- 1 - School Based Funds Reference Guide

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1 - 1 - School Based Funds Reference Guide

2 - 2 - Index Contacts 3 Internal Control Tips 4 Handling Petty Cash 5 Steps to reconcile a bank account 6 Year end reporting 7 Sample Bank Reconciliation Sample Year end report General account Sample Year end report Scholarship funds School Budget Example Appendix A Appendix B Appendix C Appendix D

3 - 3 - Contacts Director of Finance George Boudreau gboudreau@cbvrsb.ca Coordinator of Finance & Accounting Sandra Burke sburke@cbvrsb.ca Assistant Coordinator of Finance & Accounting Nancy Costigan ncostigan@cbvrsb.ca Accountant School Services Linda Buffett l_buffet@staff.ednet.ns.ca

4 - 4 - Internal Control Tips General Never pay expenditures from the cash collected. Deposit the total funds to the bank and pay any expenditures by cheque. Make all payments by cheque, except those of a minor nature. These may be paid from petty cash. (See handling petty cash later in this booklet) Ensure that all requests for payment are supported by original invoices or receipts. Do not make payments from company statements. Bank deposits must be made daily unless there is a safe on site, in which case the deposits must be made at least weekly. When cash is received from an individual (ie. a teacher), ensure that the cash received is in a sealed envelope with an attached slip detailing the amount and purpose of the cash collected and the individual s signature. Where possible, open the envelope and count the cash in front of the individual or a second person. Follow-up on any disrepancies with the attached slip as soon as possible. Cheques Do not pre-sign cheques or use a signature stamp. Store unused cheques in a designated, locked location to prevent loss or theft. There should be only one sequentially numbered book of cheques in use at all times. (for each account) Keep voided cheques and include them in your file. Keep a record of all cheque numbers to account for all cheques and to prevent missing cheques. Deposits Keep a record of the detail of what makes up each deposit. This can be done using quicken/quickbooks, writing the detail on the back of the deposit slip or keeping a separate notebook of each deposit and the breakdown. This will help you with your year end reporting.

5 - 5 - Handling Petty Cash Petty cash funds must be accounted for through the school s general account. When funds are taken from the petty cash, receipts must be maintained to support each expenditure. You must track who the money was paid to, its purpose and the expense category to which it relates. Petty cash should be reconciled on a regular basis (ie. Monthly or weekly depending on the volume of its use). At all times, the cash plus the receipts in petty cash should equal the float amount. When funds need replenishment, the replenishment amount must equal the total of the disbursements since the last replenishment. Petty cash replenishments should be made by cheque from the school s general account. Cheques should always be made payable to petty cash, not cash. Never replenish your petty cash float with cash from a deposit. It is at the point of replenishment that the expenditures, as indicated by the receipts, are recorded in the accounting records.

6 - 6 - Steps to reconcile a bank account Follow these steps each month to ensure that the school s accounting records reconcile with the bank records: A) Review the school s accounting records for a list of deposits and withdrawals or payments. Compare those to the items recorded on the bank statement. In the accounting records, mark off all deposits and withdrawals that appear on the bank statement. Generate a list of all deposits and withdrawals for the month that are still outstanding. B) If there are any items on the bank statement that do not appear in the accounting records, enter these deposits or withdrawals into the accounting records (ei. Bank interest, NSF charges). Make sure you use the proper dates to enter these transactions so they will appear in the period being reconciled. C) To balance the account: (See Appendix A for worksheet) a. Start with the bank closing statement balance (ie. March 31 st for year end) b. Add any outstanding deposits c. Subtract any outstanding cheques from the list generated in step A d. Check the final bank balance to ensure that it equals the balance in the accounting records for the end of the month being reconciled. If you use Quicken, this process will be automated and provide you with a reconciliation report. Print this report and include it in the monthly file for the account. In Quicken, always print the cleared and uncleared transactions as part of the reconciliation report. Tips for if your bank does not reconcile to the accounting records Ask yourself these questions in order: Did you reconcile the prior months bank balance? If not, your current month s bank balance will also not reconcile. Are there any transactions on the bank statement that have not been entered? Transactions could include bank charges, bank interest earned, debit or credit memos, transfers to or from other accounts. Were there any cheques that are on the bank statement that haven t been marked as cleared in the accounting system? Does the opening bank balance on the bank statement match the prior month s closing balance? (this would be an error of the bank)

7 - 7 - Year end reporting Each school must file a year end report on or before April 30 th of each year. The fiscal year of the CBVRSB runs from April 1 st to March 31 st of each year. The year end report must include income and expenses from all school based funds. Please see Appendix B for an example of a year end financial report

8 - 8 - APPENDIX A SAMPLE BANK RECONCILIATION Closing bank statement balance, March 31st 5, Add: Outstanding deposits March 29th March 30th March 31st , Deduct: Outstanding cheques #300 (65.00) #304 (200.00) #306 (300.00) (565.00) Reconciled bank balance 5, Balance per accounting records March 31st 5, Difference - Notes: Outstanding deposits: are any deposits made before April 1st (dated and deposited in March) but not recorded by the bank in the March bank statement. Because they are not recorded in the March bank statement, a difference would result from what is in the accounting records. (An example would be where a deposit was made on March 31st in the night deposit box (after bank hours or on a weekend) resulting in the bank officials not receiving the deposit until April 1st or the first business day in April.) Outstanding cheques: are any cheques that were written and dated before April 1st but not received back by the bank and therefore not recorded on the March bank statement. Because they are not recorded in the March bank statement, a difference would result from what is in the accounting records. (An example would be where a cheque was dated March 31st and a supplier deposited it into a bank different from the schools. This cheque would take a couple of days to be sent to the school's bank and therefore would not be received by the bank until sometime in April. Another example would be the case where a cheque is dated in March and the vendor that is paid does not deposit the cheque until a later date which falls in April)

9 - 9 - APPENDIX B SAMPLE YEAR END REPORT School: Marcus Highschool Year end: March 31, 2009 Bank account name: General account Opening balance per accounting records (April 1, 2008) 4,400 Funds received: Class Trips (recovery of funds) 1,400 Donations 2,085 Student Activities Yearbook 9,400 Newspaper 2,500 Student Council 2,500 14,400 Student Fees Locker 5,400 Agendas 12,200 17,600 Total cash available (opening balance plus all cash inflows) 39,885 Funds disbursed: Class Trips 1,500 Student Activities Yearbook 8,800 Newspaper 1,900 Student Council 2,450 13,150 Student Fees Locker repairs/upgrade 4,600 Agenda cost 11,500 16,100 Other general costs Thanksgiving lunch 700 Christmas lunch 900 Winter carnival 1,200 Sundry 400 3,200 Total cash outflows 33,950 Closing balance per accounting records (March 31, 2009) 5,935 Note 1: This closing balance should also equal your bank reconciliation Note 2: A similar form should be filled out for each separate bank account in the school's name. Funds and expenditures have been combined for purposes of this example, however, some of the above items may have separate bank accounts.

10 APPENDIX C SAMPLE YEAR END REPORT SCHOLARSHIPS School: Marcus Highschool Year end: March 31, 2009 Bank account name: Scholarship account Opening balance per accounting records (April 1, 2008) 12, Funds received: Scholarships 16, Bequest - Estate of John Smith 30, Bursaries 6, , Interest earned Total cash available (opening balance plus all cash inflows) 65, Funds disbursed: Awards: scholarships awarded 4, bursaries awarded 3, , Total cash outflows 8, Closing balance per accounting records (March 31, 2009) 57, Note 1: This closing balance should also equal your bank reconciliation

11 APPENDIX D SCHOOL BUDGET EXAMPLE Cost elements Actual Commitment Assigned Plan Available Equipment Telecommunications 2, , , Supplies & Materials 4, , , , , Books Over/underabsorption 6, , , , , Actual those expenses already processed through the accounts payable department. Commitment- those expenses incurred (requisitioned) but not yet processed through the accounts payable department. Assigned Actual + Commitment, total amount spent out of budget Plan Budget Available Budget less expenses incurred (Assigned) (what is leftover to spend)