Trust funds are classified as 'specific endowments' as the benefactor has specified that the funds are to be invested and the investment income is to be used for specific purposes. The funds may be required to be invested in perpetuity or for a finite period.
In UFS, each trust fund is identified by a unique source of funds code beginning with the letter "K". This distinguishes them from other types of activities in the Chart of Accounts.
The permanent capital element of a Trust Fund is distinct from the spendable capital, by the use of a different Cost Centre within the same Source of Funds.
For example, if you have a trust fund that is identified as "ABC", your account code would be as follows:
|Department||Cost Centre||Source of Funds||Description|
|Your Dept code||ZZYA||KABC||Trust Fund - Permanent Capital|
|Your Dept code||ZZYB||KABC||Trust Fund - Spendable Capital|
What does this mean to me?
Subject to the terms of the trust deed, you can pay invoices out of the spendable capital cost centre. NEVER charge expenditure to ZZYA!