UNIVERSITY OF WISCONSIN SYSTEM TRUST FUNDS

1. 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 Jonelle Rufsvold, Accountant, email: jrufsvold@uwsa.edu, phone 262-7480 or Helen Van Oosbree, University Services Program Associate email: hvanoosbree@uwsa.edu, phone: 265-3483 April 2008

2. 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

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

4. 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, 161-4500

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

6. Account Categories • Endowment (20, 25 E) – donor restricts use of principal (162) • Designated Endowment (21, 26 DE) – Board of Regents restricts use of principal (bequests > $50,000) • Quasi-Endowment (22, 27 QE) – no restriction on use of principal

7. Investment Pools • Long Term Fund (LT) – used for principal, usually non-spendable, portion of account (162) • Intermediate Term Fund (IT) – used for unspent income balances > $5,000, or for other spendable amounts when appropriate (162) • 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 (162)

8. Investment Pools How is it determined what goes in to each fund? • Income Cash Fund – This is where all earnings on income cash, IT and LIT 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.

9. 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.

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

11. 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

12. 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 work with his assignee to get an account number on parent accounts. These account numbers will be generated after entry in to SFS Project Lite.

13. Setting up Accounts Child Accounts or Sub-Accounts • A child (sub-account) is requested by the department with an approved budget transfer from the parent account. • Sub-accounts will be generated by entry in to SFS Project Lite. • Information needed to set up a sub-account: -Title -Parent account -Period –beginning and end dates -Budget amount -Funding string (UDDS) -If there is an account manager (PI) you want listed

14. The Process • The account is set up in SFS Project Lite to obtain the account number. • The information is entered on Sungard. • The dept. is given the new account number. • Once these 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.

15. 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) , Jonelle Rufsvold (2-7480), or Helen Van Oosbree (5-3483)

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

17. Closing an Account • An Endowment (20 E) is never closed. • Quasi-endowments (21 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.

18. 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 (lowercase) • Click on the login button

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

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

21. 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”

22. 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 • Spendable balances are determined by account type • For all account types the Intermediate Term (IT fund is spendable • For account types 21 and 26 only the Long Term (LT fund is spendable • The market value of the account is what is available to spend • The Investment section • Short Term Investment funds is the current cash balance • The Investment Funds are just that --Investments

23. Inquiry Tools Continued • WISDM (to view 161 only) • This is the best way to view transaction activity • PAL includes internal system transactions – share transactions • Actual Cash or Current Fund balance on WISDM should total the Income Cash Fund on Portfolio Review (except for daily timing issues)

24. TERMS Go into the Trust Fund Website – CUSTOMER CORNER:

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

26. Your Account Information will appear:

27. Making Deposits • Prepare RSP Gift Routing form • Provide investment election (Intermediate Term-IT or Long Term-LT) except for endowment • Attach check • Route Gift form and check per your departmental established procedures • Submit completed form to the Trust Funds office

28. 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 the original invoice and voucher should be available when needed) • Disbursements are made only from Income Cash Fund (161) • Sales credits are not allowed on 161

29. 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 to 161 to cover overdrafts • Transfer between 162-IT and 162-LT for quasi-endowments only, when appropriate

30. 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

31. 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