How Restricted Gifts Are Recorded in the Accounting System
Temporarily restricted gifts have a sub-fund of RGGIFT with the one following sub-fund programs:
- GIFT - Donor gifts restricted by purpose and/or time
- ENDINC - LTIP payout to restricted gift (spending) account
- GFTREP - Gifts that require financial reporting by department to donor
- ALUMNI - CC Gifts from alumni are not subject to fringe, use rate CC
Unit Responsibilities
- Understand the purpose of the restricted gift per the donor's intention. Refer to the donor documentation or reference the KFS account search Account Income or Account Expense Guideline text.
- Ensure that the expenditures posted to RGGIFT accounts meet the purpose of the gift.
- Spend restricted gift funds before unrestricted funds. Generally, restricted funds should be spent before unrestricted funds for the same purpse. The exception to this is if you have a contracts and grants for the same purpose, then spend the contacts and grants funding first.
- If unrestricted dollars were spent for the same purpose, prepare a Distribution of Income and Expense (DI) e-doc to move expenses from the unrestricted (U) to the temporarily restricted (T) account.
- Review at least annually, why restricted gift accounts are not being spent. There should be a budget plan to spend restricted funds within a reasonable time frame. Generally, a reasonable time frame should be within three years. Remember, donors have given gifts to the university with the intention that the department will spend these funds for their given purpose.
- Ensure that restricted gifts are not in deficit. Gifts and endowment income should be received or earned before expenditures are made. Remember, a gift letter of intent or pledge does not authorize the spending of restricted funds until the gift is received.
- If an RGGGIFT account is in deficit, prepare a DI e-doc that moves the restricted expenses to an unrestricted account or to another restricted gift account if it has the same purpose.
- A deficit report is available using the University Fiscal Year End Dashboard-Standard Reports.
- Follow the reconciliation guidelines posted on the Monitoring Operating Activity page.
- Provide reporting to the donor if the donor has requested it. These accounts should have a sub-fund program of GFTREP.
- If the purpose has been met and there is a small balance remaining, use the Transfer of Funds e-doc to move the balance to an unrestricted account, using object codes 7080/8080.
- Ad-hoc route the e-doc to David Hegelein for approval when using the 7080/8080, because the e-doc is crossing restrictions.
- Add a note or include an attachment that explains how the purpose has been met.
- Note: The indirect cost will not be calculated using the transfer object codes.
- Remember to take into consideration the 10% indirect overhead charge on restricted gift accounts. Please note that the following attributes do not incur the 10% charge:
- Sub-fund program = ENDINC – Endowment Income
- Higher Ed Function Code (HEFC) = 49xx
- Accounts with approved IDC waivers
- Transfer object codes
- Close RGGIFT accounts with a zero balance.