Accounting Procedures for Expenditures

Foundation Fund Accounting Procedures for Expenditures

The University of Arkansas at Monticello Foundation Fund is part of the University of Arkansas
Foundation, Inc. (the Foundation). One of the roles of the University of Arkansas at Monticello
(UAM; University) Office of Advancement is to manage the use of funds held in the Foundation for
the benefit of UAM. The Office of Advancement provides procedures and support to ensure proper
accounting for all gifts to the UAM Foundation Fund. It also processes all payment requests,
including scholarships, for the use of Foundation funds.

Foundation funds are available to support the teaching, research and service missions of UAM
through the purchase of equipment or the underwriting of expenses associated with these activities.
Additionally, Foundation funds may be used to further other legitimate educational and
advancement interests. In order to provide for consistency and uniformity in the use of these funds,
the following guidelines are provided:

  1. All authorized uses of Foundation funds must first meet basic restrictions imposed by the donor. Donor intent guides the use of the funds.
  2. All expenditures are expected to be reasonable, to have a direct University business purpose, and to be compatible with and enhance its educational mission.

UAM’s Vice Chancellor for Advancement and University Relations is available for consultation
and advice on expenditures of Foundation funds. When appropriate, the Vice Chancellor and/or
Chancellor will consult with the Vice Chancellor for Finance and Administration, the Foundation's
Executive Director, or with legal counsel. The Chancellor’s decision on the suitability of an
expenditure is final.

Permitted Expenditures from Foundation Funds

NOTE: All requests for payment must have appropriate documentation to substantiate the
expenditure such as original invoices, receipts, names of participants, dates, and purpose.

Subject to donor imposed restrictions, Foundation funds may be used for any expenditure that is a
permissible use of University operating funds. Examples of other permitted uses of Foundation
funds include:

  1. Scholarships, in accordance with donor criteria. Scholarships will be awarded to students
    through the University’s normal procedures. The Foundation will reimburse the University
    for Foundation scholarships awarded
  2. Reimbursement of salaries and fringe benefits to University accounts. The Foundation will
    not pay any compensation-related items directly. However, disbursements may be made to
    reimburse University accounts
  3. Expenses incurred in the recruitment of faculty, staff, or students
  4. Expenditures of a fundraising nature reasonable and necessary to the fulfillment of the
    Foundation's fundraising goals
  5. Expenditures of an alumni relations nature reasonable and necessary to create an attitude of
    loyalty and support for the University among UAM alumni
  6. Expenditures reasonable and necessary to the fulfillment of the duties of the Office of the
    Chancellor, and Academic and Executive Council members of the University
  7. Flowers for:
    1. a University event or an event which benefits the University
    2. an ill employee, benefactor, or friend of the University
    3. funeral of an employee, benefactor, or friend of the University
  8. Individual gifts of a reasonable and appropriate cost, as determined by UAM management,
    for persons who have a business or an advancement relationship to the University in
    appreciation of their efforts
  9. Alcoholic beverages used in official University entertainment
  10. Travel or meal expenses for an employee and/or guest of the University. The purpose for
    the breakfast/lunch/dinner and names of all guests/attendees must be provided, along with
    the receipt
  11. Vehicle mileage for distances traveled on official business at a rate not to exceed the State
    approved mileage rate
  12. Highway toll fees and parking fees associated with business travel, with presentation of
    receipts when available
  13. Infrequent departmental social gatherings with families
  14. Holiday greeting cards and ornaments for employees and friends of the University
  15. Expenses incurred in participating in events that promote good university relations
  16. Promotional materials
  17. Printing of University publications
  18. Postage expenses

Non-Permitted Use of Foundation Funds

The Foundation will not reimburse for any violations of the law (e.g., parking tickets, moving
violations), or for any expenditure that would jeopardize the tax status of the Foundation.

Ownership and Control of Items Purchased with Foundation Funds

Expenditure of Foundation funds must follow the stated purposes expressed by the donor. Further,
items purchased must always be used for the stated purposes. All items purchased with Foundation
funds become the property of the University. Established University procedures will determine which
items will be placed on the University’s inventory. An annual inventory will be conducted by the
University in accord with University procedures to insure that items are located in appropriate places
and are being utilized as intended by the donor.

Significant Purchases

Purchases of individual items or groups of like items with a cost of $10,000 or more require the
prior review of UAM’s Vice Chancellor for Finance and Administration, Vice Chancellor for
Advancement and University Relations, and Chancellor. All such purchases will be made through
the UAM’s Purchasing Office. The University will bill the Foundation for the item(s). Splitting of
invoices or purchases to circumvent this procedure is not permitted.

When purchasing these high-cost items, the UAM Purchasing Office will utilize competitive
bidding procedures. Bids may be obtained in writing or over the telephone, and at least three bids
will be obtained when possible. Quality, compatibility, ease of use, and maintenance costs are
among factors that may be considered in accepting a bid other than the low bid. Justification for
accepting other than the low bid must be presented by the requestor to the Vice Chancellor for
Advancement in writing for approval. If approved, the Vice Chancellor will submit the justification
and approval to the UAM Purchasing Office, which will retain the documentation for the files.

Segregation of Purchasing and Receiving Duties for Foundation Purchases

It is important that duties be segregated so that purchasing and receiving of items are not performed
by the same employee. Foundation purchases will be subjected to the same procedures for
segregation of these duties as University purchases.

Processing of Payment Requests for Foundation Funds

Payment authorization requests must have proper approval. All University of Arkansas Foundation,
Inc. forms for account establishment, transfer of funds, payment authorization, and other financial
approvals require the original signatures of the budget manager, Vice Chancellor for Advancement
and University Relations, and the Chancellor, or their official proxies as per University operating

All requests for payment from Foundation funds must be properly prepared and supported. Before
submitting a request for payment to the Foundation, UAM’s Foundation Accounting and Project
Coordinator will:

  • Verify all required signatures are on the request
  • Verify all required signatures are original. Signature stamps are not permitted
  • Verify that documentation to support the request is attached, such as invoices or receipts
  • Examine the invoice and receipts to verify authenticity
  • Verify that invoices and receipts add up to the total amount; foot and cross foot the invoices and receipts, and attach footing documentation
  • Verify project ID and account number
  • Ensure that invoiced items/services meet the donor’s restrictions for the use of the funds
  • Ensure that the expenses are allowable use of Foundation funds as per this document
  • Ensure that sufficient funds are available in the project. No invoice will be submitted for payment if there are not sufficient funds
  • Verify that sales tax has been charged if the invoice is from an out-of-state vendor. If not, submit the invoice to the University to pay so that use tax will be appropriately remitted. Keep a log of invoices submitted to the University and insure they are paid. Ensure that the Foundation is billed to reimburse the University for the Use Tax
  • Ensure that payment authorizations include directions that the check is to be sent directly to the vendor. Any deviation from this procedure must be approved by the Chancellor as indicated by his/her signature next to the “mail check to” line
  • Initial the payment authorization to indicate that all above items have been verified
  • Report any suspected discrepancies or irregularities immediately to the Vice Chancellor for Advancement and University Relations or the Chancellor and halt the payment process. Allegations of wrongful conduct, misappropriations, or fraud will be handled in accordance with policies of the Board of Trustees of the University of Arkansas, including Board Policy 350.1 “Fraud Policy” and 355.1 “Whistleblower Policy.

Contact Information:
UAM Vice Chancellor for Advancement and University Relations
PO Box 3520
Monticello, AR 71656
(870) 460-1028
December 12, 2013