Purpose of this document
The University of Puget Sound (university) campus community members may have fiscal responsibility (often as President or Treasurer) when they are involved with professional organizations. These organizations are legally separate from the university and are funded from sources independent of the university (e.g. membership dues). The campus community member serving as president or treasurer may request that the university act as custodian of the organization’s financial assets and in so doing may request that Office of Finance establish a separate project code in the university’s accounting system to assist the organization in the safekeeping of their financial assets and to keep a running total of their balance. The purpose of this document is to clarify when such a project code can be established, herein after referred to as an “Agency Project”, and when another kind of arrangement is necessary due to the complexity of the organization’s needs.

This document should be read by: Students, faculty, staff, and other campus community leaders of professional clubs or organizations who have or wish to request an Agency Project; student organization advisors; and Office of Finance staff.

Agency transaction is a type of exchange transaction in which the reporting organizations acts as an agent, trustee, or intermediary for another party that may be a donor or donee. Agency Projects are established by the university to track financial assets as a custodian or fiscal agent for organizations. The financial assets (generally in the form of cash) are deposited with the university’s banking institution for safekeeping, to be used or withdrawn by the depositor at will. Agency Project deposits are reflected in the university’s financial records as pooled cash with a corresponding liability to the depositing organization.

Agency project requirements
Agency Projects may be established for the convenience of university campus community members when the following conditions exist:

  1. the financial assets belong to an outside organization (the university has no financial interest) for which a university campus community member is the president or treasurer;
  2. the organization is a separate legal entity that accepts all responsibility and liability for its activities;
  3. the outside organization is a club, professional organization or fraternal organization;
  4. the financial activities of the organization are limited to occasional deposits and occasional withdrawals; and
  5. withdrawals are limited to on-campus recharges for printing, copies and bookstore purchases and to accounts payable disbursements.

Reporting for Agency Projects is limited to a running balance of the cash and a listing of deposits and withdrawals, not unlike a bank statement. Monthly statements will be emailed to all persons authorized by the outside organization. Withdrawals may be approved by individuals authorized by the outside organization. Aside from the routine Washington state use tax reporting and IRS 1099 reporting associated with vendor payments made by the university on behalf of the outside organization, the outside organization is wholly responsible for its tax and regulatory compliance and filings.

An Agency Project may NOT be used:

  1. for organizations that are profit seeking ventures;
  2. when the deposit or withdrawal activity is unusually complex and/or voluminous; or
  3. to process payroll on behalf of the outside organization.

How to request an agency project
Requests for Agency Projects should be submitted to Office of Finance via email to finance@pugetsound.edu. A senior accountant will gather the necessary information and work with the requestor to apply the criteria of this document to determine if the arrangement needed can be satisfied with an Agency Project.

If the arrangement needed is more complex than allowed for an Agency Project, an alternative will be recommended. Depending on the facts and circumstances, alternatives could include establishing a restricted project if “sponsored” by the university and approved by the appropriate Vice President, or advising the group to establish an outside bank account and seek outside accounting support.

Agency project agreement
If an Agency Project is established, an officer or faculty or staff advisor of the organization will be assigned primarily responsibility for the financial activities of the Agency Project.

That individual will ensure that the Agency Project does not become overdrawn and will notify Office of Finance of any position changes within the organization that would impact the Agency Project so that security and contact information can be appropriately updated.

Please contact the Senior Financial Accounting Analyst for questions regarding this agency fund policy.

Proposed by: Senior Financial Accounting Analyst and Director of Financial Reporting and Tax

Approved by: Associate VP for Finance

Date approved or last reviewed: Originally established by the Associate VP for Finance in February 2003. Last reviewed and approved June 20, 2013.

Frequency of review: Annually or as changes are needed.

NACUBO’s Financial Accounting and Reporting Manual (FARM) for Higher Education, sections 410 and 420.1 of the online version as of May 29, 2013.

AICPA Audit & Accounting Guide – Not-for-Profit-Entities, Agency Transactions