SECTION 16: ACTIVITY FUNDS & BOOSTER CLUBS

Transcription

1 SECTION 16: ACTIVITY FUNDS & BOOSTER CLUBS Section Contents Page # What s New? General Information Board Policy Activity Fund Types Campus/Department Activity Fund (461) Student Activity Fund or Booster Club (865) Booster Clubs (Fund 865) Money Handling (Booster Club Only) Bank Accounts Carryover Funds Purchases Raffles Sales Tax Purchases Made Revenue Received Sale vs. Not a Sale Taxable Sale vs. Non-Taxable Sale Taxable Sale Tax-Free Days One Day Definition Food Sales Monthly Reporting Exhibits Page 16-1

2 Section 16: Activity Funds & Booster Clubs What's New? There are no new updates General Information Galena Park ISD has a centralized process for controlling all revenue and disbursements for Activity (Campus/Student) Funds and Booster Clubs through the District s Business Services Department. Board Policy The following Board Policy should be referenced for additional information associated with this section of the manual: Policy Code CFD (LEGAL, LOCAL) Title: Subtitle Accounting: Activity Funds Management Activity Fund Types Activity funds consist of monies received and held by the campus to be expended or invested for the benefit of students in accordance with District policy. Specifically, activity funds accumulate from the collection of student fees and various school-approved fundraising activities. The Campus Principal, Department Budget Manager, or designee is responsible for issuing receipts for all funds prior to their deposit into the appropriate account, (See Section 8: Money Handling for more Information) as well as approving all disbursements. Below are two (2) types of activity funds that are maintained by the District: Campus/Department Activity Fund (461) This fund accounts for the collection and disbursement of funds to promote the general welfare of a campus and/or department and the educational development and morale of all students and staff. The funds are used at the Principal or Budget Manager s discretion. The District allows these funds to be subdivided, by use of the sub-object dimension of the account code, to track specific revenue and expenditures, if deemed necessary by the Principal or Budget Manager. For example, 0008 Library fines/fees and book fair proceeds used to purchase new books or equipment for the library. 00MS Campus student vending machine revenue, school picture sale profit, yearbook sales (if no club exists with elected officers) and campus-wide fundraiser sales for items such as wrapping paper, cookie dough, etc. 00PE Physical Education practice clothing sold to students and then profits spent on PE equipment. Student Activity Fund or Booster Club (865) This fund accounts for the collection and disbursement of funds held in a custodial capacity by the District and is the property of specific student groups or clubs, so long as they have: Periodic meetings where an official record of minutes is maintained Elected a group of officers Page 16-2

3 Decisions on the use of student club funds are the responsibility of the specific student group to whom the funds belong, as long as the decisions regarding the use of the funds do not conflict with Board policy and/or legal regulations or restrictions. These funds can be expended for almost any items that are appropriate for the organization. All funds raised by student organizations must be expended for the benefit of the students. The District is required to provide stewardship by properly accounting for and safeguarding these funds. Booster Clubs (Fund 865) Details for the operation of Booster Clubs are specified in the Booster Club Handbook located on the Fine Arts Website. Any group wishing to organize a Booster Club must send a letter to the Campus Principal that states the goals and objectives of the proposed organization. Once approval is given for the organization to be formed, the group shall submit the Booster Club Checklist (Exhibit 16-01) and all appropriate information required by the prescribed deadline. Booster Clubs are approved only once each year during the month of September. Each Booster Club must submit a copy of their minutes and financial report to the Principal and Fine Arts Office, within five (5) days of each meeting. The Sponsor, Principal and/or Director of Fines Arts, must approve all actions, activities, and financial matters related to the Booster Club. Booster club funds are the responsibility of the organization s sponsor and approved by the Director of Fine Arts. Funds are expended according to the organization s budget that is submitted each year with the Booster Club Checklist and supporting documentation as long as the use of funds do not conflict with UIL rules, Board Policy and or legal regulations or restrictions. Money Handling (Booster Club Only) All money shall be properly receipted, stored for safekeeping, and submitted to the campus or department Financial Clerk in a tamper-evident safeguarding bag labeled for delivery to Fine Arts for courier pickup daily. The courier will deliver the tamper-evident safeguarding bag to the Business Services Department to be logged into the safe until logged out by the Fine Arts Department. The Fine Arts Department will be responsible for verifying the funds and preparing the deposit per the guidelines defined in Section 8: Money Handling. Money refers to cash, currency, checks, money orders, or cashier s checks. District procedures per Section 8: Money Handling states: In order to maintain effective cash control, at least two (2) people must be involved in the function of collecting, receipting and depositing of District funds. The person collecting the money should never receipt the funds to himself or herself. Prior to collecting funds the Campus Financial Clerk or Bookkeeper must log out a District approved receipt book and provide the account number to be written on the receipt. A Collection Log can be used if the amount collected is $20 and below. If needed, a change fund can be requested (funds issued to make change during a specific event or for a specific group and re-deposited as soon as possible after the event or collection period). See Section 03: Fiscal Management of the Fiscal Procedures Manual for Change Fund guidelines. Page 16-3

4 Section 16: Activity Funds & Booster Clubs Bank Accounts All Campus/Department Activity Fund, Student Activity Fund, and Booster Club money will be deposited into and disbursed from the District s Depository Bank. No Activity Fund or Booster Club may open a separate bank account. Carryover Funds In accordance with District Policy CFD (LOCAL), all unexpended Activity Funds (Campus/Department Activity and Student Activity) shall remain in the appropriate account and carryover to the next fiscal year. If an organization ceases to function or exist, the unexpended funds of the organization shall be credited to the appropriate administrative activity account. Upon dissolution of a Booster Club, all remaining unspent funds will be transferred to the appropriate Campus or Student Activity Fund. Purchases All purchases made by an Activity Fund must be from a District approved or allowed vendor. Campus/Department Activity Funds (461), Student Activity Fund (865) and Booster Clubs (865) must use a District Purchase Order, District Procurement Card, or Warehouse order entry for all purchases made. For Procurement Card transactions, the purchaser must ensure that funds are available in the account prior to making the purchase (see Section 12: Procurement Cards). A Student Activity Fund or Booster Club cannot purchase Fixed Asset or Inventory Items. They may make a donation to the District (General Fund or Campus/Department Activity Fund) who can then purchase and own the Fixed Asset or Inventory Item they are interested in donating. Raffles The District (staff, student organizations and booster clubs) is not allowed under the Texas Charitable Raffle Enabling Act of 1999 to conduct raffles, bingo, or other games of chance. Sales Tax Purchases Made Any purchases made in the name of the school district or by a group of the school district are exempt from sales tax. Exempt organizations are entitled to an exemption only on items purchased and used directly and exclusively in pursuit of the exempt purpose. For school districts, items purchased must relate to the education process. Purchases made by individual members or teachers/coaches of classes or teams have no exemptions even though they are connected with a school or a school organization. Examples are: Cheerleaders purchasing their own uniforms Band members purchasing their own instrument Science students purchasing their own science display board or supplies Page 16-4

5 In order to be afforded the sales tax exemption, the following forms (located in Districtwide Business Forms in FirstClass) should be presented: 1. Tax Exemption Certificate The Texas Sales and Use Tax Exemption Certification (Exhibit 16-02) is to be presented each time a purchase is made. It must state that the merchandise being purchased is for the organization s own use in providing education is being made in the name of the organization, and that payment will be made from the organization s own funds. 2. Resale Certificate A Texas Sales and Use Tax Resale Certificate (Exhibit 16-03) should be given to the vendor when merchandise is purchased by the school for resale (i.e., fundraisers). Misuse of the sales tax exemption form for personal purchases constitutes a misdemeanor under the Texas Penal Code, Chapter 39, Abuse of Office, and Section Revenue Received The Revenue Decision Tree (Exhibit 16-04) can be used to determine if revenue received is a sale, or not a sale. Sale vs. Not a Sale Sale A sale is the transfer of title or possession of tangible personal property for consideration (usually money). A sale also includes the performance of a taxable service for consideration. Below are examples provided as a guide, but it is not intended to be an all-inclusive list: Admissions (i.e., athletic events, banquets, dances, school performances, summer camps, clinics, workshops, project graduation) Donated items that are sold Fundraisers where the District is the seller, not just the agent Parking permits Rental of items (i.e., equipment or uniforms) Rental of facilities Sales of food Sales of merchandise (including items made by students) Sales of services (i.e., car wash) School publication sales Sale of publications (i.e., yearbooks, newspapers, etc.) The total of all sales (whether taxable or not) are reported on the Sales Tax Report (this is a two part form which includes the Organization Sales Tax Report Exhibit and the Monthly Sales Tax Report Exhibit 16-06). These forms are submitted to the Accounts Payable Department to be reported to the Texas Comptroller of Public Accounts. Not a Sale A non-sale is revenue that is not attributed to the transfer of title or possession of tangible property or the performance of taxable service. These sales do not get reported on the Sales Tax Report. Below are examples provided as a guide, but it is not intended to be an all-inclusive list: Page 16-5

6 Section 16: Activity Funds & Booster Clubs Collection of money from students to pay a company for admission or service (i.e., field trips to locations such as Main Street Theater or Houston Zoo, PSAT test) Commissions from vending machines and recycling (i.e., Coca-Cola, Fresh Brew, Abitibi) Donations of money to the school or school organization, including marathon fundraisers (i.e., lift-a-thon, jog-a-thon, jump rope for heart, basketball hoops) Dues received from students for club membership Fees, such as: o ID badge replacement or issuance of temporary badge o Red Cross Cards (i.e., CPR) o Laboratory o Replacement/repair of GPISD property (i.e., calculators, cell phones, laptops, electronic tablets, musical instrument, locks) o Transcripts o Uniform cleaning o AG stall Fines, such as: o Damages (i.e., calculators, technology equipment, library books, lockers, textbooks, uniforms) o Parking violations Fundraisers when the school group merely receives a commission (i.e., book fairs, school pictures) NSF (Non-Sufficient Funds) check collection or redeposit Tuition, such as: o Summer School o Saturday School o Community Education Vendor sales (see below) In some fundraising activities, the school or school group is merely acting as an agent or sales representative for a for-profit organization. This makes the vendor responsible for the collection and payment of sales tax to the state comptroller. The sales tax would be remitted to the vendor, and the vendor would claim it as their sale and would pay the sales tax to the Texas Comptroller of Public Accounts. The school would not report this type of revenue as a sale. The sum of these collections and payments are not reported on the Sales Tax Report since they are not sales. Examples are: Vending machine sales where the vendor services the machine (i.e., Coca-Cola, pencils, sticker) School pictures (i.e., Lifetouch) Book fairs (i.e., Scholastic) Only when the school or school group purchases the merchandise and then resells these items to their customers is the school considered to be the seller. In this case, a Texas Sales and Use Tax Resale Certificate should be provided to the vendor when making the purchase and the sales should be reported on the Sales Tax Report. Page 16-6

7 Taxable Sale vs. Non-Taxable Sale The term taxable item is defined to include both tangible personal property and taxable services. Texas sales tax statutes impose tax on the sale, lease, or rental of tangible personal property and selected services. Tangible personal property includes personal property that can be seen, weighed, measured, felt, touched, or that is perceptible to the senses in any other manner. When an individual purchases a tangible item and it becomes the personal property of someone, it is taxable. It is irrelevant if the school logo is on the item or that the item will be utilized by a student in a school group for a school function. School districts, schools, and school groups making sales of taxable items that do not have a specific exemption must collect and remit the sales tax. The items or activities on the following lists have been identified as being taxable or non-taxable by the Texas Comptroller of Public Accounts when sold or sponsored by a school, by an organization within a school, PTA s, Booster Clubs, and employee associations. Taxable Sale Public schools and school-related organizations must collect sales tax on all sales which are not specifically exempted. All non-food items sold through a school-sponsored outlet or by a school-associated organization are subject to sales tax. See Taxable Sale Reference Guide (Exhibit 16-07) for more information. The following list of taxable sales is not all-inclusive, but is offered as a guide: Agriculture sales Auction items sold Bakery products when sold with plates or eating utensils (i.e., pies, cakes, cookies, bagels and muffins) Books (i.e., planner) Calculators Calendars Clothing Copies Craft sales Cups Directories Equipment (i.e., athletic, band, etc.) Flowers Horticulture sales ID cards Magazines (subscriptions less than six months) Pictures (when GPISD is the seller-easter Bunny & Santa pictures) Publications (i.e., event programs, posters, yearbooks, etc.) Rentals (i.e., equipment, instruments, uniforms, etc.) Spirit items (i.e., clothing, pennants, car decals, yard signs, etc.) Supplies (i.e., art, hygiene, music, physical education, science, school, etc.) Uniforms (i.e., athletic, band, cheerleader, dance/drill team, physical education, etc.) Vending non-edible items when school services the machine (i.e., pencils) Page 16-7

8 Section 16: Activity Funds & Booster Clubs Sales tax must be collected on merchandise other than food products. If the school assumes responsibility for the activity and/or sale, the school is responsible for ensuring the sales tax is paid. The school may purchase items tax-free and must collect the tax when the items are sold. Non-Taxable Sale Public schools and school-related organizations are not required to collect sales tax on sales, which are exempt. See Non-Taxable Sale Reference Guide (Exhibit 16-08) for more information. The following list of non-taxable sales is not all-inclusive, but is offered as a guide: Ad sales (i.e., newspaper, program, yearbook) Admission (i.e., athletic events, banquets, dances, school performances, summer camps, clinics, workshops, project graduation) Discount cards and books Fees (i.e., competition, entry/participation, tournament entry) Food (i.e., candy, cokes, popcorn, cookie dough, ice cream) Permits (i.e., parking) Rental (i.e., facility) Services (i.e., automotive, car wash, cosmetology (Note: Service is not taxable but parts and products sold are taxable) Tax-Free Days Each school district, each school, and each bona fide chapter of each school is allowed to have two, one-day taxfree sales each calendar year. During these tax-free sales, the organization may sell any taxable item tax-free. The exemption does not apply to items sold for more than $5,000, unless the item is manufactured by the organization, or the item is donated to the organization and is not sold to the donor. There is no limit on the number of bona fide groups at a school or school district. A bona fide chapter 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 (not just participatory captains), holding meetings, and conducting business are bona fide chapters of the school and each group may have two, one-day, tax-free sales in a calendar year. Groups meeting for classroom instruction or sport teams are not categorized as bona fide chapters and do not qualify for the tax-free day sales. For example: The school district qualifies for a tax-free day. The school-wide fundraiser qualifies for a tax-free day. The Basketball Club qualifies, but the basketball team does not. The Cheerleader Club qualifies, but not the cheerleader team. The Debate Club qualifies, but debate teams and classes do not. The French Club qualifies, but the French classes do not. The Senior Class qualifies, but not one particular class that has seniors in it. Page 16-8

9 One Day Definition One-day means 24 consecutive hours. The delivery should be made on a single day. Generally, title passes to the purchaser when the item is given to the purchaser. In the case of pre-ordered and pre-paid sales, title can transfer as soon as the seller (school) receives the order. Therefore, the date the items are delivered by the vendor to the seller is designated as the one-day for the purposes of the tax-free sales. However, persons buying from surplus stock on subsequent dates after the tax-free day owe sales tax on the items, unless sold at the group s other taxfree fundraiser. Example: Advance orders are taken on yearbooks throughout the school year. The yearbooks are delivered on July 31 st. Students may pick up books on or after that date. Students who prepaid or who purchased a yearbook on or before July 31 st do not have to pay sales tax. Those who decide later to purchase a yearbook must pay sales tax because the one day has passed. When the school or school group receives a commission (Vendor Sale), the tax-free day sale provision cannot apply because the sale is the vendor s sale, not the school s sale. The school group would collect and remit the tax to the vendor, and the vendor would report the sale and remit tax to the Texas Comptroller of Public Accounts. Food Sales The sales tax statute exempts the sales of food, including meals, soft drinks, and candy, by a group associated with a public, private elementary, or secondary school when the sales are part of a fundraising drive sponsored by the organization, and all net proceeds from the sale go to the organization for its exclusive use. Student groups, PTA s, and Booster Clubs are included in this provision. It does not matter if the sale is during the school day, the evening, or on a weekend; if it s a fundraiser, it is not taxable. The only time a food sale is taxable is when bakery products (including but not limited to pies, cakes, cookies, bagels and muffins) are sold with plates or eating utensils. Monthly Reporting The Texas Comptroller of Public Account website ( provides information about sales tax returns and payments. The District is required to file monthly sales and use tax returns with the Texas Comptroller of Public Accounts on or before the 20th day of the month following the month in which the taxes were collected. In order for us to meet this deadline, all sales must be reported to the Accounts Payable Department by the 5 th working day of each month on the on the Sales Tax Report (a two part form including Organization Sales Tax Reports and Monthly Sales Tax Report). If a return is filed late, penalties and interest will be charged. If all sales are not reported in the correct month and have to be reported at a later date, the report may not be considered filed on a timely basis since it was incomplete; therefore, penalties may apply. If there were no sales for the month, a Monthly Sales Tax Report with a zero balance, with both financial clerk and budget manager signature must be turned in. Page 16-9

10 Section 16: Activity Funds & Booster Clubs Exhibits Exhibit 16-01: Booster Club Checklist Page 16-10

11 Exhibit 16-02: Texas Sales and Use Tax Exemption Certification Page 16-11

12 Section 16: Activity Funds & Booster Clubs Exhibit 16-03: Texas Sales and Use Tax Resale Certificate Page 16-12

13 Exhibit 16-04: Revenue Decision Tree Page 16-13

14 Section 16: Activity Funds & Booster Clubs Exhibit 16-05: Sales Tax Report - Organization Sales Tax Report Page 16-14

15 Exhibit 16-06: Sales Tax Report - Monthly Sales Tax Report Page 16-15

16 Section 16: Activity Funds & Booster Clubs Exhibit 16-07: Taxable Sale Reference Guide Taxable Sale Agriculture sales Art (i.e., supplies and works of art) Athletic (i.e., equipment and uniforms) Auction items sold Automotive (i.e., parts and supplies) Bakery products when sold with plates or eating utensils (i.e., pies, cakes, cookies, bagels and muffins) Band (i.e., equipment, supplies, patches, badges, uniform sales or rentals) Books (when GPISD is the seller) (i.e., agenda, planner, workbooks, library, vocabulary) Brochure items Calculators Calendars Candles Clothing (i.e., school, club, class, spirit) Craft sales Cups (i.e., glass, plastic, paper) Directories (i.e., student, faculty) Equipment (i.e., athletic, band, etc.) Fees (i.e., copies, printing, laminating) Flowers (i.e., roses, carnations, arrangements) Food items when sold with plates or eating utensils Garage, rummage, and yard sales Greeting cards Handicrafts Horticulture sales Hygiene supplies ID cards (original card when they are sold to the entire student body, but not the fine for a lost ID card) Magazines (subscriptions less than six months or when sold individually) Musical supplies (i.e., recorders, reeds) PE uniforms, supplies Pictures (when GPISD is the seller) Plants (i.e., holiday greenery and poinsettias) Publications (i.e., event programs, posters, yearbooks, newspapers, etc.) Rentals (i.e., equipment, instruments, uniforms, etc.) Rings and other school jewelry School store (i.e., all items except food) Spirit items (i.e., clothing, pennants, car decals, yard signs, stadium seats, etc.) Supplies any item sold to students (i.e., art, hygiene, music, physical education, safety, science, school, etc.) Stationery Student Planner Uniforms (i.e., athletic, band, cheerleader, dance/drill team, physical education, etc.) Vending non-edible items when school services the machine (i.e., pencils) Page 16-16

17 Exhibit 16-08: Non-Taxable Sale Reference Guide Non-Taxable Sale Ad sales (i.e., newspaper, program, yearbook, athletic programs, posters) Admission (i.e., athletic events, banquets, dances, school performances, summer camps, clinics, workshops, project graduation, banquet fees, prom, homecoming, tournament fees, academic competition fees) Bakery Items (unless sold with plates and utensils) Concessions Discount/Entertainment cards and books Fees (i.e., competition, entry/participation, tournament entry) Food items sold during fundraisers (i.e., candy, cookie dough, pizza kits, mixes packaged for preparation at home) ID Cards Magazine subscriptions (greater than six months) Permits (i.e., parking) Rental (i.e., facility) Services (i.e., automotive, car wash, cosmetology (parts or products sold are taxable) Page 16-17