Policy 3117 – Guidelines for Foundation Acount Withdrawals

Effective Date: 08/26/2000

Responsible Office: Vice President for University Advancement

In order to develop and maintain policies and procedures which will provide proper
documentation and review of withdrawals from Foundation accounts, disburse funds in
accordance with donor intent, maintain the tax exempt status of the Foundation, prohibit
the use of funds for the direct personal benefit of faculty and/or staff, obtain goods
and services efficiently at the lowest cost consistent with the quantity and quality
desired, and properly account for all transactions, guidelines for withdrawal of Foundation
funds are listed below. Monthly activity reports are produced to enable the various
departments, administrators, etc., to reconcile the transactions which occurred during
the prior month on all expendable funds.

  1. Foundation Guidelines for determination of allowable use of funds includes general
    expenditure categories listed as follows:

    1. Compensation and Supplemental Payments

      Direct payment by the Foundation to faculty, staff, and/or part-time employees of
      the University is allowable under the following circumstances:

      1. Payments for services rendered under guidelines of the accounts. (i.e., TV Sports
        shows, etc.)
      2. Advances
      3. Special circumstances when departments are unable to complete necessary paperwork
        for University payments in time for an employee to be compensated appropriately.
      4. Awards

      An IRS Form 1099 will be issued by the Foundation to those who receive checks written
      under these circumstances except in the case of an advance payment which must be repaid.

    2. Moving Expenses

      Moving expenses are reimbursed upon request by the Dean of a college from accounts
      of that college. Original receipts are required. If the employee being reimbursed
      for these expenses can make the arrangements with the moving company and provide the
      Foundation with the appropriate original invoice, a check can be made payable to the
      moving company. However, Foundation check request procedures must be followed, meaning
      the check cannot be requested and issued on demand. The IRS rule for moving expense
      reimbursement is to include the amount on the employee’s W-2 Form; however, the Foundation
      is not an employer and cannot issue W-2 Forms.

    3. Guest expenses, honorarium, etc.

      Reimbursement of expenses incurred in conjunction with visits of guest lecturers,
      speakers for special occasions, and/or other guests of the University are allowable.
      Usual reimbursement is limited to expenses incurred for travel, food, and lodging
      of guests and the associated expenses for a reasonable number of University staff
      accompanying the guests. Unusual expenditures should be cleared with the Director
      of Business Affairs of the Foundation before the expenditures are incurred.

      Payment of an honorarium or consulting fee is allowable provided the individual receiving
      payment is not an employee of the University. Since honorariums constitute income
      to the recipients, the check request form authorizing payment must be accompanied
      by the form which will provide for the Foundation the recipient’s home address and
      social security number. Additional forms must be filed for payments to recipients
      who are not residents of the United States of America. Contact the Director of Business
      Affairs at the Foundation office in advance in these cases.

    4. Coffee Hours, Receptions, etc.

      Reimbursement of expenses incurred for coffee hours, teas, retirement parties and/or
      receptions may be reimbursed from Foundation funds provided the cost for such functions
      does not exceed a total of $250 per year. Special permission to exceed this amount
      must be granted by the Foundation Board of Directors.

    5. Faculty and Staff Travel

      Departments should follow the same guidelines for Foundation reimbursement of travel
      expenses that are followed for the University comptroller’s office. The completed
      travel authorization form should accompany the request. If the Foundation is to pay
      expenses not paid by the University, the original blue travel expense form should
      be attached to the check request.

    6. Capital Equipment
      1. Capital equipment generally used for teaching, research, and/or public service activities
        may be purchased from Foundation funds. Capital equipment is defined as those items
        costing $500 or more and having a useful life of one year or more.
      2. Title to, and inventory of, capital equipment purchased from Foundation funds remains
        with the Louisiana Tech University Foundation unless other arrangements for transfer
        of title are made.
      3. Department Heads or other administrators and/or faculty may determine the specific
        manufacturer or vendor of any equipment purchased with Foundation funds.
      4. Any item of capital equipment purchased with Foundation funds must be identified on
        an Inventory Form.
    7. Supplies and Expenses
      1. Expendable supplies may be purchased from Foundation funds.
      2. Supply and expense items must be used for teaching, research, public service activities,
        and other activities directly related to the mission of Louisiana Tech University.
    8. Scholarships and Student Awards

      Scholarships are generally defined as payments made to students to financially support
      academic studies. Awards are generally made in recognition of prior academic work,
      whether in college or high school. Both are allowable from Foundation funds if the
      appropriate procedures outlined for scholarships are followed. IT IS THE POLICY OF
      the Accounting Department for specific instructions and further details.

      IMPORTANT NOTE: All invoices must be paid in the fiscal year in which they are issued. For instance,
      if an invoice is issued in June, it must be paid by the end of that month because
      July 1 begins a new fiscal year for the Foundation, coinciding with the university’s
      fiscal year. NO PAYMENTS can be made on invoices from fiscal years other than the current one.

      Proposed uses of Foundation funds which are not directly related to the above listed
      categories or uses relating to unusual circumstances should be discussed with the
      Foundation office prior to the expenditures being incurred.

  2. Procedures for Requesting Withdrawal from Foundation Accounts
    1. Requests for withdrawal of funds involving honorariums, consulting fees, dues, publication
      costs, reimbursement of expenses for University guests, reimbursement for payment
      to a vendor for supply items procured directly from the vendor, items of equipment
      of a non-capital nature, capital expenditures, and other miscellaneous expenses will
      be processed as follows:

      1. A fully completed Check Request Form is to be submitted to the Accounts Payable area
        of the Foundation office. The form must be signed by all appropriate persons. If payment
        is to an individual, a completed W-9 form must be submitted with the check request.
        The Foundation office will supply this form to be completed by the payee. This information
        is necessary in order that the appropriate IRS 1099 form can be issued to the payee.
        (See Appendix D)
      2. Original vendor invoices, expense receipts, and/or other supporting documentation
        should be attached to the check request form. For University activities, the name
        and purpose of the event and date should be included.
      3. If an original invoice is not available to attach to the check request form, an explanation
        in writing is required and must be attached to the check request form. This is necessary
        to prevent duplicate payments.
    2. Requests for compensation or supplemental payments to employees or students
      1. Requests for withdrawal of Foundation funds to make salary or wage payments must originate
        with the college or other unit making the commitment to pay Louisiana Tech University
        employees or other persons for services. The form must be submitted to the Foundation
        for certification of sufficient funds, review of required documentation, approval,
        and payment.
      2. If the payee is an employee of Louisiana Tech University, that person must be hired
        in accordance with University employment procedures and be assigned to that unit’s
        budget. The unit requesting payment will be responsible for processing the appropriate
        payroll forms. Foundation reimbursement will be made to the unit budget within the
        University. The individual will receive a university payroll check from the Comptroller’s
      3. If the payee is not an employee of Louisiana Tech University, there must be a contract
        or agreement with the payee signed by all parties, and the payee must fill out an
        IRS W-9 form for the Foundation. If the payee is not a U.S. citizen, please contact
        the Foundation business office so that the appropriate and necessary forms may be
        completed in order that the person may be paid.
    3. Requests for Payment of Travel Expenses

      If the request for reimbursement for travel expenses is from Foundation funds, the
      request must be made on the Foundation check request form and supported by the original
      receipts for lodging, meals, and transportation. If travel was paid through the comptroller’s
      office, the original blue form must be attached to the check request form for expenses
      not covered by the University.

    4. Scholarships and Student Awards
      1. Scholarship recipients must be chosen according to the criteria established in the
        endowment agreement for that scholarship. The Foundation will provide the amount available
        for each scholarship in advance of the awarding of that scholarship. Scholarships
        are paid through the University; the Foundation reimburses the University for those
        scholarship payments.
      2. Scholarship payments from Foundation funds are requested on the Check Request form
        and accompanied by Scholarship forms. All signatures are required on both the Check
        Request Form and the Scholarship Form.
      3. The Office of Financial Aid credits the student’s account with the scholarship amount.
        It is very important that a copy of the scholarship form attached to the check request
        form be sent to the Financial Aid Office and the Comptroller’s Office when the request
        is being made to the Foundation.
      4. Scholarship payments cannot be made to the University if there is not a positive balance
        in the scholarship account from which the payment is requested.