SPRING BRANCH INDEPENDENT SCHOOL DISTRICT ACTIVITY FUNDS ACCOUNTING PROCEDURES MANUAL

Transcription

1 SPRING BRANCH INDEPENDENT SCHOOL DISTRICT ACTIVITY FUNDS ACCOUNTING PROCEDURES MANUAL Revised January 2012

2 SPRING BRANCH INDEPENDENT SCHOOL DISTRICT ACTIVITY FUNDS ACCOUNTING PROCEDURES MANUAL TABLE OF CONTENTS Section 1: General Information Purpose. 5 Activity Fund Types. 5 Responsibility for Activity Funds 6 Retention of Records.. 9 Audits.. 9 Section 2: Basic Records and Procedures Activity Fund Receipts General Receipting Procedures.. 9 Receipt of Money by Persons Other Than the Cash Receipt Clerk 11 Control of Activity Fund Cash Receipt Books 12 Bank Deposit Slips. 12 Monthly Bank Statements. 12 Section 3: Banking Practices and Procedures Bank Accounts Section 4: Deposit of Funds General Operating Policies Preparation of Bank Deposits Cashing of Checks. 14 Check Acceptance. 15 Bank Adjustments. 15 Returned Checks. 16 Cash Donations from Private Sources. 16 Section 5: Payment from Funds General Policies Activity Fund Purchase Orders Issuance of Checks. 17 Reimbursements. 17 Refunds. 18 Cash Advances. 18 Disallowable Expenditures. 19 Supplemental Payments to Employees. 20 Payments to Non-employees or Companies for Contractual Services. 20 Membership Fees. 20 Professional Conference Expenses. 21 Individual Account Reconciliation. 21

3 SPRING BRANCH INDEPENDENT SCHOOL DISTRICT ACTIVITY FUNDS ACCOUNTING PROCEDURES MANUAL TABLE OF CONTENTS Section 6: Petty Cash General Policies Operating Procedures Petty Cash Reconciliation. 22 Limitations. 22 Section 7: Vending Machines General Policies School-Serviced Vending Machines Vendor-Serviced Machines. 24 Section 8: Faculty Sunshine Funds Definition General Operating Procedures Section 9: Purchasing Policies and Procedures Purchases from Activity Funds Warehouse Purchases Section 10: Fixed Assets Definition Section 11: State and Local Sales Taxes Taxable Status of Purchases Tax Free Purchases Taxable Sales by an Exempt Organization Tax Exempt Sales School Sponsored Trips Collection and Remittance of Sales Tax Section 12: Fund-Raising Activities Definition Fund-Raising Activities for a School Fund-Raising Activities by Independent Outside Groups 33 Section 13: Investments General Policies Deposits and Withdrawals Interest on Investments Section 14: Transfer of Funds Between Activity Accounts Transfers Involving Related Accounts Transfers for the Purpose of Payment or Contribution 36 Transfers Involving Unrelated Accounts... 36

4 SPRING BRANCH INDEPENDENT SCHOOL DISTRICT ACTIVITY FUNDS ACCOUNTING PROCEDURES MANUAL TABLE OF CONTENTS Transfers Between Student and Campus Accounts 37 Documentation of Transfers Section 15: Activity Fund Losses General Procedures Section 16: Activity Fund Sponsor's Guide Reference Section 17: District Policies Reference Section 18: District Forms Reference

5 ACTIVITY FUNDS ACCOUNTING PROCEDURES MANUAL PREFACE This manual is designed to provide a set of standardized accounting guidelines and procedures for the administration of the Spring Branch Independent School District Activity Funds. Principals, secretaries, bookkeepers, sponsors, and other personnel involved in the handling of activity funds are responsible for following the guidelines and procedures described in this manual. This procedures manual should be utilized in conjunction with District Board Policy (Follow links on pages 38 through 39), Spring Branch ISD Purchasing Policy and Procedure Manual (Follow link on page # 26), and Spring Branch ISD Activity Fund Sponsor s Guide (Follow link on page # 38). This manual and the Sponsor s Guide supersede all prior publications regarding the administration of activity funds. 4 Jan 2012

6 SECTION 1: GENERAL INFORMATION A. Purpose of Activity Funds The Activity Funds are defined as funds consisting of resources received and held by the school, as fiduciary, to expend or invest in accordance with the purpose or goals of the club. Specifically, they are funds accumulated from the collection of student fees, donations, and from various school approved, fundraising activities. Activity Funds are used to promote the general welfare of the school and the educational development and morale of all students. Most monies collected by Spring Branch ISD (District) personnel from students are defined as Activity Funds and must be handled through the student activity funds and must comply with the guidelines and procedures outlined in this manual. The activity funds are not appropriated by the Board of Trustees, nor are they funded by state or taxpayer assessments. Balances at fiscal yearend do not revert to the District s General Fund, but rather carry over to the next fiscal year. Donations to activity funds are governed by District policy CDC (Local) Other Revenues: Grants from Private Sources. Donations will be used solely for the purpose prescribed by the donor. B. Activity Fund Types Each school s activity fund has two broad sub-classifications: School Activity Fund and Student Activity Fund. School Activity Fund Money raised from/for the student population as a whole is spent primarily in ways that benefit the student population as a whole. This money is comprised of revenue collected through school-wide fundraisers, student pictures, student ear-marked vending commissions, book fairs, lost/damaged textbook or library book fees, high school parking fees, PSAT testing fees, recycling commissions, etc. These receipts and related expenditures are accounted for at the District level in the School Activity Fund (Fund 461) Student Activity Fund Money is taken in by campus organizations and spent in ways that are directed by those organizations. Money accumulated in the general faculty account may be used to benefit either faculty or students. The school and District s responsibility are custodial in nature and these 5 Jan 2012

7 monies are accounted for at the District level in the Student Activity Fund (Fund 865). It is important to maintain separate accounts for each student organization because money raised by a student organization or for any specific purpose must be spent for the benefit of that same student organization or intended purpose. C. Responsibility for Activity Funds 1. The school principal is responsible for understanding and complying with applicable state law, SBISD board policy, and District procedure. This responsibility includes but is not limited to: a. Providing for the safekeeping of the monies at the school. Monies that are maintained at a school campus location must be maintained in a secure area. Monies must be secured in a vault if there is one at the campus. If a vault is not available, monies are must be maintained in a locked cabinet with restricted key access. b. Approving fund-raising activities in advance. Monitoring sponsor fund raising records. Reconciling sponsor fund raising records to activity fund accounting records.. c. Submitting the Fundraising Request form to the Associate Superintendent of Administration & Personnel each summer for Board approval. Any trip request of $ 50,000 or more must be submitted to the Board for a second time once funding for the trip is in place. This must be done at least 60 days prior to the trip departure date d. Proper accounting for transactions. e. Expenditure of funds in compliance with applicable laws, policy, and procedures. f. Monitoring balances in activity fund accounts and guiding the resolution of any deficit. g. Designating, training, and supervising all personnel serving as activity fund sponsors. 6 Jan 2012

8 h. Notifying the Associate Superintendent of Finance if he/she is aware of noncompliance with applicable law policy and procedure or any circumstance that has or could lead to loss of activity fund monies. The school principal is NOT responsible for funds collected, disbursed and controlled by booster clubs, parent, patron, or alumni organizations. These organizations monies are not to be accounted for in the schools activity funds. Under no circumstances should these organizations be given, or use, the District s tax ID number. 2. The school financial clerk/bookkeeper is responsible for the management of all documents necessary for the operation of the activity fund. The responsibilities include, but are not limited to: a. Reading and understanding this Activity Funds Accounting Procedures Manual and applying these procedures to the accounting for activity funds. b. Collecting and organizing all forms with appropriate signatures, account names, and account numbers for cash receipts, disbursements, transfers and adjustments. c. Recording all deposits in the MUNIS accounting system. d. Verifying bank deposits are prepared accurately and promptly. e. Processing all requisitions on a timely basis to prevent past due balances and charges. f. Monitoring activity fund accounts to prevent overdrawn balances. Preparing appropriate transfer when necessary to maintain positive balances. g. Remitting the Sales Tax Report to the District Activity Fund Accountant monthly. h. Maintaining accurate and organized activity fund files. Documentation should be filed by month and in chronological order. i. Submitting monthly the bank statement report to the District s Activity Fund Accountant. j. Reviewing the Fundraising Recap forms to ensure that figures reconcile to the accounting records for the fundraiser. 7 Jan 2012

9 3. The club sponsors are responsible for managing their respective funds. This responsibility includes but is not limited to: a. Assisting club members in developing fundraising plans. b. Maintaining adequate financial records of all monies received by the club for fees, dues, fund-raising, etc. c. Reviewing the activity fund financial statements and reconciling their records to amounts deposited into and paid out of the account. d. Monitoring the financial position of the account. e. The collecting and safekeeping of funds until turned over to the financial clerk/bookkeeper. All collections must be deposited in the activity fund. Sponsor responsibilities are listed in greater detail in the SBISD Activity Fund Sponsor s Guide available on the Finance Department Intranet. 4. The campus cash receipt clerk s responsibilities include but are not limited to: a. Counting and receipting all monies turned in by the sponsors. b. Verifying tabulation of monies forms are filled out correctly and balance to the amount turned in. 5. The district activity fund accountant s responsibilities include but are not limited to: a. Training financial clerk/bookkeepers. b. Monthly review of activity fund bank reconciliations to ensure each campus is in compliance with district policies and procedures as required by the Activity Funds Accounting Procedures Manual. c. Maintenance of the Activity Fund Accounting Procedure Manual. d. Preparation of monthly consolidated sales tax report of all district activity fund sales. e. Year-end activity fund schedules and entries. f. Periodic internal audits of each activity fund. 8 Jan 2012

10 D. Retention of Records All records should be securely kept at the campus for a period of five years. After the five years have passed records should be destroyed. For example records for the year ended June 30, 2012 would be kept through June 30, 2017 and then destroyed as soon as administratively possible. Destruction will be as prescribed by District policy in force at the date of destruction. E. Audits An audit is performed whenever there is a change in principal or financial clerk/bookkeeper. All activity fund records will be reviewed to ensure that new personnel assume no pre-existing discrepancies. The principal may request an audit if she/he believes a situation or event warrants it. In addition, the district activity fund accountant will conduct periodic audits of activity funds. Audit reports will be prepared and communicated to the principal and appropriate central office administrators upon completion of the audit. The District Activity Fund Accountant will continue to monitor to confirm compliance. SECTION 2: BASIC RECORDS AND PROCEDURES A. Activity Fund Receipts The procedures in this Section 2 are applicable to personnel in the school s central office receiving monies from sponsors. Procedures for sponsors receiving monies from students, parents, and other individuals are covered in the Activity Fund Sponsor s Guide. Receipts are the means of accurately recording cash received and providing support to substantiate each bank deposit. Activity Fund cash receipt books may be obtained from the District Activity Fund Accountant. A receipt should be prepared for all cash and/or checks received. Receipts are to be used in pre-numbered sequence and prepared in ink. B. General Receipting Procedures The activities of collecting, receipting, depositing, and keeping accounting records of monies must not be performed by a single person. As the financial clerk/bookkeeper deposits and accounts for monies, someone other than the financial clerk/bookkeeper must function as the cash receipts clerk. 9 Jan 2012

11 1. An official receipt shall be prepared for any cash or checks received. The cash receipts clerk must record all cash and checks collected in triplicate. a. One copy is given to the person submitting the money. b. A second copy is used to record the receipt in the school s records. c. A third copy is kept in the receipt book. 2. The receipt must be completed to include all of the following information. a. The date and amount. b. The name of the individual or firm submitting the money (a receipt may not be issued to more than one person) c. An explanation of the purpose for which the money was received d. The name of the student group e. The manual signature of the person receiving the money. Signature stamps are not allowed. 3. A count of monies received should be made by the cash receipts clerk in the presence of, and agreed to by, the sponsor at the time monies are received. If it is administratively impractical to do so the monies can be placed in a locked bag or sealed envelope and left with the cash receipts clerk for safe keeping. At the very first opportunity thereafter the cash receipts clerk and sponsor must perform the count and receipting of monies as here prescribed. 4. A complete and correct Tabulation of Monies (TOM) form prepared by the sponsor will accompany the monies received. The cash receipts clerk will agree and attach the receipt to the Tabulation of Money form. The sponsor and cash receipts clerk will sign the Tabulation of Money form. 5. Received monies should be timely moved to the vault or applicable secured storage location pending deposit in the bank. 6. Postdated checks shall not be accepted by the school from any source. All checks must be immediately endorsed. 10 Jan 2012

12 7. Under no circumstance should a receipt amount or signature be altered. If an error occurs, void that receipt and prepare the next sequentially numbered receipt. All copies of a voided receipt are to remain attached in the receipt book. Receipts should never be presigned or pre-dated. 8. If a check is received by mail from an outside source for commission, interest, refund, etc., it is not necessary for the original of the receipt to be mailed to comply with this procedure. In these cases, the original of the receipt should be given to the sponsor of the account being increased. C. Receipt of Money by Persons Other Than the Cash Receipt Clerk Money may be collected by an authorized individual other than the cash receipt clerk (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 must be completed with all information provided. 2. In some cases, the authorized individual may issue Cash Sub-Receipts to payers for monies collected. The cash sub-receipt must indicate if the payment was by cash, check or money order. 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 Cash Receipt Clerk weekly or whenever the aggregate amount of such collections exceeds $ The original completed Tabulation of Monies form and the attached original Cash Sub-Receipts, if used, shall be submitted with monies collected. The Cash Receipt Clerk will count the funds in the presence of the remitter and prepare an activity fund cash receipt once the deposit total is verified. The Cash Receipt Clerk should also sign the Tabulation of Monies Collected form. All monies collected must be submitted to the cash receipts clerk in the same form as collected. Employee s personal checks may not be substituted for cash collections.. All checks collected are to be made payable to the school and never to an individual. 4. The Cash Receipt Clerk should keep the original Tabulation of Monies form with attached Cash Sub-Receipts, if applicable, on file for 5 years for audit purposes. 5. Individual sponsors should keep verified copies of the Tabulation of Monies collected for 5 years for audit purposes. 11 Jan 2012

13 D. Control of Activity Fund Cash Receipt Books 1. The bookkeeper shall be responsible for maintaining an adequate supply of receipt books obtained from the District s Activity Fund Accountant. 2. Receipt books should be secured in a locked drawer, cabinet, or vault when not in use. 3. Receipts should only be issued for money in hand. The signing of a receipt acknowledges acceptance of responsibility for the money. E. Bank Deposit Slips Completed deposit slips ensure the funds are deposited in the proper account. As such, these slips, when properly prepared, are vital supporting documents in the maintenance of accurate cash records. Deposit slips shall be obtained from the bank and must indicate the school activity fund name and account number. Deposit slips should include receipt numbers corresponding to the deposit to allow for a proper audit trail. The District bank requires the district to use a deposit bag specially designed for coins for any deposit that includes more than 12 rolls of coins. In this case, a second distinct receipt and deposit should be processed. F. Monthly Bank Statements A bank statement is a transcript of the official bank records reflecting all daily transactions affecting the cash balance on deposit during a month. The school bookkeeper is responsible for printing the monthly report titled Previous Day Composite Report for each month, reviewing the transactions listed to make sure they have all been entered in the activity fund accounting system, verifying all entries balance to their records and writing the journal number from the MUNIS accounting system next to each transaction. They also are responsible for sending a copy of this report to the District Activity Fund Accountant by the 5 th of the next month. Even if there were no transactions for the month, a copy of the report still needs to be sent to the activity fund accountant, showing no transactions. 12 Jan 2012

14 SECTION 3: BANKING PRACTICES AND PROCEDURES A. Bank Accounts 1. Each school shall have only one bank checking account which is with the District s depository bank. All monies received will be deposited into this account and all disbursements will be made by a check drawn on this account. No other checking accounts are permitted if related to the school s activity funds. 2. Only Activity Fund transactions may be directed through the Activity Fund bank account. Transactions controlled by outside organizations such as Parent Booster Clubs, P.T.A s, P.T.O s, etc., must be handled through the applicable organization s bank account. 3. Surplus funds and funds not needed in the near term may be invested in CD s in the name of the school or in the Spring Branch Independent School District investment banks and pools. See Section Schools and school organizations are prohibited from borrowing funds or entering into deferred payment contracts from any and all sources without the written consent of the Superintendent or his representative. SECTION 4: DEPOSIT OF FUNDS A. General Operating Policies 1. It is the responsibility of the Principal in each school to ensure that all cash on hand is deposited in a timely manner. 2. A District police officer visits secondary campuses each day to pick up deposits. The officer takes deposits to the Spring Branch ISD Administration Building (Finance Department) for pickup by an armored security service and transport to the bank. The bookkeeper/financial clerk at primary schools will take deposits to the feeder middle school or the Spring Branch ISD Administration Building (Finance Department). Activity fund monies shall not be kept in any other off campus location. 3. Deposits should be made anytime the amount on hand exceeds $500 for secondary schools and $200 for elementary schools. 4. All checks should be endorsed upon receipt as follows: 13 Jan 2012

15 FOR DEPOSIT ONLY Spring Branch ISD (Name of School) ACT FD (Campus Number) Account # 5. All cash receipts shall be deposited in numerical sequence. 6. It is the responsibility of the Principal to be sure all monies on hand at the end of the school year are deposited prior to closing the books for the year and leaving for the summer. B. Preparation of Bank Deposits 1. Bank deposit slips shall be prepared in duplicate for each deposit. The original deposit slip will be sent to the bank along with the monies being deposited and the duplicate copy will be retained by the bookkeeper. 2. The original deposit slip is placed in the top portion of the plastic tamper proof bag with the deposit information facing out (in view). Check, cash and currency are to be placed in the bottom section of the bag. The outside of the plastic bank bag should be filled out completely and legibly. 3. Coin deposits totaling more than 12 rolls must be processed as a second distinct deposit and placed in a tamper proof coin bag along with a deposit slip. 4. The following information must be indicated on the bank deposit slip: a) The date and amount of the deposit. b) A notation of the cash receipt numbers issued in support of the bank deposit. For example, receipt numbers The sum of the amounts of the supporting cash receipts must be in agreement with the amount of the bank deposit. 6. For deposit shortages and overages, refer to Section 5.N of this manual. C. Cashing of Checks 14 Jan 2012

16 Cashing personal and/or payroll checks out of activity fund currency and coin that is not yet deposited is prohibited. All money collected must be submitted for bank deposit in the same form as collected. D. Check Acceptance 1. Checks will be accepted only for the amount of the purchase. 2. Post dated checks are not accepted by the school for any reason 3. An acceptable check should contain: a. Name of the maker b. Current physical address and phone number c. Name of club or group accepting the check 4. Checks must be endorsed by the bookkeeper/financial clerk immediately after the funds are submitted for deposit. Parents should be advised regularly of the SBISD check acceptance policy through campus handouts. Checks accepted for fund-raisers, club functions, lost textbooks, fines, fees, etc., must have the required check information on the check. Returned checks may be recovered electronically along with the state allowed recovery fee. SBISD has appointed Paytek Check Recovery Service for this purpose. It is within the principal s authority to develop a policy for their campus that does not allow the acceptance of personal checks for campus activities. E. Bank Adjustments Bank adjustments originate at the bank. Whenever the bank finds it necessary to increase or decrease the school s bank balance, the bank notifies the school by sending a Bank Debit or Credit Memo. Bookkeeping entries relative to bank adjustments are as follows: 1. To record an under deposit (amount of deposit is less than the amount of the corresponding cash receipt) Record a negative receipt in the original activity fund account. 15 Jan 2012

17 2. To record an over deposit (amount of deposit exceeds the amount of the corresponding cash receipts) Record a receipt in the original activity fund account. F. Returned Checks 1. When you receive notification from the bank or Paytek for a returned item, an entry should be made in the MUNIS accounting system. 2. In the MUNIS payment entry screen, enter a negative receipt entry using the check number as the receipt number and the date it was returned as the date. You will use the original account number. In the description you will put NSF and the last name from the check. 3. Attach a copy of the returned check notice in the batch proof screen as backup for the entry. 4. When notification is received from Paytek that the funds have been collected, a deposit will need to be entered in MUNIS using the original account number. G. Cash Donations from Private Sources Cash donations given to a campus for a specific purpose are to be deposited in the campus activity account created for that purpose. At the time of the donation, an Acceptance of Gift Form must be completed. For donations over $100, the original acceptance of gift form must be sent to the Superintendent s office and a copy kept in the campus files. For donations less than $100, the form is kept in the campus files. SECTION 5: PAYMENTS FROM FUNDS A. General Policies 1. Incentives/Awards/Gifts Campus Funds (fund 461) Incentives whose value does not exceed $50 may be given to students from campus funds. No incentives/awards or gifts may be given to employees from campus funds. 16 Jan 2012

18 Student Funds (fund 865) - Employees and/or students may be given incentives/awards and/or gifts of a nominal amount. The expenditure must be made using funds intended for this purpose. 2. Class/Club Accounts Activity fund monies must be used for purposes authorized by the class/club members and for the benefit of the students. The principal must ensure that transfers or expenditures from these accounts are for the intended purpose and must not divert funds for other uses. B. Activity Fund Purchase Orders Purchase orders (PO s) should be issued for all purchases unless the vendor does not accept purchase orders. Requisitions for Payment (Req s for Pay) can be issued if the vendor does not accept purchase orders or for reimbursements for items purchased by employees or sponsors. No expenditures should be made without prior approval from the principal. No expenditure of funds should be approved by the principal unless sufficient funds are available in the proper account. By their nature, some accounts require expenses before offsetting revenue is produced. In these situations, a planned short term deficit may occur. C. Issuance of Checks All payments shall be made using a District issued check with the exception of petty cash disbursements. D. Reimbursements 1. Payment may be made to students, parents or employees to reimburse them for personal funds expended for school purposes, provided that a Req for Pay and proper documentation are submitted in support of the expenditure. Original detail receipts are necessary for all reimbursements. Credit card receipts showing the total amount of purchase without a listing of items purchased and cost per item are not adequate support for reimbursement. 2. Reimbursements should be kept to a minimum as a safeguard against unauthorized purchases by individuals. 3. No sales tax should be reimbursed on tax exempt purchases. See Section 11 (State and Local Sales Tax). 4. Reimbursements of less than $25.00 should be made from petty cash. 17 Jan 2012

19 E. Refunds 1. Occasionally it may be necessary to make refunds for items such as, but not limited to, fees collected for cancelled events, charges for lost books or lost library books returned, or fund-raisers paid for in advance and then the product was unavailable or defective. 2. A Req for Pay will be completed with the student/parent as the vendor. 3. In addition to the normal request for check requirement, the refund check request should indicate: a. The reason for the refund b. The activity fund account name and number c. The date the receipt was issued d. The receipt number issued or a copy of the TOM with the student s name and amount paid. 4. Excess fund-raiser monies may not be refunded to students. F. Cash Advance Advance of cash may sometimes be requested for necessary expenses expected to be incurred by an account sponsor (example: student trips). Procedures for advance payments are as follows: 1. The Request for Advance Payment should be attached to the Req for Pay and approved by the principal. The Req for Pay should include a complete description of the activity that requires the advance payment and the date of the activity. 2. At the completion of the activity, the advisor shall transmit to the bookkeeper all invoices, sales slips, etc., supporting the actual amount of expenses, and shall return any unused funds. 3. The financial clerk/bookkeeper will issue a cash receipt for the money returned and will cross-reference this receipt number to the Req for Pay number. 4. The settlement of all advances shall be completed no later than fifteen days after the completion of the activity for which the money was advanced. In all cases, settlement should be attained prior to the end of the school year. It is the joint responsibility of the principal, the bookkeeper and the account sponsor to assure that all advances are properly accounted for. 18 Jan 2012

20 G. Disallowable Expenditures Activity funds shall not be used for the following types of expenditures: 1. Donations or charitable contributions unless from a club account and the approval of the donation is documented in the minutes of the club. 2. Individual s professional dues, except as stated in Section J below. 3. Loans to employees or parents. 4. Luncheons or entertainment not related to school activities other than the Sunshine and Faculty Clubs. 5. Alcoholic beverages. 6. Cash or cash equivalent (gift cards) payment to District employees unless from a club account with approval documented in the minutes of the club, and payment made through the District payroll function 7. Furniture for administrative offices (unless for the office reception area). 8. Cost of repair or reimbursement for damage to school employees property as a result of accident, theft or vandalism. 9. Cash advances for professional travel excluding student travel. 10. Fees for professional licenses or teaching certificates. 11. Prepayments of faculty travel expense. 12. Tuition for courses involving college credit or courses that meet the requirements for certification and licenses for teachers or administrators. 13. Payments to children. a. Payment for services cannot be made to children under the age of 14. b. Check with Human Resources for the guidelines before hiring anyone between the age of 14 and Jan 2012

21 H. Supplemental Payments to Employees for Services 1. The principal may occasionally agree to compensate teachers or other employees for additional services performed. Such auxiliary services are those discharged by the employee outside of his/her normal, specified duties. Examples of such supplemental services are: a. Additional custodial services. b. Additional clerical assistance. c. Security monitoring. d. Additional coaching duties for which the District does not provide extra salary. e. Officiating in extramural athletic competition where the District does not provide for and pay such officials. f. After school tutorials g. Stipends (with prior approval from Human Resources) 2. All payments to district employees for supplemental services must be made through the Spring Branch ISD payroll department in accordance with the supplemental pay schedules. Cash payments should never be made to employees for services rendered or extra-duty or overtime. I. Payments to Nonemployees or Companies for Contractual Services Payments for services performed by individuals (not employed by Spring Branch ISD) or companies are as follows: 1. A completed professional services agreement must be submitted to and approved by the Purchasing department prior to agreement to purchase the proposed services. This includes the W-9 form and a completed background check form. 2. Once approval is obtained, issue a purchase order to the individual/company. 3. When the services are complete, receive the purchase order in MUNIS and forward the invoice to Accounts Payable for payment. J. Membership Fees Activity fund monies (campus funds only) may be used to pay for individual membership dues (in the individual s name) in a professional organization not to exceed one membership each for the building principal and assistant principals. 20 Jan 2012

22 Memberships in the sponsor s name may be paid if the membership is required for the students to participate in contests, events, etc. School membership dues (memberships in the school name) are not limited. K. Professional Conference Expenses Activity fund monies may be used for professional conference expenses as long as the conference has a direct benefit to the club, it is approved in the minutes from the club meeting and all District travel procedures are followed. A Travel Request Form must be completed and approved in advance. L. Individual Account Reconciliation The bookkeeper should provide to the sponsor/advisor a Year-To-Date (YTD) Expenditure Report each month. The sponsor/advisor will reconcile their balances to the balances on the YTD report and report any discrepancies to the bookkeeper. SECTION 6: PETTY CASH A. General Policies A Petty Cash account may be established at the discretion of the principal for the cash purchase of small, miscellaneous items of $50 or less. The following guidelines shall govern all Petty Cash accounts. 1. In elementary schools, there shall be a maximum limit of $300 in the Petty Cash account. In secondary schools, the Petty Cash account shall not exceed $ Since the Petty Cash remains on the school premises, it is the responsibility of the principal to exercise the maximum available protection of these funds. 3. Disbursements from Petty Cash shall be limited to a maximum of $50 for each purchase. 4. The bookkeeper/financial clerk under the direction of the principal shall maintain custody of and account for transactions in Petty Cash. B. Operating Procedures 21 Jan 2012

23 Petty Cash Vouchers Petty cash can be used for general fund or activity fund expenditures. The Petty Cash Voucher form is used to request expenditure from petty cash. The principal should sign each Petty Cash Voucher as the petty cash officer. The recipient of the petty cash must also sign the voucher. All petty cash expenditures listed on the Petty Cash Voucher should have a purpose indicated. The purpose should be brief but adequately describe the purchase. Detail receipts should be attached to the Petty Cash Voucher. The backup for a petty cash disbursement is the same as for a check. A copy of the voucher is placed in the petty cash box. Petty Cash Reconciliation Form When replenishment of petty cash is needed, a Petty Cash Reconciliation Form should be prepared. The amount of remaining cash on hand plus the total of all outstanding Petty Cash Vouchers should always equal the amount of petty cash initially provided. The petty cash custodian should sign the Petty Cash Reconciliation Form. The Direct Invoice process may be used to replenish petty cash. The financial clerk/bookkeeper will be the vendor. For example Jane Doe as bookkeeper would use the vendor Jane Doe/petty cash. Copies of the Petty Cash Vouchers (including all invoices and receipts) and the Petty Cash Reconciliation Form should be scanned and attached with invoice entry in MUNIS. Once all approvals have been received, Accounts Payable will issue a check to the bookkeeper/financial clerk to replenish the petty cash. The bookkeeper/financial clerk will cash the check and put the money back in the petty cash box. Limitations Petty cash is provided to allow administrators to make incidental purchases. Good judgment should be exercised in the use of this source of money, and the following should be noted: 22 Jan 2012

24 1. Purchases made through petty cash should be less than $ Technology cannot be purchased with petty cash. 3. Payments for contracted services may not be made through the petty cash fund. 4. Purchases should primarily be for inexpensive or last minute unexpected items. 5. Checks cannot be cashed from petty cash or any other source of money at any location. 6. Petty cash allows principals to expend money before the purchase is approved centrally for appropriateness. Therefore, it is particularly important that the custodian review all receipts and documentation thoroughly before removing the money from petty cash. 7. Petty cash must not be used to pay employees for services. These payments must be made through the District payroll department. Failure to do so could result in unreported income for the individual and would create an IRS issue. 8. Invoices supporting petty cash transactions should be given to the petty cash custodian no later than 7 days after the purchase. SECTION 7: VENDING MACHINES A. General Policies Revenue from vending machines situated in all other areas of the school, whether school-serviced or vendor-serviced, shall be controlled by the school principal and processed through the Activity Fund. (Exception could occur for a vending machine if operated by the cafeteria.) B. School-Serviced Vending Machines All transactions involving funds generated by vending machines shall be entered into Activity Fund accounts established for this purpose. For example, receipts and disbursements for candy sales, pencil sales, etc., should be handled through separate vending machine accounts set up specifically for that machine. Profits resulting from vending machine sales may be transferred at the option of the principal to related accounts. For example monies from machines located in the gymnasium may be placed 23 Jan 2012

25 in the Physical Education or Athletics accounts. The method of entitling the individual Activity Fund accounts should relate directly to the location of the machines and the intended purpose of the profits. C. General Operating Procedures for School-Serviced Vending Machines 1. Revenue from vending machines must be collected and receipted on a timely basis. High volume machines may need to be collected more often. The principal is responsible for providing the maximum available security for vending machine inventories. 2. Any balance due for vending machine supplies shall be paid in full upon receipt of each invoice. 3. The balance in each vending machine account should be reviewed monthly to determine if a transfer of funds from profits is warranted. 4. Vending machine profits which have been transferred to any related account(s) may be expended for any purchase permissible from that account. D. Vendor-Serviced Machines Typically the District contracts for beverage vending whereby the vendor agrees to service the machine and collect the money. The school then receives a periodic commission check from the vendor. The school is not required to establish an Activity Fund account for each vending machine operated under this type of arrangement, but may choose to establish separate accounts. For example, the commission checks for all coke machines may be placed in one vending machine account or if the school chooses, they may set up separate accounts for each machine related to the location of the machine or to the intended purpose of profits from the machine. SECTION 8: FACULTY SUNSHINE FUNDS A. Definition Faculty Sunshine Funds are defined as funds voluntarily contributed by and for the school faculty to be utilized and expended at the discretion of faculty representatives. 24 Jan 2012

26 All expenditures for hospitality, condolence, or any other purpose for the sole benefit of faculty, shall be paid out of these funds. This account is the only account that does not have a District maximum limit of $50 gifts. The limits of this account are determined at the campus level by the account sponsor and committee. NOTE: A specific activity account must be used for the Faculty Sunshine Funds. No monies can be transferred into the Faculty Funds from any other activity fund account. B. General Operating Procedures 1. All regulations governing the receipt and disbursement of activity fund monies are applicable, except as noted above. 2. A Faculty Sunshine Fund Committee should be established. The Committee should be responsible for the administration and expenditures of the Faculty Sunshine Fund. A report at the end of each school year should be made to the participants as to balance on hand and expenses incurred for that school year. 3. All regulations governing the receipt and disbursement of Activity Fund monies are applicable to Faculty Sunshine Fund transactions except that the control of these monies rests primarily with the staff. The revenues in the Faculty Sunshine account should be obtained voluntarily. SECTION 9: PURCHASING POLICIES AND PROCEDURES A. Purchases From Activity Funds The school principal is responsible for all purchases and commitments requiring the present or future disbursement of Activity Fund monies. Sponsors must have a commitment from the school principal before making any purchase. Purchases shall not be made unless sufficient funds are available in the proper Activity Fund account, or will be available at the time payment is due. Refer to the Purchasing Policies and Procedures Manual for detailed information regarding purchasing policies. Purchases from Campus Activity Funds (Fund 461) must follow all District purchasing guidelines. Purchases from Student Activity Funds (Fund 865) are not required to follow the District purchasing guidelines except for the following: 25 Jan 2012

27 1. Technology Purchases All technology purchases (including software) must be purchased via a purchase order and approved by the Technology Committee. 2. Consultants - A professional services contract must be completed (prior to the services being rendered) for all consultants, including guest conductors, clinicians, judges, etc. Contact the Purchasing Department if you have any questions regarding who is required to fill out the contract. 3. Student Transportation District approved vendors must be used to transport students. 4. Trips in of $ 50,000 or more must have prior board approval and be presented to the board again once funding is complete. This must happen 60 days prior to the trip departure date. B. Warehouse Purchases Campuses, clubs or organizations needing supplies from the Central Warehouse should follow these procedures: 1. Select the desired items from the warehouse catalog. 2. Enter a requisition for those items into the MUNIS system. 3. The principal must approve the requisition in MUNIS before the order can be filled by the warehouse. 4. The warehouse will fill the orders and deliver to the campus according to its established delivery schedule. SECTION 10: FIXED ASSETS CAPITAL OUTLAY PROCEDURES In order to meet State Accounting Guidelines and to have adequate documentation for insurance purposes, it is necessary for each campus to accurately account for all fixed assets purchased through the Activity Fund. Fixed Assets are items purchased that are: 1. Tangible in nature 26 Jan 2012

28 2. Have a useful life of two (2) or more years 3. Unit cost of $5,000 or more 4. May be reasonably identified and controlled through a physical inventory system All fixed assets, whether they are a gift to the school or purchased with activity fund monies, become the property of the District and must be included in the school s inventory of equipment. Fixed assets purchased with Activity Funds may NOT be sold or gifted by the school for any reason. Disposal of fixed assets must follow District Policy. School personnel should contact the Activity Fund Accountant for further direction in advance of making a commitment to purchase a fixed asset. SECTION 11: STATE AND LOCAL SALES TAXES A. Taxable Status of Purchases Title 34, Part 1, Chapter 3, Subchapter 0, Rule of the Texas Administrative Code, adopted to be effective January 1, 1976 states: The purchase, lease, or rental of a taxable item which relates to the purpose of an exempt (educational) organization is exempt from tax when the organization pays for the item and provides the vendor an exemption certificate in the form prescribed by the comptroller. Parent, patron, or alumni organizations may be exempt from sales tax. However SBISD sales tax exemption does not convey to parent, patron, and alumni organizations. B. Tax Free Purchases All items purchased by a public school, school district or non-private school for the school s 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 signed by the school district employee. 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 27 Jan 2012

29 the name of the organization, and that payment shall be made from the organization s own funds. Sponsors/teachers/authorized agents who purchase items for school use should provide the seller with the Tax Exempt Form for purchases that will be reimbursed by the Activity Fund. Sales tax will not be reimbursed to sponsors/teachers who fail to submit the Tax Exempt Form and pay sales tax on an exempt purchase. Purchases solely for hospitality, condolence, and gifts are generally not tax exempt as these expenditures are not related to the basic educational or instructional function of the school. C. Taxable Sales by an Exempt Organization 1. An exempt organization which sells taxable items through an outside vendor is responsible for collecting and remitting tax on all sales of taxable items and services made by the organization unless such sales are otherwise exempt from the tax. 2. The school must collect sales tax on items sold to students that become the student s personal property. For example: a. Books sold at book fairs. b. Materials used in shop when the end product becomes the possession of the student. c. Spirit items sold during an athletic season. d. Clothing, including uniforms kept by the students. e. Pencils, paper, and other supplies. f. Student publications such as yearbooks and football programs. g. Printing services provided by students. h. Automotive parts used in repairs performed by students. i. Parts used in repair of personal property performed by students. j. Custom items manufactured by students. Other items defined as taxable by the State Comptroller s Office 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 28 Jan 2012

30 tax is paid. The school may purchase items tax free and must collect the tax when the item(s) are sold. There are no Tax Exempt numbers. Exemption certificates do not require numbers. 4. One-Day Tax-Free Sales Each student/campus organization may have two (2) one-day tax-free sales or auctions each calendar year. The sale or auction must not exceed 24 hours. During these tax free sales or auctions, the organization may sell any taxable item tax-free when the price of the item is $5,000 or less. Additionally, a taxable item may be sold tax free during a one-day tax-free sale or auction regardless of price if the item is manufactured by the organization or is donated to the campus. A sale does not occur until title to or possession of the property is transferred to the purchaser. For example the delivery of yearbooks to students on a single day qualifies as a one day tax-free sale even though the yearbooks were ordered and paid for throughout the year. This rule can be applied to other fundraisers where the delivery is made to the students on a single day. However, sales from surplus stock on subsequent dates after the tax-free day are subject to sales tax. Note: The time limit for the two one-day tax-free sales is a calendar year rather than a school year. A book fair is usually not a qualified sales event because the school is not the seller, and the school is therefore acting as an agent for the vendor. The sale of items received from the vendor, in which the school and the respective vendor have an agreement that the vendor will take back any unsold items, would also generally not qualify as a one-day tax-free sale. When the school receives a commission check, tax-free day sales provisions cannot apply because the sale is the vendor s sale, not the school s sale. The school would collect and remit to the vendor all proceeds and the vendor is responsible for reporting and remitting the sales tax. Only bona fide chapters of a school qualify for the two one day tax free sales. A bona fide chapter of a school is a group that must be organized for some business or activity other than instruction or a participatory group. Essentially, any student group that is recognized by the school and is organized by electing officers and holding meetings is a bona fide chapter of the school. Group meetings for 29 Jan 2012