The purpose of this session is to give the user a high-level overview of the process flow for managing an Activity Fund Account.

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2 The purpose of this session is to give the user a high-level overview of the process flow for managing an Activity Fund Account. The user is responsible to read the GPISD Business Operations Manual to develop a detailed knowledge of the management of the Activity Fund. For questions regarding the Activity Fund Accounts, please contact: aida.arredondo@gpisd.org

3 Mission/ Purpose of Organizations Similarities & Differences Activity Funds Fund- Raisers Sales Tax Booster Clubs

4 Both Activity Funds and Booster Clubs have similar purposes: Assist in supporting students or student groups. Support provided is usually financial. -fund-raisers or contributions/donations

5 Activity Funds Integral Part of the District Financial Info Included in CAFR District Bank Account Used Agency Accounts Students In- Charge Teachers Work With Group Must Have Good Money Handling Procedures Fund-Raisers District Policies No Raffles Booster Clubs External Entity Financial Info Excluded from CAFR (except if GASB #39 is met) Separate Bank Account Used Parents In- Charge Teachers Work With Group Must Have Good Money Handling Procedures Fund-Raisers District Policies May Hold Raffles

6 Activity Funds Expenses Paid By District Monthly Reconciliations to General Ledger Sales Tax Booster Clubs Expenses Paid By Booster Club Monthly Treasurer s Report Sales Tax - Paid Through District - Paid Through Booster Club - Two One- Day Tax- Free Sales Day External Audit for CAFR IRS 1099s -Two One- Day Tax- Free Sales Day Review by Internal Committee or External Person or Firm IRS 990 and 1099s

7 Principal Internal Auditor Individual Activity Fund Sponsor Individual Activity Fund Sponsor

8 Receipts should be issued for money received Face-to-face counting of money Accurate and updated Activity Fund ledger Develop fund raising plans Cash in School Buildings Responsible for following procedures for safe handling of money Safe/ Vault must be locked Money must be secured in safe/ vault Must be deposited daily See page 10 of Business Operations Manual

9 Sponsor Writes receipts for funds collected Sponsor Counts money collected Completes sponsors deposit report Sponsor Gives sponsors deposit report form receipts cash and checks to principal See page 9-10 of Business Operation Manual

10 Principal Receives Sponsor Deposit Report Receipts cash and checks Principal Validate accuracy of Sponsor Deposit Form Cash and check totals Principal Makes need changes and initial Accept deposit/provide signed copy of Sponsor Deposit Form to Sponsor See page of Business Operations Manual

11 Follow same guidelines as budgeted funds Purchasing Laws Travel Conflict of Interest Operational Accounts General Welfare of Student Body School-Wide Fund-Raisers Sunshine/Wellness Accounts No student money/ fund-raisers should be deposited in this account

12 HB 3646 Guidelines All local revenues except agency funds What is allowable/ not allowable Gift Cards Not allowable from any fund IRS considers income Ok if purchased by parent group See pages of Business Operations Manual

13 All expenditures must be made by Purchase Order. No expenditures will be made using nondeposited cash. No purchase shall be made unless sufficient funds are available. No attempt to by-pass District procedures for expending budgeted District funds. See pages of Business Operations Manual

14 Common Audit Findings Lack of face-to-face counting of money Inadequate supporting documentation for receipts Money not safeguarded in a safe/ vault Money not deposited promptly Unauthorized petty cash funds Not following district guidelines Purchase items prior to approval

15 Sponsor completes fundraiser application Forwards to principal for approval Principal forwards to Business Operations Office for approval Rules 1. No joint fundraisers between Activity Funds and outside organizations. 2. No student shall solicit door-to-door. 3. Fundraiser profit must be used to benefit the student group responsible for the fundraiser. 4. Money and checks must NOT be stored at the Sponsor s home. See page 13 of Business Operations Manual

16 Ads Camp/ Clinic Candles Car Wash Cookie Dough Concessions Plants Entertainment Book Gift Wrap Garage Sale Magazines Silent Auction T-Shirts Yard Signs

17 Cannot require anyone to participate in a fund-raiser. Cannot require that a certain amount be sold or that a certain amount be donated in lieu of fund-raising. Cannot penalize anyone for not participating in a fund-raiser. Cannot have individual accounts- Cannot credit an individual based on revenues raised to offset that individual expenses. Amount raised must benefit a campus/ organization as a whole.

18 Is vendor an Approved Fund-Raiser Vendor? All vendor s are required to submit a W-9

19 Fund raiser Application due at least two weeks before fund-raiser is to be held. Submit to Principal and to Business Operations for approval.

20 Even though you have a Texas sales and use tax- exemption: You may need to collect sales tax and, You may need to pay sales tax. See page of Business Operations Manual

21 Purchases are tax-exempt Items purchased for resale during a fund-raising event should be made as non-taxable purchases from the vendor. Sales tax must be collect on all sales/fund-raisers unless they are determined to be non-taxable or have been declared as one of your tax-free sales days. Two one-day tax-free sales days per calendar year are allowed. (For activity funds, must be recognized by school, elect officers & hold meetings to qualify for the two one-day tax-free sales days.)

22 By law, these items are tax-exempt. Ads- Athletic Programs, School Newspapers, Posters, Yearbooks Admission- Athletic Events, Dances, Dance/Drama/Musical Performances, Summer Camps/Clinics, Workshops, Project Graduation Catalog Sales of Tax- Exempt Items- Cookie Dough Discount/ Entertainment Cards & Books Food that is not ready to eat- Cookie Dough/ Frozen Pizzas Magazine Subscriptions for more than 6 Months Services- Car Wash

23 Auctions and Silent Auctions Calendars and Day Planners Candles Catalog Sales of Taxable Items- Gift Wrap Clothing (including T- Shirts) Flowers- Roses, Carnations, Arrangements Gift Wrap, Balloons, ect.

24 Magazines- When Sold Individually Magazine Subscriptions- Sold for Less than 6 Months Plants- Holiday Greenery, Poinsettias, Floral Arrangements Rummage, Yard & Garage Sales School Store & Spirit Items Yard Signs

25 Organizations exempt from sales tax are entitled to two (2) one-day tax-free sales days per calendar year NOT school year. Suggest holding one fund-raiser in the Spring and one in the Fall. Sales of taxable items are taxable unless you use a oneday tax-free sales day. One-day is a 24 hour period of time. Select the taxable fund-raisers (exclude catalog sales and book fairs) that involve the most money received (highest gross) not the largest profit. Document which fund-raisers are your one-day tax-free sales days. See page of Business Operations Manual

26 For catalog sales of taxable items and book fairs, you are considered an agent of the vendor. These fund-raisers are ALWAYS taxable. As an agent of the vendor, you CANNOT use a one-day tax-free sales day. Make sure that you and the vendor are in agreement on handling of the sales tax. Collect the sales tax and remit it to the vendor. The vendor will pay the sales tax to the Texas Comptroller s Office.

27 If you have a taxable sale, will sales tax be included in the sales price or will it be added to sales price? For catalog sales and book fairs, easiest to have sales tax included in the price. If sales tax is included in the sales price, must state on brochures or signs.

28 Texas Comptroller s Office Requires submission of a Texas Sales and Use Tax Return Due annually to accounts payable by January 6.

29 Did you know. Booster Clubs must be a 501(c)(3) organization with the IRS before the organization can qualify for a Texas sales and use tax-exemption. This exemption qualifies Booster Clubs for the two one-day tax-free sales days per calendar year. See page 152 of Business Operations Manual

30 The following directives regarding a sponsor s duties and responsibilities with the Booster Club include, but not limited to: No employee of GPISD may serve as a board member, if a part of that responsibility includes signing for checks or managing any type of financial transaction on behalf of the Booster Club. District Employee must not be identified on any financial documentation or agency related to the Booster Club. District Employee may not receipt monies collected on behalf of the Booster Club. Any monies donated by the Booster club must follow the GPISD Activity Accounts procedures. Booster Clubs may NOT utilize the District Tax Exempt Status.

31 Receipts should be issued for money received. Face-to-face counting of money Money is usually received at meetings Responsible for safe handling of money Usually have no safe/vault Best way to safeguard the money is by depositing it as soon as possible

32 Purchases No Purchasing Laws Should have documentation of expenses incurred and have two people review the documentation before issuing a check (best to have 2 signatures on checks) Avoid- Conflict of Interest Purpose Fund-Raise for Specific Student Group

33 IRS - Prohibitions Must file Form 990, 990-EZ, or 990-N annually For fiscal year ending in N Gross Receipts are $50,000 or less 990-EZ Gross Receipts are greater than $50,000 and less than $200, Gross Receipts are $200,000 or more Due 4.5 months after fiscal year end Fiscal Year End May Form due October 15 Fiscal Year End June Form due November 15

34 Texas Comptroller s Office Sales Tax General Information Exempt Organizations Department ext Internal Revenue Services (IRS) Tax-Exempt Organizations (toll-free) (Select Charities & Non-Profits)