UCR Policies and Procedures

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This policy sets for the guidelines for the distribution of Short Term Investment Pool income funds within the campus.

Short Term Investment Pool (STIP): an investment pool consisting of assets remaining in The Regents’ central bank accounts after disbursements, which are invested by the Treasurer of The Regents in short-term securities.

The Treasurer of the Regents maintains a central bank account in which all monies received by the University are deposited. Monies received by the campuses are deposited into campus depository bank accounts and are transferred daily from the depository accounts into this central account. Disbursements are made from the central bank account to reimburse campus revolving funds for payroll and vendor disbursements made by the campuses, and to pay for the purchase of securities for UCRS. The General Endowment Pool (GEP), and other specific funds.

Any cash balance remaining in the central bank account not needed to cover the above disbursement is invested in short term securities. These short-term securities plus any remaining uninvested balance in the central account constitute the assets of the Short-Term Investment Pool (STIP). The participants or “customers” of STIP are those University funds which own the cash which is invested in these short-term securities.

A record of the cash balances of major participants in STIP is maintained by UCOP. This computerized record provides daily cash balances of UCRS funds, GEP, endowment corpus funds, net revenue funds, and campus and other Systemwide funds (as a group).

At the end of each quarter, investment income which has been earned by STIP is distributed to the customer funds described above by prorating income on the basis of dollar-day investment. This distribution results in the assignment of an amount of income to campus funds as a group.

Since the detail of the campus funds which are comprised of thousands of individual funds is recorded in the campus General Ledgers only, the computerized record system cannot provide a daily cash balance of each individual fund. The amount earned by the campus funds, therefore, is distributed to individual campus funds based on their average cash balances as recorded in the end month General ledger for each month during the quarter.

Policy

The procedures for distributing the STIP income earned each quarter by campus funds include grouping funds for this purpose, and then prorating the available income to the three-month average cash balances of these groups. These groups are as follows:

1. Group I – University-wide Basis Funds

Because of budgetary/accounting considerations, the cash balances of certain funds are determined on a consolidated, University-wide basis, and the income earned by these funds are credited to these individual funds on the Systemwide General Ledger. This category of funds includes:

1. Current Funds
   
   1. Educational Fee Fund
   2. General Fund and Special State Appropriations
   3. Endowments
   4. Bond-Financed Auxiliary Enterprises
   5. Self-Insurance Reserve Funds
2. Plant Funds
   
   1. State Appropriations
   2. Regents’ and President’s Funds
   3. Transfers from Net Revenue Funds
   4. Bond-Financed Construction Projects
   5. Regents’ Advances

2. Group II-Gift Funds (Includes All Current Private Gifts, Private Grants & Interest on Endowment Income) 

This group includes Golden Tree Fund Nodes 3142, 3150 and 3160 and 3170.   On a quarterly basis, STIP income generated for funds with a surplus balance will remain in an account under the control of the Chancellor to meet funding needs of the campus. Gift and endowment funds with a deficit balance will be charged STIP. 

Ordinary income generated by UCR Foundation current restricted gift funds and endowment/endowment-related distributed payout funds will be collected by the Foundation and transferred to the Chancellor to meet funding needs of the campus.

If donor designation on gifts requires that interest must be available to the recipient, the Organization affected will be charged an amount of unrestricted money, equivalent to the interest, from another appropriate fund.

In keeping with legal obligations, under established charitable laws, donors will be informed of this policy.

3. Group III-Medical Compensation Plans and Hospital Funds

Not applicable to UCR campus.

4. Group IV-Federal, State, Local, Private Contracts

This category includes Golden Tree Fund Nodes 3060, 3101, 3110, 3120, 3130, 3140, and 3180. All cash deficits are covered by the cash balance in the Campus Unrestricted Funds (Group V). In the rare event that a campus has a positive Federal cash balance, Federal regulations require that interest be paid to the appropriate agency. It is important that cost reimbursement contracts and grants not funded by advance payment programs be reviewed periodically to determine whether the financing of these contracts and grants can be converted to advance payments programs.

5. Group V-Campus Unrestricted Funds

All campus funds which have not been assigned to Groups I, II, III, or IV are included in this group. After making the adjustments referred to in the above paragraphs, the net cash balance of Campus Unrestricted Funds is used for prorating STIP income.

As a general rule, and on a quarterly basis, STIP income for funds with a surplus fund balance will remain in an account under the control ofthe Chancellor to meet funding needs of the campus. Funds with a deficit balance will be charged STIP.

In the case of mandatory Student Fees and Student Loan funds, STIP Income and charges will be retained by the fund.

References and Related Policies

• July 1, 1982 UC Business and Finance Bulletin A-60, Short-Term Investment (STIP)-Distribution of Income
• November 15, 1996 UCOP memo to campuses from John Plotts, Director Business and Finance regarding Allocation of STIP Income to Private Grants
• January 14, 1997 UCOP memo to campuses from John Plotts, Director Business and Finance regarding Allocation of STIP Income to Private Gifts-Clarification