Setting up a New Account
Representatives of groups (students, clubs, and local chapters of organizations) and individual faculty or staff often ask if an account can be set up for the group or for a particular purpose. To some, "account" means a separate checking account at the Franklin Mint Credit Union or another financial institution, while to others it means an account on the College's books.
When you come in to open an account, one of our staff members will ask a series of questions about the sources of revenue and types of activities you (or your group) intend to pursue in order to determine what kind of account(s) is/are appropriate. For accounts on the College's books, an "account" to the individual is actually a "fund" in the College's financial records.
Checking Accounts: Setting up a separate checking account for the group using the College's taxpayer ID number and/or name is not permitted but for very exceptional circumstances. Any exceptions must be authorized by the Vice President for Finance and Treasurer. Control by the College of activities in these accounts is not possible and the risk of illegal activities taking place and jeopardizing the College's tax-exempt status is too great. If the group feels it must have a separate checking account, it can be set up under a member's taxpayer ID number and the title must not include "Swarthmore College."
Agency Funds: The meaning of "agency funds" is "deposits held in custody for others." These funds are liabilities on the College's books and deposits and withdrawals are made from the liability accounts. An agency account is appropriate only where donors do NOT expect to deduct the gift on their tax returns and/or receive an official receipt for a donation to Swarthmore College. Student groups need the approval of the Director of Student Activities to open an agency account. Other groups need the approval of the Controller. To pay group expenses, the authorized individual submits a check request form or invoice to accounts payable. The documentation requirements for disbursements are the same as those for other College expenses, as our auditors do not distinguish between agency funds and other College funds.
Restricted Funds: Restricted funds are set up to receive and expend gifts to the College to be used for specific purposes. Gifts are sent to the Alumni/Gift Records Office and a formal receipt is prepared and sent to the donor, acknowledging the gift to the College to be restricted for the specified purpose. If the gift is given to the College, the money is "owned" by the College and the gift becomes revenue; expenses are charged to the fund using the appropriate account codes for expenses. The money can be expended for the purposes specified by the donors. Any group wishing to set up a restricted fund needs the approvals of the Controller and Director of Development.
Sample situations and which fund(s) is/are appropriate:
|A department is hosting a national conference on campus||Agency|
|Baseball Team (gifts for new uniforms and payments [NOT donation] for a trip to Hong Kong)||Both: Agency for the trip payments (not gifts) and Restricted for the gifts restricted to purchasing uniforms|
|Student Service group receives a grant from a federal agency to pursue its activities||Restricted for the grant; if there are other activities that do NOT involve gifts, such as bake sales, the group may have an Agency account as well|
|Swim Team holds bake sales and hoagie fundraisers for their trip to Barcelona||Agency|
|A local chapter of a national organization collects dues from members to submit to the national chapter and collects donations for a scholarship||Agency for the dues collection/use and donations (only if the donors do not expect to receive gift credit). If the donors expect to receive gift credit, a Restricted fund would also be created for the scholarship donations.|