4.1 Foundation Disbursements

POLICY 4.1
Volume 4: Finance
Chapter 1: Foundation Disbursements
Responsible Executive: Senior Vice President and Chief Financial Officer
Responsible Office: Finance
Issued: April 21, 2008
Effective: July 1, 2008
Revised:

Foundation Disbursements

Policy Statement

The ASU Foundation (the "Foundation") mission is to advance the Arizona State University (the "University") as a New American University. All Foundation disbursements are in direct support of the University or the Foundation and are for reasonable and customary business expenses. Direct Foundation disbursements will be for cultivation, solicitation, stewardship and recognition activities related to past, present and future donors, including the associated administrative expenses, and other expenses as agreed upon by the University and Foundation. Foundation financial resources to support University activities will be paid to university accounts for disbursement by the University.

Reason for Policy

Clearly delineate responsibilities for disbursements from Foundation resources and types of activities for which money will be disbursed to the University for payment by the University.

Under this policy, expenses to support university activities, such as academic, research, public service, and student services, will no longer be paid directly by the Foundation to the vendor. Foundation funds that support these activities will be disbursed to the university and the university will make vendor payments.

Entities Affected By This Policy

All units of the Arizona State University and the Arizona State University Foundation.

Who Should Read This Policy

• All Foundation and University employees who request, process, or approve disbursements from Foundation funds.
• All Foundation and University employees who are authorized signers on Foundation accounts.

Website Address for This Policy

TBD

Contents

Policy Statement
Reason for Policy
Entities Affected By This Policy
Who Should Read This Policy
Website Address for This Policy
Contents
Related Documents
Contacts
Definitions
Principles
A. Overview
B. Complying with Donor Intent
C. Academic Activities
D. Required Documentation
Payments to vendors or reimbursements to employees
Payments to the University
E. Disbursement Fees
F. Disbursements with a Foundation Credit Card
G. Prohibited Foundation Disbursements
Procedures
A. Requesting Disbursements from Foundation Accounts
B. Requesting Foundation Services for Academic Activities
Responsibilities
Forms and Tools/Online Processes
Appendix
Appendix A: Foundation Disbursement Guide

Related Documents

Contacts

Definitions

Principles

1. Overview

   The Foundation's mission is to advance the University as a New American University. To that end, it receives gifts and other income for the support of the University and generates funds to support the Foundation's operating expenses.

   Any disbursement from Foundation accounts will:

   • provide direct benefit to the missions of the Foundation or the University;
   • be properly reported for accounting and tax purposes; and
   • comply with donor intent (if applicable).

   The Foundation pays expenses associated with fund raising activities including the cultivation, solicitation, stewardship and recognition activities related to past, present and future donors and the associated administrative expenses.

   In addition, as authorized by the University, the Foundation will pay directly, or reimburse, certain expenses that cannot be paid directly by or reimbursed by the University, such as: alcoholic beverages, flowers, approved reimbursements in excess of per diems, and other expenses specifically agreed upon by the University and the Foundation.

   Foundation financial resources to support University activities will be paid to university accounts for disbursement by the University.

   A table showing Foundation disbursements, allowable expenses and those expenses to be paid by the University is shown in Appendix A.

2. Complying with Donor Intent

   The Foundation and the University have a fiduciary responsibility to ensure that funds are utilized in accordance with the terms and conditions for which they are received.

   University departments are responsible for documenting compliance with donor intent. Departments may be asked to produce this documentation for internal or external audits, donor communications, management reporting or other purposes.

   Information about donor intent is summarized from the applicable gift agreement or other sources.

   Both Foundation and University employees who authorize disbursements of these funds, either directly from the Foundation or from University accounts supported by these funds, must be aware of the applicable limitations or restrictions. Approval of the disbursement by authorized signers indicates the expense complies with the donor's intended use of the funds.

   Various approaches for documenting compliance with donor intent are as follows:

   • Establish a University account for each specific purpose for which donated funds have been received (preferred for large amounts and ongoing activities).
   • Use the detail transaction attributes, such as sub-orgs or reporting categories within the University's financial system, to identify transactions for a specific purpose within one University account.
   • Track the use of funds for each specific purpose using a detailed subsidiary ledger, external to the University financial system. The detailed subsidiary ledger reconciles to the total transactions in the University general ledger for the account.

   Contact the senior fiscal administrator in your unit and University Financial Services to discuss these options and determine how best to meet the documentation requirements for your Foundation resources.

3. Academic Activities

Under limited circumstances and with prior approval by the Foundation Controller, the Foundation will process revenue and expenses for academic activities such as conferences, meetings, seminars or other events targeted to a specific audience or the general public.

Requests for processing by the Foundation will include a description of the activity, an explanation about why Foundation processing support is required and a detailed budget outlining the revenue and expenses of the activity.

Refer to the Procedures section for a link on how to request Foundation services and the Forms section for a link to a template to use for these requests.

Required Documentation

Payments to vendors or reimbursements to employees

Payments to vendors or reimbursements to employees are initiated by a Disbursement Request approved by authorized signers for the Foundation account from which the payment is made. Authorized signers may not approve disbursements to themselves.

The business purpose for all disbursements must be documented according to Internal Revenue Service guidelines and include:

• Type of event or expenditure and the reason for incurring the expense;
• When and where the disbursement or event occurred or will occur;
• Who attended the event and/or incurred the expenditure and that person's relation to the University or the Foundation; and
• Explanation why the disbursement is an appropriate business expense.

All disbursements to vendors and reimbursements to employees will be accompanied by original invoices or receipts. In addition, all reimbursements to Foundation or University employees require a signed statement by the employee indicating the employee will not and has not received payment for these expenses from another source.

Expenses should be submitted for payment as they are incurred, but no later than 30 days after the completion of the project, program or activity. In all cases, expenses for an activity within the fiscal year must be submitted prior to the end of the Foundation's fiscal year on June 30.

Payments to the University

Disbursements to the University are initiated by a Disbursement Request approved by authorized signers for the Foundation account from which the funds are disbursed. The request also contains an acknowledgement by the approver indicating the approver agrees to spend the funds in accordance with the donor's intent.

In compliance with the University Scholarship Office requirements, disbursements to the University for scholarship funds are supported by a Scholarship Award Authorization (SAA) and approved by authorized signers for the Foundation account from which the payment is made. You do not need to complete an additional Disbursement Request for payments from scholarship funds.

►CAUTION: It is a violation of Arizona State Law for the University to make a gift of public funds, that is, to give or loan money to another organization. Deficits in University accounts awaiting funding from Foundation resources may be considered loans to the Foundation. Therefore, requests for payment from Foundation accounts must be made prior to incurring expenses or disbursing funds from the corresponding University account.

Disbursements from the Foundation to the University are considered gift revenue to the University and are deposited into the appropriate University account.

Disbursement Fees

To support the Foundation's operations, direct payments to vendors and reimbursements to University or Foundation employees from Foundation accounts are assessed a 2 percent fee of the payment amount. Disbursements to the University are not assessed a fee.

Disbursements with a Foundation Credit Card

Disbursements from Foundation funds may be paid using a Foundation credit card. These cards are issued to University and Foundation employees who incur expenses associated with fundraising activities including the cultivation, solicitation, stewardship and recognition activities related to past, present and future donors and associated administrative expenses. Foundation credit cards are used only for the disbursement of Foundation funds and not for University expenses. Substantiation of expenses must follow Internal Revenue Service guidelines and comply with the Foundation's credit card guidelines, titled Credit Cardholder Rules and Expectations, available at the following link: https://intranet.asufoundation.org/Portals/0/departments/financialServices/Credit%20card%20rules%20and%20expectations.doc

Prohibited Foundation Disbursements

Because of federal and state reporting regulations, ASU Policy, the University-Foundation affiliation agreement and Foundation Policy, the Foundation is unable to make the following payments on behalf of the University:

• Payments to University employees for services.
• Payments to University or Foundation employees based on per diem allowances. (All reimbursements are based on actual expenses substantiated by original receipts)
• Payments to students for financial aid or other educational support.
• Payments to foreign companies or individuals in foreign countries.
• Payments to University employees for items prohibited by University policy that would be taxable income to the employee if paid by the Foundation, such as home internet service.
• Payments for items or services that are outside of the Foundation's mission to support the University.

Procedures

Requesting Disbursements from Foundation Accounts

Refer to instructions at the following link http://www.asufoundation.org/aspire/IFAS/support/, click on How to use your new, online IFAS web forms to learn how to initiate and approve disbursements from Foundation accounts.

Requesting Foundation Services for Academic Activities

• One-month prior to depositing or disbursing funds in a Foundation account, complete the on-line form Requesting Foundation Processing for Academic Activities. Provide information about the activity and why you are requesting Foundation services.
• If this is a new activity, use the on-line New Account Request form to request a Foundation account in which to record the transactions.
• If Foundation support is approved, all communications about the activity will include a statement that the activity is being supported by the Arizona State University Foundation, and instructions to make checks payable to the Arizona State University Foundation.
• Disbursements from the account must be supported by original invoices or receipts and approved by authorized signers on the account. Expenses will be paid up to the amount of the available resources.

Responsibilities

Forms and Tools/Online Processes

The following forms have been created to facilitate an efficient disbursement process.

Appendix

Foundation Disbursement Guide