GAP 200.500, Agency Funds

Contents

1. Policy Statement
2. General
3. Process
4. Agreement by Responsible Party
5. Support Corporations of the University

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I. Policy Statement

This policy applies to proposed arrangements (which may include Duke providing physical space, access to Duke agency funds, services performed, on a formal or informal basis, by Duke employees, etc.) between Duke and other entities or organizations, including but not limited to consortiums, institutes, journals, and associations (“hosted organizations”).

A Dean or Executive Officer (the “Sponsor”) can sponsor a project for entering into a contractual arrangement with a hosted organization. The Sponsor may consult with University Counsel, Risk Management, and Financial Services regarding the proposed project.

The Sponsor must submit the proposal with recommended action to the Provost. The proposal shall include the following:

• Evidence that the organization is incorporated and in good standing (or will incorporate prior to entering into the relationship with Duke) and has purchased insurance of the type and amounts appropriate for the activities and operations of the hosted organization
• A description of why the proposed arrangement should be a strategic priority for Duke
• A description of the services, facilities, etc. that it is proposed Duke would provide to the hosted organization; the value of these services, facilities, etc.; and whether the hosted organization would be paying Duke for these services, facilities, etc.

Upon receiving approval from the provost, the arrangement and any proposed contract must be reviewed by University Counsel, Risk Management, Financial Services, and other departments as may be appropriate.

The Sponsor shall be responsible for the completion of final detailed plans for the project (including a "financial backstop"). These plans shall be approved by Financial Services.

II. General

Agency Funds represent funds in which Duke University has no proprietary or financial interest. These funds belong to student organizations and groups associated with Duke University for whom the University has agreed to act as fiscal agent. Duke University’s responsibility is limited to that of custodian for such funds.  Examples of agency funds include:

• Duke Student Government
• Students for Choice
• Organization for Tropical Studies
• American Dance Festival

Since an Agency Fund does not belong to Duke University, a justification is required as to why Duke University should agree to act as a fiscal agent for the group rather than for the fund to be administered outside of the University’s financial systems.

III. Process

Requests for Agency Fund accounts can originate only from a department or school of Duke University. The department/school must be willing to fund any overdrafts remaining beyond a reasonable period of time (usually three months).  To protect the University, the sponsoring department/school will provide the cost object of an established account to backstop for any expenses in excess of revenue of the requested Agency Fund. An Assistant Vice President, Associate Dean, Dean or someone of equivalent or higher authority (“The Approver”) must approve the designation of the backstop cost object.

An Agency Fund Application form, Agency Fund Checklist, and a Cost Object Request form should be completed and signed by the person responsible for the agency fund, the sponsoring department designee and “The Approver”

All forms should be emailed to Accounting Systems Administration (ASA) at AcctgSysAdmin@duke.edu

If the organization that will use the agency fund has tax-exempt status (not usual) please include a copy of the tax determination letter with the application forms.

ASA will assign the cost object and communicate it to the responsible party and the sponsoring department.

IV. Agreement by Responsible Party

For an Agency Fund request to be considered, approved, and assigned a cost object (fund code), the organization or group must agree to abide by all applicable University policies and procedures. It is the responsibility of the organization or group to become knowledgeable and cognizant of any updates to the applicable policies and procedures. The sponsoring department has a responsibility to monitor compliance.

The policies and procedures are to include but not limited to the following:

• Accounting policies and procedures.
• Payroll/Human Resources policies and procedures.
• Purchasing policies and procedures.
• Investment policies and procedures.
• Infrastructure tax on investments. 
• A positive cash balance will be maintained in the account and should be sufficient to cover any disbursements at all times.
• Any cash overdraft in the account must be covered promptly.
• Interest will be charged on any cash overdraft of the account.

The responsibility for filing any tax or informational forms, such as IRS Form 990, is that of the organization or group using the agency account. As custodian of the fund, Duke University assumes no responsibility for this function.

The University reserves the right to terminate its agreement to act as a fiscal agent or custodian for an organization at any time the organization or group does not adhere to its responsibilities as outlined above.

V. Support Corporations of the University  

If the agency fund requested is for a support corporation of Duke University (as determined by University Counsel) the organization must agree to file annual financial statements with the Office of the Vice President of Finance. The VP, Finance and University Controller shall determine the level of accounting oversight that is required of the support corporation to include, but not limited to, procedure testing, compilation, annual audit, tax and information return preparation, financial statement preparation, etc. Any external costs associated with the accounting oversight will be borne by the support corporation.