Disbursement Process for Foundation Spendable Funds

2 The intent of this presentation is to further define the roles and processes for the disbursement of funds by Kent State University (KSU) and the Kent State University Foundation (Foundation).

Disbursement Functions 1.KSU 2. Foundation 3

Independent Entities 1.Organization 2.Governance 3.Operations 4

This project is a partnership to simplify the disbursement functions for all participants in the process. 5

6 KSU makes disbursements in accordance with the policies in the University Policy Register which have been approved by the Board of Trustees. The Foundation provides funding in accordance with operating policies approved by its Board of Directors.

7 The Foundation provides private funding for the benefit of Kent State University.

8 The Accounts Payable Department provides services to internal and external customers such as faculty, staff, students, and vendors by providing efficient, timely, and accurate information and payment processing in compliance with Kent State University’s administrative policy and external regulations. The Accounts Payable Department administers the following payment processes: Payment of Goods and Services Payment to Independent Contractors Employee Expense Reimbursements Purchasing Card Administration 1099-Misc Reporting Accounts Payable (AP)

In prior years, both organizations have operated accounts payable functions and made payments directly to payees. 9

10 KSU will become the primary accounts payable function for the university community. The Foundation will not issue payments to payees other than KSU, with minor exceptions. The role of the Foundation will be to provide funding directly to a unit of KSU subject to the availability of donor funds.

The new process will be effective for all transactions submitted subsequent to the issuance of a transmittal memorandum. 11

Role of KSU In the New Process 12

All requests for disbursement, besides alcohol, should be submitted to the KSU’s Accounts Payable Department for payment consideration. 13

 KSU will continue operating under all of its existing policies and procedures related to the disbursement function.  The procedural changes do not change any existing KSU policies.  All requests for payments to KSU Accounts Payable function must use the appropriate submission method. It will primarily be the KSU CHECK REQUEST (Check Request) form. 14

 Check Requests which are submitted to KSU must be complete and will be evaluated in accordance with existing KSU policies including any applicable accounting requirements.  One exception is for the funding of alcohol used in an entertainment function. A request to fund alcohol must be submitted directly to the Foundation for consideration. 15

 The KSU Check Request form now includes an area which indicates AP should forward the Check Request to the Foundation in the event of nonpayment.  Check Requests for alcohol will not be forwarded. 16

17 Check Request Modification

 If KSU AP cannot pay the item on the Check Request  And, the forwarding section of the Check Request form is completed  KSU AP will forward the Check Request to the Foundation for possible funding under Section D. of the Foundation policy The Forwarding Process 18

Role of the Foundation In the New Process 19

20  The Foundation disburses funds from Spendable funds.  All Spendable funds are restricted.  Spendable funds are available for immediate use in supporting KSU and are designated as discretionary or donor restricted.

Discretionary Funds (Who for ?) Example: College of Business 21

Donor Restricted Fund (What for ?) Example: Scholarships 22

Dean’s Activity Fund  Donor Restricted fund for items not qualified for funding under schedule D.  Fund description must state what type of items are permitted. (flowers, parties, donations, etc.)  Minimum of $100 to open fund  Limited to gifts from faculty and staff 23

24 Funding can be obtained through two processes: 1.A forwarded Check Request from KSU AP 2.A Foundation Funding Request form

25  A forwarded KSU Check Request is for items KSU AP could not pay.  The items may qualify for funding from the Foundation under Section D. of the disbursements policy.

Section D. Allowable items not meeting KSU disbursement policies. Foundation may pay even if KSU won’t. 26

Outline of Section D. Items 27

The second method is a direct application to the Foundation using a Funding Request form. 28

The Foundation has historically made disbursements to both KSU and non-KSU payees using its own version of a check request form. The Foundation is changing the name of its check request form to FUNDING REQUEST (Funding Request). 29

30

A Funding Request may be submitted to the Foundation for three purposes. 1.Funding from a Discretionary fund to a KSU index 2.Funding from a Donor Restricted fund to a KSU index 3.Funding for alcohol meeting the requirements of Section D. 31

1.Funding from a Discretionary fund to a KSU index  The new process continues to permit the transfer of Discretionary funds at any time, to a related KSU index for an amount up to the available fund balance.  This purpose requires no documentation other than the completed Funding Request form. 32

2. Funding from a Donor Restricted fund to a KSU index  Donor Restricted funds can be disbursed for items already paid through the KSU Accounts Payable function.  The Funding Request form must be supported by a copy of the KSU Check Request form, but not the supporting documentation.  The Funding Request must be payable to the KSU index on which the KSU Check Request was drawn.  Item must meet the fund restriction. 33

3. Funding for alcohol meeting the requirements of Section D.  Under the new process, requests for alcohol to any payee should be submitted directly to the Foundation using a Foundation Funding Request.  The Funding Request should include documentation sufficient to support the request. 34

Operating Impact  No change in amount of funding available from Foundation  No change in policies  Streamlined submission process 35

End of Presentation