Fund Evaluation Guidelines

As a department administrator, you should establish and communicate fund review protocols—including timing, frequency, review procedures, and approvals—after evaluating both the attributes of the specific fund and the internal controls which have been established within your department.  Evaluation of a fund should include the consideration of the following:



Nature of the Restriction

Funds with very narrow restrictions warrant a higher level of attention than gifts with broad restrictions. 

Funding Source

Funds received from active donors (i.e. those who are actively involved with the department, who contribute regularly or have the potential to do so in the future, and/or who require ongoing stewardship reports) merit increased stewardship attention.

Nature of Transaction

Scheduled payroll and routine activities generally require a lower level of review than those which are unscheduled and/or non-routine. For example, you may be able to simply review a particular fund report to ascertain that a scheduled payroll transaction has been recorded properly. However, in order to ensure that a non-routine transaction is properly recorded, you may be required to examine backup documentation.

Anticipated Transaction Levels (dollars and number of transactions)

Funds with high levels of transactions, in terms of dollars or number of transactions, should be reviewed more frequently than those with low levels of transactions. For example, "Prize" funds may have activity at one time during the year, so review of the activity in this particular fund need only be completed once per year. It may, however, be a good idea to periodically review the available balance in the fund when expenditures are not anticipated to ensure that errors have not occurred.

Amount of Available Funds

Funds which have large available balances warrant a high level of attention. Consideration should not only be given to reviewing fund activity but to ensuring that balances are spent in a timely manner, consistent with donor intent.

Internal Controls

Sound internal Controls provide reasonable assurance regarding: effectiveness and efficiency of operations, reliability of financial reporting, and compliance with donor restrictions and University policy. As a department administrator, you should strive to establish adequate internal controls within your department.

Issues to be considered include the following:

Authority and Responsibility

All department personnel should have a clear understanding of authority and responsibility within your department.

Organization of Department Personnel

Optimal organizational structure ensures that there is a good segregation of duties. In other words, one person does not process a transaction from the beginning to the end of a process (i.e. authorizing, recording, receiving, and reconciling).


Department personnel should be adequately trained.

Adequate Processes

Approvals, authorizations, reconciliations, and monitoring processes should be established and communicated.

Clear Policies

Policies should be established and communicated in a form and timeframe that enables people to carry out their responsibilities.