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STUDENT ACTIVITY FUND ACCOUNTING

STUDENT ACTIVITY FUND ACCOUNTING. Presented by: Natalie Rew, CPA DPI—School Financial Services. BASIC FACTS ABOUT STUDENT ACTIVITY ACCOUNTS. WI Stats, s. 120.16(2) authorizes a school district treasurer to receive money raised in “extra-curricular activities”

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STUDENT ACTIVITY FUND ACCOUNTING

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  1. STUDENT ACTIVITY FUND ACCOUNTING Presented by: Natalie Rew, CPA DPI—School Financial Services Student Activity Funds

  2. BASIC FACTS ABOUT STUDENT ACTIVITY ACCOUNTS • WI Stats, s. 120.16(2) authorizes a school district treasurer to receive money raised in “extra-curricular activities” • The district is responsible for maintaining records and properly accounting for the activity of the agency funds. • The district should consider agency fund procedures in conjunction with the district’s fraud prevention and detection procedures Student Activity Funds

  3. STUDENT ACTIVITY FUNDS (FUND 60) • Student Government • Drama Club • Class of 2XXX • Year Book • Foreign Language Club • Journalism Club • Band Club • National Honor Society • Chess Club • Debate Club • Photography Club • Pep Club • Chess Club • Computer Club Student Activity Funds

  4. STUDENT ACTIVITY FUNDS (FUND 60) WUFAR Accounts Assets • Cash -711000 • Investments -712000 Liabilities • Due to Student Organizations – 814000 NO FUND BALANCE Student Activity Funds

  5. DISTRICT ACTIVITY FUNDS (FUND10) • Athletics • School Musical • Music Concerts • Band Uniforms • Cheerleaders • Field Trips • Shop Class • Band Trip Student Activity Funds

  6. BOOSTER CLUBS AND PARENT GROUPS (FUND 60) • Due to parent organizations – 60 B 818000 • District may have agency funds for parent groups. (separate liability account in fund 60) REQUIREMENTS: • May not be a separate 501c3 • Subject to the same policies and procedures as student activity funds • Bank accounts must be in the name of the district. Student Activity Funds

  7. ODD TRANSACTIONS • Scholarships should be reported in Fund 72 • Fund Balance reserved for Scholarships 72B-931500 • Vending machines and gate receipts – Depends who determines the use. • Students – Fund 60 • District – Fund10 • Sunshine fund, coffee fund and faculty fund – Should not be on the district’s books. Student Activity Funds

  8. DEVELOPING STRONG CONTROLS • Establish clear lines of authority • Written policies for the establishment of student activity funds (signed) • Written policies and internal controls for operation of student activity funds (signed) Student Activity Funds

  9. Board of Education Adopt policies over establishment and operation of all agency funds School Business Official Overall responsibility for accounts and reporting to the board Implement policies and internal controls related to the administration of agency funds Principal Agency fund supervisor. Responsible for all receipts, disbursements Supervisor of the bookkeeper Faculty Advisor Supervising all activities of the organization Approves all transactions of the club Parent Organization Representative LINES OF AUTHORITY Student Activity Funds

  10. POLICIES TO ESTABLISH AGENCY FUNDS • Each organization is approved by the board • Application for creation of an organization • Purpose • Fund raising activities • Duration • Faculty advisor approved by the agency fund supervisor (principal) • Bank accounts approved by the Board of Education and subject to the same internal controls as other district depositories • Allocation of interest • Misappropriation or misuse of agency funds is theft Student Activity Funds

  11. ACCOUNTABILITY • Establish accountability for executing procedures within each organization. • The assignment of duties and responsibilities should be in writing. • Individuals responsible for specific tasks such as check signing, deposits, approving disbursements, reconciling bank accounts, etc should be identified. • Hold these individuals accountable Student Activity Funds

  12. GENERAL INTERNAL CONTROLS • ALL agency funds are subject to the same internal controls as all other district funds. • All forms, checks , receipts, and tickets should be pre-numbered. • Subject to periodic internal or external audit. • Monthly or quarterly reports on all activity should be prepared and submitted for review to the business office and the Board (In accordance with district policies). Student Activity Funds

  13. Three duties should be delegated to separate individuals: Check signing Bookkeeping Bank statement reconciliation Pre-numbered checks – two signatures. Bookkeeper does not sign checks. Purchase orders are approved by the agency fund supervisor. Bookkeeper does not approve disbursements. Monthly reports of revenues and expenditures for each agency are prepared for review by the agency fund supervisor and student organization faculty advisor or parent organization rep. IDEAL INTERNAL CONTROLS Student Activity Funds

  14. INACTIVE ACCOUNTS • Policy to identify inactive accounts • Policy to distribute funds from inactive accounts • Include the policy on inactive accounts in the agency fund policies. Student Activity Funds

  15. JUST PLAIN BAD BUSINESS • Check should not be signed in advance or written to cash. • Student and parent organizations should not maintain negative account balances. • Money should not be “temporarily” placed in an advisor or representatives account. • Strictly prohibit the use of student activity proceeds to cash personal checks, make “loans”, or extend credit to individuals. • Student activity organizations should not pay compensation directly to employees. Student Activity Funds

  16. What Needs to be Ready for Internal and External Audits? • District policies and procedures • Documentation of club purposes • Reconciliation of balances from beginning of period to end of period • Bank reconciliations for all months • All receipts for disbursements • Bank deposit slips and receipts Student Activity Funds

  17. What about Petty Cash? • Don’t combine student activity accounts and petty cash—they are not the same • If a school building needs petty cash, establish a petty cash account with proper district office approvals and reconcile as needed • The petty cash account could be a checking account at the building level Student Activity Funds

  18. WHAT COULD GO WRONG • Negative student activity account balances • Fraud!!!! • Generally, overall activity fund balances are immaterial to the overall financial statement presentation • Bad publicity • Damage to reputation of the district and its employees • Loss of employment for District Administrator/Business Manager/Bookkeeper Student Activity Funds

  19. MORE INFORMATION DPI Internet Website WUFAR Accounting Issues: Fund 60 Agency Fund Guidelineshttp://http://dpi.wi.gov/sfs/doc/stud_acct.doc Hand book for Evaluation and Improvements of Business Offices and Support Services Functions. Chapter 22. Published by WASBO. Includes a “Sample Policy and Procedures for Student Body Activity Accounts” Student Activity Funds: Procedures and Controls by Charles E. Cuzzetto. Published by the ASBO. Student Activity Funds

  20. CONTACT INFORMATION DPI School Financial Services: • 608/267-9114 • dpifin@dpi.state.wi.us School Finance Auditor: Natalie Rew 608/267-9212 Student Activity Funds

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