PASBO’s PASBO’s Student Activity Funds Student Activity Funds
GuideGuide
PASBO ConferenceMarch 2003
Marie S. GuidryEast Stroudsburg Area School District
The LawThe LawLegislative 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, regarding
1) 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…….
Board PolicyBoard Policy
Reasonable Rules and Regulations for student activities
Procedures for organization, management, supervision, control and financing of student activities
School Code clearly indicates that every school district should have a policy for student activity funds, which provides:
Board PolicyBoard 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
Board PolicyBoard Policy 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.
Conversely
Policy may be detailed – discussion of each element mentioned in the school code.
ManagementManagementMust 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
Management….Management….General Principals
Written Policy and Procedures Non-General Fund Use Student Use Shared Decision-Making Sound Business Practice
Categories of Student Categories of Student FundsFunds
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.
Other Types of Student Other Types of Student FundsFunds
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.
Other Related FundsOther 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
Non-School FundsNon-School Funds
Faculty Accounts
Sunshine Funds
Booster Club Accounts
PTO or PTA Accounts
Do Not include the following accounts in the Student Activities Fund:
Control SystemsControl 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.
Audits of Student Activity Audits of Student Activity FundsFunds
Internal Audits
Performed by district personnel Business office personnel should make periodic checks of
building level accounting practices In-depth examination of system of internal controls and
financial procedures to determine if in accordance with board policy, established procedures and laws and regulations
practices
Audits of Student Activity Audits of Student Activity FundsFundsExternal Audits
School districts should employ independent auditors, preferably Certified Public Accountants, to perform audits of school district funds, including student activity funds
Periodically, the Bureau of School Audits, Department of the Auditor General, conducts audits of school district funds, including student activity accounts, for each year
General Operating General Operating ProceduresProcedures
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
Student ActivitiesStudent 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
Use of Activity Use of Activity FundsFunds
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:
Use of Activity Use of Activity FundsFunds
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 students
Circumvent management or purchasing decisions made by the board or administration
Student ActivitiesStudent 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 AccountsTermination 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.
Student ActivitiesStudent 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
Student ActivitiesStudent Activities
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 fund
Cash Payments
Check 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
Guidelines-Revenue Guidelines-Revenue ControlsControls
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
Admission Charges and Ticket Admission Charges and Ticket SalesSales
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
Fund RaisingFund 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
Fund Raising - CommissionsFund 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:
These fundraisers often allow students to raise funds without the risk of inventory loss.
Purchase OrdersPurchase OrdersPurchases 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
BiddingBiddingAct 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 807.1. 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
Sales TaxSales TaxPurchase 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
Disposition of Unused Disposition of Unused FundsFunds
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
Student ActivitiesStudent Activities
Loans and purchases
Contracts
Petty Cash
Other Issues
Accounting ProceduresAccounting Procedures
Comply with State Laws
Comply with Generally Accepted Accounting Principles (GAAP)
LECS Manual of Accounting and Financial Reporting
Accounting PrinciplesAccounting Principles
Student Activity Funds – Agency Funds (Fiduciary Fund-Type) in PA
General Fund – Accounted for in function 3210 “School Sponsored Student Activities”
Fund Accounting
Accounting PrinciplesAccounting Principles
Financial StatementsState 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
Accounting PrinciplesAccounting Principles
Trial balance General Ledger Transfers Journal Adjustments Journal Cash Receipts Register Check Register Monthly Report (Beg. Bal. To End. Bal. By Activity) Bank Reconciliation
Example Reports
Accounting PrinciplesAccounting 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