End User Administration of Restricted Funds

Policy Section
Sponsored Research

Effective Date
March 1, 2009
Last Updated
June 10, 2019
Responsible Executive
Vice President for Finance and Treasurer
Responsible Office
Office of Finance and Treasury
Contacts
Steve Semenuk
Operating Budget Director
(609) 258-5523
Richard Myers
Deputy Provost for Resource Planning
(609) 258-7800
Peggy Moorehead-Seas
Director, Donor Relations
(609) 258-6353

I. Summary

The University values its ongoing relationship with all donors and strives to administer and steward restricted funds in accordance with contractual, financial, fiduciary and legal obligations. Restriction refers to the mandatory use of a gift required by a donor. A restriction is considered to be legally binding and cannot be changed without the consent of the donor or by court order.

This policy sets forth the University’s expectations for end user management of Donor Restricted Funds that are deposited into departmental accounts, (excluding Sponsored Research Funds), to enable the University to properly spend, steward and administer these Funds and honor its fiduciary responsibilities. 

II. Who is Affected by this Policy

N/A

III. Definitions

Department Administrator - refers to the specific person within the department who has been delegated overall responsibility for the department's finances.

End User Department - refers to the department which controls the income received from a restricted spendable gift or Endowment Fund.

Restriction - refers to the mandatory use of a gift required by a donor. A restriction is considered to be legally binding and cannot be changed without the consent of the donor or by court order.

IV. Policy

Transactions recorded in Restricted Funds must conform to the terms set forth in the supporting documentation and funds must be appropriately stewarded.  In addition, transactions must comply with University financial and other relevant policies.

Financial oversight is the primary responsibility of department personnel. Department administrators will meet these responsibilities by implementing both preventative and post transactional review measures as follows:

Preventative Measures

  1. Establish and communicate clear procedures, responsibilities and authorization levels for the initiation and approval of transactions.
     
  2. Those authorizing a Restricted Fund transaction should have knowledge of the fund's restrictions and the department's financial plan.  They should also understand University policy, including the Office of Finance and Treasury Business Expense Policy.
     
  3. Approved transactions should be reasonable, necessary and conform to donor restrictions.
     
  4. Both the donor and the University expect that restricted funds, (both term gifts and endowment funding), will be spent for the intended purpose.  In order to achieve this goal, department administrators should establish strategies to ensure that funds are utilized appropriately.

Post Transactional Review Measures

  1. Financial Management reports should be periodically reviewed by a knowledgeable person to ensure that funds are spent in accordance with donor restrictions and discrepancies should be corrected on a timely basis.

V. Procedures

  1. For each Restricted Fund in a department, both endowment and term gifts, the department administrator should become familiar with the purpose of the Fund and any special restrictions or requirements.
     
  2. As part of the stewardship responsibilities associated with Restricted Funds, department administrators, at the beginning of the fiscal year, should create a financial plan to ensure that these Funds are spent.  Information pertaining to the financial plan should be communicated to those who are responsible for executing and approving transactions.
     
  3. The department administrator should ensure that any person who is responsible for approving restricted fund transactions has been appropriately trained, understands applicable policies and has the authority to obtain information and process transactions.
     
  4. Transactions relating to Restricted Funds should only be executed and approved by authorized account signers who have knowledge of the fund restrictions, University policies and the financial plan which has been established by the department administrator.
     
  5. Department administrators should evaluate each Fund, establish review protocols (timing, review procedures, person responsible for the review, etc.) and ensure that review procedures occur as stipulated. Documentation detailing the protocols should be prepared and maintained.
     
  6. Financial Management reports should be reviewed and documentation retained indicating that the review has been completed. The department administrator should decide what documentation is appropriate to retain. (Documentation may vary. For example, some administrators may require that copies of the reviewed financial reports be signed while others, who have many Funds, may require that a document be signed by the reviewer stating that an examination has occurred for the following specific Fund.) Adjusting entries resulting from the review should be recorded on a timely basis.
     
  7. Plans should be established and documented which address deficits and accumulating balances.

Revision Log

6/10/19 - Updated titles in contact section.

10/1/18 - Updated Executive Sponsor listing.

8/28/18 - Fixed broken link. No substantive changes.

8/10/18 - Updated to reflect post-Prime language.

1/6/12 - No changes. Moved to Finance Policy Library from Gift Administration Site.