Iowa Admin. Code r. 281-98.101 - Custodial funds

Custodial funds are used to account for funds that are held in a custodial capacity by the school district for individuals, private organizations, or other governments. Custodial funds may include moneys collected for another government, a grant consortium when the school district serves as fiscal agent for the other school districts but has no managerial responsibilities, or funds for a teacher or a parent-teacher organization that has its own federal identification number (FIN). In a custodial fund, the school district or area education agency merely renders a service as a custodian of the assets for the organization owning the assets and the school district or area education agency is not an owner. Custodial funds typically involve only the receipt, temporary investment and remittance of assets to their rightful owners.

(1) Sources of receipts in custodial funds. Sources of receipts in custodial funds include temporary receipts of cash, investment instruments, property, and interest on investments held.

(2) Appropriate uses of custodial funds. Appropriate disbursements from a custodial fund depend on the nature of the rightful owners' conditions or the responsibilities of the custodian. Typically, disbursement will involve remittance of assets to their rightful owners or to a third party on behalf and at the request of the rightful owners. The school district cannot disburse more funds at any point in time than it has received from the rightful owner.

(3) Inappropriate uses of custodial funds. Inappropriate disbursements from custodial funds include any disbursement that is not consistent with the terms of the agreement, is not legal to a school district, or exceeds the amount of funds that have been received from the rightful owner or on behalf of the rightful owner.

Notes

Iowa Admin. Code r. 281-98.101

ARC 8054B, lAB 8/26/09, effective 9/30/09 Amended by IAB June 2, 2021/Volume XLIII, Number 25, effective 7/7/2021 Adopted by IAB April 17, 2024/Volume XLVI, Number 21, effective 5/22/2024