What is a special purpose fund?
Special purpose funds relate to the grants and donations accepted by the University to finance research or teaching projects, fellowships, scholarship awards and prizes, and also to funds received from sources such as endowments, consultancies and publications. ANU encourages members of the academic staff to seek funds from external sources to supplement moneys received from government appropriations.
Special purpose funds are moneys under the control of ANU, and as such are subject also to general ANU financial and administrative policies and procedures, including the Delegations of Authority and thePurchasing Policies and Procedures. The day-to-day management of a specially funded activity lies with the member(s) of the academic staff who is (are) responsible for the activity together with the appropriate business officer.
Types of special purpose funds
Grants for sponsored research are received through a competitive process and, while the research may be basic or strategic, it is usually not concerned with immediate commercial outcomes.
Collaborative research & development
Collaborative research and development grants involve jointly sponsored research projects between ANU and a partner.
Contract research results from a direct request by industry or a government agency, from competitive bidding, or from the production or development of a product of direct interest to an agency or industry.
A consultancy involves buying the skills and expertise of staff and equipment to work on a specified project.
The Endowment for Excellence
The Endowment for Excellence has been established by The Australian National University to provide an independent source of income for the University's many long-term activities. Further information, including Statutes, Rules and operating Guidelines can be obtained from the Development Office.
Gifts for specified purposes
Monetary gifts to ANU for a variety of purposes, as specified by the donor and agreed to by ANU, are exhausted by their use. They are distinguished from endowment funds in that there is no notion of preserving capital.
Income earned on Special Purpose Funds cash balances and investments may be used for specific teaching and research projects.
Sale of goods and services
Funds received from the sale of goods and services include:
- conferences (other than those sponsored externally);
- sale of publications;
- continuing education activities;
- construction of apparatus;
- licensing fees;
- sitting fees; and
- hire and lease fees.
Division in the ledger
Special purpose funds constitute a major and distinct area of ANU income generation and as such the accounting for them is maintained separately from other financial transactions. The allocation of funds to these segments principally reflects contractual and accountability requirements of ANU to report to granting bodies. The balances for special purpose funds are maintained for the life of the fund. Assets, liabilities, and capital balances are carried forward in the opening balance. Balances for Income and Expenditure are also carried forward.
All funds received by the University are allocated a unique general ledger code (GLC) combining a fund, department and project (subproject if required). For more information on GLC codes used by the University, please follow the link to the fund code web page in the related links panel, on the right hand side of this web page. The following codes are used for special purpose funds.
Funds are identified in the S Ledger segment where:
- There is a contractual obligation to undertake a task or series of tasks that has been funded by an external body;
- ANU is contractually bound to provide ongoing reports of the projects progress; and / or
- ANU is obligated to return to the donor (external body) any balance of funding that had not been expended in the terms of the contract.
Funds appearing in this segment are treated as income in the year of receipt and any return of unexpended funds is recorded as an expense in the year that reimbursement occurs. Typically the 'S' ledger segment records income and expenditure relating to grants for:
- sponsored research; and
- collaborative research and development.
Q Funds – under review August 2018
Q ledger segment funds may not have requirements for ANU to acquit expenditure within previously contracted guidelines, however there may still be a requirement for financial reporting on how these funds have been employed.
Typically the 'Q' ledger segment can record income and expenditure arising from:
- contract research;
- consultancies and other fee for service type contracts; and
- the sale of goods and services;
Funds appearing in this ledger segment have a requirement to have the capital preserved and relate to The Endowment for Excellence.
The cash balance of funds in this segment reflects ownership by ANU and forms part of the reported equity of ANU.
The funds in the 'E' ledger are typically divided into four categories:
- Scholarships and prizes;
- The ANU Excellence and Renewal Program;
- Named foundations to support defined disciplines or activities;
- Inter-institutional relationships for activities of mutual interest with other institutions;
Funds in the 'E' ledger come from individuals, institutions, corporations, professional practices and philanthropic organisations. Individuals may also make bequests from their estate.
Philanthropic activities are governed and accounted for in either the perpetual (E) ledger or term (D) ledger. Philanthropic income refers to all gifts to the University. A gift received through an application process differs from a grant under the following criteria:
- The source of the income is eligible: and,
- The nature of the income meets the definition of philanthropic intent: The income must be owned and controlled absolutely by the receiving institution once it is received.
A gift has the following characteristics:
- Made to a Deductible Gift Recipient (the ANU holds Deductible Gift Recipient status);
- Transfer of money or property;
- Made voluntarily;
- No material benefit, advantage or control is received by the giver; and
- There is no requirement for unspent monies to be returned.
Activities excluded from special purpose funds
The University's powers to administer moneys are limited by its Act. Moneys belonging to external agencies, incorporated bodies and bodies with their own ABN's can not be managed by ANU, or included in its financial statements.
Gifts in kind
Gifts in kind other than financial ones (cash and securities) are part of general ANU activities and are therefore not included in, nor managed through, special purpose funds.
Contingencies and savings from recurrent funds are not part of special purpose funds and should not be transferred into the Q or S ledger. Cash transfers to the Q ledger from the R ledger are not permitted unless approval has been received from the Director F&BS or if the transfer is for payment of goods and services.
Examples of goods and services that are allowed are sample analysis, equipment usage and repairs. These transfers are only allowed if the salaries and consumables for the laboratory, workshop or equipment related to the goods and services are charged to the same Q fund to which the income is being journalled.
Moneys set aside for capital items, such as building funds or for the purchase of specialised or large equipment items, are not part of special purpose funds.
ANU business units
Special purpose fund activities are distinguished from ANU business units in that the latter are predominantly self-funding, self-supporting, on-going activities of the University. ANU business units operate under the University's control to provide certain goods and services for students, staff and members of Convocation.