This training addresses how to use the Due To/Due From (DTDF) if you have the Manager module. DTDF is helpful and necessary when an institution deposits gifts in an investment account or operating account that is commingled with non endowment funds, takes withdrawals for spending at fund level without drawing from investments, or other related endowment cash flow that needs to be tracked within a commingled investment or operating account. The due to/from allows users to manage this type of cash flow and should allow you to reconcile back to an operating account the cash balance that is purely Endowment. In this example, we will show three posting periods and how DTDF is accounted for.
You can find the template and more information on how to use the template, here: https://fundriver.zendesk.com/hc/en-us/articles/208012726-Using-the-Due-to-Due-from-Reconciliation-Template
TO SET UP THE DUE TO/DUE FROM (DTDF) MANAGER
1. Navigate to the ORGANIZE tab, click INVESTMENT PORTFOLIO, select the INVESTMENT POOL to which you will be adding the DTDF.
If added successfully, you will receive a MANAGER SUCCESSFULLY ADDED message. Your DTDF manager is now ready to use.
TO USE THE DUE TO/DUE FROM (DTDF) MANAGER
1. To begin, click on ACTIVITY > INVESTMENT ACTIVITY, choose the INVESTMENT POOL to which you will be assigning the DTDF activity.
2. Click on the MANAGER DATA ENTRY tab.
3. Choose the DTDF Investment Manager.
If you don't have this set up, please refer to "How do I set up a Due To/Due From manager?"
The cash gifts (credited to the endowment fund) that have been deposited to an operating account within the current posting period and have not transferred to an investment manager will be entered as positive net cash flow. The balance in the DTDF represents the cash within the operating account that is owed to the endowment investment pool. Please refer to documentation on how to handle Stock Gifts as these may have a different way of handling rather than through the due to/from method.
$50,000 represents new gifts (not included in the market value in the investment manager's statement). In this example, the $50,000 gift was added as a single transaction to a specific fund.
4. The prior period had a $0 beginning DTDF balance; the net cash flow and ending market value need to be increased to represent the money that needs to transfer to the investment manager.
Ending market value for DTDF represents the amount of gifts for this period. This balance will eventually clear out as money is transferred to investments or as spending is drawn down.
5. Click SAVE VALUES. Your reconciliation should show a difference of 0.00.
6. Go back to INVESTMENT ACTIVITY and select your investment pool, enter your investment manager data for all other managers and reconcile each.
7. Once your other manager investment data is entered and reconciled to 0.00, it is time being the posting process. Click on the POST tab. The fields will auto populate with information attributed to the individual managers. RECONCILE your entries.
The DTDF amount entered is included in the ending market value for the period.
8. To see activity by manager, click on REPORTS > MANAGER LEVEL REPORTS > MANAGER RECONCILIATION REPORT.
9. The DTDF amount will show up in the NET CASH FLOW.
10. If everything is allocated as it should be, it is time to post the period. Got to ACTIVITY > INVESTMENT ACTIVITY and choose your INVESTMENT POOL.
11. Click CLOSE PERIOD.
12. When you period is successfully posted, the message below will appear.
Once successfully posted, the process is complete for this period. The next set of screens are moving forward to the following posting period to show additional DTDF transactions.
13. In the August posting period, we are going to create a spending distribution. Go to ACTIVITY > DISTRIBUTE.
14. In the USE FUND VALUES AS OF field, choose the period you just posted. Click CREATE DISTRIBUTIONS, then click OK on the pop up to confirm.
15. A message will appear to indicate a successful distribution.
The balance owed the investment manager is then offset when distributions are taken.
16. Now it is time to enter investment activity for August. Go to INVESTMENT ACTIVITY and click to select the POST DATE for August.
17. In this example, a $25,000 gift of stock was received and imported as a transaction into one of the managers. The investment statements do not yet reflect this gift, so this gift will need to be added to the DTDF.
Click the RECONCILE button in order to view the activity for the period. Please note that market value information has not yet been entered, which is why a DIFFERENCE is showing.
18. This worksheet illustrates how the DTDF should be impacted by this $25,000 gift and other August distributions. The Cash Flow shown below will need to be entered as the August DTDF NET CASH FLOW amount.
19. Go back to INVESTMENT ACTIVITY and click on the MANAGER DATA ENTRY tab. Choose the DTDF investment manager, enter the Net Cash Flow for August in the NET CASH FLOW field.
20. Enter the ENDING MARKET VALUE from the worksheet (August DTDF less $50,000 gift from July). SAVE VALUES.
21. The difference should be 0.00.
22. Enter other manager data and RECONCILE.
23. The pool should show a difference of 0.00.
24. To see activity by manager, click on REPORTS > MANAGER LEVEL REPORTS > MANAGER RECONCILIATION REPORT.
25. As you can see on the report above, a transfer of $100,000 between managers is also reflected on the report. It does not impact the cash flow.
If the report is accurate, the closing process can be completed.
26. The illustration below will show an adjustment made to the DTDF in the following period, September. The entire balance of the DTDF is transferred from the CASH CLEARING investment manager.
Click SAVE VALUES.
27. The reconciliation now shows that the CASH CLEARING manager has paid out the balance of the DTDF.
28. Now, the DTDF manager needs to be adjusted to show that the money has been paid by another manager. Select the DTDF INVESTMENT MANAGER and enter the appropriate amount in the NET CASH FLOW field (opposite sign as the manager that paid the money).
29. Reconciliation should show 0.00.
Please note that, if you have multiple investment pools, it may be necessary to set up multiple Due To/Due From Managers.