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UT System Administration Policy Library -- Policy UTS117
Endowment Compliance Plan System-Wide Standards and Guidelines |
Responsible Officer: Director of Development and Gift Planning Services
Sponsoring Office: Office of External Relations
Effective Date: December 14, 2001
Last Reviewed: November 20, 2007
Next Scheduled Review: June 1, 2011
Errors or changes to: policyoffice@utsystem.edu
CONTENTS
Policy Statement
Rationale
Scope
Website Address For This Policy
Related Statutes, Policies, Requirements Or Standards
Contacts
Definitions
Responsibilities
Procedures
Forms Tools/Online Processes
Appendix
POLICY STATEMENT
Each UT System institution and UT System Administration is charged with raising private sector donations for the purpose of establishing endowments to support its mission and goals. This policy outlines the fundamental objectives and procedures that each institution and UT System Administration should follow to develop and maintain an institutional endowment compliance plan that ensures the highest level of fiduciary responsibility and accountability by the institution or UT System Administration to the endowment donor.
RATIONALE
The endowment compliance process begins with strict adherence to the official UT System Gift Acceptance Procedures at the time an endowment is established. As authorized by Board of Regents’ Rules and Regulations, Rule 60101, these procedures outline the administrative processes associated with the review and acceptance of endowments held and administered by the Board of Regents of The University of Texas System.
It is recognized that the 15 institutions that comprise The University of Texas System differ substantially in organizational structure and the number and the nature of endowments. The following general guidelines associated with the endowment compliance process are outlined in order that they can be adapted for use by the 15 different institutions and UT System Administration.
SCOPE
All institutions and UT System Administration
WEBSITE ADDRESS FOR THIS POLICY
http://www.utsystem.edu/policy/policies/uts117.html
RELATED STATUTES, POLICIES, REQUIREMENTS OR STANDARDS
UT System Administration Policies & Standards |
Other Statutes, Policies & Standards |
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CONTACTS
If you have any questions about UT System Administration policy UTS 117, Endowment Compliance Plan, contact the following office(s):
DEFINITIONS
Designated Endowment Executive
Administrator designated by the President of the UT System institution or the Chancellor or his/her designee for UT System Administration as responsible for ensuring that the institution’s endowments are in compliance.
RESPONSIBILITIES
Development or Business Office of each UT System Institution and UT System Administration
- Initiates and submits all endowments to UT System Administration for approval.
U. T. System Office of Development and Gift Planning Services
- Reviews and administratively approves all endowments conforming to policy, via authority delegated by the Board of Regents to the Vice Chancellor for External Relations.
Each U.T. System Institution and U. T. System Administration
- Ensures that each endowment is used for the purpose(s) intended by the donor(s) and in accordance with the terms of the official document(s) associated with the approval and establishment of the endowment.
- Ensures that all endowment accounts are reviewed for compliance on a regular basis by appropriate personnel.
- Forms an Endowment Compliance Committee comprised of key personnel from designated areas of the institution or UT System Administration that are associated with and/or responsible for endowments.
- Conducts an annual endowment risk assessment under the leadership of the Designated Endowment Executive and in consultation with the Endowment Compliance Committee.
- Designs and establishes an institutional monitoring plan under the leadership of the Designated Endowment Executive and in consultation with the Endowment Compliance Committee.
- Develops and implements a training program as a requirement for personnel associated with and/or responsible for endowments and/or endowment compliance under the leadership of the Designated Endowment Executive and in consultation with the Endowment Compliance Committee.
President of Each UT System Institution and Vice Chancellor for External Relations of UT System
- Appoints a Designated Endowment Executive
- Reviews and approves the accumulation of large balances in endowment income accounts based on sound academic/research plans.
- Forwards an Annual Report on Endowment Compliance to the Chancellor of the UT System or to his/her designated representative.
Designated Representatives of the UT System Institutions and UT System Administration
- Provide annual reports to the known donor(s) of each endowment.
Endowment Compliance Committee
- Oversees the endowment compliance effort, from a broad institutional perspective, under the leadership of the Designated Endowment Executive.
Designated Endowment Executive
- Forwards reports, recommendations and comments of the Endowment Compliance Committee to the President of the institution or the Vice Chancellor for External Relations, for UT System Administration endowments, for his/her review and approval.
PROCEDURES
Implementation/Enforcement Step
1. Fundamental Elements of an Institutional Compliance Plan – Content
1.1 Adherence to UT System Gift Acceptance Procedures Associated With the Establishment of Endowments.
All proposed new endowments or amendments to existing endowments are initiated by the Development or Business Office of each UT System institution and UT System Administration and submitted to UT System Administration for review and approval by the Office of Development and Gift Planning Services of the UT System via authority delegated by the Board of Regents. No endowment will be established or announced without prior approval of the Board of Regents or its designee(s).
1.2 Adherence to the Terms of the Official Endowment Agreement or Other Governing Documents.
The UT System institution and UT System Administration should ensure that each endowment is used for the purposes(s) intended by the donor(s) and in accordance with the terms of the official document(s) associated with the establishment and approval of the endowment by the Board of Regents or its designee(s).
1.3 Review of Endowment Accounts.
The UT System institution and UT System Administration should ensure that all endowment accounts are reviewed for compliance on a regular basis by appropriate personnel and that funds are utilized in accordance with the terms of the endowment agreement or other governing documents. The accumulation of large balances in endowment income accounts should be based on sound academic/research plans that are reviewed and approved by the President of the institution or the Chancellor of the UT System, or his/her designated representative.
1.4 Provision of High Quality, Annual Reports to Endowment Donor(s).
The UT System institution and UT System Administration should provide annual reports to the donor(s) of each endowment. The report should summarize the major activities associated with the endowment, include a financial statement for the endowment for the report period and, when appropriate, provide information on the holder(s) or the recipient(s) of the endowment.Note: It is understood that some endowments have no known person or entity to which endowment reports may be directed. Therefore, each UT System institution and UT System Administration should develop a list of "no report"; endowments as a part of its annual report to the UT System.
2. Process
2.1 Designate a High Level Responsible Party.The President of each UT System institution and the Vice Chancellor for External Relations of the UT System should appoint a Designated Endowment Executive. [Note: Based on endowment compliance practices to date, it is anticipated that the Designated Endowment Executive will usually be the Chief Development Officer of the institution. The Designated Endowment Executive is free to designate another staff member to assume the day-to-day responsibility for endowment compliance.]
2.2 Establish an Endowment Compliance Committee.
Each UT System institution and UT System Administration shall form an Endowment Compliance Committee comprised of key administrators from designated areas of the institution or UT System Administration who are associated with endowments. The committee could be comprised of representatives of the Development Office, the Business Office, the Office of the Chief Academic Officer, the Office of the Chief Research Officer, selected representatives from departments and/or units of the institution that hold endowments and if possible, the Institutional Compliance Officer, or his/her designee from the institution's Office of Compliance. Under the leadership of the Designated Endowment Executive, the Endowment Compliance Committee shall meet regularly and be responsible for considering the endowment compliance effort from a broad institutional perspective and for reviewing the institution's or UT System Administration's endowment compliance plan. At appropriate intervals, the Designated Endowment Executive should forward recommendations and comments of the Endowment Compliance Committee to the President of the institution or the Vice Chancellor for External Relations of the UT System for his/her review and approval.
2.3 Conduct an Annual Endowment Risk Assessment.
Under the leadership of the Designated Endowment Executive and in consultation with the Endowment Compliance Committee, each UT System institution and UT System Administration should conduct an annual endowment risk assessment to assess issues that could impact its ability to meet its mission and objectives. These might involve financial, operational, compliance and/or reputational risks. The risk assessment should take into account the laws, regulations, policies, and procedures to which endowments are subject, as well as other factors pertaining to the structure and organization of the institution and the nature of its endowments. Particular endowments may be intentionally selected to assess the impact and probability of occurrence of a specific risk. For example, financial risk might be assessed through a special review of endowments funded over a specified dollar amount
2.4 Develop and Conduct Endowment Compliance Training Programs.
Under the leadership of the Designated Endowment Executive and in consultation with the Endowment Compliance Committee, a high-quality training program should be developed and implemented as a requirement for personnel associated with endowments and/or endowment compliance across the UT System institution or UT System Administration.
2.5 Establish a Monitoring Program for Endowments.
Under the leadership of the Designated Endowment Executive and in consultation with the Endowment Compliance Committee, each UT System institution and UT SystemAdministration should design and establish a monitoring plan based on its risk assessment. The plan should include a description of activities that will be performed in order to identify and reduce non-compliance for endowments. The plan might include employee training and awareness programs, certification of compliance by endowment holders, periodic testing of select endowment expenditures, and periodic review of policies and procedures.
2.6 Establish An Endowment Reporting Plan.
The reporting plan should specify the elements of periodic reports that should be made to both internal and external individuals or entities. For example, period reports should be made to the President or Chancellor, and may be made to other key administrators, such as the Provost or Chief Academic or Research Officers, Deans of colleges and schools, Directors of administrative units, etc. In addition, reports should be prepared for all known donors. The reporting plan should be designed to provide assurance that the institution's review and monitoring plans are functioning as intended.
2.7 Certify Endowment Compliance via an Annual Report to the UT System.
Based on the work of the Designated Endowment Executive and in consultation with the Endowment Compliance Committee, the President of each UT System institution and the Vice Chancellor for External Relations of the UT System shall forward an Annual Report on Endowment Compliance to the Chancellor of the UT System and/or to his/her designated representative. The report will be due annually on December 1, or on another date agreed on from time to time. The report shall summarize the endowment compliance activities of the UT System institution of UT System Administration and certify that the institution is in compliance with the endowment compliance standards established by the UT System. Special Note:For those UT System institutions or UT System Administration receiving an endowment compliance fee assessment via UTIMCO, the report shall certify that the funds received from the fee assessment have been expended on activities and personnel that are directly associated with the endowment compliance effort.
FORMS AND TOOLS/ONLINE PROCESSES
None
APPENDIX
None
keywords: endowment, compliance, gifts, gift, endowments, donor, donors, compliance
