1.1 TREASURER'S OFFICE.
(Amended 7/02)

The University Treasurer's Office has overall responsibility for administering and overseeing the banking, debt service, and investment programs for the University. The following is provided to communicate information on the services of the Treasurer's Office and the guidelines for using those services.

a. Banking and Debt Services. The Treasurer's Office administers banking, cash management, and debt services for the University. This includes the establishment and maintenance of University bank accounts, contracting for new banking services including ATM and retail credit card processing, domestic and foreign wire transfers, foreign drafts/collection, stop payments, and ACH transactions. The Treasurer's Office also serves as the bond registrar and paying agent for the majority of the bonds issued by the University.

b. Bank Accounts. Only the Senior Vice President for Finance and Operations and Treasurer, the Director of Financial Management and University Secretary, and the Director of Treasury Operations are authorized to establish and maintain University bank accounts. Requests for bank accounts or other banking services must be submitted to the Treasurer's Office for prior review and approval.

c. Prohibition of Use of University's Name and Tax Identification Number. The University strictly prohibits the use of The University of Iowa's name or tax identification number by any person or organization in any bank account except as specifically authorized by the Senior Vice President for Finance and Operations and Treasurer or the Director of Treasury Operations. Banks are periodically surveyed to identify any accounts utilizing the University's name or identification number. These accounts are independently reviewed for proper authorization.

d. Bequests. The Treasurer's Office records and invests all funds that are designated as endowment and payable directly to The University of Iowa. Both the General Counsel and the Treasurer's Office are responsible for the initial review of all bequests to determine whether any portion has been designated as an endowment under the terms of the will. Beneficiary documents, estate notices, or any communication indicating a possible beneficiary status of bequests and gifts to the University shall be forwarded directly to the Director of Treasury Operations for official handling. Wherever justified, the funds will be transferred to The University of Iowa Foundation, the University's preferred channel for private gifts.

e. Investments -- Operating, Endowment, and Quasi-Endowment Funds. Operating, endowment, and quasi-endowment funds are invested in compliance with the investment policy of the Board of Regents, State of Iowa. (See Regents Policy Manual 7.03.) Investments are independently reviewed and audited monthly and quarterly in accordance with Regent policy. Internal procedures and practices with regard to participant accounting, spendable earnings, and the charging of costs (i.e., investment management, banking and custody fees, and where applicable stewardship and donor-related services costs) are developed in consultation with the University's Investment Advisory Committee and the Treasurer's internal committee of administrative officers.

f. Guidelines for Establishing and Maintaining an Endowment or Quasi-Endowment.

(1) Endowments. Endowment funds are invested for the long-term benefit of University programs where the inflation-adjusted value of principal is retained and where spending is limited to a fixed percentage of market valuation. Restrictions as to principal are imposed by the donor. A review to determine compliance with endowment restrictions will be performed annually.

All endowments are invested in a long-term investment pool which includes equities and fixed income securities. Spending limits are set annually by the University based upon a projection of current investment income.

(2) Quasi-Endowments. Quasi-endowment funds are invested for the mid and long-term benefit of University programs using investment philosophy similar to the endowment. However, in the case of quasi-endowments, current investment income and capital gains may be spent and the inflation-adjusted value of the principal need not be maintained over time. Restrictions as to principal are determined by the University.

Based on the intended use of funds, quasi-endowments are invested in either or both the long-term investment pool which includes equities and fixed income securities, and an intermediate investment pool which is 100 percent fixed income securities.

Quasi-endowment funds may be withdrawn once per fiscal year at the beginning of the fourth fiscal quarter (April 1). Written notice of the intention to withdraw funds must be received in the Treasurer's Office by March 1. Written requests to withdraw quasi-endowment funds must be signed by an authorized departmental representative. Under unusual circumstances the Treasurer may permit withdrawal at other times.

(3) Authorization. Endowment or quasi-endowment accounts may be established only when authorized by the University Treasurer's Office. Additional contributions to established endowment or quasi-endowments accounts, other than investment earnings, also must be authorized by the University's Treasurer's Office. Endowment determinations will be made based upon an interpretation of donor or other restrictions that apply, while quasi-endowment determinations will be based upon the proposed long-term uses and intentions of the department. Any request for the establishment of a quasi-endowment must be accompanied by a specific programmatic plan for those funds and should contemplate commitment of the corpus for a minimum of three years.

(4) Investment Earnings. Endowment or quasi-endowment funds deposited with the University will be transferred to a fund manager for investment at the next endowment valuation date -- usually at the beginning of the calendar quarter following receipt of the funds. Investment pool earnings will begin accruing to the recipient department at that time. Balances in individual endowment or quasi-endowment income accounts will become part of the University pool investments; earnings on these balances will not accrue to either the fund principal or the associated income account, except where authorized by the Treasurer.

(5) Spendable Income. An amount determined by The University of Iowa's endowment spending rules will be transferred quarterly from the endowment or quasi-endowment fund to the associated income account. The spending rule is five percent of market value, calculated and distributed based upon a rolling market average. Each year in consultation with the Regents' investment advisor, the University evaluates guidelines for income distribution for the subsequent fiscal year. This target for income is generated in advance of the start of a fiscal year and is based upon long-term investment expectations and anticipated inflation.

Internal procedures are developed by Treasury Operations and approved by the Senior Vice President for Finance and Operations and Treasurer. For internal procedures and additional information, contact Treasury Operations or refer to the following Web address: www.bo.uiowa.edu/dept.cfm.


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a. Salary and Supplies and Services Accounts. Separate salary and supplies and services accounts are maintained for each department. Allocations to these accounts are available for the fiscal year beginning July 1 each year and are based on annual budgets approved by the Board of Regents, State of Iowa, and supplemental allocations recommended through regular administrative channels and approved by the President of the University. Supplemental allocation requests are made on the Request for Transfer or Allocation of Funds form.

Charges to salary accounts are based on payrolls in accordance with approved appointments. The University portion of retirement and group insurance premiums and taxes are charged to salary accounts by the University Business Office in accordance with the base salaries on which they are applied.

Charges to supplies and services accounts include all charges except those charged to salary and equipment accounts, and are based on requisitions and vouchers approved by departmental executive officers (and other administrative officers as required) and on University-wide contracts for services (such as telephone service and equipment maintenance service). Expenditures and commitments must be limited to the allocations provided. Requisitions for items to be charged to the current year's budgets must be filed in the Purchasing Department not later than June 10 each year.

Free balances in supplies and services accounts are not carried forward to the following year but are lapsed as of June 30 each year. A free balance is the balance remaining after deducting the expenditures and outstanding orders (encumbrances) from the departmental allocation(s). Amounts encumbered for outstanding orders as of June 30 each year are carried forward to the following year to the extent that June 30 balances are available and providing that delivery and payment is completed prior to October of the following year. Expenditures and commitments are not authorized in excess of the amounts allocated. If, by reason of unforeseen expense, or otherwise, a supplies and services account is overdrawn on June 30 of any year, the overdraft becomes a first charge against the departmental supplies and services account for the following year. Amounts are not encumbered for orders outstanding to University stores and service departments as of June 30 each year.

b. Equipment Accounts. Separate equipment accounts are maintained, and encumbrances and balances for equipment accounts are handled in the same manner as supplies and services accounts. Allocations to these accounts are based on requests processed through administrative channels for specific items, as approved by the University administration. Special forms for equipment allocation requests are made on the Request for Equipment form.

Following the notice of approval of the equipment allocation, departmental executive officers should submit requisitions to the Purchasing Department for purchases to be made in the regular manner.
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1.3 OTHER ACCOUNTS.
Separate accounts are maintained in the University Business Office for all current restricted, income, and revolving accounts. These accounts receive no allocations from the University general fund and balances do not lapse to the general fund.

Salaries are paid from these funds on the basis of approved budgets in the same manner as for accounts receiving budget allocations. The same procedure and general regulations apply to expenditures from these funds as apply to expenditures from allocated funds.

a. Income Accounts. Income accounts are those which are set up for activities or enterprises which are supported solely by the income received from the sale of goods or services. These include a limited number of organized educational activities, auxiliary enterprises, the stores, service departments, and revolving funds.

b. Current Restricted Accounts. Current restricted accounts are those set up for funds received from various sources outside the University. These accounts are comprised of grants, contracts, fellowships, and other sponsored agreements received from both federal and nonfederal organizations in support of a wide range of University activities. Also included in the current restricted accounts are gifts to the University to be used for a variety of special purposes.

All charitable gifts, regardless of their form, are to be acknowledged by The University of Iowa in accord with the quid pro quo requirements and substantiation requirements imposed by the Internal Revenue Service. The University has previously designated The University of Iowa Foundation (Foundation) as its primary development arm and its preferred solicitor and recipient of and channel for private gifts intended to benefit the University. To the extent possible, deans, directors, and departmental executive officers should encourage current and prospective donors to direct their gifts to the Foundation so they may be properly acknowledged for tax purposes and so they may receive consultation and advice on gift and tax procedures appropriate to their needs, including charitable lead trusts, charitable remainder trusts, life estates, and testamentary dispositions.

Monetary gifts payable to the University are reported on a Money Received form with the appropriate donor information noted or attached and forwarded to the Business Office. The Business Office deposits the monetary gift in the appropriate University gift account and forwards the donor information to the Foundation which, in turn, provides official acknowledgment to the donor on behalf of the University. Non-monetary gifts made to the University should also be reported to the Business Office with the appropriate donor information. This information will also be forwarded to the Foundation, which, in turn, provides official acknowledgment to the donor on behalf of the University.

c. Accounts Receivable. All sales of materials or services must be reported to the University Business Office for collection. Exception to this rule may be made only upon special approval by the University Business Office.
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1.4 DEPARTMENTAL CREDITS.
Income from departmental sales or services is credited to the University General Educational Fund, and is not automatically available to a department to supplement budget allocations.
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