Processing and Accounting For Gifts to Cornell University

1
Processing and Accounting For Gifts to Cornell
University

• David J. Pinker, Director of Information
  Services/AAD
• Kim Yeoh, Assistant Controller/DFA
• February 8, 2007

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Objectives Of This Seminar

• Review Policy 3.1 Accepting University Gifts.
• Outline responsibilities
• College/Unit/Department
• Information Services
• Division of Financial Affairs
• Describe how decisions are made when recording
  gifts.
• Gift restriction classification
• Understanding restriction classifications
• Managing restrictions
• Tools to review gifts
• Account Search electronic source documentation
• ADW Account Gift Detail Report

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Cornell Policy 3.1Accepting University Gifts

• Processing Monetary Gifts
• Information Services must be used to record and
  manage all transactions of monetary gifts
  received by the University.
• Policy requires same-day deposit of cash, and
  cash equivalents, including credit cards.
• All gift source documentation, including the
  original postmarked envelope, must be sent to
  AAD Information Services.
• Policy 3.1 Accepting University Gifts website
  http//www.policy.cornell.edu/vol3_1.cfm

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Source Documentation

• Where is it?
• Filed at Information Services, 130 E. Seneca
  Street, Suite 400.
• How can I see it?
• May be electronically scanned and attached to
  account during the new account setup.
• Contact College/Unit Development Officer.
• Contact Information Services.

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Cornell Policy 3.1Accepting University Gifts

• Processing Monetary Gifts
• Preferred Methods - Donor sends or transmits
  gift

• CHECKS or CREDIT CARD information
• Mail checks or written credit card information to
  Cornell University Alumni Affairs and Development
  Lockbox, P.O. Box 2600, Ithaca, NY 14851-2600
• Donors must provide the credit card number,
  expiration date, and amount, along with their
  signature authorizing the charge.
• Online credit card information
• All university giving web pages must reside on
  the Alumni Affairs and Development web server.
• https//www.alumni.cornell.edu/secure/giving/onlin
  e_giving.cfm

• CASH
• Cash gifts are sent using electronic funds
  transfers (EFT) to Tompkins County Trust
  Company, ABA 0213-0264-8, Cornell University
  Deposit Account 01-101-00065, Attn Cash
  Management Office, Reference Donor name,
  purpose of gift.

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Cornell Policy 3.1Accepting University Gifts
Processing Monetary Gifts Other Methods
Donations received by the departments

• CASH
• Cash should be delivered to Information Services,
  130 E. Seneca Street, Suite 400, attn Maryann
  Bell, Cashier or Janet Petry, Cashier.
• Information Services will issue you a receipt for
  the cash received.

• CHECKS or CREDIT CARD information
• Credit card information should be mailed or
  transmitted to Information Services, 130 E.
  Seneca Street, Suite 400, Ithaca, NY 14850.
• Do NOT send credit card numbers via email.
• All checks must be endorsed immediately upon
  receipt (For Deposit Only to Cornell
  University).
• If the check is not accompanied by a pledge card
  or letter, you should complete the Standard Gift
  Information Form
• All source documentation, including the original
  envelope, must accompany the gift complete Gift
  Transmittal Form and drop off the deposit in a
  locked bag (marked ADD Lockbox), at the
  Cashiers Office in 260 Day Hall.

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Information Services Standard Gift Information
Form

http//www.policy.cornell.edu/finance_forms.cfm
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Information Services Gift Transmittal Form
http//www.policy.cornell.edu/finance_forms.cfm
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Cornell Policy 3.1Accepting University Gifts

• Gifts-in-kind
• Art contact Johnson Museum Development Office.
• Equipment complete Gift-in-kind Information
  Form and create a new Capital Equipment Record.
• Intellectual Property contact Corporate
  Relations.
• Life Insurance, Real Estate Gifts from Estates,
  Trusts contact Trust, Estates and Gift Planning
  Office.
• Livestock contact College of Veterinary
  Medicine Development Office or Athletics
  Development Office.
• Rare books and gifts of library materials
  contact University Library Development Office.
• Real Estate contact Real Estate Office.
• Other Gifts-in-kind contact Information
  Services for instructions, Sandy Fenn x4-7137.

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Processing GiftsDonor FrequentAccount -
Existing

• Cash or cash equivalents deposited in bank.
• Bank sends copies of checks and source
  documentation to Information Services including
• Pledge cards
• Donor letters
• Pledge payments
• Gifts of 5,000 or more (or from tracked
  prospects) are identified and are sent a gift
  acknowledgement from President Skorton.
• Gift processor researches and verifies
  information.
• Donor is identified in Contributor Relations
  system (PeopleSoft), gift or pledge payment is
  processed to fund/account based on donor source
  documentation.
• Donors record is updated with proper tender
  type, gift type, designation/account, campaign
  initiative code, appeal code, and recognition and
  tributes.
• Biographical information is confirmed and/or
  updated.
• Contributor Relations session is balanced and fed
  to G/L daily.
• Gifts are QAd and gift receipts are processed
  within 24 hours.

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How are decisions made?

• Donor source documentation drives decision-making
  process.
• Source documentation can be
• Pledge cards
• Letter from donor
• Payment information on outstanding pledges
• Gift Processor looks in the PeopleSoft
  designation file to locate the designation/account
  that most-closely matches the donors intent.
• Prior designation comments are reviewed as well
  as donors previous giving history.
• When further clarification is necessary, either
  the Individual Giving Officer and/or the
  department are contacted to determine the correct
  designation/account.
• Information Services Gift Accounting creates all
  gift restriction classifications (PR, TR, or UR)
  based on donor source documentation when setting
  up new G/L accounts.

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Processing Gifts from Department Donor
FrequentAccount - Existing

• If the gift is received at the Department level,
  the College Business Officer or designee must be
  informed.
• Cash or cash equivalents and source documentation
  should be dropped off at 260 Day Hall (follow
  Deposit procedures, Policy 3.1, Accepting
  University Gifts, pg. 10).
• Bank sends copies of checks and source
  documentation to Information Services including
• Pledge cards
• Donor letters
• Standard Gift Information form
• Gift Transmittal form
• Gifts of 5,000 or more (or from tracked
  prospects) are identified and are sent a gift
  acknowledgement from President Skorton.
• Gift processor researches and verifies
  information.
• Donor is identified in Contributor Relations
  system (PeopleSoft), gift is processed to
  fund/account based on donor source documentation.
• Donors record is updated with proper tender
  type, gift type, designation/account, campaign
  initiative code, appeal code, and recognition and
  tributes.
• Biographical information is confirmed and/or
  updated.
• Contributor Relations session is balanced and fed
  to G/L daily.
• Gifts are QAd and gift receipts are processed
  within 24 hours.

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Processing GiftsDonor New or frequentAccount
- New

• Cash or cash equivalents deposited in bank.
• Bank sends copies of checks and source
  documentation to Information Services including
• Pledge cards
• Donor letters
• Pledge payments
• Gifts of 5,000 or more (or from tracked
  prospects) are identified and are sent a gift
  acknowledgement from President Skorton.
• Gift processor verifies information.
• Donor is identified (or added) in Contributor
  Relations system (PeopleSoft) new account must
  be established based on donor source
  documentation.
• New Account contact department to request a new
  account, consulting with College Business Officer
  and/or designee information Services will review
  and approve, DFA will setup new account in the
  general ledger and communicate to department
  (please include appropriate netIDs).
• Funds are deposited in a holding account pending
  account setup.
• Once account is setup, gift is processed and
  funds are moved to new account.
• Biographical information is confirmed and/or
  updated.
• Contributor Relations session is balanced and fed
  to G/L daily.
• Gifts are QAd and gift receipts are processed
  within 24 hours.

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Account Pending

• All gifts that require a new account set-up have
  been deposited to account U008888, a non-interest
  bearing holding account.
• It is imperative that any new account be
  established within 3 business days and the monies
  moved to the new account.

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Gifts Pending Designation

• Gifts not specifically designated by a donor are
  deposited to account U008887 until the donor
  decides where the money should go.
• U008887 is reconciled monthly by IS Gift
  Accounting Staff, and communication is sent to
  AAD Development staff for follow-up with donor.
• IS Performance Goal Clear all pending accounts
  within 90 days of receipt of gift.

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What does Pending Designation Mean?

• ISSUE Donor has not decided where the gift will
  be designated.
• Deposited to U008887 and is communicated by IS
  staff to AAD Development.

• ISSUE Donor has identified the college or unit,
  but not the specific program beneficiary.
• NEW PROCEDURE Deposited to U008887 and is
  communicated monthly to College Business Officer
  and/or designee and AAD Development.

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Communicating with Colleges/Units, Departments
and Programs

• Each College/Unit is assigned an Information
  Services staff member to provide direct customer
  service and liaise with business office staff.
• IS staff is available to provide information
  (including source documentation) regarding the
  accounting and gift restriction classification.

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Customer Service Point-of-Contact Information
Services College/Unit Liaisons Agriculture and
Life Sciences Denise Frutchey 4
7129 df22 Architecture Art and Planning Tammy
Becony 4 7141 tls18 Arts and Sciences Debra
Federation 4 7173 dmf39 Athletics Peggy
Smith 4 8356 mls8 Engineering Tammy McKee 4
6115 tb53 Human Ecology Bobbi Smith 4
7133 bls38 Hotel Carole Cotts 4
7187 cc154 ILR Kevin Coates 4
7117 kc377 Isles of Shoals Melissa Halverson 4
7144 mds63 JGSM Lisa Ciaschi 4
7139 ljd1 Johnson Art Museum Peggy Smith 4
8356 mls8 Law School Denise Frutchey 4
7129 df22 Library Sandra Fenn 4
7137 sf58 Medical College Sandra Fenn 4
7137 sf58 Ornithology Lynne Preston 4
7142 lf20 Plantations Ron Charron 4
6146 rjc48 Student and Academic Services Debra
Federation 4 7173 dmf39 Veterinary
Medicine Kevin Coates 4 7117 kc377 In the
event your customer service liaison is
unavailable, please contact Jean David at 47185
(jbd2) or Debra Federation at 47173 (dmf39) for
assistance with your question or concern.
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Gift Restriction Classifications
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Understanding Restriction Classifications
PR TR UR
Permanently Restricted
Temporarily Restricted
Unrestricted
ADW attribute Fas Restrict Class
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Restriction Caution!!

• Restriction classification is an accounting
  attribute.
• Only funds given by an outside entity (i.e.
  gifts, or income from endowments) may be recorded
  in a restricted account.
• All other types of income are classified as
  unrestricted on the Universitys financial
  statements.

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Permanently Restricted

• Assets that will be maintained permanently or
  invested in perpetuity.
• A permanent restriction can never be removed by
  actions of the organization, although the
  restriction can be removed by court order.
• Generally, only true endowments are permanently
  restricted

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Permanently RestrictedExample
8890 Tree Lane Orlando, Florida November 1,
2006 Cornell University Day Hall Ithaca, New
York To whom it may concern Please accept these
funds for the Ralph A. Jones scholarship for
students who would like to enter the field of
Criminology. Our father was a graduate of The
College of Arts and Science and had so many fond
memories. We feel this would be the best way to
honor our fathers work. Please establish an
endowment fund to invest these funds in
perpetuity. The income from the fund should be
used to support Student Scholarships in
Criminology. Sincerely, Sally Seelinger
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Temporarily Restricted

• Donated assets that may be used only after a
  specified period of time or only for a specific
  purpose, or both.
• The restriction is satisfied either by the
  passage of time or by actions of the organization.

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Temporarily RestrictedExample 1
Women in Congress 1188 Linden Street Stanford,
CA  July 5, 2006 Womens Studies Program Cornell
University Ithaca, NY 14853   Dear Mr.
Gillis   Enclosed you will find a check for
75,000 on behalf of Women in Congress for the
Women in Politics Program. We hope this
contribution will assist in your development
goals. It is our pleasure to contribute this
amount to this worthy cause at your university.
  Please dont hesitate to contact me should you
have any questions.   Sincerely, Summer
Kennedy Vice President
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Temporarily RestrictedExample 2
548 Middle Street Auburn, NY November 17,
2006 Cornell University Day Hall Ithaca, New
York Dear Sir or Madam Enclosed please find a
check for 1 million dollars for the renovation
of East Hill Plaza scheduled for
2010. Sincerely, Frances Jenks
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Temporarily RestrictedExample 3
Intel Corporation Santa Clara, CA June 22,
2006 Daniel Vickey Cornell University Ithaca,
New York Dear Mr. Vickey Intel Corporation is
pleased to grant 28,000 to the School of
Engineering at Cornell University as unrestricted
support of Professor Burt Martins research in
the area of Self-Adapting Optimizing
Analyzers. Sincerely, Henry Toshio
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Temporarily RestrictedExample 4
889 Bradford Lane Westport, Virginia December
10, 2005 Cornell University Day Hall Ithaca,
New York Dear Ms. Reilly I have enclosed a check
for 100,000 to create a scholarship in honor of
my mother, Madelaine Fisher. Please invest these
funds and use the income to award scholarships of
at least 5,000 per semester to worthy students.
If in any given year the income is insufficient
to fund the award, you may use principal to make
up the difference. Sincerely, Mark Fisher
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Unrestricted

• The donor has made no limitations or restrictions
  for the use of funds. Gift is for Cornell.
• Gifts with no restrictions other than to a
  college or department are treated as
  unrestricted. More later

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UnrestrictedExample 1
Baker and Brown 140 Violet Lane Lake Mead,
AZ August 21, 2006 Cornell University Ithaca, NY
14853   To Whom It May Concern Please accept
this check in the amount of 2 million for use at
the College of Human Ecology. We were at the
opening of the new wing last week and really
enjoyed the presentation of your new programs,
especially How to Handle a Teenager. You could
not understand how relevant that presentation was
to our family. Thank you again for such an
enjoyable weekend.   Sincerely, Hope Sandlot
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UnrestrictedExample 2
College of Human Ecology 142 Martha Van
Rensselaer Hall February 23, 2006 Jeremy
Howland, Director Division of Nutritional
Sciences 127 Savage Hall Dear Jeremy I was very
pleased to hear the news that Nutritional
Sciences is establishing a new scholarship fund
in honor of the retirement of Professor Angela
Gateau. The gifts you have already received from
many of our corporate partners is a testament to
the invaluable research conducted by Angela
during her tenure at Cornell. I am hereby
committing the amount of 10,000 from the Deans
fund as a contribution towards the Angela Gateau
Scholarship Fund. Sincerely, Reginald
Humphrey Dean
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Managing Restrictions
Department responsibilities in three key areas

• Understanding restriction classification of all
  accounts
• Reviewing unrestricted (UR) gifts
• Spending temporarily restricted (TR) dollars first

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Reviewing UR Gifts
If a donor restricts a gift to a college or
department, isnt that still restricted? Why do
we call it unrestricted? The simultaneous
release or the could have spent it theory
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Reviewing UR GiftsFAS 116
Financial Accounting Standard (FAS) No. 116
Accounting for Contributions Received and
Contributions Made (17) If an expense is
incurred for a purpose for which both
unrestricted and temporarily restricted net
assets are available, a donor-imposed restriction
is fulfilled to the extent of the expense
incurred unless the expense is for a purpose that
is directly attributable to another specific
external source of revenue.
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Reviewing UR GiftsWhat simultaneous release
means

• You have both gifts and unrestricted funds (e.g.
  appropriations) for Plant Science department
  during the year
• You have expenses for Plant Science department
  (in unrestricted accounts)
• FAS 116 assumes that you will use the gift funds
  first, thereby releasing the restriction

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Reviewing UR GiftsHow do you check?

• Before fiscal year end, compare total
  departmental UR gifts to total departmental UR
  expenses during same time period
• Query of all 18xx object code revenue in UR
  accounts, compared to all expenses in UR accounts
• Pre-built query available at
• http//accounting.cornell.edu/Gift_Restrictions.cf
  m

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Reviewing UR GiftsExample 1
Restriction of gift to Plant Science has been
released simultaneous release premise is
valid.
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Reviewing UR GiftsExample 2
Restriction of gift to Plant Science has NOT been
completely released simultaneous release
premise is NOT valid. 550 should be restricted
(contact DFA).
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Spending TR Dollars College/department strategies

• Be aware of all TR accounts (and what their
  restrictions are)
• Remove incentives to save TR dollars TR
  accounts should not be rainy day funds
• Provide training for those responsible for
  spending (college/departmental and DFAs FIN 110)
• Perform follow up activities

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Spending TR DollarsHow to use restricted dollars

• Direct expenses
• Cost sharing
• NOTE Project must meet donor restrictions!
• Move expenses from UR to TR
• NOTE You cannot transfer between restriction
  classes!

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Spending TR Dollars Follow up Activities

• Before year-end
• Review of TR balances (see examples)
• Periodic
• Comparative Balance Query identify accounts
  where balances have not changed
• Debit vs Credit Query identify accounts that
  continue to grow, but are not being spent
• Last Transaction Date Query identify accounts
  with no activity

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Review of TR Balances Example 1

• FASB says restriction is completely met.
• Move 75 of expenses to TR account

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Review of TR Balances Example 2

• 550 TR balance carries over to following year

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Review of TR Balances Example 3

• 400 expenses should be moved from UR to TR.
• 600 TR balance carries over to following year.
• (UR account will close with 400 balance.)

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Managing RestrictionsWhy is this important?

• Accounting Perspective
• FASB standards
• External audit
• Stewardship Perspective
• Meeting donor expectations

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DFA Contacts

• Dave Hegelein (dh273 255-0862)
• Accounting Supervisor
• Carol Wilson (cw27 255-0854)
• Restricted Gift Accountant
• Kim Yeoh (ky16 255-6513)
• Assistant Controller

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Questions?
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Tools to Review Gifts
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Account Search(https//services.dfa.cornell.edu/s
earch/account/search)

• Information available
• Account Title
• Account Attributes (including FAS Restriction
  Code )
• Balance (if authorized)
• Purpose (if available)
• View Attachments (link in top right corner)

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(No Transcript)
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View Attachments

• Relevant documentation should be attached to the
  account. For example
• Donor letters
• Contracts/Agreements
• Memos of Understanding (MOU)
• Related E-mails
• Attachments are read-only
• Cannot be modified
• Can be printed

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Attachments (contd)

• If attachments do not provide sufficient
  information, contact your Information Services
  Customer Service Point-of-Contact
• Information Services will send relevant
  documentation to department and copy DFA (to
  attach to on-line documentation)
• NOTE Departments may send documents to DFA to
  attach

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Gift Reports for Colleges/Units

• Gift Reports are available using Brio via the
  ADW.
• Reports provide account specific detail,
  including donor name, designation, date of gift,
  payment type, and gift restriction
  classification.
• To gain access to these reports, a user must have
  Division and Account-specific access rights.

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Brio Portal for Accounting
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Account Gift Detail Report
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Rpt-Account Gift Detail by FASB Restr/Process and
Password
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Enter Date Value
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Report FY (fiscal year) Value
59
Enter Department Code
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Enter Account Number or Click Ignore
61
Enter Reference Number or Click Ignore
62
Fed to GL (Yes) or Not
63
Date Range or Ignore
64
This is the report!
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Bridging the Gap!

• Information Services is committed to working with
  each College/Unit and department to ensure we all
  have a common understanding about the gifts we
  receive.
• We will create a listserv of all College/Unit and
  department administrative staff who should
  receive ongoing communications relating to
  University Gift Processing.
• Please contact your designated liaison by
  February 28th with a list of names, email
  addresses, and telephone numbers, and preferred
  communication flow for your College/Unit and
  department.
• THANK YOU!