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Student Activity Funds1 STUDENT ACTIVITY FUND ACCOUNTING Presented by: Natalie Rew, CPA DPI—School Financial Services.

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Presentation on theme: "Student Activity Funds1 STUDENT ACTIVITY FUND ACCOUNTING Presented by: Natalie Rew, CPA DPI—School Financial Services."— Presentation transcript:

1 Student Activity Funds1 STUDENT ACTIVITY FUND ACCOUNTING Presented by: Natalie Rew, CPA DPI—School Financial Services

2 Student Activity Funds2 BASIC FACTS ABOUT STUDENT ACTIVITY ACCOUNTS WI Stats, s. 120.16(2) authorizes a school district treasurer to receive money raised in “extra-curricular activities” The district is responsible for maintaining records and properly accounting for the activity of the agency funds. The district should consider agency fund procedures in conjunction with the district’s fraud prevention and detection procedures

3 Student Activity Funds3 STUDENT ACTIVITY FUNDS (FUND 60) Student Government Drama Club Class of 2XXX Year Book Foreign Language Club Journalism Club Band Club National Honor Society Chess Club Debate Club Photography Club Pep Club Chess Club Computer Club

4 Student Activity Funds4 STUDENT ACTIVITY FUNDS (FUND 60) WUFAR Accounts Assets Cash -711000 Investments -712000 Liabilities Due to Student Organizations – 814000 NO FUND BALANCE

5 Student Activity Funds5 DISTRICT ACTIVITY FUNDS (FUND10) Athletics School Musical Music Concerts Band Uniforms Cheerleaders Field Trips Shop Class Band Trip

6 Student Activity Funds6 BOOSTER CLUBS AND PARENT GROUPS (FUND 60) Due to parent organizations – 60 B 818000 District may have agency funds for parent groups. (separate liability account in fund 60) REQUIREMENTS: May not be a separate 501c3 Subject to the same policies and procedures as student activity funds Bank accounts must be in the name of the district.

7 Student Activity Funds7 ODD TRANSACTIONS Scholarships should be reported in Fund 72  Fund Balance reserved for Scholarships 72B-931500 Vending machines and gate receipts – Depends who determines the use.  Students – Fund 60  District – Fund10 Sunshine fund, coffee fund and faculty fund – Should not be on the district’s books.

8 Student Activity Funds8 DEVELOPING STRONG CONTROLS Establish clear lines of authority Written policies for the establishment of student activity funds (signed) Written policies and internal controls for operation of student activity funds (signed)

9 Student Activity Funds9 LINES OF AUTHORITY Board of Education  Adopt policies over establishment and operation of all agency funds School Business Official  Overall responsibility for accounts and reporting to the board  Implement policies and internal controls related to the administration of agency funds Principal  Agency fund supervisor.  Responsible for all receipts, disbursements  Supervisor of the bookkeeper Faculty Advisor  Supervising all activities of the organization  Approves all transactions of the club Parent Organization Representative

10 Student Activity Funds10 POLICIES TO ESTABLISH AGENCY FUNDS Each organization is approved by the board Application for creation of an organization  Purpose  Fund raising activities  Duration Faculty advisor approved by the agency fund supervisor (principal) Bank accounts approved by the Board of Education and subject to the same internal controls as other district depositories Allocation of interest Misappropriation or misuse of agency funds is theft

11 Student Activity Funds11 ACCOUNTABILITY Establish accountability for executing procedures within each organization. The assignment of duties and responsibilities should be in writing. Individuals responsible for specific tasks such as check signing, deposits, approving disbursements, reconciling bank accounts, etc should be identified. Hold these individuals accountable

12 Student Activity Funds12 GENERAL INTERNAL CONTROLS ALL agency funds are subject to the same internal controls as all other district funds. All forms, checks, receipts, and tickets should be pre-numbered. Subject to periodic internal or external audit. Monthly or quarterly reports on all activity should be prepared and submitted for review to the business office and the Board (In accordance with district policies).

13 Student Activity Funds13 IDEAL INTERNAL CONTROLS Three duties should be delegated to separate individuals :  Check signing  Bookkeeping  Bank statement reconciliation Pre-numbered checks – two signatures. Bookkeeper does not sign checks. Purchase orders are approved by the agency fund supervisor. Bookkeeper does not approve disbursements. Monthly reports of revenues and expenditures for each agency are prepared for review by the agency fund supervisor and student organization faculty advisor or parent organization rep.

14 Student Activity Funds14 INACTIVE ACCOUNTS Policy to identify inactive accounts Policy to distribute funds from inactive accounts Include the policy on inactive accounts in the agency fund policies.

15 Student Activity Funds15 JUST PLAIN BAD BUSINESS Check should not be signed in advance or written to cash. Student and parent organizations should not maintain negative account balances. Money should not be “temporarily” placed in an advisor or representatives account. Strictly prohibit the use of student activity proceeds to cash personal checks, make “loans”, or extend credit to individuals. Student activity organizations should not pay compensation directly to employees.

16 Student Activity Funds16 What Needs to be Ready for Internal and External Audits? District policies and procedures Documentation of club purposes Reconciliation of balances from beginning of period to end of period Bank reconciliations for all months All receipts for disbursements Bank deposit slips and receipts

17 Student Activity Funds17 What about Petty Cash? Don’t combine student activity accounts and petty cash—they are not the same If a school building needs petty cash, establish a petty cash account with proper district office approvals and reconcile as needed The petty cash account could be a checking account at the building level

18 Student Activity Funds18 WHAT COULD GO WRONG Negative student activity account balances Fraud!!!! Generally, overall activity fund balances are immaterial to the overall financial statement presentation Bad publicity Damage to reputation of the district and its employees Loss of employment for District Administrator/Business Manager/Bookkeeper

19 Student Activity Funds19 MORE INFORMATION DPI Internet Website WUFAR Accounting Issues: Fund 60 Agency Fund Guidelines http:// http:// Hand book for Evaluation and Improvements of Business Offices and Support Services Functions. Chapter 22. Published by WASBO. Includes a “Sample Policy and Procedures for Student Body Activity Accounts” Student Activity Funds: Procedures and Controls by Charles E. Cuzzetto. Published by the ASBO.

20 Student Activity Funds20 CONTACT INFORMATION DPI School Financial Services:  608/267-9114  School Finance Auditor: Natalie Rew 608/267-9212

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