CAMPBELL UNION HIGH SCHOOL DISTRICT

Transcription

1 CAMPBELL UNION HIGH SCHOOL DISTRICT PARENT ORGANIZATION and BOOSTER CLUB OPERATING MANUAL Page 1

2 TABLE OF CONTENTS Page # Foreword 5 Why This Manual 6 ASB vs. Parent Organization or Booster Club 7 Parent Organization and Booster Club Basics 8 What Are Parent Organizations and Booster Clubs What Is the District s Relationship with Parent Organizations and Booster Clubs? Applying to Operate Your Parent Organization or Booster Club in the CUHS 8 Overview of Parent Organizations and Booster Clubs _14 Purpose of Parent Organizations and Booster Clubs Fundamentals of Parent Organizations or Booster Clubs Reminder The Free School Guarantee 16 Checklist: Forming a Parent Organization or Booster Club 18 How to Form a Parent Organization or Booster Club 19 Forming a Parent Organization or Booster Club & Electing Officers Prepare Constitution and Bylaws Incorporation, Obtaining Tax-Exempt Status, Charity Registration, and Other Filings Obtain Board Approval California Sales and Use Tax 34 Sales and Use Tax / Obtaining Seller s Permit Sales and Use Tax Parent Organizations and Booster Clubs Sales Tax Exempt Selling Requirements Annual Approval to Operate Your Parent Organization or Booster Club in the CUHSD Operating a Parent Organization or Booster Club 33 Use of CUHSD School Facilities Relationship and Interaction with CUHSD Personnel Donations Page 2

3 Donating Funds for Supplies or Equipment to the District Must Not Purchase Supplies or Equipment to be Donated Independently Providing Funds for Transporting Students To and From Events Making Purchases for School Programs Scholarships Purchases for the Parent Organization or Booster Club Payments to CUHSD Employees Athletic Department Employees and Other CUHSD Employees California Interscholastic Federation (CIF) Insurance Requirements Limits on the Liability of the District -General Limit of Liability of CUHSD Use of the District s Copy Services Sub-Parent Organizations and Sub-Booster Clubs Guidelines for Successful Financial Management 43 Managing Internal Controls: Creating a Sound Financial Structure Internal Controls Assist as Deterrents to Possible Fraud Managing the Budget Managing Cash and Funds Financial Reporting Annual Audit / Review Requirements Other Governance The California Nonprofit Integrity Act SB 1262 Records Storage, Retention, and Public Inspection When to pay for Independent Contractor Services The Areas That Get Organizations and Clubs In Trouble 73 Alcohol and Tobacco Sale of Goods or Merchandise Food Sales Raffles Bingo Page 3

4 Illegal Gambling Scrip Private Inurement, Cooperative Fundraising and Individual Fundraising Accounts Branding Auctions Capital Improvement Do s and Don ts 81 Resource 83 Exhibits and Sample Forms 85 A. F. IRS Form W-9 Request for Taxpayer ID Page 4

5 FOREWORD Thank you for your parent organization s or booster club s time and commitment to the students of Campbell Union High School District. The Board of Education recognizes that parents may wish to form parent organizations for the purpose of supporting district activities and helping achieve the District s vision for student learning. The term parent organization may include a booster club, PTA, PFA, or any other organization that generally raises money for classroom activities or activities at specific schools. The Board supports such activities and welcomes parental interest and participation. CUHSD Board Policy 1230 (a) School-Connected Organizations Page 5

6 WHY THIS MANUAL This manual was developed because the district appreciates the many parent organizations and booster clubs that have spent so much time and energy supporting our schools. We recognize that parent organizations and booster clubs are trying their best to comply with the various rules and guidelines that effect how they interact and function with the district. This manual is designed to provide as much information as possible to assist in operating parent organizations or booster clubs, including the following: Many of the forms the district business office and school site(s) require to legally operate within the District, Guidance about how to operate as a business, What financial records, accounting policies and procedures should be used, and Many other operational best practices. We understand that many of the volunteers, parents and other dedicated supporters of our schools do not have a business background. We encourage you to contact your school site principal, as they are designated by the District Board of Education (Board) to provide oversight of all parent organizations and booster clubs operating at each school site. The school site principal can also assist you with the district s rules and regulations that pertain to parent organization or booster clubs so that you can continue to support the critical school programs with as much clarity as possible. The district business office is also available to assist you and will be providing on-going training to further guide your organization. (Banker Mention) Because the district is responsible for the activities which occur at school facilities and school functions, and has a responsibility to provide policies and procedures resulting in oversight of school-connected organizations and activities, only those parent organizations and booster clubs that are approved by the Board and operating under the policies and procedures established within this manual and board policy will be authorized to operate as a school-connected organization and allowed to use CUHSD school facilities in support of district programs. Specific questions regarding forming and operating parent organizations or booster clubs should be directed to the school site administration or the district business office. We have also included in this manual considerable guidance pertaining to raffles and bingo because of the specific requirements pertaining to both. Thank you again for your continued support. Page 6

7 ASB vs. Parent Organization or Booster Club Associated Student Body (ASB) is often referred to as Student Government or Student Leadership. ASB represents official school clubs. ASB An ASB is an organization run by currently enrolled students to benefit and conduct activities on behalf of students. All ASB organizations at district school sites are legally considered part of the CUHSD and operate under the district s Employer Identification Number (EIN). ASB organizations may conduct fundraisers and spend money for the benefit of currently enrolled students. Parent Organization or Booster Club Parent organizations and booster clubs are formed by parents, community members, and staff members to support school activities (e.g. music groups, athletic teams, debate teams). Parent organizations and booster clubs must have their own separate Employer Identification Number (EIN). Parent organizations and booster clubs are NOT legally a part of the CUHSD. The primary role of a parent organization or booster club is to enrich students' participation in extracurricular school activities. Page 7

8 PARENT ORGANIZATION AND BOOSTER CLUB BASICS WHAT ARE PARENT ORGANIZATIONS AND BOOSTER CLUBS? Parent organizations and booster clubs are formed by parents of students, community members, and staff members to financially assist and support student activities and groups with the cost of events, supplies, equipment and general expenses. WHAT IS THE DISTRICT S RELATIONSHIP WITH PARENT ORGANIZATIONS AND BOOSTER CLUBS? Parent organizations and booster clubs are legally separate from the district, and are not under the legal control of the district superintendent, board of education, site administrators, other district staff or students. Parent organizations and booster clubs are also separate from CUHSD Associated Student Body (ASB) organizations. Parent organizations and booster clubs must not administer or supervise ASB organizations. ASB activities must remain completely separate from parent organizations and booster clubs. Parent organizations and booster clubs must never comingle their funds with ASB, or district funds. APPLYING TO OPERATE A NEW PARENT ORGANIZATION OR BOOSTER CLUB IN THE CUHSD All CUHSD parent organization or booster club authorizations are subject to revocation by the superintendent or superintendent s designee if deemed necessary. The superintendent shall be required to provide the Board with a report supporting their findings within ten (10) business days of revocation. California Education Code section states: No person shall solicit any other person to contribute to any fund or to purchase any item of personal property, upon the representation that the money received is Page 8

9 to be used wholly or in part for the benefit of any public school or the student body of any public school, unless such person obtains the prior written approval of either the governing board of the school district in which such solicitation is to be made or the governing board of the school district having jurisdiction over the school or student body represented to be benefited by such solicitation, or the designee of either of such boards. The CUHSD has established Board Policies and Administrative Regulations requiring that all parent organizations and booster clubs must comply with the following or their authorization to operate can be revoked: 1. Annually request authorization to operate by applying by May of each year to the CUHSD Board of Education. (Exhibit A) 2. As part of each parent organization or booster club s application for authorization by the district, the parent organization or booster club must: a. Provide evidence of California state and federal 501(c)(3) tax-exempt status, b. Provide proof that each parent organization or booster club has its own Employer Identification Number (EIN). Proof and Evidence: Proof of tax-exempt status means presenting of an IRS Determination Letter. The IRS Determination Letter is the IRS document that formally recognizes a nonprofit as a 501(c) (3) tax exempt organization. To obtain an IRS Determination Letter, each parent organization or booster club must submit IRS Form Application for Recognition of Exemption to the IRS. If your organization has submitted Form 1023 to the IRS and you are waiting for your IRS Determination Letter, the district will accept a full and complete copy of your Form 1023 in lieu of the IRS Determination Letter for up to nine months until the IRS Determination Letter is received. In addition, while your organization is waiting to receive Form 1023 approval, the district will also accept a copy of your IRS-approved Form SS-4 -Application for Employer Identification Number or an IRS notification of EIN being assigned. California Secretary of State approved Articles of Incorporation, Statement of Information, and the non-profit s internally approved Bylaws are acceptable as evidence of California State tax-exempt status because an EIN, Articles of Incorporation and Bylaws are necessary for the successful completion of IRS Form Page 9

10 3. As part of the parent organization s or booster club s annual application for authorization, each parent organization or booster club officer must submit a signed CUHSD Parent Organization or Booster Club Operating Manual Acknowledgment form. (Exhibit B) 4. As part of the parent organization s or booster club s annual application for authorization, each parent organization or booster club must submit a signed CUHSD Hold Harmless Agreement. (Exhibit C) 5. As part of the parent organization s or booster club s annual application for authorization, each parent organization or booster club must submit the prior year s annual Profit and Loss or Income Statement showing details of revenue and expenditures for all fundraising events and a Balance Sheet as of the last day of the fiscal year. When the organization is newly formed or does not have any financial activity to report, the organization must submit a proposed budget for the first year of operation. 6. As part of the parent organization s or booster club s annual application to operate, each parent organization or booster club must submit a copy of its current articles of incorporation, constitution and bylaws. Once submitted to the district, if there are any changes to the organization s or club s articles of incorporation, constitution, or bylaws, the district must be provided copies of the changes for district review prior to the organization conducting any further activities. 7. Once granted authorization to operate, each parent organization or booster club must submit complete, up-to-date financial statements (Balance Sheet and Income Statement) to the school site principal and the CUHSD business office twice each year. The two financial report submissions should represent the July 1 st December 31 st time period or six months ended December 31, and January 1 st June 30 th time period or six months ended June 30 th. The December 31 st and June 30 th financial reports should be submitted no later than 30 days after the end of the reporting period (January 30 and July 30 each fiscal year). All financial statements submissions must contain up-to-date information on the parent organization s or booster club s revenue and expenses as well as the net gain or loss for each fundraiser held. 8. In addition, and as an express condition of approval, all parent organization and booster club s officers must attend the district s Annual Parent Organization and Booster Club Workshop. Page 10

11 CONTINUING TO OPERATE A PARENT ORGANIZATION OR BOOSTER CLUB IN THE CUHSD All CUHSD parent organization or booster club authorizations are subject to revocation by the superintendent or superintendent s designee if deemed necessary. The superintendent shall be required to provide the Board with a report supporting their findings within ten (10) business days of revocation. All CUHSD parent organizations and booster clubs must comply with all of the following rules or their authorization to operate can be revoked: 1. Parent organizations and booster clubs must not imply any form of responsibility for or sponsorship of their fundraising events by the district, school site or ASB. 2. Parent organizations and booster clubs are not legal components of the school district and must have their own EIN. Parent organizations and booster clubs are never allowed to use the CUHSD EIN. 3. Parent organizations and booster clubs are responsible for maintaining their own taxexempt status, accounting, financial records and income tax reporting to both the federal and state government. 4. Parent organizations and booster clubs must not comingle their funds with ASB or district funds 5. Parent organizations and booster clubs cannot use the ASB or district funds as a passthrough for parent organization or booster club funds. 6. Parent organizations and booster clubs must submit annually to the district business office a Certificate of Liability from their insurance company and a signed Hold Harmless Agreement. (Exhibit C) 7. Parent organizations and booster clubs must submit annually to the district business office a member roster of names and a contact list of officers complete with addresses, phone numbers and addresses. (Exhibit D) 8. Parent organizations and booster clubs must carry their own liability insurance in an amount equal to or exceeding the minimum coverage amounts determined by the district. (See the Insurance Requirements section later in this manual) 9. Parent organizations and booster clubs must submit mid-year (as of December 31 st ) and end-of-year (as of June 30th) financial statements to the CUHSD business office no later Page 11

12 than 30 days after the close of reporting period. Before submission, the financial statements should be reviewed and signed by the organization s treasurer. 10. The parent organization or booster club should submit annually to the CUHSD business office a copy of their non-profit federal and state tax return forms 990, 199, and, if applicable, Registry of Charitable Trusts form RRF-1. These federal and state forms should be submitted to the district business office no later than 30 days from the date of filing. 11. Each parent organization or booster club must have its own bank account in the name of the organization separate from the district and/or ASB. a. A copy of the bank account statement and list of authorized signers must be annually submitted to the district business office. (Exhibit E) 12. Parent organizations and booster clubs are authorized to operate for a period of one year. Renewal applications received by May and approved by the governing board authorize the organization to operate in the subsequent school year. a. If the renewal application is not submitted by May, the organization may not operate until specific district authorization is received. 13. Any rules and regulations developed by the parent organization or booster club must conform to California law, the CUHSD Board policies and administrative regulations, and all school site policies and procedures. a. This CUHSD Parent Organization and Booster Club Operating Manual must be adopted and approved by the organization s governing board and a copy of the meeting minutes where approval occurred submitted to the district business office. 14. All parent organization or booster club members must be made aware that no individual should personally benefit from the parent organization or booster club s activities. This provision must be made part of each parent organization s or booster club s bylaws. 15. If a parent organization or booster club dissolves or terminates, the parent organization s or booster club s constitution must provide for the distribution of any excess funds and assets to another non-profit organization, the parent organization or booster club s school site, the ASB or to the district. 16. All parent organizations and booster clubs must submit a proposed budget and list of proposed fundraising activities to the school site principal and district business office at the beginning of each school year in order for a determination to be made that there are no fundraising conflicts with other school activities, such as ASB. Page 12

13 17. If a parent organization or booster club wants to operate bingo or raffle fundraising events, the organization must understand that these events are strictly regulated by California Penal Code Sections and 320.5, and by county and city ordinances. Operation of bingo games or raffles without legal authorization to do so is considered gambling under California law and can be charged as a crime by the District Attorney. Parent organizations and booster clubs must never operate fundraisers they are not legally authorized to conduct. 18. All fundraising activities at any CUHSD school site are directly under the control of school site authorities and must be approved in advance per the governing s board Facility Use Policy. 19. Parent organizations and booster clubs ability to use school district facilities is regulated by California Education Code , otherwise known as the Civic Center Act. Page 13

14 OVERVIEW OF PARENT ORGANIZATIONS AND BOOSTER CLUBS PURPOSE OF PARENT ORGANIZATIONS AND BOOSTER CLUBS: Provide unified support for student school activities (e.g. music groups, athletic teams, debate teams). Raise funds for school activities and programs and for needed equipment and supplies. Enrich students' participation in school activities. FUNDAMENTALS OF PARENT ORGANIZATIONS AND BOOSTER CLUBS: Parent organizations and booster clubs are often referred to as school-connected organizations. o Parent organizations and booster clubs connect parents, staff and community members with the school curricular and co-curricular activities. Parent organizations and booster clubs MUST be legally separate from the district. The advisor or coach of an ASB or student group can serve as the liaison between the parent organization or booster club and the district, under the supervision of the school, which may include determining the various activities and trips for which the parent organization or booster club may fundraise for, with the approval of the school principal. Parent organizations and booster clubs MUST be authorized by the CUHSD Board before conducting fundraising activities on CUHSD property, having access to CUHSD students, or raising funds for CUHSD programs. Parent organizations and booster clubs MUST submit a list of proposed fundraising activities to the school principal and district business office at the beginning of each school year to determine there are no fundraising conflicts with other school activities, such as ASB. Parent organizations and booster clubs MUST always maintain a clear separation between the parent organization or booster club and a school site s ASB. Page 14

15 All activities and fundraising events based primarily upon student participation should be conducted through the ASB. o Parent organizations and booster clubs serve as auxiliaries to the school program and will conduct activities and fundraising events by relying primarily on parents, staff and other adult community members participation. o Funds raised by parent organizations and booster clubs should be used to support school programs either directly or through donations to the district to purchase equipment, supplies, uniforms, field trips, or other student activities. o Students may volunteer or assist parent organizations or booster clubs when it does not interfere with the students other school site obligations, and if approved by the principal. When a parent organization or booster club donates funds, or raises funds for, a school/asb or the district, it should state the specific purpose for which the funds are being donated. Once funds are donated and the donation is accepted by the district, the funds are the property of the district and may not be returned to the parent organization or booster club. Only the Campbell Union High School District Board of Education has the authority to accept or reject gifts, grants, and bequests. (CUHSD Board Policy 3290(a)) Parent organization or booster club funds must never be commingled with ASB, or any other district, funds. (If parent organizations or booster clubs comingle funds with ASB or other funds, those funds may be considered to have been donated to the ASB or district.) The district s tax-exempt status and identification numbers may not be used by parent organizations or booster clubs. Parent organizations and booster clubs are responsible for their own tax-exempt status, finances, accounting and audits. o Each parent organization s or booster club s tax identification number must be on file with the CUHSD s business office. A parent organization or booster club may never discriminate against students on the basis of their family s membership in, contributions to, or fundraising for the parent organization or booster club, or the family s time spent on parent organization or booster club activities. Page 15

16 REMINDER THE FREE SCHOOL GUARANTEE The California State Constitution contains a Free School Guarantee that generally entitles the youth of the state to be educated at the public s expense. The California Supreme Court in Hartzell v. Connell (1984) held that fees may not be charged for student participation in educational activities such as athletic programs, dramatic productions, and vocal/instrumental groups. WHAT DOES THIS MEAN? o Parent organizations and booster clubs may not require any fee as a prerequisite to student participation in educational activities. [CUHSD BP 1321 (a)] o No student may be required to raise funds in order to participate in school programs and events. (CUHSD BP 1321 (a)) o Parent organizations and booster clubs must always emphasize that all parent or student donations to a parent organization or booster club are voluntary. (CUHSD BP 1321 (a)) Some examples of parent organization or booster club related impermissible student fees include: Participation in any district or school site athletic or other extracurricular offering as band, choir, or drama. Hartzell v. Connell California Constitution, article IX, 5 Cal. Code Regs., title 5, 350 Students cannot be assessed a fee for a uniform; Students cannot be assessed a fee for supplemental equip if it is a required part of the uniform. This includes bows an spandex undergarments for cheerleaders/pep, hats for bas or a specific brand of shoe for a sports team; Students cannot be required to attend a camp and pay for as a condition for team participation. If camp is required, t the school site must pay for the team to go and/or student team must raise money to go; and Nor may a student who is a member of an athletic team or extracurricular offering, but who cannot afford to pay for c be prevented from attending a camp where the team participates in the camp as a team. o Example: cheer/pep where the team competes at wears the school site s uniform, wears practice uniforms, etc. Page 16

17 Deposits for school band instruments, m uniforms, and other regalia. Ed. Code, A fee or deposit is not permitted for band instruments, mu uniforms, and other regalia (required apparel or equipmen Students cannot be required to purchase or rent an instrum Exception: A deposit is allowed for school band instrumen music, uniforms or other regalia when, and only when, it is on an excursion to foreign countries. Admission to an exhibit, fair, theatre, or A student cannot be assessed an entrance fee to an exhibi similar activity for instruction or extracurricular purposes when a visit to theatre, or similar activity when entrance is part of the dist educational program. places is part of the district s educationa o An example would be when a school site visits a program museum as part of a class. Qualification: A student may be assessed a fee where the not part of the school site s educational program. o An example would be an end of the year trip to Disneyland, which is taken on the weekend, and w voluntary. Locks and/or lockers A student cannot be required to purchase a lock for a P.E. Ed. Code, or a lock for a normal locker. If the school site requires a lo and/or lock, then the student must be provided a lock and locker free of charge. Because of the Free School Guarantee, the CUHSD is grateful to the many parent organizations and booster clubs that fundraise and generate additional revenue to supplement so many of the school site and district programs. Without parent organization s and booster club s tireless efforts, many school programs would not be in existence. Page 17

18 CHECKLIST: FORMING A PARENT ORGANIZATION OR BOOSTER CLUB Note: These steps are further explained in detail on the identified pages. STEP ONE (page 22) Determine the name of the parent organization or booster club. Elect parent organization or booster club officers. Prepare a constitution and bylaws. STEP TWO (page 29) STEP THREE (page 30) Prepare and file Articles of Incorporation. File a Statement of Information with the California Secretary of State. Obtain an Employer Identification Number (EIN). Apply for Federal tax exemption with the Internal Revenue Service (IRS). Apply for California tax exemption with the California Franchise Tax Board (FTB). o REMEMBER - Parent organizations and booster clubs need both federal and state tax exemptions to conduct certain fundraisers (i.e. raffles). File the initial registration form with the California Attorney General s Registry of Charitable Trusts. STEP FOUR (page 33) Obtain CUHSD governing board approval. Page 18

19 HOW TO FORM A PARENT ORGANIZATION OR BOOSTER CLUB Because CUHSD s Administrative Regulation states: The school district s tax-exempt status and identification number are not for parent organization use. Each parent organization must be established as a nonprofit entity under section 501c (3) of the internal revenue code and must obtain its own tax identification number. Parent organization is responsible for their own tax filings and accounting. The funds of the parent organization must never be commingled with the student body funds or any other funds of the district All of the below steps must be completed before a parent organization or booster club can submit a request for authorization to operate in the CUHSD. STEP 1 FORMING A PARENT ORGANIZATION OR BOOSTER CLUB and ELECTING OFFICERS Determine the Name of the Parent Organization or Booster Club o A parent organization or booster club s name may not imply any connection with or any form of responsibility of the district, school site, or ASB. It is recommended that the name of the school or school mascot not be used in the name of the parent organization or booster club. o Parent organizations and booster clubs must not use the school or district address on its letterhead or any correspondence without the district s permission. Parent organizations and booster clubs should create their own unique logo/mascot, separate and distinct from the school site logo or the CUHSD logo. Membership in Parent Organization or Booster Club o Membership in parent organizations or booster clubs is limited to parents, community members, and school staff. A student may be a member in a booster club with approval from the school principal. Page 19

20 o The following limitations and rules are designed to help protect parent organizations or booster clubs and the district from conflict of interest and other types of allegations: CUHSD school staff members MAY NOT sign parent organization or booster club checks or invoices. Any CUHSD student advisor, coach, or teacher, whose own children may benefit from the operations of a parent organization or booster club may not serve as an officer in that parent organization or booster club; they may serve in an advisory capacity. Every parent organization or booster club must maintain ongoing communication with the school principal or designee. o Parent organization or booster club membership fees may be assessed for raising funds for specific projects, events or activities for the school but may not be required for membership in the parent organization or booster club. o Fees must never be required from students or from parents of students in order for the student to participate in school activities. o A parent organization or booster club may not unlawfully discriminate against any parents, community members, and staff who wish to participate in the parent organization s or booster club s activities. Fingerprinting o Any parent organization or booster club member who will come into contact with students must complete the CUHSD volunteer clearance process under CUHSD BP 1240/AR 1240, which includes: The CUHSD school volunteer program application registration TB test Fingerprinting Criminal Records Check o Until the volunteer clearance process is complete, parent organization or booster club members are not allowed to provide assistance for parent organization or booster club activities involving student participation. Page 20

21 Electing Parent Organization or Booster Club Officers BEST PRACTICES, TIPS & POINTERS o All parent organization or booster club officers should be elected annually. o All parent organization or booster club officers must provide complete contact information to the district business office and school principal or designee. (Exhibit E) o The district business office and school principal or designee must be notified in writing of any change in parent organization or booster club officers within 10 days of the change. (CUHSD AR 1230 (b)) o All members of a parent organization s or booster club s executive board are legally obligated to be prudent and reasonable in conducting themselves in order to preserve parent organization or booster club funds and legally protect the organization. o Each parent organization or booster club officer must read this manual and return a signed acknowledgement form (Exhibit D) to the business services department before the first parent organization or booster club meeting of each school year. o All parent organization or booster club executive board members must actively participate in the management of the parent organization or booster club including attending meetings, evaluating financial reports, and reading minutes. o Compensation: No member, management, executive, governing board member, committee member, etc. should be compensated to participate in the parent organization or booster club. o District employees may not serve in a financial capacity for any booster or parent organization. This includes holding any parent organization or booster club board or officer positions such as: Treasurer Bookkeeper Fundraising chairperson Check signer Person designated to collect any fees, donations, checks, or cash Page 21

22 Description of Parent Organization or Booster Club Officers Duties Parent Organization or Booster Club President o When possible, should be an individual previously active in the parent organization or booster club so they are familiar with the parent organization or booster club s history, procedures, finances, and goals. o Presides at all parent organization or booster club meetings. o Regularly meets with the designated school site district representative regarding planned parent organization or booster club activities. o Resolves problems between parent organization or booster club members. o Meets monthly or more often with the parent organization or booster club s treasurer to review finances. o Designates a parent organization or booster club officer to receive bank statements through the mail at their mailing address. The individual receiving the bank statements must not be a signer on the account. Upon receipt, the designee must review the bank statement against the previous month s statement for expenses and deposits and insure that the Treasurer performs the bank reconciliation of the bank statement to the organization s accounting books within 30 days of receiving the bank statement(s). o Schedules an annual internal review of the parent organization s or booster club s financial records and, if so chooses, conducts an annual independent audit by a qualified certified public accounting firm. The president may designate that the review be performed and signed off by the organization s treasurer. o Requires an independent certified public accounting firm audit whenever serious financial issues occur within the parent organization or booster club. Parent Organization or Booster Club Vice President o Acts as the president s representative in their absence, and must also be familiar with the parent organization s or booster club s operations and finances. o Presides over meetings in the absence or inability of the president to serve. Page 22

23 o Performs administrative functions delegated by the president. Parent Organization or Booster Club Secretary o Responsible for keeping accurate records of the parent organization or booster club s proceedings and reporting to the parent organization or booster club s members. o Must ensure accuracy of meeting minutes and have thorough knowledge of the parent organization s or booster club s meeting procedures. o Reports any recommendations or actions of the executive board. o Records all business transacted at each meeting. o Maintains membership attendance records. o Conducts and reports on all parent organization or booster club correspondence. Parent Organization or Booster Club Treasurer o Due to constantly increasing requirements for charitable organization financial record keeping by the Internal Revenue Service, it is strongly recommended that all parent organization or booster club treasurers have an accounting or bookkeeping background, and that the parent organization or booster club treasurer frequently consult with a certified public accountant. o The treasurer is the authorized custodian of all parent organization or booster club funds, financial records and other financial documents. o The treasurer receives and disburses all monies as indicated in the parent organization s or booster club s yearly budget or authorized by action of the parent organization s or booster club s executive board. o The treasurer serves as chairperson of the parent organization s or booster club s budget and finance committees. o The treasurer issues receipts for monies received and deposits all monies weekly (or daily, whenever cash receipts on hand exceed $250.00). Page 23

24 o The treasurer submits current financial reports including bank statements, bank reconciliations, and financial statements to the district s business office within thirty (30) days of December 31 st and June 30 th each year. Copies of parent organization or booster club s financial statements and tax returns should always be available for review by the parent organization s or booster club s general membership, upon request. o The treasurer files current financial reports at the end of each semester (December and June) with the parent organization s or booster club s executive board and CUHSD business office. o The treasurer maintains accurate and detailed record of all monies received and disbursed. o The treasurer reconciles all bank statements within 30 days when received and resolves any discrepancies with the bank immediately. o The treasurer files sales tax reports (when applicable) as required by the California State Comptroller s office and California State Board of Equalization (monthly, quarterly, annually). o The treasurer timely files annual federal and state tax forms and returns. o The treasurer submits financial records to the parent organization s or booster club s audit committee or independent auditor upon request, and during the annual parent organization s or booster club s audit. o The treasurer assists the parent organization s or booster club s executive board in maintaining the parent organization s or booster club s state and federal nonprofit status. PARENT ORGANIZATION OR BOOSTER CLUB GOVERNANCE Special Committees o Special committees are created for a specific purpose and voted upon by the parent organization s or booster club s membership. o Special committees should automatically dissolve as soon as their purpose is accomplished and the committee report is made. Page 24

25 STEP 2 Special committees should complete their assignments within each school year. If objectives are not met by the end of the school year, parent organization or booster club officers should be required to reappoint members of the committee for the following year, until the purpose of the committee has been achieved. o Individuals who have a conflict of interest because of the special committee s specific purpose should not serve as members of the committee. Example: Parents that have students likely to be considered to receive athletic or academic scholarships should not serve on the scholarship committee. Audit Committee o Annual internal reviews or independent external audits of the parent organization s or booster club s financial records must be conducted. o The annual review should be performed by at least two individuals who are independent from the parent organization s or booster club s day-to-day financial activities. If two independent individuals are not available, the treasurer may conduct the review with one other independent individual. All review reports should be signed by those conducting the review and the organization president. o An annual external audit conducted by a certified public accountant is highly recommended. All financial discrepancies discovered during the review or audit must be brought to the parent organization or booster club president s attention. A plan for resolving all review or audit exceptions and financial discrepancies must be proposed to the parent organization s or booster club s governing boards immediately. o The organization must make all parent organization or booster club financial records available upon request of the audit committee, any organization board members or the school site principal or CUHSD business office. PREPARE CONSTITUTION AND BY-LAWS All parent organizations and booster clubs must have a constitution and by-laws. Page 25

26 At a minimum, a parent organization s or booster club s constitution must include the following elements: 1. Name and purpose of the organization. 2. Membership and Tenure. a. Who can join? b. How many members? c. What officers? d. Who has voting rights? e. Will those who move from the school attendance area be allowed to serve out their terms, if desired? f. What are the procedures for removing someone from office? g. How long will they be allowed to serve? h. Will they be allowed to serve consecutive terms? If so, how many? i. How will unexpired terms be filled when vacancies occur? j. Will leaves of absence be permitted? 3. Executive Board or Officers. a. Positions and duties of each position defined b. Position and term limitations (recommended not to serve for more than two consecutive fiscal years in any one position) 4. Method of amendments to the constitution. a. By who? b. By petition of a percentage of members. c. By ballot? 5. Adoptions or ratification of constitution and any subsequent amendments. a. Shall require (percentage) vote of (executive board) A parent organization s or booster club s bylaws should include the following elements: 1. Duties and powers of executive board and officers. 2. The composition and membership of committees. 3. Succession to office 4. Elections and qualification for office. 5. Finances. a. Statement of internal controls, authorization of financial activities. b. Who shall approve prior to any commitment. c. Statement determining distribution of assets upon dissolution to another nonprofit organization, the parent organization s or booster club s school site or ASB, or to the district. Page 26

27 6. Meeting schedule/notice required a. For regular and special sessions b. Time, manner, frequency c. What constitutes a quorum? d. Who shall conduct meetings? 7. Procedures for resignation of parent organization or booster club officers 8. Procedures for filling vacancies in elected officer positions and term of replacement officer. 9. Termination of officers for failing to attend two consecutive noticed meetings without cause or notice to other parent organization or booster club officers. STEP 3 INCORPORATION, OBTAINING TAX-EXEMPT STATUS, CHARITY REGISTRATION, AND OTHER FILINGS INCORPORATE in California o Submit Articles of Incorporation to: Secretary of State, Business Entities PO Box Sacramento, CA Website: Filing fee: $30 o Articles of Incorporation typically identify: The parent organization s or booster club s name; Purpose or purposes of the parent organization or booster club; Agent for service of process a person whose name and address are identified and who can receive lawsuits and other official correspondence and other matters; The incorporator must sign the articles of incorporation. Page 27

28 o Within 90 days of filing the Articles of Incorporation, submit California State Form SI-100 (Statement of Information). The SI-100 form may be filed online at mailed to: Secretary of State Statement of Information Unit P.O. Box Sacramento, CA Website: Filing fee: $20 Obtain an EMPLOYER IDENTIFICATION NUMBER (EIN) Since parent organizations/booster clubs are NOT legal components of the school district, each parent organization or booster club must have its own EIN. o To obtain an EIN, parent organization or booster club officers or founders should carefully review, complete, and submit IRS Form SS-4, Application for Employer Identification Number. o Instructions: On-line application: Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online Obtaining FEDERAL TAX-EXEMPT STATUS o IRS Publication 557, Tax-Exempt Status for Your Organization o IRS Rules & Procedures: o To obtain federal/irs tax exempt status, parent organization or booster club officers and founders should carefully review, complete, and submit IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code o Form 1023 Instructions: o Form 1023 Application: Note: Upon approval, the IRS will issue a determination letter documenting the parent organization s or booster club s 501(c) (3) nonprofit, tax-exempt status. Page 28

29 Parent organizations and booster clubs cannot legally furnish donors with receipts for a charitable tax deductible donation unless they have obtained the IRS official determination letter. Obtaining CALIFORNIA STATE TAX-EXEMPT STATUS o Parent organizations and booster clubs with a 501(c) (3) federal IRS determination letter can obtain California affirmation of tax exemption from the California State Franchise Tax Board by carefully reviewing, completing, and submitting Form 3500A along with a copy of the IRS determination letter. There is no fee. Form 3500A: o Parent organizations and booster clubs WITHOUT a 501(c) (3) federal IRS determination letter are STILL required to file Form 3500 for state income tax exemption. There is a $25 fee. Form 3500: Note: FTB Form 3500A can only be used by organizations that have a federal IRS determination letter under Internal Revenue Code (IRC) Section 501(c) (3). CHARITY REGISTRATION California Attorney General o Charities are required to register with the California Attorney General s Registry of Charitable Trusts. Any parent organization or booster club that is organized as a nonprofit corporation with California and/or has federal tax exempt status must register with the California Attorney General s Registry by filing corporate documents no later than 30 days after initial receipt of assets. All registered charities must file the Annual Registration Renewal Fee Report to Attorney General of California, Form RRF-1 annually. o Registered charities must also file Form 990, 990-ES, or 990-PF annually. o Forms and instructions can be found at STEP 4 OBTAIN BOARD APPROVAL Page 29

30 o As part of its legal and fiduciary responsibilities under California Law, the Campbell Union High School District Board of Education must approve all parent organizations or booster clubs and school-connected organizations. o CUHSD board policy requires that all parent organizations or booster clubs request authorization from the CUHSD Board of Education by a board meeting held in May of each year. If your parent organization or booster club is not active or forms after the May board meeting, you may submit your request for authorization at any time but may not operate in the district until authorization is received. o Each parent organization or booster club must complete the CUHSD Parent Organization or Booster Club Request for Authorization to Operate form. o All renewal requests to continue operating a parent organization or booster club require an updated annual application. o Renewal applications were discussed in detail above at section, WHAT MUST A PARENT ORGANIZATION OR BOOSTER CLUB DO TO CONTINUE OPERATING IN THE CUHSD Page 30

31 PARENT ORGANIZATION OR BOOSTER CLUB AND CALIFORNIA SALES AND USE TAX It is important to know about sales and use tax in California. The State Board of Equalization can audit parent organizations and booster clubs. SALES AND USE TAX /OBTAINING A SELLER S PERMIT 1. Parent organizations and booster clubs can apply for a California Seller s Permit online at 2. Parent organizations and booster clubs ARE NOT sales tax-exempt, unless they have filled out the proper application forms from the California Franchise Tax Board. 3. Organizations that have applied for and received a letter of sales tax exemption do not have to pay sales and use tax when they buy, lease or rent taxable items necessary to the organization s exempt function. No item purchased tax-free by an exempt organization can be used for the personal benefit of a private party or other individual. SALES AND USE TAX PARENT ORGANIZATIONS & BOOSTER CLUBS SALES TAX EXEMPT SELLING REQUIREMENTS o Publication 18, Non Profit Organizations at describes at section Schools, Parent-Teacher Associations, Children s Organizations, Youth Organizations, and Children s Clothing, the permit and tax requirements. o Summarizing Publication 18, parent organizations and booster clubs may not be required to hold California seller s permits or pay tax on sales but should pay sales tax on items they purchase. Of course a parent organization or booster club may enter into more complex retail selling arrangements that will require a seller s permit, resale certificate, and require collecting and paying sales tax. o Nonprofit parent-teacher associations and equivalent organizations (i.e. parent organizations and booster clubs) authorized by the CUHSD Board of Education are considered to be consumers of the products they sell and the profits from the sales must be exclusively to further the organizations purpose. To be considered Page 31

32 an equivalent organization, according to Publication 18, the organization must meet the following conditions: 1. It is a nonprofit that includes parents. 2. The group s objectives include enhancing the welfare of all of the students in the school and developing better communications between parents and school authorities. (Groups such as athletic booster clubs, whose efforts are directed toward a select group of students rather than all students, are not considered equivalent organizations). 3. The group is authorized to operate in the school by the school s governing authority. (This is another reason why the district must have each parent organization or booster club formally apply each year and be approved by the Board of Education.) 4. The profits from the group s sales are used exclusively to advance the group s purpose. If your parent organization or booster club meets the conditions described above or your organization is a chartered PTA, the State Board of Equalization considers your organization to be a consumer of the products you sell as long as you use the profits from the sales to only advance your organization s purpose. By meeting these requirements, it means your parent organization or booster club is generally not required to hold a California seller s permit or file sales and use tax returns. For more information on sales and use tax, you may contact the California Board of Equalization at or call Page 32

33 OPERATING A PARENT ORGANIZATION OR BOOSTER CLUB IN THE CAMPBELL UNION HIGH SCHOOL DISTRICT USE OF CUHSD SCHOOL FACILITIES The school principal or designee must approve all on-campus parent organization or booster club activities, including when parent organization or booster clubs request to use CUHSD school facilities. Use of school facilities is regulated by California Education Code sections , known as the Civic Center Act. Fundraising at any school site is directly under the control of school authorities, such as the school principal, and must be approved by the site principal or designee prior to any activity. Any requests for use of school facilities must be filed with the CUHSD Facilities/Planning Department per Board Policy. ASB activities always have priority over parent organization or booster club activities for use of CUHSD school facilities. Parent organization or booster club on-campus activities must not conflict with school schedules or activities, or district activities which always take precedence over parent organization or booster club activities. PARENT ORGANIZATION AND BOOSTER CLUB RELATIONSHIPS AND INTERACTIONS WITH CUHSD PERSONNEL Parent organizations and booster clubs as a group may not attempt to influence any district or school representative, principal, or other administrator or act as a lobbying group concerning matters involving duties assigned to district personnel. (e.g. trips, staffing, schedules) Parent organizations or booster clubs may not be involved in the decisions of a coach or advisor, personnel issues, scheduling of contests, rules of participation, or policy making activities for any student group or extracurricular program. Parent organizations or booster clubs must not directly support political activities by providing campaign donations or placing advertisements in support of a particular candidate. Doing so could jeopardize the parent organization s or booster club s tax-exempt status. Page 33

34 If a candidate is running for office and is invited to join a meeting at your parent organization or booster club, an invitation must be extended to all candidates running for that office. Announcements of parent organization or booster club events and related parent/guardian permission slips must clearly indicate that the activity or event is sponsored by the parent organization or booster club, not by the school or district. Goods or services are NOT to be ordered in the name of the school or school personnel. School personnel are not to sign parent organization or booster club checks or invoices. Goods or services must be ordered in the name of the parent organization or booster club. CUHSD Board Policy AR 1230(b) states: To avoid conflict of interest, any student advisor, coach, or teacher whose students may benefit from the operations of a parent organization shall not serve as an officer in that parent organization but may serve in an advisory capacity. DONATIONS Parent organizations and booster clubs exist to assist school and ASB programs. Such assistance may be provided in the form of donations of cash, supplies, equipment and payment for student transportation to events. Parent organizations and booster clubs can donate to ASB accounts. Once the donated money is in ASB accounts the funds belong exclusively to the ASB and may not be used or influenced by parent organizations or booster clubs or transferred back to parent organization or booster club accounts. Donations to school programs must be processed in accordance with CUHSD board policy and administrative regulations. All donations to ASB must be accepted and approved by the ASB student council. Education Code section and CUHSD Board Policy 3920(a) provide that the CUHSD Board of Education may accept and approve any donations to a school or the district. Parent organization or booster club donating funds for supplies or equipment to the district: The parent organization or booster club must first donate the funds; The parent organization or booster club should clearly indicate the purpose of the donation; Page 34

35 The district will then carry out the purchase through its purchasing system and in accordance with district purchasing guidelines and California law. Parent organizations or booster clubs must not purchase supplies or equipment to be donated independently: When supplies or equipment are purchased from donated funds, the supplies or equipment become the property of the school and district. All equipment and supplies purchased for a school must be shipped to a district address. A parent organization or booster club address may not be used for purchases for schools made from donated funds. If a parent organization or booster club has supply or equipment items it wishes to donate to the school, the district Board of Education must approve the donation of the supply or equipment items and those items become the property of the school. Parent organizations or booster clubs providing funds for transporting students to and from events: The CUHSD school site must complete a CUHSD field trip request form; The district s business office will then bill the parent organization or booster club for the cost of the transportation. In no event may a parent organization or booster club remit payment directly to the transportation department. Parent organizations or booster clubs cannot directly contract for transportation with an outside agency. Parent Organizations or Booster Clubs making purchases for school programs: The parent organization or booster club can donate funds to the ASB or to the district. The ASB or district will then make the purchase following district purchasing procedures. PARENT ORGANIZATION OR BOOSTER CLUB SCHOLARSHIPS If a parent organization or booster club wishes to grant a scholarship to a district student, it must do so with adequate supporting documentation. Supporting documentation includes: Page 35

36 Documentation that shows the source of the scholarship funds; The parent organization or booster club board approval of the scholarship; and The method and criteria by which the scholarship recipient was selected. A vote among parent organization or booster club members or a vote of a scholarship committee should be part of the selection process for the scholarships. Any parent organization or booster club board member who has a direct relationship with the scholarship applicant must abstain from voting. PURCHASES FOR THE PARENT ORGANIZATION OR BOOSTER CLUB Purchases of supplies or equipment necessary for the day-to-day operation of the parent organization or booster club, and to conduct fundraisers must be made from parent organization or booster club funds. For example, if a parent organization or booster club runs a concession stand, the parent organization or booster club should purchase items to be sold from parent organization or booster club funds. The parent organization or booster club would then donate any profits from the concession stand to the ASB for specific student activities and/or purchases. Under no circumstances should the school ASB be purchasing supplies for parent organization or booster club activities. Parent organizations or booster clubs are not eligible for the district s special rates or discounted pricing. Parent organizations or booster clubs cannot make purchases under a district contract. Parent organizations or booster clubs should instead negotiate their own pricing, contracts, or discounts from vendors of their choice. CUHSD ASBs and the district itself cannot make any purchases for the benefit of or on behalf of a parent organization or booster club. Items necessary for parent organization or booster club fundraisers may not be purchased through any ASB organization, even if the parent organization or booster club provides the funding for the purchase. Page 36

37 This is considered commingling of parent organization or booster and ASB funds, is considered using the ASB as a pass-through, and is strictly prohibited. PARENT ORGANIZATION OR BOOSTER CLUB PAYMENTS TO CUHSD EMPLOYEES Parent organizations and booster clubs MAY NOT make direct payments to any CUHSD employee for services performed for the parent organization or booster club. Parent organizations and booster clubs MAY NOT make payments to CUHSD employees in the form of gift cards for services performed for the parent organization or booster club. If a parent organization or booster club wishes to make a payment to a CUHSD employee (e.g. a coach for services provided at a summer camp), it must follow the procedures outlined below. ATHLETIC DEPARTMENT EMPLOYEES & OTHER CUHSD EMPLOYEES Parent organizations or booster clubs MAY NOT hire any CUHSD employees to perform services for the CUHSD or a CUHSD school site without permission of the district business office. Procedures for parent organizations/booster clubs to pay for additional support personnel (e.g. additional coaching staff) 1. The parent organization or booster club must inform the site principal about the parent organization s or booster club s proposed hiring. The site principal must approve of the type of position being considered. The principal must then consult with the district s business office and human resources department regarding the legality of hiring the proposed position. 2. Upon approval of the human resources department, the principal will complete a personnel requisition and forward it to the human resources department for processing. 3. The district business office will collect and deposit the donation from the parent organization or booster club for the total cost of the employee. The Page 37

38 total cost of an employee may be the employee pay plus any applicable fringe benefits, reimbursed costs, or any other costs the may be incurred. If the parent organization or booster club employee paid through the district should work more or less than anticipated, the district business office retains the right to make the final determination of the employees pay. If the parent organization or booster club employee works additional hours or units of compensation described in the personnel requisition, the district business office will invoice the parent organization or booster club for the additional employee costs and the payment to the district office is due immediately. 4. The employee will be hired through normal channels, subject to all rules and regulations imposed by the district human resources department and California state and federal law. 5. The employee is not authorized to and should not perform any services until after the CUHSD Board of Education s approval and the district s receipt of donated funds to pay for the employee. 6. The employee will be paid by the district only after the above procedures have been completed. Payment will be made in accordance with applicable collective bargaining agreement and district procedures. o Parent organizations or booster clubs should deposit into the district account the proposed costs of each employee in advance of the fundraiser unless the parent organization or booster club has made other approved payment arrangements with the district business office in advance of the fundraiser. The parent organization or booster club funds must be sufficient to pay for the actual services plus any benefits due the employee. INSURANCE REQUIREMENTS Whether the CUHSD is legally liable for a parent organizations or booster club s conduct and activities may be based upon the nature of the relationship between the parent organization or booster club and the CUHSD. A lawsuit based upon a parent organization or booster club activity or fundraiser may likely also name the district and seek a finding of joint liability. Page 38

39 Whether the district is appropriately named in the lawsuit or not, the district may incur substantial legal expenses in defending the lawsuit. Therefore, parent organizations and booster clubs are highly recommended to provide the CUHSD with: Certificate of liability insurance naming the CUHSD as additional insured o The minimum required limits of coverage are: General Aggregate: $2,000,000 (annual) General Liability: $1,000,000 (per occurrence) Endorsement page naming the CUHSD as additional insured Declaration page, including any exclusions BEST PRACTICE: All parent organizations and booster clubs should purchase crime coverage or a fidelity bond and errors and omissions insurance in an amount great enough to cover the total cash assets of the parent organization or booster club. Additional information Any questions relating to insurance requirements should be directed to the district s Director of Risk Management. When using school facilities, the district may require a higher level of coverage based on the parent organization s or booster club s requested type of use at the district s sole discretion. The district may also choose to limit its liability by supervising and monitoring the activities of a parent organization or booster club while using CUHSD facilities. LIMITS ON THE LIABILITY OF THE DISTRICT GENERAL LIABILITY Parent organizations or booster clubs are not a school-sponsored student activity. Student participation in parent organizations or booster clubs or booster activities is always voluntary. Parent organizations or booster clubs are legally separate from the district. Page 39

40 They are not under the direct control nor are they the legal responsibility of school administration, district administration, or the Board of Education. Parent organization or booster club funds are not controlled by the district or by district students. Parent organizations or booster clubs must never be involved in administering or supervising activities of student organizations. Parent organizations or booster clubs must not cause others to believe they are in charge of or have any responsibility for school activities. This is especially a concern for sport or band parent organizations or booster clubs. School site and district administration advise parent organizations and booster clubs on district policies and procedures, and may as a condition of allowing the parent organizations and booster clubs to assist the schools, review or audit any parent organizations or booster clubs operations and finances. Any contractual or financial obligation incurred by a parent organization or booster club shall be solely that of the parent organization or booster club. No parent organization or booster club is authorized to operate within the district unless it executes and returns the Hold Harmless Agreement (attached as Exhibit E) annually upon submitting its application for authorization to the district. PARENT ORGANIZATION AND BOOSTER CLUB USE OF THE DISTRICT S COPY SERVICES Board-recognized CUHSD parent organizations and booster clubs may make use of district duplicating services for parent organization or booster club publications, under the following conditions: 1. Requests for duplication of classroom support materials will be prioritized ahead of requests from parent organizations and booster clubs. The Director of Printing, Graphics, and Mailing will provide a reasonable time estimate for each organizations duplicating project. 2. Project costs for materials, labor, and equipment usage will be billed to the parent organization or booster club. Project costs will be quoted by the Director of Printing, Graphics, and Mailing on a caseby-case basis. Page 40

41 3. A cash deposit may be required prior to duplication to cover the cost of the materials to be used. Programs requiring a deposit include duplicating football, band or spirit group programs, and memory books. These types of duplicating requests use special glossy paper that is not normally in stock. 4. A signed duplication authorization form will be required from the school site principal of the school supported by the parent organization or booster club, stating that I have read and examined this publication and approved its contents for distribution. (Exhibit??) 5. All parent organization or booster club publications must clearly state that they are sponsored by the parent organization or booster club, and not by the school or the Campbell Union High School District. 6. ALL parent organization or booster club publications must comply with all copyright and fair use laws and regulations. (CUHSD AR 1230 (b ) SUB-PARENT ORGANIZATIONS AND SUB-BOOSTER CLUBS Parent organizations and booster clubs are sometimes asked by well-meaning volunteers if they may use the parent organization or booster club name, EIN, or resources to put on some event or other service to further provide funding for a school site. Since only authorized parent organizations and booster clubs are allowed to operate in the district, many well-meaning parents and volunteers may seek out your district-approved organization/club as a means to piggy back on your approved status to conduct their event. If you choose to allow anyone to use your parent organization or booster club name, EIN, or resources to conduct an approved event held as part of your parent organization or booster club, you are responsible for the event. Because you are responsible as the authorized parent organization or booster club, you should make sure anyone your organization allows to operate under your district approved status: 1. Understands all of your operational and financial policies and procedures. 2. Understands all of the district board policies and regulations applicable to parent organizations and booster clubs. Page 41

42 3. Has received a copy of this manual and has read and understands what their responsibilities are. 4. Deposits all monies received for the event into your bank account. 5. Pays all expenses out of your bank account. 6. You record the event as one of your fundraising events and separately track the event as one of your events. 7. Obtains prior district and school site principal approval for the event just as you would have done if it were your event. 8. Be accountable and responsible for the event as your own event including but not limited to accounting for the event, staff management, records management, insuring all funds collected and deposited are always counted with a witness, and that school site students are not used for the event unless approved by the school site principal. We strongly recommend that if you find that your parent organization or booster club is continually asking your organization to sponsor other activities under your name, you should consider: Limiting the number of events your organization will sponsor before you encourage the volunteers to obtain their own non-profit status; Setting a fundraising dollar amount threshold before you encourage the volunteers to obtain their own non-profit status; or If you enjoy collaborating with the volunteers and find their goals align with yours, consider having them join your parent organization or booster club so you are one and the same in all aspects. Page 42

43 GUIDELINES FOR SUCCESSFUL PARENT ORGANIZATION OR BOOSTER CLUB FINANCIAL MANAGEMENT MANAGING INTERNAL CONTROLS: CREATING A SOUND FINANCIAL STRUCTURE BEST PRACTICES Parent organizations and booster clubs need internal controls just as do ASB s, school districts and any other well-managed business. Because parent organizations and booster clubs tend to experience a higher turnover of management and business staff, consistently following good business practices and internal controls can be challenging. Such turnover, the collection of a lot of cash, and many other reasons are also why parent organizations and booster clubs are often thought of as good targets for financial fraud. Because the CUHSD wants the parent organizations and booster clubs to be successful when contributing to the district s programs, we are outlining typical parent organization or booster club internal review and audit findings so that you can work to avoid them in your own parent organization or booster club operations. Not using sequentially numbered checks Poor disbursement documentation supported with complete and original receipts Improper authorization of expenditures by those with authorization authority Incomplete or missing financial statements Incomplete or missing bank reconciliations Incomplete or missing cash receipts and deposit documentation for fundraising events, concession sales, and other events Cash receipts and/or deposits were counted alone without any witness signatures Cash deposits by unauthorized individuals and without any witness Missing proper signatures for cash collections in one or all cash collection forms Checks issued to Cash Making payments of any kind including cash, check, or gift card to district employees. (This can cause serious IRS payroll tax issues for the organization, the employee, and the district whether or not you issue a 1099) Illegal gambling fundraisers Improper documentation, authorization, and committee voting for scholarships Poor or non-existent internal controls Poor or ineffective filing systems and records management Page 43

44 To further assist you in establishing and maintaining proper internal controls, accounting policies and procedures, and other forms of best practices, we strongly recommend that you obtain from a free PDF copy of the Fiscal Crisis and Management Assistance Team (FCMAT) Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference. The FCMAT manual has been adopted as policy by the district for ASB operations and contains many useful checklists, forms, policies and procedures, and other information that you may find very applicable, adaptable, and useful for the successful operation of your parent organization or booster club. Page 44

45 INTERNAL CONTROLS ASSIST AS DETERRENTS TO POSSIBLE FRAUD BEST PRACTICES Internal controls are important to assist in preventing fraud and helping to prevent volunteers, staff, management, and officers from being falsely accused of fraud. Internal controls help decrease fraud, mismanagement of funds, and embezzlement. Parent organizations and booster clubs operate with volunteers who may make honest mistakes. Without strong internal controls, policies and procedures, training, properly documented fundraising events, and solid bookkeeping practices, even a volunteer under the best of intentions can be falsely accused of and have the appearance of fraud. Strong internal controls contribute to protecting the organization and its volunteers and help mitigate misunderstandings and accusations. Parent organizations and booster clubs often experience frequent changes of volunteer personnel. Internal controls contribute to promoting sound financial management. Internal controls help protect parent organization or booster club officers and volunteers from being accused of financial impropriety. Internal controls help maintain an accurate inventory of all goods purchased or donated. Internal controls ensure operations are effective and efficient. Internal controls help promote successful fundraising ventures. Internal controls help protect against improper fund disbursements. Internal controls help to ensure that unauthorized financial obligations cannot be incurred. Internal controls help to ensure compliance with applicable laws and regulations. Segregation of Duties When possible, segregate or separate as many duties as possible. Parent organization or booster club financial functions that are recommended to be separated are: Volunteer members who initiate, authorize, or approve transactions from Page 45

46 Volunteer members who execute transactions from Volunteer members who record transactions from Volunteer members who reconcile transactions from Volunteer members responsible for receiving the item purchased in the transaction. Equally important as segregation of duties is: Always count money with a witness present and make sure both witnesses sign and date the cash count and deposit forms!!!!!!! This means never count money alone at any phase of the cash collection and deposit process!!!!!!! Page 46

47 MANAGING YOUR PARENT ORGANIZATION S OR BOOSTER CLUB S BUDGET BEST PRACTICES Before the beginning of each school fiscal year (fiscal years run from July 1 st to June 30 th ), parent organizations and booster clubs should develop a budget to project expected revenues and expenses for the next one-year period. Every parent organization s or booster club s budget should include annual financial goals and a plan for achieving these goals. The parent organization s or booster club s budget should plan for: o o o What fundraisers will be held to raise the budgeted amount of revenue? What will the planned fundraisers cost? Will there be enough revenue left to accomplish the parent organization s or booster club s financial goals? The parent organization s or booster club s elected officers must continuously monitor the budget throughout the fiscal year by constantly comparing the budget to their organization s/club s actual revenues and expenses. Ideally, the parent organization s or booster club s projected budget should be compared to the parent organization s or booster club s actual income and expenses at least twice monthly. Whenever any significant changes in the estimated revenues occur or any increases in expenses are expected, parent organizations or booster clubs should revise their budget. A good rule of thumb to use for determining whether the change in income or expenses is significant is a variance of 10 percent or more. Page 47

48 MANAGING PARENT ORGANIZATION OR BOOSTER CLUB CASH AND FUNDS BEST PRACTICES Persons who are not affiliated with the parent organization or booster club or members who are not authorized to handle parent organization or booster club funds MUST NOT have access to funds of the parent organization or booster club bank accounts and/or cash handling at fundraising activities. If unaffiliated or unauthorized persons are somehow authorized to access parent organization or booster club accounts and cash handling activities, the funds in the accounts and activities are exposed to theft, fraud and misuse. Please download to your computer, at no charge, the Fiscal Crisis and Management Assistance Team (FCMAT) Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference. This desk reference contains many useful forms and checklists. FCMAT ASB manual is available at The Fiscal Crisis and Management Assistance Team (FCMAT) Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference can be downloaded for free from This desk reference contains many useful forms and checklists such as cash count forms, bank reconciliation forms, ticket control logs and forms, purchase order forms, fundraising forms, donation forms, revenue potential forms, and more that you can download in PDF or Microsoft Excel and modify to meet your parent organization or booster club needs. A. Establishing Parent Organization or Booster Club Bank Accounts 1. Parent organizations or booster clubs MUST establish their own bank accounts. Comingling parent organization or booster club funds and Associated Student Body funds or using the ASB as a pass-through for parent organization or booster club activities is prohibited. 2. Opening the parent organization or booster club bank account: The parent organization or booster club must obtain an Employer Identification Number (EIN) from the IRS. Page 48

49 The parent organization or booster club must not use the school site or district s name on its checks. At least two parent organization or booster club officers should sign each disbursement. School site or district employees may not be signers on parent organization or booster club bank accounts. All funds received should be receipted immediately and deposited on at least a weekly basis. See the Bank Deposits section below for additional deposit recommendations. It is important to remember to count all money with a witness present, and that both witnesses sign the cash collection form. The parent organization or booster club treasurer should reconcile bank statements and prepare financial reports monthly and not later than 30 days from the date the bank statement is received. B. Bank Deposits 1. It is recommended that bank deposits be made daily if total cash received or on hand exceeds $ If daily cash received is less than $250.00, bank deposits should be made within oneweek even if the cash received for all days combined is less than $ All parent organization or booster club funds should be deposited into the parent organization or booster club bank accounts prior to holidays and weekends. No one is permitted to take fundraiser event cash proceeds home at night or over the weekend. Money should always be counted with a witness present, including when deposits are made at the bank. C. Bank Reconciliation 1. Upon receipt of the parent organization s or booster club s monthly bank statement, the balance indicated on the statement must be reconciled with the bank account balance in the parent organization or booster club general ledger/check register as of the last day of the cut off period of the bank statement. Some bank statement cut off dates are not always the last day of the month. The reconciliation should be completed within thirty (30) days of the date of the bank statement. Page 49

50 2. Monthly bank reconciliations help insure that the financial records of the parent organization or booster club, including the amount of cash available, agrees with the parent organization s or booster club s bank statements. Completing monthly bank reconciliations help prevent theft and fraud. 3. Any and all accounting journal entries and accounting transfers, including bank reconciliation journal entries for recording bank account interest, insufficient funds check entries, or other such entries should always be approved and recorded with detailed descriptions of the transaction. 4. Items needed for reconciliation include: Bank reconciliation form Prior month s bank reconciliation Bank statement Check register and/or cash disbursement journal Cash receipts journal General ledger D. Checks 1. All parent organization or booster club checks must be sequentially numbered. This is the simplest and best way to assure that all checks are properly accounted for. 2. Whenever a parent organization or booster club s checks are not issued in sequential order, it contributes to the parent organization or booster club being vulnerable to theft. 3. All voided parent organization or booster club checks must always be properly voided, documented and accounted for. E. Cash Collections 1. All parent organization or booster club cash collections must be supported by records documenting the source, the amount of funds, and when the cash was received. Page 50

51 2. Cash received from parent organization or booster club fundraisers should always be counted by two parent organization or booster club officers or officer designees who then both sign a cash receipt and/or cash count form with multiple copies. Multiple copy cash collection and deposit forms are the best practice. 3. Multiple copies of all such parent organization or booster club cash receipt and cash count forms documentation should be readily available for annual review or audit purposes. F. Cash Deposits 1. Only one person should be authorized to make cash deposits for parent organization or booster club funds and there should be at least one authorized individual to witness and accompany the deposit so that at all times two individuals make deposits together. Unauthorized personnel may not make cash deposits. 2. Best practice is for two parent organization or booster club officers to always go to the bank together to make deposits. If by some terrible circumstance you should be robbed while taking the deposit money alone to the bank, without a witness, you may be accused of even faking the robbery to steal the money. ALWAYS COUNT MONEY WITH A WITNESS AND ALWAYS TAKE MONEY TO THE BANK WITH A WITNESS. G. Petty Cash 1. Petty cash is a small amount of money kept in an office to pay for small items such as postage or office supplies. The amount of petty cash should be as little as is practical but should not exceed $ Each parent organization or booster club may need to maintain a petty cash account. 3. Strict controls must be maintained by keeping petty cash in a locked box accessible by only the treasurer and one other officer. 4. District employees may not control parent organization or booster club petty cash accounts. 5. Petty cash funds should be used for small purchases only. 6. All purchases greater than the amount set as petty cash should be made with a sequentially numbered parent organization or booster club check for better cash control. 7. Written records must be kept for all petty cash disbursements. Page 51

52 8. Receipts must be kept for all purchases using petty cash and reconciled to the petty cash balance. 9. At any given time, the amount of petty cash remaining and the total of the petty cash receipts on hand should always equal the amount of the established petty cash amount. 10. One person should be responsible for maintaining the petty cash fund. H. Disbursement of Funds 1. STEPS TO TAKE: Prior to disbursement of any parent organization or booster club funds, whether by cash or parent organization/ booster club check: The request to spend the specific funds should be compared with the parent organizations or booster club s budgeted expenditures. A written record should be completed, such as a purchase order or check request form, regardless of the amount. Appropriate supporting documentation (invoices, receipts), including a signature from an authorized officer, should be attached to the written record and filed in check number order. A parent organization or booster club check should NEVER be issued without appropriate supporting documentation and proper authorization! 2. Proper receipts and invoices must be maintained for all disbursements of parent organization or booster club funds. 3. Disbursements of parent organization or booster club funds outside the scope of the parent organization s or booster club s budget or line items exceeding the approved budget should require approval by the parent organization or booster club governing board. 4. Parent organizations/booster clubs may NOT: Make direct payments of parent organization or booster club funds to district employees. Purchase alcoholic beverages or tobacco products. Page 52

53 Contribute funds to the district in an effort to increase the personnel allocations and/or stipends of a particular program or school site without the express written approval of the district. Supplement its income by risking organization funds through gambling or other speculative activities. I. Expenses 1. All parent organization or booster club expenses are to be paid by check from the parent organization s or booster club s bank account. 2. Parent organization or booster club checks must never be made payable to cash. 3. Petty cash replenishment checks may be made on a rotating basis to the parent organization or booster club leadership or a specific individual may be designated. 4. Under no circumstances should parent organizations or booster club expenses ever be paid from cash collections. 5. Thoroughly research and vet all vendors to insure that the vendor is a legitimate business, has the correct credentials and insurances required, and is reputable. J. Bookkeeping and Accounting 1. All parent organizations or booster clubs bylaws should include written instructions on the recording of accounting transactions, such as the accounting method (cash vs. accrual), number of authorized signers on the bank account(s) and number of authorized signatures required for each check. 2. All transactions should be recorded in the parent organization s or booster club s financial records. 3. Any and all accounting journal entries and accounting transfers, including bank reconciliation journal entries for recording bank account interest, insufficient funds check entries, or other such entries should always be approved and recorded with detailed descriptions of the transaction. 4. At least two authorized signatures should be required for each check written to assist in establishing good internal controls over check disbursements. Page 53

54 If a parent organization or booster club requires two signatures for check disbursements, the bank account(s) should have at least three authorized signers to allow at least one back-up signer if one of the regular signers is not available. K. Money-Handling Procedures Receiving Money Money refers to cash, checks, money orders, or cashier s checks. The following are best practices for handling money to assist in ensuring proper accountability. The person receiving the money while in the presence of the person turning in the money should count all money received together and both should sign the cash count form. The person receiving the money should give a receipt to the person delivering the money (both parties should retain their copy of the receipt). Any checks received should be restrictively endorsed immediately. Post-dated checks should not be accepted from any source. Receipts should indicate whether cash, check, money order, or cashier's check was received, date of the receipt, and signature of person receiving the money. Copies of all receipts and a list of checks, money orders, and cashier s checks received should be made to assist in recovery of money if these items are lost, stolen, or returned due to insufficient funds. Money Orders or Cashier s Checks If a money order or cashier's check is received, the receipt should indicate the total check amount; brand name of the money order or the issuing bank's name of the cashier's check; and the complete check or money order number. If a copy of the money order or cashier's check is made and attached to the receipt, the inclusion of this additional information on the receipt is not necessary. L. Recording and Depositing Parent Organization or Booster Club Money 1. Prior to depositing money, at least two people should count the money together and both should sign and date the form used to document the counted funds. This form is known as the cash count form. Page 54

55 2. All money received should be delivered to the parent organization or booster club treasurer for deposit daily. 3. Receipts should be reconciled with all money turned in and deposited. 4. Triplicate receipt copies should be used. White copy to the person who the funds were received from, yellow copy to be attached to the cash count form, and pink copy to remain in the receipt book as the backup copy. 5. Receipts should never be issued out of sequence. 6. Receipt numbers should be listed on the cash count form. 7. Money received should only be deposited in the parent organization s or booster club s account(s). 8. Deposit slips should be retained and reconciled monthly to the account. M. Disbursing Parent Organization or Booster Club Money 1. Two signatures are required on each check. 2. Blank checks are never allowed. 3. Checks should never be made out to cash. N. Safeguarding Money 1. Do not keep any money in an unlocked drawer, unlocked filing cabinet, vehicle, or other unsecured place. 2. Invest in a combination safe or other form of safe that can be securely closed and difficult to remove from its location. 3. Do not store the records of the money received (i.e., receipts, copies of checks) in the same place as the money. If records and money are stored together and a theft occurs, the record of the money may be taken along with the money. Subsequently, determination and recovery of losses will be more difficult. 4. Money received and not yet deposited should not be used for purchases, check cashing, loans, advances, reimbursements, or for any other purpose. Page 55

56 5. All unused checks should be kept safe and secure at all times. 6. "Blank" checks should never be issued and checks should never be pre-signed. 7. The sequence of check numbers should be accounted monthly when reconciling the bank statement with the parent organization s or booster club s books. 8. Issuing checks payable to "cash" should be avoided. The IRS often examines these transactions in more detail than other transactions. 9. Each line item expenditure must be described with specificity. Exactly what was purchased? Not volleyball equipment, but specifically what kind of volleyball equipment. o How many? o What did each item cost? o Where did the purchased items go? o Where are the purchase receipt(s)? 10. Total miscellaneous line item expenditures listed should not exceed $1,000. Rather, develop a budget with more specific expenditure categories than code so many items to miscellaneous. FINANCIAL REPORTING BEST PRACTICES In order to be the most transparent, the parent organization or booster club should make its financial statements, tax returns and other important financial records available for review to the organization/club members, the district business office and school principal. A. Parent Organization or Booster Club Members 1. When: At each meeting and/or upon request. Page 56

57 2. What: The parent organization s or booster club s financial statement and bank reconciliation should be provided to the organization/ club members by the treasurer. The parent organization s or booster club s financial statements for its membership should provide a comparison of the current budgeted versus actual expenditures and receipts. The parent organization s or booster club s tax returns and other fundraising and financial records. B. District Business Office and School Principal 1. When: January 30 th for the prior six months ending December 31st. July 30 th for the prior six months ending June 30 th. 2. What: The parent organization s or booster club s financial statement should contain information on the parent organization s or booster club s income and expenses and the net gain or loss of each fundraiser the parent organization or booster club has conducted. The parent organization s or booster club s balance sheet which indicates the cash balance and balance of any other assets, liabilities or net assets/retained earnings. The parent organization s or booster club s bank statement and bank statement reconciliation. The parent organization s or booster club s annual tax returns, Forms 990, 199, and RRF-1 within thirty days of the date filed with federal and state governments. ANNUAL AUDIT/REVIEW REQUIREMENTS BEST PRACTICES What is an audit versus an internal review? Page 57

58 An audit is typically associated with an independent external audit performed by a licensed certified public accountant and they issue an independent financial opinion about the parent organization s or booster club s financial statements taken as a whole. An internal review is typically associated with an internal inspection of the books and records of the parent organization or booster club using similar scrutiny, procedures, checklists, reconciliations, and analysis techniques used in an audit but performed by someone designated by the parent organization or booster club governing board or audit committee. An audit/internal review is an examination of the parent organization s or booster club s financial operations and financial records. It attempts to assure that all income and expenses are accounted for and are consistent with the parent organization s or booster club s budget and bank statements. It also verifies that the bank and ledger balances match. The audit/internal review s purpose is to help protect the parent organization or booster club officers and the organization itself from financial fraud and improve internal controls. When should a Parent Organization or Booster Club conduct an audit/internal review? An audit/internal review is conducted: o At the end of every twelve-month calendar year or twelve-month fiscal year depending on which year end the parent organization or booster club has selected; o Whenever there is a change in the person serving as treasurer; o Whenever there is a change in any parent organization or booster club officer who signs parent organization or booster club checks; and o Any time either district personnel or an accounting firm designated by the CUHSD superintendent requests an audit. The district may decide at its discretion what level of audit to conduct and the district will pay for the audit. Should a Parent Organization or Booster Club create an audit committee? Best practice is to have the annual audit conducted by an independent party, such as a certified public accountant chosen by parent organization s or booster club s audit committee. If an audit is not conducted by an external independent person, the audit committee conducting the annual internal review should be made up of at least two members of the parent organization or booster club who are not involved in the parent organization s or booster club s day-to-day financial operations (not the president or treasurer) or the handling of cash receivables or expenditures. Page 58

59 The audit committee may perform the internal review themselves or designate a qualified individual(s) to perform the review. Recommended Parent Organization or Booster Club audit committee procedures to conduct or prepare for the annual internal review: ( 1. Review reconciled bank statements and cancelled checks to determine that: a. All disbursements have been properly documented with an invoice or receipt. b. All disbursements have been properly approved. c. All checks have been properly signed. d. All checks have been deposited or cashed by the payee indicated. e. All checks have been accounted for in the proper sequence (no missing checks). f. No checks were made payable to cash. 2. Review the addition and subtraction on all cash receipts and deposits. 3. Compare all cash receipts and deposits to all bank statements. 4. Verify that all receipts and disbursements were allocated to the correct accounts and budget categories. 5. Confirm that all ticket control forms and logs reconcile the cash collected to the number of tickets sold. 6. Confirm that all inventory control logs reconcile to inventory sold, inventory purchased, and the inventory balance. 7. Verify that all income from sales, dues, or any other sources has appropriate backup and all cash counted was counted with a witness with both witnesses signatures included on the cash count form. The total amount collected should match the amount deposited into the bank account. 8. Review all of the treasurer s monthly reports and check them for accuracy. Review beginning and ending balances on reports to verify that correct ending balances were carried forward as beginning balances on subsequent reports. Verify that only current parent organization or booster club officers are authorized signers on bank account(s). Former officers should not remain on the account(s) as authorized signers. Page 59

60 9. District employees may not be authorized signers on any parent organization or booster club account. 10. Obtain proof that all applicable sales taxes were paid. 11. The audited financial report should be signed by all members of the audit committee and submitted to the school principal and district business office no later than July 30th following the end of the fiscal year. 12. Verify that all necessary IRS Form 1098s were accounted for and 1099s were issued, if applicable. 13. Verify that all necessary sales tax forms were accounted for and issued, if applicable. OTHER GOVERNANCE THE CALIFORNIA NONPROFIT INTEGRITY ACT SB 1262 All non-profit corporations in California must comply with SB 1262 except for religious organizations, cemeteries, hospitals, and educational institutions. Most parent organizations and booster clubs will not meet the audit and compensation review dollar threshold requirement of million; however, the fundraising counsel provision will apply to parent organizations and booster clubs. A. Audit and Compensation Review - $2 Million Threshold Only a parent organization or booster club that accrues or receives in any fiscal year gross revenue of $2 million or more is required to meet the audit and compensation review requirement. If your parent organization or booster club also receives grant or contract income from government sources, that income is not included as part of the gross revenue determination as long as the governmental entity you received the money from requires an accounting of those funds. B. Audit and Independent Auditor 1. The audit must be performed by a certified public accountant (CPA) in accordance with Generally Accepted Accounting Principles (GAAP). 2. The auditor must be an independent auditor meaning that the auditor must conform to standards of independence which are set forth in governmental auditing standards, issued by the Comptroller General of the United States. Page 60

61 3. The audited financial statements must be available for inspection by the general public which is following the same inspection rules for your non-profit IRS Form 990. The 990 public inspection rules for audited statements are: a. Must be made available to the general public for a period of three years. b. Must be made available at the parent organization s or booster club s principal, regional, or district offices during regular business hours. c. By mailing a copy to any person who so requests a copy either in person or in writing. d. Best practice is to post the audited financial statements into your parent organization or booster club website. C. Audit Committee 1. A parent organization or booster club that is a corporation must establish an audit committee appointed by the governing board. 2. The audit committee may include non-board members and members of the finance committee; however, the chairperson of the audit committee cannot be a member of the finance committee, and the members of the finance committee must make up less than half of the audit committee. 3. The audit committee may not include any of the top management or any person having a material financial interest in any entity doing business with the parent organization or booster club. 4. If the audit committee members are paid, they may not receive compensation above those on the governing board. The best practice is not to pay any audit committee members or board members. 5. The audit committee duties are: a. Recommend to the governing board the retention and/or termination of the auditor. b. Negotiate the audit fee on behalf of the board. Page 61

62 c. Meet and confer with the auditor(s) to satisfy the audit committee members that the audit is progressing on time and that parent organization s or booster club s finances are in order. d. Review the audit and determine whether to accept the audit. e. Approve any performance of additional non-audit services by the auditing firm. D. Compensation Review CEO and CFO 1. If your parent organization or booster club meets the $2 million threshold, the compensation and benefits of chief executive officer (CEO) and chief financial officer (CFO)/ treasurer must be reviewed and approved by the governing board or an authorized committee. 2. The standard for the review of CEO and CFO compensation is to determine whether the compensation is Just and Reasonable and must occur when the officers are hired, renewed or extended, or compensation is modified unless the modification applies to substantially all employees. 3. Best Practice for parent organizations and booster clubs is not to have any compensated staff, management, executives, or board members. E. Fundraising Counsel or Commercial Fundraiser Provision A fundraising counsel or commercial fundraiser are entities that for some form of compensation plans, manages, advises, consults or prepares materials to solicit funds for your parent organization or booster club. A fundraising counsel or commercial fundraiser can be considered fundraising companies. If your parent organization or booster club considers using a fundraising counsel or commercial fundraiser, there are many specific requirements that must be met and you should make sure you have researched in detail all of the requirements necessary for such an activity. The Best Practice for parent organizations and booster clubs is not to use a fundraising counsel or commercial fundraiser. The school site principal and the district business office must both approve the use of any fundraising counsel or commercial fundraiser. All non-profits, including parent organizations and booster clubs, no matter how small or large must comply with SB 1262 requirements when engaging a fundraising counsel and Page 62

63 commercial fundraiser. Form CT-3CF, Fundraising Counsel for Charitable Purposes, and instructions are available at for registration of a fundraising counsel. The requirements for a fundraising counsel and use of a commercial fundraiser include the following; however, be sure to always consult with the Attorney General s office to make sure the requirements have not changed. 1. Establish and exercise control over all fundraising activities including the fundraising activities of others that your parent organization or booster club is sponsoring, helping, or allowing to use your name, etc. 2. The control must include approval of all written contracts and your parent organization or booster club must make sure that the fundraising activities are conducted without coercion. 3. Your parent organization or booster club may not contract with any commercial fundraiser who is not registered as is required with the Attorney General s Registry of Charitable Trust. The best practice is to request a copy of any commercial fundraiser s Registry of Charitable Trust s Form RRF-1 and search at the Attorney General s website to insure they are in good standing. a. A commercial fundraiser is any individual, corporation, unincorporated association, or other legal entity that solicits funds, assets or property in California and receives or controls the funds, assets, or property for charitable purposes. b. If your parent organization or booster club contracts with a commercial fundraiser, you must submit a notice of a solicitation campaign with the Attorney General Registry of Charitable Trusts at least 10 days prior to the event, campaign, or other services. c. The notice of solicitation campaign must include the name and address of the parent organization or booster club, the charitable organization to be served, and the date when the services begin and end. 4. Your parent organization, booster club, or commercial fundraiser may not misrepresent the purpose of your organization, the fundraiser, or the nature or beneficiary of the fundraising solicitation. Since misrepresentation may be established verbally by word, your conduct, or failure to disclose a material fact, the best practice is to always be very clear and transparent in everything your parent organization or booster club does. 5. There must be a clear written contract between the fundraising counsel and parent organization or booster club. Page 63

64 a. Your parent organization or booster club is set up to serve the school site, ASB, or other school-related entity which may be considered the charitable organization to be served. b. The contract must be signed by the authorized contracting officer for the fundraising counsel and by an official who is authorized to sign by the parent organization or booster club governing board. c. The contract must also contain two specific cancellation provisions: i. The parent organization or booster club must be allowed to cancel the contract without cost, penalty, or liability up to 10 days after signing the contract. The 10-day cancellation notice must be in writing. ii. The contract must permit the parent organization or booster club to terminate the contract on 30-days written notice and is effective five days from the date of mailing. The 30-day written termination notice means that the parent organization or booster club is, however, liable for the service of the fundraising counsel up to the effective date of the termination. RECORDS STORAGE, RETENTION AND PUBLIC INSPECTION It is critical to retain financial records because voluntary organizations such as parent organizations and booster clubs often experience frequent changes of officers and members. Ensure that all of the financial activities of the parent organization or booster club are always clearly documented and that clear procedures are established for retaining documents. A. Implement effective filing systems. This means: Keep all documentation and records for each year separate from the subsequent year s records and documentation. Label folders and use separate folders for different types of documents. (e.g. Keep invoices separate from bank reconciliation worksheets, keep income tax returns separate from cash receipts.) Listed below are documents that should be retained permanently and/or temporarily by parent organizations and booster clubs. Permanent records should carry forward every year. Page 64

65 Temporary records should be retained for specific time periods and are best kept for Internal Revenue Service (IRS) purposes. B. Permanent Records: IRS Publication 583, Starting a Business and Keeping Records, provides considerable guidance. Examples of permanent records are: Articles of Incorporation IRS Determination Letter Any document that establishes or authorizes anything you consider important Employee personnel files C. Temporary Records IRS Publication 583 recommends the following for what we have termed Temporary Records: D. Gross receipts Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts and sources of your gross receipts. Documents that show gross receipts include the following: Cash register tapes Bank deposit slips Receipt books Invoices Credit card charge slips Form 1099-MISC Other cash receipts such as cash count forms and receipt books E. Inventory Inventory is any item you buy and resell to customers. Your supporting documents should show the amount paid and that the amount was for inventory. Documents reporting the cost of inventory include the following: Canceled checks Cash register tape receipts Credit card sales slips Invoices These records will help you determine the value of your inventory at the end of the year. Page 65

66 F. Expenses Expenses are the costs you incur (other than the cost of inventory) to carry on your business. Your supporting documents should show the amount paid and that the amount was for a business expense. Documents for expenses include the following: Canceled checks Cash register tapes Account statements Credit card sales slips Invoices Petty cash slips for small cash payments G. Travel, transportation, entertainment, and gift expenses Specific recordkeeping rules apply to these expenses. For more information, see IRS Publication 463. H. Employment taxes There are specific employment tax records you must keep. For a list, see IRS Publication 15. I. Assets Assets are the property, such as machinery and furniture you own and use in your business. You must keep records to verify certain information about your business assets. You need records to figure the annual depreciation and the gain or loss when you sell the assets. Your records should show the following information: When and how you acquired the asset Purchase price Cost of any improvements Section 179 deduction taken Deductions taken for depreciation Deductions taken for casualty losses, such as losses resulting from fires or storms How you used the asset When and how you disposed of the asset Selling price Expenses of sale The following documents may show this information: Page 66

67 Purchase and sales invoices Real estate closing statements Canceled checks J. Other The following are miscellaneous documents which should be retained: General ledger detail report All bank records, i.e. bank statements and bank reconciliations All income tax returns All minutes of all parent organization or booster club meetings K. Record Retention Time Limits Your bylaws may identify individual time limits to retain records as described below in order to follow IRS record retention requirements and to simplify records retention time limits. The district recommends retaining all records for seven years from the time you file your non-profit income tax returns. The IRS provides further guidance for how long records should be kept. Record retention time period limitations that apply to income tax returns offer the best guidance because most record keeping is to comply with IRS requirements. Keep records for three (3) years if situations (4), (5), and (6) below do not apply to you. Keep records for three (3) years from the date you filed your original return or two (2) years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return. Keep records for seven (7) years if you file a claim for a loss from worthless securities or bad debt deduction. Keep records for six (6) years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return. Keep records indefinitely if you do not file a return. Keep records indefinitely if you file a fraudulent return. Page 67

68 Keep employment tax records for at least four (4) years after the date that the tax becomes due or is paid, whichever is later. BEST PRACTICE: obtain a safety deposit box or similar storage facility to ensure the security of important documents. Make multiple copies of all computer files and store the copies in several different locations. Use an electronic data internet cloud backup storage service to back up your data in addition to all other backup devices you may use. L. Public Inspection of Records All non-profit organizations such as parent organizations and booster clubs that are exempt under IRS Code Section 501(c)(3) or 501(c)4, including private foundations, when requested by the general public, must make available the following documents: Copies of your Form 1023, Application for Recognition of Exemption Under Section 201(c)3 of the Internal Revenue Code, submitted to the IRS. This includes all of the supporting documents submitted with Form Copies of your three most recent Form 990 s, Return of Organization Exempt From Income Tax, submitted to the IRS. This includes all of the supporting documents, statements, or exhibits submitted with Form 990; however, the names and addresses of donors do not have to be disclosed. Copies of the information returns forms 990 and 1023 must usually be provided immediately when someone makes the request in person, and within 30 days when the request is in writing. When copies are requested, your organization may charge a reasonable copying fee plus actual postage, if any. The forms 1023 and 990 plus any supporting documents may be posted on the organization s web site on the internet rather than mailing copies as long as: o Your organization informs anyone requesting copies that the materials are widely available and can be found on the organization web site, or o The materials are posted and available at a public web site database such as Guidestar at where the materials may be downloaded free of charge. Page 68

69 WHEN YOUR PARENT ORGANIZATION OR BOOSTER CLUB PAYS FOR INDEPENDENT CONTRACTOR SERVICES The IRS requires that all independent contractor service providers be separately documented and tracked for reporting purposes. When the total payments to a vendor that provides services to your organization exceeds $600 in a calendar year, you must issue an IRS Form 1099 to that vendor and report all 1099s issued to the IRS. Service-providing vendors are vendors that provide services such as consulting services like accounting or legal services. Purchasing products from a vendor such as food for a fundraiser is not considered a service. The IRS requires that all independent contractor service providers are separately documented and tracked for reporting purposes. When the total payments to a vendor that provides services to the parent organization or booster club exceeds $600 in a calendar year, an IRS Form 1099 to that vendor must be issued and all 1099 s issued must be filed with the IRS. If you are not sure if a vendor is an independent contractor or an employee, the Internal Revenue Service 20 Point Checklist for Independent Contractor is available at Defined. If you answer Yes to the first four questions in the IRS s checklist, the IRS indicates you are probably dealing with an Independent Contractor. If you answer Yes to any of questions 5 through 20 of the IRS s checklist, this means your worker is probably and employee. IRS 20 Point Checklist for Independent Contractor 1. Profit or loss. Can the worker make a profit or suffer a loss as a result of the work, aside from the money earned from the project? (This should involve real economic risk-not just the risk of not getting paid.) 2. Investment. Does the worker have an investment in the equipment and facilities used to do the work? (The greater the investment, the more likely independent contractor status.) 3. Works for more than one firm. Does the person work for more than one company at a time? (This tends to indicate independent contractor status, but isn t conclusive since employees can also work for more than one employer.) 4. Services offered to the general public. Does the worker offer services to the general public? 5. Instructions. Do you have the right to give the worker instructions about when, where, and how to work? (This shows control over the worker.) Page 69

70 6. Training. Do you train the worker to do the job in a particular way? (Independent contractors are already trained.) 7. Integration. Are the worker s services so important to your business that they have become a necessary part of the business? (This may show that the worker is subject to your control.) 8. Services rendered personally. Must the worker provide the services personally, as opposed to delegating tasks to someone else? (This indicates that you are interested in the methods employed, and not just the results.) 9. Hiring assistants. Do you hire, supervise, and pay the worker s assistants? (Independent contractors hire and pay their own staff.) 10. Continuing relationship. Is there an ongoing relationship between the worker and yourself? (A relationship can be considered ongoing if services are performed frequently, but irregularly.) 11. Work hours. Do you set the worker s hours? (Independent contractors are masters of their own time.) 12. Full-time work. Must the worker spend all of his or her time on your job? (Independent contractors choose when and where they will work.) 13. Work done on premises. Must the individual work on your premises, or do you control the route or location where the work must be performed? (Answering no doesn t by itself mean independent contractor status.) 14. Sequence. Do you have the right to determine the order in which services are performed? (This shows control over the worker) 15. Reports. Must the worker give you reports accounting for his or her actions? (This may show lack of independence) 16. Pay Schedules. Do you pay the worker by hour, week, or month? (Independent contractors are generally paid by the job or commission, although by industry practice, some are paid by the hour.) 17. Expenses. Do you pay the worker s business or travel costs? (This tends to show control.) 18. Tools and materials. Do you provide the worker with equipment, tools, or materials? (Independent contractors generally supply the materials for the job and use their own tools and equipment.) 19. Right to fire. Can you fire the worker? (An independent contractor can t be fired without subjecting you to the risk of breach of contract lawsuit.) Page 70

71 20. Worker s right to quit. Can the worker quit at any time, without incurring liability? (An independent contractor has a legal obligation to complete the contract.) All vendors that provide services should complete IRS Form W-9, Request for Taxpayer Identification Number and Certification. Based on the information the vendor provides you in the W-9, you can prepare the IRS Form W-9 is available at and is often updated at the IRS web site. 1. Don t forget to secure an IRS Form W-9 from the provider at the time of service to ensure the parent organization or booster club has an accurate record of the service providers Taxpayer Identification Number (TIN). 2. Issue an IRS Form 1099 to all vendors who performed services in the last calendar year. The 1099 must be issued by January 31 of the next year. 3. If the vendor refuses to provide you with their taxpayer identification number which usually means they do not want to provide you with a completed and signed W-9, the district recommends that you do not contract with them and find another service provider. 4. Send the IRS s copy of Form 1099 along with IRS Form 1096, Annual Summary and Transmittal of U.S. Information Returns, to the IRS by February 28 th. 5. Don t forget to also report to the Employment Development Department (EDD) any independent contractor Form 1099-MISC payments.. See for the specific requirements. The EDD requirements are as follows: Any business or government entity that is required to file a federal Form 1099-MISC for services received from an independent contractor is required to report specific independent contractor information to the Employment Development Department (EDD). This information will be used to locate parents who are delinquent in their child support obligations. The independent contractor reporting requirements apply if you hire an independent contractor and the following statements all apply: o You are required to file a Form 1099-MISC for the services performed by the independent contractor. o You pay the independent contractor $600 or more OR enter into a contract for $600 or more. o The independent contractor is an individual or sole proprietorship. Page 71

72 If all the above statements apply, you must report the independent contractor to EDD within 20 days of paying/contracting for $600 or more in services. You are not required to report independent contractors that are corporations, general partnerships, limited liability partnerships, and limited liability companies. The reporting to the EDD is completed by filing Form DE 542, Report of Independent Contractor(s) and can be submitted electronically or by paper filing. If you still decide to conduct business with a vendor that will not provide you with their TIN, per instructions found in the Form W-9, you are required to backup withhold 28% of each payment you make to that vendor. If you fail to backup withhold the 28%, your organization may be responsible for paying the 28% backup withholding tax to the IRS that you should have withheld from the vendor plus any other penalties that may be assessed should your parent organization or booster club be audited. There are additional reasons for backup withholding found in the W-9 instructions that may apply. An example Form W-9 is shown in Exhibit??? Page 72

73 THE AREAS THAT GET PARENT ORGANIZATIONS AND BOOSTER CLUBS IN TROUBLE PARENT ORGANIZATIONS AND BOOSTER CLUBS ARE SUBJECT TO THE CUHSD S PROHIBITION OF ALCOHOL AND TOBACCO ON CUHSD PROPERTY Alcohol No alcohol is allowed at any parent organization or booster club event held on CUHSD property. California Business & Professions Code section 25680(a) states: Every person who possesses, consumes, sells, gives, or delivers to any other person, any alcoholic beverage in or on any public schoolhouse or any of the grounds of the schoolhouse, is guilty of a misdemeanor. Tobacco No tobacco is allowed at any parent organization or booster club event held on CUHSD property. Under California Health and Safety Code section , California Labor Code section , 20 United States Code section 6083, and CUHSD Board of Education Policy (a), the CUHSD prohibits the use of any form of tobacco products at any time in district-owned or leased buildings, on district property and in district vehicles. This prohibition applies to all employees, students, and visitors at any school-sponsored instructional program, activity, or athletic event held on or off district property. Any written joint use agreement governing community use of district facilities or grounds shall include notice of the district s tobacco-free schools policy and consequences for violations of the policy. Page 73

74 PARENT ORGANIZATION OR BOOSTER CLUB SALES OF GOODS OR MERCHANDISE Legally Required Seller s Permit for Sales of Goods or Merchandise Any parent organization or booster club planning to conduct fundraisers involving the sale of goods or merchandise must obtain a California s Seller s Permit. A California s Seller Permit is required even if the sales are not taxable. This includes, but is not limited to, operating concession stands, and selling school spirit clothing or other items. Parent organizations or booster clubs MUST NOT use another parent organization or booster club s seller s permit or the district s seller s permit number. Sales by a parent organization or booster club are generally taxable. For more information on obtaining a seller s permit, or on sales and use tax, you may contact the California Board of Equalization at or call Information can also be found on the following web sites: Publication 73, Your California Seller s Permit : Publication 18, Nonprofit Organizations : Online Seller s Permit Registration, Register a Business Activity With BOE : PARENT ORGANIZATION AND BOOSTER CLUB FOOD SALES Parent organizations or booster clubs must comply with all California state laws and all CUHSD Board of Education Policy/Administrative Regulations regarding the sale of food on school premises. Parent organizations or booster clubs should review and become knowledgeable with all laws applicable to food sales fundraisers including county food handling requirements, and California State and federal nutritional standards. Additional information is available from the CUHSD Nutrition Services Department. Under California law, no fundraising food sales of any kind, including bake sales, are allowed during school hours. Page 74

75 Parent organizations or booster clubs may be authorized by the district to operate concession stands at athletic events in order to raise funds for the organization. o However, remember that the school site s ASB always has first priority and you must have permission from the school site principal. All parent organization or booster club food sales on district property must comply with federal and state healthy snack requirements. PARENT ORGANIZATIONS OPR BOOSTER CLUBS AND RAFFLES Parent organizations and booster clubs may conduct legal raffles only if: They have obtained both FEDERAL and STATE tax-exempt status; They have been licensed to do business in California for at least one year; They are registered with the California Attorney General; They complete the California Attorney General s annual raffle registration form by September 1 of the year in which the raffle will be held; They submit an annual report to the California Attorney General that includes gross receipts and expenses incurred from the operation of the raffle, as well as the charitable or beneficial purposes for which the proceeds were used. REMEMBER: IF ALL FIVE OF THE ABOVE REQUIREMENTS HAVE NOT BEEN ACCOMPLISHED, IT IS NOT A LEGAL RAFFLE! MORE LEGAL RESTRICTIONS ON CONDUCTING RAFFLES At least 90% of the profits of each raffle must be distributed to the beneficial or charitable purpose. This means 50/50 raffles are illegal! Detachable tickets must have identifying numbers. Only adults may supervise the raffle drawing. The raffle may not be conducted over the internet. Page 75

76 ***For more information on conducting a legal raffle, visit the California Attorney General s web site. GAMBLING IS ILLEGAL IN CALIFORNIA. ILLEGAL RAFFLES, BINGO GAMES OR GAMBLING FUNDRAISERS CAN RESULT IN REVOCATION OF THE PARENT ORGANIZATION S OR BOOSTER CLUB S AUTHORIZATION TO OPERATE. PARENT ORGANIZATIONS AND BOOSTER CLUBS AND BINGO Parent organizations and booster clubs can operate legal bingo games only if: 1. They comply with all of the City of Campbell and the County of Santa Clara s extensive ordinances regarding the operation of bingo games; 2. They are a California tax-exempt organization; 3. They hold a valid bingo license prior to conducting any games; 4. They do not allow any minors to participate in any bingo game; 5. The total value of prizes awarded do not exceed $ in cash or kind, for each game held. Remember: if all five of the above requirements have not been accomplished, it is not a legal bingo game! ****California law and city and county ordinances provide that it is a criminal misdemeanor to violate bingo ordinances, or to pay or receive a profit, wage, or salary from any bingo game. Gambling is illegal in California. Illegal raffles, bingo games or gambling fundraisers can result in revocation of the parent organization s or booster club s authorization to operate. PARENT ORGANIZATIONS OR BOOSTER CLUBS AND ILLEGAL GAMBLING California Penal Code section 330 (as well as many County and Municipal Codes) provide that: Every person who deals, plays, or carries on, opens, or causes to be opened, or who conducts, either as owner or employee, whether for hire or not, any game of faro, monte, roulette, lansquenet, rouge et noire, rondo, tan, fan-tan, seven-and-ahalf, twenty-one, hokey-pokey, or any banking or percentage game played with Page 76

77 cards, dice, or any device, for money, checks, credit, or other representative value, and every person who plays or bets at or against any of those prohibited games, is guilty of a misdemeanor, and shall be punishable by a fine not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000), or by imprisonment in the county jail not exceeding six months, or by both the fine and imprisonment. Parent organizations and booster clubs are required to comply with gambling prohibitions under California State law and may not hold any illegal gambling, casino, bunco or other lottery type events, including poker tournaments. If a parent organization or booster club believes they have identified an exception allowing the parent organization or booster club to operate a gambling fundraiser, the law providing the exemption must be given to the site principal for written approval PRIOR TO THE GAMBLING FUNDRAISER BEING HELD. Illegal raffles, bingo games or gambling fundraisers can result in revocation of the parent organization s or booster club s authorization to operate. PARENT ORGANIZATIONS AND BOOSTER CLUBS AND SCRIP Plainly said, SCRIP is not allowed in any way, even if a percentage of the earnings goes to the team, and remainder goes to the individual. The IRS addressed this issue within the body of Internal Revenue Code section 501(c) (3) itself, which allows non-profit status only for: Corporations and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or to foster national or international amateur sports competition or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual (Emphasis added.) Any parent organization or booster clubs that are 501(c)(3) non-profit organizations should avoid scrip or other fundraising methods under which any portion of the funds raised are allocated to individuals. For parent organizations and booster club non-profits, all proceeds should benefit the school and sports teams, because any amount of benefit that goes to individuals could result in the parent organization or booster club losing its 501(c) (3) non-profit status. Page 77

78 PARENT ORGANIZATIONS OR BOOSTER CLUBS AND PRIVATE INUREMENT, COOPERATIVE FUNDRAISING, & INDIVIDUAL FUNDRAISING ACCOUNTS Plainly said, parent organizations and booster clubs should stay away from any type of transaction or fundraising that can be considered self-dealing, cooperative fundraising and individual fundraising accounts. Private Inurement: In Capital Gymnastics Booster Club v. Commissioner (2013), a United States Tax Court upheld the Internal Revenue Service s revocation of a parent-run booster club s tax-exempt status. The deciding issue cited by the Court was that funds raised by parents were specifically earmarked for their own children. The booster club s fundraising methods allowed the booster club parents to pay certain out-of-pocket costs and then fundraise less. Using this type of fundraising method resulted in the Court finding there was private inurement. The Court found there was private inurement because the specific dollars raised were earmarked and targeted for particular students, and not the group generally. The Court ruled this meant some parents were using the non-profit tax-exempt booster club to raise money solely to benefit their own children. Private inurement is not only about receiving compensation and can apply to both parent organizations and booster clubs. Other types of self-dealing transactions are also components of private inurement. Self-dealing transactions where a private person and the parent organization or booster club engage in transactions such as furnishing services, transferring assets, facilities, or goods, lending money or extending credit, and sale of property or even exchanging or leasing property can be considered private inurement. Cooperative Fundraising Cooperative fundraising occurs when individuals within a parent organization or booster club receive credit for funds raised and is usually associated with individual fundraising accounts. Individual Fundraising Accounts Individual fundraising accounts are used in parent organizations and booster clubs to keep record of credits to an individual student or parent for funds raised. Parent organizations and booster clubs should never use individual fundraising accounts to benefit individual students by offsetting their sport or band expenses with the amount credited to that individual from revenues raised. Page 78

79 The IRS has indicated that use of cooperative fundraising and individual fundraising accounts may disqualify a nonprofit organization s tax exempt status. The IRS rule is, no individual may personally or privately benefit from a nonprofit tax-exempt organization s fundraising; the purpose of a tax-exempt organization must always be to benefit the entity as a whole and not to benefit individuals. This means the use of individual fundraising accounts may result in denial or revocation of the parent organization s or booster club s tax-exempt status by the IRS or the California Franchise Tax Board. In addition, the individual benefits received by donors could result in taxable income to them. PARENT ORGANIZATIONS AND BOOSTER CLUBS AND BRANDING Parent organizations and booster clubs are prohibited from using any district logos or other district specific identifying mascots, names, color schemes, or symbols without the district business office s prior written permission. In addition, if a parent organization or booster club should wish to brand the organization independently or cross brand the organization with another entity, the district business office s prior written permission must be obtained. PARENT ORGANIZATIONS AND BOOSTER CLUBS AND AUCTIONS Parent organizations and booster clubs often use auctions as a way to raise money for the schools they support. Auctions are allowable as long as they are operated correctly. Remember, the public or community perceives that all fundraising, even with auctions, is for the benefit of school programs. As with any item your parent organization or booster club receives as a donation, you should be careful that these items are representative of the high standards of your organization. Auction Best Practices: 1. Hold the auction on weekends. 2. If you cannot hold the auction on weekends, make sure it is not during school hours. 3. The auction s only purpose is to raise funds to be donated to the school. PARENT ORGANIZATIONS AND BOOSTER CLUBS AND CAPITAL PROJECTS Page 79

80 If a parent organization or booster club desires to fundraise for a facilities improvement project and/or equipment that is intended to be affixed to district buildings or facilities, the parent organization or booster club must follow the district s capital projects request procedures. SB 854 addresses all public works projects, regardless of funding source, and must comply with the Department of Industrial Relations regulations. Any facilities improvement projects conducted on district property must be coordinated, managed and performed by district maintenance employees and/or district pre-qualified contractors. Parent organizations and booster clubs cannot contract, coordinate, or perform work on school grounds without prior written permission from the district business office. Page 80

81 PARENT ORGANIZATION AND BOOSTER CLUB DOs and DON Ts PLEASE DO Obtain a tax/employer identification number and federal/state tax-exempt status. Open a separate bank account for your parent organization or booster club. Maintain, keep and file properly all financial records. Create your own logo and name. Communicate the parent organization s or booster club s fundraising plans to the school site principal or his/her designee. Donate all funds or purchases in accordance with district policy. Consult the district maintenance department prior to purchasing items that require installation or involve school site or building improvements. Consult the district business office prior to purchasing goods or services that require ongoing maintenance contracts. Elect a treasurer with a bookkeeping/accounting background and/or regularly consult with a certified public accountant. Look for a local accountant or other financial professional who will donate their time to ensure that proper accounting procedures are always followed. Maybe they will even agree to serve as treasurer! Annually renew CUHSD Board of Education approval for your parent organization or booster club. Contact the district business office with any questions any time you are unsure of the correct answer or best practice. PLEASE DO NOT Page 81

82 o Conduct fundraiser activities that require students to participate. o Comingle parent organization or booster club funds with ASB funds. o Use the ASB account as a pass-through for parent organization or booster club funds. o Represent parent organization or booster club activities as those of the Campbell Union High School District or any of its schools. o Use the CUHSD s tax/employer identification number. o Elect, solicit, or use district employees to serve in any financial capacity. o Give athletic coaches any money, including gift cards. The CIF Blue Book at provides the rules regarding coaching compensation. o CIF Blue Book Article 50, General Rules, Rule 503, Administrative Oversight, section F (1), Coaching Compensation states, A coach shall not be reimbursed for coaching services from any source other than school funds without the approval of the school s governing board, nor be subject to any bonus arrangement dependent upon the success of the school s team. o CIF Blue Book Rule 503 F (2), Penalty for Improper Coaching Compensation : Any team, coached by any person receiving any part of the salary for coaching from other than school funds without the approval of the school s governing board is ineligible. (Revised February 2009 Federated Council) o CIF Blue Book Rule 805, Any Gift, or Total of Gifts : Information on any gift, or total of gifts, sponsorships or contributions of $ or more yearly to any athletic program, team or coach which is meant to support that program, team or coach must be reported to the governing body or administrative officer responsible for policy development related to athletics. Best Practice Do not give any type of gift at all. Page 82

83 PARENT ORGANIZATION AND BOOSTER CLUB RESOURCES Campbell Union High School District Board of Education Policies and Administrative Regulations (Available online at CUHSD web site) BP 410 Nondiscrimination in District Programs and Activities BP/AR 1113 District and School Web Sites BP/AR 1230 School-Connected Organizations BP/AR 1240 Volunteer Assistance BP/AR 1321 Solicitation of Funds from and by Students BP/AR 1330 Use of School Facilities BP 3250 Transportation Fees BP/AR 3260 Fees and Charges BP 3290 Gifts, Grants and Bequests BP 3300 Expenditures & Purchasing BP/AR 3452 Student Activity Funds AR 3512 Equipment BP/AR 3554 Other Food Sales BP 4135 Soliciting and Selling (All Personnel) California Laws (Available online at: California Education Code Section Prohibited solicitations on school premises Section Fund-raising projects California Business and Professions Code Sections Enforcement Sections False advertising in general Sections Charitable solicitations California Government Code Sections Investigations and Hearings Sections Uniform Supervision of Trustees for Charitable Purposes Act Page 83

84 California Penal Code Sections Lotteries Sections Gaming Section 532(d) Fraudulently obtaining money, property or labor California Corporations Code Sections Nonprofit Corporation Law California Revenue and Taxation Code Section 214 Welfare exemption; exemption for religious, hospital, scientific, or charitable property; Application of 2004 amendments Section 23701d Religious, charitable, scientific, literary, educational organizations, national or international amateur sports competition, prevention of cruelty to children or animals Other Resources Internal Revenue Service (Federal Tax Exemption and Reporting Compliance) Internal Revenue Service (Forms and Publications) California Franchise Tax Board (California Tax Exemption) California Board of Equalization (Property taxes and sales taxes) California Employment Development Department (California payroll taxes) California State Attorney General s Charities Program Requirements California Attorney General s Guide for Charities California state PTA CIF Blue Book Corona-Norco Unified School District Booster Club Manual Chino Valley Unified School District Booster Club Manual San Marino Unified School District Booster Club Manual Page 84

85 EXHIBITS & SAMPLE FORMS Please see forms on the website: Page 85

86 XHIBIT F Page 86

87 Page 87

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89 Page 89