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GASB 84 Fiduciary Activities: What Governments and School Districts Must Report

Sherman Hsieh

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Last updated: October 9, 2026 · Independent guide · We do not sell rankings or coverage.

GASB 84 is the Governmental Accounting Standards Board statement that decides which money a state or local government, including a school district, holds for someone else and must report in fiduciary funds. An activity is fiduciary only if the government controls the assets, they do not come from its own revenue, and they benefit outsiders without the government directing how they are spent. Activities that pass are reported in one of four fiduciary fund types.

What GASB 84 requires in detail

GASB 84 replaced the old agency fund idea with a sequence of tests, and each component of a transaction must be evaluated separately (Washington State Auditor’s Office, BARS Cash Manual, changed in 2025).

Test 1: control of the assets

A government controls assets if it holds them or “has the ability to direct the use, exchange or employment of the assets.” Legal restrictions do not remove control (New York State Comptroller, Accounting Bulletin, updated November 2020). If district staff write the checks, the district holds the money (Colorado Department of Education, January 2019).

Test 2: the assets are not the government’s own revenue

Assets that come solely from the government’s own-source revenues are not fiduciary. These are “revenues that are generated by a government itself,” such as exchange revenues, investment earnings and property taxes (Washington State Auditor’s Office, 2025). Assets from mandated or voluntary nonexchange transactions, such as most grants, are also excluded. The exception is a pass-through grant where the government has no administrative or direct financial involvement (Colorado Department of Education, January 2019).

Test 3: who benefits

The assets must also meet one of three beneficiary conditions (Washington State Auditor’s Office, 2025):

• Trust: the assets are held in a trust or equivalent arrangement in which the government is not a beneficiary, they are dedicated to the beneficiaries, and they are legally protected from the government’s creditors.
• Individuals: the assets are for individuals, do not come from goods or services the government provided to those individuals, and the government has no administrative involvement or direct financial involvement.
• Organizations or other governments: the assets are for entities outside the reporting entity and do not come from goods or services the government provided to them.

Administrative involvement usually decides the outcome. A government has it if, for example, it monitors secondary recipients for compliance with program-specific requirements, determines eligible secondary recipients or projects, or “has the ability to exercise discretion in how the funds are allocated.” Direct financial involvement exists when the government finances some program costs, such as a grantor-imposed matching requirement, or “is liable for disallowed costs” (Washington State Auditor’s Office, 2025).

The four fiduciary fund types

Definitions are from the New York State Comptroller (November 2020) and Yeo & Yeo, a CPA firm, July 19, 2018.

When you owe the beneficiary

Under GASB 84 a fiduciary fund recognizes a liability to beneficiaries only when an event has occurred that compels the government to disburse the resources. That happens when a beneficiary demands the money or when no further action, approval or condition remains for the beneficiary to meet (Georgia State Accounting Office, no date shown).

Financial statements

Custodial funds need a statement of fiduciary net position and a statement of changes in fiduciary net position. If resources are normally held three months or less, a custodial fund may report a single aggregated total for additions and one for deductions, with descriptions such as “collected for other governments” and “distributed to other governments” (New York State Comptroller, November 2020).

The three-month custodial exception

A business-type activity, such as an enterprise fund for a water utility or a hospital, that normally expects to hold custodial assets for three months or less may report those assets with a corresponding liability in its own statement of net position instead of in a custodial fund (Georgia State Accounting Office; New York State Comptroller, November 2020).

This is separate from the aggregated additions and deductions option. Neither lets a governmental fund, such as a school district general fund, skip custodial reporting for an activity that passes the tests.

Student activity funds and other common examples

For student activity funds, the answer turns on administrative involvement. A faculty advisor who can approve, reject or modify club spending, a board policy that sets spending guidelines, or a district that sets club fees each counts as involvement, and the activity is then not fiduciary (Mauldin & Jenkins, a CPA firm, August 3, 2020, summarizing Implementation Guide 2019-2 examples). Booster club money raised from outside fundraising and held in a district bank account, but administered by the club with no district contribution, belongs in a custodial fund, according to a New York State Comptroller training presentation (no date shown).

State education departments reached different answers, so check your state manual before you change fund codes.

The Colorado and Texas documents predate the final Implementation Guide, so confirm they are current. Georgia’s Department of Audits and Accounts wrote in 2022 that, because of GASB 84, most school districts have determined that all of their school activity funds are now governmental funds (Georgia DOAA, November 10, 2022).

For local governments, state-mandated taxes collected for the state, the state share of permit fees, court fees mandated by the Administrative Office of the Courts and inmate commissary accounts can be custodial. Impact fees, retainage, refundable deposits, payroll clearing accounts and local fines are not (Washington State Auditor’s Office, 2025).

Who is exempt, and what GASB 97 changed

Activities avoid custodial fund reporting only by failing the tests or through the three-month business-type exception. GASB Statement No. 97, issued in June 2020, aims to reduce the cost of reporting defined contribution plans and other employee benefit plans as fiduciary component units (Deloitte DART, June 23, 2020). The no-governing-board rule now applies only to defined benefit pension and OPEB plans, and the financial burden criterion in paragraph 7 of GASB 84 no longer applies to defined contribution plans. Those component unit changes took effect immediately, and the rest of GASB 97 applies to fiscal periods beginning after June 15, 2021 (Moss Adams, a CPA firm, no date shown).

Most 401(a) and 457 plans are therefore not pension trust funds, because a separate trustee holds the assets and employees direct the investments. A Section 457 plan that meets the GASB 67 definition of a pension plan is classified as a pension plan (PKF O’Connor Davies, a CPA firm, April 27, 2021).

Deadlines and penalties

GASB itself imposes no fines. Its chairman at the time told Congress that “the GASB does not have enforcement authority” and that compliance is enforced through state laws and through the audit process, when auditors give an opinion on whether the statements are fairly presented (Robert Attmore, House testimony, March 28, 2012). State filings also set their own dates. Wyoming state agencies, for example, must return the GASB 84 custodial fund template by July 31 (Wyoming State Auditor’s Office, modified July 17, 2024).

Records you must keep

Keep evidence for each activity’s conclusion, not only the final fund assignment:

• A completed evaluation worksheet that answers the control, own-source and beneficiary questions. Georgia publishes evaluation worksheets you can adapt, and Minnesota publishes a resource guide that classifies common activities (Minnesota OSA; Georgia SAO).
• Board policies and advisor approval rules for student activities.
• Trust, grant and intergovernmental agreements for pass-through money.
• Support for when each liability to beneficiaries arose, such as a demand date or remittance schedule.
• The restatement calculation for any activity moved out of an agency fund. Colorado requires districts converting an agency fund to restate net position and fund balance as of the first day of the fiscal year, July 1, 2019 for a June 30, 2020 report (Colorado Department of Education, January 2019).

Georgia’s auditors also recommend separating cash collection from bookkeeping and having central office staff reconcile school activity bank accounts (Georgia DOAA, November 10, 2022). Our guide to accounting software for internal controls covers how approval workflows and role permissions support that separation.

What to set up in your systems to comply

Government fund accounting systems handle GASB 84 through the chart of accounts rather than a single setting.

1. Create a fund code for each fiduciary activity group and tag it with its fund type (custodial, private-purpose trust and so on) so your report writer can build the fiduciary statements. Use your state’s codes where they exist, such as California’s Funds 76 and 95 or Texas’s Fund 865.
2. Move activities that fail the tests into governmental funds. The help documentation for SDS school administrative software, which has customers in Michigan, shows how to create a new Student Activities fund code (29 in its example), add one program code per activity such as baseball, and point each activity’s revenue and expense accounts to its own cash account through a cash override field (SDS, revised April 2021; SDS sells this software).
3. Add addition and deduction accounts to custodial funds, using descriptive names such as “taxes collected for other governments” if you will use the aggregated presentation.
4. Add a liability-to-beneficiaries account and post to it only when a demand or remittance obligation exists.
5. For enterprise funds using the three-month exception, add custodial asset and liability account codes inside the proprietary fund, as New York did (New York State Comptroller, November 2020).
6. Connect activity fund tools to the general ledger. A separate school payments product should take its GL codes from your finance system and post back in the format the ledger expects. Sparkrock, which sells the SchoolDay activity fund tool, recommends this approach (Sparkrock, July 28, 2026).

A district foundation or booster organization that keeps its own books follows FASB rules instead; see our nonprofit accounting software guide and our guide to church fund accounting software.

How we researched this

We read GASB 84 guidance from state auditors and comptrollers in Minnesota, New York, Washington, Georgia and Wyoming and from education departments in Colorado, Texas, New Jersey and California. We used summaries from accounting firms that sell audit services for issue dates and GASB 97 detail, and vendor documentation only for setup examples. We checked every source on October 9, 2026.

Related guides

• GASB 34 Reporting: Requirements and 2026 Changes
• Special Revenue Fund: GASB 54 Definition and Examples
• Enterprise Fund: Definition, GASB 34 Tests and Example

Frequently asked questions

Are student activity funds fiduciary under GASB 84?

Usually not. If a district employee can approve or reject club spending, or board policy sets spending rules, the money belongs in a governmental fund. Texas guidance keeps most student activity money in Fund 865, so follow your state chart of accounts.

What is the three-month rule in GASB 84?

A business-type activity that normally holds custodial assets for three months or less may report them with a matching liability in its own statement of net position instead of a custodial fund.

When does a government record a liability to beneficiaries?

Only when an event compels the government to pay out the resources. That happens when the beneficiary demands the money or when no further action, approval or condition is left for the beneficiary to meet.

Does GASB 97 mean our 457 plan is a pension trust fund?

Generally no. Most 457 plans have a separate trustee and employee-directed investments, so the government does not control the assets. A 457 plan that meets the GASB 67 pension plan definition is still classified as a pension plan.

Sources

• Minnesota Office of the State Auditor, GASB Statement No. 84 implementation resources (no date shown; links to GASB 84 and Implementation Guide 2019-2)
• New York State Comptroller, Accounting and Financial Reporting for Fiduciary Activities (GASB 84) (updated November 2020)
• New York State Comptroller, GASB 84 training presentation (no date shown)
• Washington State Auditor’s Office, Determining Fiduciary Activities to be Reported in Custodial Funds (changed in 2025)
• Georgia State Accounting Office, GASB 84 Fiduciary Activities (no date shown)
• Wyoming State Auditor’s Office, GASB 84 Custodial Funds (modified July 17, 2024)
• Colorado Department of Education, GASB 84 Fiduciary Activities (January 2019)
• Texas Education Agency, GASB Statement No. 84 guidance (May 23, 2019)
• New Jersey Department of Education, Implementation of GASB Statement 84 (March 27, 2020)
• California Department of Education, SACS 2020 software notes (last reviewed August 5, 2026)
• Georgia Department of Audits and Accounts, Best Practices for School Activity Accounts (November 10, 2022)
• Deloitte DART, GASB Issues Implementation Guide on Fiduciary Activities (June 17, 2019)
• Deloitte DART, GASB Issues Guidance on Fiduciary Component Units (Statement 97) (June 23, 2020)
• Accounting Today, GASB delays upcoming standards and guidance (Statement 95) (May 8, 2020)
• Moss Adams, GASB Issues Statement No. 97 (no date shown)
• PKF O’Connor Davies, GASB No. 84 and 97: Fiduciary Activities, Component Unit Criteria and 457 Plans (April 27, 2021)
• Mauldin & Jenkins, GASB 84: Custodial Funds and School Districts (August 3, 2020)
• Yeo & Yeo, GASB 84: Defining Four Generic Types of Fiduciary Funds (July 19, 2018)
• Robert H. Attmore, testimony to the House Financial Services Committee (March 28, 2012)
• SDS, GASB 84 setup within General Fund data (revised April 2021)
• Sparkrock, How to evaluate a new activity fund tool without disrupting your finance system (July 28, 2026)

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Sherman Hsieh

CEO & Editor-in-Chief, Business-Software.com
Independent analysis of enterprise software — ERP, CRM and more

Sherman Hsieh is the founder, CEO, and editor-in-chief of Business-Software.com. He leads the site's independent, buyer-focused coverage of ERP, CRM, and other business systems, including vendor-neutral comparisons, pricing analysis, and implementation guidance. Before founding Business-Software.com, Sherman was an executive at Siebel ...