Shifting Sands and Rising Tides

1. Shifting Sands and Rising Tides Establishing and Maintaining Accurate School Based Accounting Principles

2. School Activity Accounts Revenues/Receipts

3. Revenue/Receipts • Policy JHB, JHB-R: Student Activities Funds Management • Documentation required for the receipt of funds • Processing of the receipt and related deposit • Timing of Deposits • Reporting requirements • Monitoring

4. Documentation of Revenue • “Receipts shall be issued for all money collected from students except lunch money.” • Revenue must be properly identified and coded to the proper fund/activity • Source of the revenue determines how the funds can be spent • “In accordance with State Board Rule 160-5-1-.12, school personnel shall not require the collection of funds from students for expenditures that are included in the school system’s budget.”

5. Receipt Methods • Various receipt methods are used during the revenue process. The method used depends on the event generating the revenue and the collection point • Fund Remittance Forms • Admission Fee Reconciliation Form • Pre-numbered receipts

6. Receipt Methods • Fund Remittance Form • Used for collection of funds outside the bookkeeper’s office that do not require ticket sales. Includes ice cream and school store sales. • Documents the purpose of the collection • Includes the date of collection, amount collected, and the signature of personnel collecting the funds • Sent to the bookkeeper for receipting into the accounting program. • Bookkeeper verifies funds and issues a pre-numbered receipt to the remitter. If variances are noted, then the bookkeeper contacts the remitter for correction.

7. Receipt Examples DEPOSIT SLIP DATE______________ ACCOUNT NAME_______________________________________________________ ACCT#_______________ COINS $_____________ BILLS $______________ CHECKS $_____________ TOTAL DEPOSIT $______________

8. Receipt Methods • Admission Fee Reconciliation Form • Used for events that require a purchase of a ticket, for example athletic events • Pre-numbered tickets must be used in order to use this form • Reconciles the total number tickets sold to the total funds collected • Signed by person completing reconciliation, usually the gate worker. This form is not completed by the bookkeeper. • Form and money is provided to the bookkeeper. • Bookkeeper verifies funds and issues a pre-numbered receipt to the remitter. If variances are noted, then the bookkeeper contacts the remitter for correction.

9. Admission Fee Reconciliation Form

10. Receipt Methods • Pre-numbered Receipts • Issued by the bookkeeper for all funds received in the bookkeeper’s office. • Pre-numbered, must be used in order • Must indicate total cash and total checks received • Must contain a description of the revenue • Must be signed by the bookkeeper • Voided receipts must be kept and available for review • Daily deposits may be required • 24 hour requirement for receipt issuance to sponsor • Bookkeeper is only to verify funds • All funds must be deposited each Friday • No funds held over a weekend or holiday period

11. Receipt Examples

12. Processing of Receipts & Deposits • Individual receipts are entered into the accounting system in numerical order. The fund number used is dependent on the source of the revenue. The source of the revenue also determines how the revenue is disbursed. • The receipts are added and the deposit slip is created. • The total cash and the total checks listed on the deposit slip must reconcile to the total cash and checks on the individual receipts. • The receipt numbers are listed on the deposit slip. • The principal must sign the deposit slip verifying the use of consecutive receipts and the total dollar amount of the deposit. The principal must perform this function before the deposit is made.

13. Timing of Deposits • Once per week or when $1,000 is accumulated • Applies to all funds collected by school personnel, not just the bookkeeper • Time requirement starts as soon as the funds are received at the school. • Funds on hand prior to deposit must be secure

14. Reporting • Daily - review of Activity Fund Level Report • Monthly • Bank Reconciliation • Bank Statement is received directly by Principal • Bank Reconciliation is completed by someone other than the bookkeeper, reviewed and approved by Principal • Distribution of reports to individuals responsible for the operation of each club, group, or activity • Quarterly • Financial reports submitted to Central Office, includes Activity Level Fund Report, Cash Receipts/Distribution Journal, GL, Adjustment Journal Entries • Each month of the quarter must be closed before submission of reports

15. Benefits of the SAA Policy • Ensures funds received at the school are deposited • Ensures the timeliness, accuracy, and completeness of deposits • Ensures a proper separation of duties • Helps to prevent or deter fraud

16. Monitoring • Performed by Central Office Personnel • Mid Year Review • Predefined review program is utilized for a specific test period • Results of review are discussed with the Principal & Bookkeeper • Review memorandum is prepared • Memorandum is sent to the Superintendent • Follow-up is performed as needed • Annual Review • Performed at Fiscal Year End • Predefined review program is utilized • More in-depth • Review report is created and shared with the Superintendent & Principal

17. Fraud Risk Factors • Delay in deposits • Misuse of Pre-Numbered Receipts • Delay in Monthly Closes • Delay in Monthly and Quarterly Reporting • Lack of documentation of Deposits • Recurring mathematical errors • Cash/Check totals per the deposit slips do not reconcile to the individual receipts • Activities with Deficit Fund Balances

18. School Activity Accounts • Disbursements

19. Disbursements - Procedures • Accounting & Procedures Manual Introduction • All money and property received in the name of the school, whether received on school property or not, becomes the property of the school system. • All money collected and disbursed for the schools must be recorded in each school’s financial records.

20. Disbursements - Procedures • A Local School Purchase/Check Request Form must be completed and approved before merchandise and services are ordered. This form should contain the following information: (1) the reason for the expenditure (2) the amount of funds required and the account where the amount will be recorded • (3) the vendor that will be used for the • purchase

21. Disbursements - Procedures The purchase/check request must be signed by the person requesting use of funds and submitted to the principal for approval. The sponsor of the field trip, class or club must sign requests for use of field trip, class or club funds.

22. Disbursements - Procedures • Only after the principal has approved the purchase/check request, can purchases be made. • The approved purchase/check request must be returned to the office manager/bookkeeper with the original invoice or receipt, packing slip, and any other pertinent information. • The invoice or receipt should be signed by the person receiving the merchandise or service to indicate the goods or services were received and that payment should be made.

23. Disbursements - Procedures • All receipts/invoices submitted for payment must clearly indicate the name of the vendor, the date of purchase, and an itemization of the items purchased. • Receipts and invoices must be original copies. • In the event that an original invoice is not received, a fax copy or photocopy can be accepted in emergency situations only and should be kept to a minimum.

24. Disbursements - Procedures • Checks are required to be made payable directly to the vendor. • No payment will be made until a valid invoice made out to the school and signed by the receiver is attached to the approved purchase/check request form. • Vendors should be requested to indicate the name of the club or organization on the invoice. • Checks made payable to “Cash” or “Bearer” are prohibited.

25. Disbursements - Procedures • All purchases are subject to the local school systems purchasing policies and procedures. • Purchases from cash collected at the school are prohibited. • Payment upon delivery and C.O.D. orders are not allowed without special permission from the principal.

26. Disbursements - Documentation • Purchase/check requests for every school check issued must be maintained in numerical order in monthly files with sufficient supporting documentation attached. • Purchase/check requests should be filed in the monthly file for the month in which the check was issued.

27. Disbursements - Documentation • The following documentation, at a minimum, must be filed in the order shown: • Approved Local School Purchase/Check Request Form with check stub attached on front in top left corner. • Original invoice, receipt or official itemized document specifying the basis for payment. • Additional supporting documentation such as packing slips or correspondence with the vendor.

28. Disbursements – Additional Info • Reimbursements to Staff Members • Purchases made by individuals from personal funds, which reimbursement from school activity funds will be requested, must be pre-approved by the principal. • Purchases made with personal funds, requiring reimbursement from school activity funds, are an exception to the rule and should be kept to a minimum.

29. Disbursements – Additional Info • Purchases without advance approval may not be reimbursed. • Sales tax is never reimbursed. All reimbursements to authorized check signers must be pre-approved by the Director of Finance. • The number of reimbursements to staff members will be reviewed during the financial compliance audit of the school activity accounts. Excessive reimbursements will be cited in the audit report.

30. Disbursements – Additional Info • Manual Checks • Manual checks are discouraged and should be kept to a minimum. • Purchase/Check Request form approved by the authorized check signer. • The purchase/check request form should include the reason for the manual check, an estimated amount and the account where the expense will be posted.

31. Disbursements - Travel • Each school is allotted travel funds through the school system budget. • Statewide Travel Regulations are followed for all system travel. • System Travel Forms must be used and system procedures must be followed even if travel is reimbursed through School Activity Funds. • The use of School Activity Funds for travel reimbursement is permitted on a limited basis only. • Travel reimbursement must meet CS1 criteria.

32. Certificate of ExemptionHotel / Motel Excise Tax

33. Disbursements – Sales Tax • Sales Tax • Sales tax should not be paid on items purchased to benefit the instructional program. • The Sales and Use Tax Certificate of Exemption form should be used when appropriate. • A Georgia Sales and Use Certificate of Registration Number is not required for schools to be exempted from sales tax.

34. Sales and Use Tax Certificate of Exemption

35. Disbursements – Additional Info • Voiding Checks • Checks that contain errors should be voided and reissued. • The voided check should be marked “Void” on the face of the check, an explanation for the void written on the face of the check and the signature line should be removed and destroyed. • The voided check should be maintained in a file labeled “Voided Checks” with the school’s annual financial records.

36. SCHOOL ACTIVITY ACCOUNTSSpecial Guidelines

37. Gift Cards • Employee gift cards can only be purchased from the Adult Benevolence account (i. e. Sunshine Fund) or from clubs which have voted to make such purchases. • Implemented in order to comply with IRS Publication 525, Taxable and Nontaxable Income

38. Employee Supplemental Pay • Schools are prohibited from paying Board of Education employees a wage or wage supplement directly from School Activity funds. • This includes bonuses and additional compensation for any service. • This is a function of the Board’s Payroll Department in order to ensure that proper taxes are paid.

39. Adult Fund vs Student Fund Expense • Watch carefully that adult expenses are not charged to student funds. • Expenses that are of an instructional/administrative nature, which directly or indirectly benefits the students, can be paid from student funds. (Ex. teacher supplies, such as calendars/planners; conference registrations)

40. Meals/Snacks for Meetings • Meals during a meeting – In order for meals to be paid from Student Funds the following requirements must be met: • ♦Meeting or training session continues during the mealtime, • ♦Employees must not be able to leave the meeting site, • ♦An agenda must be provided • ♦And a listing of attendees must be retained • If all of these requirements are not met, the meals must be paid from Adult Funds (agency funds). • Snacks during a meeting – can only be paid from Adult Funds. Based on Employee Group Meals Policy

41. Deadlines • Deadline: All bank reconciliations are due to the principal no later than the 15th of the following month. • The principal may designate an earlier date if feasible. • The principal must sign and date the bank reconciliation and the Fund Level Financial Report after reviewing them with the bookkeeper. • Quarterly reports will be monitored and are due to the Central Office by the 20th of the month following FY Quarters.

42. Checks • OUTSTANDING CHECKS: Checks should not be allowed to remain outstanding for more than six months. • NSF CHECKS (non-sufficient funds, also known as bad checks or bounced checks): It is Board procedure that after an individual’s second bad check is returned, the school or department should refuse to accept any future checks and should require cash or money order.

43. Fundraisers • FUNDRAISERS: A Fundraiser Approval Form and a Fundraiser Financial Report are required to be completed. • In-school fundraisers do not need to be sent to the Central Office for approval. All others do. • This requirement also applies to PTO and booster club projects that involve students or Board-owned property or facilities.

44. Fundraisers • The following fundraisers do not need a Fundraiser Approval Form or Financial Report. However, a Financial Report is required if the activity has a negative year-end balance. • School Pictures • Concessions • Yearbook • School Newspaper • School Store • Field Day • Book Fair

45. Adult Funding Options • ADULT FUNDS: Principal has the following adult funding options – • A. 10% of each year’s ending balance in General Fund-General Activity may be transferred to adult funds. • B. Up to 50% of profits from picture sales may be transferred to adult funds. • C. Up to 50% of profits from After School Program may be receipted to adult funds.

46. Adult Funding Options • ADULT FUNDS: Principal has the following adult funding options (continued) – • Concessions—If there are not separate vending machines for adults, a pro-rata share of the profits from general service vending machines may be transferred to adult. (# of faculty & staff divided by total school population-students/faculty/staff). • Energy Program Awards may be receipted to adult funds. If new energy ideas are generated by students, but implemented by adults, then must share awards equally with student funds and adult funds.

47. Adult Funds – Maximum Balances • ADULT FUNDS: Maximum Balance Limit • On June 30, the Adult Fund/General Activity (6000) ending balance can not be more than $5000.00 over the General Fund/General Activity (4000) ending balance. Any overage in the Adult Fund (6000) must be transferred to the General Fund (4000). • Implement a maximum balance

48. CONTRACTED SERVICES • In many school systems, contracted services are processed through the Central Office. • In other school systems, the accounting program allows the schools to process expenses for contracted services directly from school activity accounts. • Regardless of the process, it is important to monitor contracted services to ensure proper 1099 reporting at the end of the calendar year. • School employees cannot personally pay an individual or company for contracted services and then, request reimbursement from school activity accounts. This affects the proper reporting of these expenses to the IRS. All contracted services must be paid directly to the vendor.

49. TRAVEL GUIDELINES • Unallowable Expenses (not reimbursed): • Rental Car Expenses for site-seeing/tourism and “going to dinner”. • Taxi Expenses for site-seeing/tourism and “going to dinner”. • PRINCIPAL’S EXPENSE REPORT • All school principals must submit their employee travel reimbursement requests to the appropriate Executive Director in School Operations, along with a school check made payable to the Houston County Board of Education in the amount of the reimbursement. The Accounts Payable department will process the approved travel reimbursement to the principal.

50. School Affiliated Organizations • Prior notification should be given to the Principal by any group/individuals that intend to establish a school-affiliated organization. • Recommended financial guidelines should be made available from your Business Office for your school affiliated organizations. • Your school affiliated organizations, such as PTOs, Boosters, etc., should not allow wire transfers from their bank accounts. This is for their protection.