ACTIVITY FUND ACCOUNTING PROCEDURES MANUAL
This manual is designed to provide a set of standardized accounting guidelines and procedures for the administration of the White Settlement Independent School District Activity Funds.
Principals, financial secretaries and clerks, sponsors and other personnel involved in the handling of Activity Funds are responsible for following the guidelines and procedures prescribe in this manual.
This manual supersedes all prior publications regulating the administration of Activity Funds.
TABLES OF CONTENTS
SECTION 1 GENERAL INFORMATION
1.1 PURPOSE OF ACTIVITY FUNDS
The Activity Fund is designed to account for funds held by a school in a trustee capacity or as an agent for students, club organizations of the campus, teachers and the general administration of the school. These funds are used to promote the general welfare of each school and the educational development and morale of all students. The accounting function for the Activity Fund is delegated to each campus and must comply with the guidelines and procedures required by this manual.
1.2 RESPONSIBILITY FOR ACTIVITY FUNDS
The school principal is responsible for the proper collection, disbursement and control of all activity fund monies. This responsibility includes:
1. Providing for safekeeping of monies.
2. Proper accounting and administration of fund transactions.
3. Expenditure of funds in compliance with applicable state laws, and local board policy administrative guidelines.
The principal is not responsible for funds collected, disbursed and controlled by parent or booster organizations. These parent and booster organizations funds are not to be accounted for in the school’s Activity Fund.
1.3 RETENTION OF RECORDS
All records should be kept current and in good order for a period of five years and available for audit any time.
SECTION 2 BASIC RECORDS
2.1 ACTIVITY FUND CASH RECEIPTS
Activity Fund Cash Receipts are the means of accurately recording cash received and provide support for each bank deposit. Only pre-numbered cash receipt books provided by the District are to be used.
2.2 BANK DEPOSIT SLIPS
Deposit slips, once validated by the bank, serve as a record for the specific date that receipts were credited for the bank account. Deposit slips are obtained from the business manager at the business office as needed.
2.3 GENERAL LEDGER – COMPUTER PRINTOUTS
The General Ledger for Activity Funds is maintained on the Skyward Software and maintained by Student Activity Account Clerk. The General Ledger summarizes all transactions of the Activity Fund during the month. Each series and in some cases, a combined cash journal of monthly reports generated from month end close-out should be maintained or filed for audit purposes.
2.4 PREPARATION OF RECORDS
All records must be completed in ink.
SECTION 3 BANKING PRACTICES AND PROCEDURES
3.1 BANK ACCOUNTS
Only activity fund transactions may be directed through the Activity Fund bank account. Transactions controlled by the lunchroom or by outside organizations such as the PTA or booster clubs, must be handled through these groups’ own bank account.
SECTION 4 ISSUING RECEIPTS
4.1 GENERAL RECEIPTING PROCEDURES
A. All cash and check collections must be recorded by the person receiving the money:
1. Original to person submitting money.
2. Duplicate copy sent with the yellow copy of deposit slip to the Activity Fund Clerk.
3. Third copy should be retained in the receipt book.
B. The receipt must be completed in its entirety, including:
1. Date, activity fund site and amount
2. The individual or firm submitting the money. A receipt may not be issued to more than one person.
3. An explanation of the purpose for which the money was received
4. The correct Activity Fund club/account code
5. The signature of the person receiving the money. The signature must be manual; signature stamps are forbidden.
C. An actual cash count should be made by the person signing the receipt in the presence of the person turning in the money.
D. Post dated checks cannot be accepted from any source.
E. Under no circumstances shall a cash receipt be altered. If an error occurs, VOID the original receipt and all duplicates and issue a new receipt. The original of the voided receipt must be attached to the copies and retained for audit purposes.
4.2 RECEIPT OF MONEY BY PERSONS OTHER THAN THE CAMPUS SECRETARY
A. The Campus Secretary or designee is responsible for maintaining an adequate supply of Tabulation of Monies and Cash Sub-Receipts (receipt books provided by the district to each campus.
B. A distribution record must be kept of all Cash Sub-Receipts issued to teachers, sponsors and other individuals approved by the principal to collect funds.
C. Money may be collected by an authorized individual other than the Campus Secretary or designee (teachers, librarian, clerks, etc., but only as approved by the principal) for such items as books, student fees, fund raising activities, etc. In such instances, the individual collecting the monies must account for the monies collected as follows:
1. Tabulation of Monies forms must be completed with all information provided when money is turned in to the school secretary.
2. In some cases, the authorized individual may issue Cash Sub-Receipts to payers for monies collected. The permanent copy should be stapled to a Tabulation of Monies form with only the summary and total information completed.
3. Collections shall be submitted to the Campus Secretary or designee weekly or whenever the aggregate amount of such collections exceeds $100.00.
4. The original completed Tabulation of Monies Form and the attached copy of the Cash Sub-Receipts shall be sent with monies collected to the Campus Secretary or designee who will count the funds in the presence of the depositor and prepare an Activity Fund Cash Receipt once the deposit total is verified. The Campus Secretary or designee should also sign the Tabulation of Monies Collected form.
5. The Campus Secretary or designee should keep on file for 5 years for audit purposes the original Tabulation of Monies form with attached Cash Sub-Receipts, if applicable.
6. Individual sponsors/collectors should keep verified copies of the Tabulation of Monies collected for 5 years for audit purposes.
SECTION 5 DEPOSITS OF FUNDS
5.1 DEPOSIT PROCEDURES
A. Banking deposits must be made daily whenever cash collections exceed $100. The deposits will be made in the plastic bags provided by the bank and should be ready for the armored truck to pick up. The armored truck begins its route around at the elementary schools and ends at the high school.
B. Deposits should always be made on Friday even though the cash on hand does not exceed the maximum allowable. Un-deposited receipts at the close of the school week (normally Friday except in the case of holidays) should be kept to a minimum.
C. All checks held for deposit shall be endorsed with district provided stamp as follows:
For Deposit Only
(Name of School) Activity Fund
It is recommended that all checks be endorsed at the time they are receipted or accepted.
D. All cash receipts supporting cash deposits shall be deposited in numerical sequence.
E. Redeposit (of returned checks) must be deposited separate from other funds collected.
F. All monies on hand at the end of the school year should be deposited prior to closing the books for the year.
5.2 PROCEDURES FOR PREPARATION OF BANK DEPOSITS
A. A bank deposit slip shall be prepared in duplicate deposit and shall include the following:
1. The date and amount of the deposit
2. The cash receipt number(s) issued that make up the deposit.
3. A listing of each check in the deposit (or a tape).
B. The original copy of the deposit slip is retained by the bank. The duplicate copy is validated by the bank and returned at the time of the deposit. The Campus Secretary or designee should verify the validated amount.
C. The sum of the amounts of the supporting cash receipts must agree with the amount of the deposit slip.
D. Each Friday deposit slips and receipt copies should be forwarded to the Student Activity Account Clerk at the business office. If Friday falls on a holiday, they should be sent the next work day.
5.3 CASHING OF CHECKS
Under no circumstances will personal and/or payroll checks be cashed.
SECTION 6 RETURNED CHECKS AND REDEPOSITS
6.1 RETURNED CHECKS
The District will utilize “Returned Check Recovery” system. This will be coordinated through WSISD Business Office.
SECTION 7 DISBURSEMENTS
7.1 GENERAL POLICIES
A. All expenditures shall be made by purchase order.
B. Income received from a specific group (student and faculty) should be expended for that group. The principal shall ensure that expenditures from these accounts are written for the intended purpose of the group and should not divert for other uses.
C. No expenditure of funds shall be approved by the principal unless sufficient funds are available in the appropriate activity account. Thus, no purchase order or check shall be drawn on any account with a negative balance.
7.2 REQUEST FOR PURCHASE ORDER
A. A completed Request for Purchase Order shall be the authority for the issuance of an Activity Fund purchase order. It must be completed prior to the purchase of any goods. It will be entered into the district computer software, go through the approval process and then the purchase order will be issued.
B. A completed Request for Purchase Order shall include:
1. The payee (vendor)
2. Date and amount
3. Signature of person requesting purchase order
4. A list of items to be purchased
5. Activity account number to be charged
6. Approved signature of the principal
7.3 ISSUANCE OF CHECKS
A. No expenditure of funds shall be approved by the principal unless sufficient funds are available in the appropriate activity account. Thus, no check shall be drawn on any account with a negative balance.
B. All payments shall be made by pre-numbered Activity Fund checks written in the business office.
C. All Activity Fund checks will be signed with the check signer.
D. Payments must always be made to a specific person, company or organization. Checks shall NEVER be made payable to “cash”.
7.4 ADVANCE PAYMENTS
A. Advance payment may sometimes be requested for necessary expenses to be incurred by clubs or other student groups engaged in out-of-town travel.
B. A travel form should be filled out, have the principal approve the trip and the form sent to the activity funds clerk.
C. Upon completion of the activity, the sponsor shall return any unused funds to the school secretary for issuance of a receipt. All supporting documentation and the receipt for unused funds shall be attached to the original travel form.
D. The settlement of all advances shall be completed no later than fifteen (15) days after the completion of the activity for which the advance was made, except in cases deemed necessary by the principal. In all cases settlement should be attained prior to the end of the school year.
7.5 MEMBERSHIP FEES
Activity Fund monies (school accounts) may be used for individual membership dues in a professional organization not to exceed one membership each for the building principal and assistant principals as approved by the Assistant Superintendent for Instruction. School membership dues are allowable expenditures from Activity Funds.
7.6 PROFESSIONAL CONFERENCE EXPENSES
Activity Fund monies may be used for professional conference expenses in accordance with the District’s procedures for out of district travel. A Travel Request form must be complete in advance and submitted to the Superintendent for approval. Complete the budget to be charged line with the correct activity fund code.
SECTION 8 PETTY CASH
8.1 GENERAL POLICIES
A. A petty cash account may be established at the discretion of the principal for the cash purchase of small miscellaneous items.
B. It is the principal’s responsibility to ensure the maximum protection of these funds.
C. Disbursements from petty cash will be at the discretion of campus administrator.
D. Employee or other checks should not be cashed from petty cash funds.
8.2 OPERATING PROCEDURES
A. The petty cash account is established at the beginning of each year as follows:
Brewer High School/Brewer Middle School - $100.00
Tannahill Intermediate/Elementary Schools - $50.00
B. Cash disbursements will be at the discretion of campus administrator. Original invoices or other suitable documentation must be obtained for all petty cash expenditures.
C. Replenishment of the petty cash account shall be made once the cash balance falls below a manageable level such as $10. A check is written to increase the cash to the amount originally approved and set up.
D. The original invoices or other suitable documentation supporting the petty cash disbursements should be attached to the Request for Check form to be completed authorizing the issuance of the check.
E. When recording the check issued to replenish petty cash in the General Ledger, the individual school or student account should be charged for their expenditures.
F. At the close of each school year, the petty cash on hand should be receipted and deposited into the Activity Fund bank account. The receipt is coded to the Petty Cash account, which should be -0- after closing.
SECTION 9 PURCHASING POLICIES AND PROCEDURES
9.1 PURCHASES FROM ACTIVITY FUNDS
A. The school principal is fully responsible for all purchases and commitments requiring the present or future disbursement of Activity Fund monies. Teachers must have a commitment from the school principal before making any purchase in the name of the school.
B. No purchases shall be made unless sufficient funds are available in the proper Activity Fund account or will be available at a later date within the current fiscal year.
C. Payments for services performed by individuals not employed by the District may not be made directly from the Activity Fund. A check payable to the District should be attached to a Direct Pay Request and sent to the Business Office for payment. These checks will be run in the normal check run, so please keep in mind if you send it one week it may be the next week before payment is made. If it is anticipated that total expenditures to non-employees during a calendar year could exceed $600, the social security number of the individual should be recorded on the Direct Pay Request in order for the District to issue a 1099 form as required by Section 6041 of the Internal Revenue Code.
9.2 COMPETITIVE BIDDING REQUIREMENTS
The guidelines presented below serve as an introduction to making purchases through the Activity Fund.
A. Purchases under $1,000 may be implemented in the most expedient manner available to the principal.
B. Purchases from $1,000 to $10,000 require, as a minimum, written quotations secured from three (3) or more competitors recorded on Quote Tabulation Form filed with other Activity Fund records. A written explanation by the principal must be attached to the quotes when the lowest quote(s) is not accepted.
C. Purchases of
$10,000 or more must comply with the provisions of the Texas Education Code,
Section 21.901, and will be referred to the Business Office for bids,
advertising, Board approval and processing.
As soon as the price is determined, the school shall issue a check
Upon request the WSISD Purchasing Department will assist in quote, bid and contracting processes by:
A. Supplying information on existing contracts.
B. Publishing, receiving and tabulating quotes and bids for review and recommendation of the budget manager.
C. Reviewing contracts to be signed.
SECTION 10 VENDING MACHINES
10.1 GENERAL POLICY
Revenue from vending machines situated in all areas of the school, whether school serviced or vendor serviced, shall be controlled by the school principal and processed through the Activity Fund.
10.2 SCHOOL SERVICED VENDING MACHINES
A. All transactions involving funds generated by vending machines shall be entered into the Activity Fund Accounts established for this purpose. For example, receipts and disbursements for soft drinks, other vending machine sales, etc. should be handled through a separate soft drink or vending machine account, such as: Soft Drinks Faculty Lounge, Soft Drinks – Boys Gym, Vending Machine – Students.
B. Profits resulting from vending machine sales may be transferred, at the option of the principal, to accounts related to the supporters/payers from whom the profits were generated or other accounts for student related purposes.
C. This method of entitling the individual Activity Fund Accounts should relate directly to the location of the machines and the intended purpose of the profits.
SECTION 11 STATE, LOCAL SALES AND FEDERAL EXCISE TAXES
11.1 TAXABLE STATUS OF PURCHASES
Ruling No. 95-0 from the State Comptroller, effective October 1, l969 states:
“The sale, lease or rental of tangible property directly to or for storage, use or other consumption of tangible personal property directly by an educational organization …, which property is necessary to its function as such, and paid for the organization is exempted from the computation of (state and local sales) taxes.”
Provisions under Article 21-023 of the Federal Statutes
provide tax exemption to the
A. TAX FREE PURCHASES
All items purchased by a public school, school district or non-private school for the schools own use qualify for an exemption from sales tax if the items purchased relate to the educational process. The school, school district or authorized agent should provide the seller with a Texas Sales Tax Exemption Certificate. To be valid the certificate must state that the merchandise being purchased is for the organization’s own use in providing education, is being made in the being made in the name of the organization, and that payment shall be from the organization’s own funds.
Purchases for their own use by individuals, even though connected with a school or school organization, are not exempt from the tax. Examples – cheerleader purchasing their own uniforms, band members purchasing their own instruments and athletic teams purchasing their own jackets.
B. EXEMPT SCHOOL ITEMS
Public and non-profit private schools and school related organizations need not collect sales tax on the following:
1. Fees and admission tickets, including football and drama tickets
2. Club memberships
4. Sales of food and soft drinks sold during a regular school days, subject to an agreement with the proper school authorities.
6. Food and drinks sold at PTA carnivals
C. EXEMPT FOOD SALES
The sales tax is not collected on meals and food products, including candy and soft drinks, served in an elementary or secondary school during the regular school day by a school, student organization or PTA subject to agreement with school authorities. This exemption from the sales tax applies to guests, employees, or teachers served in a school cafeteria or teacher’s lounge during the regular school day.
The sale of food, including candy and soft drinks is exempt from the sales tax when sold by an organization associated with a public or non-profit private elementary or secondary school (4-H clubs, Future Farmers of America, Future Homemakers, etc.) if:
1. The sale is part of a fund raising drive sponsored by the organization; and
2. All net proceeds from the sale go to the organization for its exclusive use.
D. SCHOOL SPONSORED TRIPS
Meals purchased by the school for athletic teams, bands, etc. on authorized school trips are exempt from the sales tax if the school contracts for meals. The school must pay for the meals and provide the eating establishment with an exemption certificate.
Individual members of the athletic team, band, etc. may not claim exemption from the sales tax on the meals they purchase while on a school authorized trip.
An exemption may also be claimed by the school from the Hotel Occupancy Tax if the school contracts and pays for the accommodations and provides the hotel with a completed Hotel Occupancy Tax Exemption Certificate.
Teachers, coaches, etc., MAY NOT claim exemption from sales tax on individual purchases while on school business even though they are reimbursed by the school for expenses.
E. TAXABLE SALES
1. Supplies and Publications
Public and non-profit private schools and school related organizations must collect the sales tax on the following:
A. School purchases supplies sold directly to students including athletic equipment and physical education uniforms.
B. Fees for materials when the end product becomes a possession of the student.
C. Student publications such as yearbooks and football programs.
D. School rings
E. Books sold to students at book fairs
2. Sales by Teachers and Students
Teachers and students MUST COLLECT the sales tax on merchandise other than food products they sell.
If the school assumes responsibility for the activity and/or sales, the school is responsible for insuring the tax is paid. The school may purchase items tax free and must collect the tax when the items are sold.
3. Band boosters are required to pay sales tax when purchasing taxable items and to collect sales tax when selling taxable items.
F. TOLL FREE NUMBERS
The State Comptroller’s office maintains a toll free tax
information number for quick response to any state tax questions you may
have. You can reach the Comptroller’s
Office from anywhere in
11.2 REMITTANCE OF SALES TAX
A. All sales tax collected by the school shall be remitted quarterly by elementary and middle schools and monthly by high schools to the business office, unless contractual agreements with a vendor stipulate that such taxes should be remitted to the vendor.
SECTION 12 FUNDRAISING ACTIVITIES
12.1 DEFINITION OF FUNDRAISING ACTIVITIES
A fundraising activity may be defined as any activity involving participation of a student body or a school recognized student group undertaken for the purpose of deriving funds for a school or a school sponsored group.
12.2 FUNDRAISING ACTIVITIES FOR A SCHOOL
1. Fund raising activities are not confined to regular school hours but are considered an extension of the school program. When fundraising activities are in the name of the school, all funds raised become school funds, belonging to the school sponsored group responsible for raising the money.
2. To request permission to conduct a fund raising activity, the organization/school should complete the Fundraising form and submit it to the Communications Office no later than two weeks prior to the fund raiser.
B. ACCOUNTING FOR FUNDRAISING ACTVITIES
1. Collections and Disbursements:
A. All collections must be receipted.
B. All collections and disbursements associated with any fundraising activity coordinated by the school or a school recognized student group shall be transacted through the Activity Fund.
2. Upon completion of fundraising activities, the Financial Recap Section of the Fundraising Application should be completed by the sponsor and filed with the school secretary.
This report indicates Total Sales and Expenses and Actual Income. Disposition of the net proceeds (profits) should also be disclosed if funds were collected for a specific purpose.
SECTION 13 TRANSFERS OF FUNDS BETWEEN ACTIVITY ACCOUNTS
13.1 GENERAL POLICIES
A. Some activity accounts are established for the single purpose of isolating transactions for a specific activity, collection, solicitation, etc., thereby enabling the profitability of the activity to be determined; a Picture Account and Candy Sale Account would be two (2) examples. Net proceeds remaining in such an account must be transferred to the account approved on a Transfer of Funds Authorization Form. For example, if pictures were taken to provide funds for new library books, then the net proceeds (balance in the Picture Account after all remittances to the studio, etc.) should be transferred to the Library Account on a Transfer of Funds Authorization Form.
B. Some activity accounts are expected to be revenue producing by the very nature of the accounts. Receipts almost always exceed possible expenditures and the balance in such an account will increase indefinitely unless some disposition is made of the excess revenue; vending machine accounts are an example. As detailed in Section 10.2, vending machine revenue should be transferred, at the option of the principal, to accounts related to the supporters/payers from whom the profits were generated or other account for student related purposes.
C. Occasionally a club will compensate another school organization for goods purchased or services performed. This may occur when a club purchases advertising in the yearbook, newspaper, etc. A transfer of funds shall be made between accounts in such instances in lieu of issuing an Activity Fund check.
D. Likewise, a club may desire to make a voluntary donation or contribution to partially defray the expenses incurred by another club in directing a certain activity. In such cases, the contribution shall be effected by an internal transfer of funds.
E. Transfers require the approval in writing of the principal and club sponsors or account custodians when the transfer involves accounts with delegated responsibilities.
13.2 DOCUMENTATION OF TRANSFERS
A. Each transfer shall in initiated by preparation of Transfer of Funds Authorization Form disclosing both the amount of and the reason for the transfer,
B. When all required approvals have been obtained the school secretary may precede with the necessary journal entries.
C. All copies of the Transfer of Funds Authorization Forms shall be maintained with the School Activity Fund records.