Redbook

1. Redbook Frequently Asked Questions

2. Susan Barkley Division of District Support susan.barkley@education.ky.gov 502-564-3930 extension 4437 Presenter

4. KDE website – same page as the Redbook • http://education.ky.gov/districts/FinRept/Pages/Accounting-Procedures-for-School-Activity-Funds.aspx • Will continue to be updated periodically • New information is in red type • Publishing date on website and document FAQs

5. Protect funds raised by students • Protect students against funding responsibility Purpose of the Redbook

6. Item #1 on page 7 – “contributions and collections derived from school-sponsored fundraising activities shall be deposited in the school’s activity fund bank account” • Item #5 on page 7 – “fundraising activities are to benefit students, so fundraisers to cover staff payroll and other operating costs are not permitted” Key Provisions

7. Item #1 on page 20 – “school activity funds are raised for a specific function or purpose during a specific fiscal year and must be used for that specific function during that period” • Item #2 on page 20 – “due to timing…a school may have to carry forward funds from year to year” Key Provisions

8. Student Activity Funds - Contributions and collections derived from school-sponsored fundraising activities • Fundraising by student clubs and student organizations • To support student clubs and organizations • Expended with input from student clubs and organizations Required at School Level

9. Grants • Day care fees • Adult education fees • Tuition fees • Donations (unless board policy allows donations at the school level) • Any funding source restricted to an expenditure disallowed by Redbook (except student fundraising) Required at District Level

10. Aside from those requirements…. …there are OPTIONS

11. School Activity Funds

12. Student Activity District Activity Can be deposited at the school or the district Raised by school/district or staff Expended with input from staff • Must be deposited at the school level • Raised by student fundraising • Expended with input from student groups

13. Funds raised by students • Expended by student groups • Chorus Club • Debate Team • Class of 2016 • Beta Club • Cheerleading Club • Band • FFA Potential Student Activity Funds

14. Support co-curricular and extra-curricular activities • Not raised and expended by student groups • Gate receipts • Book fair • Locker fees • Parking fees • School plays • Field trips • Picture sales • Other commission sales Potential District Activity Funds

15. School Bank Account District Bank Account District Funds Not subject to Redbook Any expenditure that meets “educational purpose” • School Activity Funds • Subject to Redbook • No operational expenditures Narrow Allowability Increased Flexibility

16. Reported as Agency Fund on district financial statements • Cannot be used for district’s own programs • Not included in per pupil expenditures School Bank Account

17. Use special revenue fund if use is restricted, otherwise use general fund • Project codes 7XXX available to track funds separately • Guidance forthcoming regarding Fund 21 District Activity Funds Deposited in District Bank Account

18. How are you handling district activity funds deposited in the district bank account? • Submit your best practice on KDE website at http://odss.education.ky.gov/bestpractices/BP_Submit_r1.aspx?view_id=0. Best Practice?

19. School activity funds shall not be expended for operating costs (in old Redbook, too) • Must benefit student clubs or organizations • Cannot be used to support the district’s own programs (GAAP) • Go back to the purpose of the Redbook How Can School Activity Funds be Spent?

20. Redbook test: Is the expenditure operational in nature? If so, can’t use school funds • District test: Does the expenditure have an “educational purpose”? If so, you can use district funds Tests

21. Operating transactions are incurred in the course of the operating activities of the institution • “It’s what we’re here to do” • Anything supporting regular operations Operating Expenditures

22. Even if there is direct student benefit, you cannot use school activity funds to pay for expenditures which are operational in nature Operational vs. Direct Student Benefit

23. Is the cost incurred solely because of the student group and does the purchase benefit only that group?

24. Expenditures for instruction are likely to be operational because that’s what the school is in the business to do: instruction

25. Operating Costs

26. If paid with school activity funds, driver salary/benefits and fuel only • Cannot pay for maintenance or depreciation of school bus unless used only by the student group • Example: a charter bus rental Transporting Student Groups

27. “All student fees and charges shall be adopted by the board. The fee shall remain in place until modified or removed by board resolution. All student fees adopted by the board shall be used for the purposes set forth in the motion and shall not be spent for any other purpose.” Student Fees and Charges

28. Fee Donation A “fee” that is not adopted by the board Cannot be tracked by individual student Cannot be refunded Not subject to fee waiver because it is not a fee • Adopted by the board • Tracked by individual student • May be refunded • May be subject to fee waiver requirements What is a Fee?

29. 702 KAR 3:220 • Activities meeting that definition require a fee waiver process • Trips intersecting with any part of the school day • Fees to participate in school-sponsored courses, activities, or programs • Use of school property • Intramural sports, music, or fine arts • Others • Fee waiver for students qualifying for free or reduced meals Fee Waiver

30. Cannot be done through the school accounts • “Donations” can be made directly to parents/students • Will not be tax-deductible to donor • Donations may be made for fee waivers in general Donating to Specific Students

31. Additional Questions