Borrowing and Lending Funds

Applies to: applies to any school, department, or other entity within the University of Southern California and its subsidiaries.


Issued: October 5, 2004
Last Revised: November 9, 2023
Last Reviewed: November 9, 2023                                                                     

2. Policy Purpose

The purpose of this policy is to outline the rules and procedures required for the borrowing or lending of funds by any school or department within the University and its subsidiaries.

3. Scope and Application

This policy applies to schools, departments, or other entities within USC or its subsidiaries with a need to borrow or loan funds to/from an internal party or external third party. This policy does not apply to borrowing or lending by USC via its central Finance office, which is governed by separate procedures and resolutions of the Board of Trustees.

4. Definitions

Internal partyA school, department, or other entity within USC or its subsidiaries
External third-partyAn entity not owned or operated by or within USC or its subsidiaries
Borrowed fundsFunds lent via a loan, new line of credit, drawing on an existing line of credit, private investor, bond, cash, credit card advance, intercompany transfer, or any other type of borrowing.

5. Policy Details

No school, department, or other entity within the university or its subsidiaries is authorized to borrow funds from, or lend funds to, an external third-party or any internal party without a) consulting with the Comptroller and/or Deputy Comptroller, and b) receiving prior written approval from the CFO, Senior Vice President for Finance.

Prior to consultation with the Office of the Comptroller, the school or department must analyze their financial circumstances and have determined a loan to be the most reasonable alternative.

Internal Transaction

A loan to an internal party must be recorded as an intercompany accounts payable and intercompany accounts receivable transaction in the general ledger. No revenue or expense may be recorded. The borrowing party must reconcile their intercompany payable to the lending party’s intercompany receivable quarterly, at minimal.

External Transactions

The school, department, or other entity within the university or subsidiary must record a transaction with an external third-party in the general ledger in accordance with accounting guidelines provided by the Comptroller’s Office during the consultation and approval process. The ledger account(s) associated with the transaction must be reconciled at least quarterly.

6. Procedures


7. Forms


8. Responsibilities


9. Related Information


10. Contacts

Please direct any questions regarding this policy to:

Office of Comptroller(213) 821-1900