Document Sample
					                                                                                     No. 618.1

                                                   SECTION:        FINANCES
                                                   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
                   student activities.

   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.

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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
   activities funds.

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.

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Decentralized Operation

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
   entry bookkeeping.

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.

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              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

   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
   cash receipts.

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

Interest Income

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

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Internal Controls

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.

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             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.

         Unused Funds

         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.

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             618.1. STUDENT ACTIVITY FUNDS - Pg. 8

         Scholarship Funds

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.

         Property Disposition

         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.

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                    618.1. STUDENT ACTIVITY FUNDS - Pg. 9

                Sales Tax

                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

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