A. Statement of Purpose - The University and Foundations establish, maintain and manage scholarships for the benefit of students attending Tennessee Technological University. Although a variety of offices or private agencies may individually award scholarships, federal law requires that all scholarships will be coordinated for the University as a whole by the Office of Student Financial Aid. Funds management for University and Foundation scholarships is ultimately the responsibility of the administering office. Institutional scholarships shall be awarded based on recipients meeting the criteria for selection and shall be reflective of the diverse community of students attending Tennessee Technological University.

B. Definitions

1. Accepts are students coded in the Financial Aid Management System (FAM) as recipients of scholarship awards from the administering unit dependent upon their registration at TTU.

2. Annual Scholarships are those scholarships for which the donor/sponsor contributes money on a yearly basis.

3. Agency Scholarships are those scholarships awarded by persons/agencies outside the University and Foundations. Funds are sent directly to the Financial Aid Office where they are deposited in the student's account.

4. Awards are funds awarded to a student after the fact based on outstanding achievements during the previous semester(s). The recipient is free to use the funds for any purpose unless otherwise designated by the grantor. These funds will impact any other federal financial aid received by the student.

5. Earned Paids are students coded in the Financial Aid Management System (FAM) as scholarship recipients who have actually registered for classes at TTU.

6. Endowment funds are funds given to the University or Foundations with a donor-imposed restriction that the funds are not to be expended but are to be invested for the purpose of producing income. Unless otherwise stated by the donor, the principal of the funds is to be maintained in perpetuity. The donor may also place restrictions on the purpose or purposes for which the income may be expended.

7. Funds functioning as endowments (quasi endowments) are funds that the University or Foundations have designated not to be expended but are to be invested for the long term for the purpose of producing income.

8. Fully-endowed means that a fund has grown to an amount whereby an annual disbursement, in accordance with the spending policy, will satisfy the terms specified by the donor and will not jeopardize the principal in the corpus.  Endowment accounts will be considered fully endowed when the value of the account reaches 20 times the amount of the intended annual award. (A $500 annual award requires a $10,000 endowment. A $1,000 annual award requires a $20,000 endowment.)

9. Historic book value is the total amount of money contributed to the endowment account by its donor(s). 

10. Offers are students coded in the Financial Aid Management System (FAM) as recipients of scholarship awards from the administering unit dependent upon their registration at TTU.

11. Non-Endowed University Scholarships are institutional funds established by the University for use as scholarships. The criteria for recipient selection are established by the administering unit.

C. Fiduciary Responsibility - The University and the Foundations have a fiduciary responsibility to comply with the restrictions imposed by the donors of endowment funds not to expend the principal of such funds and to expend the income only as directed. A similar responsibility exists to disburse non-endowed scholarship funds in a manner consistent with donors' wishes and the needs of the University. There is a legal responsibility to manage the funds in compliance with the laws of the state of Tennessee and the policies and guidelines of the Tennessee Board of Regents (TBR).  All applicable standards established by the Governmental Accounting Standards Board (GASB), the Financial Accounting Standards Board (FASB) and the National Association of College and University Business Officers (NACUBO) will be followed. 

D. Endowment Investment Policies 

1. The Tennessee Technological University Foundation has an investment committee that establishes/recommends guidelines for the investment of Foundation funds. This investment committee, within the broad framework of policy set by the Tennessee Board of Regents (TBR), shall have direct advisory responsibility for the oversight and management of the endowment funds and for the establishment/recommendations of investment and expenditure policies and procedures.

2. Both the historic book value and the account value of endowment accounts will be maintained for each fund. For a specific report, the value used will be the one that is appropriate for that given report and will be clearly labeled. The information on endowments will be updated quarterly. 

E. Endowment Spending Policy

1. The spendable return from endowment funds, calculated on an individual fund basis, shall be a percentage of the endowment value, as established by the University and calculated as of September 30th each year.

2. If the expenditure of the amount calculated above for an individual fund should reduce the account value of that fund below its historic book value (donor's contribution), then the spendable amount shall be adjusted to maintain the corpus at its historic book value.

3. The University or Foundations in any year may elect not to spend all of the spendable return as calculated above. Any amounts not expended shall (i) be added to the corpus of the endowment, or (ii) remain in the expenditure account where the use of the income is restricted to that scholarship.

1. The minimum annual award (or annual donor contribution) to establish a named scholarship shall be $500 per year. Lesser contributions will be gratefully received and added to an existing scholarship fund of the donor's choice. The minimum for an endowed scholarship is $10,000 - which is the minimum necessary to provide a $500 per year scholarship award. Scholarships existing as of 1992 will not be held to this requirement.

2. If an endowment does not reach its fully-endowed target level within five years, and there have been no contributions to it during a five year period, the University will reserve the right to combine its funds with another appropriate scholarship account. The Development Office will be informed of the situation 60 days before any action is to be taken in order to notify the donor(s). 

3. When a donor communicates a desire to establish a scholarship fund, a Letter of Agreement will be prepared by Advancement personnel for the donor's signature. The initiating staff will consult with the appropriate academic department(s), if applicable, as to the wording and criteria acceptability. The original will be sent to the donor and the administering unit.  In cases where donors request criteria other than the standard criteria, the Provost’s signature will be required. Once returned to the Advancement Office, the original will be presented to the Vice President for University Advancement for signature. The Advancement Office will return a copy to the donor and file the original in the scholarship file.

4. The Advancement Office will work with the sponsor/donor to ensure that the new scholarship receives a unique name, which clearly delineates it from existing scholarships. Names for new scholarships that duplicate or are very similar to names of existing scholarships shall be avoided.

5. Copies of the fully-executed Letter of Agreement will be distributed by the Advancement Office to the following:

a. Scholarship Coordinator 
b. Appropriate Business Office Accountant
c. Appropriate Dean
d. Appropriate Department Chair
e. Initiating Advancement personnel  
f. Associate Vice President for Academic Affairs and Enrollment Management
g. Financial Aid Office

6. When a Letter of Agreement has been fully executed, the Advancement Office will obtain a new account number from the Business Office, a new subcode from the Financial Aid Office, and assign a new fund code. Endowed scholarships shall have two FRS accounts established for them, one for the endowment principal and one for the expenditures.

7. All appropriate staff, including those listed above, shall be informed of the new account number(s) by the Advancement Office.

8. The scholarship management database and web site will be updated accordingly.

9. Accounts should be reconciled monthly by the administering office with the Business Office FRS reports. No funds will be placed into the expenditure account until the donor(s) has fulfilled his/her obligation(s), or there is no specific individual(s)’ pledge and the account is fully funded. The Advancement Office will notify the Business Office and the administering unit when the donor obligation(s) has (have) been fulfilled. Awards, in accordance with the terms of the appropriate Letter of Agreement, may commence thereafter. 

B. Amending Endowed and University Restricted Scholarships

1. Amendments will be accomplished by revising the Letter of Agreement.  Following are examples requiring an amended Letter of Agreement:

a. A scholarship is changed from non-endowed to endowed.

b. A change in ownership of the account is required; for example, if the scholarship is moved from the foundation to the university.

c. Award criteria are changed such as the required field of study of students qualifying for the scholarship, or a substantial increase or reduction in amount of award.

d. The name of the scholarship is changed. 

2. When any of these circumstances are met, a new Letter of Agreement shall be completed, clearly marked "AMENDED (date)" and endorsed by the donor, or their representative, the appropriate administering unit personnel, and the Vice President for University Advancement. Copies of the form will be distributed as for new scholarships outlined above.

C. Reports to Donors

1. The Advancement Office will maintain the names and addresses of significant sponsors/donors in a file and database (ADS) so that the appropriate people can be notified of scholarship awards and annual reports. 

2. The Advancement Office will send status letters to scholarship sponsors and major donors each year. These letters will be based on recipient reports provided by information contained in the Scholarship Management System. These letters to donors will include:

a. The scholarship recipient's name, major, class, county (if in Tennessee) and high school.

b. Summary of transactions to the account, including all income (gifts, interest, dividends) and expenditures (scholarship awards, etc.). 

3. If no award was made from a scholarship fund, the Scholarship Coordinator shall inform the Advancement Office of the reason, i.e., not enough funds, no qualified student, etc., which shall be relayed to the donors.

4. All acknowledgments and donor reports shall be filed in the appropriate scholarship file. Copies of those documents will be sent to the appropriate donor managers, department chairs, and other appropriate university personnel. 

D. Recipient Thank-You Letters to Donors

1. The Scholarship Coordinator’s Office will coordinate the recipient thank-you letters to the donors.

2. The Scholarship Coordinator will send a list of recipients to the appropriate 
academic deans or departmental directors. The deans and directors will be 
asked to coordinate with the recipients to ensure letters are sent to the donors. A standard statement will be included in the offer letter stating that the recipient will be required to write a thank-you letter to the donor and forward a copy of the 
letter to University Advancement.

3. Thank-you letters should be sent to donors by September 30 each year. A copy of the thank-you letter should be sent to University Advancement to be filed in the appropriate scholarship file.

A. General - Scholarship recipients shall be named based on meeting the criteria for selection and shall be reflective of the diverse community of students attending Tennessee Technological University.

1. Whenever possible, scholarships shall be awarded on an annual basis, and not for a single semester only. A recipient may receive split payment or credit for an annual scholarship (half of the amount each semester) but the awarding of one scholarship to two different recipients, one for each semester, should be avoided.

2. Scholarships shall be awarded for fall semester in an amount not to exceed the amount of money available on October 31 of each year. Over expenditure of scholarships should not occur, but will be the responsibility of the awarding unit if it does. Waiting lists may be established to accommodate funds made available if initial recipients drop out of the program.

3. Scholarship funds not awarded by the last day of registration each year will not be available until the next awarding cycle. Exceptions to this policy will be considered on an individual basis.

B. The Associate Vice President for Academic Affairs and Enrollment Management will recruit applicants for all those scholarships designated for incoming new freshmen and transfer students.

1. In the case where academic majors are specified, the Associate Vice President for Academic Affairs and Enrollment Management will refer prospective students to the appropriate departments and assist them in getting scholarship information.

2. The Associate Vice President for Academic Affairs and Enrollment Management may recommend recipients for all scholarships intended for incoming freshmen and transfer students where academic majors are not specified.

C. All students inquiring about scholarships should be directed to complete the following steps:

1. complete a University admission/scholarship application,
2. complete the FAFSA,
3. complete the awarding unit's additional application/requirements as necessary,
4. consult the scholarship web site for further information on scholarships.

D. Scholarship Awards - Concurrent with notifying students of awards, administering units shall notify the Financial Aid Office of the recipients for award.  All awards shall be offered by March 1 each year.

1. If an administering unit so chooses, any of its scholarships may be delegated to the Associate Vice President for Academic Affairs and Enrollment Management (entering students) or the Director of Financial Aid (returning students). In this case, the administering unit should notify the Associate Vice President for Academic Affairs and Enrollment Management or the Director of Financial Aid by December 15 of their intent.

E. The administering unit will send the official notification of the scholarship award to the recipient concurrently with a copy to the financial aid office.

F. A disclosure statement indicating a scholarship recipient’s voluntary authorization (with parent or guardian’s permission if recipient is under 18) of the release of biographical and academic information to scholarship selection committees for award purposes and to donors and/or the media for publicity purposes in conjunction with scholarships will be included in the letter of offer.

G. The administering unit will send copies of all official award notifications (offers and acceptances) to the Financial Aid Office. The copies will include the recipient’s social security number, the expenditure account number, and the financial aid subcode.

H. Reporting – The Office for University Advancement will compile recipient reports for all donor-funded scholarships awarded to date for that academic year. The information contained in these reports will be gathered from the Scholarship Management System, which will be updated nightly from the Financial Aid Management (FAM) system. These reports shall include:Management (FAM) system.  These reports shall include:

1. Name and account number of scholarship

2. Full name, social security number, class standing, major, home address, county, and high school for each recipient, per scholarship

3. Dollar amount of each award, total number of awards for each scholarship and total dollars awarded.

If no award is made from a certain scholarship, the Scholarship Coordinator notes the reason for no award on the report, i.e., not enough funds, no qualified student, etc.  If any changes are made to awards, this information is forwarded to Financial Aid for corrections to the Financial Aid Management System (FAM) and to Advancement for reporting to the donor(s).

I. Standardized scholarship application forms are available from the Admissions Office.  Administering units are encouraged to use these forms or modifications of these forms wherever appropriate so that application information will be comparable from one department to another. All modified applications used by administering units must require the student to complete a University scholarship application as well.

IV. FINANCIAL MANAGEMENT

A. Management procedures

1. The Scholarship Coordinator's Office shall coordinate the private scholarship accounts for both the University and the Foundations and provide necessary reports on them to all appropriate staff.

B. New scholarship account numbers will be assigned by the designated person in the Business Office. New scholarship subcodes will be assigned by the designated person in the Financial Aid Office. New scholarship fund codes will be assigned by the designated person in the Advancement Office. Requests for new accounts, subcodes, and fund codes should be submitted in writing via University Advancement.

1. Separate and distinct subcodes shall be established for each scholarship.  Multiple scholarships may be paid from a single account. The individual scholarship will be identified by the subcode and the scholarship name.

C. Transferring funds - To the extent possible, transfers between endowment accounts and interest accounts will be automated.

1. Accrued interest will accumulate in endowment accounts until the endowment 
reaches the "fully-endowed" target. After the target is reached, interest will  automatically transfer to the interest accounts (commonly known as "expenditure 
accounts").

2. Manual transfers will be documented for the record. Examples of this kind of 
transfer would be when a small residue of funds remains in a scholarship account 
that is due to be terminated or other transfers to correct accounting errors or to increase endowment value.

D. Scholarships may be awarded for the coming academic year when there are sufficient funds in the expenditure account on October 31 to cover the award for the following academic year. Awards will not be made based on anticipated future interest earnings or gifts. Accounts shall not be overdrawn.

E. Accounts Receivable and Pledges - Scholarships should be awarded only when there are sufficient funds in the account to cover the award. Donors who wish to be billed for their contribution will be billed prior to the disbursal of funds for the scholarship. In the case of scholarships, bills will be considered pledges. All "bills" and pledge reminders will be sent out by the Advancement Office.

F. For tax and auditing purposes, a donor should designate on his/her check what the contribution is for--scholarships, general department use, etc. It is the responsibility of the awarding unit to properly deposit scholarship money into the correct accounts.

G. All accounts should be reconciled monthly with the Business Office FRS reports by the appropriate administering office. Funds in the expenditure side of the endowment accounts will be available for award; but care must be taken by administering units to assure sufficient funds for future year obligations.

V. SCHOLARSHIP COORDINATION PERSONNEL

A. Personnel involved in the coordination of privately-funded scholarships are as follows:

1. Scholarship Coordinator - Responsible for:

a. coordinating thank you notes to the donors,

b. completing and distributing reports for non-awarded scholarships,

c. establishing and maintaining a centralized University resource (web and/or database) for scholarship information,

d. serving as chair and recording secretary of the Scholarship Coordination Committee,

e. serving as central information resource regarding scholarships,

f. monitoring all scholarship accounts and award processes,

g. conferring with various units regarding scholarship accounts and activity,

h. analyzing systems and procedures for the exchange of scholarship data between operating units,

i. examining the flow of scholarship information and implementing procedures to ensure timely receipt of relevant information by appropriate units,

j. working with the Financial Aid Office to identify the total financial resources available for each student

2. Business Office - Responsible for:

a. assigning account numbers to all new scholarships

b. financial reporting for scholarship funds, to include annual summary report information for donors,

c. overseeing the investment of endowment funds,

d. monitoring the distribution of income from endowment accounts in compliance with investment and spending policies,

e. serving on the Scholarship Coordination Committee.

3. Advancement Personnel - Responsible for:

a. establishing scholarships,

b. posting scholarship donations to the Alumni Development System (ADS) and sending donors a receipt,

c. distributing accounts' financial summary reports to donors,

d. sending pledge reminders to donors who have pledged their donation,

e. working with donors to provide information,

f. negotiating with donors and department heads to define new scholarships and amend existing ones,

g. obtaining endorsement of Letters of Agreement by donors, department heads, the Provost (when necessary, and the Vice President for University Advancement, and distributing them,

h. maintaining a database (ADS) of the names and addresses of significant sponsors/donors to provide regular information to donors,

i. generating and mailing status letters to scholarship sponsors/donors annually,

j. providing information on new, amended or deleted scholarships for appropriatesp offices,

k. serving on the Scholarship Coordination Committee,

l. assigning fund codes for income/endowment accounts for scholarships,

4. Financial Aid Personnel - Responsible for:

a. transferring funds from scholarship expenditure accounts to appropriate student recipients' accounts,

b. assigning all subcodes for scholarships,

c. coordinating information for all scholarships.

5. Administering Office, as defined by the Letter of Agreement and/or scholarships criteria/accounts - Responsible for:

a. award recipient selection,

b. accounts deposits and expenditures and reconciliation of monthly financial reports,

c. notifying students and the Financial Aid Office of all award offers and acceptances,

d. monitoring students' progress for compliance with requirements of scholarship,

e. submitting any changes to scholarship criteria in writing to the Scholarship Coordinator. 

B. Appropriate personnel from Part A. will have the same responsibilities for the coordination of institutional scholarships. 

VI. SCHOLARSHIP COORDINATION PERSONNEL

A. The Scholarship Coordination Committee shall meet periodically to review and evaluate the effectiveness of these policies and procedures.

B. The Scholarship Coordination Committee shall be comprised of :

1. Scholarship Coordinator, Chair and Secretary

2. Business Office Accountant/Investment Officer

3. Advancement Services Director

4. Admissions Representative

5. Financial Aid Officer

6. Any other staff as directed by the Vice Presidents

C. The Investment Committee of the Tennessee Technological University Foundation shall periodically review the investment and expenditure objectives and policies appropriate to the university's financial goals and policies.

D. The Investment Committee shall also monitor and evaluate the performance of the University's and Foundation's scholarship investments and expenditures, and make corrective recommendations as required.  The committee shall seek assistance from consultants, as it deems necessary, and may recommend the addition or replacement of investment managers, as it deems appropriate.

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[Administrative Council Approved as Presented October 10, 2001.]