Georgia State University Research Foundation, Inc.
Policies for IRS Form 990 Compliance
May, 2009
Table of Contents
Section I – Governance Page
1.1Conflict of Interest Policy2
Section II – Financial Reporting and Accounting
2.1Anonymous Reporting Policy6
Section III – Financial Reporting
3.1Document Retention Policy7
Section IV – Investments
4.1Investment Policy8
Section V – Expenditures and Disbursements
5.1Employee Meal Policy 12
1.1Conflict of Interest Policy
I.Policy Statement
This policy applies to each member of the Board of Directors and to all officers of the Georgia State University Research Foundation, Inc. It is intended to serve as guidance for all persons in positions of significant responsibility for the activities of the Research Foundation.
II.Definitions
Financial InterestA person has a financial interest if the person has, directly or
indirectly, through business, investment or family:
(a) an ownership or investment interest in any entity with which the Research Foundation has a transaction or arrangement, or
(b) a compensation arrangement with the Research Foundation or with any entity or individual with which the Research Foundation has a transaction or arrangement, or
(c) a potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Research Foundation is negotiating a transaction or arrangement.
Compensation includes direct and indirect remuneration as well as gifts or favors that are substantial in nature.
Related PartiesDefined as:
(1) Business Relationships. One in which a trustee, officer, family member is an officer, director, employee, partner, trustee, controlling stockholder, or the actual or beneficial owner of more than 5% of the voting interest of an organization.
(2) Family Members. A spouse, parent(s), sibling(s), children or any other relative of a trustee or officer if the latter resides in the same household as the trustee or officer.
- Fiduciary Responsibilities
Members of the Board of Directors and officers of the Research Foundation serve the public trust and have a clear obligation to fulfill their responsibilities in a manner consistent with this fact. All decisions of the Board and officers are to be made solely on the basis of a desire to promote the best interest of the Research Foundation and Georgia State University and the public good. The integrity of the Research Foundation and Georgia State University must be protected and advanced at all times.
An effective Board cannot consist of individuals entirely free from at least perceived conflicts of interest. Although most such potential conflicts are and will be deemed to be inconsequential, it is everyone’s responsibility to ensure that the Board is made aware of situations that involve personal, familial, or business relationships that may be troublesome for the Research Foundation or Georgia State University.
Thus, the Board requires each director and officer to disclose any possible personal, familial, or business relationships that reasonably could give rise to a conflict of interest involving the Research Foundation of Georgia State University and to report certain transactions annually on the attached form. That form will also include a certification that the director or officer:
(1) has reviewed this policy, and
(2) acknowledges by his or her signature that he or she is in accordance with the letter and spirit of this policy.
As a regular part of the Research Foundation operations, the Research Foundation processes and receives grants through the efforts of individual faculty and contracts with the University to carry out the requirements of those grants. It is possible that such contracts could fund all or a portion of the salaries of faculty who could serve as directors or officers of the Board. This is not necessarily a conflict of interest. Under “Procedures” (below), a person who has a financial interest may have a conflict of interest only if the Board decides that a conflict of interest exists.
- Restraint on Participation
Directors or officers who have declared or have been found to have a conflict of interest shall refrain from consideration of proposed transactions, unless for special reasons the board or administration requests information or interpretation. Persons with conflicts shall not vote, participate in discussion, nor be present at the time of the vote. Any proposed transaction in which a conflict of interest has been declared or found to exist must be approved by a majority of the disinterested members of the Board or the appropriate committee of the Board after disclosure of the conflict of interest.
- Disclosure
All trustees and officers are requested to disclose only those “substantive financial interests” that they maintain (or their related parties maintain) with organizations that do business with the Research Foundation, Georgia State University, or any related or affiliated organization, or which otherwise could be construed to potentially affect their independent, unbiased judgment in light of their decision-making authority or responsibility.
- Procedures
In connection with any actual or possible conflicts of interest, an interested person must disclose the existence of his or her financial interest and all material facts to the Board.
After disclosure of the financial interest and all material facts, and after any discussion with the interested person he or she shall leave the Board meeting while the determination of a conflict of interest is discussed and voted upon. The remaining Board members shall decide if a conflict of interest exists.
An interested person may make a presentation at the Board, but after such presentation, he/she shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement that results in the potential conflict of interest.
Georgia State University Research Foundation, Inc.
Conflict-of-Interest
Annual Disclosure Form
In connection with the disclosure requirements of the Conflict of Interest Policy of the Georgia State University Research Foundation, Inc., please furnish answers to the following questions, sign, and return the document in the enclosed envelope.
1. Have you or any related party of yours had any material interest, direct, or indirect, in any of the following transactions since July 1, ______to which the Georgia State University Research Foundation, Inc. was, or is to be, a party?
YES NO
a. Sale, purchase, exchange, or leasing of property?______
b. Receiving or furnishing of goods, services,
or facilities for which you were paid?______
c. Transfer or receipt of income or assets other
than donations to the Research Foundation?______
d. Maintenance of bank balances as compensating
balances for the benefit of another?______
If you answered yes to any of the questions above, please explain:
______
2. Have you or any related party of yours been indebted to the Georgia State University Research Foundation at any item since July 1, ____? Please exclude amounts due for ordinary travel and expense advances. If yes, please explain. _____Yes _____No
If you answered yes, please explain:
______
3.Do you have a family or business relationship with any other officer, director, trustee, or key employee of the Georgia State University Research Foundation? _____Yes _____No
If you answered yes, please explain:
______
The answers to the foregoing questions are correctly stated to the best of my knowledge and belief. Additionally, I certify by my signature below, that I have reviewed this policy and that I am in accordance with the letter and spirit of this policy.
Name (printed)______Signature:______Date:______
2.1Anonymous Reporting Policy
The Georgia State University Research Foundation places a high priority on ensuring that its activities are conducted in an ethical, efficient and effective manner. As a result, the Research Foundation will provide a mechanism for reporting any matter that could compromise these standards.
As a regular part of the Research Foundation operations, the Research Foundation processes and receives grants, and contracts with Georgia State University to carry out the requirements of those grants. Many of these grants involve research involving human subjects and animals. The University’s Institutional Review Board and the Institutional Animal Care and Use Committee each have an anonymous mechanism for reporting concerns and noncompliance.
The Research Foundation also accepts anonymous concerns through the following link:
Section 3.1Document Retention Policy
The Research Foundation recognizes the need for consistent record retention guidelines to allow for ongoing compliance with federal and state law. The Research Foundation adopts the Records Retention Guidelines of the University System of Georgia which are found at the following link:
Section 4.1 Investment Policy
Authority
Responsibility for investment management at Georgia State University Research Foundation, Inc. (GSURF) is vested in the Board of Directors (the Board). Members of the Board recognize their responsibility to manage prudently the funds which are entrusted to their management. The Board has created three pools of assets for purposes of establishing an investment policy. One pool is for endowment funds, one pool is for operating funds, and the third pool is for investments received in connection with the commercialization of intellectual property.
I. Endowment Funds (including Quasi-Endowment Funds)
Investment Objectives
Endowment funds are gifts from donors subject to restrictions that the principal be invested in perpetuity and the income generated therefrom be expended for current operations in accordance with donor restrictions. The goal of the endowment investment program is to provide a real total return from assets invested that will preserve the purchasing power of the endowment assets, while generating an income stream to support the activities of GSURF. The endowment investment objectives are:
(1) Protect the principal of the funds against permanent loss,
(2) Generate sufficient investment return to provide sustainable funding for current operating needs, and
(3) Grow the principal to protect the endowment from inflation.
Quasi-Endowment funds are funds accumulated from general operations designated by the Board to function similar to endowment funds. Although the funds are expendable, the Board intends to set the funds aside and invest for the purpose of creating a reliable, consistent source of earnings to support on-going operations. Quasi-Endowment funds are invested in a manner consistent with true endowment funds.
Investment Management
The endowment investments will be managed by the Georgia State University Foundation (the Foundation) in a manner consistent with the Foundation’s endowment investment program. The Board may contract with other investment managers at its discretion to benefit from investment opportunities.
Investment Term
Endowment funds are a permanent investment and therefore can tolerate more volatile investments than operating funds.
Investment Type,Asset AllocationandDiversification
Endowment funds may be invested in Cash and Cash Equivalents, U.S. Government and Agency securities, Certificates of Deposit, Banker’s Acceptances, Corporate Bonds, Commercial Paper, Domestic and International Common Stocks listed on major U.S. exchanges and recognized over-the-counter markets, pooled investment funds, private equities, hedge funds, real estate and other classes identified as allowable by the Foundation’s investment policy.
Asset allocation will be determined based on the expected cash flows, income requirements and growth potential consistent with the objectives of the endowment fund. GSURF funds will be invested with the same asset allocation established by the Foundation’s investment committee for the Foundation’s endowment portfolio.
Spending Policy
The objective of the endowment spending policy is to provide a steady, growing income stream to support GSURF programs while providing sufficient reinvestment to protect the endowment from inflation. Endowment spending will be set at 4% of the three-year moving average of the market value of the endowment fund.
Management, Reporting and Monitoring
The Foundation will provide quarterly written performance reports, including calculations of total returns, comparisons to benchmark returns, asset allocations and comparisons of allocations with target and ranges. Reports will be provided to the GSURF Financial Vice-Chair/Treasurer for review. This review shall encompass:
(1) review investment performance against established objectives,
(2) review investment activity to ensure compliance with investment policy,
(3) monitor investment performance against relevant market comparisons.
The Financial Vice-Chair/Treasurer will provide a written report to the Board at each regularly scheduled meeting.
II. Operating Funds
Investment Objectives
Funds for the general operation of GSURF are received primarily from facilities and administrative cost recoveries charged on sponsored grants from federal, state and private grant-making entities. Half of the facilities and administrative cost recoveries are internally allocated for departmentally determined purposes and the remainder allocated for the general operations of GSURF. Funds received in excess of amounts spent are available for investment in accordance with this policy. Operating funds should not be invested in volatile asset classes due to liquidity demands. The investment objectives are:
(1) Protect the principal of the funds against permanent loss,
(2) Maximize current income with a minimum of risk,
(3) Provide flexibility to invest in alternative investments on a limited basis.
Investment Management
GSURF may contract with investment managers to maximize earnings and benefit from pooled investment opportunities.
Investment Termand Asset Allocation
Investment maturities of operating funds will be updated annually based on funds available for investment compared to annual expenditures and anticipated future liquidity needs.
Target % / Range % / Amount (May 2005)Cash & cash equivalents / 15% / 10%-30% / $975,000
Fixed income / 70% / 60-80% / $4,555,000
Equities/real estate / 15% / 0-15% / $975,000
Total Cash available for investment / 100% / $6,500,000
Investment TypeandDiversification
Funds in depository accounts may be invested on an overnight basis in financial institution money market funds or similar cash equivalent investments. Operating funds allocated to fixed income securities may be invested in U.S. Government and Agency securities, Certificates of Deposit, Banker’s Acceptances, Corporate Bonds, Commercial Paper, and pooled income funds with similar characteristics. Operating funds allocated for equities/real estate may be invested in domestic and international common stocks listed on major U.S. exchanges and recognized over-the-counter markets, and pooled investment funds. Direct investments in real estate are allowed from long term funds when such real estate supports the University’s mission.
Management, Reporting and Monitoring
The GSURF Financial Vice-Chair and Treasurer shall review on a quarterly basis all investments. This review shall encompass:
(1) review investment performance against established objectives,
(2) review investment activity to ensure compliance with investment policy,
(3) monitor investment performance against relevant market comparisons.
The Financial Vice-Chair/Treasurer will provide a written report to the Board at each regularly scheduled meeting.
III. Technology Commercialization Funds
Investment Objectives
Investment securities are sometimes received in connection with the commercialization of patents and licenses. The purpose of the investments is to compensate GSURF for the expense of developing the intellectual property by providing an opportunity to reap future financial benefits if the commercialization efforts are successful. The investment objectives are:
(1) Maximize capital appreciation, and
(2) Protect a portion of the investment from permanent loss.
Current income and liquidity are of minimal importance.
Investment Management
GSURF may contract with investment managers to maximize earnings and benefit from pooled investment opportunities.
Investment Type,Asset AllocationandDiversification
Investments received in connection with commercialization activities can vary from common and preferred stocks to participation in joint ventures and other equity participation agreements. In some cases, stocks may be received with restrictions under the Securities and Exchange Act that prohibit GSURF from selling the investments until certain conditions have been met, generally the passage of time. To protect a portion of the investment from permanent loss, fifty percent of the value of the investment will be sold with the proceeds reinvested either as a quasi-endowment or operating funds, as determined by the Board at the time of sale. In the event the sale is restricted under the terms of the agreements, the sale will be timed when the restrictions have lapsed; provided, however, that the market priced of the stock at that time and its projected future prices shall be considerations in determining the timing of the sale.
Section 5.1 Employee Meal Policy
Meals for employee attended meetings may be paid for by or reimbursed from the GSU Research Foundation under the following circumstances:
- On-campus committee meetings (excludes regular staff/department meetings)
- Faculty/staff training functions
- Retirement functions
- Annual celebrationsfor committees
The general guidelines to be used in determining when mealsare allowedare as follows:
- If the meeting is scheduled to be less than 2 hours in length, then only light refreshments are to be served during the meeting.
- If the meeting is scheduled to be greater than or equal to 2 hours in length, and the meeting is scheduled to occur over traditional meal time hours, then a full meal may be served during the meeting.
In these cases, reimbursement will be limited to $10 per person for light refreshments or breakfast and $15 per person for lunch.
Meals for employees may also be paid for by or reimbursed from the GSU ResearchFoundation under the following circumstances:
- Entertaining official guests
- Recruiting new employees
In these two cases, reimbursement will be limited to $15 per person for breakfast, $25 per person for lunch and $50 per person for dinner.
Note that amaximum of three employees will be allowed to escort official guests or candidates being recruited during meals.
Note that the per person amounts above include any tax, tips and delivery fees associated with the food being provided to the employee.
All requests for reimbursement must be accompanied by a receipt for the meal including the date, amount and place of the meal. The request must include a full explanation of the purpose of the meal and the names and affiliation of the attendees; however descriptions may be generalized for groups larger than twelve participants.
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