Guidelines for UCSB Agency Accounts
UC Policy Business Financial Bulletin A-54
This local procedure on agency accounts is UCSB’s guidelines to implement BFB A-54, which has been UC Policy on agency accounts since October 15, 1987. This local guideline was needed to clarify and provide instruction to UC Santa Barbara for establishing and managing agency accounts. Agency accounts are set up by UCSB’s General Accounting team for non-university entities - these are not UCSB revenues nor expenditures. Agency accounts are used if the university does not have ownership of the funds. The financial activity of the agency accounts is reported in accordance with Government Accounting Standards Board pronouncement 84, Fiduciary Activities (GASB 84).
Guidelines & Process
What is an Agency Account? Agency accounts are established by UCSB for non-UCSB entities. The activity must provide benefits to the university community. The university acts as a custodial or fiscal agent. The university does not exercise any direct financial control over the use of the funds. At fiscal year-end, expense and revenue transactions on agency accounts are excluded from university income statements, and agency account balances are reclassified on the balance sheet as a current asset or a current liability.
How to Establish an Agency Account: The outside agency must coordinate with a sponsoring campus department to establish an agency account. To establish a new agency account, the outside agency must provide a completed Agency Account Request Form to General Accounting, including:
- The name of the agency
- The primary contact person(s) for the agency
- The purpose of the agency account, including benefit to the university community
- The nature of cash receipts and disbursements anticipated on the agency account
- Which sponsoring campus department/contact person will be acting as fiscal agent for the agency account
- Agency, sponsoring department, and control point approval signatures
Depending on the level of services provided to the agency, the university may charge the agency an administrative fee for the cost of services (purchasing, payment of invoices, etc.) provided as a part of the agency agreement. General Accounting will approve and maintain the forms and set up the account. These accounts will be set up as non-reportable expenditure accounts in the 80xxxx account series.
Roles and Responsibilities of Approved Agency Account Holders:
- Complete Signature Authorization forms (found in Data Warehouse) to document who has the authority to process agency account transactions, and follow campus policy notifying BFS whenever authorized signers change in order to update signature authorizations.
- Maintain a positive account balance, depositing funds as needed to cover overdrafts in a timely manner, and no later than fiscal close each year.
- Review disbursements for appropriateness and maintain compliance with applicable UC Policy, federal, state, and local laws.
- Notify General Accounting to close the agency account once no future activity is anticipated. Any credit balance remaining in the fund will be refunded to the agency or, if the agency no longer exists, transferred to the Chancellor’s campus-wide miscellaneous income account. If a deficit in the fund cannot be recovered from the agency, it will be charged to the department sponsoring the agency account.
Services Provided for Agency Accounts: The University provides normal administration of cash receipts and disbursement services for agency accounts, except for payroll disbursements and Gateway procurement services.
Agencies with agency accounts may also make use of campus recharge operations and service departments. Agency accounts are charged the same recharge rates as UCSB users for these services. Note that because these funds belong to outside entities, amounts recharged to agency accounts should not credit the recharging department’s expense account with recharge credit object code 3900, but should instead credit the recharging department’s income account.
Note that checks for deposit to an agency account should still be made payable to UC Regents, as these deposits are processed using university bank accounts.
Agency funds do not have campus budget appropriations, therefore budget journals and Transfers of Funds cannot be processed on agency account-funds.
Additional Information & Background
It's important to note that BFB A-54 specifically excludes the Associated Students organizations from UC agency accounting, as these are UC entities. "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.'" Accordingly, at UCSB, Associated Students is included in our General Ledger. They operate as a separate department and they manage some UC fees separately with their own bank account, however their financial activity is included in UCSB’s consolidated financial reporting.
Funds accepted for an agency account are not tax deductible charitable contributions to the University.
UCSB established these guidelines for agency accounts to minimize the risk of financial exposure to the university resulting from an agency account holder’s inability to pay. General Accounting periodically audits agency accounts for compliance, evaluating the convenience of keeping the cooperation with the agency, or the cancellation of the relationship.
Questions about agency accounts? Contact General Accounting at email@example.com.
For additional information/references, see Business and Finance Bulletin (BFB) Bus-54 Policy for Agency Accounts