3/11/2016. Student Activity Funds. Basic Facts about Student Activity Funds

Transcription

1 Student Activity Funds Presented by: Natalie Rew, CPA Basic Facts about Student Activity Funds WI Stats, s (2) authorizes a school district treasurer to receive money raised in extra-curricular activities The district is responsible for maintaining records and properly accounting for the activity of the agency funds. The district should consider agency fund procedures in conjunction with the district s fraud prevention and detection procedures What s in your Fund 60? Student Government Drama Club Class of 2XXX Year Book Foreign Language Club Journalism Club Band Club National Honor Society Chess Club Debate Club Photography Club Pep Club Chess Club Computer Club 1

2 District Activities Should Be in Fund 10 or Fund 21 If the district budgets for a co curricular activity, fund raising for that activity is district revenue to be spent only on that activity and for the specific purpose of the donation/ contribution/ fund raiser. Athletics Transportation Uniforms Field upgrades Scoreboard Pizza School Musical Music Concerts Band Uniforms Trips Cheerleaders French Class Field Trips / Science Trips Shop Class Booster Clubs and Parent Organizations District may set up agency funds to hold money for parent groups. (separate liability account in fund 60) Due to parent organizations 60 B REQUIREMENTS: May not be a separate 501c3 Subject to the same policies and procedures as student activity funds Bank accounts must be in the name of the district. Developing Strong Internal Controls Protecting the School District Establish clear lines of authority Written policies for the establishment of student activity funds (signed) Written policies and internal controls for operation of student activity funds (signed) 2

3 Clear Lines of Authority Board of Education Adopt policies over establishment and operation of all agency funds School Business Official Overall responsibility for accounts and reporting to the board Implement policies and internal controls related to the administration of agency funds Principal Agency fund supervisor. Responsible for all receipts, disbursements Supervisor of the bookkeeper Faculty Advisor Supervising all activities of the organization Approves all transactions of the club Parent Organization Representative Policies to Establish Agency Funds Each organization is approved by the board Application for creation of an organization Purpose Fund raising activities Duration Faculty advisor approved by the agency fund supervisor (principal) Bank accounts approved by the Board of Education and subject to the same internal controls as other district depositories Allocation of interest Clear statement that misappropriation or misuse of agency funds is theft Establish Good Internal Controls ALL agency funds are subject to the same internal controls as all other district funds. All forms, checks, receipts, and tickets should be prenumbered. Monthly or quarterly reports on all activity should be prepared and submitted for review to the business office and the Board (In accordance with district policies). Subject to periodic internal or external audit. Purchase orders are used for all activity fund disbursements and are properly approved. 3

4 Inactive Activity Fund Accounts Policy to identify inactive accounts Policy to distribute funds from inactive accounts Include the policy on inactive accounts in the agency fund policies. Protect the School District Check should not be signed in advance or written to cash. Student and parent organizations should not maintain negative account balances. Theft from other clubs. Money should not be temporarily placed in an advisor or representatives account. Strictly prohibit the use of student activity proceeds to cash personal checks, make loans, or extend credit to individuals. Student activity organizations should not pay compensation directly to employees. What Needs to be Ready for the Audit? District policies and procedures Documentation of club purposes Reconciliation of balances from beginning of period to end of period Bank reconciliations for all months All support documentation for disbursements Bank deposit slips and receipts 4

5 501(c)(3) organizations Under 501(c) of the Internal Revenue Code, there are many different types of exempt organizations. Most booster clubs and parent teacher associations are classified as 501(c)(3) organizations. Contributions to a 501(c)(3) organization are tax-deductible to the donor. Contributions to other types of exempt organizations are not tax-deductible to the donor. 501(c)(3)organizations must file IRS form 1023 to apply for exempt status within 27 months of the date the organization was legally formed otherwise the exemption is not retro-active. Organizations exempt from the requirement to file IRS Form 1023 are those with gross receipts normally below $5,000. All other organizations file IRS Form 1024 which, with some exceptions, is retroactive if approved. Fundraising License in Wisconsin In order to fundraise to the general public in Wisconsin you must have a fundraising license. This applies to all organizations except for those organizations that normally raise less than $5,000 and only use volunteers to solicit contributions. You must file form #296 within 30 days of the date on which contributions exceed $5,000. FYI: The following materials were lifted from Gary Kvasnica s 2011 presentation 5

6 STUDENT ACTIVITY FUND INTERNAL AUDITS To protect the interest of advisors, principals, bookkeepers, students and your District, it is a good practice to conduct internal audits of student activity accounts External audits by auditors most likely will not be as in-depth Forces all parties to follow established guidelines Lets parties know when they are doing something wrong so they have an opportunity to correct it On-site visits give the Business Office insight into some of the challenges faced by schools in maintaining student activity accounts Helps prevent fraud STUDENT ACTIVITY FUND INTERNAL AUDITS :Tips Put together an Audit Checklist, At the end of the internal audit, review the checklist with the book keeper, the school principle and the business manager. Everyone should sign it. Put together a list of corrective actions with a timeframe to complete Identify the problem, provide a solution to fix the problem, and a timeframe you expect to see corrective action taken Ask for a signed written response specific to each corrective action. STUDENT ACTIVITY FUND Sample Audit Checklist 6

7 STUDENT ACTIVITY FUND Sample Audit Checklist STUDENT ACTIVITY FUND Sample Audit Checklist STUDENT ACTIVITY FUND Sample Audit Checklist 7

8 Other Resources DPI Internet Website WUFAR Accounting Issues: Fund 60 Agency Fund Guidelines Hand book for Evaluation and Improvements of Business Offices and Support Services Functions. Chapter 22. Published by WASBO. Includes a Sample Policy and Procedures for Student Body Activity Accounts + Natalie Rew, CPA Senior Manager natalie.rew@wegnercpas.com 2110 Luann Lane Madison, WI (608)

9 and the Managing of Student Activity Accounts Student Activity Accounts 1477 Students 80% of Student Participate in Co-Curricular Activities 80 Activity Accounts 1-3 Advisors per Activity Account A lot of people are involved in Activity Accounts Student Activity Accounts 2014/15 Transaction Volumes 1,950 Deposits $1,200,450 Deposited 1,738 Checks Processed several hundred credit card transactions $1,116,000 Disbursed Managing such large volumes requires organization and adherence to District Policy 1

10 Student Activity Accounts Kathie Menting 25 Years at District 22 Years as Office Manager Supervises staff of 7 In addition to many other duties, responsible for all Accounting at High School Level Managing Student Activity Accounts The sheer volume of activity requires that all parties involved adhere to all Policies and Guidelines Kathie does not allow any activity to take place unless all forms are signed and properly completed No Exceptions! Managing Student Activity Accounts Every Advisor must review the Districts Student Activity Policy and High School Activity Fund and Cash Handling Guidelines and Procedures Manual. 2

11 Managing Student Activity Accounts Every Advisor must acknowledge that they have read the Districts Student Activity Policy by signing a Policy Signoff Sheet. Managing Student Activity Accounts Every Advisor and Student Officer must acknowledge that they have read and understand the Activity Fund and Cash Handling Guidelines Manual If an Advisor or Student Treasurer changes the form must be resubmitted. Managing Student Activity Accounts A properly completed Deposit Slip must accompany every Deposit. 3

12 Managing Student Activity Accounts A properly completed Check Request along with receipts must accompany every request for payment. Student Activity Accounts and the District Business Office Kathie provides the Faculty Advisor and Business Office with a monthly report that lists beginning balances, receipts, expenditures and ending balances. Software Used: QuickBooks Pro Student Activity Accounts and the District Business Office Included with the monthly report is a bank statement that reconciles to the report. 4

13 Student Activity Accounts and the District Business Office High School Activity Accounts are reviewed annually by the District Auditor and periodically by the Business Office for accuracy and adherence to guidelines. Managing Student Activity Accounts Time Saving Tools Managing Student Activity Accounts Student enrollment has nearly doubled in the past 12 years Activity Account volume has more than doubled The District has implemented several time saving measures! 5

14 Time Saver! Coin and Bill Counter A huge times saver Precise, accurate and fast way to count money No more starting over after getting interrupted Counts both coins and bills Inexpensive Time Saver! Automating the Receipting Process Old Process Handwritten 3-part Receipt Had to add up all receipts with calculator Different process for cash and checks Had to re-add and provide tape total to be attached to bank deposit Very time consuming! 6

15 New Automated Receipting Process Cash and check amounts from Deposit Slip are input into SchoolCash.net Totaled and verified against Deposit Slip Automated Receipting Process Copy of input form and receipt returned to the Advisor Kathie also keeps copies Automated Receipting Process Automatically generates Deposit Slip for Bank when needed 7

16 Automated Receipting Process No more hand writing receipts, and then going back to add the receipts, readding the checks for totals Provides an excellent audit trail Saves approximately 2 hours per day Vendor Name: KevGroup Software Name: School Cash Register Time Saver! Automatic Check Deposit Make check deposits directly from your desktop Don t need to run calculator tape totals for the bank Don t need to endorse checks Don t have to wait in line at bank Don t have to go to the bank as often Quick and easy research of check history Works with Receipting Software Automatic Check Deposit How the Process Works Log into system and enter total dollar amount of checks to be entered. This amount was generated from the Receipting Software. 8

17 Automatic Check Deposit How the Process Works Insert checks into the scanner Automatic Check Deposit How the Process Works Checks are automatically scanned and endorsed Automatic Check Deposit How the Process Works System lists checks, check amounts, total and captures a picture of each check 9

18 Automatic Check Deposit How the Process Works If a check is misread, it will pop up on the screen and you enter what it can t read Automatic Check Deposit How the Process Works You are now ready to submit the deposit Automatic Check Deposit How the Process Works Your virtual deposit has now been sent 10

19 Automatic Check Deposit How the Process Works You receive an confirming Automatic Check Deposit How the Process Works If you have a question or get a call regarding a check, you can quickly and easily look up check information by date, amount or check number. Time Saver! Automatic Check Deposit Kimberly uses a product from Associated Bank Most Banks have similar products Saves Kathie at least 2 hours per week You can destroy checks after 30 days Cost 11

20 and the Managing of Student Activity Accounts QUESTIONS?? 12

21 GENERAL ACTIVITY/STUDENT ACTIVITY FINANCIAL AUDIT CHECKLIST SCHOOL: A. FINANCIAL STATEMENTS/GENERAL: Complete In Progress N/A 1. Bank accounts reconciled monthly. Reports sent to Business Office along with the bank statements as audit on a timely basis. 2. No new accounts were established without Business Office approval. 3. Reimbursement Account at $ by year end less outstanding. 4. Periodic financial statements of budgeted and actual revenues and expenditures were prepared and submitted to the appropriate administrators. Inflow/outflow reports as requested. 5. A list of Student Activity advisors sent to Business Office by October 1 of the school year. 6. Persons involved with S/A funds have read Policy # 6610, signed the policy sign off sheet stating that they have read Policy # 6610 and have sent to Business Office. 7. Petty Cash balanced. 8. No personal checks were cashed. 9. Accounts inactive after 12 consecutive months terminated. B. RECEIPTS: Complete In Progress N/A 1. Deposit Request forms signed & submitted to school bookkeeper? 2. Bookkeeper provides advisor with receipt if not, signed and filed. 3. Cash and checks received by teacher/advisor given to bookkeeper promptly when received. 4. Details as to the number of items receipted and the unit price per item are included in the receipt, if applicable. 5. Cash is deposited in safe or bank on a daily basis (not in desk drawers!). 6. All checks received are stamped for deposit only. 7. No monies are disbursed from undeposited receipts. 8. Receipts are being credited to the proper activity account. 9. Is there a process in place for proofing student fee collection? 10.Does split between General Fund deposit & Activity Fund deposit for fees proof out? C. DISBURSEMENTS: Complete In Progress N/A 1. Check Request form is used for expenditure requests signed by principal and/or advisor. 2. Voided checks are retained. 3. Cash expenditures are supported by a vendor s invoice, a notation indicating receipt of materials or services, and authenticated purchase orders if required. 4. Disbursements by check are properly signed (by bookkeeper and designee) and are in agreement with the information recorded in the journal. No signature stamps. 5. Disbursements from petty cash are properly supported by vouchers or receipts and are reimbursed by year end. 6. Distribution of cash expenditures is being correctly charged to the proper accounts. 7. No checks written to cash. 8. No employee/advisor reimbursements.

22 D. SALES & ACTIVITIES: Complete In Progress N/A 1. Revenue-producing activities are in accordance with those approved by the school district. 2. Adequate control is exercised by supervisory personnel over student fund-raising activities to ensure that such activities are in keeping with the intent of the program. 3. All records of sales such as receipt books and register tapes are reconciled to the cashier s receipt for monies received. 4. Student store inventories are reviewed regularly to determine propriety as to character and quantities. 5. Revenue and expenditure statements for the student store are reviewed periodically by principal or designee. 6. Completed meeting minutes by the student council or other activity groups are prepared on a timely basis and properly reflect approval of activity expenditures. E. PURCHASES: Complete In Progress N/A 1. Items of purchase are in accordance with the intentions of the student program and they are reflected in the minutes or activity fund records. 2. Associated student body monies are spent only to enhance the welfare of the general student body and not to benefit any individual. 3. Business Office was notified of equipment purchases over $1000 for inventory and insurance purposes. 4. Purchases over $2500 had prior approval from the Business Office. 5. Contractual obligations were properly authorized and kept within established limits. (i.e. contracts on file) 6. Proper controls exist to prevent negative balances 7. Timely payments were made on all purchases on account. F. MISCELLANEOUS: Complete In Progress N/A 1. NSF process in place and procedures are followed. Signature, School Bookkeeper Signature, School Principal Signature, Administrative Asst, Business Office Signature, Director of Business Services Date T:\My Documents\WASBO\Workshops\Accounting Seminar\2016 Acct Conference\Handouts\Student Activity Funds\Audit checklist.docx