Establishment and Use of Agency Funds

The University may grant agency fund status if the Associated Organization (AO) or other certain entities external to the University comply with applicable University policies and complete the following steps to obtain such status:

1. Obtain University Department Sponsorship

   An Agency must seek a University department to sponsor (sponsoring department) its request for agency fund treatment.

2. Consult with Office of General Counsel (OGC)

   If the sponsorship is with a separate legal entity from the University, a contract may be required. The sponsoring department must consult with OGC. OGC will notify the Chief Financial Manager (CFM) within 30 days of its decision of whether a contract is required. OGC will draft a contract between the University and the Agency to identify the rights and responsibilities of the parties involved.

3. Complete an Agency Questionnaire

   After consultation with OGC and having a signed contract in place, if applicable, and upon mutual agreement between the sponsoring department and the Agency, the person initiating the request and the CFM residing over the sponsoring department must complete and sign UM 1652 Agency Questionnaire (pdf). Submit the questionnaire and accompanying contract (if applicable) to Accounting Services.

4. Review Agency Questionnaire

   Accounting Services will review the answers to the questionnaire in conjunction with the contract (if applicable), and determine if sufficient justification exists for agency fund treatment based on relevant accounting standards. Accounting Services will notify the CFM of the status of the request within 10 working days.

   The notification may reflect one of the following decisions:

   • Agency fund treatment is appropriate for this separate legal entity according to Generally Accepted Accounting Principles.
   • Agency fund treatment is not appropriate according to Generally Accepted Accounting Principles for reasons indicated, and Accounting Services will recommend an alternative type of fund.
   • Presence within the Enterprise Financial System, regardless of fund type, is not appropriate because the Agency’s activities are not consistent with the University’s overall mission, policies, and/or in the best interest of the University’s overall operations.

5. Approval of Chartstring use in an Agency Fund

   Accounting Services will approve the chartstring for use within an appropriate agency fund and notify the CFM of the agency fund status.