School Support Organizations & Groups Rutherford County Schools Boardroom 6:30 PM, Monday, Aug. 20, 2018
SSG - School Support Group SSG can be either Booster Club or a PTO SSG semi-independent group that benefits the school or a school program All funds run through the School s activity fund These funds are public funds audited by the school system s auditors. All SSG s must be approved by the BOE.
School Funds vs. SSO Funds Funds in school bank accounts are public funds regardless of the source. Fund raiser money becomes school money as soon as a teacher or other Board employee handles it The exception is principal can approve turning in money in sealed envelopes to collect money from an SSO fundraiser. Both SSO and SSG funds must be spent on the purpose for which they were raised.
Separation of Duties Have more than one person involved with the money Have someone other than the treasurer receive and review the bank statements and check copies Require 2 signatures on checks
Inventory & Parking If an SSO controls parking, a parking agreement with the school is required. Concession agreements are required for an SSO. We have tried to simplify our inventory procedure. See your school bookkeeper. But inventory records are required for SSO s and schools.
SSG Funds in the School SSG members, coach, & principal will still approve the overall plan (budget) of how funds will be used. This plan and pay-out of proceeds should recorded in letter of agreement with the principal. Separate 700 series of accounts for SSG funds
Donations to the Schools Nice thing about governmental accounting, restricted funds can only be spent for the purpose for which they were raised or donated. The letter of agreement between the SSO and the principal is the vehicle to restrict how some of SSO donation can be used. The 700 accounts and sub-accounts for SSG funds will limit how they can be spent. General funds must be used to benefit the student body.
Coaches & Non-faculty Coaches Procedures for securing approval for a Non-Faculty (volunteer) Coach remain the same in terms of the background check and finger printing process. There is Request to Approve a Coaching Supplement form. Part of the gender equity settlement with OCR School Board must approve CO Athletic Director makes sure the position won t violate gender equity
Board Approval for Supplements/Payments Any planned payments to any RCBOE employee or non-employee that will total $500 for any type of service must be approved by the school board. This includes: Coaches Non-faculty coaches Employees to drive a bus drivers or handle bus duty Choreographers Mowing / Field maintenance providers Weight room supervisors Custodians & Nearly all other
Supplements/Payments through RCBOE Payroll Rutherford Co. Employees - All Supplements MUST be paid through RCBOE payroll. All Supplements to Non-Faculty Coaches (volunteer) for ALL sports MUST be paid through RCBOE payroll. Income tax, FICA, and Medicare will be withheld. (And retirement for RCBOE employees)
1099 Supplements/Payments to non-boe Employees Supplements to non-rcs employees not related to coaching can be paid by through the school after approval by RCS Board. The RCBOE will issue the 1099. Supplements to non-rcs employees not related to coaching can be paid by boosters if approved by RCS Board. The booster club must issue a 1099 and send a copy to the accounting department.
Payment of the Supplements After School Board approval the money must be paid to the school s activity fund. The school will remit the money to the Central Office Payment will be made to the coach through the Board s payroll system. Principals and bookkeepers have the form to use for these requests. Coaches should be specifically instructed not to accept payment directly from school support organizations. All compensation, as opposed to reimbursements, must flow through employee paychecks.
Gift Cards No gift cards can be used to pay coaches. Their use violates Board policy. IRS treats them as taxable, cash payments.
Fund Raisers Supplement not supplant Two general school-wide fundraisers where children sell are allowed. Other school-wide fundraisers are limited to a festival & passive fundraisers such as pictures or vending. Concession Stands & Parking An agreement between the booster club and the school to operate the concession stand or parking is required. (This is in addition to the fundraiser request form.) Records of concession sales and inventories must be submitted after each game/function.
Fundraising Approval Forms Get prior approval from the Director of Schools before the organization undertakes fundraising activities (due to scheduling conflicts). Without prior approval, all such fundraising activities are prohibited Also the SSO/SSG must comply with the law, or all fundraising is prohibited See forms packet
SSO Fundraising Need to work closely with the principals Have more flexibility than schools in the ways their funds are used Can make donations to schools for staff development and items that can t be covered by school-generated funds Athletic gate receipts must go through school books not booster club includes season pass sales All tickets, including season passes, must be prenumbered.
SSO Fund Raisers SSO/SSG members need to approve the overall plan (budget) for using the funds. Planned distribution and pay-out of proceeds should be worked out with principal and recorded in the letter of agreement. Proceeds need to be spent or shared per the letter of agreement. Written agreement with vendor that addresses sales tax
Approval of SSO Fundraisers Students shall not be out of class for booster-sponsored fund raisers. The kick-off can be during the school day as long as the SSO sponsors the event and is solely responsible for every aspect of the event. Student involvement must be on a voluntary basis only.
Fees - approved by School Board School-board approved fees list is posted on the Parent page of the Rutherford County Schools web page. Only the school board can approve a fee The school board approved fees must be deposited in the school s activity fund and not in the booster club s bank account. No booster club can charge a fee to participate in a school-sponsored extra-curricular activity, e. g. a fee to participate in marching band, cheerleading, or football
Fee Waivers Free/Reduced Students Fee waiver paid from GPS Budget for field trips and materials/supplies for free/reduced lunch children. Fee waiver funds in the GPS Budget do not pay for excursions, as opposed to field trips. Unless excursions take place totally out of school hours and days, the school, SSG, or SSO must pay for free and reduced students If an excursion is related to class work, all students must be given the opportunity to go. SSO s and SSG s can use their funds to pay for excursions for children on fee waiver.
Sales/Use Tax - 1 Tennessee controls exemption from sales tax totally separate issue from 501(c)(3) status An SSO has to be a full-blown 501(c)(3) to buy items for its school/program (e. g. a band instrument) without paying sales tax. Tennessee allows SSO s (and schools) to pay sales tax on cost of items sold not on the total receipts Possible exception the girl scout cookie law.
Sales/Use Tax - 2 SSO cannot make tax-exempt purchases through the schools SSO cannot use schools system s EIN or sales tax exemption SSO can make a designated donation to school. School can purchase tax-free
Sales/Use Tax - 3 Tax paid to the vendor. If tax not paid to vendor, SSO is liable. SSO should file a consumer use tax return with the state. Watch out-of-state vendors
Board Hourly Employees Are covered by Federal Wage & Hour Laws Cannot do volunteer work even if they work at their child s school Overtime after forty worked hours in one work week Principals must submit supplements to Accounting for Board approval
Bids for School Purchases If SSO pays 100% and handles everything for a tour, with no school staff involvement, no bid is required. Then payments must be made directly to the travel agency. This is the only way payments can go directly to a specific student and it puts all responsibility for collecting on the travel agency. (Your group can not make a collection call or send out past due notices) Director of Schools will only approve lowest and best bid for a tour. Time frame - from newspaper ad to Board approval - can take six or more weeks. Lynn Pater, Central Office Purchasing agent, must handle all formal bids.
Approval of SSO Purchases Policy 2.805 no school shall be obligated unless prior permission... Donated property becomes property of the school system. School Board approval not needed for SSO or school purchases Unless Vehicles Permanent fixtures Items attached to buildings Items requiring alteration to building Athletic facilities
Suspected Fraud or Theft Principal or Superintendent required to report to Municipal Audit if aware of any evidence of fraud related to internal school funds, cafeteria funds, or school support organizations.
Brief Break We ve covered the points that apply to both SSG s and SSO s. Let s reconvene in 5 minutes for the Independent SSO Groups
SSO s - Independent Groups Requirements: Cooperative Agreement 501(c)(3) status services of an independent CPA firm for any school SSO that keeps its own finances to perform Agreed Upon Procedures which are an attest function Most 7 th 12 th School Support Groups (SSG s) have moved their finances to their school s activity fund and are no longer independent.
Keep Charitable Funds Safe State passed this law in order to safe guard funds being raised for educational and charitable goals RCBOE has increased its accounting and reporting requirements for these groups in order to safeguard these funds. RCBOE now requires 501(c)(3) status for SSO s. 990 filed with IRS copy to Central Office
SSO-School Support Organization SSO refers to PTO or Booster Club SSO s are independent, not-for-profit organizations created to benefit the school or a school program Funds raised and handled by an SSO are quasi-public funds. All SSO s must be approved by the BOE.
School Board Policy 2.404 Summarizes state law and local BOE requirements for your organizations Annual Requirements Furnish a form stating the organization s status as a nonprofit organization. (A copy of the state charter application or application for renewal.) Telephone number, address and position of each officer of the organization Updated annual information as to each officer (turn form into school bookkeeper form in packet) Booster Clubs shall submit annual financial statements to the principal at the end the SSO s fiscal year. Principal shall forward the reports to the Central Office. Comptroller provides a manual and other guidance at http://www.comptroller.tn.gov/la/pdf/school_support_organizations_manual.pdf Revised Cooperative Agreement Form now required for SSO s Read before signing.
SSO Finances - #1 Maintain financial & organizational records for at least four years Subject to audit by state comptroller s department Provide access to all books, records, and bank account information upon principal s or central office s request
SSO Finances #2 Band, Football, Basketball, Baseball and Softball Booster Clubs shall submit monthly budgets and revenue and expense reports to the principal for review. All other Booster Clubs shall submit these reports at the end of the applicable season. Send a copy of the year-end bank statement that matches the cash on the year-end statement. Make sure your opening cash balance matches the last year s ending balance
School Representatives on SSO Boards School representatives (employees) cannot act as a treasurer or bookkeeper of a school support organization. Coaches & assistants cannot be officers A majority of the voting members of the group s board may not be school employees (including board members, the Director of Schools, coaches, trainers or sponsors)
State Charter for Nonprofit Corporation - #1 Tenn. Dept. of State handles corporations. 12/31 Default year end unless you specify a different year end, like 6/30 Forms and Guidelines are now on the Comptroller s Webpage http://www.comptroller.tn.gov/la/manualsguidance.asp
State Charter for Nonprofit Corporation -#2 Must renew each year and pay that fee Must have a current registered agent Agent must be Tennessee resident $40 fee to change agent Charter must be registered with Rutherford Co. register of deeds Searchable databases to see if your group is already registered: http://sos.tn.gov/business-services/non-profitcorporations
List of Approved SSO s The Director of Schools or the Director s Designee must post or publish annually a list of organizations that are recognized as school support groups.
501 (c) (3) True contributions (not a payment for a child) to a 501(c)(3) or a school can be deductible for income tax Some corporations require 501(c)(3) status before making a contribution The IRS treats schools as having 501(c)(3) status.
501(c)(3) s - Unequal Grants #1 No unequal grants; use of tax-exempt funds for taxable purchases Booster clubs must handle their fundraising as a fund raising goal in total for its season, a particular project, or a trip. All the participants must understand that individual fundraising goals are only goals. These goals are part of the group s planned overall fundraising.
501(c)(3) s - Unequal Grants #2 All funding received by a 501(c)3 must be distributed equally to the students in the group or activity. You can not discriminate on the basis of the family s ability to pay, fundraising participation, or time put into the club s activities. All money collected, including donations, goes to the entire group. No contracts are allowed between the parent and the Booster Club.
Does and Don t of 501(c)(3) Fund Raising #1 You can track your fundraising by participant if you choose. But that s all you can do with the per member information. Neither students nor their parents can be required to pay any shortfall or be penalized in any way for not meeting the goal. There can be no retaliation for a participant who does not meet his/her goal and no threats of retaliation.
Does and Don t of 501(c)(3) Fund Raising #2 There can be absolutely no fundraising requirement or contractual relationship between the participant and the booster organization. A participant who doesn t meet his/her individual fundraising goal cannot be required to pay the difference or barred from participating in the event.
501(c)(3) Status #1 IRS requires 501(c)(3) status if your group raises more than $5,000 per year. If your group raises or spends less $5,000 per year, your group needs to get IRS approval to operate as a 501(c)(3) with limitations. (More info. later) RCBOE now requires 501(c)(3) status for SSO s. 990 filed with IRS copy to Central Office
501(c)(3) Status #2 990 filed with IRS copy to Central Office Reports must be done from year to year! Parent turnover is a problem. Groups that have functioned well for several years can fall apart when officers change.
IRS Groups Under $5,000 #1 You can get approval over the phone to operate as a 501(c) 3 without going through the application process. Call IRS at 1.877.829.5500 When you get IRS approval, your group has a kind of limited 501(c) (3) status No IRS registration fee has to be paid
IRS Groups Under $5,000 #2 Cannot accept tax deductible contributions without IRS letter of determination Make tax-deductible contributions directly to school This option allows you to function as a 501(c)(3) without having an actual 501(c)(3) designation by the IRS. You will need to file a 990N at the end of your fiscal year. Small Booster Clubs may wish to run all financial transactions through the school account and simply support the group in fundraising efforts.
IRS Groups Over $5,000 More than $5,000 you re a taxable entity unless you get 501(c)(3) status 990 N (e-postcard) can be filed if annual receipts under $50,000 File 990EZ or 990 For questions regarding this process you can contact the IRS at 1-877-829-5500 https://www.irs.gov/charities-non-profits/exemptorganizations-required-filings