Oregon State University Foundation Utilizing OSU Foundation Funds

Oregon State University Foundation Utilizing OSU Foundation Funds: A Question and Answer Forum

OSU Foundation Accounting Team Steve Schauble, CFO Kevin Harvey, Assoc. VP of Finance Patti Nowak 7 -4922 Assistant Controller patti. nowak@osufoundation. org Oversee Accounts Payable, Payroll, Fixed Assets, Annual Audit, OSU Customer Service Michael Dickason 7 -4909 Disbursement Workflow Coordinator michael. dickason@osufoundation. org Lead Accounts Payable and OSUF Payroll Marianne Mesford 7 -1872 Gift Processing Manager marianne. mesford@osufoundation. org Gift Accounting, OSU Customer Service Kristi Tracy 7 -9583 Investment Accounting Manager kristi. tracy@osufoundation. org Endowments, Transfers Cheryl Cowgill 7 -4689 Investment Accountant cheryl. cowgill@osufoundation. org Gift Annuities, Trusts, Endowments Alec Williamson 7 -1763 Accounts Payable Specialist alec. williamson@osufoundation. org Direct Payment Requests and Signature Sheets Kim Winburn 7 -4699 Accounts Payable Specialist kim. winburn@osufoundation. org FSxxx Index Reimbursements and Scholarships 2

Presentation Outline NOTE: Project – Account – Designation – Org - Fund; are all interchangeable terms that indicate an individual fund held at OSUF Signer Sheets Online Signature System (GRRS) Forms Changing/Adding Authorized Signers to Projects 1. New project 2. Signature Authority Change/Add 3. Multi Project Signer Change Form Foundation/OSU Processing Systems: Scholarship Reimbursement System (SRS) FS Index Reimbursement System (FS) Direct Payment Request System (DPR) Use of Foundation Funds Restrictions – restricted vs. unrestricted Reimbursable Expenses General Limitations Customer Requirements Substantiation Requirements 3

Presentation Outline Disbursements Set up of New Foundation Projects Getting Access to Foundation Project Information Direct Deposit of Foundation Reimbursements for OSU EE Gift in Kind (GIK) Summary/Conclusion Questions 4

Signer Sheets • List of authorized signers for an OSU Foundation project • Determines who can approve requests in any of the three Foundation fund disbursement systems • Outdated signer authorizations will result in the delay of transactions being processed • i. e. – Signers aren’t here anymore! • Refer to OSU Office of Budget & Fiscal Planning – Grant Reporting & Reimbursement System (GRRS) instructions • Non-OSU employees can be signers on some types of projects please contact the Foundation for assistance , if needed 5

Online Signature System (GRRS) Forms “Equity Account (Project Id) Signature Form” • This form will be created after initiating a signer change/add in the GRRS • Request ID in bottom left of form is used by OSUF to look up and approve signer change • Send the signed form(s), via email or campus mail, to OSUF Accounts Payable alec. williamson@osufoundation. org • Docu. Sign is accepted - include email above in CC line or email completed document • Please give OSUF a few weeks for process time for large changes 6

Changing/Adding Authorized Signers 1. New project: • OSUF Gift Accounting personnel will notify appropriate department of new project creation and prompt to add signers • Until signers are added, there can be no expenditures from project 2. Signature Authority Change/Add • Add/remove signers in the GRRS for Project(s) Ø Reference GRRS manual • Print Document and secure all required signatures • Send completed form(s) to OSUF Accounts Payable - alec. williamson@osufoundation. org 7

Changing/Adding Authorized Signers - Continued 1. Multiple Project Signature Authority Change PLEASE NOTE: This form does NOT replace the need to go into the system to initiate a signer change for each project being changed as well as the printing out of the form for each individual project • To be used in lieu of having dean/dept head sign each individual signer change form • EXAMPLE: If you are adding or removing the same person(s)* to a bunch of projects within one department or college, the signer being added and dean approving can sign this one form instead of signing each individual project form *One form per signer being added or removed • Attach list of projects (Name and number) being changed along with each individual signer change form created within the GRRS and route to OSUF 8

Questions? 9

Foundation/OSU Processing Systems Scholarship Reimbursement System (SRS) All scholarships, to OSU students, must be processed through this system. If you need assistance with this system please contact the OSU Scholarship Office or OSU Financial Aid. If they cannot help, contact your business center. After talking with your business center please contact Kim Winburn if you are still having problems. Disapprovals Scholarship Agreements Budget Process Summary of SRS 10

Disapprovals Don’t panic! If action is needed you will be contacted by OSUF Accounts Payable Many times OSUF can take care of the problem internally and then approve the scholarship payment manually 11

Scholarship Agreements All scholarship agreements are scanned and available in Financial Edge (FE) Having a copy of the agreement is a great idea, it lets you know all the details associated with your scholarship account Contact someone in your Business Center to get a copy, if you don’t have access to FE 12

Budget Process Budget Formula: Balance in Foundation Account – encumbrances + projected endowment earnings = Available Budget If you are utilizing your scholarship account balance in a way that you are counting on current year endowment earnings to fund payments – don’t plan too close to zero budget as earnings may post after payments to students are made - this can prevent reimbursements from being able to process due to deficit balances because projected endowment earnings have not yet posted – TIMING ISSUE When first award detail code flows through each fiscal year the budget for that year is locked. Monitor any encumbrance transactions and remove them from the system if student is not attending or the award is not going to be made 13

Summary Regarding Scholarships It is the organization’s responsibility to know the award criteria associated with each scholarship account. All questions regarding use of scholarship funds will be directed to the department incurring and authorizing payments 14

Foundation/OSU Processing Systems FS Index Reimbursement System (FS) All expenses associated with operating OSU are reimbursed by OSUF utilizing this system. If an expense item is a “cost of doing business” for OSU it is processed through OSU Accounts Payable utilizing an FS Index. Once a transaction is posted to an FS Index it is then coded to the appropriate OSUF project and submitted to OSUF for reimbursement. Approved OSU business related expenses – generally reflected on OSU financial statements Transactions for $20, 000 or more – you need to send copies of backup documentation to OSUF – exception for payroll Reimbursements of $500 K or more – Please provide two weeks notice to OSU Finance If you have questions regarding FS transactions please contact Kim Winburn 15

Foundation/OSU Processing Systems Direct Payment Request System (DPR) Expenses associated with fundraising, public relations, or are specifically prohibited by OSU policy (i. e. alcohol, hosting, etc. ) or that are not budgeted for by OSU can be processed through this system These expenses are not considered to be “costs of doing business” for OSU If a request is submitted through this system and it is determined that it is a “cost of doing business” for OSU it will be disapproved and the submitter will be instructed to process the payment through an FS Index This system is operated on a first in – first processed basis. At any time, on average, there will be 25 – 50 payment requests in the queue awaiting OSUF approval. As fiscal year end approaches, each May and June, the number of requests in the queue will increase to 50 – 150. Our goal is to approve, or disapprove, payment requests within two weeks of submission to OSUF. 16

Foundation/OSU Processing Systems Direct Payment Request System (DPR) - continued Our count clock starts at the point that a request is approved by an authorized OSU signer and submitted for processing. We have no control over how long it takes responsible personnel at OSU to receive, prepare, and input requests prior to their approval and submission to OSUF. If a submitted request does not have adequate substantiation (i. e. explanation of the expense, receipts, and other supporting documentation, etc. ) or there are questions or other problems that need clarification the request will be rejected back to the originator, with an explanation of what needs to be corrected or what additional information is needed for processing. When a rejected request is resubmitted to OSUF it goes back into the queue to be processed on a first in – first processed basis. Delays in processing through this system can vary, and at times, seen unreasonably long if someone does not know the entire audit trail of a submitted request. Questions regarding this system should be directed to your business center first. If they cannot help please contact Alec Williamson or Michael Dickason. 17

Foundation/OSU Processing Systems Direct Payment Request System (DPR) - continued Typical transactions are payments to vendors and reimbursements to OSU employees for the following types of expenses: Alumni and donor relations Fundraising and public relations Hosting for the previous two categories Promotional activities (theater tickets, rodeo tickets, greens fees Give-away promotional items (T-shirts, hats, mugs, pens) Employee recognition receptions Hosting over OSU $ limits Gratuities over OSU % limits Alcoholic beverages Flowers and greeting cards Extra activities held in conjunction with a departmental retreat or other event 18

Use of Foundation Funds Ensure that gifts are used in a manner consistent with limitations, to prevent fraud, to ensure proper administration of gifted funds Limitations imposed are due to tax exempt status and placed by several authorities Terms of Service Contract with OSU Disbursement policies of both OSU and OSUF Internal Revenue Service Donor intent Restricted Projects – 4100 -XXXXXX Donor contribution created project and original gift agreement set parameters for how funds in the project can be used – these parameters cannot be deviated from Unrestricted – 4110 -XXXXXX Monies available for general use within OSU and OSUF spending policies Department is responsible for being familiar with and to use funds in accordance with restrictions 19

Reimbursable Expenses Fundraising and public relations expenses , primarily (DPR) Expenses paid through an OSU FSxxx index (FS) Not all expenses will qualify for reimbursement; [expenses incurred that are direct costs of doing business as OSU are not reimbursable except through the FS Reimbursement System] we are not here to circumvent the OSU system Reference Article 3 of the OSU Foundation Policy for Distributions – Guidelines for Use of Unrestricted Funds for a detailed comprehensive list of reimbursable expenses 20

General Limitations Donations to other non-profit organizations Cannot distribute to other non-profit organizations unless such payment is made for goods and services received by OSU or another primary benefit that fulfills the university’s mission and purpose Use of funds for private benefit to an individual Specific exceptions are covered in Articles 6 through 24 of the OSU Foundation policy for Distributions – Guidelines for Use of Unrestricted Funds Use of funds for social purposes/events Pre-payment of expenses – Can be processed through the FS Late fees and interest (except OSU assessments) 21

General Limitations - Continued Fines, penalties and parking tickets Wire transfers for payment of expenses International payments - Must be made through FS Payments to non-citizens Specific exceptions are covered in Articles 6 through 24 of the OSU Foundation policy for Distributions – Guidelines for Use of Unrestricted Funds Other than employees and students Student organizations/club support Payments in support of student organizations are made to the appropriate Memorial Union account 22

Customer Requirements Timely filing of requests for reimbursement Within 30 days; more timely at fiscal year end Proper use of funds within any imposed restrictions Proper signature authority • Keep signature sheets updated, as needed • Dean’s or equivalent signature, if warranted • Signatures signed in blue ink Proper substantiating documentation Split Invoices – need to provide Banner payment information to fully allow for overall balancing or payment to the vendor – when necessary to accommodate paying a vendor from both Foundation and state funds Vendor Tax ID #s – will need to obtain W-9 for new vendors Obtain completed W-9 will assist in the timely processing of payments to vendors as checks cannot be mailed to new vendors without a current W-9 on file. If W-9 on file is over 5 years old an update will be required. 23

Customer Requirements - continued Vendor or Name Changes – notify OSU Foundation Accounts Payable via email – this includes if tax id changes, addresses, etc. 24

Level of Service Expectations Timely processing and payment of requests for reimbursement under first-in, first-out (FIFO) system Within 10 business days Weekly check run on Thursdays with close of business Monday cut-off Processing times will be extended if customers do not meet our requirements when filing for reimbursement Periodic training, as needed Quarterly Target problems as they occur Fiscal manager meetings Year-end processing and cutoff training and reminders 25

Substantiation Requirements Backup supporting documentation must accompany each request for payment and verify the following: Who: Responsible party, and where applicable provide names of attendees What: Business purpose of the expense Where: Location, and where applicable name of restaurant or location of event When: Date the expense occurred Why: Why donor funds are being used to pay for the expense 26

Substantiation Requirements Original Invoices, itemized receipts, or credit card receipts less than 8 ½” x 11” must be taped to a full size piece of paper; multiple documents can be taped to one sheet of paper; do not tape over or highlight information on receipts, i. e. dates, dollar figures as it will interfere with scanning of needed information If recycled paper is used for taping of receipts please X out non pertinent information that is not relevant to the payment request. This information could be scanned. Credit card transactions must include both the credit card receipt and the register receipt – one shows total amount paid while the other shows the details of what was purchased – neither on their own is complete Guest lists Conference registration confirmation for attendee Conference agenda Hotel receipts must be itemized; movies, laundry, mini-bar or hotel amenity expenses are not reimbursable 27

Substantiation Requirements - Continued Hosted Meals – itemized receipts, brief description detailing purpose of the meal/meeting, list of attendees and their relationship to OSU Receipts for meals that included alcohol must be separated and show separate totals for food and alcohol purchases Documents to Accompany Check – any documentation that needs to be mailed with the check must be included with the request – please email OSUF AP 28

Disbursements Must use one of the three systems Use the matrix as a reference document. Restricted fund expenditures must be within project parameters and comply with OSU, and OSUF policies Unrestricted fund expenditures must comply with OSU and OSUF policies 29

Deadlines Expenses must be submitted in the fiscal year in which they were incurred Cutoff at fiscal year end is according to FY EOY calendar Weekly Cutoff for DPR System Need to be approved by 5 pm on Monday to make Thursday check run THE CAMPAIGN FOR OSU 30

Set up of New Foundation Projects Minimum of $50, 000 of funding needed to open a new project; must also show perpetual funding Questions regarding setting up of a new project should be addresses to Marianne Mesford 31

Getting Access to Foundation Project Information Access to and use of Financial Edge and Report Manager • Needs to be requested through your managing business center • Requests for access will be routed by the business center to Patti Nowak Access to and use of CRM Advance • Send request to OSUF ITS at the following email service@osufoundation. org • They will evaluate request and provide further instructions and training Gift Journals • New Gift journal access available for 10 projects or less can be accommodated • Complete a Data Access Account Request form; attach or include the list of projects that you need information for • • Go to OSU Foundation Website: http: //osufoundation. org/ Go to bottom of page and click on Staff Resources, then Online Forms. Under the Information Technology section, choose Data Access Account Request Send completed form to Marianne Mesford NOTE: System to replace current gift journal system is in development – implementation date TBD 32

Direct Deposit option for reimbursements ACH Set Up Information Request Document (direct deposit form) • • Go to OSU Foundation Website: http: //osufoundation. org/ Go to bottom of page and click on Staff Resources, then Online Forms. Under the Accounting section, choose ACH Set Up Information Request Document The first line of the form states company; if an individual put their name on this line 33

Gift in Kinds (GIK) GIK Valued from $1. 00 to $499. 99 • • The donor completes their portion of the GIK form, including address The department or development officer completes the departmental portion of the form; signer of form must be someone at OSU Please ensure that the project number and name are correctly referenced so that the gift is properly credited Send the completed form to the Foundation for receipting GIK Valued from $500 to $4, 999. 99 • • • Instructions above are the same In addition, the department accepting the gift should inform the donor that an IRS Form 8283 will need to filed with their income tax return to claim the deduction and should advise the donor to contact their tax consultant. The form is available from the IRS website: https: //www. irs. gov/forms-pubs-search? search=8283 34

Gift in Kinds (GIK) GIK Valued at $5, 000 and above • All instructions for earlier categories still apply • The donor should still be informed that an IRS Form 8283 is required by both the IRS and the Foundation • • • The form can be found on the IRS website If the donor has questions they should seek the advice of a tax consultant The IRS Form 8283 will need to have the signature of an independent appraiser The form will need to be submitted to the Foudation for acknowledgement and receipting If the item donated is sold, transferred, or disposed of within three years from the date of the gift, the department must notify the Foundation in writing so that proper IRS reporting can be made OSU Inventory and Insurance • Departments are responsible for adding appropriate items to their state inventory list • Items valued at $5, 000 or more need to be added for insurance purposes • DO NOT SEND this information to the Foundation Questions regarding GIK can be directed to Jessica Lammert 7 -9042 35

Summary/Conclusion It is the organization’s responsibility to ensure that funds are being used in accordance with restrictions and limitations imposed by donors, State of Oregon laws and guidance, the Internal Revenue code, and OSU Foundation policies OSU Foundation will strive to provide timely payment processing, training and processing guidance Customer requirements include timely filing, proper electronic approvals or signature(s) (blue ink), providing proper substantiating documentation and transaction information All questions regarding use of funds will be directed to the department incurring and authorizing payments 36

Questions/Comments 37