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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Agency Funds

Agency Funds (FT09)

Definition and Purpose

Agency funds are used to account for the assets held for distribution by the state as an agent for another entity for which the government has custodial responsibility and accounts for the flow of assets. Agency funds are custodial in nature and do not involve measurement of operations and provide the most appropriate mechanism for accounting for assets and liabilities.

Per GASB 34, paragraph 111, when an agency fund is used as a clearing account to distribute financial resources to other funds of the agency, the portion of the balance that belongs in other funds is not reported in the agency fund but rather in governmental or proprietary funds, as appropriate.

Suspense fund 0900 cannot be accounted for as a separate fund type due to operational reasons related to the automated systems in place between the agencies and Treasury Operations Division. This requires agencies to clean out the cash balances in their suspense fund throughout the year and especially at the end of the fiscal year. If agencies do not clear out these balances before fiscal year-end, the amounts must be reversed out of fund type 09 and recorded to another appropriate fund type (most often fund type 01) — unless the cash belongs to an outside entity and will be distributed in the next fiscal year. For more information, see Reclassifying Material Cash Balances That Remain in Suspense Fund FT09 at Fiscal Year-End.

Universities must establish their GAAP agency funds as fund type 05 in USAS because all of their funds are considered enterprise funds.

Glenn Hegar
Texas Comptroller of Public Accounts
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