endowment suspense 10

Endowment Suspense 10 (for non-majors)

UW Endowments from the Perspective of Endowment Suspense

10-13-09

1. Endowments have minimums.

$25,000: program support, research fund, lectureship

$50,000: scholarships

$100,000: Fellowships

$250,000: Professorships

$1,000,000: Chair

Two facts about endowment investing:

2. Gifts are invested once each quarter.

UW Endowment Basics

Suspense Account

CEF

JunFeb Mar Apr May

Accumulating gifts to new endowments

Additions to existing (invested) endowments

4th qtr investment

UW Endowment Basics: Why Have Suspense Accounts?

Suspense Accounts:

accumulate gifts until the minimum is reached.

hold additions to existing endowments until the next investment date

Three matching programs:

1. Matching Gift Initiative (MGI)

2. Faculty-Staff-Retiree (FSR) Campaign for Students

3. Students First

UW Endowment Basics

NO! There’s

Matching!Simple, no?

96-9000New Endowment Suspense

Non-matchable gifts accumulating to minimum, including non-matchable FSR gifts

96-9100 CEF Suspense Existing

Non-matchable additions to existing endowments, including non-matchable FSR gifts

Suspense account budget #’s: 96-9x00

UW Endowment Basics: Suspense Account Taxonomy

we need at least two… …but there’s FSR

and Students First Matching!

96-9000New Endowment Suspense

Non-matchable gifts accumulating to minimum, including non-matchable FSR gifts

96-9100 CEF Suspense Existing

Non-matchable additions to existing endowments, including non-matchable FSR gifts

96-9500 New Endowment Suspense FSR

Matchable gifts to accumulating FSR endowments

96-9600 FSR Matchable Gifts

Matchable additions to existing FSR endowments

96-9700 New Endowment Suspense SCH

Matchable gifts to accumulating Students First endowments

96-9800 CEF Suspense SCH

Matchable additions to existing Students First endowments

UW Endowment Basics: Suspense Account Taxonomy

…and don’t forget MGI !

96-9000New Endowment Suspense

Non-matchable gifts accumulating to minimum, including non-matchable FSR gifts

96-9100 CEF Suspense Existing

Non-matchable additions to existing endowments, including non-matchable FSR gifts

96-9500 New Endowment Suspense FSR

Matchable gifts to accumulating FSR endowments

96-9600 FSR Matchable Gifts

Matchable additions to existing FSR endowments

96-9700 New Endowment Suspense SCH

Matchable gifts to accumulating Students First endowments

96-9800 CEF Suspense SCH

Matchable additions to existing Students First endowments

96-9200 Founder’s Fund Suspense

Founder’s Fund Matching Pool

96-9400 CEF Suspense MGI

Additions to existing MGI endowments

UW Endowment Basics: Suspense Account Taxonomy

Endowment Suspense Report Basics: Purpose and Process

Purpose Provide quarterly investment data to Treasury:

Amounts to invest (new and existing endowments).

New endowments over investment minimum.

Segregate matchable from non-matchable gifts.

Provide tracking info for departments and fund raisers.

Process Identify, sort and total gifts posted monthly to FIN.

Verify that totals reported to Treasury = totals in FIN

Identify misplaced funds, make corrections.

Schedule

Monthly, posted by the 15th.

Interim Report, 3rd month of each quarter, data pulled on the 20th.

Corrections involve selling CEF shares to backfill the deficit

(bad, especially bad in a down market)

This is often due to a gift modification after the funds have invested.

Endowment Suspense Report Basics: What’s at stake?

OOPS! Errors in reporting or in gift-processing (mis-allocations) can cause Treasury to over-invest.

Endowment Suspense Report Basics: Glossary

Suspense Account budget numbers: 96-9x00

Principal Account numbers: 99-xxxx

Allocation Code: 6-letter code OR 6-letters + S/F/M

Pool Code: Suspense account #. e.g., 96-9100

used to track individual endowments with the suspense accounts

account number assigned to invested endowments within the CEF and suspense accounts

state agency accounts in the CEF: 38-xxxx

REDDOG: non-matchable gifts

REDDOGS: matchable gifts, Students First matching program

REDDOGF: matchable gifts, Faculty-Staff-Retiree matching program

REDDOGM: matchable gifts, Matching Gifts Initiative

Specifies which suspense account receives funds as they are distributed out of the general ledger into suspense.

Endowment Suspense Report Basics: Example Scenario

1. A professor establishes a pledge payment program for a new Financial Analysis Training in Biology Endowment, within the FSR matching program.

2. The new endowment is assigned the Allocation Code: FATBIOF

3. The pool code for the new endowment is 96-9500 (New Endowment Suspense-FSR)

4. Each month, payroll deductions are FAS’d to 96-9500 and allocated to FATBIOF.

6. Continuing payroll deductions are now FAS’d to 96-9600 and will be matched until his contributions total $10,000 (he can continue to make non-matching contributions after that).

5. In Nov 2008, 96-9600 FATBIOF reaches the $5,000 minimum. On Jan 1, 2009, Treasury invests the balance in the CEF and the endowment is assigned the principal account number 99-6666. The pool code is updated from 96-9500 to 96-9600 (FSR Matchable Gifts).

7. The Biology Dept finds some extra money in a current use account and decides to make its own monthly matching contributions to the FATBIO endowment. This money is not eligible for UW matching so a new (“mirror”) allocation is created, FATBIO, with the pool code 96-9100 (CEF Suspense Existing).

8. Note that the endowment now has two allocation codes pointing to a single principal account number, and that each allocation code has a different pool code.

1. Quarterly Report

2. Quarterly Investment Data

3. Reconciliation to MyFD BSR

4. Monthly Transaction Datasheet

5. Master Allocation List

Endowment Suspense Report Basics: Report Workbook Tabs

Quarterly Report: Allocation Description

Endowment nameAllocation Code

Principal Acct #Error flag (!)

School abbreviationDepartment

Previous qtr ending balance

Amt invested

Balance after investment

Quarterly Report : Investment Data

Ending balance

Monthly activity by allocation

Total quarter activity

Quarterly Report : Monthly Transactions (Gifts)

Adjustments for pending transactions

Adjusted quarter total (does not reconcile to MyFD)

Reference to footnote explaining adjustment/anomaly

Quarterly Report : Adjustments and Notes

Where’s the money (which suspense account)?

Control-F is Excel find

Look up allocation in Advance. The pool code is the suspense account #

Look up the pool code on the Monthly Allocations Tab of any suspense report.

What’s the current balance?

Ending balance

Monthly activity by allocationTotal quarter activity

The Quarterly Report tab lists monthly activity and current totals.

Control-F is Excel find

Control-F is Excel find

The monthly transaction datasheets list individual gifts and transfers.

What gifts make up the total?

Allocation CodeTran Dec = Donor Name Tran Ref 3 = Gift Receipt #

Any questions:

Michael Tu AnalystUA Finance & Administration

(206) 685-9596

mstu@u.washington.edu