1.  Read Chapter 8 and briefly describe and
explain the difference between student activity funds and district activity
funds.

According
to the National Center for Education Statistics student
activity funds support activities that are based in student organizations.
Students participate in the activities of the organization, as well as manage
and direct the organization’s activities. One important distinction is
that disbursing the monies from the student activity fund may be subject to
approval by the student organization and its sponsor rather than by the board
of education. Student activity funds are fiduciary in nature, and should be
classified as agency funds. The principal usually has the control of these
funds, and they are accounted for at the school site. If it isn’t a
student organization, it should not be classified as a student activity fund.
These do have to be reported to the school district and in the school’s
financial report.

District activity funds are defined as funds that belong to the district and
are used to support its co-curricular and extra-curricular activities. These
are administered by the school district. The board is in charge of disbursing
and approval of district activities monies. The board decides how these monies
are spent and the programs that receive the funds. District activity funds
represent district resources and are classified as special revenue funds. These
are deposited in the district accounts.

Resources:

Guidelines
for School Activity Funds
http://www.ksde.org/leaf/guidelines_manuals/activity_fund_guidelines/actv_fnd.htm

Financial
Accounting for Local and State
School Systems, Chapter
8: Activity

Fund Guidelines

2.  Locate the policies in your school
(district) regarding student activity funds and evaluate them item-by-item
basis according to the list below:

Does
your school district abide by and follow each of the above policies? What
exceptions are there?

Each activity fund should be established by
specific board of education approval. Each club/organization (Drama, FCA,
Jr. Beta) is initially approved by the board and the fundraising
activities are then approved by the board just prior to the time of the event.

All activity funds should be subject to sound
internal control procedures. According to 1.2.2 of the Tattnall County
policy all school financial records must be audited by a public accountant
or an internal auditor in the Business Department. The principal should
make a quarterly report to the local BOE that will contain an account of
all receipts and expenditures of funds during the past quarter. The local
board can at any time demand to inspect all books, records, and accounts
of funds and property. The books should be in good auditable order at all
times (Ga. Law 20-2-962).

All activity funds should be accounted for on
the same fiscal year basis as all other school district funds. The STAR
Accounting software generates the Quarterly Financial Report that is due
on the 15th of the month following the end of each quarter. A
copy of the Monthly Bank Account Reconciliation must be sent with the
Quarterly Report. For June 30 reporting, a complete copy of the bank
statement and any related investments must be submitted.

All activity funds must be audited and subject
to well-defined procedures for internal and external auditing. At the
annual audit the following records must be submitted to the auditor upon
request:

Month end reports that include all journal

Monthly Financial Report – GASB

Paid Invoices

Bank statements, deposit slips, cancelled
checks, and bank statement reconciliation forms

Purchase orders and check authorizations

Investment account statements

List of unpaid bills

Report of tickets sold and ticket summary
forms

Receipt books/cash collection forms

Quarterly financial statement

Each
school’s accounting records should be audited following the closing of
each fiscal year and at such time as there is a principal change. The records
of a school may be audited by an outside firm as requested by the
Superintendent, School Board, or Chief Financial Officer.

All employees responsible for handling and
recording activity fund monies should be bonded by the district.  Policy does state that only regular
employees of the school may collect school funds and issue receipts. Our
main bookkeeper is bonded but teachers are not bonded.

One or more activity fund supervisors should be
formally designated by the board of education.  Our bookkeeper is the designated
supervisor for our school.

Each activity fund supervisor should maintain a
checking account for the attendance center.  Our bookkeeper is the person that
maintains the checking account.

Depositories for student activity funds should
be approved by the board of education and be further subject to the same
security requirements as all other board funds.  All funds must be deposited into a
single account in a federally insured banking institution within the
county. The account information and a list of the individual(s) authorized
to sign checks is provided to the Central Office. If any changes are made
they must be made in writing.

All activity funds should operate on a cash
basis, meaning that no commitments or indebtedness may be incurred unless
the fund contains sufficient cash.
Our bookkeeper keeps the account balance up-dated on each
organization. When a check request is presented, a check is not written
until verification of funds is made.

A system of purchase orders and vouchers should
be applied to all activity funds that requires written authorization for
payment and should be strictly enforced. School employee cannot use
purchase orders without prior authorization from the school principal or
county level official. If a PO is presented
without prior authorization, the employee is responsible for the amount.

A system for receipting cash should be adopted
that includes using pre-numbered receipt forms for recording cash and
other negotiable instruments received.  Each teacher is given a sheet of
numbered receipts with a money envelop.  When money is collected and
receipted, the receipt sheet and money is turned into the office on a
daily basis. This procedure is followed throughout the county.

All receipts should be deposited intact. That
is, all receipts should be deposited in the form in which they are
collected and should not be used for making change or disbursements of any
kind. This procedure is not completely followed at my school.  Change is made from the money
collection envelopes and teachers do not always turn in the envelope on
the day it is collected even though we are not supposed to keep the money
in our rooms after the school day. All receipts should be deposited daily.
Un-deposited receipts should be well secured.  This is the ‘rule’ at
our school even though it is not strictly followed.

A system for disbursing funds that includes
using pre-numbered checks and multiple original signatures (no signature
stamps) should be adopted as the sole means for disbursing activity fund
monies. All disbursements must be made by check.  Checks cannot be written until an
original approved invoice or check requisition is received and account
statements cannot be used as a basis for payment. Checks are never made
payable to “Cash” or for invoices marked
“Miscellaneous”.

A perpetual inventory should be maintained on
pre-numbered forms, receipts, and other documents to create an adequate
audit trail.  All of the paid bills/invoices
and check requests are filed in numerical order by month. There is an
unpaid bills file that contains all the unpaid bills/invoices and check
requests.

Bank statements for activity funds should be
reconciled as soon as they are received.  The county policy contains a Bank
Account Reconciliation section on how to balance the bank statement and
what to do if it results in a non-reconciled balance. There is not a
guideline on when to reconcile but it is completed soon after receiving
the bank statement.

Using activity funds receipts to cash checks to
accommodate individuals, to make any kind of loan, to pay any form of
compensation directly to employees, or to extend credit should be strictly
prohibited. Even though it is not always followed, policy does state that
funds should not be used to cash checks or make change.

Monthly financial reports on all activity funds
should be prepared and submitted to the administration and the board of
education. A full reporting of activity funds should be included in the
district’s annual financial statements.  We do this on a quarterly basis
instead of a monthly basis.  A
full report of activity funds is included in our systems annual financial
statements.

Student activity fund monies should benefit
those students who have contributed to the accumulation of such monies.  Each organization’s money is
turned in and credited to that organization and only available for that
organization to spend. Any money in the organization’s account is
transferred to the general fund if the organization becomes inactive.

A board-approved process should be specified for
all fundraising activities, and any fundraising event should require
advance approval. Sponsors are required to submit fundraising activities
in advance for board approval. Our principal submits this request for the
next board of education meeting agenda. The sponsor can only initiate the
fundraising activity if approved by the board of education.

3.  Monthly financial reports on all
activity funds should be prepared and submitted to the administration and the board
of education. Find the most recent financial report from your school and review
it.

I was provided with the following after requesting the most recent
financial report:

·
Fund Ledger
Summary (January – March)

·
School Equity
Fund Summary (January – March)

General Fund

Savings CD

Student Council

Galaxy

FCA

Beta Club

Baseball

The
Fund Ledger Summary is listed by account numbers, description, starting
balance, deposits, purchases, transfers, miscellaneous, and ending balance. A
grand total is listed across the bottom portion of the form. This ledger includes
organizations that have funds at our school including baseball, Beta Club,
Cheerleading, Chess, Eighth Grade, FCA, Football, Galaxy, General Fund, Garden
Club, Media Center, Science Club, Special Education,
Student Council, Tennis, Y-Club and Yearbook. The Savings CD states how much is
in the CD and how much has been earned for the year. School Equity Fund
Summaries listed each group and Revenues/Expenses with the beginning fund
equity and ending fund equity.

4.  Describe and explain the basic legal
issues in handling student activity funds.

The
basic legal issues related to student activity funds are centered on the checks
and balances of the process.  This
internal control ensures that all monies are accounted for and are appropriated
for approved materials/activities.
It also reduces/eliminates any “creative bookkeeping.

5.  Find the software used by your school in
managing student activity funds.

Review
the Frequently Asked Questions about Manatee (see link to Savannah-Chatham County)
and compare these issues to what you find in an interview with the person in
your school that is responsible for student activity funds.  Post the name of the software your school
uses and the results of your interview.

Our
bookkeeper provided the following:

We
currently use the STAR software system (Student Administrator). This
software allows for a level visibility needed from the Board of Education Level
down to each school within that district. The software includes a section for
Purchase Requests, Purchase Orders, Checks, Deposits, Fund Journal, Ledger,
Transfers, Activities, Vendors, Accounts, and Reports. More information can be
found at this site:
http://www.starsoftware.com/divisions/education.asp

All
of the people who use the STAR bookkeeping system are properly trained. When
updates become available she is sent for further training. There is also a tech
support web site and phone number for any questions or concerns that arise. Our
Technology Director is also trained in the use of STAR and is available for
assistance when necessary. No teacher has access to the STAR account and
therefore requires no training. A handbook is provided to each person trained
at each school and includes a Troubleshooting section.

6.  Identify all the forms used in
accounting for student activity funds in your school. Post a complete list (with
correct numbers) of all the forms uses.
Our bookkeeper provided the following:

1.
Receipt booklet (date, received from, account number, for,
amount, received by, receipt number) that provides a carbon copy.

2.
Check Requisition Form (date, school, organization name,
check payable to, amount, funds are spent for, signature for teacher and
treasurer, issued check number, approved by) form is in duplicate

3.
Tattnall County Board of Education Report of Monies
Collected form(date, source of collection, source, total for deposit, signature
of sponsor) in duplicate form.