Subject  Trust Fund Interest

* TRUST FUND INTEREST POLICY

     The Board of Trustees of the University of Massachusetts collects funds each year from various groups as payments for assorted goods and services provided by the University. The funds, as they are collected, are deposited and recorded in a distinct Trust Fund. The funds are then deposited by the Treasurer of the University. These deposits earn interest, known as Trust Fund Interest. These earnings are then allocated by the Board of Trustees to support University projects and programs. The funds are allocated by several distinct categories. These categories are:

I.   Trustee Reserve

     Trustee Reserve is an account maintained by the Board of Trustees to support miscellaneous unforeseen financial liabilities of the University. Authorization to use this fund is limited to the Board of Trustees. The Board of Trustees is the custodian of this account. Purpose of fund:

1. To insure the long-term financial viability of the University and its Trust Funds.
   
2. To serve as an emergency fund against a special or critical situation in the University.
   
3. To be a reserve against revenue shortfalls of budgeted Trust Fund Interest income in a given year or to stabilize such income when Trust Fund Interest is expected to be low.
   
4. To meet short term fiscal crisis by supplementing program phase out.
   
5. To meet other extraordinary situations as identified by the Trustees.

II. Funded Endowments

     The Board of Trustees may establish and/or fund endowments and/or trusts for University of Massachusetts purposes. The most recent example is that of establishing/supplementing the Healey and Public Service Quasi-Endowments. Such endowments will be established particularly when Trust Fund Interest revenue exceeds reserve and operating needs.

Date:    10/1/90                              Page:    1.3.2

Subject  Trust Fund Interest

TRUST FUND INTEREST POLICY

III. President's Program Funds

An account established to support University and campus academic, institutional, developmental, and management projects and programs on a short term basis (generally one to three years or less). The President is authorized by the Board of Trustees to allocate these funds at his/her discretion, when requests are made for financial support in these areas. The President is authorized to allocate up to $40,000 per request. Amounts greater than this require Board approval. The President is the custodian of this account. Purpose of fund:

1. To provide funds to institute new educational programs as major program priorities within the University.
   
2. To assist in the development of University-wide or multi-campus programs, research projects, institutes or other initiatives.
   
3. To provide matching funds for development efforts, and projects having University-wide implications.
   
4. To assist in the support of major management developments and systems where critical funding can move the project significantly ahead.
   
5. To supply funding for projects which will result in major savings of University resources over a longer time frame.

IV. Operating Support Fund

     An account established to provide internal support of campus operations. These funds are allocated annually by the Board of Trustees to each campus and the President's Office. The Vice Chancellors for Administration and Finance are custodians of these funds. These funds will support expenses of the campuses for travel, academic expenses, business, scholarships, special equipment, supplies, etc. Purpose of fund:

1. To provide for benefits to the University President, Chancellors, or other staff as voted by the Board of Trustees.
   
2. To meet special meeting or other expenses, such as workshops.
   
3. To provide special scholarships or fellowships.

Date:    10/1/90                              Page:    1.3.3

Subject  Trust Fund Interest

TRUST FUND INTEREST POLICY

4. To fund University-wide expenses.
   
5. To meet other expenses as requested and approved by the Board of Trustees as part of the regular operating budget process of the University of Massachusetts.

     The balance of funds, in each of the funding categories discussed above, unexpended at the end of each fiscal year, shall remain in the account reporting the allocation and be reported as such a carry-over to the Board of Trustees. These carry-over funds shall not influence future allocations.

     The following pages identify the guidelines necessary to ensure the proper and appropriate expenditure of Trust Fund Interest funds. All expenditures of funds must follow recognized and approved University of Massachusetts guidelines and procedures for such. All information related in this document is subject to both prior and future policy decisions reached by the Board of Trustees in the determination of appropriate levels of funding, expenditures and reporting.

Section B

     The following guidelines shall be exercised in relation to all funds allocated by the Board of Trustees as Trust Fund Interest. All expenditures of funds must be consistent with University policy on expenditure of funds and reports of all expenditure activity must be presented to the Budget and Financial Affairs Committee of the Board of Trustees by March 1, and again by October 1, of each year.

     All existing University of Massachusetts policies, guidelines and procedures covering the use and stewardship of funds are applicable to Trust Fund Interest allocations, unless otherwise specified. Some of these policies, procedures and guidelines are reiterated at this time. These guidelines are applicable to all Trust Fund Interest allocations regardless of means of expenditure.

1. The University of Massachusetts Financial Records System (FRS) is the official record of the University. All expenditures must be recorded through this system.
   
2. Annual Trust Fund Interest allocations will be approved by the Board of Trustees.
   
3. These funds may not be expended for any form of political support.

Date:    10/1/90                              Page:    1.3.4

Subject  Trust Fund Interest

TRUST FUND INTEREST POLICY

4. These funds may not be used for the personal benefit of any person.
   
5. These funds may not be expended for fines associated with the violation of the law or ordinances.
   
6. All prerequisites must be in compliance with the University of Massachusetts Executive Compensation Package for University President and Campus Chancellors. (See Trustee Document T87-032 attached).
   
7. All records relating to the expenditure of Trust Fund Interest money shall be accompanied by the appropriate level of back-up documentation to support the specific expenditure of funds in keeping with University of Massachusetts policy and are subject to review by the Internal Auditing Department.
   
8. Allocations categorized as Operating Support Funds will be transferred to accounts on each campus established for the receipt of these funds. The specific guidelines for the expenditure of these funds is detailed below:

9. There will be only one authorized imprest checkbook account of Trust Fund Interest money on each campus. The specific guidelines governing the appropriate use of the checkbook accounts will be detailed in the imprest Checkbook Account Guidelines to be distributed by the Vice President for Management and Fiscal Affairs. 

Date:    10/1/90                              Page:    1.3.5

Subject  Trust Fund Interest

TRUST FUND INTEREST POLICY