Trust Funds

Trust funds are accounts for receipts earmarked for specific purposes and for the expenditure of these receipts.

An example of a trust fund is a bequest left by a wealthy benefactor, whereby an endowment is left to maintain local parks.

Failure to use a trust fund for its designated purpose can result in the government being required to reimburse the fund for the unauthorized expenditure. In extreme cases, the fund may be required to return the fund in its entirety to the donor or his/her heirs.