[Moderate revision–posted 3/3/26 (replaces 2/9/23 edition)]
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Operating Policy and Procedure

OP 62.22: Fiduciary and Agency Funds

DATE: March 3, 2026

PURPOSE: The purpose of this Operating Policy/Procedure (OP) is to set forth policy for the establishment of fiduciary and agency/custodial funds in the university’s accounting system.

REVIEW: This OP will be reviewed every two years after publication by the Assistant Vice President and Controller with substantive revisions forwarded through administrative channels to the Senior Vice President for Administration & Finance and Chief Financial Officer (CFO).

POLICY/PROCEDURE

1.  Policy Statement

It is the policy of Texas Tech University (TTU) that fiduciary and agency or custodial funds are established only for organizations dedicated to the mutual achievement of educational, research, and public service goals but which are separate entities from the university. To ensure accurate financial reporting and effective stewardship of funds, Accounting Services is responsible for the final determination of the relationship and granting associated access to university financial systems.

2.  Background

In 2020, accounting standards changed formal terminology from agency funds to fiduciary funds. Fiduciary activities that meet certain criteria are identified and reported separately in TTU’s financial statements and classified as 82 funds.

TTU also holds informally titled agency or custodial funds, which do not meet the criteria for fiduciary activities or are held in the short term by nature. Most student and faculty organizations fall under agency or custodial classification and are classified as 81 funds. Determinations are made by Accounting Services.

3.  Fund Accounting Policies

a.    Fiduciary and agency/custodial funds account for resources held by the university as a custodian or fiscal agent on behalf of faculty, staff, and academic and student organizations (external entity). The agency retains all its rights, titles, and interest in and to such funds.

b.   The establishment of a fiduciary or agency/custodial fund does not

(1)    Entitle the external entity to the use of university services other than the normal administration of funds;

(2)    Place the agency under the university’s tax-exempt umbrella;

(a)    Funds deposited to a fiduciary or agency/custodial fund are not tax-deductible gifts to the university.

(b)    Expenditures from a fiduciary or agency/custodial fund are not entitled to the university’s state sales tax exemption. Registered student organizations may hold a one-day tax-free sale each month, subject to the requirements set forth in OP 62.30, Sales Tax Collection. Additional information pertaining to student organizations’ tax responsibilities can also be found on the Student Organizations webpage.

(3)    Make the university liable for any of the external entity’s debts, liabilities, or actions;

(4)    Grant the external entity the right to use the university’s name, logo, or trade and service marks; or

(5)    Continue indefinitely.

(a)    Fiduciary or agency/custodial status is contingent on adherence to all university policies and state law.

(b)    The university has the right to close an external entity’s fund at its discretion after providing reasonable notice.

4.  Terms and Conditions

a.    Student organizations must register annually with the Student Involvement Office.

b.    All other external entities must complete the Agency Agreement Form signed by the designated university sponsor (financial manager) and the external entity’s representative.

c.    The financial manager assigned to the fiduciary or agency/custodial fund serves as the fiscal agent and assumes responsibility for the proper and compliant administration of the fund.

d.    Use of the university’s accounting system, with properly designed internal controls, ensures transactions initiated on agency funds are subject to institutional checks and balances.

(1)    Fiduciary and agency/custodial funds are requested as determined by Accounting Services in the online Finance Fund Maintenance application. The requestor must include proof of student organization registration or a completed Agency Agreement Form.

(2)  Fiduciary and agency/custodial resources must be separately accounted for in the university’s accounting system and not commingled with other university funds managed by and/or allocated to the financial manager.

(3)    Goods and services purchased on behalf of the external entity must comply with all university policies and procedures and be procured through the institutional systems. Procurement policies are contained in chapters 72 and 79 of the university’s Operating Policy Manual.

(4)    Funds collected by the external entity must be deposited in accordance with university OP 62.07, Departmental Deposits and Completion of the Departmental Deposit Information Sheet (DDIS). Budget is populated systematically upon receipt of funds.

e.    Payroll expenses are not allowed. Faculty, staff, and students providing services to agency operations must be paid from a university source.

f.    The fiduciary or agency/custodial fund must have a positive cash balance at all times.

(1)    Should a deficit occur, the financial manager is responsible for remedying the deficit balance promptly upon notification.

(2)    Interest earned on agency cash balances is credited to a central university fund unless there is an approved exception from the CFO.

g.    External entities with approved fiduciary or agency/custodial funds may use services of university departments such as Central Warehouse, MailTech, and Communication Services. All charges for university-provided services will be processed consistent with university OP 62.26, Charging Departments for Goods and/or Services.

h.    University faculty members serving as editors of professional journals/newsletters for organizations and societies related to their academic area of specialization may establish fiduciary or agency/custodial funds to account the income and expenses associated with this work.

i.    Funds remaining in a fiduciary or agency/custodial fund after the fund is no longer needed will be returned to the agency unless different disposition instructions are set forth in the agency agreement.

5.  Annual Review

a.    Funds will be reviewed annually by Accounting Services to determine whether the agency status continues to be appropriate.

b.    Inactive balances should not be carried forward indefinitely from year to year but should be disposed of in accordance with the Agency Agreement Form. If the external entity no longer exists, unused balances will be handled in accordance with TTU OP 76.09, Abandoned Personal Property.

OP Categories

• 01 Chancellor
• 02 Development
• 04 Audit Services
• 10 President
• 30 Academic and Student Affairs – General
• 32 Academic Policies – Faculty
• 34 Academic Policies – Students
• 36 Academic Programs
• 40 Institutional Compliance
• 48 Communication Services
• 52 Information Technology
• 60 Environmental Health and Safety
• 61 Facilities Management
• 62 Financial and Accounting
• 63 General Services
• 64 Graduate Programs (Faculty and Students)
• 65 Research Accounting
• 66 Libraries
• 67 Mail Services
• 68 Communications and Marketing
• 69 Payroll and Tax Services
• 70 Human Resources
• 72 Purchasing, Contracting, and Payables
• 73 Data Management
• 74 Research
• 75 Research Security
• 76 Security
• 77 Student Services and Registrar
• 78 Traffic and Parking
• 79 Travel
• 80 Vehicles