Trust Funds Project Management
The Office of Trust Funds offers two main investment vehicles. The Income Fund is for funds that will be used within the next year (IC/Fund 161). The Long Term Fund is for funds that will not be needed in the immediate term (LT/Fund 162). All endowment funds are invested in the Long Term Fund as the principal may never be used.
The Office of Trust Funds can also assist departments in determining the appropriate fund for deposit.
If the donor set the terms/conditions for the account, only a formal letter from the donor or their heirs can be used to change the account terms. If the department mandated the terms/conditions, a formal letter from the Dean requesting the change can be used.
Trust Funds 161/162 balances can be viewed in WISER, which also contains the spending terms and conditions under the “associated documents” tab. If you have additional questions or need assistance with the WISER environment, please contact the Office of Trust Funds staff. The Trust Funds website also contains high level information on the Trust Fund, such as policies, procedures, and fund performance.
- Cash: The Cash figure shows the days cash activity, and if there is no Income Cash Fund, Cash equals the Fund 161 Overdraft.
- Income Cash Fund: The Income Cash Fund shows Fund 161-Income cash on hand.
- Principal Cash Fund: The Principal Cash Fund shows Fund 162-Principal cash on hand. This is where Principal Cash is invested until it is moved to the Intermediate-Term Fund or the Long-Term Fund quarterly.
- ASAP Regent Fund: The Regent Fund is an intermediate-term fixed income portfolio. Participation in this fund is limited.
- Long Term Fund: The Long Term Fund shows the Fund 162-Long Term investment balance.
In the case of an endowment account, the Fund 161 less any encumbrances would be available for spending. In all other cases, both the principal and income are available for spending. Therefore, the current balance in Fund 161, less any encumbrances, and the fund 162 Long Term market values would be available for spending.
Fund 161= Income Cash Fund, or, if no Income Cash Fund, then the Fund 161 overdraft equals the Cash Balance.
Fund 162 = ASAP Regent Fund, Long Term Fund, Principal Cash.
After January of the current fiscal year, the Office of Trust Funds can prepare earnings estimates for accounts by request. These earnings estimates include all actual investment earnings through January and estimates of earnings for the remaining months. Also, these estimates must be adjusted for any open encumbrances that have not yet been posted on the Trust Funds accounting system.
Complete the proper form (i.e. PIR, TER, non-salary payment transfer with copy of original invoice) noting fund 161, the 7-digit project/grant being charged, and any other required coding. Consult the terms and conditions for the project or grant to ensure the payment complies. Payments will be successful if it complies with account terms, sufficient funds exist, and it conforms to pre-audit guidelines. Consult your Dean/Director’s office for specific procedures unique to your division.
For previous disbursements that need to be credited back to a Trust Funds projects, be sure to note the disbursements voucher number and the vendor name. Send this information with check attached to the Office of Trust Funds. Note, sales credits are not allowed on Trust Fund accounts.
Trust Funds Project Policies
At the end of each quarter, an average of the LT/162 market value for the past 12 quarterly valuations is calculated. This average is then multiplied by one-fourth of the annual 4.0% distribution rate to calculate the total quarterly earnings to be credited for investments. The earnings are normally comprised of both interest income and capital appreciation as needed.
The spending policy, approved by the Board of Regents, sets a percentage annual distribution rate for the Long Term Fund. The rate is currently 4.0%, effective June 30, 2005. The distribution rate is set to provide a relatively predictable stream of income while maintaining a principal base that grows with inflation. In this way, the stream of income should also grow with inflation, providing for inter-generational support.
Generally, all Regent Fund and Income Cash Fund balances are available for spending. The actual investment income (interest generated) within the Regent Fund is distributed to the Income Cash Fund quarterly. Investment income (only interest income) generated within the Income Cash Fund remains in there.
Check the project's terms and conditions to see if the donor set a specific number or amount of awards to be generated. In the event the terms provide no specific number or amount, the department has full discretion in the structure of the scholarship or award.
The documentation of non-monetary gifts is no longer coordinated through the Office of Trust Funds. Procedures for recording and reporting of these gifts are the responsibility of each individual institution with an annual report supplied to UW System. The gift in kind transmittal form is used to record those gifts received by UW-Madison departments.
Trust Funds vs. UW Foundation
The Office of Trust Funds consists of unsolicited bequests and gifts that are donated to the Board of Regents. The foundations of each institution actively solicit gifts and accept all those that name the foundations directly. In the event the gift does not specifically name a foundation, it is considered intended for the Board of Regents and becomes part of the Office of Trust Funds.
No. Upon acceptance of a gift by the Board of Regents, it becomes property of the University of Wisconsin and the State of Wisconsin. Trust funds are not transferable.