Business Procedures Manual

Essential business procedural components for University System of Georgia institutions.

14.4 Oversight and Maintenance of Custodial Funds

(Last Modified on July 1, 2019)

Financial stewardship of custodial funds is paramount, therefore, ongoing accountability and oversight must be maintained. Each custodial account should be reviewed periodically, at least once a year, for the purpose of ensuring that custodial funds are being properly maintained and reported correctly. Circumstances to consider which could lead to change, suspension or revocation of custodial account status would include:

  • A failure to adhere to institution policies and procedures;
  • A change in the nature of the activities and functions such that reporting as a custodial fund is no longer appropriate;
  • Deficit balances which have not been remedied in a timely manner;
  • If, in the institution’s judgment, continuing the custodial account relationship is no longer in the best interest of the institution.

After 24 consecutive months without activity, unused balances must be either disposed as outlined in the custodial agreement or refunded to the Owner of the custodial fund. Refunds that remain outstanding after one hundred eighty (180) days from the check’s issue date must follow procedures outlined in section 19.1, Unclaimed Property.

Individual custodial accounts should not carry a negative balance outside of short-term timing differences in processing. Under no circumstances should the custodial fund group have a deficit balance. At the end of the fiscal year, accounts receivable should be set-up and external providers should be billed for any applicable deficit balances.

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