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October 15, 1987
I. REFERENCES
A. University Policy on the Administration of Restrictive Financial Aid
Funds, adopted by The Regents January 17, 1969, and revised March 18,
1977.
B. Action by The Regents reaffirming that Associated Students on the
various campuses of the University are official units of the
University, May 18, 1972.
C. Letter on the Implementation of The Regents' May 18, 1972 action,
Vice President Robert L. Johnson to Chancellors, August 10, 1972.
D. "Supplement Memorandum: Title IX Regulations-University
Interpretation of Section 86.37 Relating to Student Financial Aid,"
Vice President Johnson to Chancellors and Laboratory Directors, May
27, 1976.
E. Policy on Campus Foundations, adopted by The Regents May 17, 1987.
F. Business and Finance Bulletin BUS-43, Materiel Management.
G. Business and Finance Bulletin BUS-54, Operating Guidelines for
University Supply Inventories.
II. PURPOSE
This Bulletin sets forth the general guidelines and procedures for
establishing agency accounts for non-University entities.
III. INTRODUCTION
For purposes of this Bulletin, agency accounts are to be considered as
those accounts established by the University for non-University
entities - such as student, faculty, staff, governmental, and private
organizations or activities, and Campus Foundations-for which the
University provides the agency services presented in Section IV.B.,
below. In accepting funds for the operation of activities sponsored by
these entities, the University does not usually exercise any direct
fiscal control over the use of the funds; such control remains in many
cases in the hands of the sponsoring entity. Hence, it should be
clearly understood by the parties concerned that funds accepted are
not considered tax-deductible donations to the University in as much
as disbursements, and use of these funds are made only in accordance
with the specific instructions from the sources.
The activities of these entities are usually closely associated with or
even related to the activities of the University, and these entities in
fact directly or indirectly provide services or benefits to the
University community, i.e., students, staff, and faculty. Nonetheless,
the receipts and disbursements of funds coming from these entities are
not reported as University income and expenditures, as these entities
are not considered official units of the University.
IV. GUIDELINES FOR AGENCY ACCOUNTS
A. TYPES OF ACCOUNTS
Based on the purposes intended for the funds received, agency
accounts may be established as follows:
1. Scholarships and Fellowships Definition
These are accounts in which funds are received for purposes of
providing scholarships, fellowships, and other aids to students
matriculating in established degree programs of the
University. The entities providing the funds have the sole
discretion in designating the recipient and the amount of
stipend or aid to be provided. Normally funds for agency
scholarships and fellowships are received from foundations,
institutions, governmental agencies (both domestic and
foreign), private firms and associations, service clubs, and
similar organizations. Funds may also be received from
individuals such as parents or relatives of students.
Guideline
Campuses may, at their individual discretions, provide agency
services to groups or individuals, as mentioned above, as long
as funds provided are intended to aid students registered at
the University. In providing these services, campuses should
take into consideration the "University Policy on the
Administration of Restrictive Financial Aid Funds," adopted by
The Regents on January 17, 1969, and revised on March 18,
1977, and the regulations regarding the administration of
sex-restricted scholarships as set forth in "Supplement
Memorandum: Title IX Regulations-University Interpretation of
Section 86.37 Relating to Student Financial Aid," dated May 27,
1976, from Vice President Robert L. Johnson to Chancellors and
Laboratory Directors.
In matters concerning the restriction of funds provided for
scholarships, any questions regarding the need to make direct
inquiry to the funding entity should be directed to the campus
financial aid officer, as called for under the afore cited
regulations.
Disbursements of these funds can be made as direct payments to
recipients of specific scholarships or fellowships or as an
offset against student, residence hall, or other student fees
due from the recipients. For campuses using the Financial Aid
Information System (FAIS), disbursements must be recorded in
FAIS as well as in the campus General Ledger.
2. Student Organizations and Activities
Definition
These accounts are established for student organizations such
as student clubs, residence hall associations, or workshops
sponsored by student groups. Excluded from these types of
accounts are accounts established for the Associated Students
organizations. The Regents, at their May 18, 1972 meeting,
reaffirmed that "The Associated Students in the several
campuses of the University are official units of the University."
Campuses should adhere to the local procedures established for
the accounting of Associated Students fiscal activities in
response to Vice President Robert L. Johnson's letter of
August 10, 1972, to the Chancellors on the implementation of
The Regents May 18, 1972 action.
Guideline
Agency accounts of these types should be provided only for bona
fide student activities and University-affiliated student
organizations, with approval of the appropriate campus
administrative office such as the Vice Chancellor-Student
Affairs Office.
3. Faculty/Staff Organizations and Activities
Definition
These are accounts established for faculty and/or staff
organizations and activities-such as professional and
scientific organizations in which faculty and/or staff are
members, conferences and workshops sponsored by faculty or
staff groups, billing and collection services for medical
professional fee plans, faculty club operations and
auxiliary-type groups such as alumni groups and hospital
auxiliaries. Agency accounts, where warranted, may also be
established for activities of individual faculty members if
such activities will benefit the University. However, agency
accounts should not be established for grants or contracts
awarded to faculty members as individuals where the research
would normally be handled as a departmental research grant or
contract.
This will eliminate the possibility of agencies awarding grants or
contracts to individual faculty members rather than to the
University in order to avoid charges for indirect costs or to
bypass University regulations on the administration of grants
and contracts.
Guideline
Establishing agency accounts for faculty/staff organizations and
activities should be made only with approval from a campus
administrative office such as the Vice Chancellor-Academic
Affairs Office for faculty activities or the Vice
Chancellor-Staff Personnel Office for staff organizations.
4. Campus Foundations
Definition
These are accounts established for Campus Foundations in
accordance with the Policy on Campus Foundations adopted by The
Regents on May 15, 1987.
Guideline
Each campus should establish agency accounts for its Campus
Foundation unless the Campus Foundation accounts are established
as regular University accounts. The accounts are to be used for
restricted funds received and unrestricted funds allocated for
support of Campus Foundation activities. All expenditures are
to be made in accordance with University or explicit, written
Campus Foundation policies.
5. Other Agency Activities
Definition
These are accounts established for non-University organizations
that do not fall under the classifications of the foregoing four
types of accounts.
Guideline
These types of accounts may be established, provided the
University has entered into an agreement with a specific
organization to participate jointly in a project or undertaking
where the University agrees to act as the fiscal agent.
B. SERVICES TO BE PROVIDED
The types of services to be provided to the above-mentioned
entities may include the following:
1. Normal administration of funds-cash receipts and disbursement
services.
2. Use of campus service departments with the approval of the
appropriate campus office, such as the Administrative Vice
Chancellor's Office. The amount to be charged for such use
should be based upon the campus standard recharge rates for the
services of the department involved.
3. Purchase of materials from campus storehouses with the approval
of the Chancellor, in accordance with Business and Finance
Bulletin BUS-54, "Operating Guidelines for University Supply
Inventories, in Section IV.
Direct payroll charges and purchases through the campus purchasing
department should normally not be permitted for these entities.
When it is necessary to provide these services, specific approval
should be obtained from the Chancellor. When direct payroll
services are handled for agency accounts, there should be a clear,
documented agreement between the funding entity and the campus
department involved that the individuals included in the activity
or project payroll are University employees (eligible for all
employee benefits and covered by the University's personnel
rules). Under no circumstance should direct payroll service be
provided for non-University employees, as this would
involve separate tax reporting and other complications. When
payroll services are provided, all employee benefit costs must be
paid from the agency account.
Signature authorization forms (Form U242) for these accounts should
be provided by the campus administrative office approving the
establishment of any given agency accounts. These forms should be
properly completed by the activity, project, or group for which the
agency account is being established before any of the
above-mentioned services can be authorized or provided.
C. COST RECOVERY
Agency services provided by the University, as listed in Section
IV.B., above, are extended in recognition of the benefits accruing
to the University. In providing such services, campuses should
weigh the benefits accruing to and the costs to be incurred by the
University. In cases where the services are provided to large
organizations-such as faculty clubs-or where substantial additional
workload will be required, any increase in cost associated with the
additional workload should be recovered.
V. ACCOUNTING
Agency account transactions are recorded as balance sheet items, not as
University income and expense. If receipts from an entity, organization
or an individual are in excess of the amount expended, the difference is
to be recorded as a liability of the University to the entity,
organization or individual concerned; if receipts are less than the
amount expended, the difference is to be recorded as a receivable due to
the University from the entity, organization or individual concerned.
During the year, receipts and disbursements of agency funds may be
recorded in non-reportable expenditure accounts in the 80XXXX account
series. This will provide the campuses with the ability to identify
separately each agency account and enable the accounting offices to
provide the General Ledger expenditure sheets to departments
administering these accounts. At year end, as part of the fiscal closing
process, any balances in these non-reportable expenditure accounts must
be transferred as appropriate to a balance sheet receivable or liability
account. Any balances remaining after completion of the activity or
project should be returned to the original fund source. However, if it
is not possible to return a balance due to discontinuance of the
activity or project, such balance should be transferred either to the
campus General Funds miscellaneous income account or to a University
gift fund income account designated by the sponsoring entity.
VI. RESPONSIBILITIES
The guidelines set forth in this Bulletin are general in nature and are
intended only to provide the basic descriptions of the types of agency
services which campuses may provide at their individual options as well
as to present a broad background on the fundamental function of agency
accounts. It is the responsibility of each campus to establish its own
detailed procedures for agency services. Also, it is each campus'
responsibility to ascertain that agency funds are readily available
(i.e., they have been received and are on deposit in the agency's
account) prior to making any disbursements.
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