Restricted Funds Utilization and Compliance

Purpose

This policy ensures consistent compliance in the utilization of restricted funds, as directed by gift agreements or understandings, court orders, grant awards, estate documentation, or federal and state guidelines and legal requirements. For circumstances in which the above stipulations do not direct the utilization of the restricted funds, the process will ensure consistent compliance as directed by the President’s or the Board of Trustees’ designated use of the funds and in accordance with the St. Mary’s Investment Policy Statement.

Note: The annual review and reporting process will occur after an initial assessment of all restricted funds, which is described in the last section of this document.

Annual Review and Reporting Process

The financial compliance administrator in the Office of Finance is responsible for the annual review and reporting of all restricted funds to ensure consistent compliance in the utilization of restricted funds with requirements and the St. Mary’s Investment Policy Statement.

The financial compliance administrator will work with restricted fund managers responsible for administering restricted funds and the Office of University Advancement to conduct the review and reporting processes. The following identifies responsibility for some restricted funds:

• Office of Financial Assistance – fund manager responsible for the administration of all scholarships
• Office of Sponsored Projects, Academic Research and Compliance, and academic departments –

fund managers responsible for the administration of grants

• Office of the Provost, academic deans and directors – fund managers responsible for the administration of restricted funds including, but not limited to endowed professorships and chairs

Review

The financial compliance administrator will meet at least twice each year with restricted fund managers to review the administration of restricted funds in their control and prepare required reports demonstrating compliance for utilizing those funds.

The financial compliance administrator will also perform an end-of-year reconciliation review by June 30 annually. For funds with reporting requirements that do not align with the St. Mary’s fiscal year, such as restricted funds derived from federal grants, the financial compliance administrator will adjust the reconciliation review period to meet the requirements. The reconciliation review provides an opportunity to:

• conduct a final review of the utilization of restricted funds in the fiscal year
• adjust charges to the restricted funds, which then may be included in stewardship and other required reports
• ensure any remaining funds comply with the restricted fund requirements and are managed according to the St. Mary’s Investment Policy Statement

If discrepancies are identified in the compliance of the restricted funds’ utilization, the supervising member on the Executive Council, in collaboration with the President, will work to resolve the issues.

Reporting

The financial compliance administrator will ensure required reports are completed and that the Office of University Advancement has the information needed to prepare annual stewardship reports.

The Office of University Advancement is responsible for stewarding donors and providing annual stewardship reports to donors who have restricted gifts to the University. A primary purpose for stewardship reporting is to confirm compliance in utilizing restricted funds directed by donor gift agreements or understandings.

The financial compliance administrator and the Office of University Advancement are responsible for ensuring that language used in gift proposals, gift agreements and stewardship reports is consistent and accurate.

Initial Assessment of Restricted Funds

The financial compliance administrator is a new position to be filled no later than June 1, 2021. Upon filling this position, the financial compliance administrator will immediately conduct an initial Assessment of restricted funds and restricted fund managers.

The process includes assessing current and historical compliance with requirements of restricted funds as directed by gift agreements or understandings, court orders, grant awards, estate documentation, or federal and state guidelines and legal requirements. For circumstances in which the above stipulations do not direct the utilization of the restricted funds, the financial compliance administrator will assess historical compliance as directed by the President’s or the Board of Trustees’ designated use of the funds and in accordance with the St. Mary’s Investment Policy Statement.

The financial compliance administrator will review all restricted fund documents and establish a clear understanding of each of the funds’ intended utilization and, if necessary, produce a clarifying document. After legal counsel has reviewed these documents to ensure interpretations are compliant with the law and governing restrictions, the clarifying document will guide the future administration of restricted funds.

The financial compliance administrator will also assess the number of fund managers and, if necessary, consolidate responsibilities to improve controls and minimize the potential for misinterpreting compliance requirements.

The Office of Finance will upload all restricted funds into an accounting database designed to manage and track the funds’ utilization and compliance.

At the end of the assessment process, a report will be presented to the President, Executive Council and, as requested, to the appropriate Board Standing Committees.