Scope

This procedure describes how organizations may create, add to, and divest from quasi endowment accounts.

Program Operation

The University provides guidance on how to create and manage a quasi endowment account and how to determine which investment vehicle is suitable for investing quasi endowment funds.

System References [Top]

Policy [Top]

Policy FIN-026, "Creating and Managing Quasi Endowment Accounts"

Responsibility [Top]

The department dean or vice president is responsible for ensuring that all necessary information is forwarded to the Comptroller's Office and that quasi endowment transactions are in accordance with gift agreements and existing quasi endowment requirements.

Distribution [Top]

Fiscal Administrators

Ownership [Top]

The Comptroller's Office is responsible for ensuring that this procedure and actual practice support University policy.

Procedure Steps [Top]

University departments wishing to create, add to, or divest from a quasi endowment should follow the steps below.  Any questions related to these minimum requirements or the policy should be directed to the Comptroller's Office.

1.     Departments must first assess whether the transaction is in accordance with the requirements outlined in the policy on Establishing and Managing a Quasi Endowment Account.  A transaction must meet the minimum requirements related to the investment amount, investment term, plan of investment and redemption, and advance notification and any use restrictions governing the source of funds. 

2. If the policy requirements can be met, departments must draft a letter detailing the purpose and timing of the requested quasi endowment action.  The letter must be signed by the dean or vice president over that department and include the following information at a minimum:

a.     For creations

1.     investment amount

2.     source of the funds

3.     purpose of the quasi endowment

4.     treatment of distributions (i.e. paid out or reinvested)

5.     projected timing of any additional investments or redemptions

b.     For additions

1.     investment amount

2.     source of the funds

3.     any change to the existing plan of investment and redemption

c.     For divestments

1.     amount to be divested

2.     use of the divested funds

3.     any change to the existing plan of investment and redemption

For all transactions, the signer should certify that the action is consistent with any gift agreements when gifts are being used as a funding source for the quasi endowment.

3. Once signed, the letter should be sent to the Comptroller's Office.  For creations, the letter should be accompanied by a Quasi Endowment Project Request Form (link).  If money is being invested into an account from a gift, the gift agreement should be included with the letter.  The Comptroller’s Office will review the request and submit it for approval to the Vice President and Chief Financial Officer or to the Board of Visitors (“BOV”), as appropriate.

4. The Comptroller's Office will notify departments of the approval or rejection of their quasi endowment request.  Funds are typically invested or divested in the month following the Comptroller's Office's receipt of any request.  A transaction may take longer to execute if there are open questions related to the request or, in the case of BOV approval, the next scheduled BOV meeting is more than one month away.

5. In the case of newly created quasi endowments, once approved, the Comptroller’s Office establishes the new project and award and notifies the departmental administrator of the requesting department.

Related Information:

Policy FIN-026, "Creating and Managing Quasi Endowment Accounts"

Request to Establish Quasi Endowment Project (Form)

Supercedes: Financial and Administrative Procedure 9-41 – Creating New or Withdrawing Money from Quasi Endowment Projects.

End of Activity