AUDIT GUIDANCE FOR AGENCY ACCOUNT ADMINISTRATION
November 12, 2008
Agency accounts are accounts that are held by a University-related organization in a custodial or fiscal agent capacity. Agency accounts are used to receive, hold, and disburse non-State funds for approved activities as a fiscal agent for students, faculty, staff members, and appropriately recognized organizations. The Research Foundation of the State University of New York, Auxiliary Service Corporations, Campus-related Foundations, and Alumni Associations are authorized to administer agency accounts.
To help ensure that agency accounts are being administered in accordance with the Agency Account Guidelines (SUNY Guidelines) and to assist in strengthening internal controls and asset management, we offer the following audit guidance. This audit guidance should be considered in conjunction with the SUNY Guidelines.
WRITTEN POLICIES AND PROCEDURES
- Campus-related organization administering agency accounts should have up-to-date comprehensive written policies and procedures for the administration of agency accounts. These policies and procedures should specifically address the establishment of agency accounts (including types of activity allowed, applications for establishing, and agreements with agency account holders), procurement and disbursement of agency funds, agency fund cash receipt controls, investment of agency funds (including distribution of interest earned), and inactive accounts.
- The Campus President or designee should review SUNY Guidelines and the agency account policies and procedures of the campus-related organization administering agency accounts with the Executive Officers of the campus-related organization on an annual basis to ensure compliance with SUNY Guidelines. The policies and procedures should also be reviewed to ensure that appropriate controls are in place to help ensure agency funds are adequately safeguarded.
ESTABLISHING AGENCY ACCOUNTS
- Campus-related organization administering agency accounts should ensure that the agency account activity is an allowable activity per the SUNY Guidelines (see Exhibit A). To help ensure that the activity is allowable, the campus-related organization should utilize an agency account application that includes the name of the account, the intended purpose, source of funds, allowable expenditures, and authorized signatories. The agency account application should also be reviewed and approved by the appropriate campus vice president or designee.
- Upon approval of an agency account, the campus-related organization administering the agency account and the individual(s) conducting the activities related to the agency account should enter into an agreement. The agreement should define the responsibilities of each party, disclose the management fee that will be charged (if any), describe the types of services that will be provided, and indicate how any agency funds will be invested (if at all). The application should be attached to the agreement.
AGENCY ACCOUNT FISCAL AGENTS
Campus-related organization administering agency accounts act as fiduciary agents for any funds held in such a capacity. As such, these campus-related organizations have an obligation to the agency account holders to ensure all funds are adequately safeguarded, receipts are credited to the appropriate agency account, and disbursements are properly authorized and in accordance with the agency account agreement. Campus-related organizations in performing its fiduciary responsibility should:
- Provide receipts to the agency account holders upon the receipt of any funds.
- Require the use of standard agency account disbursement forms that describes the purpose of the expenditure and includes the signature of an authorized account signor and a supervisor.
- Verify signatures on disbursement requests are those of an authorized signor.
- Verify that the disbursement meets the intent of the agency account from which the funds are being disbursed.
- Require original receipts and invoices when disbursing funds. Payment requests based on vendor statements should provide enough detail that describes the type of expenditures and be supported by original receipts and invoices.
- Provide a monthly statement to the agency account holders so that the account balance can be reconciled to the agency account holders internal records.
- Follow-up on any inactive accounts (accounts with no activity for over six months) and determine whether they should be closed.
AGENCY ACCOUNT HOLDERS
To assist agency account holders (student organizations, campus departments, and others) in managing their funds, the campus-related organizations administering agency accounts should consider providing training to the account holders. Controls that agency account holders should consider implementing include:
- supervisory review of purchases,
- timely reporting and depositing of cash receipts,
- reconciliation of cash deposits to the agency account's monthly statements and supporting documentation,
- independent reconciliations of account balances,
- maintenance of equipment inventory records and periodic testing of those records to actual equipment, and
- periodic reconciliations of payroll charges to supporting payroll documentation, as appropriate.
SUNY Agency Account Guidelines: http://www.suny.edu/sunypp/documents.cfm?doc_id=62
For additional information, please contact the Office of the University Auditor at 518-320-1533 or University.Audit@sysadm.suny.edu