Trust Funds

Frequently Asked Questions

How can I check my Trust Funds account balance?

The Trust Funds website contains information on balances for fund 161 and fund 162 accounts. There is also a breakdown of the principal (162) balance between Long-Term (LT) and Intermediate-Term (IT).

Below are some guidelines we hope will help you navigate through the new site.

WEB SITE TERMINOLOGY:

  • 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.
  • Intermediate -Term Fund: The Intermediate Term Fund shows the Fund 162-Intermediate Term investment balance.
  • Long-Term Fund: The Long-Term Fund shows the Fund 162-Long Term investment balance.

What balance is spendable?

In the case of an endowment account (20 E, 22 DE), the Fund 161 plus Fund 162 Intermediate - Term Fund less any encumbrances would be available for spending. In all other cases (21 QE, 23 EX, 24 TE) both the principal and income are available for spending. Therefore, the current balance in fund 161 less any encumbrances, and the fund 162 Intermediate Term and 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 = Intermediate-Term Fund, Long-Term Fund, Principal Cash.

How can I get an estimate of my annual earnings?

After January of the current fiscal year, the Trust Funds Operations group 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.

How do I decide where the funds should be invested?

UW Trust Funds offers three investment vehicles. The Income Fund is for funds that will be used within the next year - fund 161. The Intermediate Term Fund is for funds that will be used within the next one to three years - fund 162 (IT). The Long Term Fund is for funds that will not be used for at least four years - fund 162 (LT). All endowment funds (E, DE) are invested in the Long Term Fund as the principal will never be used.

What is the spending policy for the Long Term Fund?

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 to the University and its students.

How does the spending policy work?

At the end of each quarter, an average of the 162-LT 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 in fund 162-LT. The earnings are normally comprised of both interest income and capital appreciation as needed.

What is the spending policy for the Intermediate Term Fund and the Income Cash Fund?

As discussed above, generally all Intermediate Term Fund and Income Cash Fund balances are essentially available for spending. The actual investment income (generally, interest and dividends) generated within the Intermediate Term Fund is distributed to the Income Cash Fund quarterly. Investment income (generally, just interest income) generated within the Income Cash Fund remains in that Fund.

How do I process payments against Trust Funds projects/grants?

Complete the proper form (i.e. PIR, TER, non-salary payment transfer with copy of original invoice) noting fund 161, 7-digit project/grant being charged (ex. 1611576) , and other required coding. Consult the Proj/Grants Trust terms to ensure the payment complies with Trust terms and conditions. Payments will be paid 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.

How do I deposit money to Trust Funds accounts?

Complete an Trust Funds Gift Routing Form. All checks are deposited to fund 162. Note the fund and portfolio (i.e. intermediate or long term principal). General guidelines are as follows. Funds to be spent in current fiscal year, or within 4 years to fund 162-intermediate. Funds not to be spent within 4 years to 162-long term (endowment & designated endowment principal long term is not expendable). Route form for signatures required, and send to UW Trust Funds.

How do I change the terms/conditions on a Trust Funds account?

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.

How do I know how many scholarships or awards can be supplied from a Trust Funds account?

If the donor set very specific numbers or amounts of awards to be generated from the account, the terms will provide this information. In the event the terms provide no specific number or amount, the department has full discretion in the structure of the scholarship or award.

Can my Trust Funds accounts be combined with foundation accounts?

No. Upon acceptance of a gift by the Board of Regents, it becomes property of the University of Wisconsin and the state. As no state funds can be transferred to a foundation at any time, Trust Funds are not transferable.

How do I process vendor refund credits for Trust Funds accounts?

For previous disbursements that need to be credited back to a Trust Funds account, complete a vendor refund form. Be sure to note the disbursements voucher number and the vendor name. Send the form with check attached to the Trust Funds office. Incomplete forms will be returned. SALES CREDITS ARE NOT ALLOWED ON TRUST FUND ACCOUNTS.

How do I document receipt of gifts in kind?

The documentation of non-monetary gifts is no longer coordinated through 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.

What is the difference between the UW Trust Funds and the UW Foundation?

UW 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 UW Trust Funds.