Invested Funds is responsible for overseeing the accounting for and compilation of financial reports on endowed, medical and contract college endowment, and similar funds. The staff is the liaison with the Investment Office, the Trust Office, Alumni Affairs and Development's Information Services Office, and units associated with endowment and similar fund accounts. Other areas of responsibility include the long-term investment pool (LTIP).
Investment Accounting focuses on true endowments, funds functioning as endowments, split interest agreements, endowment and similar funds assets, and liabilities.
LTIP Share Management
Prior to the implementation of KFS, shares were calculated by the legacy general ledger system. Between July 2011 and June 2013, shares were managed using Microsoft Access. In July 2013, FUNDRIVER, a software application, was implemented to manage the Long-Term Investment Pool (LTIP) shares (available on the Oracle BI Interactive Dashboards - Account site as of February 2018).
FUNDRIVER manages accounts at market value (MV) rather than "book" value. As a result, the monthly investment earnings will be booked to each general ledger account to bring the balance up to MV. The general ledger balance will reflect a one-month MV lag, with the exception of June 30.
Investments earnings consist of investment income, realized and unrealized gains/loss, net of fees. The activity will be posted to the following object codes: 3208 for funds funding as endowments (FFE) and true endowments (TE), and liability object codes – 2228 for deferred compensation and 2416 for funds held for others.
New features with FUNDRIVER:
- Shares are calculated on each transaction for the month.
- Withdrawals are made at MV.
- Historical cost is equal to the book value as of June 30, plus new gifts and payout returned to principal.
- Transfers between LTIP accounts and transfer in/out of the LTIP pool are recorded as transfers.
- Shares and share rate are rounded to eight decimals, reports will display six decimals.
- The use code will be updated with new attributes, more information to follow.
The LTIP cutoff will remain the 25th of the month. If the 25th falls on a weekend or university holiday, the cutoff date will roll back to the previous business day, so that actual cash can be invested or withdrawn within the same month. Note: e-docs must be approved by the 25th of the month. Transactions approved after the 25th will fall into the next period. A period cycle runs between the 26th of the current month and the 25th of the following month.
Accounting will post to the LTIP Share Management page the following standard Excel reports from FUNDRIVER monthly:
- Units and Market Values - this will contain the equivalent of the KFS account, title, MV share rate, units, and MV of the account.
- Market Values and Historical Gift Report – this will contain the equivalent of the KFS account, title, restriction classification, current market value, historical gift. This report will be available soon.
As we become more familiar with additional reports they will be posted to the website. In addition, we will begin working on customized reports to include additional information that has been loaded but not included on the standard reports, like the org number.
Below is a list of invested fund attributes to assist with the conversion between legacy and KFS:
- The Appropriation Number will contain either “LTIP” (long-term investment pool) or “SI” (separately invested), identified in legacy as account type 3 and 7, respectively.
- The Income Account will be stored in the Endowment Account Number.
- The Use Code will continue to be consistent with the the legacy code, stored in the Account Income Guideline field.
- The Account Purpose field was populated with the legacy ID field.
- Account documentation should be attached to the account when it is set up and can be retrieved using the Account e-doc, which is used to create new accounts and edit or copy existing accounts.
See the matrix of Fund, Sub-Fund, and Sub-Fund Program values (XLSX, 42 KB).
Initiating Invested Funds and Income Accounts
- Gift invested fund accounts: Gift accounting staff in Alumni Affairs and Development (AA&D) will continue to set up these accounts with Accounting as the approver.
- Departmental funds (non-gift) functioning as endowment (FFE): BSCs will initiate these accounts and route them to Accounting as a sub-fund approver.
- LTIP income accounts: LTIP income accounts associated with gift invested fund accounts will no longer be set up by AA&D. Instead, the operating income accounts will be set up in the units.
- When the income account is initiated, the income account should be routed as “Ad-Hoc Recipients,” as an FYI to Betsy McMullin. Once the income account has been approved, Accounting will edit the new invested fund gift account with the newly created income account number.
- It is necessary to Ad-Hoc, FYI Betsy McMullin so that the income account can be entered to the invested fund account, because it impacts payout. Note that the income account that is entered in the Endowment Accounts Number field needs to be an existing KFS account before it can be entered.
- Account roles: Timeliness of account setup and transaction approval is critical for invested funds, as it impacts the calculation of shares, payout, market value and overall reconciliation of investments. As a reminder, KFS does not calculate shares, gain/loss, or average share rates, these will maintained outside of Kuali until KEM go-live. Therefore, roles have been limited as follows:
- Fiscal Officer: bjm42, Betsy McMullin
- Account Supervisor: as defined by the BSC director
- Account Manager: bjm42, Betsy McMullin
Please direct questions about this information to Accounting.
