Procedure: 301-Custodian Funds
Date: 7/18/2011 (Last updated January 14, 2010)

Travel advances for individual travel—refer to Policy: 302-Travel Authorizations and Cash Advances (fomerly Travel Advances).

All custodian fund requests are based on three months or less of anticipated expenditure levels. Please attach the Custodian Fund Budget Information form and the Custodian Fund Individual/Department Custodian Agreement to the Custodian Fund Request Form.

Procedure:
1. The custodian fund request is based on three months or less of aniticipated expenditure levels.

2. Department prepares a Custodian Fund Request Form, the Custodian Fund Individual/Department Custodian Agreement and the Custodian Fund Budget Information Form. These custodian funds are issued to the custodian only and cannot be issued for another person working for the custodian.

Within 30 days after the end of the custodian fund time period, all fund requests must be properly accounted for by submitting a Custodian Fund Accounting Form to the Dean's/Divisional Office with supporting documentation for the use of those funds.

All custodian fund requests require, at minimum, monthly review and reconciliation to the authorized fund request levels. Quarterly reporting of expenditures is required, at a minimum, by using the Custodian Fund Accounting Form.

Any custodian fund request for one year or greater is a replenishable custodian fund. Replenishable custodian fund requests require a UW Madison checking account established and set up by UW-Madison Custodian Fund. These bank accounts cannot be used to purchase gift cards nor to request cash withdrawls.

If the individual requesting the new, temporary custodian funds already has another temporary custodian fund account outstanding, it is required all past due temporary custodian funds be reconciled, reported, and turned into the Dean's/Divisional Office for approval before a new custodian fund request will be issued. It is the Dean's/Divisional Office discretion to approve more than one custodian fund request at any given time to one individual.

Procedure

  1. The custodian fund request is based on three months or less of anticipated expenditure levels.
  2. Department prepares a Custodian Fund Request Form ,Custodian Fund Individual/Department Custodian Agreement and Custodian Fund Budget Information Form. These custodian funds are issued to the custodian only and cannot be issued for another person working for the custodian.
    1. On the Custodian Fund Request Form, fill out financial coding using Department funds with SFS Account Code 6167 and create an internal unique department nine digit Custodian Fund Request ID Number, starting with NR_______. (e.g., NR0000001, NR000000a, NRab123f6)
    2. Indicate the type of Custodian Fund (check those that apply):3 months or less, 1 year or greater, Human Subject Study, Petty Cash, and/or Change Fund. Indicate time period for start and end date. If there is no specific end date, indicate it as such in the end date line.
    3. Complete Custodian name, address, and 'check payable to' section.  Note: The 'check payable to' must be the name of the Custodian and if it is a Department Only Custodian agreement, then it can be the name of the Department starting with UW-Madison and the Department name. Deliver to information (if different than custodian address), and contact name/call number. If this custodian fund request is to be used for a foreign bank account, contact Cash Management to ensure appropriate banking arrangements are established.
    4. Complete the Purpose of Custodian Fund Section with information to make the fund request justifiable.
    5. Must be signed by the Dean's/Divisional Office and, when applicable, the custodian (employee).
    6. Prepare Custodian Fund Individual/Department Custodian Agreement. The Department section must be completed and signed off by the Department. Forward the agreement to the Dean's/Divisional Office for review and approval. If the custodian fund request is the responsibility of the Individual Custodian, then this form must also be signed by the Custodian (employee).
    7. Complete the Custodian Fund Budget Information Form and attach this document to the Custodian Fund Request form.
    8. Attach all paperwork (agreement and Budget Information form) to the Custodian Fund Request Form.
  3. Department/Dean's Office keeps a copy of the Custodian Fund Request Form, signed Custodian Fund Individual/Department Custodian Agreement and any attachments .
  4. Original paperwork including the Custodian Fund Request Form, Custodian Fund Individual/Department Custodian Agreement, and the attachments are sent to Cash Management, 21 N. Park Street, Suite 6101, Madison, WI 53715-1218. Cash Management reviews the request and coding for processing.
  5. The check will be sent to the address indicated as the deliver to address on the Custodian Fund Request Form or deposited into the authorized bank account. Check WISDM to see if the custodian fund request has been processed. Otherwise, contact Cash Management for more information on the deposit and any timing issues.

Decrease/Increase to an Existing Replenishable Custodian Fund Request (does not apply to Temporary Custodian Fund Requests)

  1. Prepare a Custodian Fund Request Form and a Custodian Fund Individual/Department Custodian Agreement with the amount of the custodian fund decrease/increase :
    1. On the Custodian Fund Request Form, fill out financial coding using Department funds with SFS Account Code 6167 and use the original Custodian Fund Request ID Number which starts with NR.
    2. In the Type of Custodian Fund Request area, mark in red letters if this is an increase or decrease to the original Custodian Fund Request Form.
    3. Complete Custodian information. Note: The 'check payable to' must be the name of the Custodain and if it is a Department Only Custodian agreement, then it can be the name of the Department starting with UW Madison and the Department name. Deliver to information (if different than custodian address), and contact name/call number.
    4. Complete the Purpose of Custodian Fund Section with information to make the request justifiable.
    5. Must be signed by the Department and the Dean's Office and when applicable the custodian (employee).
    6. Prepare Custodian Fund Individual/Department Custodian Agreement. Must be completed and signed by the Department and Dean's Office. If the custodian funds are the responsibility of the Individual Custodian, then this form must also be signed by the Custodian (employee).
    7. Attach an explanation of what the funds will be used for with a preliminary budget. Include any important details related to how funds will be spent.
    8. Attach all paperwork to the Custodian Fund Request Form.
  2. Department/Dean's Office keeps a copy of the Custodian Fund Request Form, signed Custodian Fund Individual/Department Custodian Agreement and any attachments.
  3. Original paperwork including the Custodian Fund Request Form, Custodian Fund Individual/Department Custodian Agreement, and the a ttachments are sent to Cash Management, 21 N Park St., Suite 6101, Madison, WI 53715-1218. Cash Management reviews coding for processing.
  4. When check arrives, the check will be sent to the address indicated as the deliver to address or deposited into the authorized bank account. Check WISDM to see if the request has been processed. Otherwise contact Cash Management for more information on the deposit and any timing issues.

Closing, Ending, and/or Documenting Expenditures Related to All Custodian Fund Requests

Custodian Fund Accounting Form:

This form will be used to record program expenditures related to the custodian funds. Expenses using the custodian funds must agree with the original purpose of the request and include detail.

The Custodian Fund Accounting Form is designed to:

  1. Identify the original Custodian Fund Request Form and Custodian Fund ID Number.
  2. Reduce the custodian funds on SFS code 6167 used by the Department on the original Custodian Fund Request Form.
  3. Post the expenses to the appropriate Account, Fund, DeptID, Program, and Project.

Process

Custodian, Department, Dean's/Divisional Office:

  1. Initiates the Custodian Fund Accounting Form paying particular attention to:
    1. Complete the first line of the form as an offset to the original request by the total expenditures being reported on the Custodian Fund Accounting Form (see coding submitted on Custodian Fund Request Form - SFS account code 6167. Offset amount must be listed as a negative to reduce the custodian funds.
    2. Subsequent lines would include all SFS account codes being expensed according to submitted expense documentation.
    3. Identify which Custodian Fund ID Number is being expensed by attaching a copy of the original request and noting the number in the upper right corner of the Custodian Fund Accounting Form.
    4. Additional lines of coding detailing the expenses incurred are included in the body of the form under itemized expenditures. Include all SFS account codes being expensed according to submitted expense documentation and in accordance with the original purpose of the custodian funds.
    5. Attach all original/supporting documents for itemized expenditures, number the documents and identify the number on the front of the Custodian Fund Accounting Form. Total the amounts on the itemized expenditures to ensure they agree with the total posted on the Custodian Fund Accounting Form.
    6. Indicate the balance remaining on the original custodian funds after taking into account the previous expenses on the custodian funds line.
    7. Mark off on the Custodian Fund Accounting Form if check is attached or reimbursement is due to employee.
    8. Complete the Payee and Deliver to information.
    9. Fill in call contact information and Custodian's name.
    10. Obtain the signature of the Custodian (employee) on the Custodian Fund Accounting Form.
    11. Forward to the Dean's Office for review, approval, and signature.
    12. Dean's Office forwards all documents to Cash Management, 21 N Park St., Suite 6101, Madison, WI 53715-1218.

Cash Management:

  1. Reviews accounting form for:
    1. Proper approvals
    2. Coding, with particular attention to account codes, being used
    3. Copy of Custodian Fund Request Form
    4. Original Receipts/payment log
    5. Total expense amount on the accounting form agrees with the total of the itemized amounts on the supporting detail.
  2. Approves the Custodian Fund Accounting Form and forwards within Accounting Services for processing of financial data into the financial system.
  3. Quarterly, the Dean's Office reviews outstanding custodian advances for timely expenditure reporting, funding source changes, and under-reporting of activity. Notify Cash Management of any Department funding source changes and under-reporting of activity.
  4. Annually, Cash Management will work with the Dean's Office to confirm updated custodians agreements on all outstanding custodian funds.

Department/Dean's Office:

  1. Periodically review outstanding custodian funds on WISDM. Log into WIDSM, use the Navigation menu, choose “Transactions” under “Other Searches,” choose current fiscal year and include all accounting periods, fill in the following boxes: “Organization” select “starts with” from pop down menu and enter your Department number, “Account” enter 6167 , “Show Balance Acct” check the box as yes, submit. WISDM will display all outstanding custodian funds which have been set up by the above process. This information can be viewed and sorted in Excel.
  2. On a monthly or quarterly basis, reviews custodian funds for end dates, custodian agreement changes, outstanding custodian funds, and amount expensed against original custodian fund requests.
  3. Notifies Custodian Fund, any custodian funds past due requiring collection notices. Cash Management sends out collection e-mail to custodians with a copy to the Department and the Dean's Office.
  4. Once payments and reimbursements have been vouchered, checks WISDM for correct custodian fund balances by Department ID.

Related Policy:

Who should know this procedure?

Deans, Directors, and Staff dealing with custodian funds

Related Documents:

Contacts:

For tax questions contact Jose Carus.

cstdnfnd@bussvc.wisc.edu or Kathy Virnig

Policy and Procedure Index