Fund Evaluation Guidelines

LAST UPDATED: February 16, 2018

Department administrators should establish and communicate Fund review protocols, (timing, frequency, review procedures and approvals), after evaluating both the attributes of the specific Fund and the internal controls which have been established within the department.  

Evaluation of a Fund should include 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 require on-going stewardship reports), merit increased stewardship attention by the department.
  • Nature of Transaction Activity – Scheduled payroll and routine activities generally require a lower level of review than those which are unscheduled and/or non-routine.  For example, one 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 one may be required to examine backup documentation.
  • Anticipated transaction levels both in terms of dollars and number of transactions – Those Funds which have high levels of transactions, either 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 only at one time during the year. It may be determined that review of the activity in this particular Fund need only be completed once per year. In this instance, 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 – Those Funds which have large available balances warrant a high level of attention. Consideration should not only be given to reviewing the Fund activity but to also ensuring that balances are spent in a timely manner, consistent with donor intent.

Internal Controls are established to provide reasonable assurance regarding: effectiveness and efficiency of operations, reliability of financial reporting and compliance with donor restrictions and University policy. Department administrators should strive to establish adequate internal controls within their department. Issues to be considered include the following:

  • Authority and responsibility – Department personnel should have a clear understanding of authority and responsibility within the department.
  • Organization of department personnel – Optimal organizational structure ensures that there is a good segregation of duties (one person does not process a transaction from the beginning to the end of a process, i.e. authorizing, recording, receiving and reconciling).
  • Training - Department personnel should be adequately trained.
  • Adequate processes within the department – Approvals, authorizations, reconciliations and monitoring processes should be established and communicated.
  • Clear policies – Policies should be established and communicated in a form and time frame that enables people to carry out their responsibilities.

It is acknowledged that the ability to establish optimal internal controls in all areas may be limited in some departments. More stringent review protocols should be established in departments which do not have the best possible internal controls in all areas.


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