Activity Fund Accounting ACT301

Campus & Student Activity Accounts

Presented by: Deborah Ottmers, Fredericksburg ISDdeboraho@fisd.org

ASBO

Contents

Activity Fund Presentation SlidesFASRG – Account CodesFASRG - Cash ManagementFASRG - SBDM Activity Fund Accounting Exhibits - Sample formsAudit ProgramsSales Tax Issues

Updated: Jan 2010

Two Types of Activity Funds

SAF = Student Activity Funds

CAF = Campus Activity Funds

Often times, both use the same accounting

system at the school, but they are very

different types of funds

Updated: Jan 2010

How do I distinguish between the two types?

Do other persons besides the students decide how to spend the money? If yes, funds are CAF - Fund 199 or 461.Do the students have sole responsibility for deciding how to spend the money? If yes, funds are SAF - Fund 865

Updated: Jan 2010

CAFPresent Assets and LiabilitiesPresent Revenues and ExpendituresReport with Governmental Funds Report as part of Government-wide Financial Statements

SAFPresent Assets and Liabilities ONLYReport with Fiduciary Funds

Activity Fund Presentationin Financial Statements

Updated: Jan 2010

Updated: Jan 2010

Updated: Jan 2010

Policy Requirement

Updated: Jan 2010

BOARD POLICIES (CFD)

Updated: Jan 2010

CAF

CAMPUS Activity Funds:Belong to the Campus/DistrictMoney raised locally at the school or donated to the schoolAccounts include school office and departmental accountsSponsors for CAF accounts include the Principal as well as departmental people

Updated: Jan 2010

CAF

Expenditures must benefit student body

Like General Funds: Must adhere to State and Board policy and District regulationSubject to purchasing and bid laws

Updated: Jan 2010

Updated: Jan 2010

ALLOWABLE EXPENDITURES(Examples)

General operation of the schoolPublic purpose in the realm of educationDirect or indirect benefit to students

Field trips - admission feesPerfect attendance incentives for studentsTeacher appreciation & awardsClassroom and office suppliesRefreshments & snacks (for inservices, staff meetings, retirement receptions).

Updated: Jan 2010

PROHIBITED EXPENDITURES(Examples)

Individual membership feesGifts (i.e., flowers, Christmas turkeys, gift certificates, bonuses) of public fundsDonationsAbuse of staff appreciation meals, parties for staff, including food, decorations, favorsExtravagant expenditures

Refer to Exhibits for expanded list (Sample)

Updated: Jan 2010

STUDENT FUNDS = CLUB FUNDS = AGENCY FUNDS

Belong to various student groups; not to the campus or districtMoney spent by the students in the SAF organization

SAF

Updated: Jan 2010

STUDENT FUNDS = CLUB FUNDS = AGENCY FUNDS

Belong to various student groups; not to the campus or district - “trust” fundsSpending decisions rest “solely” with the students Not subject to purchasing & bid lawsClass, club or student groups must have elected officers (in order to qualify for tax free days)

SAF

Updated: Jan 2010

REVIEW OF BUDGET CODES

Financial Accounting System Resource Guide (FASRG)

Review of Account Codes

Ensure that fund, function, & object match the purchase

Updated: Jan 2010

Accounting Methods

CentralizedFunds are controlled and disbursed through the school district’s accounting department

DecentralizedFunds are accounted for and controlled at the various school sites

Combination of the two

Updated: Jan 2010

Centralized Accounting Method

AdvantagesBetter internal controls by using one central systemEasier access to information and records for performing auditsConsistent & efficient cash managementLess accounting responsibility at the campus level - district management

Updated: Jan 2010

Centralized Accounting Method

DisadvantagesLess control at the school sitePossible delay in information and reporting to the school sitePossible delay in obtaining checks for planned disbursementsPossible delay in ordering supplies, equipment, etc.

Updated: Jan 2010

Chain of Responsibility

Updated: Jan 2010

RESPONSIBILITY of SPONSOR

Attends annual meeting and obtains information bookletSpends money in accordance with guidelinesMaintains records to support financial activitiesReconciles account to reports monthly; turns in reconciliation.

Updated: Jan 2010

RESPONSIBILITY of SECRETARY/BOOKKEEPER

Records SAF & CAF transactions to include receipts, deposits, disbursements, and journal entries Assists sponsorsInforms Principal of problems and concerns

Updated: Jan 2010

RESPONSIBILITYof District Accounting Department

Trains BookkeepersProvides Help DeskDistributes reportsReviews bookkeepers’ monthly bank reconciliations and sales tax reportsUpdated: Jan 2010

RESPONSIBILITYOF PRINCIPAL

ULTIMATE responsibility for:SAF & CAF funds and transactionsSafekeeping money Proper accounting and administrationApproval of disbursements in accordance with procedures manual.

Updated: Jan 2010

CASH MANAGEMENT

Updated: Jan 2010

FASRG 8.5.1.3

Cash Management

Separation of DutiesIf possible, at least two persons should be involved in cash handling & deposits

High Risk AreaFlow of money must be supported by receipt books and bank deposits

Updated: Jan 2010

Cash Management - Deposits

Procedures should include:All funds collected must be deposited

Cash collected should not be disbursed by cashing personal checks

Deposits should match the amount collected and should be supported by receipts or listings of collectionsDeposits to district office and bank should be timely - daily if possible

Updated: Jan 2010

Cash Management - Receipts

Procedures should include:Both the sponsor and secretary/bookkeeper should be present when the money is counted & receiptedAn official receipt book with pre-numbered, bound receipts in triplicate should be used if an electronic system of receipts is not available

A copy of the receipt must be given to the person paying (sponsor)A copy of the receipt must remain in the receipt bookA copy of the receipt should be attached to the deposit documentation

Updated: Jan 2010

Cash Management - Receipts

Procedures should include:Receipts are not to be pre-dated or pre-signed Receipt numbers must be used consecutivelyReceipt numbers should be written on the bank deposit slip for documentationReceipts should not be alteredVoided receipts must be re-attached to the receipt book

Updated: Jan 2010

Bank Account Reconciliations

All accounts must be reconciled on a monthly basisBanks allow for 10 - 30 days for discovery of errorsSealed Bank statements should be routed to someone other than the person who deposits funds Excess funds should be invested

Updated: Jan 2010

CHECK DISBURSEMENTS

Updated: Jan 2010

Check Disbursements

Use District’s depository bank Pre-numbered checks must be usedTwo signers should sign each checkNo checks for “Cash” Sufficient funds must exist in the appropriate activity account(s)

Updated: Jan 2010

Check Disbursements

All expenditures must be supported by original invoicesPre-payments should not be made for goods or servicesOriginal invoices should be stamped “Paid” to avoid duplicate paymentsDisbursement records must be maintained for five (5) years

Updated: Jan 2010

Payments to Individuals

No payments for services should be made to district employees - all payments should be made by the Payroll Department

(Exception if they have their own business)

Payments for services:Check your district’s policiesA SSN or TIN is required – W-9 Form1099 issues

Updated: Jan 2010

Recordkeeping Requirements

All receipt books, deposit slips, and checks must be maintained for auditSupporting documentation for Fund Raisers:

Fund Raiser authorization formFund Raiser Profit/Loss Statement (Recap)Fund Raiser Collections RecordFund Raiser Merchandise Distribution Log

Updated: Jan 2010

Other Issues

Donations Received -Check local policy for limit before Board or Superintendent approval is requiredEquipment purchases - CAF Fixed assets should be taggedRetention of records - Five (5) years

Collect records from sponsors at year-end as part of check-out procedures

Updated: Jan 2010

Other Issues – No Raffles

Updated: Jan 2010

Other Issues - FMNV

Often times, fundraisers are food salesCan’t have competing food salesFoods of Minimal Nutritional Value (FMNV)

Federal regs prohibit the sale of certain foods to students during the school day

Elementary: May not serve FMNV at any time, anywhere on the school campus during the school day. Snacks can only be during nutritional breaks.Middle School: May not serve FMNV during meal times. Nutritional snacks can only be after lunch.HS: May not serve FMNV during meal times.

FMNV during school holiday celebrations are ok to an extent

Updated: Jan 2010

Other Issues – FMNV Penalties

Texas Dept. of Agriculture (TDA) will monitor and enforce the policy to ensure complianceTDA will disallow all meal reimbursements for the day and require the school to reimburse the food service account for the lost reimbursementDocumented corrective action plan will be required and monitored for compliance

Updated: Jan 2010

Updated: Jan 2010

CAMPUS and STUDENT ACTIVITY FUNDS PROCEDURES MANUAL

Procedures governing activity fund accountsControls to help prevent

misappropriation of fundsviolations of Federal, State, & District regulations

acts of fraud or negligenceDistribute to sponsors, bookkeepers, & principals - Provide training!

Updated: Jan 2010

Updated: Jan 2010

Manuals on the Internet

Use TASBO’s Member’s Best PracticesGo to a specific ISD’s website and lookGoogle “Activity Fund Manuals Texas School Districts”

Updated: Jan 2010

Common Audit Findings and Recommendations

Audit to ensure funds are in compliance with policies and procedures

Updated: Jan 2010

AUDIT FINDINGS

“Broken” audit trailMoney collected doesn’t equal the money depositedInventory of goods purchased and money deposited doesn’t equal the total merchandise purchased [vendor invoice]Receipting of funds - missing void receipts, changes to receipts, etc.Lack of documentation for checks

Updated: Jan 2010

AUDIT FINDINGS

“Weaknesses in Internal Control”Lack of dual signature of authorized check signers, when requiredImproper receipting of cash (incomplete or missing receipts, etc.)Lack of supporting documentation for check disbursements, such as vendor invoicesViolation of District’s policies regarding timely bank deposits

Updated: Jan 2010

Other Audit Findings

Violation of District’s policies and procedures over activity fundsLack of reconciliation between Sponsor’s records and campus bookkeepers

Updated: Jan 2010

RESOURCES

TEA Websitewww.tea.state.tx.usFinancial Accountability System Resource Guide (FASRG v14)

FAR - Account CodesPurchasingSBDM - Activity Fund AccountingManagement - Cash Management

Updated: Jan 2010

QUESTIONS & ANSWERS

Updated: Jan 2010

Activity Fund Accounting ACT301

Campus & Student Activity Accounts

Presented by: Deborah Ottmers, Fredericksburg ISDdeboraho@fisd.org

ASBO