Agency Accounts

POLICY STATEMENT
 
Delta State University acts as a custodian for independent organizations. Delta State University does not own these funds, but does have a responsibility to manage the funds properly. The university accepts these resources only when the funds will be used by the organization for activities consistent with or in support of the mission of the university.
 
DEFINITIONS
 
Agency Funds: funds held by the university as custodian or fiscal agent for independent organizations. Agency funds are not owned by Delta State University and are accepted only when they help to fulfill the mission of the university. The accounts that track agency funds are assigned a fund code beginning with ‘7’. 
 
Independent organization: an organization not legally part of the university that acts on its own behalf, is not controlled by the university, and could have a separate taxpayer identification number.
 
PROCEDURES and RESPONSIBILITIES
 
Delta State University acts as a custodian for certain resources provided by external independent organizations. Such resources are accepted only when the funds will be used by that independent organization for activities consistent with, or in support of, the mission of the university. The funds in Delta State’s general ledger where the resources are recorded are called agency funds and are coded with numbers beginning with ‘7’.
 
The university does not own the funds in an agency account; rather, the assets are owned by the independent organization and liabilities are its responsibility. All transactions in an agency account must be made on behalf of the independent organization. Therefore, although there is a fund set up on Delta State University’s general ledger, in the process of charging transactions to an agency fund, individuals cannot use Delta State’s tax-exempt status or hold themselves out as being part of, controlled by, or acting on behalf of the university.
 
Agency funds may be set up for:
·        DSU student associations – funds deposited for recognized student organizations (i.e., annual dues)
·        Certain student financial aid – funds deposited to provide scholarships and other aid to specific students enrolled in established degree programs of the university. The entities providing the funds have the sole discretion in designating the recipient and scholarship amount provided.
·        Faculty or staff professional or academic organizations – funds deposited for faculty and staff organizations and activities
·        Externally sponsored events, such as the MCTE Regional Convention
 
An independent organization that wishes to open an agency account in DSU’s general ledger should submit an Approval Request Form (see web address below for form) available in University Accounting. The form requests information about the nature of the independent organization, how and when it will be funded, who will be authorized to expend its funds, and other tax information. The completed form should be forwarded to University Accounting for approval and assignment of fund numbers
 
·        Review Approval Request Form for new agency funds.
·        Periodically review agency accounts, including reconciliations and relationship of the independent organization to the university.
 
Authorized Representative, Independent Organization
·        Complete Approval Request Form and submit to University Accounting for approval.
·        Explain to vendors the independent nature of the organization – that the organization is not a part of Delta State University
·        Process transactions on behalf of independent organization
·        Monitor balance in the agency fund prior to funds being depleted.
 
RELATED DOCUMENTS
  • Agency Fund Request Form
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