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Invested Funds

Invested Funds is responsible for overseeing the accounting for and compilation of financial reports on endowed, medical and contract college endowment, and similar funds. The staff is the liaison with the Investment Office, the Trust Office, Alumni Affairs and Development's Information Services Office, and units associated with endowment and similar fund accounts. Other areas of responsibility include the long-term investment pool (LTIP).

Investment Accounting focuses on true endowments, funds functioning as endowments, split interest agreements, endowment and similar funds assets, and liabilities.

Kuali Endowment Module (KEM) Update

The Kuali Endowment Module (KEM) is scheduled to go live May 1, 2012, after KFS has been upgraded to version 4.1. For the interim period between July 1, 2011 and May 1, 2012, all invested funds net asset accounts have been mapped to the same account in KFS. The invested fund accounts are mapped to temporary institutional organizations (orgs), consisting of the first two digits of the legacy org code followed by “E0” (the letter “E” and a zero).

On July 1, 2011, five significant changes will be in effect until KEM go-live:

  1. The long-term investment pool (LTIP) monthly processing cutoff date becomes the 25th of the month. If the 25th falls on a weekend or a university holiday, the cutoff date will roll back to the previous business day, so that actual cash can be invested or withdrawn within the same month. Note: e-docs must be approved by the 25th of the month. Transactions approved after the 25th will fall into the next period. A period cycle runs between the 26th of the current month and the 25th of the following month.
  2. Shares will be purchased or sold, and the gain/loss calculation will be based on the net sum of transactions within the period, instead of on each transaction. This will eliminate the need for share and gain/loss adjustments, because all transactions will buy or sell at the correct market value share rate. The gain/loss calculation will be posted to KFS after the 25th of the month, but before month-end. The gain/loss calculation will be done manually.
  3. LTIP payout will be posted earlier in the month!  In legacy, we needed to wait until the end of the month to post payout so that the reinvested payout would purchase shares at the correct market value share rate.  Since shares will now be calculated at the end of the period, at the correct market value share rate, payout will be posted earlier in the month.
  4. Shares will be rounded to five decimals instead of being rounded to a whole number.
  5. Shares will be maintained centrally in a Microsoft Access database until KEM go-live. At the end of the period, the account, title, change in permanent shares, YTD permanent shares, average share rate, cost, and market value will be posted to this Web site.

Below is a list of invested fund attributes to assist with the conversion between legacy and KFS:

  • The Appropriation Number will contain either “LTIP” (long-term investment pool) or “SI” (separately invested), identified in legacy as account type 3 and 7, respectively.
  • The Income Account will be stored in the Endowment Account Number.
  • The Use Code will continue to be consistent with the the legacy code, stored in the Account Income Guideline field.
  • The Account Purpose field was populated with the legacy ID field.
  • Account documentation should be attached to the account when it is set up and can be retrieved using the Account e-doc, which is used to create new accounts and edit or copy existing accounts.

See the matrix of Fund, Sub-Fund, and Sub-Fund Program values.

Initiating Invested Funds and Income Accounts

  • Gift invested fund accounts: Gift accounting staff in Alumni Affairs and Development (AA&D) will continue to set up these accounts with General Accounting as the approver.
  • Departmental funds (non-gift) functioning as endowment (FFE): FTCs/BSCs will initiate these accounts and route them to General Accounting as a sub-fund approver.
  • LTIP income accounts: LTIP income accounts associated with gift invested fund accounts will no longer be set up by AA&D. Instead, the operating income accounts will be set up in the units. 
  • When the income account is initiated, the income account should be routed as “Ad-Hoc Recipients,” as an FYI to Bronwyn O’Brien. Once the income account has been approved, General Accounting will edit the new invested fund gift account with the newly created income account number.
  • It is necessary to Ad-Hoc, FYI Bronwyn so that she can enter the income account to the invested fund account, because it impacts payout. Note that the income account that is entered in the Endowment Accounts Number field needs to be an existing KFS account before it can be entered.
  • Account roles: Timeliness of account setup and transaction approval is critical for invested funds, as it impacts the calculation of shares, payout, market value and overall reconciliation of investments. As a reminder, KFS does not calculate shares, gain/loss, or average share rates, these will maintained outside of Kuali until KEM go-live. Therefore, roles have been limited as follows:
  • Fiscal Officer: smh44, Sue Hoadley
  • Account Supervisor: as defined by the FTC/BSC director
  • Account Manager: beo7, Bronwyn O’Brien

Please direct questions about this information to General Accounting.