Transcript Endowment Compliance

C
B
T
An Educational
Computer Based Training Program
ENDOWMENT COMPLIANCE
The University of Texas at Tyler
General Compliance Training
U.T. Tyler Compliance
Program
The objective of this course is to assist you in
gaining an understanding of:
the policies governing endowment compliance
the documents that each department should
have related to their endowments
the tracking of the use of endowment
distributions
the monitoring of the use of endowments
the location of additional available resources
Policies Governing Endowment Compliance
and Use
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Endowments are established with a minimum
amount of $10,000 with the Office of
University Advancement. The donor gift and
a signed endowment agreement forwarded to
UT System and approved by the Board of
Regents.
Policies Governing Endowment
Compliance and Use (cont.)

The distributions (interest earned) from
endowments are used to fund scholarships,
academic positions, and other educational
programs and activities.
Policies Governing Endowment
Compliance and Use (cont.)
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Once the endowment agreement is approved by the
Board of Regents, the criteria or terms of the agreement
may not be changed by the donor at will.
Restrictions may be reduced, but additional
requirements may not be imposed.
Amendments may be submitted through the Office of
University of Advancement at UT Tyler and are then
presented to the Office of Development and Gift
Planning Services at UT System.
Policies Governing Endowment Compliance
and Use (cont.)
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Distributions from endowments for academic positions may be used
for salary supplementation and professional support of the holder,
including assistance in the holder’s research.
Endowment funds are invested at the UTIMCO (University of Texas
Investment Management Company). Distributions from endowments
supporting academic positions may be used to fund costs related to
recruitment activities for the sole purpose of filling the vacant
positions.
A new Endowment for an academic position must be approved by
the Board of Regents or its designee(s) before being announced.
No initial appointment will be made to an endowed or named
academic position without prior approval as a Request for Budget
Change by the president of an institution after review and approval
by the appropriate Executive Vice Chancellor. Subsequent new or
continuing appointments to the endowed or named academic
positions may be approved as a part of the annual operating budget.
Polices Governing Endowment Compliance
and Use (cont.)
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Interest income or distributions from endowments are received from UTIMCO and
deposited into local U.T. Tyler accounts (DEFINE) on a quarterly basis. Those few
held by external organizations may have one annual distribution.
REQUIREMENT: The Budget Authorities shall insure that the projected payout is
included in the annual budget and that the balance in DEFINE at the end of each fiscal
year is less than two times the annual distribution from the endowment. The Office of
University Advancement requires an annual Report of Use for monitoring purposes
and for excessive accumulation a Report of Planned Use by the Budget Authority is to
be submitted stating the plan to correct the excessive accumulation and the projected
payout for the following budget year.
REQUIREMENT For each Endowed academic position that remains unfilled for a
period of three consecutive years, the institution shall provide a report to the donor
disclosing the vacant status of the chair.
REQUIREMENT Endowed academic positions: U. T. Tyler must also report to the
Legislative Budget Board the average length of time in months endowed chairs have
remained unfilled and the percent of endowed chairs unfilled within the fiscal year
being reported.
REQUIREMENT Scholarships: Failure to award an endowed scholarship during its
first five years is reported to the donor and the Higher Education Coordinating Board
by the Office of University Advancement and results in notice of that failure being
published in the Texas Register.
Polices Governing Endowment Compliance
and Use (cont.)
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If the aggregate amount of an unawarded endowed scholarship
reaches $250,000, the University shall also notify the
Legislative Budget Board.
Diminishing an endowed program’s financial support from
institutional local funds within five years of the program’s
creation or endowment (i.e., U. T. Tyler has to continue the
same level of support as in the past), requires notification of the
donor, the Higher Education Coordinating Board and the
Legislative Budget Board as well as publication in the Texas
Register.
If any of the above occurs, upon application by the donor, the
University shall return the donation or endowment to the donor.
Endowment Documentation required by
Colleges and Budget Authorities
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A copy of the Endowment agreement and/or supporting
documentation showing use requirements
Monthly account reconciliations of Endowment accounts in
DEFINE
Supporting receipts and documentation for those expenditures
Where applicable, forms documenting the eligibility of
scholarship recipients
Notification copies of awards to professorships, chairs, and/or
departmental endowments
Copies of annual narrative Reports of Endowment Use, detailing
enhancement to the students, department, program
or academic area (Office of University Advancement will supply
template)
Tracking the Use of Endowment
Distributions
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Local endowment account balances and expenditure amounts
by category (i.e., salaries, wages, scholarships, etc.) can be
accessed through DEFINE by Deans, Faculty and/or staff.
Also, Endowment distribution information can also be accessed
through UTIMCO via CRIS (Component Reporting Information
System.)
UTIMCO makes Quarterly Endowment Funds Summary reports
available on-line. These reports provide endowment account
balances, market and book values of the endowments, the most
recent quarterly distribution amount, and an estimate of the
annual distribution to the account. This report provides
investment and payout information only.
UTIMCO generates annual reports, which are sent by the Office
of University Advancement to endowment donor/contacts.
Monitoring the Use of Endowments
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An Annual Compliance Review Report will be distributed to all
budget authorities responsible for one or more endowments.
This report will include DEFINE fund balances for two fiscal
years and review of adherence to Policies and Procedures.
The responsible persons for the endowments within each unit
(usually the Department Chair and Dean in academic units and
the Vice President in non-academic units) will review all activity
and sign the report.
After signing, the budget authority will forward the report to the
Director of University Advancement and copy the Provost.
The Office of University Advancement will review each
endowment in detail on a three year cycle.
Monitoring the Use of Endowments (cont.)
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Endowment funds must also be spent in accordance with the
donor’s criteria documented in the endowment agreement and
institutional policy. In other words, endowments for scholarships
must be spent for scholarships, awarded to eligible applicants;
endowments for professorships must be spent only to support
the named professor and his/her allowable work-related
expenses; and endowments for other endowments must be
spent for specified expenses.
On a quarterly basis, the Office of University Advancement
reports the results of monitoring activities to executive
management through the Compliance Working Group.
Failure to Use the Funds or Spend Them
Correctly
Failure to use the funds or spend them correctly
could result in any or all of the following:
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Legal liability with the donor(s)
Return of the gift to the donor
Jeopardizing future gifts
Adverse public relations
Endowment Compliance
How do I find out more?
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General Appropriations Act of the 77th Legislative Sessions, Article III, Sections 44,
47, and 48, on Endowment Reporting Guidelines
Texas Education Code Title 3. SUBCHAPTER H. 51.401
Texas Government Code, Section 552.1235
Texas UPMIFA (Uniform Prudent Management of Institutional Funds Act) revised
2007
UT System Board of Regents Rules and Regulations,
Gift Acceptance Procedures, UT System Admin. Policy #UTS138
UT System Admin. Policy #UTS117.
Management Responsibilities Handbook, Revised October 2004.
U.T. Tyler’s Disciplinary
Procedures
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Failure to follow compliance
guidelines may result in disciplinary
action including: departmental
counseling, formal disciplinary
action, suspension or termination
and loss of confidence in donors.
Test Your Knowledge
Following are several
questions to test your
knowledge of the
information presented.
Answer all questions
correctly to receive credit
for the training.
Question #1
The balance in DEFINE is required to be below
two times the annual distribution income from the
endowment.
TRUE
FALSE
REVIEW
Question #2
Endowments may be established to fund
scholarships, academic programs, academic
positions, and other educational activities.
TRUE
FALSE
REVIEW
Question #3
A department can enter into a verbal agreement
with a donor as to how the endowment proceeds
can be used.
TRUE
FALSE
REVIEW
Question #4
Budget Authorities should maintain the following
documents related to their endowment accounts:
1. Copy of Endowment agreement and/or supporting documentation of
donor criteria
2. Monthly account reconciliations including documentation for their
endowment accounts
3. Documentation of student eligibility for endowed scholarship
ALL OF THE ABOVE
NONE OF THE ABOVE
REVIEW
Question #5
Endowment funds must be spent in accordance
with the endowment agreement.
TRUE
FALSE
REVIEW
Question #6
In this endowment training, references were provided
on where to find information and who to contact for
more information on Endowment Compliance.
TRUE
FALSE
REVIEW
Congratulations… you have completed
your training on Endowment
Compliance!
The University of Texas at Tyler
General Compliance Training
C
B
T
The Training Post
An Educational Computer Based Training Program