Purpose:
To provide for an administrative fee for the support of enhanced and
expanded endowment compliance efforts
Date Approved:
November
8, 2001
Background:
Each
University of Texas System component institution is charged with raising
private sector contributions for the establishment of endowments to fulfill the
mission and goals of the institution. Endowments are designated for student scholarships and fellowships,
faculty and administrative support, and for programmatic purposes. High quality, effective compliance programs
are of fundamental importance and represent an ongoing fiduciary responsibility
of each institution. All U. T.
System component institutions have endowment compliance programs in place. The 77th Texas Legislature recognized the
compliance obligation of higher education institutions in Sections 44, 47, and
48 of Article III of the General Appropriations Act.
As
authorized by Texas Education Code Section 65.37, the Board approved the
following policy authorizing the assessment of a fee for institutional
endowment compliance:
The Board authorized The University of Texas
Investment Management Company (UTIMCO) to assess an administrative fee of up to
0.08% of the market value of the Long Term Fund’s (LTF) net asset value as
determined by UTIMCO for the support of enhanced and expanded institutional
endowment compliance efforts.
This approval authorizes a small portion of the LTF to
be used for enhanced and expanded administrative activities to ensure
institutional compliance with the agreement made with an endowment’s
donor(s). Through the recommendation
of each component president to the Chancellor, an institution may exercise this
funding option and request an assessment level up to 0.08% of the market value
of its endowments invested in the LTF. An institution may exempt specific endowments from the assessment.
Operational details are to be determined by the
Chancellor, the President and Chief Executive Officer of UTIMCO, and/or their
designated representatives.
NOTE: It is
anticipated that the first assessment level distribution to participating
component institutions will be made in March 2002 based on the prior 12-quarter’s
average of the market value of the LTF on November 30, 2001. Thereafter, it is anticipated that
assessment level distributions will be made annually based on the prior
12-quarter’s average of the market value of the LTF on May 31 of each fiscal
year. Based on institutional
preferences regarding participation and percentages and the value of the prior
12-quarter’s average of the market value of the LTF as of May 31, 2001, the
estimated total distribution to 11 component institutions in September 2001
would have been $1,027,764.
Last reviewed January 2002