OBFS Policies & Procedures Manual Section 2: Agency Funds OFFICE OF BUSINESS AND FINANCIAL SERVICES – UNIVERSITY ACCOUNTING & FINANCIAL REPORTING

Presenters OBFS – University Accounting: Nikki Melander Bridget To

Agenda Agency Fund Definition Background Policy Objectives Additional Information Agency Fund Request Form

Agency Fund Definition A type of fund where the University holds money on behalf of an outside entity and acts minimally as its fiscal agent, forming an agency relationship Must be related to the University’s mission Non-university activities Owner can be any entity: Corporation Government Not-for-Profit Unincorporated Association Individual

Agency Funds at the University Type Nature of Activity Typical Legal Status of Fund Owner 9A Payroll /Benefit Withholding Governments, charities, health care providers, pension funds, etc. 9G Student organizations (includes some staff and similar organizations) Not-for-profit corporations; Unincorporated associations 9D All Other:   URO/consortia/similar Not-for-profit/for-profit corp., governments Hosted conferences Not-for-profit/for-profit corp., govt., assoc. Athletic booster clubs Not-for-profit corporations Academic associations Not-for-profit corp./Unincorp. associations Study abroad students Individuals Private financial aid

Background Need for Agency Fund Policy due to: Contractual relationship created without a formal agreement Ambiguity about University role, responsibility and liability University having to cover deficit balances

Policy Objectives Minimize liability & responsibility to protect the University Implement signed agreements Limit University commitment to minimal bookkeeping services Clarify the role of University units as a liaison with the owner of the money

Minimizing Liability New agency funds require updated FPI request form https://www.obfs.uillinois.edu/forms/accounting-financial-reporting/ University’s sales tax-exempt number should not be used for any agency fund purchases Additional information on procurement (iBuy, TEM & P-Cards), conferences, non-resident alien payments, and other processes will be released as finalized

Implementing Agreements All new agency funds will be required to have agency agreements prior to the establishment of the fund, effective immediately All existing agency funds will be required to have agency agreements by June 30, 2016

Limiting Commitment Transaction processing only Defer to existing campus policies on space use University will not provide services for: A/R Tax (except 1099/NRA reporting) Insurance/risk management Legal counsel

Liaison Unit Responsibilities Assure understanding of agreement terms and requirements Monitor fund Monthly reconciliations Review for overdraft potential Provide regular reports to the owner of the funds Terminate fund when relationship ends In the event of a surplus, complete a “Request to Return Agency Funds to Owner” Form: Payee vendor ID required Process in TEM

Additional Information Inactive surplus balances are subject to State of Illinois unclaimed property requirements Student organizations are currently not covered by this policy Potential fee to departments for undisclosed deficits

Agency Fund Request Form Supplemental information tab Define University relationship with owner Discuss relation to University mission Deficit disclosure Transfer of activity to a new institution

Agency Fund Request Form Agency agreement tab Unit prints top portion only (default print view) Gets ink signature from owner representative Scans this signed form and returns with request Unit “signs” bottom portion in spreadsheet via electronic signature

Questions? University Accounting Services Group Michelle Flack Nikki Melander 217-300-0291 217-333-9138 mflack@uillinois.edu melander@uillinois.edu Roger Fredenhagen Bridget To 217-333-7156 217-244-7329 frednhgn@uillinois.edu bridgett@uillinois.edu OFFICE OF BUSINESS AND FINANCIAL SERVICES – UNIVERSITY ACCOUNTING & FINANCIAL REPORTING