Tuesday, March 3, 2015

Using CF1s with Foundation funds

It is important to use correct chartfield1s when spending Foundation funds.

When funds are transferred from the Foundation, they are deposited to a chartsrting including the CF1 associated with the Foundation fund that generated the funds.  If those funds are subsequently transferred to a chartstring with a different CF1 and spent from that chartstring, then reports showing utilization of our endowments will be incorrect.  

Proper reporting on our use of Foundation funds is important, as we have a high obligation to demonstrate that funds have been spent consistent with donor intent.  Therefore, Foundation fund transfers from the Dean's Office must either maintain the appropriate CF1 or drop the CF1.  Ideally, we will maintain the CF1, but I understand that to ease administrative effort it can be easier to drop it for one-off transfers from endowments that you are unlikely to utilize ever again.  Dropping the CF1 makes reporting more difficult, but it does not result in incorrect reports.  Except in unusual circumstances, we will not transfer Foundation funds to a chartstring with the CF1 of a different fund, because that leads to incorrect fund utilization reporting.  

I encourage you to have similar internal departmental practices to maintain integrity in your Foundation utilization reports.