1. PASBO 47 th Annual Conference Newly-Revised Student Activity Fund Handbook Jackie Horrocks Owen J. Roberts SD Ernie Werstler Exeter Township SD Dave Piper Altoona Area SD

2. The Law Legislative Mandate Section 511 of Public School Code of 1949 (24P.S. §5-511)

3. Board Policy  Purpose – Promote general welfare, education, and morale of all students and to finance normal, legitimate co-curricular activities of various individual student groups  Definition – Activities approved by the School Board but conducted outside the regular classroom  Authority – 24 PS 5-511 PA Public School Code

4. Board Policy Should Provide for…  Reasonable Rules and Regulations for student activities  Procedures for organization, management, supervision, control and financing of student activities

5. Management  Must be done within the framework of state laws and regulations, board policy and administrative rules and regulations  Organized to serve the best interests of the pupils

6. Management…. General Principals Organization  Board of School Directors  Superintendent  Principals  Business Administrator  Fiscal Officer/Custodian  Faculty Advisors  Students

7. 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.

8. Other Related Funds  Many districts separate athletic programs from the Student Activity Fund and treat as a Special Revenue Fund (recommended) or operate through General Fund  By establishing a Special Revenue Fund for athletics, administration can more readily determine the extent to which the athletic fund is self-supporting Athletic Fund

9. Other Related Funds Some student money may be accounted for through the District’s General Fund:  Student accounts that are primarily controlled by the District (as opposed to the students) ie. Elementary student activity accounts  Fines and Fees – library, etc. General Fund

10. Non-School Funds  Faculty Accounts  Sunshine Funds  Booster Club Accounts  PTO Accounts Do Not include the following accounts in the Student Activities Fund:

11. Control Systems  Centralized – Bookkeeping functions performed at a central location for all school buildings (business office)  Decentralized – Bookkeeping functions performed at building level Centralized vs. Decentralized Decision should be based on availability of personnel and information systems.

12. Audits of Student Activity Funds  Internal Audits  External Audits

13. General Operating Procedures  Educational opportunities and additional monies for students  Often create accounting and control “nightmares” for school business officials  Fiscal procedures may vary widely depending upon the size of the District and the needs of the programs

14. Student Activities  Liquidity – Cash or Consumable Inventory  Large Number of Individuals Handling Transactions  Controlled by Individuals w/o Formal Financial Background  Student Learning Experience Risk vs. Exposure

15. Use of Activity Funds  Earned by the students and used only for student activities  Monies designated for student purposes and restricted for those students currently in school  Monies should be used to finance a program of activities not part of the regular curriculum Proper Use of Activity Funds:

16. Use of Activity Funds Improper Use of Activity Funds:  Small cash and check needs of other funds or organizations  School district charges – library book fines, student examinations  Donations from student or parent groups, such as scholarships  Expenditures for refreshments served as school district sponsored parent events or receptions for community members not made to benefit the students  Circumvent management or purchasing decisions made by the board or administration

17. Student Activities  All new student activity clubs or accounts must be approved by the Board of School Directors  All faculty club advisors and student club officers should be approved by the Board of School Directors on an annual basis Initiating Accounts Terminating Accounts  Termination as well as disposition of all inactive student activity accounts should be approved by the Board of School Directors All requests for initiating/terminating accounts must be made in writing from the Principal to the Business Office.

18. Student Activities  Student Activity Fund Balances should be deposited in interest-bearing accounts or otherwise invested in interest- earning investments permitted by the School Code  Because §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 Interest Income

19. Student Activities  All Payments should be made by check  No 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 fund Cash Payments Check Signatures  Board should designate 2 or more persons to sign checks  Principal should be 1 of those persons designated by the Board  Two signatures should be required on all checks

20. Guidelines-Revenue Controls  Receipts should be written for the faculty advisor or student treasurer when money is received in the school office  Cash receipts should be deposited daily in a bank  Safes may be used for protecting money during the day until the deposit is made. Amounts kept in safes overnight should be minimal  Large receipts from night or weekend activities (i.e. plays) should be deposited into an overnight depository in locked bank bags

21. Admission Charges and Ticket Sales  Use of pre-numbered tickets for admission to certain activities is recommended  Use of pre-numbered tickets without a system for control is meaningless  A person independent of the ticket sellers must control ticket numbers and restrict access to the ticket stock

22. Fund Raising  Implications of fund raising projects are broad and require board policy  District 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 fundraiser  Controls and procedures should be developed around the two most important features of fundraisers: cash and inventory

23. Fund Raising - Commissions  Approved contract with commission calculation, collection of funds, distribution of items and terms of payment  Establish a system to verify commissions  Responsibility for defective products of lost funds  Prizes and awards provided by the vendor should comply with school policies Key points when dealing with commission-type fundraisers: Often allow students to raise funds without the risk of inventory loss.

24. Purchase Orders  Purchases usually should be initiated by a purchase order  A separate PO Form or purchasing agent/agents may be designated for student activities  The Student Treasurer (secondary schools only), faculty advisor and school principal should approve all purchase orders

25. Bidding  §5-511(e) requires that purchases of materials or supplies by any organization, club, class or group in excess of $1,000 shall be made upon solicitation of 3 or more quotations or bids  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

26. Sales Tax  Purchase of property or services for use by school organizations in connection with its activities are tax exempt under the school’s tax exemption number  When 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 resold  If 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

27. Disposition of Unused Funds  Develop procedures to deal with inactive account balances or accounts of graduated classes  Graduated class or disbanding organization must use for or commit to a proper school-related purpose the unexpended account balance within one year  Maintaining or distributing funds for future class reunions is not a legitimate use of funds

28. Student Activities  Loans and purchases  Procurement cards  Employee Compensation  Contracts  Petty Cash Other Issues

29. Accounting Procedures  Comply with State Laws  Comply with Generally Accepted Accounting Principles (GAAP)  LECS Manual of Accounting and Financial Reporting

30. Accounting Principles  Student Activity Funds - Special Revenue Funds in PA under GASB 34  Student Activity Funds – Agency Funds prior to GASB 34  General Fund – Accounted for in function 3210 “School Sponsored Student Activities” Fund Accounting

31. Accounting Principles  Classification - Appropriate fund  Control - Most important step in accounting process  Deposits - Timely with reconciliation of discrepancies  Disbursements – Supported by purchase orders, invoices and proper approvals Receipts & Disbursements – Key Points

32. Accounting Principles Financial Statements  State Reporting Requirements – Requires at least quarterly reporting to the Board of School Directors  Monthly Reporting is recommended when there is a significant amount of accounting transactions each month

33. Accounting Principles Financial Statements  Monthly or Quarterly Statement of Revenues and Expenses by Activity  Monthly or Quarterly Balance Sheet  Annual Reports (same as above)

34. Accounting Principles Other Considerations  Limits on Balances  School Store