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 should be established when the University of Illinois System is acting as a fiscal custodian for an external entity’s financial activities. These 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 hosts an event on their behalf, the unit must establish a custodial fund. All event-related revenue and expenses would be recorded within this fund, and any surplus at the end of the event would be returned to the external entity (or, if the event ends in a deficit, the external entity must provide additional funding to cover the shortfall).
- Other common examples include serving as a fiscal custodian for registered student organizations (RSOs), athletic booster clubs, and university related organizations (UROs).
- Since custodial funds are essentially used to account for financial activity of an external party, they are not allowed to utilize:
- The system’s Federal Employer Identification Number (FEIN)
- The system’s sales tax exemption on purchases
- The system’s tax-exempt status for the purpose of soliciting charitable donations to their organization
- Departmental C-FOPs (such as state funds or ICR funds) for making purchases on behalf of their organization
- System-owned credit card terminals for processing credit card receipts on behalf of their organization
- The system’s purchasing power or discounted pricing
- For further details, refer to Section 2 of the Business and Financial Policies and Procedures.
Contact
For further details, contact UAFR’s applicable subject matter experts, who can be found by searching for “Custodial Funds” in the Business and Finance Who to Ask list.
