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Chapter 1: Gift and Endowment Compliance


1.1 Purpose

1.1.1 The purpose of this policy is to ensure that gifts to The University of Texas at El Paso (“University”) are appropriately administered in a manner that protects the interests of both the institution and its donors.

1.1.2 The purpose of the compliance program is to honor donor intent by ensuring the appropriate and effective use of endowment and gift resources, standardizing the management of endowments and gifts, increasing awareness of compliance issues across campus, and encouraging philanthropy through increased donor trust.

1.2 Policy Statement

1.2.1 The Rules and Regulations of the Board of Regents of The University of Texas System, policies of The University of Texas System, and policies of the University, include specific guidance for handling gifts and endowments, as follows:

a. UTS 117 Endowment Compliance Plan Systemwide Standards and Guidelines
b. UTS 138 Gift Acceptance Procedures
c. Regents’ Rule 60101: Acceptance and Administration of Gifts
d. Â鶹¹ÙÍø HOP Section III, Chapter 4.21: Appointment, Operation and Continuation of Endowed Academic Positions

1.3 Responsible Parties

1.3.1 The Cost Center Approver is responsible for managing the endowment, approving transactions charged to the cost center, and abiding by institutional compliance standards.

1.3.2 The Office of Institutional Advancement (IA) is responsible for accepting, processing, recording, acknowledging, and administering all gifts to the University.

1.3.3 The Endowment and Gift Compliance Committee is responsible for oversight and risk management of the Endowment and Gift Fund Compliance Program.

1.4 Definitions

1.4.1 Gift Fund: a fund containing outright gifts available for use according to the agreement purpose, without being invested.

1.4.2 Endowment: a fund that is permanently invested and distributes income earnings that support the designation outlined in the agreement. The principal is held in perpetuity (permanently), and only the income generated from the principal amount is distributed.

1.5 Gift Fund Compliance Standards

1.5.1 It is the responsibility of the Cost Center Approver to adhere to the gift fund compliance standards listed below.

a. Inappropriate Expenditures – Gift fund expenses must be consistent with the purpose outlined in the agreement.
b. Account Reconciliation – Gift fund cost centers must be reconciled monthly.
c. Negative Balance – Gift fund cost centers with a negative balance must be remedied by the Cost Center Approver.
d. Un-awarded Scholarships or Fellowships - Gift fund student support funds must not go un-awarded in any fiscal year.
e. Report of Use – Cost Center Approvers of gift funds must submit an annual report to IA detailing how funds were used the prior fiscal year.

1.6 Endowment Compliance Standards

1.6.1 It is the responsibility of the Cost Center Approver to adhere to the endowment compliance standards listed below.

a. Inappropriate Expenditures – Endowment expenses must be consistent with the purpose outlined in the agreement.
b. Account Reconciliation – Endowment cost centers must be reconciled monthly.
c. Negative Balance – Endowment cost centers with a negative balance must be remedied by the Cost Center Approver.
d. Un-awarded Scholarships or Fellowships - Endowment student support funds must not go un-awarded in any fiscal year.
e. Zero Expenditures – Endowment cost centers must not have zero expenses within a fiscal year.
f. Excessive Accumulations – Endowment cost center balances must not exceed two years’ worth of the annual distribution amount.
g. Unfilled Academic Positions – Endowed academic positions must not be unfilled for longer than two years.
h. Report of Use – Cost Center Approvers of endowment funds must submit an annual report to IA detailing how funds were used the prior fiscal year.

1.7 Low Balance Waiver

1.7.1 Cost centers with a balance less than $999.99 at the start of the fiscal year will be granted a waiver from the zero expenditures and excessive accumulations compliance standards.

1.8 Use of Gift Fund/Endowment Income Form

1.8.1 Endowment Cost Center Approvers are required to submit a Use of Gift Fund/Endowment Income Form for each endowment cost center that is not in compliance at fiscal year-end. The form must be approved by the respective Dean or Vice President, and the Vice President for Institutional Advancement. Multi-year approval will be considered as long as the need to save over multiple years is justifiable and necessary as determined by the Vice President for Institutional Advancement.

1.9 Automatic Reinvestment of Endowment Distributions

1.9.1 Endowments with a cost center balance greater than 9% of the endowment’s market value at fiscal year-end that do not have an approved Use of Gift Fund/Endowment Income Form on file with IA, shall be subject to automatic reinvestment of the cost center balance, less one year’s earnings. In rare circumstances, the Vice President for Institutional Advancement may grant an exception to automatic reinvestment. 

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