STUDENT ACTIVITY FUND ACCOUNTING

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STUDENT ACTIVITY FUND ACCOUNTING

• Presented by Natalie Rew, CPA
• DPISchool Financial Services

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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 districts
  fraud prevention and detection procedures

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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

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STUDENT ACTIVITY FUNDS (FUND 60)

• WUFAR Accounts
• Assets
• Cash -711000
• Investments -712000
• Liabilities
• Due to Student Organizations 814000
• NO FUND BALANCE

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DISTRICT ACTIVITY FUNDS (FUND10)

• Athletics
• School Musical
• Music Concerts
• Band Uniforms
• Cheerleaders
• Field Trips
• Shop Class
• Band Trip

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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.

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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 districts books.

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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)

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LINES OF AUTHORITY

• 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

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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

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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

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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).

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IDEAL INTERNAL CONTROLS

• 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.

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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.

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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.

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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

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What about Petty Cash?

• Dont combine student activity accounts and petty
  cashthey 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

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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

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MORE INFORMATION

• DPI Internet Website WUFAR Accounting Issues
  Fund 60 Agency Fund Guidelines http//http//dpi.w
  i.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.

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CONTACT INFORMATION

• DPI School Financial Services
• 608/267-9114
• dpifin_at_dpi.state.wi.us
• School Finance Auditor
• Natalie Rew 608/267-9212