The authority for the establishment of non-appropriated funds by the University is granted through the legislative process. Chapter 116, Article 1 of the General Statutes provides the legal requirements, corporate powers, rights and duties of the University of North Carolina System. Following is a discussion of the legislation providing for the establishment of trust funds by the University.
General Statute 116-36 "Endowment Funds" provides the legal authority to the board of trustees of each constituent institution to establish and maintain, pursuant to such terms and conditions, uniformly applicable to all constituent institutions, as the Board of Governors of the University of North Carolina may from time to time prescribe, an endowment fund and shall establish an investment board known as "The Board of Trustees of the Endowment Fund of (name of University)". The board of trustees shall be responsible for the prudent investment of the fund. Any gift, devise, or bequest of real or personal property to the University shall be presumed, nothing to the contrary appearing, a gift, devise, or bequest, as the case may be, to the endowment fund of the University. Proceeds from any endowment fund shall not take the place of State appropriations or any part thereof but rather shall supplement the State appropriations to the end that the institution may improve and increase its functions, may enlarge its areas of service, and may become more useful to a greater number of people.
General Statute 116-36.1 "Regulation of Institutional Trust Funds" provides the legal authority for the University to establish institutional trust
funds. This legislation was created by the 1977 General Assembly and places responsibility
for the custody and management of university institutional trust funds with the University
of North Carolina Board of Governors. Subsection (a) of the statute directs the Board
to adopt uniform policies and procedures over the administration of the institutional
trust funds that would ensure that the receipt and expenditure of such funds are properly
authorized and that the funds are appropriately accounted for.
These uniform policies and procedures are discussed further under the caption " UNC POLICIES AND PROCEDURES ON TRUST FUNDS" .
Subsection (b) of the statute requires that institutional trust funds be deposited with the State Treasurer and held in the name of each university.
Subsection (c) of the statute provides that the University's State Treasurer Account and interest earned on its deposits are available for expenditure without further authorization from the General Assembly.
Subsection (h) allows the Board to designate an official depository for trust funds defined below in (g)(7) in one or more banks or trust companies in this State. Provided, however, such deposits are fully secured by deposit insurance, surety bonds, or investment securities of such nature, in such amounts, and in such manner as prescribed by the State Treasurer for security of public deposits generally.
Subsection (d) of the statute provides that the institutional trust funds are subject to the oversight of the State Auditor but are not subject to the provisions of the Executive Budget Act except for capital improvement projects that are subject to G.S. 143-18.1.
Subsection (e) of the statute requires the submission of reports as directed by the Director of the Budget.
Subsection (f) of the statute provides that the trust funds or investment income there from shall not take the place of State Appropriations and shall be used to supplement State Appropriations to the end that the institution may improve and increase its functions, may enlarge its areas of service and may become more useful to a greater number of people.
Subsection (g) defines trust funds as follows:
Subsection (i) of the statute provides that the cash balances and receipts of funds identified in the G.S. 116-36.1 are appropriated to the use of the University of North Carolina and its constituent institutions.
General Statute 116-36.2 "Regulation of Special Funds of Individual Institutions" provides the legal authority for the chancellor of each institution to have custody and manage the institution's special funds. It provides that the Board of Governors shall adopt uniform policies and procedures applicable to the administration of these funds, which shall assure that the receipt and expenditure of such funds is properly authorized and that the funds are appropriately accounted for. Special funds of an institution include:
General Statute 116--41.7 "Proceeds of Bonds, Revenues, Etc., Deemed Trust Funds" provides the legal authority for the proceeds of all bonds issued and all revenues and other moneys received pursuant to the authority of this Part shall be deemed to be trust funds, to be held and applied solely as provided in this Part. The resolution authorizing the issuance of bonds shall provide that any officer to whom, or bank, trust company or fiscal agent to which, such moneys shall be paid shall act as trustee of such moneys and shall hold and apply the same for the purposes hereof, subject to regulations as such resolution may provide.
Session Law 1999-237, Appropriation Bill, Section 10.13 " UNC Overhead Receipts" provides the legal authority for overhead receipts earned by constituent institutions of The University of North Carolina to be retained at the campus earning the receipts.
Session Law 2001-424, Appropriation Bill, Section 15.1.(b) " State Agencies to Report on Intellectual Property/Study State Intellectual Property Assets and Technology Transfers " provides that the provisions of this section do not apply to the University of North Carolina and its constituent institutions, or to the North Carolina Community Colleges System, or to employees of these respective institutions who are subject to the intellectual property and inventor policies of the institutions employing them.
To view the North Carolina General Statutes, go to the following website:http://www.ncga.state.nc.us/gascripts/statutes/statutelookup.pl?statute=116