ACCOUNT ADMINISTRATION POLICIES

The purpose of this manual is to provide information and to assist the Account Administrator in understanding the University of Hawaii Foundation’s (Foundation) policies and procedures relating to accounts administered by the Foundation.

 UNIVERSITY OF HAWAII FOUNDATION

The Foundation is a non-profit organization established in 1955. The Foundation’s mission is "to secure, raise and manage gifts to assist the University of Hawaii system in reaching its maximum potential". To achieve this mission, the Foundation will (1) utilize and maximize available resources to generate gifts from all potential sources for the benefit of all campuses of the University, (2) build and manage relationships on behalf of the University which, both short term and long term, will generate additional funds for the University, (3) provide leadership throughout the University system by managing the fundraising process and contributing to a cohesive advancement program, and (4) manage assets to generate competitive returns, while inspiring trust and confidence in that ability.

The Memorandum of Understanding between the University and the University of Hawaii Foundation states that the Foundation is organized to receive, hold, manage and expend private funds for the benefit of the University and its programs. The Foundation will also insure that gifts are used to fulfill the specifications of the donor.

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 Types of Accounts

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Endowment accounts receive gifts that donors have specified not be spent and that only earnings on the corpus be made available for use. These monies are invested according to the investment policies established by the Foundation’s Board of Trustees. Annually, the Board sets the rate for distribution to participants to be expended according to the purpose of the account.

The minimum gift(s) to initially open any endowment account is $10,000. The donor(s) shall continue to make gifts to the account until the gift total reaches the required level to be fully endowed. See Appendix A for different gift levels currently required to fully endow an account. The account must be fully endowed within five years from the initial gift, during which time the net earnings generated from the endowment shall be reinvested and retained in the account. An unnamed general endowment account will be considered fully endowed at $10,000.

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Quasi Endowment accounts represent expendable monies that the account administrators have requested be invested. The minimum amount required to set up this type of account is $50,000. All transactions of $100,000 or more require the Foundation Board of Trustees’ approval. See Appendix B for quasi endowment transaction policies.

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Expendable accounts receive gifts/other income that may be expended according to the purpose of the account, which reflects the donor’s wishes, and in accordance with the Foundation’s policies as outlined in this manual. The minimum amount to open this type of account is $1,000, provided there is no other existing account with a similar purpose. Any interest earned on expendable accounts is used to support the operations of the Foundation.

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 Purpose of Accounts

The donor’s wishes provide the most important criteria for determining the account’s purpose. This purpose should be clearly stated at the time of the account’s establishment. New gifts can often be placed in existing accounts and still fulfill the intent of the donor.

The purpose of all accounts administered by the Foundation must be University-related. Changes or revisions to the purpose or the name of an account can be made when appropriate and requested in writing. In some cases, when the account is set up for a specific purpose by the donor, written approval of the donor is required.

A Memorandum of Understanding (MOU) typically accompanies all endowment gifts. If for some reason the requirements of the MOU cannot be fulfilled, the Board of Trustees of the Foundation in consultation with the University will determine an alternate disposition of the funds consistent with Foundation policy. For significant gifts not governed by an MOU, the account administrator should obtain written approval from the Dean/Director/Chancellor, whichever is applicable, to move the monies to another similar-purposed account.

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Establishing an Account

A UHF Request for Establishment of Account Form-F001 (Appendix C) must be submitted to create an account.

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Approvals - Accounts for colleges and schools must be approved by the dean, chancellor or provost of the unit. For all other accounts, the vice-president to whom the unit reports must approve the establishment.

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Account Administrators - There should be a minimum of two, but not more than six, University-affiliated individuals who are authorized to approve transactions. These individuals are referred to as account administrators throughout this policy. Persons selected must meet the following criteria: (1) be employees of the University holding a faculty or administrative position classification or higher and (2) be able to spend the time necessary to personally carry out their responsibilities described below.

A temporary account administrator may be assigned for specific dates. This will allow a unit to conduct business with the Foundation when an account administrator is unavailable. A memo assigning a temporary account administrator, including a sample signature and period of authorization, should be sent to the Foundation’s Fiscal Office. A current account administrator must sign the memo.

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Changes to an account’s attributes – title, unit and authorized signers can be revised by a memorandum signed by an account administrator. The memorandum needs to include a sample signature of any new authorized signers.

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All accounts will be reviewed at the end of each fiscal year. If an account has been inactive for two years, the account may be closed with the account administrator’s approval and the balance transferred to an account with a similar purpose or to the Foundation’s Fund for Excellence.

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Responsibilities of Parties

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The University of Hawaii Foundation's responsibilities are to ensure that:

• Properly authorized transactions are processed in a timely manner
• Compliance with account restrictions is determined
• Transactions are reasonable and properly recorded and classified
• Project History Reports regarding the activity and status of accounts are produced monthly and sent to the account administrators in a timely manner.

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The Account Administrator's responsibilities are to ensure that:

• Accurate and complete source documents and supporting documentation necessary to execute a transaction with the Foundation are provided.
• All transactions are appropriate, reasonable and conform to the account’s purpose. Account administrators are expected to thoroughly understand and comply with the restricted purposes of their accounts.
• The monthly Project History Report is reviewed and that any unauthorized transactions are reported to the Foundation’s Fiscal Office immediately. See Appendix D for instructions on how to read the project history report.

§         The account is managed so that expenditures and encumbrances do not exceed the available cash in the accounts.

• Each expenditure has sufficient documentation to clearly indicate a benefit to the University.

  Sensitivity to the appearance of improper use is critical.

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Submitting Deposits

When submitting cash or checks to be deposited in a Foundation account, use the Transmittal of Contribution Form-DP001 (Appendix E) for gifts and the Transmittal of Other Income Form-DP002 for non-gift income. (Appendix F).

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Gifts

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Cash Gifts

• Cash gifts can be in the form of cash, checks or credit cards. Credit card fees will be charged back to the project account.
• Account administrators should not make personal gifts to an account from which they are authorized to make disbursements which could be construed to be to their personal benefit, e.g. travel or entertainment, unless the gift is insignificant in proportion to the total gifts to the account.

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Pledges

• Pledges, except telemarketing pledges, must be properly documented and signed by the donor in order for the Foundation to record the gift.
• Pledges over $10,000 may be documented using the Foundation’s pledge form (Appendix G).

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Gift of Securities

• See Procedures for Accepting Gifts of Securities (Appendix H).

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Non-Cash Gifts

• Non-cash gifts include tangible items such as equipment, supplies, real property, etc. Non-cash gifts will not be accepted by the Foundation unless there is a reason to believe the property can be disposed quickly. Non-cash gifts intended for use by the University must be accepted by the appropriate University personnel. If accepted, the Foundation will facilitate the processing by the University of these gifts-in-kind. All non-cash gifts with a fair market value of $1,000 or more will be included in reports on overall support to the University. Please complete the Transmittal Form for Non-Cash Gifts-DP014 (Appendix I).
• If the donor intends to claim a tax deduction for a non-cash gift with a value of $5,000 or more, he/she will be responsible for obtaining an appraisal. An IRS Form 8283 Non-Cash Charitable Contribution must be filed with the donor’s tax return. An official of the University will be required to sign Form 8283 acknowledging receipt of the non-cash gift. See Transmittal Form for Non-Cash Gifts-DP014 (Appendix I) for further instructions.

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Gift Premiums

• When conducting a fund drive in which goods or services will be provided in return for a gift, a Gift Premium Worksheet-DP005 (Appendix J) must be submitted to determine what portion of the payment is tax deductible. A full-value deduction may be allowed depending on the type or value of all benefits received in connection with the gift. See Appendix K for the current Low-Cost Token Items and Safe Harbors for Gift Premiums-DP004 figures. This chart is updated annually and is available at the UHF Fiscal Office.

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Non-Gift Income

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Some types of non-gift income may be deposited in the Foundation for a University program or activity approved by the University. The following types of non-gift revenue may be deposited in a Foundation account:

• Royalty payments generated by Foundation-owned property
• Fundraising event proceeds to benefit the University
• Research funds for which there is no deliverable
• Reimbursement/refunds for items paid with Foundation funds
• Membership dues to university-affiliated organizations such as alumni associations
• Sale of education materials produced and purchased with Foundation funds.

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The following types of funds are not eligible for deposit in a Foundation account:

• Research contracts and grants where there is a transferring of assets (cash) in exchange for specified benefits to the resource provider
• Proceeds from the sale of University property originally purchased with University funds
• Any funds of a personal nature or an outside business activity not specifically generated for the benefit of the University
• Income generated from the use of University facilities and resources
• Registration fees for University credit and non-credit courses, workshops and conferences
• Revenues generated from a University event (e.g., University athletic team playing at a fundraising tournament)
• Corporate sponsorships where there is an arrangement or expectation that the corporation will receive a substantial benefit in return for their payment.

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 Fundraising Events

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If monies for a fundraising event sponsored by the University will be collected and deposited in a Foundation account, an Event Worksheet-DP003 (Appendix L) must be submitted prior to the printing of solicitation materials or publicizing the event. Attach a budget and draft copy of the notice of the event for review by the Foundation. This form will be used to calculate the tax-deductible portion of the event fee.

If the event fee is $75 or more per person, the Foundation will record and acknowledge all donors’ gifts. If the event fee is less than $75 per person, the Foundation will record and acknowledge donors’ gifts only for tax-deductible amounts of $25 or more.

If the Event is not a fundraising event (the value of the item the donor receives is equal to the amount collected), e.g. a banquet where the fair market value of the dinner is equal to the cost, an Event Worksheet will not be required to be completed.

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For reporting prizes awarded at special events see Section IV.11.00.

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For depositing monies raised from auction sales, please submit a Transmittal of Auction Items Form-DP008 (Appendix M) to provide the fair market value of each item auctioned. The tax-deductible portion, if any, will be the purchase amount over and above the fair market value of the item. The fair market value of each item to be auctioned must be displayed with the item at the time of the sale or in any printed materials listing the items.

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Submitting Requests

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Timing – Requests for checks that are received by Friday will be processed by the following Friday, provided all documentation is in order.

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Authorized Signatures - Requests for disbursement or transfer of funds in excess of $250 require the signature of two account administrators. A second authorized signer must countersign payments to an account administrator, regardless of the amount.

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Purchase Orders

• Will be issued if a vendor requires a purchase order before providing goods or services
• Complete and submit a University of Hawaii requisition form with authorized signatures
• Purchase orders are issued one day after the requisition is received, providing all documentation is in order
• A copy of the purchase order will be returned to the account administrator for use as a receiving report
• If the actual amount of the invoice is the greater of 5% or $100 more than the purchase order, the account administrator's approval will be required before payment can be made except for reasonable changes or modifications to taxes, shipping charges or insurance.