A fund's life begins when monies are received by Stanford, and the use of this money needs to be tracked; it ends when the monies are fully spent, and all obligations have been met. In the case of some funds, such as endowments, the principal is required to be invested in perpetuity so the fund never ends. Other funds, like operating budgets and clearing accounts, serve special purposes. The life cycle of a fund consists of these and several other stages that are dependent on the type of money involved.
Understanding the type of money you have and its restrictions is the first step in managing the fund and tracking its use. Answering these questions will help you achieve this first step:
- Who is the money from?
- What can the money be spent on? What are the restrictions on the money?
- Is it one-time money or ongoing?
- Is there an agreement or other documents associated with the money? If so, what are the terms of the agreement or documents?
- Is reporting required and if so, what type?
Refer to the following resources for guidance on determining the fund type:
Once the type of fund is determined, a new PTA account can be requested. PTA accounts include project, task and award information.
For help setting up a fund, refer to Topic Overview: Request New Account (PTA) and How to: Request New Account (PTA).
Inflows of money to a fund may take the form of receipts or transfers in from various sources. A key component to managing these inflows is ensuring that all of the appropriate inflows are received and properly recorded.
The source of a receipt determines the system used to record it, refer to Topic Overview: Receive Funds. Some receipts require department action, while others are handled internally. Common examples include:
- Endowment payout
- Sponsored project receipts
- Industrial affiliate income
- Program income, fees, miscellaneous income
Funds that were already recorded as a receipt in one fund can be moved to a different fund where they will appear as a Transfer In. Refer to Topic Overview: Fund Transfers. Common sources for a Transfer In include:
- University general funds (unrestricted designated funds) being provided to departments
- Funding from another department to pay for a shared obligation or commitment
- Sales of endowment shares
- Receipts for services provided to departments (service centers and auxiliaries only)
Outflows, or "uses" of the money, may take the form of expenditures (e.g., purchases of goods or services or salary) or transfers out (e.g., to another fund). All use of funds is guided by a common set of principles. Refer to Policy: Proper Use of Funds.
- Purchases of goods or services
- Salaries and wages
- iJournal transfers of expenses incurred in a different account. Refer to Administrative Guide Policy 3.2.2: Cost Transfers and System: iJournals.
Transfers out show money going to another fund. Common examples include:
- Moving money to a different fund to cover expenses or commitments incurred by that fund. Refer to How to: Request a Fund Transfer.
- Billing for services provided internal to Stanford. Refer to Topic Overview: Auxiliaries & Service Centers.
- Infrastructure charges on certain types of transfers. Refer to Topic Overview: Fund Transfers.
- Purchasing shares of an investment fund (e.g., funds functioning as endowments; refer to Resource: Contacts for Non-Sponsored Funding by School/Department).
Managing the balance means understanding how much you have left to spend and using the remaining funds prudently. Information to help you monitor fund balances can be found in the Commitment Management System (CMS), Faculty Financial Inquiry Tool (FFIT) and Oracle Business Intelligence (OBI) reporting.
While the objective of managing a fund is the same, (i.e., understanding what you have left to spend and using the remaining funds prudently), some fund types are managed using different business practices. For award types that are expected to be temporary holding accounts (such as expense clearing accounts), fund and available balance, as well as turnover of activity, are important management concepts. In certain other cases, such as sponsored projects, the budget is the key management tool. Understanding the fund or award type will help you determine the best way to manage the monies. Refer to Topic Overview: Fund Types.
Certain fund types accept the receipts, transfers and associated expenditures in the same fund. Therefore, it is appropriate to use the fund balance and available balance, and the various components, to manage these funds. These types of funds include:
- Expendable gift funds
- Service center
- Endowment income funds
- Cost sharing accounts and university research (at the end of the project)
Turnover and Balance Reviews
Certain types of funds are temporary "holding" accounts. The activity should turnover regularly with a minimal balance, reflecting only recent activity that has not been cleared. These fund types include:
- Accounts receivable
- Expense clearing accounts (such as organization suspense accounts)
Budget Versus Actual (e.g., Variance Reports)
Other fund types are better suited to manage expenditures against their budget, as the timing of the receipts and expenditures are not always in sync and may not be meaningful except at the end of the project or period. For example, many grants and contracts stipulate that billings must be based on actual expenditures, and revenue earned is really a function of expenditures. These fund types include:
- Capital projects
- Grants and contracts
- Operating budget
Reporting Tools and Resources for Managing Funds and Expenditures
- For reporting about expenditures and commitments, go to OBI Consolidated Expenditure Reporting Dashboard
- For reporting about fund management, go to OBI Revenue and Fund Management Dashboard
- For information about OBI, refer to System: OBI Financial Reporting.
- For information about the expenditure and fund reporting tool used by faculty, go to System: Faculty Financial Inquiry Tool (FFIT).
- For information about the expenditure and soft/hard commitment reporting tool, go to System: Commitment Management System (CMS).
- For information about handling expenses for sponsored research projects, refer to Monthly Review and Quarterly PI Review and Certification on the DoResearch website.
- For information about burdening (the charge levied by the university on top of certain expenses, transfers or receipts), refer to Topic Overview: About Burdening.
In general, a fund should be closed when the inflows of money have been exhausted, and all obligations have been met. For specific steps and requirements related to the closing of funds, refer to Topic Overview: Close PTAs and Administrative Guide Policy 3.1.3: Expenditure Accounts (PTAs).