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Statement of Financial Accounting Standards (FAS) No. 116 Accounting for Contributions Received and Contributions Made, paragraph 14: “A restriction on an organization’s use of the assets contributed results either from a donor’s explicit stipulation or from circumstances surrounding the receipt of the contribution that make clear the donor’s implicit restriction on use. …Restricted support increases permanently restricted net assets or temporarily restricted net assets. Contributions without donor-imposed restrictions shall be reported as unrestricted support that increases unrestricted net assets.”

The donor is the only one who can place a permanent or temporary restriction on funds. Permanent restrictions result in the corpus or principal of the fund being maintained in perpetuity with only the investment earnings being made available for use. Temporary restrictions result from the donor establishing restrictions on the use of the gift or a time restriction on the gift.

Designated funds are unrestricted dollars designated to a specific purpose by the university, while restricted funds are designated by the donor.

To the extent that your department is expending funds that satisfy the donor’s purpose, the university is required to spend the TR money first.

Only contributions can be deposited to TR funding sources.

Any other types of revenue received by a department are considered unrestricted and should be deposited to an unrestricted funding source, including:

• Educational Program Fees

• Affiliate Program fees

• Royalties

• Event fees

• Fees-Sales

Note: Situations exist where fees are explicitly collected “for the benefit” of a particular purpose (e.g. Golf Outing with proceeds supporting the purchase of new lighting for the auditorium). Contact Elizabeth Kaciubij, Senior Director, Accounting & Financial Reporting, at ekaciubi@andrew.cmu.edu for questions.

The following table establishes some primary indicators used in differentiating between contributions and exchange transactions.

These responsibilities include:

• Knowledge of the restriction (donor wishes) on the funds
• Ensuring that the funds are expended in accordance with donor wishes
• Ability to answer questions about how the funds were expended (from donors or auditors)
• Sound fiscal management of the funds (i.e. redistributing inappropriate charges in a timely manner and where possible, not overspending the funds available and halting spending when payments are not received, etc.)
• Effecting transfers and clearing deficits as necessary

An income transfer / funding entry should be recorded under the following circumstances using the appropriate object codes of 72100 and 72200 between university funds or 85802 between university and agency funds:

• To fund an activity, program or initiative within unrestricted (UNR) funds

• To fund an activity code or another organization within the same temporarily restricted (TR) funding source

• To fund another TR funding source provided the use is consistent with the donor's intent

• To fund an agency funding source provided the use is consistent with the agent's intent

Note: Always use the same object code on both sides of the entry and use a journal category of funding, funding PTA or agency funding.

Please follow the Temp Restricted & Agency Funding Source Transfers procedure.

• To move funds between TR and UNR (see below)
• To fix a charge recorded to the wrong account string (use redistribution process)
• When Oracle won’t accept the correct object code (review string)
• When charging an organization for goods or services

Deficits can be cleared with unrestricted funds by utilizing object code 88510 (see Funding TR Deficits with UNR procedure) or by transferring contributions received with like purposes between temporarily restricted funding sources using accounts 72100 or 72200 (see above).

Yes, if the support is consistent with the donor’s restriction on the funds you can contact Elizabeth Kaciubij, Senior Director, Accounting & Financial Reporting, at ekaciubi@andrew.cmu.edu to handle the transaction. Appropriate donor documentation supporting the request is required.

Expense should not be incurred on a routine basis in anticipation of receiving future contributions. Exceptions should be discussed with Elizabeth Kaciubij, Senior Director, Accounting & Financial Reporting, at ekaciubi@andrew.cmu.edu on an individual basis.

We need to ensure the integrity of our financial statements and we can’t distort the temporarily restricted net asset balance by allowing these deficits to reduce real fund balances. They are actually a reduction to the unrestricted net assets and should be reflected as such.

Yes, as soon as you’ve satisfied the donor’s requirement for the spending, the funding source can be closed out. When the balance is at zero, contact Contact Elizabeth Kaciubij, Senior Director, Accounting & Financial Reporting, at ekaciubi@andrew.cmu.edu and request that the funding source will be disabled. If in the future you receive additional funds from the same donor/for the same purpose, the funding source can be enabled again.