Administrative Forum: Institutional Trust Funds Use

Thursday, November 17, 2011

Chris Wilks, Sonja Austin and Sharon Riley

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

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

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

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

Unrestricted Operating Funds• Range of numbers is 137000-138999 and139001-

139699• Largest group of the ITFs • People tend to confuse “unrestricted” and

“discretionary”

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 spentwithin those parameters

• Provide greater flexibility in accomplishing the existing program and research goals and in pursuing and developing new ones

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

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

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

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

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”

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 beused

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

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

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

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 fundpurpose

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

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

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

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

Questions?

ContactsChris WilksSenior Trust Specialist(704) 687-5807crwilks@uncc.edu

Sonja AustinTrust Specialist(704) 687-5811slaustin@uncc.edu

Sharon RileyTrust Specialist(704) 687-5808skriley@uncc.edu