Does your unit manage financial activity within custodial funds (i.e., funds within the 9nnnnn fund code range)? If so, keep the following points in mind:
- Custodial funds need established when the University of Illinois System is acting as a fiscal custodian for an external entity’s financial activities.
- Custodial funds are used to account for the revenues and expenses of the external entity’s financial activities.
- For example, if a system unit agreed to serve as a custodian for an external party and host an event on their behalf, that unit would need to establish a custodial fund which would then be used to account for the event revenue and expenses.
- Any surplus balance at the end of the event would need to be remitted back to the external entity. Or, if the event ended in a deficit, the external entity would be responsible for providing additional funding to cover the excess expenses.
- Common examples of scenarios which require a custodial fund include:
- Hosted conferences
- Registered Student Organizations (RSOs), including the Chicago Organization Fund (COF)
- Athletic booster clubs
- University Related Organizations (UROs)
- There are also limitations to consider when managing custodial funds. The financial activity accounted for within these custodial funds cannot utilize the University of Illinois System's:
- Federal Employer Identification Number (FEIN)
- Sales tax exemption for purchases
- Tax-exempt status for the purpose of soliciting charitable donations to their organization
- Departmental C-FOPs for making purchases on behalf of their organization
- Credit card terminals for processing credit card receipts on behalf of their organization
- Purchasing power or discounted pricing for their external organization’s purchases
For further details, refer to Section 2 of the Business and Financial Policies and Procedures.
Contact
If you have questions, feel free to reach out to one of our applicable subject matter experts by searching on “Custodial Funds” within the Business and Finance Who to Ask list.
