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The authority for the establishment of non-appropriated funds by the University
is granted through the legislative process. Chapter
116, Article 1 of the General Statutes
provides the legal requirements, corporate powers, rights and duties
of the University of North Carolina System. Following is a discussion
of the legislation providing for the establishment of trust funds
by the University.
General
Statute 116-36 "Endowment Funds" provides the legal authority to the board of trustees
of each constituent institution to establish and maintain, pursuant
to such terms and conditions, uniformly applicable to all constituent
institutions, as the Board of Governors of the University of North
Carolina may from time to time prescribe, an endowment fund and
shall establish an investment board known as "The Board of Trustees
of the Endowment Fund of (name of University)". The board of trustees
shall be responsible for the prudent investment of the fund. Any
gift, devise, or bequest of real or personal property to the University
shall be presumed, nothing to the contrary appearing, a gift, devise,
or bequest, as the case may be, to the endowment fund of the University.
Proceeds from any endowment fund shall not take the place of State
appropriations or any part thereof but rather shall supplement the
State appropriations to the end that the institution may improve
and increase its functions, may enlarge its areas of service, and
may become more useful to a greater number of people.
General
Statute 116-36.1 "Regulation of Institutional
Trust Funds"
provides the legal authority for the University to establish institutional
trust funds. This legislation was created by the 1977 General Assembly
and places responsibility for the custody and management of university
institutional trust funds with the University of North Carolina
Board of Governors. Subsection (a) of the statute directs the Board
to adopt uniform policies and procedures over the administration
of the institutional trust funds that would ensure that the receipt
and expenditure of such funds are properly authorized and that the
funds are appropriately accounted for. These uniform policies and
procedures are discussed further under the caption "UNC POLICIES AND PROCEDURES ON TRUST FUNDS"
. Subsection (b) of the statute requires that institutional
trust funds be deposited with the State Treasurer and held in the
name of each university. Subsection (c) of the statute provides
that the University's State Treasurer Account and interest earned
on its deposits are available for expenditure without further authorization
from the General Assembly. Subsection (h) allows the Board to designate
an official depository for trust funds defined below in (g)(7) in
one or more banks or trust companies in this State. Provided, however,
such deposits are fully secured by deposit insurance, surety bonds,
or investment securities of such nature, in such amounts, and in
such manner as prescribed by the State Treasurer for security of
public deposits generally. Subsection (d) of the statute provides
that the institutional trust funds are subject to the oversight
of the State Auditor but are not subject to the provisions of the
Executive Budget Act except for capital improvement projects that
are subject to G.S. 143-18.1. Subsection (e) of the statute requires
the submission of reports as directed by the Director of the Budget.
Subsection (f) of the statute provides that the trust funds or investment
income there from shall not take the place of State Appropriations
and shall be used to supplement State Appropriations to the end
that the institution may improve and increase its functions, may
enlarge its areas of service and may become more useful to a greater
number of people. Subsection (g) defines trust funds
as follows:
- Moneys, or the proceeds of
other forms of property, received by an institution as
gifts, devises, or bequests that are neither presumed nor designated to be gifts,
devises, or bequests to the endowment fund of the institution;
- Moneys received by an institution
pursuant to grants from,
or contracts with, the United States government
or any agency or instrumentality thereof;
- Moneys received by an institution
pursuant to grants from, or contracts with, any State agencies, and political subdivisions of the State, any
other states or nations or political subdivisions thereof, or
any private entities whereby the institution undertakes, subject
to terms and conditions specified by the entity
providing the moneys, to conduct research, training or public service programs,
or to provide financial aid to students;
- Moneys collected by an institution
to support
extracurricular activities of students of the institution;
- Moneys received from or for
the operation by an institution of activities established for the benefit of scholarship funds or student activity programs
;
- Money's received from or for
the operation by an institution of any of its self-supporting auxiliary enterprises
, including institutional student auxiliary enterprise
funds for the operation
of housing, food, health, and laundry services;
- Money's received by an institution
in respect to fees and other payments for services rendered by medical, dental, or
other health care professionals under an organized practice plan approved by the institution or under a contractual
agreement between the institution and a hospital or other health
care provider;
- The net proceeds from the disposition effected pursuant
to Chapter 146, Article 7, of any interest in real property
owned by or under the supervision and control of an institution if the interest
in real property had first been acquired by gift, devise, or bequest
or through expenditure of moneys defined in this subsection (g)
as "trust funds," except the net proceeds from the disposition
of an interest in real property first acquired by the institution
through expenditure of moneys received as a grant from a state
agency;
- Moneys received from the
operation and maintenance of institutional forests
and forest farmlands , provided, that
such moneys shall
be used, when used, by the institution for the support of forest-related
research, teaching, and public service programs.
Subsection (i) of the statute provides that the cash balances and receipts
of funds identified in the G.S. 116-36.1 are appropriated to the use of the University
of North Carolina and its constituent institutions.
General
Statute 116-36.2 "Regulation of Special Funds of Individual Institutions"
provides the legal authority for the chancellor of each
institution to have custody and manage the institution's special
funds. It provides that the Board of Governors shall adopt uniform
policies and procedures applicable to the administration of these
funds, which shall assure that the receipt and expenditure of such
funds is properly authorized and that the funds are appropriately
accounted for. Special funds of an institution include:
Moneys received from or for
the operation by an institution of its program of
intercollegiate athletics ;
Moneys held by an institution as fiscal agent
for individual students, faculty, staff members, and organizations.
General
Statute 116-36.5 "Centennial Campus Trust Fund"
provides the legal authority for all moneys received through development
of the Centennial Campus of North Carolina State University at Raleigh,
from whatever source, including the net proceeds from the lease
or rental of Centennial Campus real property, to be placed in a
special, continuing, and non-reverting trust fund having the sole
and exclusive use for further development of the Centennial Campus,
including its operational development. This fund shall be treated
in the manner of institutional trust funds. This fund shall be
deemed an additional and alternative method of funding the Centennial
Campus and not an exclusive one.
General
Statute 116--41.7 "Proceeds of Bonds, Revenues, Etc., Deemed
Trust Funds" provides the legal authority for the proceeds of all bonds issued and all
revenues and other moneys received pursuant to the authority of
this Part shall be deemed to be trust funds, to be held and applied solely as provided in this Part. The resolution
authorizing the issuance of bonds shall provide that any officer
to whom, or bank, trust company or fiscal agent to which, such moneys
shall be paid shall act as trustee of such moneys and shall hold and apply the same for the purposes
hereof, subject to regulations as such resolution may provide.
Session Law 1999-237, Appropriation Bill, Section 10.13 "UNC Overhead
Receipts" provides the legal authority for overhead receipts earned
by constituent institutions of The University of North Carolina
to be retained at the campus earning the receipts.
Session Law 2001-424, Appropriation Bill, Section
15.1.(b) "State Agencies to Report on Intellectual Property/Study
State Intellectual Property Assets and Technology Transfers"
Provides that the provisions of this
section do not apply to the University of North Carolina and its
constituent institutions, or to the North Carolina Community Colleges
System, or to employees of these respective institutions who are
subject to the intellectual property and inventor policies of the
institutions employing them.
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