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Handbook of Business Procedures

Date published: 
Last revised: 
Issued by: 

June 15, 2010
Aug. 31, 2010
Financial Accounting Services


Part 2. Fund Accounting - Table of Contents


A. Purpose

The purpose of an agency fund is to fulfill the custodial and fiduciary responsibilities of funds held temporarily by The University of Texas at Austin as a custodian or fiscal agent for the benefit of non-university entities, which support or enhance the mission of the university. The university does not own these funds but has the responsibility of managing the funds properly.

There should be a mutual benefit in having the university act as fiscal agent for the funds. The official letter or written agreement outlining the agency relationship and responsibilities must be included with the new account set-up request.

Agency funds include:

  • A professional journal when a university faculty member is an editor of the journal
  • Conferences offered by an outside organization and administered by the university
  • Designated scholarships where the scholarship recipients are chosen by the agency and the funding is given to the university to distribute
  • Employee, student, or alumni organizations or clubs sanctioned by the university

If an agency requires services resulting in payroll, fringe, consulting, or Authorization for Individual Services (APS) expenses, a business/services contract is required to be processed through the Business Contracts and Agreements Office. Once the contract is complete, the funds will be administered by Sponsored Projects Award Administration in the 26–account series.

The agency authorizes a university faculty or staff employee to sponsor the agency, acting on the behalf of the agency. The sponsor assumes responsibility for the proper administration and monitoring of the agency fund. The sponsor may designate a university employee as signatory, the person to whom the approval authority for the various forms necessary to initiate transactions on the agency fund is delegated.

Services provided for the agency by the university include:

  • Administration of funds, including cash receipts and disbursement services
  • Use of campus service departments
  • Purchase of materials from campus stores

B. Source of Funds

41-accounts are funds temporarily held by the university as a custodian or fiscal agent for non-university entities.

C. Transfers

Funds cannot be transferred to other fund groups.

D. Rules and Restrictions

  • Business and accounting procedures of The University of Texas at Austin must be followed.
  • The agency, university sponsor, and designated signatories must adhere to applicable federal, state, and local laws.
  • Agency funds must have a positive cash balance at all times.
  • Agency fund income/receipts should be recorded as object code 3383 (agency funds increase) or 3737 (scholarship income).
  • Agency funds are not considered tax-deductible gifts to the university.
  • Prohibited transactions include:
    • Salaries
    • Fringe benefits
    • Consulting services
    • Professional services via APS (including AIS/PBS)
    • VT5 documents crediting the agency fund account, unless authorized by FAS
    • Foreign travel, unless institutionally approved
    • Accrued revenue may not be recorded
    • Deferred revenue may not be recorded
  • Capital equipment
    • Title to capital equipment vests with the agency
    • Insurance, if applicable, is the responsibility of the agency
    • University purchasing guidelines must be followed
  • University travel guidelines must be followed.
  • Entertainment and Official Occasion expenses are permitted as allowed by the agency. University Entertainment and Official Occasion expenses guidelines must be included in the financial aid package.
  • Designated scholarships must be reported to the Office of Student Financial Services (OSFS), because they are considered an outside resource, which must be included in the financial aid package.
  • If a student organization wants to set up a 41-account, the organization must be affiliated with a department on campus and must be a sponsored student organization approved through the Office of the Dean of Students.
  • Designated scholarships must be approved by the Office of Student Financial Services.
  • Receipts and expenditures are not reported as university income and expenditures in the Annual Financial Report.
  • The agency fund must be closed at the completion of the project or activity. Any credit balance remaining in the fund will be refunded to the agency unless a written request from the agency states otherwise. If the agency no longer exists, the remaining balance should be filed as unclaimed property with Payment Information.



Part 2. Fund Accounting - Table of Contents