ACTIVITY FUNDS ACCOUNTING PROCEDURES MANUAL

Transcription

1 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 Humble Independent School District Activity Funds. This manual is to be used in conjunction with the Basic Accounting Manual provided by EPES Software, Inc. 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. Other materials available for use in administering activity funds are the District Board Policy and the Humble ISD Purchasing Policy and Procedure Manual, both of which can be found on the District s web page. 1

2 HUMBLE INDEPENDENT SCHOOL DISTRICT ACTIVITY FUNDS MANUAL 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 trustee, to expend or invest in accordance with conditions of the trust. Specifically, they are funds accumulated from the collection of student fees, donations, and from various school approved, fund raising activities. Activity Funds are used to promote the general welfare of the school and the educational development and morale of all students. All funds collected by 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. B. Responsibility for Activity Funds All policies that apply to the administration of District funds apply to the administration of Activity Funds. 1. The school principal is personally responsible for the proper collection, disbursement, and control of all school activity funds. This responsibility includes: a. Providing for the safekeeping of the monies in the school. Monies that are maintained at a school campus location must be maintained in a secure area within the vault. If a vault is not available, monies are required to be maintained in a locked cabinet with restricted key access. Keys or vault combinations must be restricted to the Principal and the activity fund clerk. b. Proper accounting for transactions. c. Expenditure of funds in compliance with applicable state laws and local board policy. d. Adequate training and supervision of all personnel designated by the principal to administer activity funds. 2. The school principal is not responsible for funds collected, disbursed and controlled by booster clubs, parent, patron, or alumni organizations. These organizations and booster club funds are not to be accounted for in the schools activity funds, nor are these organizations to be given, or use, the Districts tax ID number. 3. The school secretary/bookkeeper is responsible for maintaining adequate records and supplies pertaining to the student activity funds and the performance of duties in a timely manner. 2

3 4. The account advisors are responsible for managing their respective funds. This responsibility should include following district purchasing policies and procedures, developing fund raising plans, monitoring the financial position of the account, reviewing the financial records, the collecting and safekeeping of funds until turned over to the bookkeeper, and other fiduciary responsibilities. 5. The Finance Specialist s responsibilities include: a. Training of bookkeepers/secretaries. b. Monthly review of activity fund bank reconciliations to ensure compliance with district polices and procedures as required by the Activity Fund Accounting Procedure Manual for each campus. 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. 6. The Internal Audit Department is responsible for the periodic internal audits of each activity fund. C. Audit of Activity Funds 1. Elementary schools must submit all activity funds records to the Finance Specialist at the end of the school year. 2. Secondary schools should submit only the required annual reports to the Finance Specialist at the end of the school year, unless specifically instructed to do otherwise. D. Retention of Records All records should be kept current and in good order for a period of seven years for audit purposes. 3

4 SECTION 2: BASIC RECORDS AND PROCEDURES A. Activity Fund Receipts 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 s warehouse or may be computer generated. No other type of receipt is acceptable under any circumstances. A receipt should be prepared immediately for any cash and/or checks received. Receipts are to be used in pre numbered sequence and prepared in ink. An actual cash count by the person signing the receipt should be made in the presence of the person turning in the money. The total of cash, checks, and coin should be shown separately on the receipt. The person turning in the money should initial the receipt to evidence agreement with the count. B. General Receipting Procedures 1. In order to maintain effective cash control, at least two persons must be involved in the functions of collecting cash, receipting cash, and depositing cash. The person that collects cash should not be responsible for receipting that cash to herself/himself and later, depositing that cash, except where unavoidable. 2. An official receipt shall be prepared for any cash or checks received. The person receiving the money 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. 3. The receipt must be completed to include all of the following information. a. School name. a. The date and amount. c. The name of the individual or firm submitting the money (a receipt may not be issued to more than one person) d. An explanation of the purpose for which the money was received e. The name of the student group f. The manual signature of the person receiving the money. Signature stamps are forbidden. 4. An actual cash count should be made by the person signing the receipt in the presence of the person turning in the money, whenever possible. If an emergency arises and the money cannot be receipted immediately, the funds can be left with the bookkeeper if an 4

5 AF 104 (Tabulation of Monies Collected from Pupils) form has been properly completed and attached to the funds. 5. The maker of a check should be indicated on the receipt or on the attached AF 104 form if it is other than the person turning in the money. The payee s telephone number and driver s license number should be included on the check. 6. Postdated checks shall not be accepted by the school from any source. All checks must be immediately endorsed. 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. Computer generated receipts should contain all parts, be stamped VOID and filed in numerical order. Receipts should never be pre signed or predated. 8. The original copy of the cash receipt shall be given to the person relinquishing or remitting the money. The second copy will be used to support the bank deposit and the third copy shall be retained in the receipt book. If a check is received by mail from an outside source for commission, interest, refund, etc., it is not necessary that the original of the receipt be mailed to comply with this procedure. In these cases, the original of the receipt should be given to the advisor of the account being increased. C. Receipt of Money by Persons Other Than the Bookkeeper Occasionally monies may be collected by an authorized individual other than the bookkeeper (teacher, secretary, clerk, etc., but only as approved by the principal) for such items as books, student fees, pictures, etc. In such instances, the following operating procedures shall be applicable in addition to the provisions of General Receipting Procedures: 1. Form AF 104 (Tabulation of Monies Collected from Pupils) may be used for small, multiple collections such as yearbooks, library fines, class pictures, bus trips, etc. Form AF 104 must be prepared in ink. 2. The original AF 104 form shall be sent with the money collected to the bookkeeper. The bookkeeper will count the money in the presence of the advisor and prepare an activity fund receipt once the deposit is verified. The bookkeeper will also sign the AF 104 form. 3. Collections shall be submitted to the bookkeeper daily. 4. In elementary schools, teachers utilizing Form AF 104 may enter the names of the students from whom monies were received. In secondary schools, students must, in the presence of the collector, manually sign the AF 104 and enter the amount of money turned in. 5

6 5. All money collected must be submitted to the bookkeeper in the same form as collected. Employee s personal checks may not be substituted for cash collections. 6. All checks collected are to be made payable to the school, never an individual. 7. For audit purposes, advisors should keep verified copies of the AF 104 for a period of 7 years. The bookkeeper should keep the original for a period of 7 years. D. Receipt of Money by the Bookkeeper 1. The activity fund receipts issued by the bookkeeper provide the basic support for activity fund bank deposits. The following procedures are to be observed in addition to those specified in General Receipting Procedures. When funds submitted to the bookkeeper have previously been receipted on an AF 104, the bookkeeper shall: a. Tabulate monies collected and reconcile to the AF 104. b. Issue an official activity fund receipt to the employee when monies received have been satisfactorily verified. The receipt number should be written on the AF 104 form or receipt attached. c. Each receipt must be entered into the activity accounting system. E. Control of Activity Fund Cash Receipt Books 1. The bookkeeper shall be responsible for maintaining an adequate supply of receipt books, obtained from either the District s warehouse or a business forms company. 2. Receipts should only be issued for money in hand. The signing of a receipt acknowledges acceptance of responsibility for the money. F. Pre numbered Checks Checks must be used to disburse all funds from the activity fund checking account. Prenumbered checks are obtained directly from the bank or a check printing company as needed. No more than a two year supply should be on hand at any time. Checks must be printed with the schools activity fund name. Checks must also have provision for two signatures, which are required on all checks. Original purchase orders, invoices, etc., must support all payments and be attached to the accounts payable copy of the check. The original check is given/mailed to the payee. One copy/stub is kept in numeric order. 6

7 G. 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. Currently, the District depository requires that checks be on a separate deposit slip, all currency and coin up to, but not more than $10 on a separate deposit slip; and all coin in excess of $10 be on a separate deposit slip. H. 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 the preceding month. The monthly statement includes deposits, cancelled checks and other memoranda which confirm the additions to and the subtractions from the cash balance during that month. When properly reconciled, the statement serves as official support for the cash balance in the activity fund records. I. Request for Internal Transfer of Funds (AF 107) This form, when completed, authorizes the transfer of funds from one account to another, as required by interschool purchases (i.e. yearbooks purchased by library or the sharing of fund raising profits.) This form must be signed by both the donor and recipient sponsors and the principal. Prepare the AF 107 in duplicate. The original is kept with your monthly reconciliation and the duplicate is included with the monthly bank reconciliation report sent to the Finance Specialist. J. Additional Records The above section described only the basic records required by the District. Any additional records may be utilized either for a specific purpose or for better control over Activity Funds in general, provided the additional records are not used to replace the required records. The basic records described in Section 2 are exclusive of the necessary forms used in accounting for activity funds. These forms are specified in Section 21 of this manual. 7

8 SECTION 3: BANKING PRACTICES AND PROCEDURES A. Bank Accounts 1. Each school shall have only one bank checking account which shall be entitled (Name of School) School Activity Fund. This bank account title must be imprinted on all activity fund checks and deposit slips. 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 the cafeteria or by outside organizations such as Parent Booster Clubs, P.T.A s. P.T.O s., etc., must be handled through separate bank accounts. Club/class, Courtesy, Band activity accounts are not considered as outside organizations. 3. The bank to be utilized for checking account purposes shall be the District s approved depository bank, and business conducted with the bank shall not be in violation of any Board policies, rules or regulations. 4. Surplus funds may be invested in CD s in the name of the school or in the Humble 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. B. Check Signatures Each bank account shall have three authorized check signers, one of which must be the principal. Only one office professional shall have signature authority on the bank account. The third signature must be that of another campus administrator. These names should be kept on file at the bank. All checks and savings withdrawals must be signed with two manual signatures, preferably consisting of the principal and bookkeeper. In the event of the absence of the principal or the bookkeeper due to illness or other reason, the remaining authorized two signatures on the check or savings withdrawal shall be deemed acceptable. The principal will be considered responsible for all financial transactions and proper check signatures, even in the case of his/her unavoidable absence. 8

9 Checks made payable to an authorized check signer must be signed by the other two authorized signers. Under no circumstance shall checks be pre signed by both check signers until the check has been filled out in its entirety. Bank signature cards are processed through the Finance Specialist in the Finance Department. Changes must be approved by the Assistant Superintendent of Finance before being submitted to the bank. Under no circumstances are requests for signature change submitted through the local branch of the bank. C. Bank Reconciliation 1. One of the most important aspects of the financial secretary s / bookkeeper s job is the prompt reconciliation of the activity fund bank account. It is the principal s responsibility to see that the bookkeeper or secretary has adequate time to complete the monthly bank reconciliation on a timely basis. 2. Upon receipt of the monthly bank statement, the balance indicated on the statement shall be reconciled using the EPES software program. The monthly bank reconciliation must be retained with the activity fund records. 3. A copy of the monthly reconciliation and account balances should be sent to the Finance Specialist by the 15 th of each month. Reports needed in Finance each month: Bank Reconciliation Report General Ledger Report Sequential List of Receipts by receipt # Sequential List of Checks by check # List of Outstanding Checks Sequential List of Activity Fund Transfers with an AF 107 Copy of Bank Statement Sequential List of Receipts by Vendor Sequential List of Checks by Vendor Deposits in Transit Form 9

10 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. Funds for deposit shall be transported by the Districts police officers to the Humble ISD police station for immediate pickup by armored security service for transport to the bank the same day. Activity fund monies shall not be kept in any other off campus location. 3. Deposits should be made at least twice weekly. If necessary, additional deposit pickups can be made upon request by calling the Humble ISD police station. 4. All checks to be deposited should be endorsed as follows: FOR DEPOSIT ONLY (Name of School) School Activity Fund Account # 5. All cash receipts shall be deposited in numerical sequence. 6. Re deposits must be deposited separate from other funds collected, i.e., a separate deposit slip(s) that includes the check endorser s name(s). 7. It is the responsibility of the Principal to be sure all monies on hand at the end of the school year, including petty cash, is deposited prior to closing the books for the year and leaving for the summer. B. Procedures for the Preparation of Bank Deposits 1. Currently the District depository requires that all checks be on a separate deposit slip and all currency and coin, not to exceed $10, be on another deposit slip. Both deposit slips and the checks are to be placed in the bottom pocket of a plastic tamper proof bag, and the currency and coins in the top portion of the bag. Coin deposits totaling more than $10 and the deposit slip must be placed in a separate tamper proof coin bag. The outside of the plastic bank bag should be filled out completely and legibly. 10

11 2. Bank deposit slips shall be prepared in duplicate for each deposit. The original deposit slip will be retained by the bank; the duplicate copy will be retained by the bookkeeper. The bank will fax a confirmation of each deposit transaction. 3. 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 , inclusive. 4. The sum of the amounts of the supporting cash receipts must be in agreement with the amount of the bank deposit. 5. For deposit shortages and overages, refer to Section 5.N of this manual. C. NSF Procedure 1. When you receive notification from the bank or CheckSmart for a returned item, an entry should be made in the EPES/ACT program. 2. Set up an Activity Fund Account called NSF checks or Returned Checks. 3. In the EPES/ACT program, enter a negative receipt entry using the check number as the receipt number and the date it was returned on the bank statement as the date. You will use the Returned Checks activity fund account number not the original account number. In the description you will put NSF and the last name from the check. 4. If you are not using CheckSmart you and/or the Sponsor will need to notify the check writer and collect the funds. A fee shall be charged. Set a certain amount of time to collect the funds (example 60 days.) When the funds are collected a receipt entry will need to be entered using the Returned Checks account number. 11

12 SECTION 5: PAYMENTS FROM FUNDS A. General Policies 1. Monies raised by clubs, class/student groups for the expressed purpose of financing trips for faculty sponsors and students to clinics, conferences, programs, etc., may be expended with the approval of the building principal. 2. Events Tickets to activities where the school or District benefits educationally may be purchased using the activity funds if the tickets purchased are used by sponsors or students. 3. Hospitality The General Revenue/Miscellaneous account funds may be used for payment of food, snacks, coffee or other non alcoholic beverages at inservice meetings, parental or community meetings, or other school related activities which are held by the school. (This is an exception to regular transfer policy.) If the food, snacks, or other non alcoholic beverages are taken from the school s vending machine(s) an AF 107 should be prepared. The cost of the items consumed would be transferred from the Hospitality account to the appropriate vending machine(s) account(s). 4. Cash Gifts No cash gifts are allowed to employees or students except fully collected from employee s voluntary contributions. 5. Incentives/Awards/Gifts Employees and/or students may be given incentives/awards and/or gifts whose value does not exceed $35. The expenditure must be made using funds intended for this purpose. 6. Textbooks In instances where a lost textbook is not the responsibility of the teacher or principal, payment should be made from the textbook account in the activity fund if the textbook account balance is in excess of $100. A balance of $100 should be retained to make refunds to students. Textbook unexpended funds at the end of the school year shall remain in the textbook account and be carried over to the next school year. If the unexpended funds exceed $1,000 after making payment to the District for lost textbooks, the principal may request a Summer Textbook audit. If after making any payment required by the audit, the unexpended funds exceeding $1,000 may be transferred with approval by the principal. 7. Class/Club Accounts An activity fund account is a trust account to be used for the intended purpose stated at the time the account was created. The principal must ensure that transfers or expenditures from these accounts are for the intended purpose and must not divert funds for other uses. To document the authorization 12

13 for proper transfers and expenditures, a form AF 107 (Request for Internal Transfer of Funds) should be completed. B. Activity Fund Purchase Orders 1. Purchase orders (PO s) are the authority for making a purchase and issuing a check drawn on the activity fund checking account. They provide support to substantiate each bank withdrawal. Activity fund PO s are electronic forms accessed by use of the computer. Income received from a specific club/account is to be expended for that account. No expenditure of funds should be approved by the principal unless sufficient funds are available in the proper account. 2. A purchase order completed by an employee and approved by the principal gives that employee the authority to purchase materials or services in the school s name. An activity fund purchase order should be in place prior to making any purchases. An activity fund P.O. (Form AF 113) should be completed in it entirety as described below: a. Complete the top portion of the P.O. (Do not assign a P. O. number.) b. Fill in bottom part, describing materials or services, quantity, price, dates (trip information), and account(s) to be charged. c. Sign the P.O., retain a copy, and return the original to the bookkeeper for the principal s approval. d. After the principal s approval, a copy of the P.O. will be returned to the requester indicating whether the purchase can be made and the purchase order number to be used when ordering. e. After the purchase has been received, the purchaser should sign the receiving report, attach any invoices or other support documents, and return to the bookkeeper to authorize payment. 3. After obtaining all required information and signatures on the P.O., (original invoices, billings, etc.), payment can be made. The check number used to pay a purchase order should be noted on its face. A copy of the check or the check stub should be attached to the P.O. and invoice. NOTE: Statements may be paid only if supported by all original invoices. Credit/debit card receipts do not have sufficient detailed information for payment/reimbursement. 13

14 C. Issuance of Checks Operating Procedures 1. All payments shall be made by activity fund check with the exception of petty cash disbursements. Note: The check must be written in ink or typed. 2. All activity fund checks must bear the signatures of two authorized check signers. See Section 3.B for procedures regarding authorized a check signers. 3. No expenditure should be approved by the principal unless sufficient funds are available in the appropriate activity fund account. If funds are not available, a transfer as a loan between two or more accounts may be executed after obtaining required written approvals. Refer to Section 15.C. By their nature, some accounts require expenses before offsetting revenue is produced. In these situations, a planned short term deficit may occur. 4. Payments must always be made to a specific person, company, or organization. Checks shall not be made payable to Cash or to the paying school. 5. Under no circumstance shall checks be pre signed by an authorized check signer. That is, both signatures shall not be affixed to a check until all blanks (date, payee, and amount) have been filled in and all supporting documentation is present. 6. If it becomes necessary to void a check, the check must be clearly marked VOID across the check. All voided checks should be filed in numerical sequence. Follow procedure in Section 5 K (page 17) for voiding a check. D. Reimbursements 1. Checks may be issued to students, parents or employees to reimburse them for personal funds expended for school purposes, provided that a P.O. and proper documentation are submitted in support of the expenditure. Original receipts are to be taped individually to an 8 ½ X 11 paper and attached to the P.O. (refer to Section 5.B). 2. Reimbursements should be kept to a minimum as a safeguard against unauthorized purchases by individuals. 3. No sales tax should be reimbursed. 14

15 E. Refunds Occasionally it may be necessary to make refunds due to cancellations of field trips, overcharges on books or bus transportation, etc. In cases of multiple refunds, a single check may be issued to the activity advisor who will distribute the refunds to each student. Each person due a refund shall sign a list verifying that the cash refund was received. The activity advisor will return the signed refund list and any undistributed refund to the bookkeeper who will issue a cash receipt for any money returned. The bookkeeper shall attach the refund list to the purchase order and indicate thereon the receipt number issued for money returned. No refunds may be made for any money other than that contributed directly by the student. Excess fund raiser monies may not be refunded to students. F. Advance Payments Advance payment may sometimes be requested for necessary expenses expected to be incurred by an account advisor. Procedures for advance payments are as follows: 1. The request for advance payment should be on a purchase order and approved by the principal. The P.O. should include a description and the date of the activity purchase necessitating the advance. 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 bookkeeper will issue cash receipt for the money returned and will crossreference this receipt number to the check number. 4. The settlement of all advances shall be completed no later than fifteen days after the termination of the activity for which the money was advanced, except in cases deemed unusual or exceptional by the principal. 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 advisor to assure that all advances are properly accounted for. G. Supplemental Payments to Employees for Services 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: 15

16 Additional custodial services. Additional clerical assistance. Security monitoring. Additional coaching duties for which the District does not provide extra salary. Officiating in extramural athletic competition where the District does not provide for and pay such officials. Payments to employees for supplemental services may not be made directly from the activity fund. The prescribed procedures are as follows: 1. Complete payroll time sheet verifying service preformed. Submit original time sheet with budget code to Payroll. 2. Issue an activity fund check payable to Humble ISD in the amount of the supplemental payment and send to the Tax Office/Accounts Receivable with the Budget Amendment and Funds for Deposit form. Copies of all forms should be kept by the bookkeeper as supporting documentation. Be sure to indicate the proper expenditure code on all forms. 3. The amount to be paid for additional services will be added to the employee s next regular payroll check. H. Payments to Non employees or Companies for Contractual Services Payments for services performed by individuals (not employed by Humble ISD) or companies may not be made directly from the Activity Fund. Instructions for paying non district employees are as follows: 1. Complete a budget amendment form increasing the proper revenue and expenditure accounts. 2. Prepare an activity fund check payable to Humble ISD and a Funds for Deposit form. 3. Send items 1 and 2 to the Tax Office/Accounts Receivable. 4. Once the budget amendment has been posted to the general ledger by the Budget Department, enter a requisition into Pentamation to generate a District Purchase Order. Upon completion of services, the contractor will be issued an HISD check after the bookkeeper submits the signed pink copy of the P.O. along with an original invoice and the contractors W 9 to Accounts Payable. 5. Accounts Payable will be responsible for the preparation of Form 1099 as required by Section 6041 of the Internal Revenue Code. 16

17 I. Payments for Capital Outlay Purchases Payments for capital outlay purchases may not be made directly from the activity funds. Follow the same procedures as in Payments to Non employees/companies for Contractual Services. J. Cashing of Checks The practice of cashing personal and/or payroll checks is strictly forbidden. The cashing of checks is similar to making an employee loan until the check clears. Neither student nor District funds may be loaned. K. Void Checks It will occasionally be necessary to void a check. When it becomes necessary to void a check for current month, prior month, or prior year, the following procedures shall be employed: 1. When the check is lost or unaccountable, a stop payment order should be requested from the school s bank where economically feasible. 2. In the EPES/ACT program go to: Checks Paid Find the check you want to void (either by going to FIND and search for check number or go to LIST and scroll down to the check and enter) Click on the VOID THIS ENTRY botton In the VOID DATE field put current date(make sure you use the current date) In the REASON field you can leave void or enter your own note (Example: ck lost, stop payment, wrong amount, to be reissued, etc.) Select Void this Entry By doing this process it will automatically add a reversing entry, indicate that it is a void, cancel the outstanding check and cancel the reversing entry. The original entry will have the original issue date; the cancel date will be the current date. The reversing entry will have the current date for both the issue date and the cancel date. L. Outstanding Checks Over a Year Old Texas law requires districts and other governmental entities to report unclaimed (uncashed) vendor and payroll payments to the State Comptroller periodically. Therefore, to incorporate activity fund checks into the District report process please do the following: 1. As of June 30 each year, ascertain which outstanding checks are over a year old. 2. Set up an Activity Fund Account called Outstanding Checks/Liability. Indicate the year in which the account was created (example, Outstanding 17

18 Checks/Liability 07). Next year you will create another activity account titled the same except the year will change. 3. In the EPES/ACT software program the process will involve printing out reports prior to voiding the check and then transferring the amount from the original account to the liability account. Follow the steps below: Step 1 Print the following 2 reports showing the original check detail and keep for your files; a Sequential List of Checks by Check Number and Sequential List of Checks by Vendor Number. Specify by Check Number and Is Equal To, in the Compare to field put the check number. Step 2 Void the check following the Void this Entry procedure from page 17, except in the note field the description should be void outstanding check, move to liability Step 3 Do an Activity Account Transfer as directed on page 2 14 in the EPES Software Program Instruction Manual. Transfer the amount of the outstanding check from the activity account it originated from, to the Outstanding Check/Liability activity account. In the Document # field put the outstanding check number for reference. 6. Keep the Check List printout/reports showing the original check date and detail on file. After 2 years in the Liability account, send this information to Finance along with a check made payable to HISD for the amount in the Liability Account. M. Check Acceptance Policy All checks written to Humble ISD, including student activity funds, campus activity funds, and cafeteria funds must include on the front of the check the name(s) of the student(s) involved in the transaction, the check writer s driver s license number, and the purpose of the check. Checks written to the cafeteria for deposits into a student s cafeteria account must include the student s cafeteria account number of the front of the check. Post dated checks are not accepted. Any check returned for insufficient funds, accounts closed, improper signatures, or other reasons will be referred to a check collection agency and a $30.00 fee will be charged plus applicable sales tax (subject to change). Following notification of a returned check, additional checks will not be accepted until the returned check has been paid. 18

19 N. 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 Memo. Whenever the bank balance is to be increased, the bank prepares a Bank 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 corresponding cash receipt) Record a negative receipt in the original activity fund account. You may add a receipt or add a line item to the original receipt if the receipt and deposit correction occur in the same month. 2. To record an over deposit (amount of deposit exceeds the amount of corresponding cash receipts) Record a receipt in the original activity fund account. 3. To record check printing and/or account analysis fees from your bank statement. Record a negative receipt entry in the Bank Charges activity account. All explanations must describe the type of adjustment being made. O. Individual Account Reconciliation The bookkeeper should provide to the sponsor/advisor a monthly reconciliation. Two times during the year the reports should be signed by the account sponsor/advisor and be retained in the bookkeeper s files for audit purposes. 19

20 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. The following guidelines shall govern all Petty Cash accounts. 1. In elementary schools, there shall be a maximum limit of $50 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 $15 for each purchase. 4. The bookkeeper shall be responsible for all Petty Cash transactions. B. Operating Procedures 1. The Petty Cash account is established at the beginning of each year by issuing a check in the desired amount (not to exceed the maximum stated in Section 6.A) payable to the bank. The account to be charged is General/Miscellaneous. The bookkeeper shall then endorse the back of the check by signing her name. Send the check to the bank by HISD police officer, for cashing. The officer will endorse the check in the presence of the bank teller. The officer will return the cash to you the same day the check is taken to the bank and cashed. You will sign the officer s form that you have received the cash. Depending on the work load for the officer on any given day, your check may not be taken to the bank the same day. It may take 2 to 3 days for the check to be cashed. If this is the case, the check will be secured at the Humble ISD Police Department. 2. Once the Petty Cash account is established, reimbursements shall be made only by an Activity Fund check for the total of receipts or invoices on hand that will restore the Petty Cash to its original amount. For example, if the Petty Cash account is established for $50 and a reimbursement is made when $5 cash is left, the reimbursement check will be for $45 and the Petty Cash balance will then be replenished to the original $50. The accounts to be charged are the appropriate accounts per the expenditures. 20

21 3. At the close of the school year, the unexpended Petty Cash shall be receipted to the General/Miscellaneous account and deposited into the Activity Fund bank account, thus closing out the Petty Cash account. 4. Invoices or other suitable documentation shall be obtained for all Petty Cash expenditures. All supporting documents shall be attached to a Purchase Order when reimbursement is made. Refer to 5.B. 21

22 SECTION 7: VENDING MACHINES A. General Policies Revenue from vending machines situated in all other areas of the school, whether schoolserviced 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 a separate vending machine account, such as, Candy Sales or Pencil Sales Students. Profits resulting from vending machine sales may be transferred at the option of the principal to accounts related to the supporters/payers from which the profits were generated and the money raised at the option of the principal can be transferred to any account for student related purposes. Profits from machines located in the gymnasium area may be placed in the Physical Education or Athletics accounts, etc. 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. C. General Operating Procedures for School Serviced Vending Machines 1. Revenue from vending machines must be collected and receipted weekly. 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. Funds shall be disbursed from the individual vending machine account only for the purchase of vending machine supplies and maintenance of the machine(s). 3. Any balance justly due for vending machine supplies shall be paid in full upon receipt of each invoice. 4. The balance in each vending machine account should be reviewed monthly to determine if a transfer of funds from profits is warranted. 5. Vending machine profits which have been transferred to any related account(s) may be expended for any purchase generally permissible from that account. 22

23 D. Vendor Serviced Machines A school may occasionally contract with a firm 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. Vending machine profits, i.e., the commission checks, may be placed directly into the account related to the location of the machine or to the intended purpose of profits from the machine. 23

24 SECTION 8: FACULTY OR COURTESY FUNDS A. Definition Faculty/Courtesy Funds are defined as funds voluntarily contributed by and for the school faculty to be utilized and expended at its own discretion. 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 $35 gifts. The limits of this account are determined at the campus level by the account sponsor and committee. NOTE: Faculty/Courtesy Funds must be accounted for in separate individual accounts. And 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/Courtesy Fund Committee should be established. The Faculty Fund Committee should be responsible for the administration and expenditures of the Faculty/Courtesy Fund. However, in order to comply with present policy, all monies in the Faculty Fund must be spent through the school s Activity Fund with the principal and faculty chairman having signature authority for expenses incurred by the Faculty/Courtesy Fund Committee. 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. All regulations governing the receipt and disbursement of Activity Fund monies are applicable to Faculty/Courtesy Fund transactions except that the control of these monies rests primarily with the staff. Financial activities such as condolences and hospitality involving faculty and all other school staff should be conducted through the Activity Fund and not as an off campus activity. The revenues in the Faculty/Courtesy account should be obtained voluntarily. 24

25 SECTION 9: PURCHASING POLICIES AND PROCEDURES A. Purchases From Activity Funds 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. Vendors who are regularly used should be so notified. 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. B. Competitive Bidding Requirements The following shall be the basis for competitive bidding requirements: 1. Purchases under $ may be implemented in the most expedient and cost efficient manner available to the principal. 2. Purchases from $ to $ require, as a minimum, oral or telephone quotations secured from three (3) or more competitors recorded on a Request for Quotation Form and filed with other financial records. A written explanation approved by the principal must be attached to the Request for Quotation Form when the lowest bid meeting all specifications is not accepted. 3. Purchases from $10,000 to $24,999 for construction, renovations, maintenance and repairs to facilities must have three written quotations signed by the authorized company representative. Purchases costing less than $5,000 may be made in the most expedient and cost effective manner and shall conform to the administrative procedures. When time is not critical and quotations are not feasible without delay, three quotes should be obtained. 4. Purchases of $10,000 or more must comply with the provisions of the Texas Education Code, Section , and will be referred to the District Purchasing Department for development of specifications, bids, advertising and processing. As soon as the price is determined, the school shall issue a check payable to the Humble ISD and forward it (and a copy) to the Finance Specialist along with a budget amendment and a Fund for Deposit Form. Once the budget amendment is posted, a purchase order can be entered into Pentamation. When the merchandise is received, the receiving individual must sign off on the pink copy of the purchase order and forward it with the original invoice to Accounts Payable. A check will be prepared and mailed to the vendor at the next check run. 5. All competitive bidding requirements must be followed. Refer to the Purchasing Policy and Procedure Manual (online). 25

26 C. Contracts, Installment Contracts, Lease Agreements All contracts, installment contracts, and lease agreements must be approved by General Counsel and signed by the Superintendent or his representative(s). The District may enter into a one year contract subject to an extension on an annual basis under the same terms and prices, if agreeable to both parties, not to exceed two additional years. D. Contract With Outside Entertainers All outside entertainers must be approved by the District. A District purchase order should be issued and all payments should be made through the District s Accounts Payable Department. For any additional requirements and updates, refer to the Student Parent Handbook and directives issued by the appropriate Assistant Superintendent. E. Commemorative Items Commemorative items are not a requirement for graduation and students are not obligated in any manner to buy or rent these items from the vendor receiving the contract or from any other source. 1. Basic specifications will be developed for all commemorative items by a committee of principals, student council representatives and Purchasing staff. The bids will be coordinated and advertised annually by the Purchasing Department. 2. Commemorative items will be known as: a. Class rings b. Yearbooks c. Graduation announcements, envelopes, personalized cards d. Caps and gowns e. Pictures i. Elementary individual and class ii. Middle school individual and dual image iii. Senior portraits, senior class panoramic, under classmen and senior prom 3. Sample specifications developed by the committee and approved by the Purchasing Department will be used for all schools when bids are taken for commemorative items. The principal may alter the sample specifications so as to meet the individual school needs, but the specifications should be broad based enough to insure competitive bidding from a number of vendors. 26

27 a. The individual school s Activity Funds should not be involved in transactions related to commemorative items. The vendor will be responsible for collecting, documenting, receipting and delivery of commemorative items. b. The District may enter into a one year contract subject to an extension on an annual basis under the same terms and prices, if agreeable to both parties, not to exceed two additional years, on all commemorative items except rings, providing the bid is awarded to the low bidder. In cases where vendors have not met specifications or have given poor prior performance, the low bid may be bypassed. If the award is made to other than the low bidder, such action must be recommended by the building principal and approved in writing by the appropriate Assistant Superintendent. All items will be bid at least every three years. c. On class rings, the District may enter into a three year contract if: (1) The company is required to construct an original and complete set of dies specifically for the District: (2) The charges for the dies are separately quoted: (3) The dies become the property of the school at the end of the three years. After the initial three year period, the contract must be rebid annually if the same set of dies is used. d. Individual and Class Pictures A stipulation will be included in the specifications for class and individual pictures that will require the vendors to place the following statement on each package of pictures: A part of the purchase price of these pictures will provide funds for the individual school activity account. These funds will be used by the school to further enhance the educational environment of our students. F. Competitive Bid Process Interested bidders will be given an opportunity to competitively bid for the commemorative items business. On all commemorative items, the Purchasing Department will advertise annually, or according to contract terms, furnish schools with a list of approved suppliers. Any company desiring to do business with the Humble ISD 27