Managing Restricted Gift Accounts

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

1. 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.
2. Ensure that the expenditures posted to RGGIFT accounts meet the purpose of the gift.
3. 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.
   1. 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.
4. 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.
5. 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.
   1. 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.
   2. A deficit report is available using the University Fiscal Year End Dashboard-Standard Reports.
6. Follow the reconciliation guidelines posted on the Monitoring Operating Activity page.
7. Provide reporting to the donor if the donor has requested it. These accounts should have a sub-fund program of GFTREP.
8. 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.
   1. Ad-hoc route the e-doc to David Hegelein for approval when using the 7080/8080, because the e-doc is crossing restrictions.
   2. Add a note or include an attachment that explains how the purpose has been met.
   3. Note: The indirect cost will not be calculated using the transfer object codes.
9. 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:
   1. Sub-fund program = ENDINC – Endowment Income
   2. Higher Ed Function Code (HEFC) = 49xx
   3. Accounts with approved IDC waivers
   4. Transfer object codes
10. Close RGGIFT accounts with a zero balance.