1
MurrayCounty
Board of Education
Financial Guidelines
for
School Activity Funds
and
School System Accounts
Updated: March 2013
MurrayCountyBoard Of Education
Financial Guidelines For
School Activity Funds
Table Of Contents
PAGE
Introduction...... 4
Section 1:General Information
1.1Activity Funds - Definition and Purpose...... 5
1.2Legal Requirements...... 5
1.3Basis of Accounting...... 6
1.4Accounting System...... 6
1.5Annual Audits...... 6
1.6Records Retention...... 6
Section 2:Banking
2.1Bank Accounts...... 7
2.2Authorized Signatures...... 7
Section 3:Bookkeeping Procedures
3.1General Comments...... 7
3.2Fund Types...... 8
3.3Receipts...... 8
3.4Deposit of Funds...... 9
3.5Purchasing...... 9
3.6System Purchasing Guidelines...... 10
3.7Disbursements...... 10
3.8Reimbursements to System Funds...... 11
3.9Adult vs. Student Funds...... 11
3.10Transfer of Funds...... 11
3.11Budget Amendments...... 11
3.12Bank Statement Reconciliation...... 12
3.13Closing Procedures...... 12
3.14Grants Financial Management...... 12
Section 4:Special Guidelines
4.1Admissions/Ticket Sales...... 13
4.2Hospitality/Sunshine Funds...... 14
4.3Change Funds...... 14
4.4Charity/Family Support Funds...... 15
4.5Donations to the School...... 15
4.6Field Trips...... 15
4.7Fund Raising/Enterprise Funds...... 15
MurrayCountyBoard Of Education
Financial Guidelines For
School Activity Funds
Table Of Contents (Continued)
4.8Gratuities/Discounts...... 15
4.9Inactive Funds...... 15
4.10Lost or Damaged Books...... 16
4.11Negative Fund Balances...... 16
4.12PTA/Booster Clubs...... 16
4.13Refunds...... 16
4.14Salary Supplements/Bonuses/Loans/Gifts...... 17
4.15Sales Tax...... 17
4.16Travel...... 17
4.17Vandalism...... 17
4.18Vending Machines...... 17
4.19Wages/Casual Labor...... 18
4.20Summary of Safeguards...... 18
4.21School Based Accounting Policies & Procedures..19
Section 5:Personnel Ethics & Guidelines
5.1General Guidelines...... 20
5.2Fraudulent Activities...... 21
1
Introduction
This manual has been developed by the Murray County Public Schools (JCPS) Finance Department and is designed to assist bookkeepers, secretaries, and principals in administering an efficient and effective accounting system at the local school level. It incorporates state laws, board policies, rules, and regulations pertaining to local school funds. Following these guidelines will provide an audit trail that will properly account for the receipt and disbursement of funds.
Questions arise from time to time regarding the necessity of some of the procedures outlined in this document. In a school system, the area most susceptible to fraud and misappropriation is the individual school. School personnel handle relatively large amounts of cash each day. We must therefore take appropriate measures to insure that school resources and personnel are protected. Our best means of accomplishing this is through clear and understandable guidelines regarding the handling of school funds. By standardizing procedures and practices, all schools will be able to maintain and report their financial activities accurately and uniformly.
Please recognize and understand that each and every aspect of accounting and record keeping for student activity funds and school system funds has not been covered in this manual. Effort has been made to include the most pertinent information in areas with which the schools must comply. Through continued use and communication, this manual will evolve. This manual will be reviewed and updated annually.
All procedures are subject to change. If you have recommended changes, let us know. Above all, we want this manual to be helpful. Changes will be approved and made in writing through the Finance Department. Any changes will be distributed to and discussed with all appropriate personnel.
Any questions with regard to interpretation should be directed to the Finance Department.
Section 1: General Information
1.1Activity Funds - Definition and Purpose
School (student) activity funds consist of either school funds or agency funds consisting of resources received and held by each school to be expended in accordance with conditions of a particular club or group. Specifically, they are all monies accumulated from student activity programs and various school board-approved fund raising activities. Student activities have become a part of the regular school program because of their value in supplementing academics with leadership training. Each school will maintain student activity funds. These funds will embody those activities and functions relating to student and faculty programs. The basic policy for student activity funds is that income received for a specific function shall be disbursed only for that function. However, if unusual circumstances occur, the school principal may re-allocate funds to the general function. Upon dissolution of any function, the school principal shall insure that any liabilities of that function are paid.
Some funds have restricted uses, and some have discretionary uses. Monies generated by and for students are to be expended for the benefit of students only and for educational purposes only (1934-56 Op Att’y Gen. P. 269). Adult generated monies are to be kept separate.
Activity funds safeguard the assets of the public schools and provide reliable information for interested persons. These funds maintain internal accountability through a uniform financial accounting system to meet legal requirements and standards set by the Local and State Boards of Education.
1.2Legal Requirements
The school principal is personally responsible for the proper collection, disbursement, and control of all school activity monies relative to the funds in his/her trust.
Each principal shall make financial reports to the Finance Department for all receipts and expenditures of school funds, at least quarterly.
Each principal shall maintain adequate records of all funds collected and make complete financial reports to the Finance Department, accounting for all receipts and expenditures.
All monies raised or collected on the behalf of or for the benefit of students and under the authority of the principal shall be deposited into the general operating bank account. Within the accounting records, an individual account, or fund, shall be established for the student club, organization, or school activity for which the money has been deposited. Proper record keeping procedures shall be maintained, and reports shall be made on at least a quarterly basis. All disbursement of funds shall be by check, unless an unusual circumstance occurs. Any payment, other than by check, must be pre-approved by the principal.
1.3Basis of Accounting
Student activity funds will use the cash basis of accounting. This method recognizes revenues when they are received, and expenses when they are paid. No accruals are used or recognized. This is the same basis that most people use with their checkbooks at home.
1.4Accounting System
Each school should establish accounts or funds within their accounting system to track the various activities within the school. The Finance Department will provide an updated fund list to each Principal.
1.5Annual Audits
All MurrayCounty schools’ financial records are subject to audit by the Georgia Department of Audits, at least annually, and a written report will be issued to the Board. This report will detail the results of the audit and identify any areas where improvement should be made. Audits are a control to assure principals that their procedures for handling funds entrusted to them appear to be adequate for the protection of themselves, their personnel, and the school’s assets.
All schools are subject to a spot inspection of their records at any reasonable time during any workday by the Finance Department.
Records needed for an audit include, but are not limited to, the following:
- Reconciled bank statements with cancelled checks
- Check stubs (if available) or duplicate checks
- Invoices paid (with check request forms) and documentation
- Receipt books and deposit tickets
- Year-end financial statement and transaction reports or ledgers showing all transactions for the year by fund (July 1- June 30).
- Monthly financial statements and transactions reports or ledgers, showing all transactions for the month both chronologically and individually by fund.
1.6Records Retention
The principal is responsible for the maintenance and security of school financial records. All records need to be maintained in accordance with the Retention Schedules for Local Government Records provided by the Georgia Department of Archives and History.
Questions regarding records retention should be directed to the Finance Department.
Section 2: Banking
2.1Bank Accounts
Each school is authorized to maintain one checking account and one investment account (if desired) for its student activity funds. If an investment account is used, be sure that it is reflected in the financial statements. Interest-bearing checking accounts are authorized. Every account should be in a MurrayCounty federally insured financial institution. If any account or combination of accounts exceeds $100,000, the bank must furnish proof of pledge of securities in the name of the school for the amounts in excess of FDIC or FSLIC guarantees.
Opening a checking or an investment account, or changing any account to another financial institution, is the prerogative of the principal. You must notify the Finance Department of any change in banks or account numbers within 30 days of the change. The Finance Department will keep a record of all school bank account numbers and quarterly balances.
2.2Authorized Signatures
The principal shall be authorized to sign checks withdrawing money from the bank account. The principal’s personal signature is required. Use of a signature stamp or other facsimile signature is prohibited - except in emergency situations. A high school principal may authorize the Athletic Director to sign checks for Athletic Accounts, however, the principal is still ultimately responsible for maintenance and security of the Athletic Funds.
The bank account title, account number, and authorized signature should be on record in the Accounting Department.
Section 3: Bookkeeping Procedures
3.1General Comments
“Fund” is defined as a self-balancing set of accounts. It is an individual set of books. If each fund balances within itself, then the total of all funds will balance, and this total will agree with the bank balance. Each fund and all funds must be balanced at least monthly. Each new fiscal year must begin on July 1 with the same figures that ended the prior fiscal year on June 30 in each fund.
Each fiscal year’s financial records must be kept separate. If an error is found in a prior fiscal year after the books are closed for that year, the error must be corrected through a journal entry adjustment to fund balance in the current fiscal year.
Quarters are July – September; October – December; January – March; April – June.
Questions asked and answered before posting transactions will pay many dividends in time, effort, and aggravation saved. Call the Finance Department if any doubt exists.
3.2Fund Types
There are two main types of funds: restricted and discretionary.
Restricted funds are those whose expenditures must be limited to the educational purpose for which the monies were collected. Transfers “out” from these funds should have the prior approval of the fund sponsor and principal. Examples are athletic, clubs, field trips, yearbooks, student council, instructional area organizations (vocational, band, math, etc.), and donations for specific purposes, etc. Normally these funds will carry over from year to year. An inactive restricted fund may be closed to the General Fund on authorization of the principal, if the activity is no longer active or viable. (See paragraph 4.9)
Discretionary or non-restricted funds are those whose monies may be transferred at the principal’s discretion to other funds which are used for the benefit of students and are expended for educational purposes. Examples are concession, school store, fund raising/money-making donations with no restrictions, etc.
3.3Receipts
Written receipts are necessary to accurately record all cash received, and to substantiate virtually all bank deposits. Receipt books should be used for each deposit.
All funds collected must be receipted. Money collected for different purposes must be kept separate and identified separately by the bookkeeper. All collections should be turned into the principal’s designee, intact on a daily basis. The principal’s designee should be an employee other than the school’s bookkeeper. Money should never be left unattended in a classroom. Teachers will obtain a system-generated pre-numbered receipt when the money is entered into the accounting system. School volunteers are not authorized to make collections or to issue receipts. Only employees may do this. If booster club accounts are maintained in the school books, collections and receipts must be issued by an employee. Exception: Individual receipts do not have to be issued for book fair sales if the media center uses a cash register that generates individual receipts and daily sales can be totaled at the end of each day. If using such a cash register, the register tape total and total money collected must equal. Any discrepancies must be noted on the tape and the tape signed and dated by the teacher in charge of the book fair. Tape and money collected should be turned over to the bookkeeper who will issue a receipt for the day’s total to the teacher.
The principal’s designee will verify receipt amounts in the presence of the remitter IF POSSIBLE, and, if the money and the reported amount agree, a receipt will be issued to the person turning in the money by using a system-generated pre-numbered receipt. The one copy will go to the remitter and the second copy will serve as a source document for deposits. Receipts should not be altered. Errors should be voided.
Receipts will always show:
The date the money is received.
The name of the person submitting money (remitter).
The amount of money received.
The purpose of money collection.
The name of the account to be credited.
The signature or initials of the bookkeeper.
Cash receipts should always equal the sum of money for deposit. It is to be deposited intact. Vending money should be collected and counted by two employees (excluding the bookkeeper) IF POSSIBLE. Vending money will be receipted to the school employee(s) submitting the money. All checks must be endorsed restrictively “FOR DEPOSIT ONLY.” A stamp with the school’s name, bank account #, and For Deposit Only can be used.
3.4Deposit of Funds
Principals are responsible for the timely deposit of money into the bank. This responsibility may be delegated, but it is not negated. No substantial amount of cash money other than change funds should be held in the school overnight. Night deposits should be made to avoid this situation. Any money kept overnight should be secured in a locked cabinet or vault.
The school office will deposit, intact, all monies collected. The last receipt on all bank deposits should include all receipt numbers contained in the deposit, the total amount of the deposit, and the date of the deposit. The deposit ticket itself MAY show all the receipt numbers that make up the deposit.
Periodically, the bank will return a check that has been deposited to the school with an explanation as to why the check has not cleared (insufficient funds, account closed, etc.) When this happens, deduct the amount from the fund it was initially deposited into. Then, unless a check recovery agency is utilized, contact the person that wrote the check and explain the situation. The individual should either pay the amount of the check in cash or advise the school to redeposit the check.
3.5Purchasing
School principals are responsible for all purchases that use student activity fund monies, and for ensuring that these purchases are used for the benefit of students. They also are responsible for expending funds only for the purpose for which the funds were collected. Monies collected for restricted account funds must be expended for the restricted purpose. The principal, prior to purchasing, must approve all purchases made in the name of the school. The principal at a high school may direct the Athletic Director to purchase items from Athletic Funds, however, the principal is still ultimately responsible for these purchases as well.
Purchasing items from school system employees is prohibited. Paying for services from a school system employee is prohibited unless the employee has a business license.
Each principal shall follow written purchasing procedures as difined in Section 3.6 and 3.7 below in addition to existing BOE Policies. Purchasing procedures shall include procedures for making requests for purchases, obtaining authorization to purchase, and submitting documentation of purchase (invoices, receipts). Refer to MurrayCounty’s Policy Manual for additional purchasing information.
Any equipment or furniture purchased with school funds becomes the property of the Murray County Board of Education. Purchases should not be made unless funds are available in that particular fund.
Obligations should not be made beyond the end of the fiscal year (example: multi-year lease-purchase agreements) without the knowledge and approval of the Director of Finance.
Contracts signed for a purchase should, only be signed by the principal, be for no longer than a year, and a copy should be pre-approved by the Director of Finance for system records.
Prepayment of purchases and/or services is prohibited.
The school system is exempt from state sales tax. Any purchases being made that include sales tax will not have the sales tax reimbursed. Sales tax exempt information can be obtained from the Finance Department.