PASBO 47PASBO 47thth AnnualAnnual ConferenceConference

Newly-RevisedStudent Activity Fund

HandbookJackie HorrocksOwen J. Roberts

SD

Ernie WerstlerExeter Township SD

Dave PiperAltoona Area

SD

The LawThe LawLegislative Mandate

Section 511 of Public School Code of 1949

(24P.S. §5-511)

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 PolicyShould Provide for…Should Provide for…

Reasonable Rules and Regulations for student activities

Procedures for organization, management, supervision, control and financing of student activities

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 PrincipalsOrganization Board of School Directors Superintendent Principals Business Administrator Fiscal Officer/Custodian Faculty Advisors Students

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 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

Other Related FundsOther 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

Non-School FundsNon-School Funds

Faculty Accounts

Sunshine Funds

Booster Club Accounts

PTO 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

External Audits

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 Donations from student or parent groups, such as 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 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:

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

BiddingBidding §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

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

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

Student ActivitiesStudent Activities

Loans and purchases Procurement cards Employee Compensation 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 - 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

Accounting PrinciplesAccounting 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

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

Financial StatementsMonthly or Quarterly Statement of Revenues and Expenses by Activity

Monthly or Quarterly Balance Sheet

Annual Reports (same as above)

Accounting PrinciplesAccounting Principles

Other Considerations

Limits on Balances

School Store