SPECIAL ACCOUNTING PROCEDURES FOR TRUST AND AGENCY FUNDS OUTSIDE THE STATE TREASURY - 19400

(Revised: 10/2024)

 

Trust and Agency Funds outside the State Treasury (i.e., money or property in the custody of a state agency/department not required to be deposited in a fund in the State Treasury) generally fall into the following types:

 

  • State Veterans' Home Post Fund
  • Agriculture Marketing Trusts
  • Employment Development Department Trust Funds
  • Guaranty Deposits
  • Private Trusts
  • Special Purpose Trusts

SAM does not include specific procedures for the first three types of trusts as they are accounted for by their respective agencies/departments. For special procedures that apply to the last three types of trusts listed above, see SAM Sections 19410 through 19464.

To appropriately show the financial status and operations of certain Trust and Agency Funds, the Department of Finance, Fiscal Systems and Consulting Unit (FSCU) may issue special manuals or instruction memorandums that prescribe the use of all or some commercial accounting principles such as:

  • Accruing collectible operating income earned, regardless of when collectible.
  • Accruing expenditures based on services received and goods used—or goods received if there are insignificant differences between usage and receipt of goods.
  • Accounting for assets with no offsetting reserve and depreciating them.
  • Preparing the following year-end reports for trust accounts outside the State Treasury:
  • Report No. 7, Pre-Closing Trial Balance
  • Report No. 8, Post-Closing Trial Balance
  • Report No. 9, Analysis of Change in Fund Balance
  • Report No. 14, Reports of Accounts Outside the State Treasury
    For information on these reports, see SAM Chapter 7900.

FSCU may issue special instructions to ensure the proper recording and reporting of certain funds in this category. Such instructions will remain applicable except that:

  • Accounts prescribed in SAM Chapter 7600 will supersede those shown in such instructions.
  • Procedures regarding income accounting prescribed in SAM Chapter 8200 will supersede those shown in such instructions except for funds that use the accrual basis of accounting to record operating income. Funds of this type normally account for operating income as it is billed throughout the year, regardless of when cash is received. For information about the basis of accounting, see SAM Section 7440.

Where no special instructions have been issued by FSCU, agencies/departments shall use the following guidelines:

  • General procedures prescribed in SAM Chapters 7000 through 8800. However, procedures regarding income accounting prescribed in SAM Chapter 8200 will not be used if the fund requires that operating income be recorded on an accrual basis.
  • Journal entries described in SAM Chapters 10500 and 10600 to the extent that they are applicable, with modifications for the use of some different General Ledger accounts as prescribed in SAM Chapter 7600 (unless otherwise provided in SAM Sections 19410 through 19464 which apply to guaranty deposits, private trusts, and special purpose trusts).

Agencies/Departments shall maintain separate General Ledger accounts for each type of trust.

 

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