Financial Edge User Guide and FAQs

Transcription

1 Financial Edge User Guide and FAQs Financial Edge FE is the CU Foundation s CUF accounting system. The reports described in this document are run from a reporting warehouse and are referred to as FE reports. They are available to be accessed by any CU staff with a business need. This document is provided to assist end users with basic terms and concepts. Formal training is available on a regular basis (search for course ID ilt_u00108 on SkillSoft to register). Additional assistance can be found at as well as Accounting policies and procedures have changed over time. The Financial Edge warehouse contains data from FY12 to present, while the accounting department has data back to FY99. accounting@cufund.org to obtain access to FE or with other questions. TABLE OF CONTENTS (Ctrl + Click to jump to section) Overview of Available Reports Common Tasks Key Terms and Definitions Commonly Used Account Codes FAQs Gift Fund Structure and Fund Types 1 P a g e

2 OVERVIEW OF AVAILABLE REPORTS Report Custom Compilation Endowment Summary Fund Lookup Fund Number Summary Gift Fund Statement Transaction Detail Summary A summary of gift funds for a selected group such as school or department that has one row per fund presenting key data for each fund. Runs a summary of endowment funds with totals by campus and school. Allows a user to run a list of funds or search by fund title or SpeedType. A summary of gift funds for a selected group such as school or department that rolls beginning fiscal year net assets to ending net assets and breaks out ending net assets into major categories. Reports are separated by fund type: Current Expendable, Endowment Distributions, and Endowment Principal. Summary of one gift fund with current balances and fiscal year to date activity. Allows a user to enter specific beginning and ending dates and generate a list of transactions for that time period on a particular account code. COMMON TASKS I want to. Obtain a current balance on a particular gift fund View a list of gifts and donors to a particular fund or group of funds View key balances and information on all of the funds related to a particular unit (Campus, School, Department) on one report View all of the funds related to a particular unit (Campus, School, Department) with year-to-date activity segregated by type of fund Obtain the spendable balance on a particular fund or group of funds Obtain current or upcoming distribution amounts for an endowment or group of endowments Gain a high level overview of a gift fund including activity and balances Locate a fund based on a word or words in the fund name Locate a fund based on its associated CU SpeedType Suggested Report Gift Fund Statement Transaction Detail Report Custom Compilation Fund Number Summary Custom Compilation Custom Compilation or Endowment Summary Gift Fund Statement Fund Lookup Fund Lookup 2 P a g e

3 KEY TERMS AND DEFINITIONS Fund Number/Allocation: Different terms used by different systems (, Fund Number = FE, Allocation = Advance) to describe the number identifying a gift fund. The same 7 digit number will be used in both systems. Advance is the donor database where gifts originally are recorded and receipted. Historical Gift Value HGV The total of all gifts received by an endowment since inception. In some cases for quasi endowments that have made principal liquidations historical gift value may have been reduced by the liquidation. Available Balance The amount of money available to be spent from a fund, equal to cash plus reinvested distributions (i.e., distributions that are invested in the LTIP see Reinvested Distributions, below). LTIP: Long Term Investment Pool. This pool is similar to a mutual fund. All endowment funds get their proportional share of any LTIP gains/losses on a monthly basis. Additional information about the LTIP is available at the Foundation s website: Pledge: A commitment from a donor to make a gift or gifts at a later date on an assigned schedule. Outstanding Pledges The total amount of pledges to a fund that have not yet been paid. Also called Contributions Receivable on the Gift Fund Statement. Pledges may also be known as commitments. Principal Market Value - The total of all cash and investments in an endowment fund. Pledges are excluded. Net Assets The total value of all assets controlled by a fund less any liabilities owed by a fund. This includes cash, investments, and pledges receivable, minus any payables or liabilities. Underwater: When the market value of an endowment is less than its historical gift value. See FAQ section for potential impacts an underwater status may have on distributions. Reinvested Distributions- In limited cases, endowment distributions have been invested in the LTIP. This balance remains available to be spent as part of the total balance in the endowment s distribution fund. These balances are subject to LTIP market gains and losses as well as the Advancement Support Fee. Program Principal & Manager: These are the individuals assigned on PeopleSoft at CU to the linked SpeedType. CUF uploads this data once/month to FE so that it may be included on FE reports. 3 P a g e

4 REPORT SPECIFIC TERMS Endowment Summary Reinvest Date Reinvest Amount-Historical Gift Value Reinvest Amount-Market The date, usually defined in a gift instrument, that distributions should begin. The amount needed to be accumulated in the HGV of a fund and invested in the LTIP before distributions should begin. The amount required in a fund s LTIP market value before distributions will begin. Since, the market value fluctuates monthly, distributions will begin if the market value exceeds this balance in any one month. NOTE: If more than one Reinvest criteria is listed, distributions will commence as soon as one criterion has been met. Custom Compilation: M/H ratio Gifts (YTD and prior years) Used (YTD and prior years) The ratio of the market value of a fund to the historical gift value, a ratio below 1 indicates that a fund is underwater and could potentially not distribute. As an example an endowment worth $1.5M with a HGV of $1M would have a 1.5 M/H ratio. These 3 columns only include cash basis gifts, not pledges committed. These 3 columns are the amounts transferred to CU for the fund s purpose. 4 P a g e

5 Gift Fund Statement: Commonly Used Account Codes Account Account Name Summary Cash Cash is created in a fund whenever a cash gift is received, a non-cash gift is liquidated, or money is transferred in. Cash is decreased if funds are transferred to CU or to another Fund. Cash is decreased in an endowment when that cash is invested in the LTIP Investment-Stocks The value of gifts of stock received by a fund. This account generally only has a balance between the time a stock gift is received and when it is sold (at which point the account returns to zero and cash is increased) LTIP-Gifts (Historical Gift Value) The total of all gifts invested in the LTIP. Principal fund only LTIP-Reinvested Distributions The total of all distributions invested in the LTIP. Distribution fund only LTIP-Change in Market The total of LTIP market gains and losses, less distributions and fees. Principal fund only Contributions Receivable The balance of any outstanding pledges/commitments Gift Revenue Cash basis gifts received by a fund, including pledge payments Bequest Gifts Gifts received from an estate liquidation Pledges Revenue recorded at the time a donor makes a commitment Pledge Payments The amount of pledge payments made (see FAQ s for accounting) Transfers to the University The amount wired to CU for expenditures made in accordance with the fund s purpose Endowment Distribution Transfer Reflects the annual distribution of funds from the principal fund of an endowment to its associated distribution fund Advancement Support Fee The amount assessed on each endowment fund (and distributions invested in the LTIP) for advancement support. Endowment Min: This is the amount of historical gift required before spending of the available balance will be allowed. The amount of the Endowment Min is determined by the fund agreement or Endowment Funds Policy that was in place when the fund was established. 5 P a g e

6 FREQUENTLY ASKED QUESTIONS (FAQs) Question How much do I have to spend from my fund? How much will my next endowment distribution be? Who has donated to my Fund? What is the Advancement Support Fee? How are endowment distribution amounts calculated? What are Transfers to University? Is my endowment fund underwater? Why do I see an amount in accounts payable? Why don t I see any department or division codes for my school? Why do historical endowment reports look different than current reports? Answer The amount of money available to be spent form a fund is referred to as the available balance. To obtain the available balance, run a Custom Compilation report for the fund number from which you would like to spend. Exceptions: If an endowment has not met a specified minimum or does not have a finalized fund agreement, this balance will not be transferred to CU. Endowment distributions are calculated on March 1 each year, and distributions are made on July 1. To obtain the amount of your next distribution run a Gift Fund Statement, Custom Compilation or Endowment Summary report anytime between March 1 and June 30. To find a list of cash gifts to a particular fund, run a transaction summary report with an account codes 40000, This assessment helps to pay for the Fundraising/Advancement operations at CU. Please refer to the document CU Foundation Advancement Fee, available on the fund manager page, for more information. Distributions will be 4% of an endowment s trailing 36 month average fair market value, as of December 31 of the previous year. For more information see the Brief overview of important details and dates and Endowment Spending Policy documents on the fund manager page. This amount (available on the gift fund statement) shows the amount that was sent from a gift fund to its linked SpeedType to reimburse the SpeedType for spending. An endowment is underwater when its Principal Market Value is less than its Historical Gift Value. Distributions will generally be suspended if a fund s market value is less than 90% of its HGV. However, this policy only applies to pure endowments and a fund agreement may override standard policy. In almost all cases, the only time you will see a payable in a gift fund is at June 30. For year-end audit purposes, CU records a receivable from the Foundation and the Foundation records a payable to CU for any expenses incurred in June where the actual wires to CU in did not include those expenses. The payable is reversed on July 1, and report are run on a cash basis during the rest of the year. In order to track the components, account is used for this accrual (and subsequent reversal). Account represents actual cash payments made to CU during the fiscal year. Not all schools/colleges have taken the time to create departments and/or divisions. The potential to provide this breakdown exists, please contact accounting@cufund.org with questions. Beginning in FY16, the presentation was changed to break out individual components that had been previously aggregated. 6 P a g e

7 How long does it take for a new gift to appear on an FE statement? How do SpeedTypes relate to fund numbers? How are pledges and pledge payments recorded? What does Alcohol Allowed? mean? Generally two days after it has been posted to Advance. From time to time, there could be additional delays. With limited exceptions, every CU Foundation gift funds had a linked CU SpeedType. The actual expenditures (for scholarships, salaries, research, etc.) are made from the SpeedType by CU, and CUF reimburses those expenditures on a weekly basis. CUF sends available balance amounts each night to CU, and those balances are uploaded into the linked SpeedType so CU staff always know how much is available at CUF. Pledges are initially counted when the donor makes the commitment. The revenue is booked to account When a payment is made, the receivable in account is reduced and cash account is generally increased (in some cases a payment could be made with a non-cash asset, such as real estate, and cash will only be increased after that asset is sold). In the activity section on a Gift Fund Statement, an entry will be made to add the payment to gift revenue account This allows account to track cash basis gift revenue. However, since the revenue was originally recorded in account 42000, an offsetting entry is posted to account for the pledge payment to avoid double counting. Per CU policy, only certain types of funds can have expenditures for alcohol. If a CUF statement has a yes shown, then that fund is linked to a CU SpeedType that allows alcohol purchases. See CU policies for more info. 7 P a g e

8 GIFT FUND STRUCTURE AND FUND TYPES The CU Foundation uses a seven-digit number to identify the gift fund (called an Allocation on Advance). The number is established using the following information: Campus (CCXXXXX) The campus code is identified by the first two digits of the fund number: VALUE CAMPUS 01 Boulder 02 University of Colorado Denver Anschutz Medical Campus 03 University of Colorado Denver Downtown Campus 04 Colorado Springs 08 University-Wide 09 CU Foundation Fund Type (CCXXXXX) The last five digits of the fund number identify the fund. The third and fourth digits identify the fund type based on the following table: VALUE Fund Type 2XXXX Current or Capital Fund 30XXX, 31XXX 34XXX 38XXX 39XXX 50XXX, 51XXX 54XXX 58XXX 59XXX Distribution for various endowment types Principal for various endowment types Pure Endowment Quasi-Endowment Pure Custodial Quasi Custodial Pure Endowment Quasi-Endowment Pure Custodial Quasi Custodial Also, the distribution and principal funds for every endowment occur in pairs. The last four digits of the distribution fund will match the last four digits of the endowment fund. Example: is a distribution fund for a quasi-endowment for the Downtown Denver Campus. This fund accrues the distributions from the principal fund P a g e

9 Current Expendable Funds (CC2XXXX) Available for immediate spending. Does not receive interest unless held for a capital program. Capital Funds Available for immediate spending Purpose must be the funding of a capital project and the purpose code begins with B. Receives interest at a short-term rate while awaiting distribution. Endowment Funds (CC5XXXX) Minimum investment amounts apply to establish the fund. Pure Endowment (CC50XXX, CC51XXX, or CC58XXX) The gift is invested and held in perpetuity per donor restriction. Only distributions from the endowment to the distribution fund may be spent to support University activities. Quasi-Endowment (CC54XXX or CC59XXX) The gift is invested based on approval from the Board of Regents or the donor fund agreement without the restriction that the funds be held in perpetuity. Distributions are transferred to the distribution funds for immediate expenditure by the University. Principal may be liquidated to support expenditures by processing a transfer request form. The fund agreement is reviewed for any special requirements before processing the request. Last Updated 5/24/18 SD 9 P a g e