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Restricted Funds

Grants, Contracts, and Sponsored Projects

Restricted Funds (RF) is responsible for the post award financial administration of sponsored research grants/contracts and externally funded grants/contracts. RF establishes grant/contract accounts and monitors and reviews all charges to those accounts to determine compliance with both University and funding source regulations. RF prepares and submits invoices and financial related reports to the funding agencies, disseminates financial information to the project investigators and respective departments, manages the grant close out process, and coordinates audit activities for grant accounts. RF also interacts with the Office of Sponsored Programs and is involved in the pre-award process by reviewing and approving the proposal budgets and coordinating contract and/or grant agreement signature execution.

Gifts and Endowments

Restricted Funds (RF) works closely with the Development Office to ensure that gift funds, both endowed and current use, are classified and used for the purposes communicated by the donor when making the gift. RF establishes gift and endowed accounts; is committed to ensuring that the expenditure of gift funds and endowed account spending funds are in accordance with the intent of the donor; verifies that gift accounts and endowed accounts transactions are processed properly and all revenue and expenditures have been correctly coded and recorded; and assures that all transfers of funds are in compliance with donor intent restrictions and accounting rules.

University Designated

Restricted Funds (RF) establishes university designated accounts and handles all accounting related functions for established University Centers, internal University funding awards, and specific restricted use accounts.

Grant or Gift?

Some time ago many university personnel used a simple guide for determining whether resources received were a grant or a gift. If a report to the provider was required, it was a grant. If no report was required, it was a gift. Actually, the definition is not so simple. Some grants do not require a report to the provider, and some gift donors require an annual report.

Today accounting standard setters and others are using the terms exchange and nonexchange to determine whether resources received are a grant or a gift. If the resource provider expects nothing in exchange for the resources provided, the revenue is classified as a gift (nonexchange transaction). If the resource provider expects performance or the receipt of something in exchange for the resources provided, the revenue is classified as a grant (exchange transaction).

FASB Standard No. 116, Accounting for Contributions Received and Contributions Made introduced exchange contracts. Exchange contracts are reciprocal transfers in which each party receives and sacrifices something of approximate equal value. Determining resources received as grants or as gifts may require judgment concerning whether a reciprocal transaction has occurred. One must determine whether the institution has given up the rights, privileges, or assets in an amount equal to the value of the assets, rights, or privileges received. The value of what was given and what was received must be determined from both the provider’s and the institution’s perspective. Lots of variables can affect the transaction.

Two straightforward illustrations of an exchange transaction and nonexchange transaction are as follows:

This is an exchange transaction as the university receives resources to perform the work prescribed in the agreement. The contractor receives the work’s output called for in the contract. Some research contracts are for exploratory activity with the provision if anything is found that could be patented, licensed or royalties, the contractor will own the benefits. Those agreements are, for the most part, also identified as exchange transactions (even though if something is found, the contractor will receive a greater exchange than the university).

This would not be an exchange transaction. The grantor provides resources to support the university’s mission (scholarship) and expects nothing in return of equal value. A report of the recipient’s name would not satisfy the equal value exchange criteria. In this case, the transaction would be a contribution/nonexchange transaction.

The following is a list of situations that can be helpful in identifying whether the resources provided and received by the university should be classified as a gift (contribution/nonexchange transaction) or as a grant (exchange contract).

Gift (Nonexchange contribution)Grant (Exchange contract)
The university solicits resources as a contribution.The university seeks resources in exchange for specified benefits or services.
Resource provider affirms that it is making a donation to support the university’s programs.Resource provider affirms that it is providing resources in exchange for specified benefits or services.
The resource provider determines the amount of the payment.The resource provider’s payment equals the value of the specified benefits or services including the services’ cost plus any markup. The total payment is based on the quality of benefits or services to be provided.
The time or place of delivery of the resources provided by the university to a third-party recipient is at the discretion of the university.The time or place of delivery of the resources provided by the university to a third-party recipient is at the discretion of the resource provider.
The university is not penalized for nonperformance. Any unspent unrestricted resources may be retained. Restricted resources are retained for disbursement in future fiscal periods.The university is penalized for nonperformance.
The university delivers the assets to individuals or organizations other than the donor.The university delivers the assets to resource provider or individuals or organizations connected to the resource provider.
The fair value of the resources received by the university is disproportionately greater than the goods or services provided.Payment is for the normal cost of the goods or services.

In cases where it may be difficult to ascertain the status of the resources provided to Bradley University, particularly when the resources are from a foundation, a determination of the status as being an exchange transaction or a nonexchange transaction will be made by the Controller’s Office with input from the Development Office and the Office of Sponsored Programs.

Primary Investigator Responsibilities

  • Funding Source – Federal, State, or Other (Corporate, Foundation, Non-Profit)
  • RFP Financial Requirements 
  • Budget Categories
  • Allowable vs. Unallowable
  • Notification of Account Number
  • Specific Grant Requirements
  • Bradley University Policies & Procedures
  • Faculty Handbook
  • Research & Sponsored Programs Handbook
  • Controller’s Office Accounting Policies and Procedures
  • Federal Rules & Regulations
  • OMB Circulars
  • A-21: Cost Principles for Educational Institutions
  • A-110: Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profits
  • A-133: Audits of Institutions of Higher Education and Other Non-Profits
  • Internal Revenue Service Requirements
  • Code of Federal Regulations
  • Sponsoring Agency Terms and Conditions
  • Award Terms and Conditions
  • State Rules & Regulations
  • Illinois Compiled Statutes
  • Sponsoring Agency Terms and Conditions
  • Award Terms and Conditions
  • Corporate, Foundation, Other Non-Profits
  • Sponsoring Agency Terms and Conditions
  • Contract Terms & Conditions
  • Bradley Account Classifications vs. Funding Agency Budget Classifications
  • Monthly Financial Reports
  • Budget vs. Actual Report
  • Monthly Revenue & Expense Report
  • Account Detail Report
  • Additional Financial Reports as needed/requested
  • Grant/Contract Compliance
  • Monthly/Quarterly Expenditure Reports/Invoices
  • Financial Close Out Reports and Audit
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Additional Links

Establishing a New Gift Account

The Controllers Office tries to follow certain criteria when establishing a new gift account. The two requirements that should be met before the Controller’s Office establishes a gift account are the following:

  • The contribution or gift should total $25,000 or more; and
  • The donor has placed written restrictions on how the gift shall be utilized.

The initial gift does not have to equal $25,000 but the total amount of contributions over time must equal or exceed the $25,000 limit. The donor must also stipulate in writing how the gift is to be used. (By doing this, the donor has restricted the use of the gift.)

If the gift is restricted and does not meet the $25,0000 limit, the gift will be placed in the departments/colleges general gift account and all gift expenditures will be made out of this account. The department/college can track all contributions and expenses for this gift via Financial Edge transaction attributes to determine the availability of funds and to insure compliance with donor requirements. If the gift, regardless of amount, is unrestricted, meaning it can be used for any purpose, the gift is automatically placed in the departments/colleges general gift account for general use.

The main reason the Controller’s office established these two guidelines is because if a gift account was established every time someone gave a small gift for a specific purpose, the university could end up having thousands of different gift accounts. The logistics involved in accounting for and keeping track of all these gifts accounts for the entire campus would be enormous.

Restricted Funds Monthly Financial Reports

Financial reports are intended to keep the responsible individuals informed and up to date on the financial status of their respective account(s). The responsible party should review their reports regularly and contact the Restricted Funds staff at restrictedaccounts@bradley.edu if there are any problems or concerns with the amounts or transactions contained in the reports.

All financial reports for Gift and University Designated Accounts and Endowed Spending Accounts are available electronically through the Financial Edge Accounting Software (FE) system to select users. FE designated users are responsible for disseminating reports to the appropriate individuals in their division/ unit (college)/department. While reports can be run on-demand, each month (on approximately the tenth business day after month-end, emails are sent to the FE designated users stating month end processing has been completed.

All requests for printed reports or should be made to the FE designated user in your division/unit (college)/department.

The Principle Investigator (PI) will receive three financial reports each month via email from Restricted Funds staff. The financial information contained in these reports reflects either monthly data for the month just ended or project-to-date data through the month just ended. The report name and a brief description of each of these financial reports is as follows:

  • Budget vs. Actual w/Variances/Projects – This report contains revenue and expenditure descriptions by row with six columns of financial data categorized accordingly. The first column contains the approved project budget for the entire grant/contract period. The second column reflects actual revenue received and actual expenditures incurred since the start of the project (through the report date). The third column lists any project encumbrances. An encumbrance represents an amount of funds obligated or set aside for future use. The fourth column is the sum of column 2 and column 3. The fifth column is the difference between column 1 and column 4. The sixth column contains actual year to date revenue and expenditures for the current Bradley fiscal year.
  • Revenue and Expense – This report contains revenue and expenditure descriptions by row with five columns of Bradley fiscal year financial data categorized accordingly. The first column contains the monthly revenue and expenditures for the report month. The second column contains actual year to date revenue and expenditures for the current Bradley fiscal year. The remaining three columns are of no significance to grant/contract accounts.
  • Account Detail Report – This report identifies all of the individual transactions by revenue and expense categories that have hit the grant/contract account for the report month.

Endowment, Annuity and Charitable Remainder Trust Management

  • Over 750 endowed accounts supporting:
  • Scholarships -Department/college support accounts
  • Endowed professorships/Lecture series -Program support
  • Faculty development
  • Capital/facility enhancement
  • Gift annuities and charitable remainder trusts (CRT)
  • Deferred giving providing current income to donor
  • Assets managed by the University
  • Gift annuities backed by University assets
  • CRTs are separate entities with Bradley acting as trustee
  • Signed agreement with the intended use of the funds
  • Signatures of the donor and appropriate Bradley representative(s)
  • Minimum commitment of $50,000
  • Donors can be individuals, corporations, estates, trusts
  • Endowed accounts and gift annuities are managed in investment pools. CRTs are invested to meet the income needs of trust and seek long term growth. Funds are invested in a diversified portfolio
  • Investment objectives are:
  • Provide for long term growth of the endowment
  • Produce current income to support intended use of funds
  • Enhance the purchasing power of contributions

Spending Policy

The spending policy determines the level of spending to be awarded to endowed accounts on an annual basis. Awards are based on the three year average market value (MV) of the endowed account as of December 31. Awards may be up to 5% of the average MV as determined by the Board.

Gift Annuities and Charitable Remainder Trusts

  • Provide life income for donor and/or designated recipient
  • Payments made quarterly
  • Annual tax reporting provided to donor
  • Donor may designate intended use of remainder interests

Gift annuities

  • Age of income recipient(s)
  • Life expectancy
  • Start date of annuity payments

Charitable Remainder Trusts

  • Remainder Annuity Trust vs. Unitrust
  • Market Value of trust assets
  • Applicable distribution percentage
  • Additional contributions (unitrusts only)
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