Mississippi Administrative Code › Title 8 - Education - Institutions of Higher Learning › Part 3 - Bylaws › Chapter 5 › Section 8-3-5-301.0806 - University Foundation/Affiliated Entity Activities

Current through June 25, 2024
A. Purpose of
				Foundations and Similar University Affiliated Entities:
This policy shall apply to the relationship between
				  Mississippi public universities ("universities") and university development
				  foundations, research foundations, athletics foundations, alumni associations
				  and all other similar entities affiliated with any of the eight state
				  universities (collectively referred to as the "Foundation/ Affiliated Entities"
				  or "Entities").
The Board of Trustees (hereinafter "Board" or "IHL")
				  recognizes that such Entities have played and continue to play an important
				  role in providing financial and other support for its institutions. This
				  support has assisted the institutions in achieving a level of excellence not
				  possible through state funding and tuition alone. While the Board of Trustees
				  recognizes and appreciates the contributions made to higher education by such
				  foundations and similar entities, the Board of Trustees reaffirms that the goal
				  of the Entities is not to replace necessary support from the state.
The Board of Trustees also acknowledges that the independent
				  nature of the Entities provides flexibility to state universities in fiscal
				  management and responsiveness.
The primary purpose of the foundations and other entities
				  affiliated with the state universities is to engage in raising and managing
				  funds and/or other activities consistent with the mission and priorities of
				  their respective affiliated institutions, as determined by the Institutional
				  Executive Officer (the "IEO") of each. Each Entity is expected to have a
				  mission statement relevant to this purpose and to adopt policies, plans, and
				  budgets designed to achieve that mission.
The Board fully recognizes the importance to the
				  universities and to the Entities of preserving the confidentiality of
				  information related to donors or potential donors. Providing appropriate
				  confidential treatment for information related to donors who have voluntarily
				  provided funds to support the state universities is in the best interests of
				  this state and its citizens Thus, it is the policy of the Board that its
				  oversight of the relationship between the foundations and the universities
				  shall be accomplished in a manner that will effectively and appropriately
				  preserve and protect the confidentiality of such information to the fullest
				  extent possible which is consistent with the duty of the universities and the
				  IHL to assure that assets intended to benefit the state universities are
				  appropriately and effectively managed and utilized.
B. Relationship Between Board and Affiliated
				Entities
As provided in Miss. Const. Art. 8, Section 213-A and
				  Section 31-101-1 of the Miss. Code Ann. of 1972, as amended (the "Miss Code"),
				  the Board of Trustees has governing authority over the eight state
				  universities. Under such authority, the Board of Trustees has responsibility
				  for ensuring that the public interest is served by any individual or
				  organization that is established to support one of the eight state
				  universities.
The Board recognizes that the Entities are not state
				  agencies. The Entities have their own governing authorities. The Board
				  recognizes that it does not have the power to exercise governing control over
				  the Entities.
While the Board of Trustees does not have the power or
				  authority to exercise governing control over the Entities, the Board has the
				  full authority to establish the terms under which state universities will
				  contract with private organizations. That is particularly necessary with
				  respect to these Entities, since they, or some of them, will solicit and manage
				  funds on behalf of and for the benefit of the state universities, and may use
				  the name, logo, or other insignia identified with the state universities. The
				  Board has the authority to require that any organization that manages funds for
				  any state university, or whose name is associated with a state university under
				  the governance of the Board, must adhere to ethical standards appropriate for
				  such organizations and must properly manage, utilize and account for funds
				  contributed to or for the benefit of the universities.
To ensure the independence of the affiliated Entities, no
				  member or employee of the Board of Trustees of State Institutions of Higher
				  Learning shall hold a voting position on an institutionally affiliated Entity
				  board. The Board of Trustees may allow exceptions to this restriction if needed
				  to comply with NCAA requirements or other proper purposes. Senior
				  administrators of the institution should only participate on the Foundation/
				  Affiliated Entity's board in an ex-officio capacity.
C. Affiliation Agreements Required
Each university must enter into a formal contractual
				  affiliation agreement (the "Affiliation Agreement") with its development
				  foundation(s), research foundation(s), athletics foundation(s), alumni
				  association(s) and any other similar university affiliated Entity in a form
				  submitted to and approved by this Board. The Affiliation Agreement shall be
				  reviewed for approval by the Board of Trustees at least every five (5) years,
				  or whenever the Affiliation Agreement is changed (other than changes for
				  non-substantive, conforming or purely administrative matters). Affiliation
				  agreements should be signed by the applicable institutional executive officer
				  and by the affiliated entity's board chair and chief executive.
Universities are required to review and update affiliation
				  agreements to comply with any changes to this Policy 301.0806. As stated above,
				  substantive changes to affiliation agreements require IHL Board approval.
In order to appropriately conserve the resources of the
				  universities and the IHL, and to expedite the Board's review of the proposed
				  Affiliation Agreements within the time period set forth above, the IEO's of the
				  universities are expected to direct the resources of their university to work
				  in coordination with the other universities in developing and reviewing
				  templates of proposed affiliation agreements to be used by all similar Entities
				  and universities. Counsel for the Board will be directed to assist in that
				  process. The universities are expected to use those templates insofar as
				  practical, given the acknowledged differences between universities and the
				  Entities, as the basis and pattern for preparing the proposed Affiliation
				  Agreements which are required by this Policy.
D. General Requirements of Affiliation
				Agreements
The Affiliation Agreements for each Entity shall address and
				  comply with the following general requirements and subjects:
1. Outlining the services and benefits the
				institution and the Entity are to provide to each other and the compensation or
				other requirements related thereto;
2. Describing the mechanisms by which the
				institution shall, through its IEO, keep the Entity apprised of the needs and
				priorities of the institution, and requiring that the Entity, in concert with
				donor intent or directives, if any, agree to consider and communicate to the
				university its ability and plans to fund university needs and priorities, as
				determined by the IEO;
3.
				Describing whether, and the terms under which, any institutional assets of the
				institution itself are to be managed by the Entity on behalf of the institution
				and providing for appropriate rights of inspection and auditing for such funds
				by the IHL and all appropriate state officials;
4. Delineation of the terms upon which the
				Entity is authorized to accept gifts, restricted and unrestricted, on behalf of
				or for the benefit of the institution;
5. Requiring that the Entity abides by a gift
				acceptance policy to be jointly endorsed by the university and affiliated
				entity and describing the method by which the entity will keep the University
				informed about endowment performance, endowment spending policy, and
				anticipated accumulation and distribution of funds.
6. Requiring that all gifts made to the
				university shall be accounted for and ownership maintained by that university,
				even though they may be managed by the Entity;
7. Requiring that the records of such Entity
				shall be maintained separately from the records of the respective affiliated
				institution;
8. Requiring
				maintenance of financial and accounting records, including thorough
				documentation of donor intent, in accordance with Generally Accepted Accounting
				Principles;
9. Requiring that the
				Entity must cause to be prepared annual financial statements of the condition
				of the Entity, which shall include such detail as the IHL Board may from time
				to time require; The Entity must also engage a Certified Public Accounting
				(CPA) firm to perform annual audits of the Entity's annual financial
				statements; The Entity shall submit the audited financial statements, along
				with a list of Entity officers, directors or trustees, not later than five
				months following the completion of the Entity's fiscal year, to the affiliated
				university's IEO and to IHL;
However, the annual audited financial statements of some of
				  the Entities will be required for inclusion in the State of Mississippi's
				  Comprehensive Annual Financial Report (CAFR); Those Entities which will be
				  required to submit annual audited financial statements for inclusion in the
				  CAFR, as determined by the IHL Board's Associate Commissioner of Finance and
				  Administration and the external auditing firm hired to perform the annual IHL
				  system audit, must submit annual audited financial statements to the affiliated
				  university's IEO and to the IHL, along with a list of Entity officers,
				  directors or trustees, by October 15 of each year; The IHL Board's Associate
				  Commissioner of Finance and Administration shall notify each such Entity of the
				  applicability of the October 15 deadline to such Entity as far in advance of
				  the deadline as possible each year; The CPA firm to be utilized by the Entity
				  must be in good standing with the Mississippi State Board of Public
				  Accountancy, have substantial experience in auditing like organizations, and
				  must be approved by the IEO or his/her designee; However, at the request of the
				  Entity, the IEO of a university , with the approval of the IHL Board, may grant
				  a request of the Entity to waive the requirement of an annual audit by a CPA
				  firm on a showing of adequate grounds, such as a showing that the assets of the
				  Entity are so limited as to make the expense of engaging a CPA firm to perform
				  an audit financially burdensome to the Entity and unnecessary; Such a waiver
				  may be conditioned upon such other review of the financial records of the
				  Entity in lieu of an audit as the University and the IHL may deem feasible;
				  Such a request for a waiver must be accompanied by (a) the most recent annual
				  audited financial statements of the Entity (if any such statements exist), (b)
				  the financial statements of the most recently completed fiscal year, (c) a
				  written description of how the Entity anticipates that the year-end financial
				  statements for the current year will differ from the financial statements as of
				  the end of the most recently completed fiscal year, and (d) a good faith
				  estimate of the cost of engaging an auditor with respect to the statements; The
				  granting of any request to waive the requirement of an annual audit by a CPA
				  firm approved by the IHL is within the sole discretion of the university and
				  the IHL Board; Any waiver of the audit requirement will apply only for one
				  year, and any request to waive the requirement for the next year should be
				  submitted as outlined above;
10. Requiring that the Entity only accept or
				solicit gifts for the benefit of the university that are consistent with the
				university's mission, goals or objectives;
11. Requiring that the Entity manage all
				funds in its control in a fiscally sound and prudent manner;
12. Requiring that the Entity establish and
				maintain a conflict-of-interest policy that complies with all requirements of
				Miss. Code Ann. §
										79-11-269(1972)
				as amended, entitled "Conflict of interest Transaction", university conflict of
				interest policies, and which addresses transactions with university or entity
				staff;
13. Requiring that no form
				of additional compensation for an IEO or any IHL system office employee be
				underwritten or increased by the Entity without the prior approval of the
				Board; The request for approval shall come through the Commissioner to the IHL
				Board; As to other university employees, the Affiliation Agreement will provide
				that no form of additional compensation may be provided or paid by the Entity
				without the prior approval by the IEO; All such approvals by the IEO must be
				reported to the Board of Trustees at its next official meeting; This provision
				does not apply to transfers from the Entity to the supported university for
				items such as professorships, chairs, and other programmatic support that are
				paid directly to the university and included in its annual budget;
14. Requiring the Entity to submit to the IHL
				an annual report providing a detailed list of supplemental compensation
				provided to administrators, faculty, athletic staff, and other employees;
				provided however that the Affiliation Agreement may provide for appropriate
				exceptions for such compensation made by the institution out of funds routinely
				provided to the institution to be included in its budget; and,
15. Requiring compliance with all state and
				federal laws applicable to such organizations.
16. Establishing appropriate maximum limits
				on the period of time for which the Entity shall enter into contracts for
				professional, advisory, or other personal services.
17. Requiring that the provisions of the
				affiliation agreement shall apply to any and all entities owned or controlled
				by the affiliated Entity, with the exception of a special purpose entity
				created for the sole and specific purpose of utilization as a financing vehicle
				for the private financing of university auxiliary facilities by a private
				developer using the alternate dual-phase design-build privately financed
				construction method, as specially authorized by Miss. Code Ann. Section
				37-101-41,
				et seq. (1972), as amended. If the use/purpose of any such special purpose
				entity ever changes, the special purpose entity would then be required to
				comply with any and all provisions of the affiliation agreement between the
				university and the Entity which owns or controls the special purpose entity.
18. Affiliation agreements must
				address the reporting relationship of the chief executive of the affiliated
				entity and the roles of the IEO and the affiliated entity board in hiring,
				assessment, compensation and termination decisions related to the entity's
				chief executive.
19. Requiring
				that the entity abides by a gift acceptance policy to be jointly endorsed by
				the university and affiliated entity and describing the method by which the
				affiliated entity will keep the university informed about endowment
				performance, endowment spending policy, and anticipated accumulation and
				distribution of funds.
20.
				Requiring documentation of donor intent.
21. Requiring that the university ensure that
				gift funds distributed by the affiliated entity are used in a timely manner in
				compliance with donor intent and that the university provide affiliated entity
				staff and auditors access to records and accounts needed to monitor and verify
				use of gift funds.