Procedures

Endowment Investment Access Control

Responsible position(s):

• Controller

Required documents and access:

• Online administrator access to investment accounts

Frequency and timing:

• As needed to add or delete user access
• Annually review user access

Steps:

• Ensure investment account set up requires dual controls for transaction activity in the accounts.
• Assign appropriate security roles to the employees in those positions. The investment manager will require the assigned users to validate their identity.
• Review authorized users' access annually to ensure access is appropriately assigned and revoked in a timely manner.
• oController and Accountant - query only access; positions responsible for reconciling investment accounts.
• oVP Advancement – transactional access to initiate transfers out.
• oCFO – transactional access to approve transfers out.

Endowment Spending Allocations

Annual spending distributions from endowments is set by policy. It is calculated by a smoothing formula based on a rolling three-year average of the quarterly market values. Ending market values for the last 12 quarters are averaged, and the result is then multiplied by the 4% spending rate (1% per quarter) to determine the total amount to be distributed. This amount is then allocated to participating funds based on their pro-rata share of the total investment pool.

The calculated annual spending distribution must fall between 3.5% and 5% of the current market value of the pooled endowment investment. Should the rolling three-year average be outside of this range, it will be raised to 3.5% or lowered to 5%. The Board of Regents reserves the right to freeze, lower, or increase the annual spending distribution in an extraordinary financial situation.

Eligible endowment funds will be charged an annual internal administrative management fee of 0.50% of the current market value (assessed quarterly) to support the administrative costs of the institution.