(Note: OLPM sections on this page may be cited following the format of, for example, "BOT.IV.A.1.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)

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A. Financial Planning and Budgeting

1. State Delegation of Authority
   1. State law (RSA 187-A:16) delegates to the Board of Trustees powers for "... the management and control of all property and affairs of the University System of New Hampshire, the University of New Hampshire (including the New Hampshire college of agriculture and the mechanical arts), and all its divisions and departments, the Keene State College, the Plymouth State University, and the Granite State College." Further, the law specifically authorizes the University System to accept and retain "all monies appropriated by or received from the government of the United States or the state of New Hampshire, all dividends and interest accruing to these institutions, all gifts of securities and property, real and otherwise, all grants and matching funds from any source, ... income received and due from all sources, including bequests, trusts, student fees and tuition charges, rents, sales, and any other income from whatever source derived, and to authorize the use thereof in such manner as the trustees may determine or as may be provided by law or by the conditions incident to the trusts, gifts, and bequests involved."
2. Trustee and Financial Affairs Committee Authority
   1. In cases of conflict among policies, the most restrictive policy will govern. Institutional policies may be more restrictive than USNH BOT policies but in no case may they be more lenient.
   2. The Board of Trustees, upon recommendation of the Financial Affairs Committee, retains sole responsibility for approval of tuition and fees, annual operating budgets, proportion of nonresident students attending UNH if greater than 25%, and certain other authorities as it deems necessary.
   3. The Board of Trustees delegates to its Financial Affairs Committee responsibility for all other financial planning and budget matters, including overseeing the development, coordination, implementation, and monitoring of all long-range financial planning for USNH and its component institutions.
   4. The Financial Affairs Committee will be engaged at the beginning of each budget cycle by reviewing and approving certain global and institution-specific preliminary financial planning and budget assumptions, parameters and targets to be used in the development of the budget and multiyear financial plan.
   5. The final assumptions, parameters and targets will be approved by the Financial Affairs Committee before the start of each fiscal year, and will include significant drivers of the budget including:
      •   global assumptions, such as state appropriation, inflation, investment earnings, and fringe benefits rate;
      •   campus parameters, such as price of attendance, aggregate increase to total non-grant non-union benefits-eligible salaries, and annual transfer to plant funds for renewal and replacement ("R&A") to address deferred maintenance;
      •   campus targets, such as operating margin and unrestricted financial resources to debt ("UFR:Debt"); and
      •   campus-specific drivers, such as enrollment, enrollment mix, financial aid, and grants revenue.
   6. Use of beginning unrestricted net resources that were not approved as part of the original operating or capital budget for the fiscal year are limited to the greater of (a) 3% of the most recent final audited institutional unrestricted financial resources ("UFR"; previously known as unrestricted net assets, or "UNA") with System-wide balances allocated, or (b) $2 million, in aggregate by institution unless approved in advance by the Financial Affairs Committee. In addition, uses of unrestricted net resources greater than $1 million that were not approved as part of the original operating or capital budget are to be communicated to the Treasurer's Office as far in advance as possible to permit accurate assessment of future cash flows and fund balance impacts.
3. Financial Affairs Committee Delegation of Authority to Chancellor
   1. The Financial Affairs Committee delegates to the Chancellor, in consultation with institutional presidents, the responsibility for determining the format, content, process, frequency and timing of institutional and USNH consolidated financial plans and budget reports to enable appropriate oversight, control and decision-making on behalf of the Financial Affairs Committee.
   2. At a minimum, the Financial Affairs Committee shall require a financial plan for each institution and consolidated USNH that utilizes at least a five-year planning horizon, is updated at least semi-annually on a 'rolling' basis, and models all planned revenues, expenses, liquidity, unrestricted financial resources and debt.
   3. Institutional and consolidated USNH financial plans and budgets will be developed on an 'all funds' basis in a format that is easily reconcilable to the audited financial statements and that will enable comparison to projected ratios commonly used by independent rating agencies to assess the financial strength, trends and debt capacity of the institutions and USNH.
4. Financial Affairs Committee Delegation of Authority to Presidents
   1. The Financial Affairs Committee delegates to the Presidents the responsibility for developing (utilizing the format and instructions as determined by the Chancellor) and maintaining multiyear financial plans and budgets that fully incorporate all financial implications of multiyear capital plans and fundraising plans, and that support and articulate with the institution's multiyear strategic plan.
   2. Presidents are responsible for recommending annual operating budgets in accordance with assumptions, parameters and targets as established by the Financial Affairs Committee.
   3. Presidents are responsible for management of operations in accordance with approved budgets, strong internal controls, and good business practices.
   4. Presidents are responsible for monitoring budget to actual results and adjusting expenditures during the year as necessary to enable achievement of approved targets. Periodic reporting of budget to actual results, projected full fiscal year results, and analysis of significant variations to budget and management actions to align operations to the approved target will be made to the Financial Affairs Committee at least three times annually.

(Note: OLPM sections on this page may be cited following the format of, for example, "BOT.IV.B.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)

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B. Internal Borrowing

1. Loans will be considered only after all other sources of funds have been reviewed and when the loan is needed to support a pressing need or special opportunity for an institution. Internal and external borrowing will be considered, and a recommendation made by the Treasurer based on the specific facts and circumstances including impact on key financial indicators, current and future debt capacity and credit ratings, eligibility for HEFA funding or state capital appropriation, cost of capital, debt issuance costs, terms of repayment, etc.
2. All borrowing must be repaid within five to 20 years. In no case may the term of the borrowing exceed the estimated useful life of the asset being financed.
3. Operating losses may not be capitalized through internal borrowing.
4. All loans must be supported by a payback schedule that defines a source of revenue that is of sufficiently low risk to reasonably assure repayment over time. Where there is any discernible risk identified in the revenue streams for repayment (e.g., fund raising or revenues from a new venture), the borrowing institution must identify appropriate backstop funding to ensure repayment of the internal borrowing.
5. All loans must be repaid with interest. The interest rate applied will be based on the rate that would have been earned had the capital been invested. For borrowings of five years or less, the interest rate may be variable or fixed and may not be less than the average short-term investment rate of return for the University System. For borrowings of more than five years, the interest rate will be fixed and may not be less than the current applicable U.S. Treasury rates as depicted on the Treasury yield curve in the Wall Street Journal.
6. Requests for internal loans are submitted to the Treasurer by the campus chief executive officer. The Treasurer reviews loan requests and submits them with recommendations to the Administrative Board.
7. Each instance of internal borrowing of greater than $5 million or with a repayment period exceeding 5 years, and any instance of internal borrowing where 100% concurrence of the Administrative Board does not exist, must be approved by the Financial Affairs Committee.
8. Each instance of internal borrowing of $5 million or less and with a repayment period of 5 years or less must be approved by the Administrative Board and Treasurer and reported on a timely basis to the Financial Affairs Committee. No loans may be made from quasi-endowment funds without the approval of the full Board of Trustees. The General Counsel will review loans to ensure that they do not conflict with state statutes.
9. Each new internal borrowing reported to or submitted for consideration by the Financial Affairs Committee will be accompanied by a statement from the Treasurer showing the current status of all outstanding internal loans and the current remaining internal borrowing capacity as determined annually as specified by the Investment Guidelines. Total internal borrowings may not cause the projected remaining cash balances to be less than projected cash needs as determined by the Treasurer. (See also BOT VI.A, Capital Planning and Budgeting, for additional stipulations with respect to project and financing approvals.)

(Note: OLPM sections on this page may be cited following the format of, for example, "BOT.IV.C.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)

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C. Internal Audit

1. Internal Audit Department Mission (Purpose)

1.1 The USNH Internal Audit Department is an objective assurance and consulting activity designed to provide the Board of Trustees and management with appraisal of the adequacy of, compliance with, and improvement for existing internal controls. The Internal Audit Department helps the USNH accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes through both audits and consulting services.

2. Internal Audit Function

2.1 The internal auditing function is an objective appraisal activity within the USNH's overall organizational structure. The Internal Audit Department is specifically authorized and directed to:

2.1.1 Have full, free and unrestricted access, consistent with all applicable laws, to all USNH functions, files, records, property and personnel. All employees are requested to assist Internal Audit activity in fulfilling its roles and responsibilities. Internal Audit will also have free and unrestricted access to the Board through its Audit Committee.
2.1.2 Determine whether management's policies, procedures and instructions are followed in a manner consistent with USNH's objectives.
2.1.3 Evaluate any matter that comes to its attention that, in the judgment of the Internal Audit Director, would require a change in policy, procedure, or instruction in order to safeguard USNH assets.
2.1.4 Issue reports to members of management who should be informed or who should take appropriate action, showing the results of the internal audit review and offering recommendations for required improvements. The Internal Audit Director will ensure that all formal audit reports are delivered to each member of the Audit Committee of the Board of Trustees.
2.1.5 Obtain and evaluate plans or actions taken to implement audit recommendations from internal or external auditors and recommend further plans or actions if appropriate.
2.1.6 Review and document the adequacy of internal controls of areas under review.

3. Independence and Objectivity

3.1 The internal audit activity will remain free from interference by any element in the organization, including matters of audit selection, scope, procedures, frequency, timing, or report content to permit maintenance of a necessary independent and objective mental attitude.
3.2 Internal auditors will have no direct operational responsibility or authority over any of the activities audited. Accordingly, they will not implement internal controls, develop procedures, install systems, prepare records, or engage in any other activity that may impair internal auditor’s judgment.
3.3 Internal auditors will exhibit the highest level of professional objectivity in gathering, evaluating, and communicating information about the activity or process being examined. Internal auditors will make a balanced assessment of all the relevant circumstances and not be unduly influenced by their own interests or by others in forming judgments.

4. Professionalism and Standards of Internal Audit Practice

4.1 The internal auditing department strives to comply with the International Standards for the Professional Practice of Internal Auditing of The Institute of Internal Auditors.
4.2 The Institute of Internal Auditors' Practice Advisories, Practice Guides, and Position Papers will also be adhered to as applicable to guide operations. In addition, the internal audit activity will adhere to USNH’s relevant policies and procedures and the internal audit activity's standard operating procedures.

5. Internal Audit Operations

5.1 The Internal Audit Director will prepare a proposed audit budget for the next year. The audit budget will outline the scope and objectives of audit programs, projects and other activities, and resources necessary to perform them. The Audit Committee will approve the audit budget and will have overall responsibility for oversight of the performance of internal audit activities.The Chancellor's Office is responsible for providing the Internal Audit Department with adequate resources to perform the scope of its responsibilities. The Chancellor, through the Vice Chancellor for Financial Affairs, will provide administrative oversight for the performance of the Internal Audit Department.

6. Quality Assurance Program

6.1 Internal Audit will strive to maintain a quality assurance and improvement program that covers all aspects of the internal audit activity.

7. Audit Committee Function

7.1 The Board of Trustees' Audit Committee has the responsibility for reviewing the activities of the Internal Audit Department to make certain it operates in accordance with this policy.

8. Audit Committee Operations

8.1 The Audit Committee will meet with USNH management, the Internal Audit Director and the external auditors at least three times per year and fulfill the duties and responsibilities of the Audit Committee of the Board as outlined in the Audit Committee Charter, Appendix 9 in the Board of Trustees On Line Policy Manual and provide the Board with a report of each meeting.

(Note: OLPM sections on this page may be cited following the format of, for example, "BOT.IV.D.1.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)

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D. External Audit

1. State Law Regarding External Auditors
   1. The Board of Trustees shall submit to the Governor, for his concurrence, the Board recommendation with respect to the selection of external auditors.
   2. The external auditors selected by the Board of Trustees shall render their report and findings to the Board of Trustees, to the Governor, and to the Legislative Fiscal Committee. Such auditors shall provide to the Governor and to the Legislative Fiscal Committee any information normally provided to the audit committee and shall respond to any request from the Governor or from the Legislative Fiscal Committee relative to the financial conditions, operations, and systems of the university that the board reviewed during its audit. (From RSA 187-A:25-a)
2. Board of Trustees' External Audit Policy
   1. The Board of Trustees shall engage an external auditing firm which will conduct an examination of the financial records of the University System at the close of each fiscal year.
   2. The Audit Committee shall establish the qualifications and standards desired and shall prescribe and carry out the selection process and make appropriate recommendations to the Board of Trustees. The selection process shall consider the firm's experience in the auditing of higher educational institutions, with particular attention to the auditing of state universities.
   3. External auditing firms shall be engaged from among the major national public accounting firms, subject to the Board's continuing satisfaction with the firm's services and with re-proposals to be reviewed after each five to seven year period.

(Note: OLPM sections on this page may be cited following the format of, for example, "BOT.IV.E.1.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)

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E. Classification of Students for Tuition Purposes (Residency Rules)

1. Basic Rule​.

1.1   All students enrolled in credit-bearing programs in any division of the University System of New Hampshire in any capacity shall be charged tuition at a rate to be determined by their domicile. Those domiciled within the State of New Hampshire shall pay the in-state rate. Those domiciled elsewhere shall pay the out-of-state rate.

​2.   Definitions.

2.1   "Parent" means:

2.1.1   The individual or individuals named on the student's birth certificate;

2.1.2   The student's legal guardian or legal custodian provided that there are no circumstances indicating that such guardianship or custodianship was created primarily for the purpose of conferring the status of an in-state student on the un-emancipated person; or

2.1.3   An individual who can claim the student as a dependent on his or her IRS 1040 tax return.

2.2   "Domicile" means a person's true, fixed and permanent home and place of habitation, to the exclusion of all others. It is the place where the person intends to remain and to which he or she expects to return when he or she leaves without intending to establish a new domicile elsewhere.

​2.3   "Veteran" means "veteran" as defined in RSA 21:50, I.

3.   Determination of Student Status.

3.1   A student shall be classified as in-state or out-of-state for tuition purposes at the time of his or her first admission to the University System unit. The decision shall be made by the dean or director of admissions of the appropriate division in the first instance based upon information furnished by the student's application and other relevant information available to the dean or director.

4.   Application Form.

4.1   Anyone applying for in-state status for tuition purposes at the same time he or she is applying for admission shall complete and submit the form "Notarized Residency Statement for New Hampshire Residents",  which shall include a sworn statement certifying that the applicant is legally domiciled within the State of New Hampshire and is a lawful resident of the United States. In the event the campus residency officer possesses facts or information indicating that a student's status should be changed from in-state to out-of state, whether or not the information was received from the student in compliance with notification requirements set forth in BOT IV.E.13, the campus residency officer can require submission of additional information establishing domicile from any in-state student prior to the commencement of each semester the student plans to attend the University System unit.

5.   Burden of Proof.

5.1   In all cases of application for in-state status for tuition purposes, the burden of proof shall be on the applicant. At the applicant's request the dean or director of admissions shall state the reason or reasons for the decision in writing.

6.   Determination of Domicile.

6.1   No person shall be eligible for in-state status unless he or she has been domiciled within New Hampshire for 12 consecutive months immediately preceding registration for the term for which in-state status is claimed and meets all other requirements for domicile.

6.2   In accordance with RSA 187-A:20-c, any veteran of the armed forces who establishes a residence in New Hampshire shall be eligible for the in-state rate immediately, and the twelve-month waiting period for establishing domicile shall not apply.

6.3   No un-emancipated person shall be eligible for in-state tuition status unless his or her parent(s), as defined in BOT IV.E.2.1, shall have established domicile in this state.

6.4   No person shall be eligible for in-state tuition status unless he or she establishes that his or her residence in New Hampshire is for some purpose other than the temporary or primary one of obtaining an education.

6.5   When a person has established eligibility for in-state tuition based on his or her parent's domicile and the parent subsequently establishes domicile outside of New Hampshire, the person shall be eligible for in-state tuition for one academic semester following the academic semester during which the parent established out-of-state domicile. The student shall notify the campus residency officer of any changes affecting the student's eligibility for the in-state tuition rate, pursuant to BOT IV.E.13.

6.6   All evidence relevant to determining domicile shall be considered, including the following, which shall be relevant but not necessarily conclusive:

6.6.1   Payment or non-payment of any tax levied by the State of New Hampshire or any political subdivision on persons resident or domiciled thereon;

6.6.2   Residence reported on any federal or state tax return;

6.6.3   Registration of one's automobile;

6.6.4   State issuing one's driver's license;

6.6.5   Receipt of support from parents who are resident or domiciled outside the State of New Hampshire;

6.6.6   Voting residence;

6.6.7   Claim by any non-resident parent that the applicant is a dependent for tax or any other financial purpose;

6.6.8   Regular departure by an applicant from the State of New Hampshire during recesses or vacations from the University System unit;

6.6.9   The filing of any claim for benefits under any policy of insurance or any federal, state or local benefit legislation based on residence or domicile outside the State of New Hampshire; or

​6.6.10   Status in some other state which would qualify a person for in-state tuition in that state.

7.   Emancipation.

7.1   No person shall be deemed to be emancipated unless his or her parent, as defined in BOT IV.E.2.1 above, has entirely surrendered the right to the care, custody and earnings of such person and unless his or her parent is no longer under any legal obligation to support or maintain such person or, having supported and maintained such person even though under no legal obligation to do so, has ceased to support or maintain such person. Emancipation shall not be found unless all such tests are met.

7.2   Evidence of the following shall be submitted by an applicant and requested by the dean or director of admissions:

7.2.1   Lack of financial support of the person by the parents;

7.2.2   Lack of contribution by the parents to any earnings or other income received by the person;

7.2.3   Failure of the parent to claim the person as a dependent on his or her income or other tax returns;

7.2.4   Establishment by the person of a domicile separate and apart from that of the parent; and

7.2.5   Failure of the person to return to the home of the parent during vacations and other recesses from school.

8.   Presumptions.

8.1   Unless the contrary appears to the satisfaction of the dean or director of admissions in individual cases, the following presumptions shall prevail:

8.1.1   A student shall be presumed to be emancipated from his or her parent(s) when he or she reaches the age of 24;

8.1.2   The domicile of an un-emancipated person shall be that of his or her parent(s), as defined in BOT IV.E.2.1.

8.1.3   The domicile of any person who first enters the University System from the domicile of his or her parent(s), as defined in BOT IV.E.2.1, above, shall be that of the parent until he or she abandons such domicile and, for purposes other than that of education, acquires a new domicile;

8.1.4   The domicile of any person who first enters the University System from a domicile other than New Hampshire shall be such a domicile until he or she abandons such domicile and, for purposes other than that of his or her education, acquires a new domicile; and

8.1.5   Attendance at a unit of the University System or at any other educational institution in this state in itself shall not be evidence of intention to establish or establishment of a domicile in this state.

9. Waiver.

9.1   Nothing contained in these rules shall preclude the dean or director of admissions or campus residency officer from waiving any requirements hereof under special circumstances in individual cases. Waivers shall not be routinely granted.

10.   Military Personnel.

10.1   A member of the Armed Forces of the United States stationed in this state under military orders shall be entitled to classification for himself or herself, his or her spouse and his or her dependent children as in-state for tuition purposes so long as the member remains on active duty in this state pursuant to such orders.

10.2   Individuals receiving educational assistance under 38 U.S.C. § 3001 et seq. or 38 U.S.C. § 3301 et seq., including children or spouses of active service members or veterans eligible for educational assistance under 38 U.S.C. § 3311(b)(9) or 38 U.S.C. § 3319, shall be eligible for the in-state rate while living in this state.

11.   Review of Student Status.

11.1   Any student who is aggrieved by the decision of the dean or director of admissions classifying him or her as an out-of-state student for tuition purposes may appeal to the campus residency officer on forms and in accordance with procedures which shall be made available to the student in the office of the dean or director of admissions. Any student aggrieved by the campus residency officer's decision may appeal that decision to the University System's Residency Appeals Board (the "Board").

11.2   The student may present to the Board such additional evidence as he or she deems appropriate in processing the appeal and may appear before the Board and be heard. The decision of the Board shall be the final decision of the University System.

11.3   The University System Residency Appeals Board shall be comprised of four members who shall be designated by the presidents of each of the System's institutions. At the first meeting of each academic year, the Board members shall designate one member to serve as chair for the remainder of the academic year and until a successor has been designated for the following year. The chair may delegate authority to chair particular meetings of the Board to any member of the Board.

12.   Change in Status.

12.1   Any student who has, on his or her first admission to the University System, been classified as out-of-state for tuition purposes may apply to the campus residency officer for a change in status.

12.2   Students applying for a change in status shall file their applications with the campus residency officer prior to the first day of the semester for which the student is seeking the in-state tuition rate. Applications shall be considered in the chronological order in which they are presented. No changes approved during a semester shall be effective until the beginning of the next following semester. However, where a change of status from out-of-state to in-state has been denied by the campus residency officer prior to the commencement of a semester, and that decision is reversed by the Residency Appeals Board during the semester, the student's status shall be effective as of the commencement of the semester.

12.3   In the event the campus residency officer possesses any fact or information indicating that a student's status should be changed from in-state to out-of-state, the student shall be informed in writing of the change of status. The student can appeal the decision of the campus residency officer as set forth in BOT IV.E.11.1. No such change made by the campus residency officer after the commencement of any semester shall be effective until the beginning of the next semester. Change to out-of-state status made by the campus residency officer prior to the commencement of any semester, but reversed during the semester by the Residency Appeals Board shall be effective as of the commencement of the semester.

​13.   Student Responsibility to Notify Institution of Changes in Status.

13.1   It shall be the responsibility of students on all campuses to notify the campus residency officer of any change in their eligibility for the in-state tuition rate as a result of:

13.1.1   Change in the domicile of their parents; or

13.1.2   Change in their own domicile.

13.2   Failure to notify the campus residency officer of any changes affecting eligibility for the in-state tuition rate shall subject a student to disciplinary action under the provisions of the code of student conduct or to such actions that may be available under law, or both.

(Note: OLPM sections on this page may be cited following the format of, for example, "BOT.IV.F.1.1.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)

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F. Student Fees

1. Use of Student Fees to Engage Legal Representation for Students
   1. No student fees shall be used for the purpose of engaging representation for, or providing advice to, any student in any way relating to, or arising out of, a matter that is:
      1. Criminal in nature (i.e., a charge, whether the original charge or otherwise) that is at the Class B misdemeanor level or above; or
      2. Against a student who has a criminal record that includes an offense at the Class B misdemeanor level or above, committed while a student at a USNH institution; or
      3. Related to the theft, damage, or destruction of property belonging to a USNH institution, the state, a municipality or other political subdivision, or any private party; or
      4. Adverse to the interests of any USNH institution which is, or is reasonably likely to become, a party to the matter.
2. Use of Student Fee Reserves to Pay Municipal Expenses
   1. Under its plenary authority to manage and control the property and affairs of USNH and it component institutions, including its authority to establish, collect, and expend student fees, the Board delegates to each President the following authority.
   2. Should a President determine that reimbursement is appropriate, he or she is authorized to use the student fee reserves available at his or her institution for the purpose of paying the expenses incurred by a municipality relating to or arising out of a student disturbance.
   3. The authority to so use student fee reserves shall extend only to then-current reserves. In no case shall future student fees or student fee reserves be pledged to make such payments.

(Note: OLPM sections on this page may be cited following the format of, for example, "BOT.IV.G.1.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)

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G. Quasi-endowments (also known as Funds Functioning as Endowments)

1. Trustee Delegation of Authority
   1. The Board of Trustees delegates to its Financial Affairs Committee responsibility and authority for final approval of all interfund transfers, including transfers of current, loan and plant funds to establish or add to quasi-endowment funds.
   2. The Financial Affairs Committee delegates to the Treasurer responsibility and authority for approval of transfers to quasi-endowments in amounts of $1,000,000 or less upon request from a President or the Chancellor with respect to their institution's identified funds. It is the intent of this policy to aggregate like transactions when determining the applicable approval procedure.
2. Definition of and Accounting for Quasi-endowment Funds
   1. Quasi-endowments are funds that have been transferred from another source to be retained and invested in the Consolidated Endowment Pool (CEP) with the true endowment at the direction of the Financial Affairs Committee (or in the case of amounts under $1,000,000 at the direction of a President or the Chancellor). Quasi-endowments differ from true endowments, which are amounts received by USNH subject to a requirement by a donor or other external provider that the funds be invested in perpetuity.
   2. The original source of quasi-endowment funds may be current restricted, current unrestricted, loan, or plant funds. If the original source of funds was restricted as to purpose by a donor or other external resource provider, the quasi-endowment will be classified as restricted and the use of the annual distribution of endowment earnings will be similarly restricted.
   3. Ordinarily the Treasurer will not authorize the establishment of a quasi- endowment of less than $25,000 unless there is a plan to build the fund to at least $25,000 through future transfers or a commitment to reinvest the annual earnings in the fund until it reaches a $25,000 balance.
3. Revocation of Quasi-endowment Funds
   1. Because a quasi-endowment results from an internal designation as opposed to a legally binding external requirement, a quasi-endowment may be revoked in the future. A revocation of a quasi-endowment of any amount requires the vote of the Financial Affairs Committee.

(Note: OLPM sections on this page may be cited following the format of, for example, "BOT.IV.H.1.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)

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H. Investment Policy

1. State Delegation of Authority
   1. State law (RSA 187-A:16) delegates to the Board of Trustees authority and responsibility for the management and control of all income received and due from all sources, including the authority to use the same in such manner as the Trustees may determine.
   2. State law (RSA-187-A:17) states that the Governor, the Treasurer of the University System, and 3 members of the Board of Trustees, to be selected by the Board of Trustees, shall constitute a finance committee responsible for the investment of the University System institutions' funds.
2. Trustee Delegation of Authority
   1. The Board of Trustees delegates to its Investments and Capital Planning Committee the responsibility and authority for all pooled cash and investments for (a) development of formal investment guidelines, to be reviewed and approved by the Committee at least annually; (b) selection, assessment and termination of endowment investment advisors and managers; (c) oversight of specific investments and methods of investing; (d) recommendation to the Financial Affairs Committee for the percentage and payout methodology used to determine amounts to annually distribute from endowment for operations; and (e) periodic assessment of investment strategy and results, including asset allocation, risk, return and liquidity, to ensure investment of USNH funds in accordance with the statement of investment principles below. The Investments and Capital Planning Committee delegates to the Treasurer the responsibility and authority for (a) developing and maintaining appropriate staffing, systems, procedures and controls to carry out these policies and the investment guidelines; (b) daily management of cash and investment transactions and relations with external advisors, managers, funds, banks, and other financial services firms; (c) monitoring general economic and financial conditions, determining the short-term and long-term cash needs of the University System and its institutions, and effecting timely tactical decisions to meet the best interests of the University System in the judgment of the Treasurer; (d) support and advise the Board, as appropriate, on USNH capital investments; and (e) from time to time recommending modifications to policies, guidelines, processes and advisors as appropriate.
3. Policy Scope
   1. This policy covers pooled cash and investment assets under the direct control of the USNH Board of Trustees. It does not cover non-pooled investments where affiliated boards have primary fiduciary responsibility for investment of certain funds (including UNH Foundation, and Keene Endowment Association). This policy also does not cover specifically-invested funds for which USNH is the beneficiary but that cannot be pooled together due to donor, state or other legal restrictions prohibiting commingling (including Elliott Trust Fund, bond proceeds invested by the Bond Trustee, and certain UNH Alumni Association funds).
4. Investment Principles
   1. State law (RSA 292-B:3 and 292-B:5) also known as the Uniform Prudent Management of Institutional Funds Act ("UPMIFA"), forms the conceptual framework for USNH investment policies, guidelines and procedures, for both endowment and non- endowment funds. UPMIFA states that an institution may delegate management and investment functions to its committees, officers, or employees as authorized by law of New Hampshire. Other applicable provisions of UPMIFA require that:
      1. Each person responsible for managing and investing USNH funds shall do so with loyalty to USNH, in good faith and with the care an ordinarily prudent person in a like position would exercise under similar circumstances.
      2. Factors be considered in managing and investing USNH funds, including general economic conditions; the possible effect of inflation or deflation; the role that each investment or course of action plays within the overall investment portfolio; the expected total return from income and the appreciation of investments; other resources of USNH; and USNH needs to make distributions and to preserve capital.
      3. Investment decisions about an individual asset must be made in the context of the USNH endowment or non-endowment portfolio of investments as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the portfolio and to USNH.
      4. USNH investments of its endowment and non-endowment funds shall generally be diversified.
      5. A person that has special skills or expertise, or is selected in reliance upon the person's representation that the person has special skills or expertise, has a duty to use those skills or that expertise in managing and investing USNH funds.
      6. If USNH chooses to delegate to an external agent the management and investment of endowment or non-endowment funds, USNH shall act in good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances, in: selecting an agent; establishing the scope and terms of the delegation consistent with the purposes of the funds; and periodically reviewing the agent's actions in order to monitor the agent's performance and compliance with the scope and terms of the delegation.
   2. Other investment principles delineated in the formal investment guidelines to be adopted by the Investments and Capital Planning Committee include identification of risks; determination of tolerance of risk; asset allocation targets; diversification of investment strategy; diversification of investment managers; permitted investment securities; collateralization requirements; safekeeping of assets; ethics and conflicts of interest; measurement of investment performance; and periodic monitoring and reporting.

(Note: OLPM sections on this page may be cited following the format of, for example, "BOT.IV.I.1.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)

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I. Ancillary Financial Policies

1. Receipt of Negotiable Instruments
   1. All gifts received in the form of negotiable instruments shall be immediately forwarded to the University System of New Hampshire Treasurer for pricing through recognized reference publications or brokers as of the date of transfer of title, and immediately offered for sale through a registered broker by the Treasurer.
   2. When retention of the stock is requested by the donor, gifted instruments may be dealt with in accordance with the following procedures:
      1. For gifts of stock valued at $25,000 or less, the Chair of the Investment Committee, at his/her discretion, may invoke an exception to policy and retain the gifted stock in its original form for a period determined by the Chairman.
      2. For gifts of stock valued in excess of $25,000, the Chair of the Investment Committee through the Treasurer shall poll the Committee as to the donor's request before invoking an exception to policy.
      3. All action taken by the Chair of the Investment Committee and the Committee shall be reported to the Board of Trustees.
2. Holding Equity in Start-up Companies
   1. The Board supports the transfer of technology and intellectual property from USNH institutions to industry by a variety of means including the granting of licenses to start-up companies in exchange for equity interests. Subject to the conditions established in this policy, USNH and its component institutions may acquire and hold equity interests in one or more start-up companies in exchange for the transfer of technology and other intellectual property.
   2. The Chancellor, in consultation with the Administrative Board shall establish such System-wide policies as may be necessary to ensure the prudent management of equity interests acquired or held under this policy.
   3. The Presidents shall establish such institutional policies as may be necessary to ensure the prudent management of equity interests acquired or held under this policy at their respective institutions.
      1. Said institutional policies, at a minimum, shall address the following issues:
         •   Conflicts of interest
         •   By whom the decision to divest is made
         •   On what basis the decision to divest is made
         •   Distribution of the proceeds of divestiture
      2. In no case shall an institution hold an equity interest after the start-up company's initial public offering, or as soon as permitted under governmental regulations.
   4. On or before September 1 of each year, the President of any institution holding an equity interest in a start-up company at any time during the previous fiscal year shall report those holdings to the USNH Treasurer including, at a minimum, the date acquired, number of shares, book value, and name of the company.
   5. On or before November 1 of each year, the USNH Treasurer shall report to the Finance Committee on Investments the information collected pursuant to the previous section.

(Note: OLPM sections on this page may be cited following the format of, for example, "BOT.IV.J.1.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)

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J. Gift Acceptance Policy

1. State Delegation of Authority
   1. State law (RSA 187-A:16) delegates to the Board of Trustees authority and responsibility for the management and control of all income received and due from all sources, including the authority to use the same in such manner as the Trustees may determine.
   2. Further, State law states that the Trustees are authorized to "accept legacies and other gifts to or for the benefit of the university or any of its divisions or departments" and "...all gifts of securities and property, real and otherwise..."
2. Trustee Delegation of Authority
   1. The Board of Trustees delegates to the President of each University System institution responsibility and authority for approving, overseeing and acknowledging all unrestricted cash gifts, as well as all restricted or conditional gifts, gifts of securities, deferred gifts, and gifts of real or personal property, in accordance with this and other relevant USNH policies.
   2. The USNH Treasurer will notify the Executive Committee of the USNH Board of Trustees of any gift with a value of $10 million or greater prior to any public announcement.
3. General Policy on Gift Acceptance
   1. Definitions
      1. A gift is a voluntary, irrevocable transfer of assets (e.g., cash, securities, real or personal property) made by a donor without any expectation or receipt of direct economic benefit or tangible compensation (i.e., goods or services) from the recipient commensurate with the worth of the gift. In other words, a gift is a nonexchange transaction where there are no reciprocal transfers for approximate equal value.
      2. A grant, contract, or other sponsored agreement is not a gift. It is a written agreement representing the voluntary transfer of money or property by a sponsor in exchange for the specifically enumerated performance of services (i.e., an exchange transaction), often including rights and access to results of this performance, and always including some formal financial and/or technical reporting by the recipient as to the actual use of money or property provided. The agreement is enforceable by law, and performance is usually to be accomplished under time and fund use constraints with the transfer of support revocable for cause.
   2. Gift Acceptance Committees. Each University System component unit shall establish a Gift Acceptance Committee consisting of officials from the institution. At a minimum, the institutional Committees shall include the component unit's Chief Financial Officer and Chief Advancement Officer, or their designees. The role of the Gift Acceptance Committee is to review and recommend gifts for final approval by the President.
      1. Prior to acceptance of any complex or unusual gift, any gift of real property, or any gift with a gross value in excess of $100,000 other than cash and/or publicly-traded securities, the Gift Acceptance Committee will review the facts and circumstances surrounding restrictions, conditions, pledge schedules, and other terms to determine whether accepting the gift is in the best long-term interests of the institution. To be acceptable, gifts must be consistent with the mission, purpose, and priorities of the institution, and comply with all applicable laws, regulations and USNH policies.
      2. Prior to acceptance of any complex or unusual gift, any gift of real property, or any gift with a gross value in excess of $1,000,000 other than cash and/or publicly-traded securities, the Gift Acceptance Committee shall consult with the USNH Treasurer and General Counsel in its review and acceptance under 3.2.1 above. Institutional Gift Acceptance Committees are encouraged to seek consultation from the USNH General Counsel and the USNH Treasurer in all instances whenever there is a question.
   3. Gift Acceptance Policies and Procedures. Each University System component unit (i.e., University of New Hampshire, Keene State College, Plymouth State University, Granite State College, UNH Foundation, Keene Endowment Association, etc.) is responsible for developing their own gift acceptance policies and procedures consistent with this USNH policy. Institutional policies may be more restrictive than USNH policy but not less restrictive. Institutions are encouraged to seek review of their policies and procedures by the USNH General Counsel and USNH Treasurer.
      1. USNH component unit policies shall provide for the sound administration of current use gifts, endowed funds, capital gifts and planned giving programs at USNH, and ensure that gifts and donor recognition are consistent with the purpose and mission of USNH.
      2. For all pledges, conditional gifts, restricted gifts, and gifts of real or personal property, USNH component unit policies shall require written documentation such as a memorandum of understanding from the donor that specifies the required use of the contributed funds, conditions associated with the pledge (if any), and expected payment schedule of the pledge to USNH. This documentation shall be signed by the donor and all required campus representatives prior to public announcement or recording in the official institutional development records or the USNH financial statements.
      3. Acceptance of a gift by the institution is demonstrated by the full execution of the Memorandum of Understanding, the formal acknowledgement of the gift by the institution, the public announcement of the gift, the recording of the gift in the official records, or any of the above.
      4. All gifts naming facilities or programs shall comply with USNH BOT policy III. H.
      5. All gifts of real and personal property must comply with USNH BOT policy VI.B.
      6. All gifts of negotiable instruments must comply with USNH BOT policy IV.I.1.
      7. All conditions and restrictions of gifts must comply with USNH BOT policies on conflict of interest III.I and III.L.
      8. USNH institutions will follow the Internal Revenue Code and Regulations regarding the acknowledging and receipting of charitable contributions.
      9. USNH institutions shall comply with IRS reporting obligations including, but not limited to, the following forms, as required: Form 1098-C - Contributions of Motor Vehicles, Boats, and Airplanes; Form 8282 – Donee Information Return (Sale, Exchange or Other Disposition of Donated Property); Form 8283 – Noncash Charitable Contributions.

(Note: OLPM sections on this page may be cited following the format of, for example, "BOT.IV.K.1.1". These policies may be amended at any time, do not constitute an employment contract, and are provided here only for ease of reference and without any warranty of accuracy. See OLPM Main Menu for details.)

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K. Gift Counting Policy

1. State Delegation of Authority
   1. State law (RSA 187-A:16) delegates to the Board of Trustees authority and responsibility for the management and control of all income received and due from all sources, including the authority to use the same in such manner as the Trustees may determine.
   2. Further, State law (RSA 187-A:16 VII and VIII) states that the Trustees are authorized to "accept legacies and other gifts to or for the benefit of the university or any of its divisions or departments" and "...all gifts of securities and property, real and otherwise..."
2. Introduction
   1. Purpose
      1. The purpose of this policy is to provide guidance on valuation methods to be used when counting different types of gift revenues accepted by the campus. Note that there may be instances where gift values reported using the below criteria vary from the revenue amount recorded for the gift in the USNH financial system. In all instances the USNH financial system value will represent the gift total determined using Generally Accepted Accounting Principles for governmental entities.
   2. Gift Counting Policies and Procedures
      1. Each Each University System component unit (i.e., University of New Hampshire, Keene State College, Plymouth State University, Granite State College, UNH Foundation, Keene Endowment Association, etc.) is responsible for developing their own gift counting policies and procedures consistent with this USNH policy. Institutional policies may be more restrictive than USNH policy but not less restrictive. Institutions are encouraged to seek review of their policies and procedures by the USNH Treasurer.
   3. Appraisals
      1. The value of certain gifts must be determined by a qualified independent appraisal as described below. In such instances the cost of the appraisal should be paid by the donor.
3. ​Valuation Methods Required for Counting Specific Types of Gifts
   1. Gift Counting Standards
      1. Gifts of Cash and Securities
         1. Gifts of cash shall be reported at full value as of the date of receipt.
         2. Gifts of publicly-traded securities should be valued at the average of the high and low quoted selling prices on the date the donor relinquishes control of the assets to USNH. The date control has been relinquished by a donor depends upon the method of delivery of the securities to USNH. Internal Revenue standards will be followed in determining whether or not a gift has been made.
         3. Gifts of closely held stock will be valued at the per-share cash purchase price of the closest transaction, if available and reasonably recent. If the total value using this method exceeds $10,000 a qualified independent appraisal of the gift must be done prior to receipting the donor. In such cases the gift should be counted at the appraised value.
      2. Gift Pledges
         1. Pledges of future gifts in the form of cash or publicly-traded securities, whether for endowment or current use gifts, may be counted at the full value of the future payment stream as of the date the signed pledge commitment is received.
      3. Gifts-in-Kind - Real and Personal Property
         1. All gifts of real property including land, buildings, and easements, must be accompanied by a qualified independent appraisal which will be used to determine the value of the gift.
         2. Gifts of personal property should be counted at their fair market value. If the fair market value as declared by the donor is $5,000 or less, the gift may be counted at that amount after review by a qualified expert on the faculty or staff of the institution. Gifts of equipment shall generally be counted at their educational discount value which, for purposes of these gift counting standards, shall be deemed to be fair market value.
         3. If the value of a gift of personal property is deemed to exceed $5,000, a qualified independent appraisal of the gift must be done prior to receipting the donor. In such cases the gift should be counted at the appraised value.
      4. Gifts of Royalties, Patents and Copyrights
         1. Gifts of royalties from property that USNH does not own (possible examples could be oil, gas and mineral rights) should be counted as a gift each time a separate royalty payment is received. No pledge should be counted in anticipation of receipt of future royalty payments as there is no guarantee of the amount or continuation of such payments.
         2. The fair market value of certain forms of intellectual property rights such as patents, copyrights, or software under development may not be known or readily ascertainable at the time the gift is made. In such instances, the value of the gift shall be recorded and reported in the year the value becomes known.
      5. Planned Giving
         1. Planned giving arrangements include gifts from Charitable Remainder Trusts, Charitable Lead Trusts, Pooled Income Funds, Charitable Gift Annuities, and gifts to separately-held trusts with directives to distribute periodic payments to USNH. The value of these gift instruments is generally counted at the discounted present value of the related payment streams. Most often these values can be determined using existing software programs, or with the assistance of third-party administrators. Due to the complexity and unique terms of individual arrangements, such calculations should be reviewed by the USNH Treasurer whenever there is a question of valuation.
      6. Gifts of Retirement Plan Assets
         1. USNH may be named as the beneficiary of individual retirement accounts. USNH institutions may count pledges of retirement plan assets if the following requirements have been satisfied: (i) the donor is at least 65 years of age at the time of the pledge; (ii) USNH has a means to establish a credible estimate of the future value of the retirement plan account at the time the commitment is made; and (iii) USNH must receive verification of the commitment in the form of a letter from the donor or donor's representative.
      7. Testamentary Gifts
         1. USNH may also be named as a beneficiary in individual wills. USNH institutions may count testamentary pledges if the following requirements have been satisfied: (i) the donor is at least 60 at the time of the pledge; (ii) if the pledge is a joint pledge to be paid at the death of a survivor, all named survivors must also be at least 60 at the time of the pledge; (iii) the commitment must be for a specified amount or specific asset or assets or, if based on a percentage of the estate, the donor must be willing to provide a credible estimate of the value of the estate at the time the commitment is made; and (iv) the commitment must be verified through one of the following forms: a letter from the donor or donor’s attorney, a deferred pledge agreement or a contract to make a will.
      8. Gifts of Life Insurance
         1. USNH institutions may count commitments of life insurance gifts if the institution is the owner and irrevocable beneficiary of the policy using the following valuation methods.
            1. Paid-up life insurance policies will be valued at the cash surrender value, or at the discounted present value of the policy's death benefits provided the donor is age 60 at the time of the pledge. If a policy is a 'second to die policy', each insured must be at least age 60 at the time of the pledge.
            2. A life insurance policy that is not fully paid up on the date of pledge may be counted at the existing cash surrender value. Note that increases in the cash surrender value will not be counted until the time the policy benefit is received. In addition, where the payment of premiums is pledged over a fixed period, the discounted value of premiums to be paid may also be counted as part of the pledge.
            3. Premiums paid for policies owned by the institution may also be counted as current gifts.
4. ​Fundraising Reports
   1. Grant income from private, non-government sources may be counted in fundraising reports only if the award is a non-exchange transaction and significant effort of Advancement staff was spent in securing the award.
   2. Amounts reported in internal fundraising reports should agree with revenues reported annually for Strategic Indicator 16, "Gifts by Donor Category and Intention".