Activity Fund Manual GILMER I.S.D.

Activity Fund Manual GILMER I.S.D.

INDEX SECTION 1: General Information 1.1 Definition and Purpose of Activity Fund 1.2 Responsibility for Activity Fund 1.3 Income and Dues 1.4 Interest Earnings 1.5 Auditing of Activity Funds SECTION 2: Basic Bookkeeping Records 2.1 Basic Records Described 2.2 Additional Records 2.3 Retention of Records SECTION 3: Banking Practices and Procedures 3.1 Bank Accounts 3.2 Check Signatures 3.3 Bank Reconciliation SECTION 4: Organization / Club Financial Records 4.1 Responsibility of the Sponsor 4.2 Collection of Monies 4.3 Expenditure of Organization Funds 4.4 Disbursement of Funds 4.5 Carry Over of Funds From One Year to the Next SECTION 5: Receipt of Cash 5.1 General Operating Procedures 5.2 Receipt of Monies by Persons Other Than School Secretary 5.3 Control of Activity Fund Receipt Books 5.4 Interest on Investments 5.5 Collections from Staff SECTION 6: Deposit of Funds 6.1 General Operating Policies 6.2 Procedures for the Preparation of Bank Deposits SECTION 7: Returned Checks and Redeposit 7.1 Returned Checks 7.2 Redeposit 2

SECTION 8: Payment from Funds 8.1 Payments in General 8.2 Disbursement Check Requests 8.3 Issuance of Checks 8.4 Reimbursements 8.5 Multiple Refunds 8.6 Advance Payments 8.7 Cancellation of Checks SECTION 9: Vending Machines SECTION 10: Faculty Funds 10.1 Definition of Faculty Funds 10.2 General Operating Procedures SECTION 11: Purchasing Policies and Procedures 11.1 Purchases from Activity Funds 11.2 Purchases under $200 11.3 Competitive Bidding Requirement 11.4 Contract, Installment Contract, Lease Agreement 11.5 Prohibited Items SECTION 12: Fixed Assets 12.1 General Information 12.2 Purchase of Fixed Assets 12.3 Accounting for Fixed Assets SECTION 13: Fund Raising Activities 13.1 Fund Raising Policy 13.2 Definition of Fund Raising Activities 13.3 Accounting for Fund Raising Activities 13.4 Termination of Organization or Club SECTION 14: State and Local Sales Tax 14.1 Taxable Status of Purchases 14.2 Taxable Items 14.3 Tax Exempt School Items 14.4 Use of a Tax Exempt Sale Day 14.5 Tax Exempt Food Sales 14.6 Collection and Remittance of Sales Tax 3

SECTION 15: Principal s Fund 15.1 Definition of Principal's Accounts 15.2 Disbursement of Funds 15.3 Emergency Expenditures FORMS: Request for Approval of Fund Raising Activity Tax Collection and Remittance Report Tabulation of Money Collected 4

SECTION 1: GENERAL INFORMATION1: 1.1 Definition and Purpose of Activity Fund Activity funds are monies primarily consisting of various fees and proceeds of schoolapproved money-raising activities collected from students and school personnel. Each school may maintain a student activity fund. These funds are used to promote the general welfare of each school and the educational development and morale of all students. As a general guideline, funds derived from the student body as a whole should be expended as far as possible to benefit the student body as a whole. Funds collected or earned by specific groups of students should be expended to benefit those students from whom the funds are derived. Funds accumulated by the faculty may be used to benefit either faculty or students, at the discretion of the faculty. 1.2 Responsibility for Activity Fund Principals are charged with the responsibility for efficient and effective management of their school's activity funds as set forth in the Manual and interpreted by the Assistant Superintendent for Business & Operations. The Principal will appoint and supervise reliable and capable personnel for the physical handling of receipts, deposits, disbursements, and other duties associated with activity fund operations as specified in the manual. Principals are also responsible for notifying the Assistant Superintendent for Business & Operations if they are aware of any significant problems with regard to their school's activity funds. 1.3 Income and Dues Any club, group, or student organization having control of monies either as membership dues or income from other sources shall deposit the funds with the principal. The money shall be disbursed only for such purposes as may be authorized by action of the club and upon approval of the sponsor. All money raised by student organizations must be expended for the benefit of the students. 1.4 Interest Earnings All interest earned by any activity fund will be deposited into the General Activity Fund for that campus. 5

1.5 Auditing of Activity Funds The Assistant Superintendent for Business & Operations will conduct periodic audits of activity funds. Audits are the final control to assure principals that their procedures in handling funds entrusted to them are entirely adequate for the protection of themselves and their personnel. Audits often are requested by persons responsible for large sums of money to prove themselves careful and to prevent the development of any weakness in their financial procedures or records. It is the purpose of the activity fund audit to provide the principal with this type of protection. Also, the district s auditing firm on a yearly basis will audit the student activity funds. In addition, there will be an audit upon any change of principal or activity fund bookkeeper to insure that new personnel assume no pre-existing discrepancies. Scope of the audit will be determined by the quality of internal control present at the time of the audit. Activity fund records will be kept current so that procedural reviews or audits may be conducted at any time. SECTION 2: BASIC BOOKKEEPING RECORDS: 2.1 Basic Records Described Activity Fund Cash Receipts Pre-numbered multi-part cash receipt forms are required for all cash receipts. Activity Fund Cash Disbursement Check Requests These Check requests are to be used as the authority for issuance of a check drawn on the activity fund. Activity Fund Checks These checks are used to disburse all funds from the activity funds checking account. Checks must be secured from the local depository bank. Bank Deposit Slips These slips serve as transmittal advice to the bank and the record of monies deposited in the bank on specific dates. As such, these slips, when properly prepared, are vital supporting documents in the maintenance of accurate cash records. Deposit slips should be obtained from the local depository bank. 6

Monthly Bank Statements This statement is a transcript of records reflecting all transactions included in the activity funds management. When properly reconciled, the statement serves as official support for the cash balance indicated in the activity fund records. General Ledger The general ledger serves a summary of all transactions included in the activity funds management. The general ledger is compulsory for all schools. The general ledger will be maintained at the Central Office. Subsidiary Ledger This ledger contains activities for individual accounts. Each campus will use the Quickbooks or a similar software program for this purpose. The financial activity of each organization and group will be tracked through this method. Cash Receipts Journal This journal serves as a record of all receipts deposited for each month. Journal supplies may be ordered from outside vendors. These reports can be found within the software program. Disbursement Journal This journal serves as a schedule of checks written for each particular month in support of totals posted to the general ledger. Journal supplies may be ordered from outside vendors. These reports can be found within the software program. 2.2 Additional Records The above section describes only the records required by the District. Any additional records may be utilized either for a specific purpose or for better control over activity funds in general. 2.3 Retention of Records All activity fund records must be kept on file for a period of five years. They may be destroyed after five years. 7

SECTION 3: BANKING PRACTICES AND PROCEDURES 3.1 Bank Accounts Each fund shall have only one bank checking account. All monies received will be deposited into this account and all disbursements will be made by a check drawn on this account. Only activity fund transactions may be directed through the activity fund accounts. Transactions controlled by food service or outside organizations must be handled through separate bank accounts. Schools and school organizations are prohibited from borrowing funds or entering into deferred payment contract from any and all outside sources. 3.2 Check Signatures Each fund's bank account shall have four authorized check signers - the principal, the principal's secretary (or other office staff member designated by the principal), the Superintendent and the Assistant Superintendent for Business & Operations. These names shall be authorized by means of signing signature cards at the depository bank with a copy of the signature card filed in the Business Office. Each check will require two manual signatures. The principal will be considered responsible for all financial transactions and proper check signature, even in the case of the unavoidable absence. Under no circumstances shall checks be pre-signed. 3.3 Bank Reconciliation Upon receipt of the monthly bank statement, the balance indicated on the statement shall be reconciled to the bank account balance in the register as of the last day of the applicable month. Be sure the outstanding checks are determined by comparing the cancelled checks against the disbursement journal, not against the check stubs. Compare them with both the check number and the amount recorded in the journal. The reconciliation shall be prepared in duplicate. One copy of the reconciliation shall be submitted to the Assistant Superintendent for Business & Operations and one shall be retained with the activity fund records. 8

SECTION 4: ORGANIZATION / CLUB FINANCIAL RECORDS 4.1 Responsibility of the Sponsor The sponsor of each school organization or club is required to maintain adequate financial records as evidence of proper custodianship and supervision of fund raising activities, receipt of club funds, and the disbursement of club funds. These records are subject to audit for evaluating the sponsor's performance in meeting the financial responsibilities associated with the operation of the club or organization. 4.2 Collection of Monies All cash collections received by the organization or club for fees, dues, fund raising activities, etc., must be recorded on pre-numbered cash receipts, tabulation of Monies Collected from Students, or cash collection forms provided by fund raising vendors. The pre-numbered forms should be controlled and properly accounted for. All collections must be deposited in the school activity fund. 4.3 Expenditure of Organization Funds Money derived from the combined participation and involvement of the student body as a whole shall be so expended as to benefit that student body as a whole, and not for the benefit of a single student group. For example, when the student body as a whole participates in a fund raising activity, the proceeds of the fundraiser should not be used in such a way that only officers of the organization receive the benefit. Expenditure of organizational funds must be approved by the majority of any organization prior to the expenditure of the funds. This authorization can be through the use of official vote recorded in official minutes or through a signature page prepared by the sponsor. It must be clearly reflected in the authorization that the group knew exactly what the expenditure would be when approving the expenditure. 4.4 Disbursement of Funds The school secretary shall make all disbursements by the organization/club with an activity fund check. The organization/club should prepare an Activity Fund Disbursement Check Request and submit the completed form along with supporting documentation (original invoice, sales ticket, or cash register receipt) to the school secretary. The activity fund check will then be issued if sufficient funds are available and with the approval of the principal. No disbursements (or purchases) may be made from undeposited cash collected by the club. Stamped receipt from the bank must be turned in to the secretary prior to a check being issued. 9

4.5 Carry Over of Funds From One Year to the Next The club or organization should make every effort to expend all monies raised during a school year during the same school year. Every effort should be made to insure that the students earning the monies should be able to benefit from the proceeds. To assist with start up costs for each school year, each club/organization will be allowed to carry over a maximum of $500 from one school year to the next. Any money in the accounts in excess of the $500 start up balance will be moved into the campus general activity fund for the use of the student body as a whole. Exceptions may made with the prior approval of the Superintendent for such thing as trips that are made every two years, purchase of large ticket items, etc. SECTION 5: RECEIPT OF CASH: 5.1 General Operating Procedures All monies collected must be submitted to the school secretary in the same form as collected. Employee's personal checks may not be substituted for cash collections. All cash receipts shall be recorded by immediate preparation and issuance of an official activity fund receipt. Cash receipts must be issued in numerical sequence. Pre-numbered receipt books should be used. The receipt must be completed in its entirety, including: The date and amount The payee - an individual or firm, a receipt may not be issued to more than one person For This field shall include an explanation of the purpose for which the money was received The account This field shall state the Activity Fund account to be increased by the amount of the receipt The signature - the person receiving the money the signature must be manual; signature stamps are strictly forbidden 10

An actual cash count to verify monies received shall be made by the school secretary in the presence of the person turning in the money before a receipt is issued. When funds submitted have be tabulated on the correct form, the secretary shall issue a receipt number after the monies have been immediately counted and found to agree with the total on the form. Under no circumstances shall a cash receipt be altered. If an error occurs in the preparation of a cash receipt, void both the original and duplicate of the incorrect receipt and issue a new receipt. The original of the voided cash receipt must be attached to the carbon copy and both documents clearly marked as VOID. The original cash receipt shall be given to the person paying the money. All duplicate copies of cash receipts must be retained in the receipt book. If there is a third copy, it should be attached to the copy of the deposit slip. Cash receipts are not to be pre-signed or predated. The school shall not accept postdated checks from any source. Checks shall not be accepted from any party who has not redeemed a previous returned check. Any claim for money that is not verifiable by a receipt becomes the financial obligation of the employee who did not obtain a receipt. A copy of a deposit slip will be acceptable proof that a deposit was made. 5.2 Receipt of Monies by Persons Other Than the School Secretary Monies may be collected directly by an authorized individual other than the secretary for small, multiple collections, approved by the principal for such items as bus trips, movie admissions, student fees, pictures, etc. In such instances the following operating procedures shall be applicable. Tabulation of Monies Collected from Student (form is located at the back of this manual) must be prepared by the person receiving the money. A. Teacher completes form - any copies are to be initialed B. Teacher will list students by the name and amount paid C. Students paying for another student should be listed and noted as such D. Total collected should agree with the amounts listed E. Secretary should: 1. Count money, assign receipt number and enter the receipt number 2. Give a copy of the receipt to the teacher 3. Attach a list of forms (adding machine tape) to the deposit slip. 11

4. Names of teachers may be shown in order to facilitate the process. Charitable or voluntary collections in homerooms need not be accompanied by collection form when transmitted to the school secretary. The school secretary should issue a receipt. If the student requests evidence of payment, the teacher should either acknowledge receipt by a note or by use of a receipt. Collections shall be submitted to the school secretary no less than weekly and at any time the total amount of such collections exceeds $25.00. All collections turned in to the secretary must be accompanied by the supporting documents. The school secretary will retain the original and the duplicate will be returned to the teacher or other authorized individual, along with an official receipt. On such occasions when the entire class will attend an event and a definite sum is paid by all students, the teacher/sponsor may indicate the number of students and the amount on a single line of the collection form, i.e. 15 students at $1.00 each - $15.00. If the amount per students exceeds $5.00; students should be listed by name. 5.3 Control of Activity Fund Receipt Books The school secretary shall be responsible for maintaining an adequate supply of receipt books. The secretary shall not issue receipt books to any other party without prior approval of principal. 5.4 Interest on Investments Interest earned on the checking account should be periodically transferred to the General Activity Fund, usually at month end. 5.5 Collections from Staff Separate accounting is required when monies are received from the staff for gifts, tickets, donation, etc. and the monies are deposited to the Activity Fund. These types of transactions should be clearly identified in the accounts. 12

SECTION 6: DEPOSIT OF FUNDS 6.1 General Operating Policies Deposits must be made daily when the total cash receipts on hand exceed $50.00. If daily receipts are less than $50.00, deposits must be no less than weekly regardless of the amount of money. School personnel shall transport funds directly to the bank for deposit. All checks to be deposited should be endorsed by the use of a stamp or manually as follows: FOR DEPOSIT ONLY GILMER I.S.D. (Your bank account number) Re-deposits must be deposited separately from other funds collected. (See Section 7.2 for instructions.) 6.2 Procedures for the Preparation of Bank Deposits All coins must be rolled and wrapped prior to turning in to secretary for deposit. Bills should also be separated by denomination by organization. Checks should be made out to individual organizations (i.e. GHS Yearbook). If this is not done, sponsors should indicate the name of the receiving organization in the memo area on the front of the check. Bank deposit slips shall be prepared in duplicate for each deposit. Both copies should be submitted with your deposit. One copy will be returned to the school as the official record. All applicable blanks on the deposit slip must be completed. An adequate supply of forms must be maintained because of the extra time required for printing official forms bearing the school's name and number. The sum of the amount of the supporting cash receipts must be in agreement with the amount of the bank deposit. If your deposit amount does not agree with the total of receipts included in the deposit, count the monies again and correct deposit before releasing it. Place all monies and deposit slips in the deposit bag. 13

SECTION 7: RETURNED CHECKS AND REDEPOSITS 7.1 Returned Checks Occasionally the bank will return a check that was previously deposited unpaid, due to insufficient funds, closed account, improper signature, or other reasons. This check should not be redeposited. If the bank returns it, the school secretary or organization sponsor will immediately contact the maker of the check requesting that it be redeemed with cash. Under no circumstances should the returned check be surrendered to the maker except in return for cash. Checks shall not be accepted from any party who has not redeemed a previous check. The secretary shall issue a cash receipt when the returned check is redeemed with cash. Do not give original cash receipt to the maker since such action would constitute duplication, but indicate "NSF Collection" on the receipt. The original receipt is retained in the NSF check file. If after repeated efforts, a returned check has not been redeemed, the check should be submitted to the school principal/supervisor for final action. If the principal/supervisor determines the check to be un-collectable, it should be written off. 7.2 Redeposits When a check is returned from the bank: 1. The cash collected from the maker is to be deposited separately from other school receipts. 2. Attach the original and copy of receipt to the deposit slip. Indicate "Redeposit" on the deposit slip. 3. The previous cash receipt number should be shown, e.g., "Previously Receipted on Receipt No. 122". 14

SECTION 8: PAYMENT FROM FUNDS: 8.1 Payments in General An original invoice directed to the school constitutes the authority for the issuance of a check after the receiving party has initialed the invoice indicating prices and extensions are correct and that the merchandise has been received in good order or the services performed satisfactorily as invoiced. Prepayments are not permitted without approval of the Business Office. These should be limited to very unusual circumstances. All original invoices shall be presented and approved by the principal as related checks are presented for signature. Approval should be indicated by signature or initials entered on the invoice. The check numbers and dates shall than be indicated on all invoices before they are filed. 8.2 Disbursement Check Request A completed disbursement Check requests constitutes the authority for the issuance of an activity fund check when an original invoice charged to the school is not applicable or has been lost. An official Activity Fund Disbursement Check Request must be written prior to the issuance of each check, which is not supported by an original invoice. Procedures governing the preparation of disbursement Check Requests are as follows: A. The disbursement Check Request shall be completed in its entirety including: 1. The date and the amount 2. Check # - the corresponding activity fund check number 3. The payee - must be the same as the payee shown on the check 4. For - a description of the merchandise purchased or service rendered 5. The account - the activity fund account to be decreased by the amount of the Check Request 6. The signatures - school secretary and principal 15

B. The disbursement check request shall have attached to it all supporting documents relative to the proposed payment. Proper documentation includes: 1. Any documentation (letters, acknowledgments, renewal notices, etc.) when the vendor does not issue invoices. 2. A statement by an individual requesting payment. This statement, which may be a form designed by the school, must provide a description of the services rendered and/or materials delivered, the amount of money requested, and must bear the signature of the person requesting payment. 8.3 Issuance of Checks - Operating Procedures All checks shall be made by activity fund check. All activity fund check must bear the signature of two of the authorized check signers. See Section 3.2 for procedures regarding check signers. The principal shall approve no expenditure unless sufficient funds are available in the appropriate activity fund account. It shall be the responsibility of the principal to determine whether payment is permissible from the designated account. Payments must always be made to a specific person, company or organization. Checks shall not be made payable to "Cash" or to the paying school. Under no circumstances shall checks be pre-signed by authorized check signer. That is, no signature shall be affixed to a check until all blanks (date, payee, and amount) have been filled in. If it becomes necessary to void a check, the check signatures are marked out or removed and "VOID" clearly marked across the check. The original should be filed in numerical sequence. Documents in support of check should be "canceled" when payment is made to prevent a duplicate payment by using the document again. Canceling may be accomplished by the secretary's initials, the date, check number on the document after the check has been signed by the principal. The school's name and number are pre-printed on the supply of checks. Therefore, it is important to maintain an adequate supply of checks because of extra time required for printing. 16

8.4 Reimbursements Checks may be issued to students or employees to reimburse them for personal funds expended for school purposes, provided that proper documentation is submitted in support of the expenditure. 8.5 Multiple Refunds Occasionally, it may be necessary to make multiple refunds due to cancellation of field trips, overcharges, etc. In such cases, a single check may be issued to the activity sponsor who will distribute the refunds to each student. Each secondary student due a refund shall sign a list verifying that the refund was received. The activity sponsor should list elementary students receiving a refund. The undistributed refund shall be returned to the secretary who will issue a cash receipt. The secretary shall attach the receipt number and date issued for money returned. 8.6 Advance Payments The purpose of this section is to provide the procedures for the issuance of monies when groups of students are traveling out of town as a group for school purposes. A sponsor accompanying the group may receive a check in advance of the trip in order to pay for meals and lodging for the group. Procedures for advance payments are as follows: A. The activity sponsor shall make a written request for an advance stating the amount needed and the purpose for which the advance is required. The Activity fund Check Request will be used for this purpose. B. The request for advance payment should be attached to the original disbursement check request when presented for the principal s approval. The check request should stipulate that the proposed payment is an advance (in the "for" blank). C. At the completion of the activity, the sponsor shall transmit to the secretary all invoices, sales slips, etc., supporting the actual amount of expenses, and shall return any unused funds. D. The secretary will issue a cash receipt for the money returned and will crossreference this receipt number to the original disbursement check request. All supporting documents submitted shall be attached to the original disbursement check request. 17

E. The settlement of all advances shall be completed not later than seven (7) days after termination of activity for which the money was advanced, except in cases deemed unusual or exceptional by the principal. In all cases, settlement should be attained prior to the end of the school year. It is the dual responsibility of the principal and the secretary to assure that all advances are properly accounted for. 8.7 Cancellation of Checks It will occasionally be necessary to cancel a check, which is outstanding for a period in excess of ninety (90) days, which has been lost, or which has been returned by the payee for some reason. In such cases, the following procedures shall be employed: A. When the check is lost or unaccountable, a stop payment letter should be sent to the bank. This letter should include check date, amount and whom the check is made out to. If the check is to be replaced with another check, also provide information on the replacement check, (i.e. check number and date). B. Prepare a journal entry debiting (increasing) the bank account and crediting (decreasing) the account expense to which it was charged. SECTION 9: VENDING MACHINES: All receipts from student use vending machines shall be deposited in the General Fund for the purpose of enhancing student education as a whole. No vending machines may be located in the district without approval from both the building administrator and the superintendent. SECTION 10: FACULTY FUNDS 10.1 Definition of Faculty Funds Faculty funds are defined as funds generated or contributed solely by the school faculty to be utilized and expended at its own discretion. All expenditures for hospitality, condolence, lounge facilities, or any other purpose for the sole benefit of the faculty, shall be paid out of Faculty Funds. 18

10.2 General Operating Procedures All faculty fund transactions shall be conducted through the school activity funds. All regulations governing the receipt and disbursement of activity fund monies are applicable to faculty fund transactions. Prior approval of expenditures is also required for this group. Please see Section 4.3 for more information regarding group approval. Transactions involving Faculty Funds must be processed though a separate activity fund to prevent their being co-mingled with other funds. SECTION 11: PURCHASING POLICIES AND PROCEDURES 11.1 Purchases from Activity Funds The principal is fully responsible for all purchases and purchase commitments requiring the present or future disbursement of activity fund monies. Teachers must have a commitment from the principal before making any purchase in the name of the school. Purchases shall not be made unless sufficient funds are available in the proper activity fund account. Principals are authorized to purchase on an emergency basis, up to $50 of instructional materials through activity funds and receive reimbursement from the district's budgeted funds provided sufficient funds are budgeted. Standard purchase order procedures should be followed to secure reimbursement. This is to be used for emergency or unforeseen purchases only and in no way replaces the necessity of purchase orders and encumbrance accounting for district purchases. 11.2 Purchases Under $200 For the purposes of efficiency in administration and management, schools are authorized to make purchases of supplies and materials, and equipment for various activity fund groups directly from an approved vendor when the dollar amount is less than $200. Purchases in excess of $200 will require the approval of the Superintendent or designee. This limit does not apply to expenditures of an approved fund raising project. 11.3 Competitive Bidding Requirements Competitive bidding procedures must be followed for any purchase in excess of $5000 as required by Gilmer Independent School District Policy. 11.4 Contract, Installment Contract, Lease Agreement, The Superintendent or Assistant Superintendent for Business & Operations are the only people authorized to enter into contracts, installment contracts, or lease agreements between the District and a third party. 19

11.5 Prohibited Items A. Loans, credit, or accommodation purchases for district employees B. Purchases from any district employee C. Articles for personal use of district employee D. Salary or salary supplements to any district employee E. Purchases of alcohol, firearms, or controlled substances. SECTION 12: FIXED ASSETS: 12.1 General Information In order to meet state accounting guidelines and have adequate documentation for insurance purposes it is necessary for each campus to accurately account for all fixed assets purchased through the school activity fund. Fixed assets are items purchased that are tangible in nature; they have a life of more than one (1) year; are of a significant value at the time of purchase; may be reasonably identified and controlled through a physical inventory system. Significant value may be generally defined as a value of $500 or more. 12.2 Purchase of Fixed Assets Fixed assets may be purchased indirectly with activity funds. The school may choose the particular equipment and vendor (as long as district purchasing and bidding guidelines are met) but may not issue a check to the vendor nor order from them directly. The purchase of a fixed asset item (furniture or equipment) is accomplished by preparing a district purchase order (as if purchasing the item from district budgeted funds) including an appropriate expenditure code for equipment. A check should be issued from the activity fund account with the appropriate source of funds indicated on the check. The check should be made payable to Gilmer ISD. The completed purchase order and the check should then be forwarded to the Business Office. The Business Office will record the check and a budget amendment will be made in the General Operating fund increasing the appropriate budget code. The completed purchase order will be processed normally. Campus personnel will then be responsible for notifying the Business Office for any overpayment or send a check for any underpayment for the difference between final payment by the GISD Business Office and the amount of the activity fund check. 20

12.3 Accounting for Fixed Assets Purchased by Activity Funds The fixed asset becomes the property of the Gilmer ISD and will be added to the district's fixed asset records. The asset must be accounted for by the principal and tagged as GISD property. Section 13: Fund Raising Activities : 13.1 Fund Raising Policy In order to provide administrative control over the fund raising activities promoted by the various school organizations, the Request for Fund Raising Activities must be completed, turned in, and approved at least seven (7) days prior to any fund raising activity. Materials or merchandise for a fund-raising project may not be ordered prior to approval by the principal. Persons who order merchandise without prior approval shall assume full responsibility for the bill. No sales, collections of funds, or collection of items shall occur without the approval of the principal. 13.2 Definition of Fund Raising Activities A fund raising activity may be defined as any activity involving participation of a student body or a school recognized student group undertaken for the purpose of deriving funds for a school or school sponsored group. Money-raising activities are not confined to regular school hours but are considered an extension of the school program. Schools may advertise, collect funds for, and buy and sell products or tickets for fund raising activities sponsored by a booster, parent-teacher, or student group or club that benefit the school and its instructional program. These fund raising activities must not interfere with the instructional program or instructional time. The sale of tickets and the collection of funds must be handled tactfully without exerting pressure on or causing embarrassment to students. 21

13.3 Accounting for Fund Raising Activities All collections and disbursements associated with any fund raising activity coordinated by the school or a school recognized group shall be transacted through the Activity Fund. Outside organizations conducting fund raising activities shall manage their own finances and make donations to the District. Expenditure of the funds is at the discretion of the District, although the organization may suggest uses for the monies donated. All expenditures must have the approval of the principal of the campus most closely related to the area receiving the benefit of the expenditure. Any expenditure in the area of athletics must have the approval of the Athletic Director and be in compliance with U.I.L. regulations. The club sponsor or activity chairperson is responsible for keeping accurate records for all monies turned in to the campus secretary and for all monies collected from the students. All records shall be retained for audit purposes. 13.4 Termination of Organization or Club In the event of the termination of an organization, student club, or graduating class, the officers or the membership should move to properly expend any available money. Proper disposition of such remaining monies includes: The purchase of a memorial, which is acceptable to the principal to commemorate the historical accomplishments or services, rendered by the group The purchase of equipment or tangible items that would benefit future students, when such purchase is coordinated through the Business Office Should they fail to take the above action, any monies remaining will be transferred to the campus Activity Fund at the beginning of the subsequent school year immediately following the group or class ceasing to exist. The money at that time may spent on any item that benefits the student body as a whole. The campus principal is responsible for determining how the money will be spent. Section 14: State and Local Sales Tax 14.1 Taxable Status of Purchasesof Purchasesof Purchases Purchases by the school of equipment and materials for educational or instructional use, for administrative use necessary to the educational function of the school or for resale are exempt from state and local sales taxes. 22

Purchases from Activity Funds for hospitality, condolence, etc. are generally not tax exempt, as these expenditures are not related to the basic education or instructional function of the school. The Superintendent and Assistant Superintendent for Business & Operations are the only persons authorized to sign a sales tax exemption certificate. The Gilmer ISD tax exemption certificate may not be utilized by parent, patron, student groups, booster clubs or alumni organizations to secure exemption from sales tax. A school must provide the vendor with the State Sales Tax and/or Federal Excise Exemption Certificate. 14.2 Taxable Items School purchased supplies sold directly to students, such as clothing, materials, and supplies Fees for materials when the end product becomes a possession of the student Student publications such as yearbooks and directories Any type of organization/club materials such as pennants, ribbons, pom-poms, T-shirts, etc. Sales by teachers & students: Tax must be collected on merchandise (other than food) that is sold If the school assumes responsibility for the activity and/or sales, the school is responsible for insuring the tax is paid. The school may purchase items tax-free and must collect the tax when the items are sold. Examples of taxable sale items are the following that are purchased by the school/club/organization and sold to students or other individuals. 1. School pictures 2. Books purchased for individuals at Book Fairs 3. Fees for materials used in the classroom if end product belongs to the student, such as, lumber in industrial arts classes, art supplies in art classes, fabric in homemaking classes and band reeds in band. 4. Spirit ribbons 23

14.3 Tax Exempt School Items 1. Fees and admission tickets, including football games and plays 2. Club memberships 3. Subscriptions to magazines entered as second class mail and sold for semiannual or longer period of time 4. Vending machine sales of food and drinks 5. School newspapers, if they meet the following criteria: printed on newsprint, printed more than once a month, and sells for less than $0.75 6. School sponsored trips - meals purchased by the school for students and sponsors on authorized trips are exempt from tax if the school contracts for the meals and issues the check. 14.4 Use of a Tax Exempt Sale Day Other items may qualify for tax exemptions by use of a tax-exempt day by the organization selling the item. More information is available through the State Comptroller's Office and the Business Office. 14.5 Tax Exempt Food Sales Youth organizations are exempt. Parent organizations are not. Sales tax is not collected on meals and sales in the campus cafeterias during the regular school day. The exemption applies to guests, employees, or teachers served in the cafeteria. Sale is part of a fund-raising drive sponsored by the organization and all net proceeds from the sale go to the organization for its exclusive use. 24

14.6 Collection and Remittance of Sales Tax When imposing sales tax, the school has the option of: Adding the tax to the selling price of the item. For example, if the selling price was $2.00 and the tax was 8.25%, the school would collect $2.17 from the buyer for each item sold. Absorbing the tax in the selling price of the item. For example, if total sales were $100.00 including tax, the school would retain 92.38and remit $7.61 for sales tax. If this method is used, divide your total sales by 1.0775 to find your taxable sales. Multiply taxable sales by.0825 to find the amount of state and local taxes due on total sales. All taxes collected by the school shall be remitted by check to the Business Office by the 10th day of the month following the close of the calendar quarter. (i.e. April 10, July 10, October 10, and January 10) Use the appropriate form found in the back of this manual for transmitting information to the Business Office. The Business Office will assume full responsibility for transmitting all sales tax to the State Comptroller's Office. SECTION 15: PRINCIPAL'S FUND 15.1 Definition of Principal's Accounts The principal's fund on each campus will act as a clearing account for each campus. Proceeds from this account will consist of sales, fees, and commissions from the students as a whole. Examples of these proceeds are student pictures, monies collected from students for admission to certain events, and charitable collections. The cost of the items producing the revenues is also paid from the principal's fund. 15.2 Disbursement of Funds Expenditures must be made in accordance with the purchasing procedures in place for other expenditures from the General Fund. Those funds in the Principal s portion of the activity fund are by definition part of the general fund of the school district. Careful attention should be paid by all concerned that all District policies and procedures are followed when spending these funds. 25

15.3 Emergency Expenditures In emergency situations, the principal may purchase up to $50.00 of instructional supplies from the activity fund to be reimbursed by the General Fund. The funds must be available and budgeted. Reimbursement to the activity fund will consist of submission of a purchase order and other standard procedures as set forth in Gilmer I.S.D. regulations. 26

ACTIVITY FUND FORMS 27

GILMER INDEPENDENT SCHOOL DISTRICT STUDENT GROUP OR ORGANIZATION REQUEST FOR APPROVAL OF FUND RAISING Organization: Campus: This is the (1st, 2nd,etc.) fund raising activity this year. PURPOSE OF FUND RAISING: PROJECT INFORMATION: Project: Date of Project: Length of Project: Expected Profit: Scope of solicitations: VENDOR INFORMATION: Vendor: Vendor Address: Representative Name: Sponsor Signature Principal Signature Approved: Denied: 28

GILMER INDEPENDENT SCHOOL DISTRICT TABULATION OF MONIES COLLECTED Receipt No. Date: School: Organization: Activity: Name and/or Activity Amt. Name and/or Activity Amt. Teacher or Sponsor Total Amt.: This form should be prepared in duplicate listing contributors and their contributions. The original should be turned into the School Secretary along with the total amount indicated. The copy should be kept by the teacher/sponsor responsible for collecting the money. A receipt for the total amount should be issued to the teacher/sponsor. 29

GILMER INDEPENDENT SCHOOL DISTRICT ACTIVITY FUND CHECK REQUEST School: Date: Organization: Check to be payable to: Name: Address: Amount: For: Person Requesting Payment: Vendor Qualifications: ESC7 QISV Sole Provider Other, Explain ----------------------------------------------------------------- Sponsor Approval: Principal Approval: Check Number: Check Date: 30