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Endowment Module

Endowment Module. Norm Peacock, Assistant Director ITS Indiana University Foundation Mary Wheeler, Kuali Project Specialist Cornell University. Kuali Endowment Module (KEM). Based on the IU Foundation Endowment and Trust Accounting System (ETA) The Scope of the KEM includes

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Endowment Module

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  1. Endowment Module Norm Peacock, Assistant Director ITS Indiana University Foundation Mary Wheeler, Kuali Project Specialist Cornell University

  2. Kuali Endowment Module (KEM) Based on the IU Foundation Endowment and Trust Accounting System (ETA) The Scope of the KEM includes • transactions of the individual investments • managing the unitized investment “pools” • administering the funds that are the “owners” of the investments

  3. Out of Scope • Gift Records System • fund raising activity - campaign goals and results • donor contacts • pledges- both conditional and unconditional • gift payments However, data elements that provide linkages between an external gift system and the Kuali Endowment Module will be necessary.

  4. Conceptual Diagram

  5. General Requirements • Accommodate security transactions at the individual security level or at the summary level • Support both FASB and GASB reporting • Capture and maintain donor restrictions and instructions for income/unspent funds • Facilitate the management of “unitized” investment pool(s)

  6. General Requirements • Track “separately invested” securities, or non-pooled investments • Maintain stewardship information for reporting to donors • Route transactions for FYI/Approval • Feed financial transactions to an institution’s General Ledger

  7. KEM Features • Investment tracking and reporting • number of shares, book, par and market values, CUSIP number, investment category (stocks, bonds, real estate, etc.), and capital commitments. • purchases and sales of investments; income earned, collected, accrued; management and custodial fees and commissions; and other investment related data. • provide data to compare investment policy allocation targets to actual allocations and incorporate pending transactions (i.e. rebalancing). • track investment commitments for limited partnerships and contributions made against these commitments.

  8. KEM Features • Investment participation management and reporting including unitized transactions • Investment pool data (number of units, market value per unit) for all funds that participate in an institution's investment pool(s). • Quantify units purchased and sold, and calculate the gain or loss on withdrawal. • Record investment income, realized gains, unrealized gains, and fees to the various funds, either in the specific fund or in high level accumulation accounts. • Track the net asset balance of a true endowment fund between its components of historical book value and accumulated earnings. • Allocate either a budgeted payout to the income accounts affiliated with a principal account (based on pooled units), or actual income earned on separately invested endowment funds.

  9. KEM Features • Enable formula and/or actual income projections • Project the budgeted payout (based on pooled units and an approved spending policy) • Project the anticipated actual income based on declared dividends, bond holdings, etc. • Update current year income projections • Create spending policy reports by fund, account #, college, dept, etc.

  10. KEM Features • Access to donor instructions • Capture and distribute the donor instructions for a gift or endowment fund • link imaged document files to KEM accounts and transactions

  11. KEM Features • Beneficiary disbursement process and tax reporting • For “split interest agreements” – disburse payments to beneficiaries • Provide data for annual tax reporting • Update the actuarial calculation of the liability for accounting adjustments.

  12. Interface Diagram

  13. Who is the Indiana University Foundation? • Established in 1936 • Not for Profit 501c3 • Generate private support for Indiana University (IU), a public university • The majority of the monies generated are held and invested by the IUF for the benefit of IU. • Financial information can be found at our website: www.iufoundation.iu.edu

  14. The IUF Relationship with IU • The IUF is independent of the university it serves. • Approximately 5000 individual accounts are managed which benefit over 200 unique departments on 8 campuses. • Endowments • Expendable (Quasi) Endowments • Operating/Discretionary • Charitable Remainder Trusts and Charitable Gift Annuities • Invested assets under management total over $1.1 Billion dollars.

  15. Business Functions of the IUF • Development • Fund Raising • Campaigns, Annual Gifts, Major Gifts, Planned Gifts • Donor Relations • Reporting, Stewardship • Investment Management • Cash and Non-Cash gifts • Pooled Investments, Real Estate, Stocks, Bonds • Charitable Trusts • Account Administration • Account Management • Payments from accounts, reporting • Gift Administration

  16. IUF Back Office Pre-1994

  17. Operations at the IUF • Trust Banking method of operation for 12 years. • Ability to receive deposits of cash or securities • Automated daily sweep of cash into and out of an interest bearing (money market) fund. • Automated periodic investment of cash and money market investments in long term investments. • Automated distribution of income • Ability to distribute income automatically or on request. • Daily pricing of marketable securities.

  18. IU Foundation Systems Overview

  19. IUF General System Requirements • Flexible enough to change with our needs • Provide functionality to support our business processes • Generate selected transactions automatically • A single data source for endowment and trust information • A fully relational database • Capable of interfacing to any gift or general ledger system

  20. Modular Design

  21. Accounts (Endowments and Trusts) • All relevant account administration data • Open and close records • Ticklers • Account type • Associations with Fund and Unit • Instructions • Transaction Restrictions • Account Status, Agreement Documentation Status, Restrictions and authorizations • Investment Instructions • Automated Investing, Daily and Periodic • Fees

  22. Accounts

  23. Accounts

  24. Accounts

  25. Accounts

  26. Securities, Holdings and Cash • Balances by Account • Current and historical • Cash • Securities • Units, Carry Value, MarketValue, Accrued Income • Securities Managed by the Organization • Current Values • Units, Carry Value, Unit Value, Market Value • Security type • Interest rates and dividend per share, payment schedule • Pooled Investment Fund Data • Current and historical unit values and distribution amounts

  27. Balances by Account

  28. Securities by Account

  29. Securities Managed

  30. Pooled Investment Funds

  31. Transactions • Unique transaction types • Cash, Asset and Liability • Purchases, Sales, Deposits, Disbursements • Increase, Decrease or Transfer • Special types • Original Gift Value Adjustment • Holding Unit Adjustment • Corporate Reorganization • Trust Asset Transfer • Multiple entry methods • Recurring transactions • Imported Transactions • Gift Transactions, Spreadsheets • Daily Processes

  32. Transactions

  33. Transactions

  34. Transactions

  35. Recurring Transactions • Investment Models • Cash Sweeps (Money Market Investments) • Pooled Funds • Scheduled Transactions • Transfers • Disbursements • Automated Processes • Interfaces • Batch • Daily • Monthly • Annual

  36. Investment Models

  37. Investment Models

  38. Scheduled Transfer

  39. Scheduled Disbursement

  40. Automated Processes • Interfaces • Importing Gift Transactions • Security Pricing • Exporting General Ledger Entries • Updating Database used for Web Inquiries

  41. Daily Nightly Batch Processes • Daily • Transaction Import • Large Batch Posting • Accrual Transactions • Accrual Calculations • Recurring Transactions • Pooled Fund Distributions • Automated Cash Investments • Cash Sweeps • Pooled Fund Control Accounts Summary Transactions • Change Reporting • Date Frequency Roll Process

  42. Periodic Nightly Batch Processes • Monthly • Cash Balance Archive • Holding Balance Archive • Seasonal Address Update • Fee Assessment Transaction Process • Year-End • Update Original Gift Values

  43. Individuals • Payees, Account Signers, Users • Name and Address records • Home, Business, Campus, Seasonal • 1099 reporting • Independent Contractor, NRA • Bank Depository • ACH or Wire Transfer • Associated Accounts

  44. Individuals

  45. User Security • Screen level • Read, Write , Exclude • Defined Groups

  46. User Security

  47. Investment Tracking and Reporting • Tracking Managed Securities • Holdings by Security • Current Position • Share Price • Income information • Holdings by Endowment • Current and Historical • All Holders List • Holding Detail • Securities Transactions • Purchases and Sales • Corporate Actions • Accrued Income Calculations • Income Distributions

  48. Investment Tracking and Reporting

  49. Managed Securities

  50. Managed Securities

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