Policy 51 - Allocation of Interest to Sundry Funds

Approved Administrative Committee 838.2

ALLOCATION OF INTEREST TO SUNDRY FUNDS

PURPOSE

1. The purpose of this policy is to outline the rules governing the allocation of interest revenue to the Operating, Capital and Trust Funds.

INVESTMENTS

2. To optimize its interest revenue the University has chosen the method of pooling its funds for investment purposes.

3. Investments are made at the discretion of the University unless it is bound by contract or by donor specifications. In the latter case it is suggested that the donor be consulted before reinvestment.

INTEREST ALLOCATION

4. Generally, the University allows interest only to non-expendable funds. Expendable funds receive interest only on the express permission of the Administrative Committee.

5. Interest is credited to the funds annually, on April 30, unless specific investments were made; then, interest is credited when received. It is the responsibility of Financial Services to establish interest allowances and to credit the appropriate accounts.

RATE AND CALCULATION OF INTEREST

6. When allocated interest comes from pooled investments, the rate used to establish credits is the average yield for the fiscal year.

7. Interest will be calculated on the average of the month-end balances of the year under review.

CAPITALIZATION OF INTEREST

8. The conversion of unused interest in an expendable fund into anon-expendable fund may be done once a year, on May 1. It is the responsibility of the fund administrator to advise Financial Services in writing.

DEFINITIONS

9. Expendable Fund. It is a fund, the capital of which, and the interest earned thereon, may be spent at the discretion of management.

10. Non-expendable Fund. It is a fund the capital of which may not be spent.

EXCEPTION

11. No exception may be made to this policy without the written consent of the Administrative Committee.

Published March 25, 1985

(Financial Services)

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