Fund 20

LAST UPDATED: January 13, 2014

What You Should Know

There are more than 6,500 fund 20 project grants with balances -- more than for any other operating fund group. Almost 15% of all operating budget expenditures occur in fund 20. 

Fund 20 project grants receive support from many different restricted and unrestricted sources, such as:

  • restricted endowment income
  • restricted term gifts
  • unrestricted general funds (administrative allowance departmental savings, Science Fund allocations, research rebates, grants from the University Committee on Research in the Humanities and Social Sciences, or UCRHSS )
  • unrestricted outside income (for example, conference fees)
  • transfers across departments
  • other sources, such as corporate affiliate fees

Compared to fund 10, a distinguishing feature of fund 20 project grants is that unexpended balances or deficits automatically roll over, or carry forward, from one fiscal year to the next. The amount of carry forward is visible on the PGS001 report, on the “Prior-year Net Balance” line.

Along with current-year income, carry-forward amounts are included as part of total spending authority. You should always plan to spend these balances over a reasonable period of time. If donor-imposed restrictions make it difficult to spend all available income or carry-forward, consult with the budget office to explore potential legal or donor remedies. Deficit balances should be addressed and eliminated; not rolled over from year to year.
 

Endowment Payout & Investment Income

Endowment payout and other forms of investment income are posted to fund 20 project grants by the budget office, using account code 198. Only the budget office can use this account code. 

Transfers of endowment payout and other investment income from one fund 20 project grant to another should be made using account code 199 on both sides of the transaction, if the source endowment’s restrictions are sufficiently general; more restricted endowment income should not be transferred from one project grant to another. For more information, see the accounting guidelines portion of the Gift Administration website.

Contributions of endowment income to agency departments (5XX) should be charged to account code 578 on the funding department side, and credited to account code 156 on the receiving side. See the Account Code Primer for more information.

Three Income Sources

The source of the investment income appears on your PGS001 report as a seven-digit “090” number that is the unique identifier for the invested fund. The journal line description indicates whether the source is a primary pool endowment or quasi-endowment fund (PPI), a secondary pool fund (SPI), or an external trust (EXT TRUST). 

Income from these three sources is determined differently, and you should take that into account in your financial planning.
 

Primary Pool Income

Primary pool income, or endowment payout, changes annually according to the spending rule set by Princeton’s Trustees. The spending rule generally increases payout by five percent per year, but this parameter is subject to change by the Trustees. For the current rate, see the primary pool payout table.

Secondary Pool Income

In contrast to primary pool payout rates, which are fixed for an entire fiscal year, secondary pool interest income tracks short-term interest rates. This causes secondary pool interest income to fluctuate up or down during the year, making revenue estimation difficult for these funds. For example, interest earned on secondary pool balances fell by 80% in FY2010 (from 3.42% to 0.67%) and by a further 82% percent in FY2011 (from 0.67% to 0.12%). See the secondary pool payout table for current rates.

External Trust Income

External trust income depends on decisions by individual trust managers, not on Princeton’s spending rule. As such, external trust income fluctuates from year to year, often by much larger and different percentages than for endowments managed by Princeton. Unlike primary pool and secondary pool funds, there is no common rate of change for external trust fund income; annual income change rates vary from trust to trust.
 

Income Restrictions

Most investment income is restricted by the donor and must be spent for specified purposes. In other cases, the funds may be unrestricted by the donor but designated to a certain department’s use by the Provost’s Office or by another authorized central office. 

To ensure that you are familiar with the restrictions on invested funds that you control, consult the IF001 report in the Information Warehouse. Under each project grant that receives income from a primary pool, secondary pool, or external trust fund, you will see information about how a fund was established, whether or not it is restricted to endowment, and the purpose or purposes for which it may be spent.

For specific guidance and policies related to administration of restricted endowment fund payout, see Gift Administration.

Science Fund Allocations

The Provost’s Office makes allocations from the Science Fund to help fund faculty start-up packages and for special initiatives. These allocations are supported by general funds appropriations and are transferred to departments on account code 194. Departments should use account code 194 on both sides of the transaction if they transfer their allocations to other project grants after the initial deposit by the Provost’s Office. As with any general funds allocation, Science Fund appropriations may not be invested in the primary or secondary pool.

Since Science Fund allocations are fixed, often one-time, commitments, expenditure plans for these allocations should be based on the information contained in commitment letters and emails between the Provost’s Office and the receiving department.
 

Research Rebates

Research rebates represent an appropriation of unrestricted general funds to departments and principal investigators (PIs) based on the prior year’s indirect cost collections from sponsored projects that carry the maximum federal overhead rate. The rebate is posted each year to departmental fund 20 project grants DPT295X on account code 192.

The total rebate equals 3/58ths (5.17%) of overhead collected for all awards paying 58% and 6/61sts (9.84%) of overhead dollars for all awards paying 61%. There is no rebate on awards with indirect cost rates lower than 58%. 

Rebates are calculated and posted as follows:

  • For 58% grants, one-third of the rebate (1 of the 3 points) is allocated to a project grant designated by PI name and under the PI’s control.
  • For 61% grants, two-thirds of the rebate (4 of the 6 points) is allocated to the PI. The additional three points are intended to help the PIs meet compliance obligations associated with their grants and to provide flexibility in managing their research.
  • The remainder of the rebate is allocated to the department’s 2950 project grant.
  • Rebates earned in centers (PRISM, PEI, et al.) are credited as follows:
    • The one-third for 58% or two-thirds for 61% PI share goes to the PI.
    • The departmental share stays in the center where the grant is recorded.

A detailed list of rebates generated for each PI and for the department as a whole is available from the budget office, Kate Braunstein.
 

UCRHSS Grants

Regular, full-time members of the faculty in the humanities and social sciences may apply to the University Committee on Research in the Humanities and Social Sciences (UCRHSS) for grants in support of scholarly research.

UCRHSS grants from University general funds are posted to DPT23XX project grants in individual academic departments on account code 192. The committee also makes grants from the William Hallam Tuck Fund and from the Frank D. Graham fund, which are donor-restricted endowed funds. These awards are posted to individual departmental fund 20 PGs on account code 199.

For more information see UCRHSS.

Term Gifts

Term gifts, in contrast to endowment gifts (which produce income only), are fully expendable, and usually are to be spent over a three- to five-year period. The Development Office posts term gifts to project grants on account code 130 or 131. A record of donors and amounts of term gifts appears on Stripes reports in the Information Warehouse. 

It’s important to know the amount and duration of your department’s term gifts so that supported activities cease, or are funded by other sources, when term gifts are exhausted.

Work the development officer or corporate and foundation relations representative assigned to your department to get an idea about the timing and amount of large gifts that will be coming to your department, as an aid in planning how you will spend those gifts.

To view the restrictions on term gift project grants that you control, see the TG001 report in the Information Warehouse. Under each project grant established to hold a term gift in recent years, you will see information about the donor and purpose or purposes of the gift.

For specific guidance and policies related to administration of term gifts, see the Gift Administration website.

As with highly restricted endowment income streams, highly restricted gifts should be expended in the PG to which they are originally deposited; transfers of gift income should only occur if the underlying gifts are more generally restricted. For more information, see the accounting guidelines portion of the Gift Administration website.
 

Departmental Savings

DPT2900 project grants hold general funds surpluses transferred from fund 10 administrative allowance project grants. Balances accumulated from general funds savings in one year may be transferred back to fund 10 in subsequent years if needed to cover deficits. 

Fund 20 balances from gifts, endowment income, or other sources should remain in the respective fund 20 project grants, and should not be commingled with balances in the DPT2900 departmental savings project grant.
 

GL Suspense Project Grant

The DPT2993 suspense project grant is used to post errant transactions, allowing the rest of the batch to be processed without delay and flagging the transaction so the department manager can determine the correct project grant.

Other Central Fund Commitments

The Provost’s Office sometimes makes other non-Science Fund commitments for specific projects or initiatives in academic or administrative departments. The Provost’s Office will notify your department about such allocations.

New project grants typically are established to hold funds transferred for these one-time, special purposes. These transfers may appear on the 199 or 193 account code, depending on the originating source. Some other central offices, such as the Dean of the College and Dean of the Faculty, also make funding transfers from central funds under their control.

Contact the originating department if you have any questions about the purpose, amount, or duration of the central funds being transferred to a project grant in your department.
 

Funding Transfers between Departments & Shared Funds

It is often appropriate to transfer funding between departments in order to support shared activities like conferences, seminars, or research projects. Depending on the original source of funding, the incoming transfer will usually appear on account code 193 (gift and other reallocations), 199 (investment income reallocations), 192 (research rebate), or 194 (Science Fund). 

Departments that make these transfers should inform the receiving department of any restrictions on the funds being transferred. If your department sees such an incoming transfer and does not know the terms and conditions of the transfer, ask the originating department.

Except for transfers to agency departments (5XX), the same account code should be used on both sides of the transaction. Contributions to student organizations or other 5XX project grants usually debit account code 578 and credit account code 156.

In some cases, it may be appropriate to record a shared expenditure rather than a transfer of funds. For instance, if a large item of equipment is being purchased jointly by two or more departments, it is usually better to record the expenditure in each department, rather than transferring funds.

Balance Transfers from Investment Principal

Quasi-endowments in the primary pool, and secondary pool funds, can be liquidated partially or wholly. 

In cases where liquidations are permitted and approved, the budget office will post the balance transfer from the principal project grant (081XXXX or 082XXXX) to the spending project grant (your fund 20 project grant) on account code 197. Requests to withdraw balances should be submitted to gift administration.

Outside Income

Departments sometimes create project grants to hold unrestricted income from external sources, such as royalties from the sale of publications, membership fees from corporate affiliates, or fees collected from external participants in conferences organized by University departments. This unrestricted, external income is typically posted on account code 156 or other more specific income codes.
 


 

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