(1) Institution and dept/program within that institution for which the account is being established

(2) Account type being established

An account is categorized as one of the following:

H UNRESTRICTED (for general use of a department, program, center, fund-raising, etc.)

H RESTRICTED (given by a donor for a specific project, scholarship, research, grant, or conference)

Restricted funds cannot be deposited in an account designated as unrestricted.

H PERMANENTLY RESTRICTED (given by a donor for an endowment)

(see SAMPLE - MOU on Appendix page A-16).

(4) Account administrator (person at the institution responsible for stewardship of the account). He/she has overall responsibility for account transactions and receives the monthly statements.

(5) Authorized signers (the persons having authority to approve requests for disbursements).

At least two (2) persons must be identified. The person with stewardship responsibility (the Account Administrator) may be one of those persons, but he/she cannot be the only person

authorized to sign disbursement requests.

K contributions from faculty or staff are tax deductible only if they are made to a program over which that faculty or staff member has no control or spending authority.

K the taxpayer bill of rights 2 law provides certain penalties that may be charged to "fund managers" as well as to recipients of the funds, when payments from 501(c)(3) entities provide excessive compensation to the payee. it is certainly possible that the irs may consider institution employees who recommend disbursement of funds to be included within the definition of "fund managers". the penalties can be severe.

The Foundation accepts monies via cash, check, stocks, bonds, or credit card.

(See section on REVENUES – MONETARY METHODS OF GIVING on page 15 for detailed instructions re these kinds of payments)

checks made payable to the institution rather than to the foundation cannot be processed

"This (Program /Event /Activity) is an activity of The University of Maryland Foundation, Inc.

"The funds raised will be administered by The University of Maryland Foundation, Inc. for the

"This event is an activity of The University of Maryland Foundation, Inc. Funds earned will be

** Review checks as to payee and restrictively endorse them with the Foundation's name, when appropriate.

** Forward funds to be deposited to the appropriate Office of Institutional Advancement (OIA) with the transmittal form required by the institution.

(OIA enters all contributions to ensure all contributions are included in the fund-raising totals.)

** Separately batch contributions to the Foundation from those to the Institution.

** File supporting documentation (i.e., a letter from the donor and/or a copy of the check) with the Batch Detail Report at each OIA.

** Remit checks and and two copies of the Batch Detail Report to the Foundation.

** When received, the Foundation Accounting Associate does the following:

þ Signs the Batch Detail Report, indicating receipt of the checks, subject to verification;

þ Returns the signed copy to OIA;

þ Reconciles the checks to the transmittal documentation;

þ Prepares the deposit ticket and the Foundation deposit form;

þ Closes the batch on BSR. This action releases the "gift receipts" (they are now ready for printing) and automatically transfers the records to the accounting software, using the prefix of CR9 for cash or checks and the prefix CR7 for credit card charges;

þ Sends the deposit to the independent custodian of the Foundation’s funds (currently Mercantile-Safe Deposit & Trust Company)

Note: The Foundation prints and mails Gift Receipts for contributions received from Foundation Board members and for contributions of $1,000 or more that are specifically designated for USM, or University-wide or Foundation purposes. These gift receipts are reviewed by the Vice President for Finance and then given to the President of the Foundation, who sends the receipt to the donor along with a personal letter.

þ Reviews all matching gifts to ensure compliance with individual company policy as to eligible gift, donor, purpose, and recipient institution/organization;

þ Reviews the donor's record to confirm that the donor and the specific gift are recorded and the donor is linked with the matching Gift Company;

þ Links the gift to the matching gift company;

þ Completes the form, including signature by the chief financial officer, and mails it to the company matching the gift;

þ Files a copy of the form under the company name;

þ Enters the matching gift as a cash donation from the company when it is received.

** Forward checks, supporting documentation and the NON-GIFT DEPOSIT FORM (see Appendix page A-10) directly to the Foundation Business Office for processing. Before remitting, be sure that all of the following information is included on/with the form:

Û If the single prize has a value of $600 or less, the Foundation is not required to report or withhold.

Û If the single prize has a value of $600 or more, but not more than $5,000, the Foundation must withhold 31% backup withholding IF a W-9 is not completed.

** Send revenue from this kind of fundraiser to the Foundation Business Office.

** When the above are received, a transmittal letter, signed by an officer of the Foundation, will be prepared. The Foundation will forward the letter and the proposal to the funding agency or return the packet to the department for submission, depending on the agreed upon arrangements between the parties involved.

** Upon notice of acceptance of the proposal from the funding agency, the Foundation will inform the Office of Sponsored Programs or equivalent department.

narrative reports;

· Copy of financial reports filed with the funding agency. These reports are prepared by the

department, but must be submitted to the Foundation for review PRIOR to submission;

· Copy of the transmittal letter that accompanies technical reports prepared and submitted to the funding agency by the principal investigator for the grant/contract.

** Requests for grant backs are submitted to the Grants Administrator and must include the following information:

(see GENERAL CONTRIBUTIONS - Procedure for Processing on page 7 for instructions on how to proceed)

Ü In limited circumstances a check made payable to the Account name may be accepted for deposit. When and if that occurs, contact the Foundation Business Office for clarification.

** Obtain and print the following information on the charge slip or on a form such as the pledge payment slips:

** Call the appropriate person at the Foundation Business Office to have the charge authorized.

do not enter the information in bsr until the transaction is authorized.

** Send the charge slip or other documentation with the above information to the Foundation Business Office. UMB and UMCP must submit a copy of the form with the Batch Detail Report.

** Funds related to credit card charges are transferred monthly by check to the appropriate Operating or Endowment account. This is done when the bank accounts are reconciled.

· A letter from the company on its stationary to confirm the purpose of the wire transfer

þ Photocopy the originals and file the copy alphabetically by institution;

þ Send the originals to the Central Payroll office in Annapolis.

** Semi-annually, for participating institutions that are affiliated with UMF (those not listed above), a report is prepared that identifies each participating employee and the total amount of his/her deductions within that reporting period. The Foundation posts those totals in BSR, either as a pledge payment or as an outright gift, if there is no pledge on record.

** After the above posting, the balance in the holding account is adjusted as the totals that were reported are allocated to the accounts the employee donors had designated.

** A report is received from MCC for each institution. It details the donor name, address, amount donated for those donors who have given permission to the release of their name. Donors who did not choose to be identified are listed on the report as "Anonymous Giver" with the $ amount of their gift noted.

** A copy of the MCC report is forwarded to each institutional OIA. The gift processing office uses this report to enter a pledge for each donor whose name in on the list. The pledge is posted to the endowment account designated by the donor, if applicable, or to the institution’s MCC account if no endowment was specified.

Contributions from all donors who did not choose to be identified are posted as a lump sum pledge to the institution’s MCC account.

** Distributions, representing these designated and undesignated funds, less the MCC administrative fee, are received and are deposited to a Foundation holding account.

** Semi-annually, the balance in the holding account is adjusted as funds are allocated to the institutional accounts that were designated by the donors.

** A report is received from CFC. If a donor has given permission to the release of his/her name, the report details the donor name, address, and institutional account he/she has designated. Donors who did not choose to be identified are listed on the report as "Anonymous Giver" with the $ amount of their gift noted.

Note: If a donor has informed the Foundation in writing of the amount of their contribution and the institution it is to benefit, that information is kept on file until the funds are distributed to that institution.

** Distributions, representing these designated and undesignated funds, less the CFC administrative fee, are received and are deposited to a Foundation holding account.

** Semi-annually, the balance in the holding account is adjusted as funds are allocated to the institutional accounts that were designated by the donors, if applicable, or to the USM Office Scholarship Program.

** Transfer stocks/bonds either through a (1) DTC transfer, or by (2) sending the Certificate along with a completed Stock/Bond Power Form, or (3) by transferring the stock/bond to an account at a brokerage firm --- the least preferred.

(See instructions detailed below for each of these options)

DTC transfer is the easiest method when a third party (not the donor) holds the Certificate. Contact the Foundation Director of Accounting for information and instructions on using this method.

® The Foundation Director of Accounting informs the institution of the $ value of the stock/bond;

(The dollar value of the gift is the average of the high and low value of the security on the day the gift is given.)

® OIA enters the gift information in BSR, as outlined in the BSR Gift Policy and Procedures Manual;

The Foundation enters the gift information in BSR if the stock gift is to benefit UMBI or UMCES.

if a stock or bond certificate is received, about which the foundation has been given no prior information, if the donor is identifiable, the foundation will contact him/her.

® OIA forwards the certificate and any information regarding the donor and the donor's designation(s) and/or restriction(s) to the Foundation Business Office.

® The Foundation Director of Accounting informs the institution of the $ value of the stock/bond;

(The dollar value of the gift is the average of the high and low value of the security on the day the gift is given.)

® OIA enters the gift information in BSR, as outlined in the BSR Gift Policy and Procedures Manual;

The Foundation enters the gift information in BSR if the stock gift is to benefit UMBI or UMCES.

(Corporate Resolution Forms needed to complete the transaction are on file with the Foundation's custodian).

** IRS Form 8283: Donors who contribute non-cash gifts with a total value greater than $500 must file this form with their tax return. If the donor cannot obtain the form, the Foundation Business Office can provide a copy.

® The donor must complete the appropriate sections of the form, including the appraisal section,

which provides information regarding the value of the item(s) donated.

® The donor must forward the completed form to the Foundation Business Office for review and signature.

þ A schedule listing the due dates for the premium payments is maintained;

þ The mailing date of the reminder notice is noted on the payment schedule;

þ Premium payments are not remitted until the appropriate payment has been received from the donor;

** The Office of Planned Giving (PG) coordinates the establishment of the annuity contract or trust.

** The Foundation sets up a sub-account for each annuity contract or trust.

** Payments due to the donor are disbursed via a Foundation check or via direct deposit.

** Tax Forms:

K 1099 Tax Forms are prepared annually by the Foundation and sent to each annuitant.

K Tax Returns for all Trusts administered by the Foundation are prepared for each donor by the Foundation’s accountants.

Under Reg. 1.62-2 (f) an "Accountable Plan" must require persons to return within a reasonable period of time the amounts reimbursed that exceeded substantiated business expenses (advances).

Reg. 1.62 (h) states that if a company has an "Accountable Plan" but the person does not return excess amounts within reasonable time, the amount, which is taxable, is reported as compensation to the person.

** Submit all requests for disbursements on a Foundation DISBURSEMENT REQUEST FORM (see

Appendix page A-11) The form must be completed in its entirety and should include the following:

(See section on ACCOUNTABLE PLAN on page 23 for information related to travel and other types of reimbursements)

i.e., detailed invoices or receipts for all expenses over $25; a copy of an approved Out-of-State Travel authorization for university employees. balance due statements are not acceptable.

If the check is to be made payable to the requestor or the approver, that person’s supervisor must sign the form. it is vital to understand that the signature serves as certification of the propriety of the requested expenditure, to the best of his/her knowledge and belief.

>> If the Disbursement Request Form is incomplete or is missing pertinent supporting documentation, the missing information will be identified and the form will be returned to the sender.

>> Disbursement Request Forms received at the Foundation's Business Office by 1:30 P.M. Thursday will usually be available the following Tuesday. Because procedure requires all requests be reviewed prior to check writing, requests will be processed in the order received; therefore if there is not enough time, some of the later arrivals may not be processed until the following week.

** The Accounts Payable Associate does the following:

þ Reviews all Disbursement Request Forms to ensure:

· Correct account code and/or sub code is used

· Original and adequate supporting documentation is attached

· Reasonableness of the request

· Compliance with 501(c)(3) regulations, IRS regulations, federal government regulations, Secretary of State regulations, Board of Regents regulations

Questionable requests are given to the Controller or the Vice President for Finance to review and determine appropriate follow-up

þ Designates activity code (program, general and administrative or fundraising)

þ Reconciles the preliminary check register with the Disbursement Request Forms

** The Staff Accountant generates the checks and gives them to the Accounting Clerk, who prepares them for mailing.

Û Mileage - a standard mileage rate can be used for automobile expenses. The rate cannot exceed the maximum IRS rate.

Û Airline travel - submit the original airline travel passenger receipt, even when the cost has been charged through Omega or Travel-On and billed directly to the Foundation. Also include the original travel agent invoice or airline invoice that documents the amount paid for the fare, if the purchase was made directly or through some source other than Omega, Travel-On or the Foundation.

Û Expenses of a spouse – payment for a spouse who accompanies the employee when traveling is not allowed unless the spouse is an employee and along for a bona fide business purpose. To qualify as a valid business purpose, the spouse’s business involvement must meet the tests in the IRS Code and regulations with respect to spousal travel (See IRS Publication 463). The IRS rules are such that most spousal travel is not considered to be a bona fide business expense.

Reimbursement for spousal attendance at retreats is not allowed.

¨ If the cost of the trip is less if the individual stays a day or two longer in order to travel on a cheaper flight, the Foundation will reimburse for those extra days, even though they will be classified as personal days.

¨ IRS regulations state that travel expenses, when part of the trip includes personal days, are usually deductible by the taxpayer as business expenses if the trip is primarily business in nature.

¨ If the trip is primarily personal in nature, travel expenses are not deductible. Travel expenses that do not qualify as deductible business expenses will not be reimbursed. (See IRS publication 463 for more information) www.irs.treas.gov

¨ If it is determined that the person is a non-resident alien, it might be impossible for the Foundation to compensate the person. (See section on CASH DISBURSEMENTS - NON-RESIDENT ALIENS on page 35 for more information)

payment to the individual cannot be processed until the w-9 form has been completed

K A completed Form W-9 (Request for Taxpayer Identification Number and Certification) must be executed for each person to be paid as an independent contractor. The person’s social security number, home address and signature must be included on the form.

K Payments for services by non-employees (independent contractors) are reported to the recipient and to the IRS on a Form1099.

Flowers may be sent, when intended as an expression of sympathy or concern related to the hospitalization of or as a memorial for an employee and his/her spouse, and lineal descendants, adopted children, stepchildren, ancestors, siblings and members of the immediate household, as long as the amount is reasonable. In-laws are not included.

Memorial contributions to charitable entities or other appropriate expressions of sympathy, in lieu of flowers, are acceptable. The limit on these is $50, including delivery and any taxes or other charges.

Gift certificates are considered cash equivalents and therefore become taxable income to the employee. The Foundation cannot pay for cash equivalents. Requests for payment will be returned.

Foundation funds should not be used to purchase personal gifts, such as those for Secretary’s Day, Boss’s Day, a new baby, weddings, etc. These items provide a personal benefit to the recipient. As such, the expenditures are not made for a business purpose, as defined by IRS regulations.

If Foundation funds are used to provide a "personal benefit", both the Foundation and the person authorizing the expenditure may be subject to "intermediate sanctions" from the IRS.

K Fringe Benefits paid by the employer that are not exempt from tax laws must be included in the employee’s Form W-2 Form.

® Payment of business related expenses to or on behalf of an employee of the University is taxable, unless it is made in accordance with the rules of an Accountable Plan (see section on ACCOUNTABLE PLAN on page 23 for more information). However, even when payment is made under the rules of an Accountable Plan, if the payment confers benefit to the individual, such payment is consi

dered to be a taxable "Fringe Benefit".

The Foundation can reimburse the University for moving expenses they have paid on behalf of a University employee.

Whether the Foundation can directly reimburse a University employee or pay his/her moving

expenses directly is determined by tax laws (is the expense exempt or not exempt?), as detailed

below:

exempt: The following moving expenses are exempt under tax laws IF the new main job

location is at least 50 miles farther from the former home than the old main job location:

storage expenses)

meals) to get to the new home. This should be done using the shortest route.

K Moving expenses which are not exempt under tax laws may be reimbursed to the University.

Fringe benefits paid for valid business purposes are exempt from tax laws (i.e., business trips,

business meals, yearly membership dues, etc.)

· Club dues: - The IRS has ruled that payments for certain types of club dues paid on behalf of an individual are usually not business related. Payment requests for dues paid to airline travel

clubs, or similar social clubs will be thoroughly reviewed.

· Mobile phone costs: - The Foundation will not purchase mobile phones for any university employee, but will reimburse for any business calls.

Persons with this entry status generally can be paid income if the J VISA is sponsored by the USM institution that is requesting the payment and if other required documentation is supplied to UMF.

K To receive the compensation/income payment on U.S. source income the non-resident alien must already have (or obtain) a U.S. social security number or ITIN number, regardless of VISA status.

K U.S. social security numbers are only provided if the non-resident alien is acting in the capacity of an employee.

K The University of Maryland Foundation, Inc, is a certified acceptance agent for the IRS for the issuance of ITIN numbers. Contact UMF for necessary documents to obtain an ITIN number.

K To claim a tax treaty benefit a non–resident alien must already have (or obtain) a U.S. social security number or ITIN number, regardless of VISA status.

K Form 1042-S will be prepared by the Foundation and issued to foreign nationals who received U.S. source income (not reimbursement), including income that was exempt under a U.S. tax treaty.

· Name

· SS #

· Academic year

· Award notification letter to the student or some other official documentation

K Under IRC Section 117, scholarships for tuition, books and fees are not taxable. Any amount in excess of tuition, books and fees is taxable.

K Any payment given for services rendered, even if it is called a scholarship, is compensation and must be reported on a Form W-2.

K Scholarships that are not compensation or are not given to non-resident aliens are not reportable. However, the student must include the portion in excess of tuition, books and fees as income on their tax return.

There are occasions when a student receives notice of a scholarship award after he/she has already paid some or all of the costs that are covered by the scholarship. In those circumstances, upon receipt of the required information and documentation to confirm the award, the Foundation can reimburse the student directly from the appropriate account for those pre-paid expenses.

Each institution has it own procedures for determining scholarship awards and coordinating the payments associated with those awards:

UMCP: Foundation checks are issued payable to the University. Information on scholarships must be communicated to the Office of Financial Aid (OFA). OFA provides the departments with reports confirming the award(s) made. A copy of the report is submitted to the Foundation with the Disbursement Request Form and provides the required information detailed above.

UMB: Foundation checks can be issued payable to the student directly or to the University. When requests are for payments directly to the student, the formal letter notifying the student of the award must accompany the Disbursement Request Form. In all other cases, required information regarding the recipient(s) must be included with the Disbursement Request Form.

UMBC: Foundation checks can be issued payable to the student directly, or to the University. Information on scholarships must be communicated to the Office of Financial Aid (OFA) using a five-part form they supply. One part of the form must be sent to OFA and one part must be submitted with the Disbursement Request Form.

UMES: Foundation checks can be issued payable to the student directly or to the University. Scholarships are coordinated through various departments at the University. Required information regarding the recipient(s) must accompany the Disbursement Request Form.

UMUC: Foundation checks can be issued payable to the student directly or to the University. Scholarships are coordinated through various departments at the University. Required information regarding the recipient(s) must accompany the Disbursement Request Form.

K Awards paid to students are considered taxable and are reportable on Form 1099 under IRC Section 74.

K Any payment given for services rendered, even if it is called a scholarship, is compensation and must be reported on a Form W-2.

Before an employee can be paid, the following must be on file:

employee supervisor, and person with signature authority)

(3) Signed form confirming the employee has received a copy of the UMF personnel manual

(4) Form W-4

An Employment Agreement may be included in the personnel file when and if an employee has been hired for a specific time period and the employer wants to document that arrangement for the record. In those cases, the person with signature authority should submit a letter to the Foundation that documents the arrangement. The UMF President will also sign the letter if the parties involved want the document to reflect the signatures of both the employer and the Foundation.

** The Payroll Administrator maintains the personnel files. He/she confirms that all required documents are completed and on file for each employee.

Hourly employees will only be paid upon submission of a time sheet. Salaried employees must submit a time sheet for every two week period, but it can be submitted monthly.

** The employee record of annual leave accrued and used is maintained by the employing department. When an employee resigns or is terminated, accrued annual leave will be paid only to the extent that information has been provided to the Foundation for its payroll records.

** non-resident aliens: Specific tax rules and requirements apply, per Internal Revenue Code

K For U. S. Income Tax purposes the law requires an additional federal withholding each pay period for all persons classified as Non-resident Aliens (currently $15.30 per biweekly pay period, subject to change)

K For U.S. income tax purposes, F-1, J-1, M-1 and Q-1 Visa holders who are classified as Non-resident Aliens for U.S. are exempt from FICA.

K Non-resident Aliens may never claim exemption from federal withholding and must complete Form W-4 as follows:

· Filing Status - Single (even if marital status is not single)

· Number of exemptions claimed must be 1 or 0

· Additional federal withholding must be shown

Note: State tax rules and requirements follow the federal guidelines.

** resident aliens: For U.S. Income Tax purposes persons in this category are treated equivalent to U.S. citizens.

** The Vice President for Finance reviews the payroll register periodically.

** Receipt of the INVENTORY CONTROL FORM is noted on the DISBURSEMENT REQUEST FORM.

** A copy of the form and transmittal letter is filed chronologically at the Foundation Business Office.

Note: There are occasional unique circumstances when ownership of equipment/furnishings is retained by the Foundation. In such cases the equipment is tagged by the Foundation, with insurance and maintenance provided under the Foundation's policy. Equipment/furnishings owned by the Foundation is reviewed annually.

Call the Foundation’s Controller if you have questions or believe the circumstances that require your purchase of equipment/furnishings should be considered unique.

Fair Market Value: A contributed asset that will be used and not sold is recorded, using the fair market value as of the date of donation.

documentation: Supporting documentation for all assets contributed to the Foundation must be forwarded to the Vice President for Finance.

** Disbursement Requests:

Assets acquired with Foundation funds for the use of a constituent institution are subject to cash disbursement procedures.

exception: When equipment to be purchased costs over $25,000 three (3) bids must be obtained and submitted with the disbursement request.

** Capitalization and Depreciation:

· Automobiles- 5 years

· Computers- 5 years

· Other equipment- 5 years