Agency Fund Guideline

Agency Funds Guideline
and Criteria

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Fund Description

By definition, “agency funds account for resources held by the University as custodian or fiscal
agent for faculty, staff members, and academic organizations” (NU Accounting Policies and
Procedures Manual, June 1991). Agency funds recorded in Fund Group G consist of the following
major categories:

Faculty professional organizations - for professors with official positions within a

professional organization (e.g. editor of a journal).
McGaw Medical Center - for intern and resident payroll.
Work Study Employers - for work-study wages provided by the external employer to be
paid to students through the NU payroll system.
Fraternities & Sororities - NU purchases goods and services for fraternities & sororities

and then invoices them for reimbursement.
Other Affiliated Institutions - for independent organizations, usually on campus, that are

closely connected to the University such as alumnae, credit union, and student publishing.
Student Organization Clearing - student organizations clearing account for NU

charges & reimbursements to NU.

Accounting Services and Budget review written requests from organizations, units, and

individuals which describe the purpose of the fund to be established, expected expense activity,
and responsible manager.

The fund must meet agency fund criteria for approval. After approval, Accounting assigns a
fund number and the Budget Office activates an account (org) with appropriate objects of
expense. The agency fund manager is provided with written confirmation of the agency
account and operating guidelines.

Criteria for Approval of Agency Funds

Consistent with agency funds definition
Annual expense transaction activity of $25,000 or more

If funds meet the agency definition but have less than $25,000 activity, Accounting
Services/Budget Operations will establish designated funds to be managed by the sponsoring
unit/department. Multiple programmatic agency funds with individual expense activity less than
$25,000, such as work study employer accounts, are allowable if the sponsoring unit/department
provides centralized administration and support for account management.

Note: These criteria are the result of a cost/benefit analyses by Accounting of the number and
nature of existing agency accounts. Over the last several years agency accounts have proliferated.
They require extra staff training and “exception based” accounting rules which are difficult to
administer. Agency accounts established prior to 9/1/96 which do not meet these criteria will
be phased out in subsequent years. Each school/unit area will be contracted by Accounting
Services and assistance provided to either close the account or establish a designated account
for those funds.

Operating Guidelines

Agency fund managers are responsible for monitoring their funds. Monthly NA10 reports are
distributed by Accounting to the account managers for their review and reconciliation of activity.
Managers report discrepancies to Accounting for research and resolution, Credit balances
represent an overdraft of funds which must be investigated and corrected on a timely basis.
Accounting reviews agency funds on a quarterly basis for credit balances. Managers of
funds in an overdraft position will be contacted by Accounting. If Accounting is not notified
within thirty days by managers of plans to correct the deficit balance, an interest charge may
be assessed on the deficit amount at the NU working capital rate (per Budget Office).
Agency funds income and expense activity is removed from the University financial
records at year end to exclude non-University transactions for financial reporting purposes
(debit to balance sheet 6080 and credit to balance sheet 7000). The accounts are
reestablished in the new fiscal year.

Office of Accounting Services
Last Updated: 1/26/2006

619 Clark St. Rm. 217

Evanston, IL 60208

Phone: (847) 491-5337