: Agendas/Invitations On 49er Mart add comment or note stating business purpose Copy of speaker announcement On interdepartmental expenses/transfers provide a statement of relationship to program

19. Food Beverage and Amenity Form Most important question for us is business purpose Second most important is business relationship Most types of expenditures need supporting documentation for TS internal control audit requirements

20. Oddities Employee only Purchases: (i.e. flowers, awards, meals) can only come from Discretionary Funds unless certain other requirements are met (i.e. in Travel status) Gifts Be sure to complete the gift section of the Food, Beverage and Amenity form Cannot come from Unrestricted Funds unless they support the business purpose of the fund

21. Oddities cont. Food from Overhead (120000-129999) Not normally approved unless has a clear business purpose supporting research Scholarships Are any student financial assistance not only tuition Must be related to fund purpose especially when being paid out of a non-scholarship fund Not normally approved from Overhead funds unless has a clear business purpose supporting research

22. Questions?

23. Contacts Julie Harman Senior Trust Specialist (704) 687-5807 JulieHarman@uncc.edu Sonja Austin Trust Specialist (704) 687-5811 slaustin@uncc.edu Julie Hughes Trust Specialist (704) 687-5808 jrhughes@uncc.edu