Procedure for Using Foundation Funding for Purchases over $10,000

When a department is planning to use University of Connecticut Foundation (UCF) funds for a purchase that is greater than $10,000, the Foundation will set aside the amount needed in an ‘encumbered’ account.  This will enable the department to see the commitment separately from their other Foundation funds.

1. The requesting department will contact the Foundation regarding encumbering the funds for the purchase. The department will provide to the Foundation sufficient documentation regarding the purchase as well as obtain the required signatures (i.e.Dean).
   
   
2. The UCF Disbursements staff will:
1. Review the documentation to ensure the purchase meets the restrictions of the account being charged and that enough funds are available to encumber.
2. Transfer funds via a journal entry from the Foundation account being charged to a Foundation encumbrance account.
3. Notify the University Accounting and Budget Offices of this transfer.

The department should submit a completed new account request form to the Accounting Office with a copy to the Budget Office, for a new FRS 6 Ledger account to be used exclusively for this purpose. When the Budget Office receives a copy of the notification (2c) and is notified that the corresponding FRS 6 Ledger account has been established, a budget will be posted to that 6 Ledger account in FRS. 

3. Based on this notification (see item 2c above), University Accounting will allow the University Purchasing Department to perform required functions to make the purchase. The department should code the purchase using the new 6 Ledger account. 
   
   
4. Once the purchase is complete and items received, the department will forward to the Foundation the following:
   1. A copy of the FRS report reflecting this purchase
   2. A copy of the authorized University purchase order

5. The Foundation will release payment to the University via ACH from the Foundation encumbrance account.  This will require the signature of the University of Connecticut Foundation VP Of Finance.
   
   
6. On a quarterly basis, the UCF Disbursements Manager will report to the University Accounting Office all outstanding encumbrances related to this process.  The Disbursements Manager will follow up with requesting Departments for outstanding paperwork regarding these encumbrances.
   
   
7. This policy will also apply to Foundation funded construction expenses.  At no time should the Foundation pay a contractor directly.

Updated: 7/18/08