Financial Operating Procedures

County Master Gardener programs represent University of Minnesota Extension. It is therefore critical that procedures for handling funds be transparent and follow sound financial management practices. Importantly, volunteer risk associated with financial management must be minimized; groups must have a consistent and safe way to manage finances.

The University requires that funds generated to support local Master Gardener Volunteer Programs be managed in the University EFS system, not personal checking or other local accounts. Moving funds to the EFS system will reduce the risk of fraud and lost funds, reduce the potential for local liability, and facilitate program donations.

Key Points

  • Sources of funding generally fall into three categories: sales, gifts, or grants

  • All funds generated and held by local Master Gardener programs in University EFS accounts will be designated for use by the local program only.

  • No fees will be charged to funds deposited in non-foundation EFS accounts.

  • Local programs commit to using the University’s EFS system to record financial transactions.

  • Program coordinators and volunteers are authorized to approve use of funds regarding their local budget.

  • An EFS expense/revenue account is set up for use.

  • The local program will use the U of M payment protocol (pre-paid debit card, reimbursements via check request, paying speakers with the speaker payment form, etc.)

  • Paid staff, including program coordinators, will use a Purchasing Card (PCard) when making purchases for the group.

  • Program coordinators and volunteers will work with the state team and regional support staff when placing vendor orders using a University pre-paid debit card.

  • In addition to a pre-paid debit card, the local program will get access to other University purchasing options and contract rates. Regional support staff or state program support staff will help expedite the process. Purchasing options will include:

    • U Market. This is the least expensive overall process. The University will make every effort to add vendors to U Market at the request of the local group.

    • Standard purchase order with a reputable supplier.

    • Check request form submitted to Regional Extension administrator to reimburse volunteers expending money on local program’s behalf.

Gifts

Local programs may process tax deductible “gifts/donations” through the University of Minnesota Foundation (UMF). This expands giving opportunities by allowing individuals and organizations to make tax-deductible donations. Funds deposited at UMF are to be used in accordance with the terms and conditions of gifts. Extension Finance will process gifts and UMF is the University’s legal entity to send thank you notes and gift receipts to donors. UMF funds will earn interest. The three types of funds are:

  • UMF Demand funds: Demand funds are established with gift monies designated for current program support. All funds are available “upon demand” and with 100% liquidity. The funds are pooled for investment purposes with other accounts intended for current use, and generally cannot be exposed to significant market risk. Therefore, they are invested in short-term fixed income securities. Demand funds receive distributions of interest based upon the short-term rates set by the UMFIA. Demand funds earn the least amount of interest of all funds. This type of fund will likely be the one used most by Master Gardener groups. No fees are charged for this fund.

  • UMF Quasi-endowment funds: Quasi-endowment funds are similar to permanent endowment funds in that expanding the principal amount is a long-term goal; however, in addition to expending income, principal may be invaded and expended for the funds’ intended purpose. The initial fund balance must meet the minimum guideline for establishing a quasi-endowment (currently $10,000). Funds are invested in the long-term pool. Annual UMF administrative fee is 1.5% of the fund's market value. Earnings vary with the market, but average approximately 4% to 5% per year.

  • UMF Endowment funds: Endowment funds are established when gift monies are intended to exist in perpetuity and the endowment income is intended to support ongoing programs. The principal of the endowment cannot be spent. The minimum fund balance for establishing a permanent endowment is $25,000. Funds are invested in the long-term pool. If available funds are not spent, reinvestment of available funds to principal is permitted on an annual basis. Annual UMF administrative fee is 1% of the fund's market value. Earnings vary with the market, but average approximately 4-5% per year.

Gift Processing

Gift processing is completed in conjunction with Extension’s Chief Development Officer and Finance Director in Extension Finance. Donations via check should be made payable to the “Regents of the University of Minnesota.” Local program staff, volunteers and regional support office staff will forward gifts and documentation (eg., letter from donor indicating purpose, email, etc.) to the Extension Finance Director for proper receipt and processing. The AFNR accountant would establish a spending budget (fund 1701) which correlates with the gift fund.

External Sales

Local programs may conduct sales (eg. plant sales, etc.) and should properly record the sales as follows:

  • Sales tax: Sales will be subject to tax and collected on taxable sales in accordance with applicable county rates (state tax (6.875%) and any other local taxes where the sale occurs) (http://www.revenue.state.mn.us/businesses/sut/Pages/SalesTaxCalculator.aspx). Sales tax is recorded when EFS deposit is made to account code 200150. Depositing of sales is coordinated with Regional staff.

  • The University of Minnesota is tax-exempt with the exceptions of "meals, served beverages, catering services and lodging." Payment (University Pcard or pre-paid debit card, or direct payment (invoice)) must be made from the University of Minnesota for this tax-exemption. Please notify vendor of this when placing an order so sales tax is not charged. A copy of the University's tax-exemption certificate may be required (send an email to mgweb@umn.edu to request a certificate).

  • Grants – Sponsored Projects

Other Information

The turnaround time from when local program requests funds to the time the funds are delivered will be reasonable.

  • Non-foundation EFS accounts: 30 days

  • Foundation accounts: From the time the Foundation receives the written request until the time the check is mailed is 4-6 weeks.

Should the local group dissolve, all remaining funds in its account(s) will be disbursed according to its receipted purpose.

A report of county account activity will be sent monthly or as requested, to the group’s Treasurer and Chair.