Presentation on theme: "PASBO’s Student Activity Funds Guide"— Presentation transcript:
1 PASBO’s Student Activity Funds Guide PASBO ConferenceMarch 2003Marie S. GuidryEast Stroudsburg Area School District
2 The Law Legislative Mandate Section 511(a) of Public School Code of 1949 (24P.S. §5-511) states:The board of school directors in every school district shall prescribe, adopt and enforce such reasonable rules and regulations as it may deem proper, regarding1) Management, supervision, control or prohibition of…..activities related to the school program……including fundraising and disbursing of funds…2) Organization, management, supervision, control, financing or prohibition of organizations, clubs, societies and groups of the members of any class or school…….
3 Board PolicySchool Code clearly indicates that every school district should have a policy for student activity funds, which provides:Reasonable Rules and Regulations for student activitiesProcedures for organization, management, supervision, control and financing of student activities
4 Board PolicyPurpose – Promote general welfare, education, and morale of all students and to finance normal, legitimate co-curricular activities of various individual student groupsDefinition – Activities approved by the School Board but conducted outside the regular classroomAuthority – 24 PS PA Public School Code
5 Board Policy Conversely Policy may be general – limited to a statement of general principals and assign responsibility for student activity funds to the superintendent with a requirement to establish rules, regulations and procedures.ConverselyPolicy may be detailed – discussion of each element mentioned in the school code.
6 ManagementMust be done within the framework of state laws and regulations, board policy and administrative rules and regulationsOrganized to serve the best interests of the pupils
7 Management…. General Principals Written Policy and Procedures Non-General Fund UseStudent UseShared Decision-MakingSound Business Practice
8 Categories of Student Funds General Student Activities – impact all students i.e. Student Council, Student Store, Yearbook, etc.Classes – Class of 2003, Junior Class, etc.Clubs – Science Club, Key Club, Band Club, etc.Athletics and Intramurals – Football Club, Tennis Club, etc.
9 Other Types of Student Funds Student Body Activities Account – “The Principal’s Account” has come under close scrutiny in past years and should be managed with extreme caution.Petty Cash Account – Should only be used for support of student activities and operated according to proper fiscal procedures.
10 Other Related Funds Athletic Fund Many districts separate athletic programs from the Student Activity Fund and treat as a Special Revenue Fund (recommended) or operate through General FundBy establishing a Special Revenue Fund for athletics, administration can more readily determine the extent to which the athletic fund is self-supporting
11 Non-School FundsDo Not include the following accounts in the Student Activities Fund:Faculty AccountsSunshine FundsBooster Club AccountsPTO or PTA Accounts
12 Centralized vs. Decentralized Control SystemsCentralized vs. DecentralizedCentralized – Bookkeeping functions performed at a central location for all school buildings (business office)Decentralized – Bookkeeping functions performed at building levelDecision should be based on availability of personnel and information systems.
13 Audits of Student Activity Funds Internal AuditsPerformed by district personnelBusiness office personnel should make periodic checks of building level accounting practicesIn-depth examination of system of internal controls and financial procedures to determine if in accordance with board policy, established procedures and laws and regulationspractices
14 Audits of Student Activity Funds External AuditsSchool districts should employ independent auditors, preferably Certified Public Accountants, to perform audits of school district funds, including student activity fundsPeriodically, the Bureau of School Audits, Department of the Auditor General, conducts audits of school district funds, including student activity accounts, for each year
15 General Operating Procedures Educational opportunities and additional monies for studentsOften create accounting and control “nightmares” for school business officialsFiscal procedures may vary widely depending upon the size of the District and the needs of the programs
16 Student Activities Risk vs. Exposure Liquidity – Cash or Consumable InventoryLarge Number of Individuals Handling TransactionsControlled by Individuals w/o Formal Financial BackgroundStudent Learning Experience
17 Use of Activity Funds Proper Use of Activity Funds: Earned by the students and used only for student activitiesMonies designated for student purposes and restricted for those students currently in schoolMonies should be used to finance a program of activities not part of the regular curriculum
18 Use of Activity Funds Improper Use of Activity Funds: Small cash and check needs of other funds or organizationsSchool district charges – library book fines, student examinations, parking feesDonations from student or parent groups for scholarshipsExpenditures for refreshments served as school district sponsored parent events or receptions for community members not made to benefit the studentsCircumvent management or purchasing decisions made by the board or administration
19 Student Activities Initiating Accounts Terminating Accounts All new student activity clubs or accounts must be approved by the Board of School DirectorsAll faculty club advisors and student club officers should be approved by the Board of School Directors on an annual basisTerminating AccountsTermination as well as disposition of all inactive student activity accounts should be approved by the Board of School DirectorsAll requests for initiating/terminating accounts must be made in writing from the Principal to the Business Office.
20 Student Activities Interest Income Student Activity Fund Balances should be deposited in interest-bearing accounts or otherwise invested in interest-earning investments permitted by the School CodeBecause §5-511(d) of the School Code provides that student activity funds “…remain the property of the respective school, class, organization, club, society or group,” procedures must be developed to deal with the prorating of interest earnings to the depositor organizations
21 Student Activities Cash Payments Check Signatures All Payments should be made by checkNo expense should be paid in cash directly from ticket sales, gate receipts, dues collections, etc.The only cash payments permitted should be those from an imprest petty cash fundCheck SignaturesBoard should designate 2 or more persons to sign checksPrincipal should be 1 of those persons designated by the BoardTwo signatures should be required on all properly completed checks
22 Guidelines-Revenue Controls Receipts should be written for the faculty advisor or student treasurer when money is received in the school officeCash receipts should be deposited daily in a bankSafes may be used for protecting money during the day until the deposit is made. Amounts kept in safes overnight should be minimalLarge receipts from night or weekend activities (i.e. plays) should be deposited into an overnight depository in locked bank bags
23 Admission Charges and Ticket Sales Use of pre-numbered tickets for admission to certain activities is recommendedUse of pre-numbered tickets without a system for control is meaninglessA person independent of the ticket sellers must control ticket numbers and restrict access to the ticket stock
24 Fund RaisingImplications of fund raising projects are broad and require board policyDistrict and schools must decide the extent to which the community will be inundated with sales, if projects must be established in advance of approval for fund raisers and what limits, if any, should be set for the accumulation of funds, etc.Faculty advisors of each fund raising activity should be held accountable for that fundraiserControls and procedures should be developed around the two most important features of fundraisers: cash and inventory
25 Fund Raising - Commissions Key points when dealing with commission-type fundraisers:Approved contract with commission calculation, collection of funds, distribution of items and terms of paymentEstablish a system to verify commissionsResponsibility for defective products of lost fundsPrizes and awards provided by the vendor should comply with school policiesThese fundraisers often allow students to raise funds without the risk of inventory loss.
26 Purchase OrdersPurchases usually should be initiated by a purchase orderA separate PO Form or purchasing agent/agents may be designated for student activitiesThe Student Treasurer (secondary schools only), faculty advisor and school principal should approve all purchase orders
27 BiddingAct 88 of 2002 changed the provisions of Sec 511(e) requiring all purchases of materials or supplies by any organization, club, class or group be made in accordance with Sec All materials and supplies costing $10,000 or more are subject to the competitive bidding and advertising requirements. Written or telephonic quotes from 3 or more vendors are required for purchases $4,000 - $9,999.Any purchases of materials and supplies not for the purchase of fund raising that go through the Student Activity Fund are subject to the above bidding requirement
28 Sales TaxPurchase of property or services for use by school organizations in connection with its activities are tax exempt under the school’s tax exemption numberWhen a student activity class or club purchases taxable property for resale to raise funds, then they must pay the applicable sales tax at the time of purchase or collect the sales tax from the customer when the item is resoldIf the school organization sells property or services to the public (school store, pictures, class rings, etc.) this requires the collection and remission of sales tax directly to the PA Dept of Revenue
29 Disposition of Unused Funds A policy should be established to address monies left unused or uncommitted for one year or more after graduation of the class. All such monies are deemed to have been committed and transferred to a general student body account (i.e. student council) or other designated student related activity account
30 Student Activities Other Issues Loans and purchases Contracts Petty Cash
31 Accounting Procedures Comply with State LawsComply with Generally Accepted Accounting Principles (GAAP)LECS Manual of Accounting and Financial Reporting
32 Accounting Principles Fund AccountingStudent Activity Funds – Agency Funds (Fiduciary Fund-Type) in PAGeneral Fund – Accounted for in function 3210 “School Sponsored Student Activities”
33 Accounting Principles Financial StatementsState Reporting Requirements – Requires at least quarterly reporting to the Board of School DirectorsMonthly Reporting is recommended when there is a significant amount of accounting transactions each month
34 Accounting Principles Example ReportsTrial balanceGeneral LedgerTransfers JournalAdjustments JournalCash Receipts RegisterCheck RegisterMonthly Report (Beg. Bal. To End. Bal. By Activity)Bank Reconciliation
35 Accounting Principles Example FormsBoard PoliciesBy-LawsRequest to Establish a Student ActivityRequest to Close a Student ActivityPlan of Fundraising ActivitiesCash Settlement/Deposit SheetPurchase Order/Check RequestStudent Activity Fund Record CardRequest for QuotationSummary of Request for QuotationsExpense Reimbursement FormCash Advance Form & Receipt Reconciliation