5. The administration of the school shall decide how to use student-generated funds to benefit the student body.

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1 SHELBY COUNTY SCHOOLS DIVISION OF INTERNAL AUDIT (DIA) QUICK REFERENCE GUIDE FOR PRINCIPALS The principal of each school shall have the duty of implementing and following the regulations, standards and procedures adopted by the Board of Education. The principal is liable for the safekeeping and handling of all funds, raised or collected from student activities, school services and school events, regardless of the source of funds or the purpose for which they were raised. There are 10 general principles governing student activity funds. 1. School activity funds are to be used to finance school activities augmenting, but not replacing, the funds provided by the Board of Education. 2. School activity fund-raising projects shall generate profits, in general, to contribute to the educational experience of pupils and shall not conflict with the instructional program. 3. Funds derived from the student body as a whole should be used to benefit the student body as a whole. 4. School activity funds shall be expended to benefit those students currently enrolled in the school. Funds should be expended in the same year received, unless a long range plan is in action. 5. The administration of the school shall decide how to use student-generated funds to benefit the student body. 6. Principals shall follow policies, regulations and procedures affecting school activity funds. 7. The management of school activity funds shall act according to sound business practices, including sound budgetary controls and accounting procedures. 8. School activity reserves at the school's year end should be limited to amounts estimated as necessary for the beginning of the following year's operation or for specific expenditures that require long range planning. 9. Student body business shall be conducted in a way that offers minimum competition to commercial concerns, while still benefiting the student body. 10. Student body representation is encouraged in the management of funds raised by the student body and expended for its benefit.

2 GENERAL FUND All revenue raised by the student body as a whole must be placed in the General Fund. Expenditures from the General Fund must benefit the entire student body. The principal has sole control over the expenditures from the General Fund. Monies cannot be transferred from the General Fund to a restricted account. Specific accounts in the General Fund can be overdrawn as long as overall the General Fund has a positive balance. General Fund resale accounts such as School Pictures, Bookstore, Concessions, Vending, Fund-raising I, and Fund-raising II should not be overdrawn. General Fund must maintain a positive balance. RESTRICTED FUND Composed of athletics, clearing, vocational, club and employee courtesy accounts. Revenue and expenditures in these accounts benefit specific groups of students or individuals. Expenditures from these activities require the approval of both the principal and the sponsor of the specific club or activity. It is the principal s responsibility to ensure the restricted accounts are not overdrawn at year-end. General funds must never be used to support restricted accounts. Restricted balances are carried forward to the next year. The signature of the club sponsor and the student president is required on a transfer request before money can be moved from a restricted account. The request must be ed to Twadie Williams before money is moved. ATHLETICS Expenses incurred by an athletic account should be coded to the athletic account incurring the expense; however, all athletic accounts should be considered when determining the balance in the athletic fund. Athletic accounts may be credited with funds derived from athletic events, athletic fund raising activities, and athletic concessions operated during athletic events. The principal is responsible for ensuring the athletic fund, as a whole, is not overdrawn at the end of the school year. The athletic fund balance at the end of the school year is carried forward to the next year. CLEARING ACCOUNTS Used for funds collected for a specific purpose, and are to be paid out promptly. VOCATIONAL ACCOUNTS Established to account for vocational-related transactions.

3 EMPLOYEE ACCOUNTS (STAFF INCENTIVES) Credited with funds derived from dues, or proceeds from employee vending machines. BANKING The school should have only one checking account for making deposits and withdrawals. The principal may choose any FDIC bank as long as the bank agrees to waive all bank charges. Internal Audit must be contacted before changes are made to the account. The bank account will contain two authorized signatures, the principal s and the financial secretary s. In case of an emergency, the principal may choose a third authorized signature, e.g., the assistant principal. The principal must sign every check. The third signature is for emergencies only. Schools must use checks that require two authorized signatures. Contact the DIA to order checks. DISBURSEMENTS All expenditures, including student refunds, must be made by check. An itemized invoice, itemized cash ticket, or some other proof of purchase must support all disbursements. The principal must approve all purchases before the purchase is made. The bid/request forms should be utilized. Payments to non-board of Education employees for services rendered must be paid through Accounts Payable. No blank checks should be signed in advance. Rubber stamps cannot be used. Purchase orders must be approved by the principal and issued for all purchases of $100 or more when school funds have been committed and the school will be billed at a future time. Bids should be obtained and documented when the school makes a material purchase. If the principal decides that bids are not feasible, the reason should be documented. Vendors must be on the approved list. At this time the financial secretary will need to check in APECS for approved vendors prior to writing a check. We are working to provide easier access to the vendor list in the next few weeks. Reimbursements should not be made to staff who have purchased from unauthorized vendors. RECEIPTS All money received in the school must be receipted and deposited daily. Each student that turns in money must receive a receipt. Exception: Pay activities where tickets are utilized.

4 Principals are responsible for the protection of funds in the school. When money is collected after the daily deposit is made and the amount is material, it should be placed in a night depository at the bank. (Material may be defined as the amount for which the principal will assume responsibility.) Another member of the office staff should be trained to receipt and deposit money in case the financial secretary is absent. The financial secretary is responsible for verifying collections and recording transactions in the school s records, and should not be the first to count any money. This includes pay activities, tickets, SACC. Deposits must be verified by someone other than the financial secretary. The person should initial the deposit slip and deposit analysis once they confirm that the amount placed in the bag agrees with the amount listed on both of these. If this is not done, the financial secretary/bookkeeper will be responsible for replacing money missing from the deposit. Student fees should be kept to a minimum. Student fees must be expended for the purpose for which they are collected. Fees cannot be charged for the use of school property. A voluntary maintenance fee of $4 maximum may be collected for parking, lockers, etc. BANK RECONCILIATION The principal should open and review the bank statement each month. Statement should remain sealed until opened by the principal. The financial secretary should reconcile the bank statement every month and present it to the principal for review and signature. Rubber stamps cannot be used. Bank reconciliations are due by the 15 th of each month. OTHER INSTRUCTIONS The following require prior written approval of the appropriate regional superintendent: (pending) Equipment costing more than $1,000 Equipment attached to the building, regardless of the cost Installment contracts or purchases that will not be paid during the current year Gifts or donations $500 or more. Funds should be deposited to gift account unless it is donated for a particular purpose. If so, a restricted account should then be used. Written intent from the donor should be obtained if funds are to go to a restricted account. The following vendors need to be on the approved list: Bus/Tour Companies (issued by Risk Management) Photographers (issued by the DIA) Fund Raising Companies (issued by the DIA)

5 Student activity funds cannot be used to place additional funds on account in the cafeteria unless the money has been collected from parents. If money is collected, account Cafeteria Payments should be used. A purchase order must be issued anytime a bus is ordered to transport students. This should not be an open purchase order, but one for each activity. Fundraising Activities Fund raising activities should generate a profit. Sales tax must be paid on all items purchased for resale, even if the purchase is not intended to raise a profit. Exception: textbooks, P.E. uniforms, and coupon books or cards where taxes will be paid when coupon or card is used. Principal must approve all fund raising activities held at the school and involving students. A contract must be signed between the principal and fund raising representative. Fund raising companies shall be selected from a list of approved vendors. The approved fund-raiser list is not the same as the approved vendor list. Approved fundraisers must be approved by the Division of Internal Audit, and the fund-raiser must also complete the vendor application through Procurement. Fund raising by clubs may be used to benefit the individual clubs; however, remember that school-wide fund raiser proceeds should be deposited in the general fund and not an individual club account. A maximum of 20% of the net profit from a restricted fund raising activity may be transferred to the General Fund. An income statement must be prepared at the end of each fund raising activity and available to students, teachers, and parents upon request. All fund raising collections must be accounted for. A debt list must be maintained for students receiving but not paying for fund raising items. Competitive bids should be obtained and documented. Pay Activities Pre-numbered tickets must be used. The beginning number should be documented. Used tickets should be on hand and available for audit review. A ticket reconciliation form should be prepared, accounting for all tickets sold and funds received. It should be signed by the principal and kept on file for audit review. An income statement should be prepared at the end of each pay activity and made available to students, teachers, and parents, if requested. Allocation Per Teacher (TCA ) BEP Each classroom teacher must receive a yearly allocation to use in the classroom for instructional needs.

6 Individual records should be maintained on each teacher verifying the funds were made available to the teacher. Each classroom teacher is allotted an additional amount that can be pooled with other teachers to permit the purchase of items such as equipment that may exceed the individual teacher s allocation. The principal should establish a committee for the purpose of determining the use of pooled funds. The committee should submit in writing to the principal their proposal for the use of pooled funds. Fee Waiver Any student who has a signed fee waiver request form and has met the eligibility guidelines may have school fees waived. School fees are defined as fees for activities that occur during regular school hours, and/or for supplies or materials required to participate in all courses offered for grade or credit. School fees are not for fines, charges owed to the school for lost or damaged textbooks, library books, workbooks, other school property, debts owed the school, basic supplies such as paper and pencils, costs for extracurricular activities occurring outside the regular school day, etc. If the school has an activity that qualifies for fee waiver benefits, the school must provide fee waiver regardless of the school s allocation. Principals should carefully monitor the number of qualifying fee waiver activities and/or materials that the school requires in a school year to prevent over spending of fee waiver allocation. Purchase of Equipment The principal is accountable for the school s inventory of equipment. It is recommended that new principals perform an inventory of school equipment upon assignment. The principal is responsible for storage of equipment that provides reasonable security and control. The principal is responsible to notify the Police Department, SCS Office of Security Services, and the Internal Audit Division when the school has had a theft or break-in. The principal is responsible for having equipment of a material value ($100 or more) that is purchased with a school check tagged and placed on the school s inventory listing. Payroll Procedures A timekeeping system should be in effect to support all compensation to employees and students. By law, overtime must be paid on all hours over 40 hours worked by non-exempt employees.

7 Teachers work on contracts and therefore, this law does not apply. Absentee forms should be maintained on all employees qualifying for benefits, e.g., sick or vacation days. Pay for BOE employees being compensated for additional services rendered should be submitted in APECS. If the school receives an allocation for clerical assistance, the money should not be used to compensate other staff. These funds must not be overspent. Professional Development Procedures Student activity funds cannot be used to pay professional development expenses. Travel authorizations must be filled out and approved by the principal before a trip is taken. A travel expense report must be completed within seven days following the return from a trip. All overages on advances are due at this time. Supporting documentation must be attached to the travel expense report. Copies of all travel expense reports and supporting documentation must be maintained at the school for audit review regardless of the reimbursing agent. Student activity funds cannot be used to pay for individual memberships to professional organizations. An institutional membership for these organizations (NAESP,TASSP, etc.) can be paid from School Funds Online (SFO) Instructional account Athletic Ticket Reconciliations All tickets sold for an athletic event must be pre-numbered. The beginning ticket number should be recorded on the ticket reconciliation form. Once ticket sales have ended for each game, the ending ticket number should be listed on the ticket reconciliation form. The ticket reconciliation form should be completed and submitted to the office for the principal s signature. A ticket reconciliation form should be completed for each athletic event. Funds collected for athletic events should be turned in to the financial secretary the next school day following the event. Site-base Budget Procedures The funds provided in the school s site-base budget are intended for day-to-day operations of the school. These funds should be exhausted before the student funds are expended. Funds not expended before June 30 each year, are returned to the BOE s General Fund. If the school overspends its site-base funds, the charge is coded to the school s money-due-board bill. The Finance Division issues critical dates for using site-base funds. The dates are strictly adhered to. The school should contact Finance for training on site-based budget procedures. Money Due Board Account Charges coded to the BOE account should be paid in full in the month the charges occur.

8 Attendance Policies and Procedures Required postings and forms Manuals that should be reviewed and adhered to Tennessee Internal School Uniform Accounting Procedures Manual (Find a link on the Internal Audit Web Site) School Activity Accounting Manual