Classification of Restricted Gifts
1.0 PURPOSE
The purpose of this procedure is to document the procedure used by the Development Office and the Controllers office to classify restricted gifts.
2.0 SCOPE
This document describes the process of ensuring that restricted gift accounts are property coded and documented.
3.0 DEFINITIONS
Restricted Gifts - Restricted gifts are those gifts to the University that include donors' restrictions. Gifts can be restricted to:
- Individuals, departments or schools, or
- For a specific purpose.
4.0 PROCEDURES
In order to ensure the accuracy of accounting and reporting of restricted gifts, the Development Office is part of the review and approval process when opening new restricted gift accounts in the Financial Records System (FRS).
When a request for a new gift account is submitted through the Budget System, the Development Office is part of the process. The Office reviews the donor documentation to determine whether the gift is restricted. If it is, this office indicates that the new account be created in the 5XXXXX range of accounts. If the gift is restricted for major capital project, the Development Office indicates that the account be created in the 7XXXXX range of accounts.
If the gift has no donor restrictions, the account would be opened in the 3XXXXX range of accounts. Note: In case of an unrestricted gift, sometimes it may not even be necessary to open a new account. Unique object codes which can be used in any fund provide the detail tracking of gift revenue. This could be determined on a case by case basis.
In addition to the above, the Development Office reviews the expense purpose designation on the account request form. If the donor documentation indicates that the donor wishes the gifted funds to be used for research, the Development Office assigns expense purpose "1200" research on the account request form. In addition, pending clarification from System Audit, we may be able to assign expense purpose "1200" research to an account, if we determine internally that the gifted funds will be used for research. (This issue is currently pending review by the Coordinating Board and System Audit).
After the Development Office's approval, the request for the new account is forwarded to the Finance Division for opening in the accounting system (FRS).
For all restricted gift research accounts, the Development Office completes and forwards to the Finance Division the "Research Expenditure Determination Process and Checklist" form. The form is reviewed and co-signed by the Finance Division representative and is kept on file for documentation.
5.0 RESPONSIBILITIES
The Development Office is responsible for screening user requests for new accounts and interpreting donor information to ensure that new accounts are classified properly with respect to function and fund.
The Finance Division is responsible for making sure that required documentation is on file and that accounts are opened in FRS in accordance with the documentation.
6.0 REFERENCES & ATTACHMENTS
- Higher Education Coordinating Board "Standards and Accounting Methods for Reporting Restricted Research Expenditures - Dated 10/2/2001.
- Higher Education Coordinating Board "Appendix B Research Award Determination Process and Check List"
- Higher Education Coordinating Board "Appendix A Definition of Research and Development"
Last Updated: August 8, 2012
