3/11/2016 - wasbo€¦ · 3/11/2016 1 student activity funds presented by: natalie rew , cpa basic...

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Student Activity FundsPresented by: Natalie Rew , CPA

Basic Facts about Student Activity Funds

• 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

What’s in your 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

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District Activities Should Be in Fund 10 or Fund 21

• Athletics• Transportation• Uniforms• Field upgrades• Scoreboard• Pizza

• School Musical• Music Concerts

• Band • Uniforms• Trips

• Cheerleaders• French Class• Field Trips / Science Trips• Shop Class

If the district budgets for a co curricular activity, fund raising for that activity is district revenue to be spent only on that activity and for the specific purpose of the donation/ contribution/ fund raiser.

Booster Clubs and Parent Organizations

• District may set up agency funds to hold money for parent groups. (separate liability account in fund 60)

• Due to parent organizations – 60 B 818000

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.

Developing Strong Internal Controls

Protecting the School District

• 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)

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Clear 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

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• Clear statement that misappropriation or misuse of agency

funds is theft

Establish Good 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.

• 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).

• Subject to periodic internal or external audit.• Purchase orders are used for all activity fund disbursements

and are properly approved.

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Inactive Activity Fund Accounts

• Policy to identify inactive accounts• Policy to distribute funds from inactive accounts• Include the policy on inactive accounts in the agency

fund policies.

Protect the School District

• Check should not be signed in advance or written to cash.

• Student and parent organizations should not maintain negative account balances. Theft from other clubs.

• 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.

What Needs to be Ready for the Audit?

• 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 support documentation for disbursements• Bank deposit slips and receipts

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501(c)(3) organizations

• Under 501(c) of the Internal Revenue Code, there are many different types of exempt organizations. Most booster clubs and parent teacher associations are classified as 501(c)(3) organizations.

• Contributions to a 501(c)(3) organization are tax-deductible to the donor. Contributions to other types of exempt organizations are not tax-deductible to the donor.

• 501(c)(3)organizations must file IRS form 1023 to apply for exempt status within 27 months of the date the organization was legally formed otherwise the exemption is not retro-active. Organizations exempt from the requirement to file IRS Form 1023 are those with gross receipts normally below $5,000. All other organizations file IRS Form 1024 which, with some exceptions, is retroactive if approved.

Fundraising License in Wisconsin

In order to fundraise to the general public in Wisconsin you must have a fundraising license.

This applies to all organizations except for those organizations that normally raise less than $5,000 and only use volunteers to solicit contributions. You must file form #296 within 30 days of the date on which contributions exceed $5,000.

FYI: The following materials were lifted from Gary Kvasnica’s 2011 presentation

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STUDENT ACTIVITY FUND INTERNAL AUDITSTo protect the interest of advisors, principals, bookkeepers, students and your District, it is a good practice to conduct internal audits of student activity accounts

• External audits by auditors most likely will not be as in-depth

• Forces all parties to follow established guidelines

• Lets parties know when they are doing something wrong so they have an opportunity to correct it

• On-site visits give the Business Office insight into some of the challenges faced by schools in maintaining student activity accounts

• Helps prevent fraud

• Put together an Audit Checklist, – At the end of the internal audit, review the checklist

with the book keeper, the school principle and the business manager. Everyone should sign it.

• Put together a list of corrective actions with a timeframe to complete– Identify the problem, provide a solution to fix the

problem, and a timeframe you expect to see corrective action taken

• Ask for a signed written response specific to each corrective action.

STUDENT ACTIVITY FUND INTERNAL AUDITS:Tips

STUDENT ACTIVITY FUNDSample Audit Checklist

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Other Resources

z DPI Internet Website WUFAR Accounting Issues: Fund 60 Agency Fund Guidelineshttp://http://dpi.wi.gov/sfs/doc/stud_acct.doc

z 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”

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Natalie Rew, CPASenior Manager

[email protected] Luann Lane

Madison, WI 53713(608) 442-1963

http://http:/dpi.wi.gov/sfs/doc/stud_acct.doc

mailto:[email protected]

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Kimberly High School and theManaging of Student Activity Accounts

Kimberly High SchoolStudent Activity Accounts

• 1477 Students• 80% of Student Participate in Co-Curricular

Activities• 80 Activity Accounts • 1-3 Advisors per Activity Account

A lot of people are involved in Activity Accounts

Kimberly High SchoolStudent Activity Accounts2014/15 Transaction Volumes

• 1,950 Deposits• $1,200,450 Deposited• 1,738 Checks• Processed several hundred credit card transactions• $1,116,000 Disbursed

Managing such large volumes requires organization and adherence to District Policy

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Kimberly High SchoolStudent Activity Accounts

• 25 Years at District• 22 Years as Office

Manager• Supervises staff of 7• In addition to many

other duties, responsible for all Accounting at High School Level

Kathie Menting

Kimberly High School Managing Student Activity AccountsThe sheer volume of activity requires thatall parties involved adhere to all Policiesand GuidelinesKathie does not allow any activity to take placeunless all forms are signed and properly completed

No Exceptions !

Kimberly High School Managing Student Activity Accounts

Every Advisor must review the Districts Student Activity Policy and “High School Activity Fund and Cash Handling Guidelines and Procedures” Manual.

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Every Advisor must acknowledge that they have read the Districts Student Activity Policy by signing a “Policy Sign-off Sheet.”


Every Advisor and Student Officermust acknowledge that they have readand understand the Activity Fund and Cash Handling Guidelines Manual

If an Advisor or Student Treasurer changesthe form must be resubmitted.


A properly completed Deposit Slip must accompany every Deposit.

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A properly completed “Check Request” along with receipts must accompany every request for payment.

Kimberly High School Student Activity Accounts and the District

Business OfficeKathie provides the Faculty Advisor and Business Office with a monthly report that lists beginning balances, receipts, expenditures and ending balances.

Software Used: QuickBooks Pro


Business OfficeIncluded with the monthly report is a bank statement that reconciles to the report.

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Business OfficeHigh School Activity Accounts are reviewed annually by the District Auditor and periodically by the Business Office for accuracy and adherence to guidelines.


Time Saving Tools


Student enrollment has nearly doubled in the past 12 years

Activity Account volume has more than doubled

The District has implemented several time saving measures!

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Kimberly High School Student Activity Account Receipting

Time Saver!Coin and Bill Counter

• Precise, accurate and fast way to count money

• Inexpensive

• A huge times saver

• Counts both coins and bills

• No more starting over after getting interrupted


Time Saver!Automating the Receipting Process


• Handwritten 3-part Receipt• Had to add up all receipts

with calculator• Different process for cash

and checks• Had to re-add and provide

tape total to be attached to bank deposit

Very time consuming!

Old Process

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Kimberly High School

Student Activity Account Receipting

New Automated Receipting ProcessCash and check amounts from Deposit

Slip are input into SchoolCash.net

Totaled and verified against Deposit Slip


Student Activity Account ReceiptingAutomated Receipting Process

Copy of input form

and receipt returned

to the Advisor

Kathie also keeps

copies


Student Activity Account ReceiptingAutomated Receipting Process

Automatically generates Deposit Slip for Bank when needed

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Automated Receipting Process• No more hand writing receipts, and then going back to add the receipts, re-

adding the checks for totals

• Provides an excellent audit trail

• Saves approximately 2 hours per day

• Vendor Name: KevGroup

• Software Name: School Cash Register


Time Saver!

• Make check deposits directly from your desktop • Don’t need to run calculator tape totals for the

bank• Don’t need to endorse checks• Don’t have to wait in line at bank• Don’t have to go to the bank as often• Quick and easy research of check history• Works with Receipting Software

Automatic Check Deposit



Log into system and enter total dollar amount of checks to be entered. This amount was generated from the Receipting Software.

How the Process Works

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Insert checks into the scanner




Checks are automatically scanned and endorsed




System lists checks, check amounts, total and captures a picture of each check


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If a check is misread, it will pop up on the screen and you enter what it can’t read




You are now ready to submit the deposit




Your virtual deposit has now been sent


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You receive an email confirming




If you have a question or get a call regarding a check, you can quickly and easily look up check information by date, amount or check number.



Time Saver!

• Kimberly uses a product from Associated Bank• Most Banks have similar products • Saves Kathie at least 2 hours per week• You can destroy checks after 30 days• Cost


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Kimberly High School and theManaging of Student Activity Accounts

QUESTIONS??

GENERAL ACTIVITY/STUDENT ACTIVITY FINANCIAL AUDIT CHECKLIST

SCHOOL: A. FINANCIAL STATEMENTS/GENERAL: Complete In Progress N/A 1. Bank accounts reconciled monthly. Reports sent to Business Office along with the bank statements as audit on a timely basis.

2. No new accounts were established without Business Office approval. 3. Reimbursement Account at $ by year end less outstanding. 4. Periodic financial statements of budgeted and actual revenues and expenditures were prepared and submitted to the appropriate administrators. Inflow/outflow reports as requested.

5. A list of Student Activity advisors sent to Business Office by October 1 of the school year.

6. Persons involved with S/A funds have read Policy # 6610, signed the policy sign off sheet stating that they have read Policy # 6610 and have sent to Business Office.

7. Petty Cash balanced. 8. No personal checks were cashed. 9. Accounts inactive after 12 consecutive months terminated. B. RECEIPTS: Complete In Progress N/A 1. “Deposit Request” forms signed & submitted to school bookkeeper? 2. Bookkeeper provides advisor with receipt—if not, signed and filed. 3. Cash and checks received by teacher/advisor given to bookkeeper promptly when received.

4. Details as to the number of items receipted and the unit price per item are included in the receipt, if applicable.

5. Cash is deposited in safe or bank on a daily basis (not in desk drawers!). 6. All checks received are stamped “for deposit only”. 7. No monies are disbursed from undeposited receipts. 8. Receipts are being credited to the proper activity account. 9. Is there a process in place for proofing student fee collection? 10.Does split between General Fund deposit & Activity Fund deposit for fees proof out?

C. DISBURSEMENTS: Complete In Progress N/A 1. “Check Request” form is used for expenditure requests signed by principal and/or advisor.

2. Voided checks are retained. 3. Cash expenditures are supported by a vendor’s invoice, a notation indicating receipt of materials or services, and authenticated purchase orders if required.

4. Disbursements by check are properly signed (by bookkeeper and designee) and are in agreement with the information recorded in the journal. No signature stamps.

5. Disbursements from petty cash are properly supported by vouchers or receipts and are reimbursed by year end.

6. Distribution of cash expenditures is being correctly charged to the proper accounts.

7. No checks written to cash. 8. No employee/advisor reimbursements.

T:\My Documents\WASBO\Workshops\Accounting Seminar\2016 Acct Conference\Handouts\Student Activity Funds\Audit checklist.docx

D. SALES & ACTIVITIES: Complete In Progress N/A 1. Revenue-producing activities are in accordance with those approved by the school district.

2. Adequate control is exercised by supervisory personnel over student fund-raising activities to ensure that such activities are in keeping with the intent of the program.

3. All records of sales such as receipt books and register tapes are reconciled to the cashier’s receipt for monies received.

4. Student store inventories are reviewed regularly to determine propriety as to character and quantities.

5. Revenue and expenditure statements for the student store are reviewed periodically by principal or designee.

6. Completed meeting minutes by the student council or other activity groups are prepared on a timely basis and properly reflect approval of activity expenditures.

E. PURCHASES: Complete In Progress N/A 1. Items of purchase are in accordance with the intentions of the student program and they are reflected in the minutes or activity fund records.

2. Associated student body monies are spent only to enhance the welfare of the general student body and not to benefit any individual.

3. Business Office was notified of equipment purchases over $1000 for inventory and insurance purposes.

4. Purchases over $2500 had prior approval from the Business Office. 5. Contractual obligations were properly authorized and kept within established limits. (i.e. contracts on file)

6. Proper controls exist to prevent negative balances 7. Timely payments were made on all purchases on account. F. MISCELLANEOUS: Complete In Progress N/A 1. NSF process in place and procedures are followed. _______________________________________________ ______________________________________________ Signature, School Bookkeeper Signature, School Principal _______________________________________________ ______________________________________________ Signature, Administrative Asst, Business Office Signature, Director of Business Services

______________________________ Date