Interest Income Distribution Policy

Purpose

The purpose of this policy is to establish the distribution of net interest income. Treasury Operations is responsible for cash and investment management and the distribution of net interest income in accordance with this policy. This policy is important to ensure the University complies with applicable state statutes, Legislative Audit Commission (LAC) University Guidelines, grants and other contractual agreements. This policy applies to all university-controlled cash (not held at NIU Foundation) that is invested and/or deposited at financial institutions.

Policy Narrative

The university pools its cash and investments for reporting of cash at the fund level. All university investments are recorded in a single university investments cost center. For financial reporting purposes only, cash and investments are allocated between restricted/unrestricted at the consolidated financial statement level.

The university allocates net interest income based on the requirements specified in the 30 ILCS 105/6a, LAC University Guidelines, grants and other contractual agreements. In general, interest income from investments and cash at financial institutions is credited to the funds generating the income. Investment management fees related to the administration of the university’s cash and investment program, custody, and bank fees reduce the amount of interest income returned to a given fund.

Section VIII of the university guidelines states that "Net investment income received in any fiscal year by a university which is not allocated to the source of funds generating the investable cash or used for the cost of managing the investment program is to be deposited into the appropriate University Income Fund."

Procedural History

Approved January 9, 2024