San Jacinto High School Friday, October 8, 2010 1
Agenda for Today Controls & Why Requirements of Boosters & Parents Groups Application, tax exempt status, financial reports, etc. Fundraising Food Sales, Raffles & Gambling Cash Handling Procedures Expenditures Records Retentions Where You Can Get Forms 2
Keep Your Name Out of the Newspapers! When need meets opportunity, money goes missing In 2005, Carrie Schimke, the treasurer of a girls softball league in Alpine, was caught up in swirling problems in her personal life, including the end of her marriage and loss of financial support for her daughters. She became desperate and panicked at the thought of not making rent, courts records state. So, she took $10,919 from the league treasury, writing checks to herself and forging the signature of a league board member. She pleaded guilty to felony grand theft. She repaid all monies and received three years probation, one day in jail, 200 hours of community service and 15 days public works service. Tonya Yannaki a former treasurer for the Goodrich Athletic Booster Club, is accused of stealing $48,000 from the group to pay bills and buy a house. Yannaki had been electronically transferring funds from a bank account into a personal account at the bank. 3
Embezzlement of School Booster Club Funds No Joking Matter! Bobbie Norby, a parent who was paid a stipend to coach the Valhall High School cheerleading squad, admitted to depositing parents checks into her own account. The Grossmont Union High School District filed a civil suit accusing Norby of taking $55,000. Criminal charges are still possible. Megan McCarthy King, former president of the Parent Teacher Organization at Rios Elementary, admitted stealing $4,625 by using a debit card and pleaded guilty to felony grand theft. She was sentenced to three years probation and has repaid the money. 4
Controls for Parent Groups and Booster Clubs Protection for Students and Employees Parents and Community Members School Site Staff and the District Safeguard funds raised and spent Separate from ASB and district Illegal to co mingle with School ASB funds Illegal to deposit into School ASB funds Business Department needs to approve Booster Club/Parent Group Officers that are school site employees 5
Booster Clubs and PTAs Provide support to students & district Ability to raise funds and donate Ability to purchase items and donate Must have own TIN Tax Identification Number Must have 501(c)(3) tax status Approved by the district 6
Board Policy AR 1230 and BP 1230 The Board appreciates the contributions made by Booster Clubs and encourages their interest The Board recognizes that Booster Clubs are separate, legal entities, independent of the district Prior to establishing a club a request for authorization should be presented The district shall be granted the right to audit the group s financial records Evidence of liability insurance as required by law Identified by a unique taxpayer ID # Compliance with Board policies, administrative guidelines, IRS 7
Application for Board Approval Completed Application signed by School Principal Constitution and Bylaws Names, addresses, e mails and phone numbers of all officers Meeting dates calendar A brief description of the organization s purpose including specific annual objectives List of fundraising activities for the year Name of the bank and names of those authorized to withdraw funds Evidence of liability insurance Tax Identification Number Evidence of tax exempt status IRS Section 501(c)(3) Determination Letter An annual financial statement for the year just ended; the statement is to include all expenditures and all income for all events and fundraisers ***Authorization will be granted for a period of one year 8
Liability Insurance The District requires Booster Clubs to provide proof of liability insurance in the minimum amount of $1,000,000 combined single limit, with the district named as an additional insured Use of school facilities may require a higher level of coverage based on the type of activity or for large events Use of School Facility Form AIM (Association Insurance Management) www.aim companies.com General Liability Coverage $1 million Cost: ~$175 9
Use of District Facilities Use of Facility Form should be submitted, generally, one month before the intended activity Certificate of Insurance covering liability and property damage, endorsing the district as additional insured is required 10
Tax Exempt Requirements Each organization must have their own tax ID number, bank account, and is directly responsible for compliance with IRS and state reporting and disclosure requirements Organizations who provide receipts to donors as a charitable tax deductible donation must be officially approved by IRS as a 501(c)(3) tax exempt organization and have a Determination Letter on file with the District 11
Tax Identification Number Form SS 4 Application for Employer Identification Number Instructions: http://www.irs.gov/pub/irs pdf/iss4.pdf Fill in form: http://www.irs.gov/pub/irs pdf/fss4.pdf IRS Home Page www.irs.gov IRS Customer Service 1 800 829 1040 12
Non Profit/Tax Exempt Status Publication 557 Tax Exempt Status for Your Organization http://www.irs.gov/pub/irs pdf/p557.pdf Package 1023 Application for Recognition of Exemption under section 501(c) (3) of the Internal Revenue Code http://www.irs.gov/pub/irs pdf/f1023.pdf Form 8718 User Fee For Exempt Organization Determination Letter Request: http://www.irs.gov/pub/irs pdf/f8718.pdf 13
ASB or Booster Club Event? All activities and fundraising events that involve the primary participation of students should be conducted through the ASB Booster organizations should serve as auxiliaries to the school program and should conduct activities and fundraising events involving the primary participation of parents and other adult community members 14
Fundraising Activities California Education Code Section 51521 requires that all organizations that conduct fundraising to benefit clubs, schools, students or the district have prior approval from the School District Governing Board or the board assigned designee Approval may be granted based on completion of Fundraising Request Form and approval by the School Principal and the Business Department DO NOT represent booster activities as those of SJUSD or one of its schools. Create logo and name to be used. High school or district logo should not be used without specific authorization. 15
Membership Membership fees may be used for raising funds but participation fees may not be a requirement of parents or students to participate in school activities 16
School Connected Food Sales Food sales on school premises must comply with state law as well as district policies and regulations No food sales during the day Food sales can only begin 30 minutes after the school day ends BP/AR 3554 Other Food Sales BP/AP 5030 Student Wellness Additional information is available from Child Nutrition Services 17
Raffles The elements of a Raffle are: A prize is offered Distributed by chance To a person who has paid money for a paper ticket, which provides the opportunity to win, and which has detachable coupon or stub, both of which have a unique identification The winner is determined by a draw from among the detached coupons or stubs 18
Raffle Qualifications Must be tax exempt and have been qualified to do business in California for at least a year before the raffle At least 90% of the gross receipts from the sale of raffle tickets for a single draw must be used for charitable purposes by the organization conducting the raffle. A charitable purpose includes using those revenues to benefit another eligible organization. *50/50 raffles are illegal because 90% of the gross ticket sale revenue is not used for charitable purposes* 19
Raffle Qualifications, continued Must register annually, before event is held, with the Department of Justice, for which a fee may be required Must file an annual report with the Department of Justice (form supplied by the Justice Department) that includes: Gross receipts from the operation of raffles Direct costs incurred by the organization from the operation of raffles The charitable purposes for which proceeds of the raffles were used and the amount of those proceeds 20
Raffle Registration Exemption A raffle is exempt from registration with the Attorney General s Office if all of the following are true: 1. It involves a general and indiscriminate distribution of tickets 2. The tickets are offered on the same terms as the tickets for which a donation is given 3. A participant is not required to pay for chance to win ***If you require a donation in return for a ticket, you must register with the Attorney General 21
Gambling/Controlled Games Any poker or pai gow game, and any other game played with cards or tiles, or both Approved by the Bureau of Gambling Control Any game of chance, including any gaming device, played for currency, check, credit, or any other thing of value 22
Charitable Gambling Nonprofit organizations licensed to do business in California for at least three years Must register annually with Bureau of Gambling Control, before event is held One fundraiser per calendar year using controlled games Event cannot exceed five hours in duration 90% of the revenue must go directly to the eligible nonprofit organization 23
Charitable Gambling, continued No more than 10% of gross receipts can be paid as compensation No one under the age of 21 is allowed to participate Maintain records for each fundraising event: Gross receipts List of recipients of the net profit The number of persons participated A list of direct costs incurred A list of all prizes awarded Date, hours, and location 24
Unacceptable Fundraisers Mechanical or animal rides Games with live targets/water tanks Objects thrown at people Anything involving darts/arrows Trampolines Jumpers Rental of district owned equipment or facilities Anything not allowed by board policy 25
Recommended Cash Handling Procedures Use pre numbered, three part receipt books Dual cash counting Safe storage of monies Do not leave money unattended Never make purchases from cash Deposit all funds timely and regularly Use pre numbered receipts, tickets, etc. Utilize cash registers, cash boxes, cash log sheets, etc. 26
Administration and Expenditure of Funds Treasurer s books and accounts shall be open for review by the district at any time Must benefit the group as a whole instead of benefiting individual members of a group 27
Purchases for Schools All purchases shall be donated to the school Donation Form Cash donations are recommended so that items can be acquired according to statutory laws by the District Business Department Maintenance department must be consulted prior to purchase of all items requiring installation Capital improvements, equipment over $5,000, must be processed through the District Business Department 28
Support Personnel Booster Clubs/Parent Organizations that wish to pay staff for additional hours and/or extra curricular services, must hire staff through the District Personnel Services Department Submit a Personnel Requisition Deposit funds to cover employee s salary and benefits 29
Retention of Records The following documents are examples of documents that should be retained by the organization: Cash receipts Cash disbursements and general ledger Bank records Income tax returns Minutes of meetings as defined by the organization by laws 30
Summary Controls & Why Requirements of Boosters & Parents Groups Application, tax exempt status, financial reports, etc. Fundraising Food Sales, Raffles & Gambling Cash Handling Procedures Expenditures Records Retentions 31
Booster Club Information on the District s Website www. sanjacinto.k12.ca.us Business Services Business Forms Booster Checklist for School Connected Organizations Donation Form Fundraiser Request Form Fundraising Schedule Parent Organization Booster Club Application SJUSD Booster Club Guidelines Use of School Facility Form Financial Statement Form 32
Additional Questions? Comments? Feedback? 33