UNIVERSITY OF WISCONSIN SYSTEM TRUST FUNDS

UNIVERSITY OF WISCONSIN SYSTEM TRUST FUNDS Questions about this presentation can be directed to: Debi Morgan, Accountant-email: dmorgan@uwsa.edu. phone: (608) 265-9664 Helen Van Oosbree, University Services Program Associate email: hvanoosbree@uwsa.edu, phone: 265-3483 May 2006

Trust Fund Operations • Trust Fund Lingo • Overview • Sources • Account categories • Investment Pools • Fund “payouts” • Account setup, maintenance and closing • Accessing PAL (Portfolio Account Link) • Inquiry on PAL and WISDM • Accessing Terms and Conditions of accounts • Deposits, expenditures and transfers • SFS and Sungard Interface • Vendor Refunds

Trust Fund Lingo • BOR = Board of Regents • DE = Designated Endowment • E = Endowment • IC = Income Cash Fund • IT = Intermediate Term Fund • LT = Long Term Fund • PAL = Portfolio Account Link • PC = Principal Cash Fund • QE = Quasi Endowment • SWIB = State of Wisconsin Investment Board • TF = Trust Funds • T-Form = Transmittal Form

Overview • Trust Funds (TF) are generally funds donated to the Board of Regents for various purposes • TF office provides investment oversight, accounting and administration • Donations are pooled for investment purposes • Records are maintained for each individual account, i.e. 161/162-1000, 161/162-4500

Sources • Bequests from individual wills & trusts • Matching gifts • Other gift funds • Student loan repayments • Research & Sponsored Programs 133

Account Categories • Endowment (E) – donor restricts use of principal (162) • Designated Endowment (DE) – Board of Regents restricts use of principal (bequests > $50,000) • Quasi-Endowment (QE) – no restriction on use of principal

Investment Pools • Long Term Fund (LT) – used for principal, generally non-spendable, portion of account (162) • Intermediate Term Fund (IT) – used for unspent income balances > $5,000, or for other spendable amounts when appropriate • Income Cash Fund (IC) – used for current income spendable balances (161) • Principal Cash Fund (PC) – holding area for new gift purchases of IT or LT and other transactions pending the quarter end close

Investment Pools How is it determined what goes in to each fund? • Income Cash Fund – This is where all earnings are posted. Generally expected to spend in less than one year. • Intermediate Fund – Unspent earnings from a prior fiscal years transferred here. Gifts for non-endowment accounts generally spent between one and four years. • Long Term Fund – If gift is an endowment or if funds will not be spent for over four years.

Investment Pools • Long Term Fund – invested in a diverse strategic asset allocation including equities, bonds and alternative assets. • Intermediate Term Fund – invested in domestic bonds; valued quarterly. • Income Cash Fund – invested in short term money market vehicles; valued daily.

Fund “Payouts” • Intermediate Term & Income Cash Funds • Interest earnings allocated quarterly • Credit to Income Cash Fund (161) component

Fund “Payouts” • Long Term Fund • “Small fraction spending plan” • 4% of trailing 12 quarterly market valuation • Smooths fluctuations in distributions of earnings • Distributed quarterly • Earnings components • Income on investments (interest/dividends) • Capital appreciation • Credited to Income Fund (161) component after quarter end

Setting Up Accounts • Parent Accounts Parent accounts will be set up between Doug Hoerr and the Department Dean or his/her designee. Doug Hoerr will assign the account number on parent accounts. These account numbers will always be less than 3000.

Setting up Accounts Child Accounts or Sub-Accounts • A child or sub-account is set up by the department with an approved budget transfer from the parent account. • Sub-accounts will always be greater than 3000 • Information needed to set up a sub-account: -Account number you want assigned from your block of numbers -Title -Parent account -Period –beginning and end dates -Budget amount -Funding string (UDDS) -If there is an account manager (PI) you want listed

The Process • The account is set up in Sungard. • The information is sent to the campus contact for 161 set-up on SFS. All 162 set up in SFS is done in the Trust Fund office. • Once these 2 steps are done, the account information is given to the TF accountant to put the budgeted money into the new account. • A process is done on Sungard to update the information into our database. • The account is entered on PAL under it’s UDDS coding.

The Process Continued • The total process usually takes about 5 working days. • In an emergency, a rush can be requested. Call Debi Morgan (5-9664) or Helen Van Oosbree (5-3483)

Changes to an Account • To close, edit, or add money to an account you can e-mail Debi Morgan or Helen Van Oosbree. • Do not contact your campus to close a UDDS/Alpha Key. Please contact Trust Funds.

Closing an Account • An Endowment (E) is never closed. • Quasi-endowments (QE) must have a zero balance before closing. • If the balance is not at zero, IT and LT will need to be liquidated at end of the next quarter by TF staff. • To zero out the income cash fund, apply expenditures up to the balance amount but before the next earnings are posted. • Do not contact your campus to close the account. Please contact Trust Funds for approval and to initiate the closing on all systems.

How to get into PAL • Go to Trust Fund Website: http://www.uwsa.edu/tfunds/ • CUSTOMER CORNER • Account Balance & Transactions • User ID – • You approach this in different ways. • For all campuses enter uw_ _ _ and your 3 letter business unit • For all campuses except Madison, that is all the further you need to go. • For Madison, ALL accounts start with uwmsn • If that’s all you enter you will get all of the UW Madison accounts. To be more select you can enter uwmsn48 (the first 2 digits of your UDDS) To really focus on fewer accounts you can take it one level further, uwmsn4810. • Tab to password; it is ALWAYS trust (in small letters) • Click on the login button

This screen will appear, depending on how much of the UDDS you have entered.“I Accept”

Check this dropdown menu for the number of the account you are looking for and hit GO!

If your account number does not appear on drop down menu, click on Find More and enter your four digit account number in the search box and click on “Find”

Inquiry Tools • PAL (to view 161 & 162) • Dates are used for transaction activity only (24 months available) • Account balances are to date • Can download to excel • WISDM (to view 161 only) • This is the best way to view transaction activity • Actual Cash or Current Fund balance on WISDM should total the Income Cash Fund on Portfolio Review (except for daily timing issues)

TERMS Go into the Trust Fund Website – CUSTOMER CORNER:

Click Account Terms, Conditions and Coding and enter your four digit account number:

Your Account Information will appear:

Making Deposits • Prepare transmittal form (i.e., T-form) • Provide investment election (Intermediate Term-IT or Long Term-LT) except for endowment • Attach check • Route T-form and check per your department established procedures • Submit completed form to the Trust Funds office

Expenditures • Disbursement can be made if: • Expenditure complies with account terms & conditions • Sufficient funds exist – if not, the payment will be rejected and department will have to transfer to another fund • Conforms to pre-audit guidelines • For non-salary transfer (a copy of original invoice and voucher available when needed) • Disbursements are made only from Income Cash Fund (161) • Sales credits are not allowed on 161

Transfers • Automatic annual transfer of unspent 161 balances to 162-IT • Budget transfers between parent and sub accounts per department request • Automatic quarterly transfer from 162-IT or 162-LT to 161 to cover overdrafts • Transfer between 162-IT and 162-LT for quasi-endowments only, when appropriate

Interface between SFS and Sungard • Revenues are initiated on Sungard and interfaced to SFS • Expenditures are initiated on SFS and interfaced to Sungard • Therefore timing issues can occur and cause reconciliation differences for a few days

Vendor Refunds • ONLY vendor refunds are allowed on 161 • Complete Vendor Refund Form • There must be an original voucher number included on this form to verify the original purchase • For fund 161, the form should be sent to Trust Funds Office • You CANNOT apply sales credits against 161 • If this happens, you will be asked to reverse it a.s.a.p

UNIVERSITY OF WISCONSIN SYSTEM TRUST FUNDS