____________________________________________________________________
FISCAL MANAGEMENT OPERATIONS GUIDE
Accounting Treatment of Gifts
Generally accepted accounting principles require "unrestricted gifts" be accounted for by the institution as revenue of Current Funds. Such funds may be budgeted, appropriated, and expended for any appropriate institutional purpose through the institution's normal fiscal procedures.
Restricted gift monies available for current expenditure in accordance with the purpose designated by the donor will be credited to an appropriate restricted account within the specified college or department.
The donor's written communication at the time of gift determines the placement of the funds and how the funds can be spent. If the donor does not clarify his or her intent upon donation of the gift, the funds are considered totally unrestricted, placed in a discretionary account and used for expenditures that cannot be paid from state funds. If the donor restricts the donation, then the funds are placed in an appropriate restricted account.
The Board of Regents of the University of Texas System has ultimate authority in decisions regarding the acceptance of gifts for endowment purposes. The minimum gift that will be accepted to create an endowment is $10,000. Endowments are processed through the Development Office with development officers securing endowment gift agreements from the donor. The agreements contain pre-approved language from the University of Texas Office of Estates and Trusts that state the purpose of the endowment, administration terms and investment terms. The donor, the Development Office and the UT System Office of Estates and Trusts keep original copies.
Endowment gifts are accepted locally and deposited into appropriate endowment clearing accounts established through the Office of Accounting. On a monthly basis, funds held in these accounts are forwarded to the University of Texas Investment Management Company (UTIMCO) and invested in the Long Term Fund. On a quarterly basis, funds are distributed back to the University from the interest earned on the principle. Endowment funds are managed in accordance with Board of Regents' Rules and Regulations.