TITLE: STUDENT ACTIVITY FUNDS
ADOPTED: October 7, 1999
SCHOOL DISTRICT REVISED: June 15, 2010
618.1. STUDENT ACTIVITY FUNDS
1. Purpose It is the purpose of this policy to establish financial supervision and controls for
administering various activities that comprise student activity funds.
2. Definition For purposes of this policy, student activity funds shall include the funds of Board-
approved student groups.
3. Authority The School Code clearly indicates that every school district should have a policy for
student activity funds which provides:
1. Reasonable rules and regulations regarding student activities.
2. Procedures for organization, management, supervision, control, and financing of
SC 511 (d) The Board adopts this policy to ensure proper supervision of student activity funds
under the district's responsibility.
Student activity funds are not part of district funds but must be approved by the
Board and supervised by the Superintendent or designee, who shall countersign all
checks drawn upon them.
4. Guidelines Each student activity covered by this policy must be recognized and budgeted by the
student organization before funds can be collected or disbursed in the name of the
All student activities shall be on a self-sustaining basis, except for situations
approved by the Board.
Page 1 of 9
618.1. STUDENT ACTIVITY FUNDS - Pg. 2
Types Of Student Activities Funds
Student activities accounts are limited to student organizations and classes with
officers and a faculty advisor. Each organization and class must maintain minutes of
their meetings. Scholarship funds are also permitted as part of the student activities
The organizational hierarchy and positional responsibilities outlined below are for
student activities funds:
1. The Board is responsible for establishing policies in conformation with state
2. The Superintendent, as chief school administrator, is responsible for
implementing policies and establishing administrative regulations for student
3. The principal of each school is responsible for working with students,
implementing policies and regulations, and administering fiscal procedures.
4. The Business Administrator is responsible for prescribing appropriate accounting
procedures and for internal auditing or student activities funds.
5. The fiscal officer, who may be designated by the principal within the building,
should be responsible for maintaining appropriate fiscal records.
6. Faculty advisors are responsible for working with students in specific activities
and for carrying out administrative regulations.
7. Students who choose to participate in various activities should be involved in the
fiscal management of those activities. This is a learning activity which may
benefit interested pupils. Different activities groups may choose to have student
officers including a treasurer, who could work with the faculty advisor in
carrying out financial procedures that are established.
Page 2 of 9
618.1. STUDENT ACTIVITY FUNDS - Pg. 3
Decentralized accounting for student activities means that the bookkeeping functions
are performed at the building level. This requires someone with an understanding of
bookkeeping at each school because double entry accounting is recommended. Each
school can use microcomputer, mechanical, or manual systems. Among the books of
original entry are the following:
1. Cash Receipts Journal - Receipts are recorded in detail by account numbers.
Recorded receipts should be compared with deposits and adjusted when needed.
Credits are distributed to detail accounts by activities.
2. Cash Disbursements Journal - All disbursements of cash or checks should be
entered in this journal. Charges are distributed to detail accounts by activities.
3. General Journal - Noncash entries and adjustments are recorded in the general
journal. All entries must be made to both debit and credit accounts in double
4. General Ledger - The general ledger is comprised of individual accounts on
which debits and credits from cash receipts journal, cash disbursements journal,
general journal, and general ledger.
5. Cash Receipts and Disbursements Journal - Schools which have a small number
of transactions may utilize a single cash receipts and disbursements journal
which combines the functions of the cash receipts journal, cash disbursements
journal, and general ledger. Subtotals provide monthly totals.
Responsibility For Auditing
Auditing is the process of examining documents and procedures to determine their
accuracy and adequacy. Audits are of two (2) types:
1. Internal Audit Controls –
Internal audits are performed by school district personnel. While the word
"audit" conjures a detailed investigation in one's mind, internal audits can be as
simple as day-to-day checking of receipts, invoices, and procedures. Each school
should have certain "audit" procedures built into everyday fiscal routines.
Page 3 of 9
618.1. STUDENT ACTIVITY FUNDS - Pg. 4
In addition, the school district may choose to have business office personnel
make periodic checks of building level accounting practices to determine if those
practices are in conformance with state laws and district policies and regulations.
These are called internal audits. All schools shall submit a monthly balance sheet
to the Superintendent. All schools shall submit a standard quarterly financial
report for Board review and approval.
2. External Audits –
SC 2401 Audits performed by individuals who are external to the operation of the school
district are called external audits. Section 2401 of the School Code indicates who
shall and may audit school accounts. School district should employ independent
auditors, preferably certified public accountants, to perform audits of school
district fiscal records, including those of student activities funds.
Periodically the Division of School Audits, Office of the Auditor General,
conducts audits of all school district funds for each school year. School audits are
performed to determine compliance with state laws and regulations and with the
district's own policies. The Auditor General may cite districts for improper
procedures and inform the Board and the Pennsylvania Department of Education
which may take appropriate action.
General Operating Procedures
Fiscal procedures used to accomplish student activities fund accounting objectives
may vary widely depending upon the size of the school and upon the needs of the
program. The following procedures should be used:
1. Use of Activities Funds –
The activities fund should not be used for small cash and check needs of other
funds and organizations, even though it may be more difficult or cumbersome to
deposit or withdraw money from nonactivity funds. Student activities funds
should be used solely for their intended purposes.
2. Initiating Accounts/Terminating Accounts –
As new programs, clubs, or organizations are formed, principals may establish
new accounts. New accounts should not be established solely for individual
charitable drives. Requests should be in writing and occur only after a need for
new financial accounts is determined.
Page 4 of 9
618.1. STUDENT ACTIVITY FUNDS - Pg. 5
Principals may terminate at any time any inactive accounts which has a zero
balance. The appropriate faculty advisor may request the principal to terminate
an account. This request, in writing, should also state the planned disposition of
any money or materials which remain in the closed account.
3. Cash Payments –
All payments to activities fund purchases should be made by check. No expenses
should be paid in cash directly on gate receipts, dues collections, sales or other
4. Signatures on Checks –
The Board should designate and authorize one or more persons to sign checks for
activities fund payment. The principal should be one of the persons. Normally,
signatures should be required on all checks. Two (2) signatures are needed if an
adequate voucher system with separation of functions is in place. If a signature
machine is used to sign checks, the number of signatures on the check is moot;
but care should be taken to safeguard and control the signature plate. The persons
signing checks should require invoices or other evidence of obligation, properly
approved by the faculty advisor and/or student treasurer of the activity, before
signing the check. These documents should be reviewed prior to making payment
and should be initialed to avoid making duplicate payments. No checks should be
signed until they are filled out completely, including the date, name of payee, and
Activities funds balances will be deposited in interest bearing accounts or otherwise
invested in interest earning investments permitted by the School Code. Money
market funds which invest in securities approved for school investments, are
presently available in Pennsylvania. School districts, with Board approval, may
invest in these money market funds which also permit the direct issuance of checks
so that earnings accrue while the checks are clearing. These, along with NOW
accounts, savings accounts, certificates of deposit, and other approved investments
will earn interest for invested student activities fund cash balances.
Interest income from these investments will be credited to individual student
activities accounts. The Business Office will prorate interest earnings and distribute
them annually to each activity account based on the balance in the account on June
Page 5 of 9
618.1. STUDENT ACTIVITY FUNDS - Pg. 6
The greatest protection of funds comes from effective internal controls; however, the
following guidelines should be used to protect cash:
1. Receipts should be written for the faculty advisor or student treasurer when
money is received in the school office so its arrival is established for accounting
and insurance purposes. This should be done without delay. A duplicate receipt
book, machine, or cash register should be used so the office retains copies of the
2. Cash receipts should be deposited daily in a bank approved by the Board as a
3. Safes may be used for protecting money during the day. Amounts kept in safes
overnight can encourage attempted robberies which may do damage that is more
costly to repair than the money being safeguarded.
Loans And Purchases
If an individual activity has a cash flow problem, other activity balances within the
fund may be loaned to that account on a temporary basis. All activity fund cash flow
will be positive at the close of the fiscal year. Loans between student activity
accounts can be made only with student approval and proper documentation.
Student activities funds will not be used to make purchases for any individual or
other organizations. It is unlawful to use the activity funds to make privileged or tax-
free purchases for any school employee or other person.
All school district employees who are paid by student activities funds for services
will be paid through payroll with regular deductions. In Pennsylvania, such earnings
are subject to income tax withholding, social security, retirement contributions,
workers' compensation act assessments on employees, and any other federal, state,
and local deductions that may be required from time to time.
Page 6 of 9
618.1. STUDENT ACTIVITY FUNDS - Pg. 7
SC 511 Section 511 of the School Code requires that purchases of materials or supplies by
any organization, club, class or group in excess of one thousand dollars ($1,000)
shall be made upon solicitation of three (3) or more quotations of bids. Amounts in
excess of ten thousand dollars ($10,000) require public solicited bids. All purchases
in excess of one thousand dollars ($1,000) must be handled through the business
Any purchase of materials and supplies that go through the student activities fund
are subject to the bidding requirement. Services, such as those of proms, hotels, and
music groups are not subject to the bidding process.
If purchase of such materials as rings, yearbooks, and pictures are made directly by
the students and no transaction goes through the student activities fund, then bidding
is not required. If rings, yearbooks, and pictures are purchased through the student
activities fund, then bidding is required. However, long-term contracts are desirable
and service should be considered when reviewing the bids.
Student groups may obligate themselves by contracts for materials, equipment, or
services with the approval of the principal, provided that legal requirements for
bidding and district policies are followed. Contracts presented by vendors such as
musical groups and yearbook publishers, should be reviewed by the principal.
Procedures are needed to deal with balances in inactive accounts or accounts of
graduated classes. When the interest of themselves declines to the point where
organizational activities cease, and there is a financial balance in the account, some
decision must be made about the disposition of funds. If the contributors to the
balance are in school and can be identified readily, the money may be returned to the
students, or the balance may be transferred to one (1) or more active accounts with
approval of the school principal and the Superintendent for balances less than five
hundred dollars ($500). Disposition of funds in excess of five hundred dollars ($500)
will be determined by the School Board.
Page 7 of 9
618.1. STUDENT ACTIVITY FUNDS - Pg. 8
SC 511 Section 511 of the School Code permits raising and disbursing funds for
scholarships under student activities funds. Scholarships and memorial funds may be
properly accounted for as trust funds, particularly when large principal amounts are
held from year to year. The State Manual of Accounting describes the use of and
accounting for trust funds.
Prenumbered documents and tickets are recommended. The use of prenumbered
tickets without a system for control is useless. The numbers must be used to control
tickets distributed without charge, sold at reduced prices, and sold at full price. A
person independent of the ticket sellers must control ticket numbers. The principles
applicable to prenumbered tickets are applicable to all prenumbered documents.
Independent control of numbers is required.
The implications to fundraising projects are broad. Fundraising projects range from
in-school sales of store items, food, dances, and entertainment to out-of-school sales
of advertisements, gift items, candy, fruit, raffles, magazines, programs, car washes,
concession sales, and innumerable others. The district and schools must decide the
extent to which the community will be inundated with sales; what sales are
appropriate for which clubs or organizations; if projects must be established in
advance of approvals for fund raisers; what limits, if any, should be set for
accumulation of funds; what purposes are appropriate for use of funds and what
happens if a trip or other fundraising objective is cancelled.
Caution is required that in-school sales of food do not conflict with cafeteria sales.
All activities will submit a list of fund raising projects to the principal for approval.
If student activities funds have any surplus and unneeded material or property, it
should be disposed of following the policy of the district. Proceeds from the sale of
student activity funds property should be returned to the student activities fund.
Page 8 of 9
618.1. STUDENT ACTIVITY FUNDS - Pg. 9
Activity groups must be cautious to collect, where appropriate, and remit
Pennsylvania sales tax on items sold to students and adults. This is applicable
particularly for school store sales and book sales. Appropriate forms for remitting
sales tax are available from the Pennsylvania Department of Revenue.
While the purchase of items for which commissions are paid should be discouraged,
it is common practice that commissions are paid on sales of items such as pictures.
Commissions may be returned to a specific student activities account.
Equal Opportunity Education Institution
Pol. 103, 104 Keystone Central School District is an equal opportunity education institution and
will not discriminate on the basis of race, color, national origin, sex and handicap in
its activity programs or employment practices as required by law.
School Code – 24 P.S. Sec. 511, 2401
Board Policy – 103, 104, 229, 608, 610, 619
Page 9 of 9