Accounting & Financial Reporting

process guides

Agency Accounts

What are agency accounts?

Agency accounts are used if the University does not have ownership of the funds (i.e., we are holding them as custodian only). The purpose for having agency accounts is so that the individual / group using an agency account can tap into University services that require an account (e.g., purchasing, accounts payable). Usually, the fund provider will cover deficits and take back excess funds. Examples include funds for:

  • an outside professional group
  • a faculty or student association
  • bench fees
  • a group funding an employee retirement party

How is an agency account different than a university related event account?

An agency account is used to record activity performed on behalf of an external entity. A university-related event account is used to record activity performed on behalf of the University. For example, if XYZ Company wants a UC Davis faculty member to host a conference and the company will pay for all of the expenses, then use an agency account. However, if it's an event the University is putting on, whether or not an outside entity is sponsoring some of the activity, then use a university-related event account. More information is available in the University-Related Event Accounts guide.

What are principals and authorized approvers?

A principal is an individual or entity responsible for paying all costs associated with the activity either by directly paying for expenses or indirectly by collecting funds from participants to pay the costs. If the event is non-University, the Principal must be a non-University entity such as an individual or non-University organization (i.e., not a University department, research or public service center). The principal may be a University employee if the activity is specific to the University (e.g. a retirement party or office water cooler fund).

An authorized approver is the person granted authority by the principal to request and approve disbursements from the agency account, and granted authority by the department to approve financial system (e.g., KFS) transactions.

What do I and the provider of the funds need to know about agency accounts?

Please note the following:

  • Funds accepted for an agency account are not tax deductible charitable contributions to the University.
  • The University does not exercise any direct financial control over the use of agency account funds but acts only as custodian or fiscal agent on behalf of the principal.
  • Disbursement of agency funds is not subject to the same level of oversight and restriction as University funds; however, general university policies must be followed and reasonable internal control over agency account funds must be exercised.
  • The activity must be closely associated with or related to the activities of the University. It must provide benefit to the University community (i.e., students, staff, and faculty). Receipts and disbursements from this account must be in line with the purpose stated.

How can I request an agency account?

Create an Account (ACCT) document in KFS and complete the Request for Agency Account form. After departmental approval, the KFS document will route to General Accounting for approval. Email the Request for Agency Account form to General Accounting. If all is in order, General Accounting will approve the form and the KFS document and will then email a copy of the approved Request for Agency Account form to your department, for your records.

How should I manage my agency account?

When an agency account is established, funds are received and then expenses are charged against the account. Unless there is a signed business agreement which indicates payment will be made on a reimbursement basis, agency accounts must have a positive balance and overdrafts must be cleared as soon as possible.

Because disbursements from agency accounts do not receive the same level of oversight or go through the same approval processes (for example: alcohol and other entertainment expenses) expenses as University funds, expenses may not be moved from agency funds to University funds without prior approval of General Accounting. You can, however, move expenses to an Agency Account if the expense was appropriate to the purpose of the account.

Who can see the agency account ledgers?

The agency account's transaction and cash balance information will be available to authorized FIS Decision Support users. If a non-UC Davis principal would like to access the information directly, the UC Davis department overseeing the agency account can request access for the person via a Temporary Affiliate Form for special UC Davis affiliates.

What should I do when I no longer need the agency account?

On the Request for Agency Account form, if you indicated leftover funds would be returned to the principal, do the following:

  1. Create a KFS Disbursement Voucher (DV) document using Payment Reason Code of Agency Fund.
  2. After the payment is made, create an Account (ACCT) document in KFS to inactivate the account.

On the Request for Agency Account form, if you indicated leftover funds would be placed into a gift fund, do the following:

  1. Complete and submit a Gift Acceptance Report to Advancement Services. In the donor instructions section, state "This is a transfer from (cite your agency Account number)". Contracts & Grants Accounting will then complete the transfer.
  2. After the transfer is complete, create an Account (ACCT) document in KFS to inactivate the account.

On the Request for Agency Account form, if you indicated leftover funds should be placed into the University's miscellaneous income account, do the following:

  1. Contact General Accounting and request that the transfer be made.
  2. After the transfer is complete, create an Account (ACCT) document in KFS to inactivate the account.

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