Finance Fun with Restricted Accounts October 16 th, 2012 Revised: September 25 th, 2014
What is a Restricted Fund? Money that is limited in its use either by an external part of an internal decision The money was earned for a specific use and cannot be pooled into the operating funds of the College An example would be, revenue generated by Creations can only be spent on expenses related to the activities of operating Creations rather than pooled into College regular operating funds
Why Use a Restricted Cost Centre? To track revenue and expenses for a particular business or event such as a golf tournament To hold money for future use such as a field trip To carry forward funds to be used in the next fiscal year, if applicable To track money donated by an outside source for specific use such as scholarships and bursaries
The Restricted Account Number Example: This account is made up of: The fund – 5 – All restricted funds start with 5 The cost centre – – All restricted cost centres start with department code 010, the remaining three digits represent the specific cost centre The object – – All account strings include an object to define where the funds should ‘go into or come out of’ and describes the nature of the transaction
What Does a Restricted Fund Cost Centre Look Like?
Things to Note About Restricted Accounts Money earned within a restricted account is subject to the same taxes and Revenue Canada rules as money earned by other operations within the College Purchases (capital or otherwise) made with restricted funds must follow the College’s purchasing protocols and be approved according to the College’s signing authority
Who is Responsible for the Restricted Accounts? The dean and/or manager of the department is ultimately the one who request set-up of a restricted account and approved expenditures from that account Often they will delegate to the person who is in charge of the operations or event Tyler Virostek in Finance looks after the financial end of restricted accounts and can help you with your