1. Guidelines For School SUPPORT Organizations
LOWNDES COUNTY Board of Education
Professional Development
OCTOBER 19, 2017
Kim McPherson, CPA

2. Welcome
Support organizations allow parents, administrators, teachers and students to work together to achieve more than they could individually
The Lowndes County Board of Education appreciates its parent’s time and efforts and is interested in each of your organizations achieving its full potential
Your involvement is essential not only to a successful school program but also to a successful school system

3. From the Headlines:
Ethics Commission says Decatur High coaches likely broke ethics law by accepting booster gifts
Muscle Shoals Schools warned by state over questioned bonuses - someone filed a complaint with the state's ethics commission, accusing them of giving their high school football coaches illegal bonuses.
Ex-PTA treasurer accused of stealing from 2 schools
Band Treasurer Arrested For Stealing More Than 40K In Booster Funds
Teacher, PTO officers sentenced for stealing from school funds
The nature of activity funds makes them especially vulverable to error, misuse, and fraud. Can be LARGE amounts of cash.

4. TODAY show – June 3, 2014
steal-thousands-dollars-school- booster-clubs-2D
After numerous complaints to ALSDE from school support organizations who lost thousands of dollars each year due to theft from volunteers and officers over whom the school districts had no authority, control or legal remedy to prosecute, State Supt. Dr. Joe Morton issued Guidelines in 2007, with full compliance required by July 1, 2008.

5. Legislation and Authoritative Guidance
The School Fiscal Accountability Act of 2006
Alabama State Department of Education Guidelines for Financial Operations of School-Related Organizations adopted in November 2007
Alabama State Department of Education Financial Procedures for Local Schools adopted in June 2010

6. Other Considerations Alabama Examiners of Public Accounts
Southern Association of Colleges and Schools Council on Accreditation and School Improvement (SACS/CASI)
Alabama Examiners of Public Accounts
Alabama PTA/PTO
Alabama Building Commission
Alabama Ethics Commission
Alabama DOR – Sales and Use Tax Division
Internal Revenue Service
Governmental Accounting Standards Board (GASB)

7. Operating Support Organizations
Student and Parent Organizations – “OFF THE BOOKS”
Separate EIN
Separate Mailing Address
Maintain their own records and accounts outside the control of the school
A school employee must not lead fund-raising or maintain the accounting records for the organization
An annual audit must be provided to principal
Financial reports (including budget) must be provided timely and made available for audit upon request
Treasurer must be bonded
No payment or benefit to school employee

8. Operating Support Organizations
Booster Organizations – “OFF THE BOOKS”
Same as Student/Parent organizations, with the addition of:
A school employee who is associated with the activity supported by the organization cannot serve/hold a leadership position in the organization

9. organization BOE approval of support organization
Bylaws and Operating Procedures
Officer Information Form
Proposed Budget
Meetings
Records
Rules

10. administration Relationship with Leaders
Be familiar with law and policy
Officer training each year
No authority for loans in the name of school, or contracts related to use of board property or equipment
Prior approval and final summary reports for fundraising
Self-Work Projects – Alabama Building Commission

11. Relationship is key!
Principals are responsible for the communication between the school and its support organizations.
Principal or designee should be invited to all meetings and must approve any activity of the organization that affects the school or involve student participation.
The use of school facilities must be requested through the principal.
Principals should involve
school related organizations
with budget development to
communicate needs, set goals
within available resources
and prevent duplication of
efforts

12. FINANCIAL Bank Accounts and Checkbooks
Financial Statements and bank reconciliations at each meeting.
Comparison of Budget to Actual Receipts/Expenditures
Fundraising
Purchase Authorization for Goods/Services (card?)
Inventory of Items for Resale
Receipting Money
Payments to Vendors
Payments to Employees
Payments to Volunteers

13. Public vs. Non-Public Funds
Public - “ON THE SCHOOL BOOKS”
More restrictive
Examples: Public fundraisers, gate receipts, concessions, parking at athletic events, restricted donations from booster clubs, advertising commissions, game program sales.
Separate accounts may be established for individual sports or events.
Subject to control of school principal

14. Public vs. Non-Public Funds
Non-Public – “ON THE SCHOOL BOOKS”
Restricted only to intent and authorization of the appropriate sponsors and officers
Not used for general operations of the school
Clubs and classes (self-imposed fees, fund raising), Other School-Related Organizations
Principal does not direct the use but does have authority to prohibit inappropriate expenditures

15. SPENDING IT WISELY What can you spend money on?
Public
“Public” property and items
Professional development
General operations of school
Refreshments for open house
Pre-game meals for coaches WITH athletes
Academic incentives
Uniforms
Memberships-professional organizations
School upkeep and improvements
Non-Public
Can spend on anything public funds can be spent on
Food and prom entertainment
T-shirts for faculty or clubs
Donations
Transport to club events
Championship rings
Faculty appreciation gifts
Scholarships
Flowers
Faculty beverages (coffee, etc.)

16. STRUCTURE YOUR FUNDRAISERS!
ON SCHOOL PROPERTY?
INVOLVING SCHOOL CHILDREN?
DURING SCHOOL HOURS? =
PUBLIC
(NOTE: Public resources used for Non-Public Fundraisers
MUST be reimbursed!)

17. Controls Over School Income
Report of Sales of Tickets
All events where admission is charged
Separate report for each ticket seller, witness signature
All charges deposited in school bank account
Deposit intact and timely by school employee
Fundraising
Principal approval prior to activity
Deposit income intact and on timely basis
No holding funds until fundraiser is complete
All expenses should be paid by check

18. Controls Over School Income
Concessions – Proper accounting for sale of products and income
Cash register preferred; must have a report
Inventory of items purchased, sold, and on hand should reconcile to cash collected
Do not cash checks or make payments from cash
Master Receipt should be issued after verifying the amt. of receipt at the time funds actually received
Supporting documentation of items sold should accompany the funds collected

19. Public Contributions and Grants from City, Legislators, etc.
Must be used for an educational purpose
Competitive Bid Law does apply.
Are considered PUBLIC funds.
Must be deposited into School/System account and records of expenditures maintained at school/system.

20. Alabama’s Ethics Law It’s Your Responsibility!
Ethics law applies to individuals
Violations can result in criminal liability
Not the board’s responsibility or the superintendent’s to monitor, interpret, or enforce

21. The Basics Can’t use position for personal gain
Can’t use public resources for personal use
Prohibits conflicts of interest
Can’t solicit or receive a thing of value because of position
Can’t be given anything to influence official action

22. The Rules Personal Use of Position
Can’t use position for personal gain:
“No…public employee shall use or cause to be used his or her official position or office to obtain personal gain for himself or herself, or family member of the public employee…or any business with which the person is associated…”
Ala. Code § (a)

23. The Rules Use of Public Resources
Can’t use public resources for private benefit:
“No…public employee shall use or cause to be used equipment, facilities, time, materials, human labor, or other public property under his or her discretion or control for the private benefit or business benefit of the…public employee, any other person, or principal campaign committee…”
Ala. Code § (c)

24. The Rules Solicitation of Thing of Value
Can’t solicit a thing of value:
“No…public employee shall, other than in the ordinary course of business, solicit a thing of value from a subordinate or person or business with whom he or she directly inspects, regulates, or supervises in his or her official capacity.”
Ala. Code § (e)

25. What is a Thing of Value?
“Any gift, benefit, favor, service, gratuity, tickets or passes to an entertainment, social or sporting event, unsecured loan, other than those loans and forbearances made in the ordinary course of business, reward, promise of future employment, or honoraria or other item of monetary value.” Ala. Code § (a)

26. The Rules De Minimus
$25.00 or less per occasion and an aggregate of $50.00 per year from a single provider or as may be prescribed by the Ethics Commission.

27. Most common financial irregularities
Failure to receipt and deposit all money collected
Failure to remit all funds from fundraiser
Unauthorized use of school property
Expenditures for personal gain
Checks made payable to cash
Payments of personal expense from unauthorized acct.
Sale of property purchased by support organization for personal gain.
Reimbursement of travel expenses from two sources
Use of unofficial receipt book
Forgery of signature and alteration of checks
Nonpayment of vendor invoices
Failure to use tickets at athletic events
Unauthorized salary payments

28. Ethics and Schools More practical examples
School Equipment for personal use (computers, cameras, lawn mowers)
Collecting Funds for Principal’s (or Coach’s or Band Director’s) Birthday
Support Organizations soliciting gifts in excess of for teachers
Contracts (Pouring rights, prom, yearbooks, class rings, construction, etc.)
T Shirts, clothing, goods, “rewards” programs, etc.
Alabama, Auburn, UAB Tickets/Other Recreational Tickets