Procedure for Internal Loans

Vice-Principal's Operation Committee (managed through the Office of the Controller)

Receive and review application for Internal Loan.

Step 2 - VPOC Approval

If request for Internal Loan is approved - forward loan approval document to Financial Services for safekeeping until the Internal Loan receives appropriate Board approval.

If request for Internal Loan is denied - inform organizational unit that application for Internal Loan has been denied.

Step 3 - Capital Assets and Finance Committee Approval

As per the Debt Management policy the Capital Assets and Finance Committee must ultimately approve all new internal loans

Obtain a copy of the Board approval of the Internal Loan and confirm final terms with Associate Vice-Principal Finance.

Step 2

Prepare amortization schedule for the loan.

Step 3

Prepare Standard Loan Agreement for signature by Controller and the Head of the organizational unit responsible for the principal and interest payments. See Appendix B for Standard Loan Agreement. Append an amortization schedule for the loan to the agreement.

Step 4

Record Internal Loan in PeopleSoft using appropriate accounts.

Step 5

Provide copy of Internal Loan documentation to Budget Office.

Upon completion of a Capital Project if actual costs are lower than the internal loan issued, the amortization schedule will be updated to reflect the actual principal required for the project and an updated loan agreement will be prepared and executed.

If during construction a need for additional funds is identified, details of the request together with updated information on planned repayments should be sent to Financial Services at financial.reporting@queensu.ca as soon as is practicable. Requests to increase internal loans require approval from the Capital Assets & Finance Committee. Requests to increase the budget of a capital project may require approval of the Board of Trustees.

By April 15th, inform Associate Director, Financial Reporting via e-mail of the desire issue a loan prepayment.

Email must include:

1. Information on loan to be repaid;
2. Amount of repayment;
3. Chartfield to which prepayment should be charged.

Step 1

Verify that repayment criteria are met (amount and timing)

Step 2

Process journal entry to record prepayment

Step 3

Recast amortization schedule to reflect new balances. Send a copy of the revised amortization schedule to the organizational unit. Maintain a copy of the revised amortization schedule on file.