The University of Minnesota invests its financial resources in an effort to maximize interest earnings. The University Budget & Finance Office oversees the allocation process for the income earned by the Temporary Investment Pool. Under favorable market conditions, investment income may be allocated as interest earnings to departmental accounts that have positive cash balances. In addition, interest is allocated to sponsored accounts that are required to participate due to a legal requirement of the grant/contact, to Equipment & Building Replacement reserve accounts, and to applicable loan fund accounts. Charges are assessed on accounts with negative cash balances.
This policy applies only to chartfield strings in the University's financial ledger.
The TIP process provides an incentive for units to establish and maintain good budgeting, proper accounting and strong fiscal management . Maintaining positive balances helps contribute to the amount of investment income the University earns overall. This policy allows for a portion of that income to be allocated back to the units that helped earn it. This policy also encourages proper funding of expenses by providing a mechanism for charging the account strings that are maintaining deficits and thus "borrowing" from the temporary investment pool.
- New TIP forms will be posted once the TIP procedures are finalized (expected in fall 2008).
University Budget & Finance has overall responsibility for allocating TIP income and assessing TIP charges.
- TIP Roll-up:
- A predetermined combination of chart string balances whose aggregate total is used to calculate the TIP allocation or charge.
- Target Chartfield String:
- A specific chart string within a TIP roll-up which has been identified to receive the interest earnings or charge for the entire TIP Roll-up.
- Threshold:
- The minimum balance that is established each year as the necessary balance or deficit that must exist in a roll-up or chart string for earnings to be distributed or charges to be assessed.
- University Budget & Finance
- Responsible for the overall TIP process:
- Determine unit responsibilities
- Update policies and procedures
- Establish allocation and charge rates
- Run financial system query of rolled-up/summarized chart string balances
- Prepare timely & accurate calculation of charges or earnings distributions on the rolled-up balances
- Prepare journal entry of charges and earnings distributions
- Review and maintain exception and adjustment requests and communicate decisions.
- Communicate changes in TIP allocation process/procedures.
- Maintain back-up detail for distributions and reports.
- Accounting Services:
-
- Run financial system query of loan fund balances and prepare journal entry for distributions.
- Sponsored Financial Reporting (SFR)
-
- Run financial system query of Sponsored chart strings with an interest-earning requirement. Prepare and process the journal entry for any earnings distributions.
- Notify units of allocation.
- Sponsored Projects Administration (SPA)
-
- Provide SFR with information regarding TIP participation for affected sponsored chart strings.
- Dean / RRC Manager:
-
- Identify target chartfield strings for each specified TIP roll-up.
- Identify chart strings, if any, to be considered for exception to the TIP allocation or charge process and forward approved requests to University Budget & Finance.
- DeptID Manager / Department Head:
-
- Identify chart strings, if any, to be considered for exception to the TIP allocation or charge process and report them to the RRC for approval.
There are no frequently asked questions for this policy.
- Amended:
- July 2008 - Updated to address rollout of Enterprise Financial System (EFS).
- Amended:
- March 2007 - Updated Contacts and definitions sections.
- Amended:
- March 2006 - Updated date references, position titles and acronyms. Updated forms and
added new "TIP Exception Request" form. Updated language on where and how balances are calculated including the rate table. Added "Automatic Exclusions" section. Updated "Responsibilities" section. Policy Statement and Reason clarified.
- Amended:
- June 2002 - Updated Rates Section and appendix: fund Categories for Tip Allocation.
- Amended:
- July 2000 - Updated Contacts Section; Updated Date references in Rates section; Updated TIP Forms; Updated appendix: Fund Categories for Tip Allocation.
- Amended:
- July 1999 - Updated Date references in Rates section, and who should know section. Updated appendex: Fund Categories for Tip Allocation.
- Amended:
- July 1998 - Updated Date references in Rates section and Procedure 3.3.3.1 to reference FY 99.
Updated appendix: Fund Categories for Tip Allocation. Responsible University Officer changed from Senior Vice President for Finance and Operations to Associate Vice President for Budget and Finance.
- Amended:
- June 1997 - Updated and clarified Category and Rate information.
Added Fund numbers to Tip Categories.
- Amended:
- June 1996 - Updated Date references in Rates section, and Updated Fund Categories for Tip Allocation.
- Amended:
- December 1995 - No TIP income will be earned by ISOs.
- Amended:
- June 1995 - New Forms added, and Clarification of when TIP charges will be 8%.
- Effective:
- June 1994
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