NHCS BUDGET MANUAL July 2015

NHCS BUDGET MANUAL July 2015 1

Table of Contents Introduction... 4 Budget Duties and Responsibilities... 4 Budget Director... 4 Budget Delegation Process... 4 Financial Tools... 5 Centralized Financial System... 5 Cook Spreadsheets... 5 DocAgent... 6 Travel Tracker... 6 Reconciliation Process... 6 Budget Topics... 7 Chart of Accounts... 7 Grouped Account Codes (Roll-up Codes)... 10 Budget Transfers... 10 Print Shop... 10 Textbooks... 11 School General Ledger Reports... 11 Budget Information on Finance Web Site... 11 Allotment Process... 12 Allotment Formulas... 12 Allotment Policy Manual... 12 Types of State Allotments... 12 School Budget Allotments... 13 Disbursement Procedures... 14 Preaudit Certificate... 14 Obligations Requiring Purchase Orders... 14 Contracts Not Requiring Purchase Orders... 14 Expenditures Not Requiring Purchase Orders or Contracts... 15 Disbursement Violations... 15 Unallowable Expenditures and Accounts... 15 Travel Procedures... 16 Professional Leave Approval Process... 16 Travel Expenditure Restrictions... 16 Payment Requests... 16 Direct Deposit of Employee Reimbursements... 17 Workshop and Meeting Procedures... 17 2

General Procedures... 17 Internal Workshops... 18 External Workshops... 18 Accounts Payable... 18 Account Payable Process... 18 Accruals... 18 Accounts Payable Forms... 19 Check Requests... 19 Employee Expense Reimbursements... 19 In-County Travel... 19 DocAgent (Electronic A/P File Cabinet)... 20 On-Line Receiving in Sunpac... 20 Internal Service Invoices... 20 Textbook Procedures... 21 Fixed Assets... 22 Fixed Asset Responsibilities... 22 General Fixed Asset Procedures... 23 Missing Equipment Procedure... 25 Other Inventory Procedures... 25 Managing Federal Programs... 25 School Allotments from Title I... 26 Time and Effort Forms... 26 Time and Effort Reconciliation... 26 Semi-Annual Certifications... 26 Multiple Cost Objective... 27 Departmental Receipt Procedures... 27 Department Invoicing Procedures... 29 Central Office Event Ticket Sales... 29 Signature/Approval Requirements... 30 Year-end close out process... 31 Purchase Order Roll Over... 31 Budget Carryover... 31 Expense Accruals... 31 Prepaid Expenditures... 31 3

INTRODUCTION The purpose of this manual is to serve as a reference guide for budget administrators and support associates with budget responsibilities. Topics include basic budget information, along with procedures related to purchasing and accounts payable. This manual does not include School Funds or Payroll Procedures. Please refer to the Treasurer s Manual for procedures related to School Funds and the Administrative Payroll Manual for procedures related to payroll administration. Suggestions for additional topics to be included should be emailed to the Finance Office. BUDGET DUTIES AND RESPONSIBILITIES BUDGET DIRECTOR Each budget program is assigned a budget director, also referred to as budget manager. The budget manager for each school allotment is the principal. Recurring program assignments are listed annually in the budget book. A more detailed listing is located on the Finance web site under the Budget tab, and includes all programs by fund, budget director, department, and the Finance Department budget analyst assigned to each program. This position serves as liaison between the director and the Finance Department, providing technical guidance and support. Budget management duties include: 1. Ensuring all procedures are followed in a timely and accurate manner 2. Planning for expenditures in alignment with school or department goals 3. Authorizing expenditures in accordance with financial procedures and in compliance with grant requirements 4. Requesting Budget Transfers and/or Position Changes as needed 5. Review and reconciliation of transactions to ensure general ledger properly reflects activity approved by the Budget Manager 6. Budget Delegation, if any, for assigned programs BUDGET DELEGATION PROCESS A budget director may opt to delegate authority to perform specific budget duties, but the responsibility and accountability for those duties remain with the budget director. Specifically, the following duties may be delegated by program or specific purposes within a program: 1. Approval of Expenditures (Purchase Requisitions, Check Requests, Travel Reimbursements, etc.) 2. Budget Transfer Requests 3. Warehouse Order Entry To delegate budget duties, please complete a Budget Delegation Form (see Finance forms on Finance web page), sign and submit to Donna Rosser in Finance. Donna maintains a summary chart used by Finance and Purchasing to ensure only those with proper authority approve expenditures. 4

FINANCIAL TOOLS CENTRALIZED FINANCIAL SYSTEM SunPac is the K12 Enterprises Financial Software Package used by NHCS. This software also transmits monthly financial transactions to the NC Department of Public Instruction (DPI). All financial transactions are recorded in this software. Software modules include: Budgeting Purchasing General Ledger Payroll Accounts Payable Fixed Assets Child Nutrition inventory and purchasing transactions are recorded in Meals Plus, a separate software product, and all general ledger transactions interface with SunPac. COOK SPREADSHEETS Cook Spreadsheets are an EXCEL based Reporting Tool for Financial Software, Absence History, Substitutes and Teacher Certification. Each elementary and middle school has two site licenses for principal and treasurer/payroll operator. High Schools have three licenses for the principal, treasurer and payroll operator. Each department has two licenses for the director and the support associate that works with their budget. The Finance Department conducts periodic training for both Cook and SunPac. Below is a quick guide for running School Budget Reports in Cook. Quick Reference Guide for School Budget Reports in Cook Cook security for schools is set to allow access to payroll and HRMS data for all staff assigned to the school. However, that also gives automatic access to salary expenditures which are budgeted centrally. Below are a few suggestions for setting report formats to ignore those salary accounts: Budget Tab: 1. Click Hide Payroll Codes (top right). This is a filter so don t try to subtotal if you select this option. Then filter on the program you want to review. 2. Sort by Fund/PRC/Purpose. 3. Subtotal by Fund/PRC/Purpose. 4. Then filter on the programs you want to see. Budget Pivot Table Tab: 1. Select budget Fund/Purpose/PRC/ Object Table 2. Filter on programs you want to see. The most used school programs are listed below: 024 - Supply allotment for STAE 050 - Title I 061 - Instructional Supplies 069 - At-Risk Services (secondary schools may see payroll expenses in 069; and alternative schools may have non-salary allotments in this program) 105 - Title I School Improvement 509 - School Funded Payroll 500 s - Grants 802 - Custodial Supplies 5

805 - Administrative Supplies 806 - Flexible Use School Funds 807 - Priority Allotments 862 - High School Signature Programs 882 - Athletics 884 - Arts 3. Filter to select non-salary object codes (300 s and 400 s only). 4. Also may be helpful to throw away the following columns: Beg Budget, Budget Adjustments, Estimated Escrow, and Balance w/ escrow. DOCAGENT DocAgent is a web-based software program which allows retrieval and routing of electronic versions of Invoices, Purchase Orders, Receiving Documents and Check copies. See more information under Accounts Payable. TRAVEL TRACKER Travel Tracker is the bus scheduling program that is used for field trips and athletic trips. Teachers/Coaches have the capability to enter their own trip requests, follow their trips through the approval process, send notification to child nutrition for meal planning, print customized parent permission slips, and view their bus assignments on a trip calendar. The system is internet-based, allowing access at any time from a web browser. Either the treasurer, or the funding source can identify whether the trip will be paid by budget code or a school funds check. The following link to the Travel Tracker system is located on the NHCS website, on the Transportation Department page. http://appgarden2.app-garden.com/traveltracknc650.nsf RECONCILIATION PROCESS Monthly Activity Review - Use Cook Spreadsheets or General Ledger Account Inquiry to review budget, encumbrance and transaction activity as follows: Ensure all requested budget transfers were posted Check to make sure all requisition/purchase orders are accounted for Review Purchase Order Balances for reasonableness Make sure expected payment transactions are reflected on the transaction ledger 6

BUDGET TOPICS CHART OF ACCOUNTS The NC Department of Public Instruction (DPI) requires Local Education Agencies (LEAs) to use a standard Chart of Accounts. All chart of account documentation and definitions can be found on the State Web site: www.ncpublicschools.org/fbs/finance/reporting/coa2015 Below is a brief overview of how the chart works. It is critical that all expenditures are properly coded in compliance with the chart for proper planning, accountability, and budget analysis, and both a local and state level. Segment Structure X XXXX XXX XXX XXX XXX XX FUND FUNCTION PROGRAM OBJECT SCHOOL USE 1 USE 2 Segments are divided by dots (x.xxxx.xxx.xxx.xxx.xxx.xx), but may be keyed in the system with or without them First 5 segments must be in compliance with the State Chart of Accounts The last two segments are locally defined, with Use 1 used for Department Numbers as needed for budget delegation purposes, and Use 2 used as needed to define projects, program set-asides, or installment indicators Definitions for the first 5 segments and a listing of allowable codes for each program on included in the state documentation referred to above. Fund: A Fund is an Independent Fiscal Accounting Entity. The following funds are used by NHCS: 1 State 2 - General 3 - Federal 4 - Capital Outlay 5 - Enterprise (Child Nutrition) 6 - Trust 8 - Other Restricted Revenue Purpose: The reason for which something exists or is used. Activities or actions performed to accomplish the objectives of a local school administrative unit. Five Categories of Expense: 5000 - Instructional Services 6000 - System-Wide Support Services 7000 - Ancillary Services 8000 - Non-Programmed Charges 9000 - Capital Outlay 7

Each of the 4 digits have a specific meaning/use: X X X X P U R P O S E F U N C T I O N L O C A L S U B F U N C T I O N U S E Example: 5000 - Instructional Services 5300 - Alternative Programs and Services 5350 - Extended Day/Year Instructional Services 5353 - Summer School Instructional Services The function (2 nd digit) is used to categorize the major operational activities of the district. The budget is approved and financial statements reported at this level. The sub-function level (3 rd digit) provides greater level of detail used in program analysis. The 4 th digit use is optional. We use when we need to track program expenditures at a greater level of detail Program: A program report code (PRC) designates a plan of activities or funding designed to accomplish a predetermined objective. Program Codes are used to allocate money from DPI for State and Federal Programs Local allocations are also made by program The chart of accounts for local program must match state (example: PRC 032 Children with Special Needs) Locally defined programs can have a locally defined Chart (example: PRC 856 Human Resources) Object: Service or Commodity obtained as a result of a specific expenditure: 100 - Salaries: All payroll amounts paid to persons who are employed by the local school administrative unit 200 - Benefits: Amounts paid by the local school administrative unit on behalf of employees, in addition to the regular salary. 300 - Purchased services 400 - Supplies and Materials 500 - Capital Outlay 700 Transfers 8

Object Code definitions for most commonly used non-salary school codes: 311 Contracted Services Include amounts paid for non-payroll professional and technical services performed under contract, excluding Workshop Expenses. Services include amounts paid for non-payroll services performed by a qualified attorney to assist the local school administrative unit in specialized legal matters, services performed by an independent auditor concerned with examining, verifying, and reporting on the accounting records of the local school administrative unit, copier contracts as well as for other professional and technical services in the school system. 312 Workshop Expenses Include amounts paid for contracted services, supplies, and participant's travel costs for workshops and in-service seminars designed to enhance the quality of a program. Expenses include reimbursement to employees for mileage for workshops on personal vehicles equal to or less than the IRS allowable rate for business use. 331 Pupil Transportation - Contracted Include expenditures to agencies and persons, other than employees, for the purpose of transporting children to, from or between schools. This includes reimbursement of transportation expenses to individuals who transport themselves or parents who transport their own children. 332 Travel Reimbursements Include costs for transportation, meals, hotel, and other allowable expenses (which require documentation) associated with traveling on business (other than for workshops and in-service seminars, which are coded to 312) for the local school administrative unit. Also includes reimbursement to employees for mileage on personal vehicle equal to or less than the IRS allowable rate for business use. Employer paid relocation costs. 333 Field Trips Include expenditures for transportation and other costs related to field trips for students. 342 Postage Include amounts paid for postage services. 411 Supplies and Materials Include all supplies, materials and workbooks used in the school system for instructional and non-instructional purposes. Examples of supplies: construction paper, crayons, pencils, pencil sharpeners, and other small unit cost equipment that meets the criteria for a supply item as outlined above. Examples of workbooks: map skills, handwriting, bookkeeping workbooks, etc. Include amounts expended for supplies and materials other than instructional supplies. (Expendable tools used in the garage and School Food Service should be recorded here.) Include amounts expended for periodicals and newspapers. A periodical is any publication appearing at regular intervals of less than a year and continuing for an indefinite period. Include amounts expended for audiovisual supplies and materials in the local school administrative unit. Include amounts expended for processing and cataloging books and materials in a school library. This would include kits and other supplies used for this purpose. Include amount for subscriptions to internet based educational resources and for the purchase of on-line educational media/materials used for the instruction of pupils. 412 State Textbooks Include the value of the State Textbook fund expended for prescribed textbooks purchased for pupils or group of pupils, and resold or furnished free to them. 413 Other Textbooks Include amounts expended for other prescribed textbooks purchased for pupils or groups of pupils, and resold or furnished free to them, which are not classified above. This category includes the cost of textbook binding or repairs, as well as the new amount of textbooks, which are purchased to be resold or rented. This category also includes online textbooks. 414 Library Books (Regular and Replacement) Include amounts expended for regular or incidental purchases of library books available for general use by students, including any reference books used solely in the classroom. Also recorded here are costs of binding or other repairs to school library books. 418 Computer Software and Supplies Include amounts expended for computer programs, floppy disks, ribbons, and etc., annual renewable license code and maintenance fees for computer software. 459 Other Food Purchases Include amounts expended for other food purchases, such as snacks and meetings. 9

461 Furniture and Equipment - Inventoried (>$1000 but less than $5,000) Include expenditures for the initial, additional and replacement costs of equipment for both instructional and support areas whose small unit cost and/or lease/purchase arrangement makes it inadvisable to capitalize the item. Use this code only if you will inventory the items purchased. If not inventorying the item, use 411 Supplies and Materials. 462 Computer Equipment Inventoried (>$1000 but less than $5,000, and all computers) Include expenditures for computer hardware whose small unit cost and/or lease/purchase arrangement makes it inadvisable to capitalize the item. Use this code only if you will inventory the items purchased. If not inventorying the item, use 411 Supplies and Materials instead. 541 Purchase of Furniture and Equipment Capitalized (>$5,000) Include expenditures for the initial, additional, and replacement items of capitalized equipment such as furniture and machinery; including lease/purchase, for both instructional and support areas. 542 Purchase of Computer Hardware - Capitalized (>$5,000) Include expenditures for the initial, additional, and replacement items of capitalized computer hardware such as microcomputers, printers, file servers, other equipment required for infrastructure/connectivity, etc.; including lease/purchases. GROUPED ACCOUNT CODES (ROLL-UP CODES) Several codes used for school allotments in the Chart of Accounts have been grouped with a Parent/Child link. This means that money is budgeted in the "parent code" but may be spent in the linked "child codes" without budget transfers. All grouped codes must have the same purpose codes, and transfers will not be processed to linked codes. These codes are grouped for budgeting purposes only, and expenditures must still be coded to the appropriate codes in compliance with the State Chart of Accounts. To view grouped codes in Cook Spreadsheets, filter by program, purpose and object. To view in the SunPac, select Option #11 on the General Ledger Menu. Please note that the system deletes codes not used in the prior year, so please email Tonice Brewer in Finance to request set up of codes. BUDGET TRANSFERS Once the budget has been approved, budget managers may request line item transfers by submitting a Budget Transfer Form. Transfer Restrictions: No transfers are allowed between funds, but most local transfers are allowable. Federal Transfers must be submitted through the Federal Budgeting System (LBAAS). Transfers between purpose codes in excess of $50,000 require Board approval. Do not request transfers between salary codes without first meeting with your assigned budget analyst to review the budget impact. PRINT SHOP Program 853 Not real money Allocated by Purchasing and used for tracking purposes only May transfer in additional money, but may not transfer out 10

TEXTBOOKS Program 830 Not real money; Allocated for use to order from State Textbooks Warehouse Funds may be transferred to State Program 061 See more detailed information in this manual under Textbook Procedures SCHOOL GENERAL LEDGER REPORTS Run reports from the General Ledger Menu as follows, using options 40 and 42. Only the school and programs under your authority will print when you run this report. Locations also have access to options #39 and #41 to copy or create reports. When creating reports start the name with location number to ensure the report is not deleted at year-end. Ledger Reports Formats Option 40: These reports will print account balances for the period selected Once a report is selected, select the Current Month for month-to-date column and select the fiscal periods of the selected months, which will default to YTD. Standard School Reports include: SCHOOL ALLOCATIONS (for school supply allocations) SCHOOLPRGREPORT (for allotted programs with salary codes) SCHOOLNCPREK - State Pre-K funding for schools which may have Pre-K supply allocations SCHOOLSUMPRG and SCHOOLSUMALLOC These two summary reports provide program totals only so you can review your funds at a glance Standard Department Reports include: PROGRAMREPORT Program Reports PROGRAMREPORT% - Program Reports with % Expended/Encumbered Activity Reports Formats Option 42: These reports will print detailed ledger transactions Once a report is selected, select the current month for Month to Date column and select the months for the report, which will default to YTD. Standard School Report is : SCHOOL Standard Department Report is : DEPARTMENT BUDGET INFORMATION ON FINANCE WEB SITE www.nhcs.k12.nc.us/finance/budget.htm Annual Budget Book Budget Resolution Allotment Formulas Budget Calendar Budget Development Process Request Forms Program Assignments Grouped Account Codes www.nhcs.net/finance/forms_finance.htm Budget Delegation Form Budget Transfer Form 11

ALLOTMENT PROCESS ALLOTMENT FORMULAS Allotment formulas determine the amount of funding for each program. Various criteria are used in formulas such as: Number of students Number of students in a specific population Student numbers weighted by poverty data State allotment formulas are found in the Allotment Policy Manual listed below, and local formulas are posted on the Finance web site. ALLOTMENT POLICY MANUAL The Allotment Policy Manual provides information on restrictions for each allotment (program): www.ncpublicschools.org/fbs/allotments/general/ For each allotment, the manual provides information related to the: Term of allotment (# of Months; Carryover eligibility) Eligibility Allotment Formula Special Provisions Allotment Restrictions TYPES OF STATE ALLOTMENTS State and Federal funding is allotted by program in one of 3 ways: Categorical Allotments Funds used to address the needs of a specific population or service. All other State and Federal Programs with Salaries are Categorical and budgeted for salary and nonsalary support of the specific programs. All Categorical Allotments are assigned budget directors. These directors work closely with finance to determine how allotted funding will be spent. Dollar Allotments Dollars allotted to hire employees or purchase goods for a specific purpose. Most state programs with salaries are either position or categorical. Below are examples of state programs allotted in dollars for one specific purpose: o Central Office Admin 002 o Teacher Assistants 027 o Non-Instructional Support 003: Subs, Clerical, and Custodians only Position Allotments The State allocates a number of positions or a number of months of employment for a specific purpose and pays the state salary regardless of dollar amount. 12

Positions Allotments: o 001 Teachers o 007 Instructional Support Months of Employment Allotments: o 005 School Administrators o 013 CTE Months of Employments (State only) Local funding is added to Programs 001, 005, and 007, which result in better local formulas. Local Allotment Process The State usually issues State and Federal planning allotments in February or March, which are based on current or projected funding levels along with State Student Projections. Student Support Services prepares local student projections, which are generally more accurate, but we have to adjust to State for teacher allocation purposes so we don t overspend. We adjust to actual during the first 10 days because the state will adjust funding to actual based on best 1 of first 2 months ADM. In order to maximize the use of State Funding, all supplies are allocated from local funds in program 061, but both the State and Local formulas are used to calculate the allotment per school. Local Allotment formulas are included in the Annual Budget Book. SCHOOL BUDGET ALLOTMENTS Allotment Formulas: Used to determine number of positions and allocations of supplies Position Allotments: Finance calculates based on projected ADM and sends to Human Resources Human Resources works with schools to implement position changes For programs with position allotments, the program directors are also involved in this process with recommended allotment changes based on need Supply Allocations: Finance sends preliminary supply allocations in May for Summer Orders. These orders are processed early by Purchasing, but all dated 7/1/xx and shipped after the beginning of the new year Remaining allotments in July, with adjustments based on ADM changes in September 13

DISBURSEMENT PROCEDURES All purchases and contracts shall be made in accordance with the requirements of Board Policies 4610(Purchasing Administration) and 3410 (Contract Administration). These procedures provide additional guidance to help budget administrators determine which disbursements require contracts and/or purchase orders. PREAUDIT CERTIFICATE All New Hanover County School disbursements must be preaudited. A preaudit certificate is an assurance by the Chief Financial Officer that funds are available. If an obligation is supported by a contract or purchase order, then those documents must be preaudited. Expenditures that do not require purchase orders shall be preaudited on the face of the payment document. In accordance with G.S. 115C-441, no obligation may be incurred by a local school administrative unit unless the budget resolution includes an appropriation authorizing the obligation and an unencumbered balance remains in the appropriation sufficient to pay in the current fiscal year the sums obligated by the transaction for the current fiscal year. If the Chief Financial Officer disapproves any payment not in compliance with 115C-441, the obligation is invalid and may not be enforced and the employee shall be held liable for any sums so committed. OBLIGATIONS REQUIRING PURCHASE ORDERS Purchases of goods and services shall be supported by an encumbrance (purchase order) unless listed as an exception below: Contracts for the Procurement of Goods: Contracts for the procurement of goods are normally established through issuance of a purchase order (offer to purchase), which becomes a contract when the vendor either issues an acknowledgement accepting the purchase order terms and conditions, or ships the goods in accordance with the purchase order. Contracts for goods established in this way are preaudited when the purchase order is issued. Service contracts Service contracts for personal/professional, construction or repair work, or general services are signed by both parties and establish terms, conditions, provisions, expectations, requirements and obligations of both parties. Service contracts shall also be supported by a purchase order to encumber funds, unless the checks will be immediately processed. Service contracts below New Hanover County Board of Education approval levels may also be established through issuance of a purchase order if the bid document or written quote address the issues above, are signed by vendor, and are incorporated in the purchase order. A basic contract and contract amendment form can be found on the Finance web page under forms. Procurement Card Purchases Procurement card purchases also require encumbrances. Please refer to Procurement Card Program Procedures issued by the Purchasing Department: www.nhcs.net/purchasing/ CONTRACTS NOT REQUIRING PURCHASE ORDERS Purchase orders are not required for service contracts for which checks will be immediately processed. Examples include staff development presenters or arts performances for which payment will be made on the day of the presentation or performance. Attach a copy of the contract to the check request and indicate that the check should be held in Accounts Payable for pick-up by the budget administrator. The budget administrator will then be responsible for delivery of the check to the presenter when the presentation is complete. A purchase order is still advised to encumber the money for such contracts made well in 14

advance. In such cases, use the same payment process as listed above and the purchase order will be cancelled at the time of payment. EXPENDITURES NOT REQUIRING PURCHASE ORDERS OR CONTRACTS Some types of expenditures do not require a purchase order because the obligation occurs at the time of payment, and the disbursement is preaudited prior to payment in the Finance Department. Allowable exceptions include: 1. Emergency Payments Invoices meeting the definition below may be submitted for payment with an Emergency Payment Request. Definition: An emergency purchase is only allowable in cases of genuine emergency or pressing need. Pressing needs arise from unforeseen causes including, but not limited to, delay by contractors, delay in transportation, breakdown in machinery, or unanticipated volume of work. Genuine emergencies are situations that endanger lives, property, or the continuation of a vital program and which can be rectified only by immediate on-the-spot purchases or rental of apparatus, supplies, materials, equipment or services. 2. Employee Reimbursement for Food or Supplies under $100: Reimbursements should only be requested for small purchases totaling less than $100. Do not split purchase into multiple transactions. Recurring purchases should be made with a purchase order. Employees will only be reimbursed for expenditures approved by budget administrator with funding available in the appropriate code. 3. Check Requests for items other than purchases of goods or services such as: Postage Miscellaneous fees and fines Travel Advances and Reimbursements Workshop Registrations School Fund Reimbursements for staff development, postage, or athletic travel Renewable Annual Contracts paid in advance such as maintenance agreements, insurance policy payments and institutional memberships 4. Utilities 5. Legal Services approved by the Board Attorney, Superintendent or designee. DISBURSEMENT VIOLATIONS Non-emergency purchases completed without first obtaining a purchase order or contract are considered violations of Board policies 4610, Purchasing and 3410, Contract Administration, and NHCS Disbursement Procedures. When a disbursement violation occurs, the invoices must be submitted to Finance with a completed Disbursement Violation Form to justify the direct payment to the vendor. Payment may be denied by the Finance Officer if funds are unavailable in a particular budget or if school funds may be appropriately used instead. According to General Statute 115C-441, if a finance officer disapproves any such payment, the employee may be held liable for any funds so committed or disbursed. UNALLOWABLE EXPENDITURES AND ACCOUNTS The following items are unallowable and shall not be purchased with budgeted or school based New Hanover County School s funding: 1. Gifts, Gift Cards, or Gift Certificates 2. Expenditures not budgeted or specifically allowable in the Chart of Accounts No credit cards or store accounts in the name of the school system or an individual school may be authorized by any employee other than the Chief Financial Officer or the Director of Purchasing. 15

TRAVEL PROCEDURES Reimbursement for travel expenses of employees traveling on behalf of New Hanover County Schools are paid in accordance with the policies, regulations and approved rates of the Office of State Budget and Management. PROFESSIONAL LEAVE APPROVAL PROCESS 1. A Professional Leave Request form is required for all Professional Leave and must be signed by the employee and the appropriate supervisor prior to approval by the program administrator. Professional Leave includes workshops, conferences, and out-of-county meetings. Both in-county meetings related to regular administrative responsibilities and in-county workshops held beyond the regular workday are excluded. Professional Leave Forms may be ordered from the Print Shop or printed from Human Resources website under Employee Forms. 2. Budget managers may approve all travel inside of the contiguous United States. The Superintendent or Designee (appropriate Assistant Superintendent) must approve any other travel requests. 3. If the budget manager is not the supervisor, please return the approved copy back to the requesting school/department to confirm approval. 4. Copies of Professional Leave forms should be kept on file by schools/departments with related payroll records for 3 years. TRAVEL EXPENDITURE RESTRICTIONS 1. Meals and lodging are reimbursed at the subsistence rates determined by the state, with separate rates for in-state and out-of-state travel. Tips are included in the daily subsistence rates for meals and lodging. No receipts are necessary. 2. State Travel Regulations require that lodging rates may only exceed State rates with State and Federal funds if lodging could not be obtained at the State rate or that safety was a concern. Excess lodging authorization must be approved in advance with written documentation explaining why lodging could not be obtained at the State rate or that safety was a concern. Approved documentation must be submitted with the payment or reimbursement request. Personal preference is not a valid reason for excess lodging. 3. Lodging rates that exceed the state rate for reasons not authorized by the Office of State Budget and Management must be paid from local funds and approved by the Superintendent or designee on the payment request form. PAYMENT REQUESTS 1. Expenses may be approved and incurred in accordance with budgetary allocations for travel expenses. Expenses will not be reimbursed in excess of budgeted amounts. 2. All reimbursement requests must be filed for approval and payment within 30 days. Each employee is responsible for his/her request for reimbursement. 3. Supervisory personnel must certify the reimbursement requests as necessary and proper. 4. Registration fees must be supported by an original receipt or copy of the cancelled check. Lodging expenses must be supported by the original detailed hotel receipt. 5. At the discretion of the Chief Financial Officer, an advance of funds that does not exceed the estimated travel expense may be issued to an employee. All travel expenses must then be reported on an Expense Reimbursement Form showing amount of advance and net amount owed to employee or to New Hanover County Schools. Any refund due to New Hanover County Schools should be submitted to the Finance Department along with the Expense Reimbursement Form. 16

6. If unusual circumstances require an employee to leave his duty station before 6:00 a.m. and/or return after 8:00 p.m., the cost for the morning and/or evening meal may be reimbursed; however, a statement identifying specific times must be shown on the expense reimbursement form. 7. Reimbursement for personal vehicle mileage will be made at the current state rate. Mileage rates include all related charges incurred except tolls and parking. MapQuest documentation should be provided measuring the mileage for the closer of duty station or point of departure/return. 8. Other Travel Related Reimbursements: a. Tolls and Parking - Will be reimbursed but require receipts. b. Tips and Gratuity Tips are allowable for: i. Airports: Baggage Handling/Skycaps = no more than $2 per bag; ii. Parking/Valets = $2 per car; Taxi Drivers = 15% of the fare and $1-$2 per bag iii. Hotel Internet Access. Local funds may be used to reimburse hotel internet access only approved by Superintendent or designee. 9. All payment request forms are located on the Finance Department web site under the Forms/AP Forms drop down and print with detailed instructions: Form Employee Expense Reimbursement Monthly In-County Travel Check Request Use Employee travel expense reimbursements and advances including daily subsistence and lodging, transportation, and other travel related expenses. In-county mileage reimbursements excluding commuting mileage. Registration and hotels. DIRECT DEPOSIT OF EMPLOYEE REIMBURSEMENTS All employee reimbursements processed by Accounts Payable are directly deposited into employee bank accounts similar to payroll checks. Checks can be viewed using the Employee Portal. Direct deposit for reimbursements are processed weekly. Requests for reimbursements must be received in the Finance department 10 business days prior to the Friday of the expected deposit. WORKSHOP AND MEETING PROCEDURES GENERAL PROCEDURES 1. All purchases should follow Disbursement Procedures published by the Finance Department. 2. Local supply funds may be used to purchase food for meetings that are not classified as workshops. Such expenditures must be coded to object code 459, Other Food Purchases, and amounts are restricted as per #2 below. (Food may not be coded to object 411.) 3. System banquets must be approved by the Superintendent. 4. School general funds may be used for expenditures related to workshops and meetings. All restrictions listed below apply. 17

INTERNAL WORKSHOPS 1. Internal Workshops are those that involve the attendance of employees within our agency. A routine staff meeting is not an internal workshop. 2. Staff Development funds may be used for food for internal workshops as follows: Snacks may not exceed $4.50 per person. Snacks may only be purchased with State & Federal funds for workshops with a minimum of 20 attendees. Meals may be purchased on a limited basis for an all day workshop with Local funds, but the cost per attendee may not exceed the In-State Lunch Per Diem rate. Meals may not be purchased with State or Federal funds. 3. Workshop Participant Stipends may only be paid for required workshops outside contracted employment dates. Payroll pay requests should be submitted on Request for Extra Pay. Stipend rates for workshop participants and presenters are published annually on the NHCS Supplement Schedule. 4. Workshop Object Code Definitions: 312 Workshop Expenses/Allowable Travel - Include amounts paid for contracted services, supplies, and participant's travel costs for workshops and in-service seminars designed to enhance the quality of a program. Expenses include reimbursement to employees for mileage for workshops. (Include food for internal workshops in accordance with #2.) 163 Substitute Teacher - Staff Development Absence 166 Teacher Assistant Salary When Substituting - Staff Development Absence 196 Staff Development Participant Pay - Workshop Participant Stipends (#4 above) 197 Staff Development Instructor - Hourly instructor fees paid to local school employees for conducting in-service workshops on personal time. 5. Staff Development funds may be used to reimburse a school s General Fund if the proper documentation is attached to the check request, including school check number, and all workshop procedures are followed. EXTERNAL WORKSHOPS External workshops are those that involve the attendance of persons other than the employees of our agency. Staff Development funds may be used for food for external workshops as listed above, but external workshop meals may not be purchased with State or Federal funds unless a registration fee is charged to all attendees. The registration fee must not consist exclusively of the cost of the meal. The fee must help defray the total costs of the workshop. ACCOUNTS PAYABLE ACCOUNT PAYABLE PROCESS All budgeted non-payroll expenditures are paid through the Accounts Payable Process. Listed below are forms and procedures related to the payment process. Before an invoice can be paid, documentation is needed to verify that goods have been received or services have been completed. Employee reimbursements or check requests must also have appropriate approvals and supporting documentation. ACCRUALS Expenditures must be booked in the fiscal period in which an item is received or service is rendered. After year end (6/30/xx), the Finance Department will book journal entries to reclassify expenditures to the correct period. For example, an invoice paid in July for items received in June will be reversed out of July 18

and expensed to June. Accruals may only be keyed to local funds (2, 4, 5, 6 & 8), so make sure all invoices to be paid in June are received by the Accounts Payable deadlines for June processing, otherwise local funds will have to be used. ACCOUNTS PAYABLE FORMS All Accounts Payable forms and the Payment Schedule can be found at: http://www.nhcsa/p Forms. Please note that each form has second tab with detailed instructions on how to complete the form. Check Request Monthly In-County Travel Board Monthly In-County Travel Mileage Chart Expense Reimbursement 1-15-14 Disbursement Violation Emergency Purchase CHECK REQUESTS Check requests may be used to requests vendor payments when invoices are not provided. Check requests may not be used for employee reimbursements or salary payments to employees. The check request should clearly indicate purpose of the expenditure and supporting documentation must be provided such as registration forms, reports, or contracts. Make sure the budget code is appropriate and has a sufficient balance to cover the expenditures, and that all required Disbursement Procedures have been followed. EMPLOYEE EXPENSE REIMBURSEMENTS Must be submitted within 30 days upon return. An explanation is required for late submissions. Use the current form on website to ensure current reimbursement rates. Original receipts are required (hotel, transportation, registration, etc.). No faxes or e-mails. Date and time of departure and return are required. Receipts are not required for meals but conference covered meals are not reimbursable. Attach support for mileage (MapQuest). Lodging which exceeds the State rate must be paid with Local funds. Employee and Supervisor must sign the form. IN-COUNTY TRAVEL Must be submitted within 30 days upon return. An explanation is required for late submissions. Use the current form on website to ensure current reimbursement rates. Form will automatically total. Date of travel and to and from are required. Use the mileage chart on the website. Employee and supervisor must sign the form. 19

DOCAGENT (ELECTRONIC A/P FILE CABINET) DocAgent is a web-based software program which allows retrieval and routing of electronic versions of Invoices, Purchase Orders, Receiving Documents and Check copies. It is a tool we use to store and move paper documents electronically from the Finance and Purchasing Departments to Schools and Departments. Everything we process through Accounts Payable (with the exception of Child Nutrition related information) is available for viewing in DocAgent. It is also used to share information about those documents with others in the routing path for that document. Who needs Access? Access will be granted to the individual in your School/Dept. who reviews invoices for payment and/or is responsible for keying the on-line receiving information into SunPac. What kinds of things will be sent to me in DocAgent? When an invoice arrives in the Finance Department but receiving has not been entered into SunPac for the items on the invoice, it is sent to you through DocAgent. You also have the ability to search for Invoices, Purchase Orders, Receiving Documents, and Check copies. Documentation for receiving is still done in SunPac (see On-Line Receiving below). ON-LINE RECEIVING IN SUNPAC Schools and departments are responsible for keying online receiving for items picked up from vendors or shipped directly to schools/departments. Purchasing will key online receiving for items shipped to the Purchasing Department. Merchandise on a purchase order must be received before it can be paid by Accounts Payable. This should reduce turnaround time on invoice payments. You can access on-line receiving as follows: Under the Purchasing Menu Choose Enter PO Receipts (Option # 9) Detailed - Purchase Order Blanket - Purchase Order INTERNAL SERVICE INVOICES Process for Payment of Transportation Invoices: 1. Follow Travel Tracker Procedures found on the Transportation web page or the application link: http://appgarden2.app-garden.com/traveltracknc650.nsf 2. The system will require a designated funding source for each trip. The funding approver, usually the school treasurer or budget director, will be required to enter a budget code or school funds commitment prior to scheduling the bus. 3. Send invoices for payment (either by budget code or school funds check) on the site as soon as they have been approved for payment by Transportation. Process Steps for CN Catering Invoices: 1. Determine appropriate budget code and verify funds are available when catering is requested 2. Child Nutrition will send invoices to each department or school upon completion of the catering service. 20

3. Budget manager should verify work was completed, record budget code and approve invoice for payment. 4. Forward approved invoice with either a school check or budget code authorization to Finance in a timely manner. 5. Finance will charge budget code and mark invoice paid. TEXTBOOK PROCEDURES Textbook Coordinator: Each principal should appoint a Textbook Coordinator to be responsible for Textbook Management. Allocations: State textbook funding is allotted to schools on a per pupil basis, and unspent funds carry forward into the next budget year. Funds are allotted in a local budget code (2.5110.830.413.xxx) because textbook funding is not real money, but rather an authorization to purchase up to a certain dollar amount from the State Textbook Warehouse. This account may only be used for purchases from the State Textbook Warehouse. No outside vendor orders may be coded to this account. Funding Transfer Process: State funding flexibility allows for transfers from the State Textbook Account (Local PRC 830) and State PRC 061. If textbook funding is to be used for purchases of books or supplies not on the State Adoption List, then funds must be transferred as follows: 1. Transfers must be approved at the State level and should only be submitted for significant dollar amounts (minimum of $1,000). Try to estimate transfer needs on an annual basis so only one or two transfers are submitted per year. 2. The principal should complete a Budget Transfer Form and forward to the Finance Department. 3. The Finance Department will complete the appropriate State Form and forward to DPI for approval. 4. Transfers will be entered into our system as soon as the internal approvals have been obtained. 5. Transferred funding will be allotted to 1.5110.061.411.xxx, and orders will follow the normal purchasing process. Budgeted funds in PRC 061 must be spent by June 30th or will revert to the State. Transfers of Books between Schools: When agreements are made between two principals to transfer or trade books, the school transferring the books should complete a Textbook Transfer Form from the Purchasing website. Instructions are included at the bottom of the form. Send the books through school mail, and be sure to include a copy of the transfer form with the books. Textbook Ordering Process: 1. Textbook Order Forms by school level and ordering deadlines are posted on the Purchasing website. 2. The Textbook Coordinator should consolidate all teacher requests for textbooks and teachers editions. 3. The Textbook Coordinator should compare order form totals with the current budget report to ensure that adequate funds are available for the orders. 4. The Textbook Coordinator should fax all warehouse requisitions for textbooks to the Purchasing Department at 254-4414 or email to laurie.lee@nhcs.net. 5. Only textbook orders going to the State should be processed from budget code 2.5110.830.413.xxx. As soon as the order is entered, an encumbrance will be set up, and a transaction recording the expense will be recorded once the books are shipped to your school. 21

5. Modified textbooks for visually impaired or reading disabled students are available. We now have online access for students approved for modified textbooks. Please contact Cindy Booth or Laurie Lee to setup student or teacher accounts. Braille and large print books are still ordered from Textbook Services and are loaned to our unit on a yearly basis, and they must be returned at the end of the school year. Copies of new adoptions take several months for preparation since the titles are custom printed. These books are very expensive, and so accountability for them is critical. If you have questions about this service, contact Laurie Lee in Purchasing. Textbook Fines: 1. Fines for all textbooks shall be collected, receipted and turned into the School Treasurer. 2. All fees should be turned in daily (as with all receipts) and deposited into the School Funds textbook account. 3. Schools may transfer these funds to their General Fund, or may send a check to the Finance Department requesting they be allotted to the school s instructional supply code. Surplus: Textbooks become surplus when no longer on adoption or in use by the school. Surplus books may be discarded as follows: Surplus textbooks may be given to students. Some schools offer them to their PTA or PTO and the books are then distributed to parents at a meeting. Surplus books may be given to a non-profit agency. For example, some local churches make use of surplus books. Some use them in after school programs or ship them overseas to use in mission programs. Surplus books may be discarded by simply throwing them away. Other Textbook Procedures and Forms: To view important textbook ordering dates, forms and adoption schedules, visit the New Hanover County Schools Purchasing Department website and click Textbook Information. www.nhcs.net/purchasing/ Textbook Inventory Procedures: www.nhcs.net/auditor/inventoryprocedures/inventoryprocedures_061312.pdf FIXED ASSETS Fixed Assets include Land, Buildings, Furniture, Equipment and Vehicles. Board Policy 3320 defines the capitalization levels for Capital Assets, those assets which are depreciated and reported in the Financial Statements. The policy also designates that asset control is the responsibility of individual schools and departments, while financial reporting and depreciation are the responsibility of the Finance Department. Therefore, furniture, equipment and vehicles are assigned to specific schools or departments. Administrators are responsible for each asset assigned to their school or department. FIXED ASSET RESPONSIBILITIES 1. Ensuring that assets are properly identified, accounted for, and safeguarded. 2. Location transfers are tracked and approved. 3. The location of assets is verified during the annual fixed asset inventory. 22

GENERAL FIXED ASSET PROCEDURES The Fixed Asset System is a centralized accounting data base used to track all capital assets. It is also used to track assets with a unit cost greater than $1,000 or any computer. All items are tagged when purchased with a Fixed Asset number. Throughout the year items are added, deleted or transferred from this data base to reflect the current fixed asset inventory balance. As purchases are made, asset records are created by the system based on the budget code used (object codes 461, 462, 541 and 542). Once per year the Finance Department coordinates a physical inventory of fixed assets. The following procedures should be followed throughout the year as schools and departments are managing inventory: 1. A Fixed Asset Addition Form should be completed for assets donated or purchased with school funds, with a unit cost greater than $1,000 or any computer. The asset value should be estimated for donations. Please submit this form to the Finance Department at (fixedassets@nhcs.net) and the Asset tags will be assigned and distributed for these assets. 2. For any drop shipped equipment that is not tagged by Purchasing or Technology, please complete the Fixed Asset Processing Form and submit to the Finance Department at (fixedassets@nhcs.net) and the Asset tags will be assigned and distributed for these assets. 3. A Transfer of Fixed Assets Form should be completed when assets are transferred between sites. The form should be signed by the sending and receiving location. Please keep a copy for your records and send a copy to the Finance Department. 4. A Property Loss Statement should be completed and submitted to Operations for all types of property loss. If tagged assets are lost or damaged, a copy of the form should also be submitted to Finance. 5. Federal Assets: Federal Grant compliance requirements include an inventory of all equipment purchased with federal funds, regardless of the capitalization policy. Federal Equipment is defined as tangible, non-expendable, personal property having a useful life of more than 1 year, regardless of dollar amount. The fixed asset system is also used to track all federal equipment as follows: a. All federal equipment coded to 461 and 462 are tagged, regardless of dollar amount. b. Federal assets tags are red and indicate equipment is NHCS Federal. 6. Federal Equipment Under Warranty (Repairs and Replacements): a. If a FEDERAL asset is under warranty and the asset is being replaced, an Equipment Disposal Request (EDR) is NOT required to be submitted to DPI. A NEW federal asset number should be assigned to the replacement item. The ORIGINAL asset number should be disposed in the Fixed Assets system. Both asset numbers should reference the corresponding asset number that it either replaced or was replaced by, and the date of replacement. Make sure this change is well documented for future reference. This type of scenario would typically be an asset located in the technology department. b. If the federal asset is an eeepc that is in need of repair, and the warranty company sends notification that the asset cannot be fixed, a check will be mailed to the attention of Dawn Brinson, Chief Technology Officer. The Area Technical Coordinator will also notify the federal program director to begin the federal process for disposal of the asset. (Directions for disposal are in the next section) i. If the asset was purchased from a grant that is still active, the warranty funds will be refunded to that federal grant. The funds will then be budgeted as part of the current year federal program budget, and may then be used to replace the asset. ii. If the asset was purchased from a grant that has ended, the warranty funds should then be refunded to DPI as a prior year refund and these funds are essentially lost to NHCS. The asset would need to be replaced using another funding source. 23

7. Federal Equipment Disposition Process: When disposing of equipment purchased with federal funds with a unit price greater than $5,000, federal guidelines require the approval from the state awarding agency (DPI): a. It is the program directors responsibility to coordinate this process. Schools should work with the appropriate federal director if they wish to dispose of any federal assets. b. An Equipment Disposition Request form must be submitted to DPI by program directors. A notification will be mailed to you, from DPI, with the approved disposition action and any further disposition instructions if necessary. You must wait for these instructions before any action can be taken. Please send an electronic copy of the State authorization to the Finance Department at (fixedassets@nhcs.net). c. The Finance Department will be responsible for getting a copy to the person responsible for the federal program pertaining to the disposal request. 8. Surplus. The Purchasing Department coordinates the disposal of all surplus property. (See detailed Surplus Procedures at www.nhcs.net/purchasing) Assets identified for surplus should be stored in a secure area. As surplus property is removed administrators and the Purchasing employee that picks- up the items should both sign the Surplus Removal Form. Please maintain copies for your records, but do not send a copy to Finance. Purchasing will submit a listing of those items transferred to surplus. Do not request disposal of Federal Equipment without first completing the Federal Equipment Disposition Process. 9. The Fixed Asset Forms referenced above are located on the Finance website at www.nhcs.net/finance/forms_finance.htm. 10. The Finance Department contact person for Fixed Assets is Dawn George, Accounting Supervisor. (dawn.george@nhcs.net) Fixed Asset Physical Inventory Process The Finance Department will email each principal and director a Fixed Asset (FA) Inventory Verification Report. Items will be sorted first by the room number indicated last year and then by asset category. Any items missing last year will be listed in a separate category, so please make every effort to locate these items. The location of each asset should be physically verified based as per the procedures listed below: 1. An inventory coordinator may be assigned to oversee this process, but principals and directors must ensure that person is properly trained. It remains the principal or director s responsibility to ensure the integrity of the inventory verification process. 2. Teams of two employees should go room to room to perform the inventory verifications. One of the following processes must be used to verify assets: a. One person calls out the asset number and the other person records the information. The data is then used to check items on the FA Inventory Verification Report. b. One person calls out the asset number and the other person checks the item on the FA Inventory Verification Report. 3. Mark room location changes as appropriate. 4. Verification of serial numbers may be helpful if you are trying to locate missing assets. Please note any serial number corrections in the column indicated. 5. If an item on the list cannot be located, check the school/department records for transfers, surplus or property loss forms. Reference the documentation and forward/email a copy with the report. If no documentation can be found, indicate the item is missing. 6. If tagged items are found that are not listed on your sheet, please add the following data on the second tab for the report, listing Asset #, Serial #, Asset Description, and Room #. 7. Once all discrepancies have been resolved and the inventory process is complete, the principal or director should email the updated FA Inventory Verification Report to Dawn George in the Finance Department. Any supporting documentation should be scanned and attached to the email, or mailed separately with a reference to the documentation in the email. 24

MISSING EQUIPMENT PROCEDURE At the close of the inventory process, the Finance Department will review and update our records based on the inventory submitted. A listing of all missing inventory will be submitted to each principal or director. The list will show items missing for 2 years and will be reported by year. The school or department will be given 30 days to locate the items in question. If items in question are still missing, a report of missing items for that location will be submitted to the appropriate Assistant Superintendent (Departments) or the Superintendent (Schools). Significant losses may result in disciplinary action if it is determined that the administrator did not provide appropriate oversight to safeguard the assets. Equipment that is not located at the end of one year will be removed from the Fixed Asset system at the end of the next fiscal year if it is still missing at the end of the second year. OTHER INVENTORY PROCEDURES The internal auditor maintains the Inventory Procedures Document referenced below for other inventory procedures including: 1. Technology Equipment 2. Classroom Inventory 3. Program Inventory 4. Textbook Inventory www.nhcs.net/auditor/inventoryprocedures/inventoryprocedures.htm MANAGING FEDERAL PROGRAMS Most federal programs flow through the NC Department of Public Instruction (DPI) and are budgeted in Fund 3. Any federal grants received directly by New Hanover County Schools will be budgeted in Fund 8. Federal Program Directors should carefully review all Federal Grant information published on the DPI Finance web site below, including grants available through DPI, Award Information, Grant Expiration Dates, and Compliance Resources, along with links to federal regulations and compliance supplements. http://www.ncpublicschools.org/fbs/finance/federal/ For federal grants administered by DPI, grant applications are submitted between April and June in accordance with the annual calendar published by DPI. Budgets for each grant application will be submitted through the LBAAS system, which will transmit the budgets to DPI. Questions about this process should be directed to your assigned budget analyst. Until DPI approval is received for the grant, the budget or any amendments will not be posted to our general ledger. All federal requirements are designed to ensure that federal funds are properly spent. Recipients of federal funds need to be able to tell the story of what happened to every federal dollar. If there are gaps in documentation, there is likely an internal control weakness that could lead to potential audit findings. When disposing of equipment purchased with federal funds, EDGAR guidelines require the approval from the state awarding agency (DPI). Please refer to the Federal Equipment Disposition Process in the Fixed Assets section of this manual. 25

SCHOOL ALLOTMENTS FROM TITLE I Principals will submit proposed Title I Budgets to the Federal Instructional Programs Director in April, and the approved budget will be posted to PRC 050. Transfers have to be approved by DPI, and transfer requests will be accepted in accordance with the schedule below: Transfers Requests Due to the Director of Federal Programs Transfers to be Processed by Finance Approved Transfers to be Posted to the General Ledger October 15 October 31 Upon DPI Approval January 15 January 31 Upon DPI Approval March 1 March 15 Upon DPI Approval TIME AND EFFORT FORMS When Federal funds are used for salaries, time distribution records must be kept. These are usually referred to as Time and Effort records. Time & Effort documentation serves as a receipt for payroll expenditures. These requirements regarding time distribution are in addition to the standards for payroll documentation. Any salary costs used by DPI to meet a matching requirement must also be documented, which includes State CTE Programs (013 and 014) and Child Nutrition (Fund 5). TIME AND EFFORT RECONCILIATION Finance Dept. conducts comparison of actual costs (based on reported PARs) to budgeted distributions at least quarterly. Annual adjustments may be made if the quarterly comparisons show that the differences between budgeted and actual costs charged to the Federal program are less than ten percent (10%). If the quarterly comparisons show that the differences between budgeted and actual costs charged to the Federal program are ten percent (10%) or more, then adjustments must be made immediately. SEMI-ANNUAL CERTIFICATIONS Semi-Annual Time Certifications must be completed for employees working on a single cost objective and paid 100% from a single funding source. Applicable employees: o Single cost objectives will be determined by the employee s activities, not solely by the employees funding source. o Federally-funded extra-duty time beyond the full-time day such as Tutoring or Parent Involvement is also included. o These employees must have at least semi-annual certifications certifying that they worked solely (100%) of their time on the program or activity in which they are being compensated. Semi-Annual Certifications should include: o List of individual Employees names. o A blanket statement of activity for the period. o Signature of person with firsthand knowledge (usually Principal). Date signed must be afterthe-fact and handwritten (blue or black ink). o Scanned forms will be accepted by email, but original form must be maintained by the approver. o Must coincide with 1 or more pay periods. Semi-Annual Certifications must also: o Be completed in a timely manner. 26

o Should always be signed and dated the actual date the forms were completed. Please do not back-date forms. o Principals and/or Supervisors are responsible for contacting the Finance Department ASAP when errors or omissions are found. o If errors are found, strike-through the error with one line then initial & date, or complete a new form. 100% of Employee s Time: o Don t be confused by an employee s full-time/part-time status. o If employee works only 3 days a week, for example, then 60% employed will equal 100% of the employee s time. MULTIPLE COST OBJECTIVE Employees with multiple cost objectives must completed monthly Personnel Activity Reports (PAR): PAR Applicable employees o These employees are usually paid from more than one federal grant or by federal grant & a non-federal award. o As with the single cost objective employees, it is not always possible to tell by looking at funding only whether an employee is single or multiple cost objective. o Multiple Cost Objective will be determined by the employee s activities and not solely by the employee s funding. For example - A Title I employee who works on two different Title I set-asides is a multiple cost objective employee. PAR Form Additional requirements: o Must complete and maintain support and/or documentation for their PAR forms. o Must account for the total activity for which each employee is compensated. o Must be signed by the employee. Required PAR Form Components: o An effort statement that accounts for 100% of the employee s effort. o The number of hours worked (No X entries). No Vacation, Sick and/or Holidays. o The time worked on all cost objectives. o The specific federal cost objective (not just federal ) Red Flags: o Multiple cost objective personnel whose actual effort equals budgeted effort every month. o Personnel paid entirely from federal funds (say, 4 different programs) yet responsible for 16 federal programs. DEPARTMENTAL RECEIPT PROCEDURES All receipts by central office staff shall be deposited through Finance or Child Nutrition in accordance with the procedures listed below: 1. One person from each department should be designated as the person to handle receipts for the department. A Receipt Authorization Form (See Finance Forms) should be completed and submitted to Donna Rosser in the Finance Department each time the designation is changed. Receipt/Deposit procedures issued by the Finance Department should be reviewed annually by the department head and designee. 27

2. All funds collected must be recorded on a Receipt/Deposit Log. This log provides a summary for the deposit, and should reference related receipt numbers along with budget codes to be used for posting the revenue to the general ledger. Supporting documentation should include copies of all checks or a ticket sellers report if applicable. 3. Receipts: a. Receipt books should be pre-numbered. Each receipt must include payer, date, amount, method of payment (cash or check), purpose of the receipt, and the employee's signature. Receipts should be used in sequential order. Receipts should never be pre-signed. The employee signing the receipt is responsible for all funds recorded in their receipt books. b. Voiding Receipts Do not alter or write over carbon copies of receipts. If an error is made, write VOID on the receipt and process another one. The voided original must be attached to the receipt carbon for internal control purposes. This will help prevent giving a refund to a person whose receipt has been voided. c. Receipt documentation should be maintained by the department for at least one year, and should not be destroyed until after this fiscal year audit is completed. Documentation should include copies of all logs, receipts, and other supporting documentation submitted to the Finance or Child Nutrition Departments. 4. Once money is collected, it should be safeguarded while in the possession of the staff member before it is delivered to the Finance or Child Nutrition departments. It should always be maintained in a locked facility with limited access. This could be a locked file cabinet or a money box. Receipted funds and required documentation should be delivered by the employee who collected the money daily or the next business day to the Finance or Child Nutrition departments. This is in accordance with state law. Funds should be brought to Finance or Child Nutrition by 12:00 noon each day so they can be included in that day s deposit. 5. The total from the receipt document(s) must equal the total amount of cash and checks turned over to Finance or Child Nutrition. 6. Staff should turn in the money (cash and checks) in an organized manner. Please use envelopes for loose change and cash. Do not tape loose change to a piece of paper. If large amounts of cash are received, the bank has requested that it should be organized in the following manner: a. Currency - counted and bundled as follows: Ones - strapped by $25.00 increments Fives - strapped by $100.00 increments Tens - strapped by $250.00 increments Twenties - strapped by $500.00 increments b. Coins - counted and wrapped in coin wrappers as follows: Pennies - wrapped by.50 increments Nickels - wrapped by $2.00 increments Dimes - wrapped by $5.00 increments Quarters - wrapped by $10.00 increments Any loose coin should be placed in an envelope or ziploc bag. 7. Refunds Refunds may be requested with a NHCS Check Request to Accounts Payable, supported by a copy of the original receipt or receipt log. The check request should be coded to the same budget code as the original receipt. 8. The Receipt/Deposit Authorization and Receipt/Deposit Log may be found on the Finance web site at: www.nhcs.net/finance/forms_finance.htm 28

DEPARTMENT INVOICING PROCEDURES These invoicing procedures should be used when billing is necessary for internal service reimbursements or for services provided to external customers. 1. The department is responsible for creating invoices for their department or program. 2. Invoices should include: a. The name of the department and the name of the program, if applicable. b. The date the invoice (date mailed or sent) c. The date of the service. d. An invoice number. The prefix should be the department code. Such as 905-1 would be the first invoice for Career-Technical Education. This should be established and maintained on a log. Invoice numbers should be used in sequential order. e. Description of service provided should be as specific as possible. f. An amount for each item or service provided. g. Total amount due. h. Date the invoice is due. This is usually 30 days from the invoice date. i. Contact person and phone number. j. Remittance address: New Hanover County Schools Finance Department 6410 Carolina Beach Road Wilmington, NC 28412 A sample invoice and invoice log may be found on the Finance Web Site at www.nhcs.net/finance/forms_finance.htm 3. Invoice copies: a. If the invoice is to an outside customer (not within the school system), a copy of the invoice should be sent to Donna Rosser in the Finance Department at the time the invoice is mailed. (This will allow the Finance Department to book the accounts receivable entry properly). b. If the invoice is to an internal department (within the NHCS system), these same procedures should be followed unless separate procedures have been previously approved by the Finance Department. 4. The department is responsible for keeping track of any outstanding invoices. An invoice log should be maintained by the department to track the status of invoices. It should state the invoice number, customer name, date of the invoice, date the payment is received and the check number. The invoice log can be used to track when payments are received and when additional invoices have been mailed. Another invoice should be sent every 30 days (monthly) until the amount is collected. On the invoice it should state that this is a SECOND, THIRD NOTICE. This log is due to the Donna Rosser monthly. CENTRAL OFFICE EVENT TICKET SALES When tickets are sold or admission charged for an event, controls must be established for the issuing of tickets and receipting the money. Procedures: 1. A project manager should be assigned for each event to be accountable for the security of the tickets before, during and after the sale. 2. Tickets should be pre-numbered and maintained in a locked facility. 29

3. Tickets issued for sales by the project manager to ticket seller(s) should be recorded on a Department Ticket Sellers Report located on the Finance Web Site: www.nhcs.net/finance/forms_finance.htm. Assigned ticket numbers should be recorded on the left portion of the report under Tickets Issued by the project manager. Indicate ticket type (student or adult). 4. When the event is over the ticket seller will count and return any unused tickets and receipted funds to the project manager. The ticket seller and the project manager should reconcile the receipts as follows: a. Count the money together. The money should agree with the number of tickets that were sold. b. The ticket seller will turn in the tickets that have not been sold. The project manager will complete the right side of the Ticket Sellers Report, Tickets Returned (not sold). c. At the bottom of the form, Summary of Cash Received, the project manager will submit the report showing the following information total number of tickets sold by type and amount total receipts from ticket sales. d. The ticket sales and the money collected should equal. Any discrepancies should be noted. 5. Expenses in connection with the event may not be made from cash proceeds from the event. If needed, the project manager may submit a Check Request to the Accounts Payable department for any expenses associated with the event. This is state law. 6. The Ticket Sellers Report should be attached to the Receipt/Deposit Log and submitted to Finance Department or Child Nutrition in accordance with NHCS Receipt Procedures. SIGNATURE/APPROVAL REQUIREMENTS Original Signatures All Finance, Payroll and HR forms and New Hanover County Schools Contracts must be signed with original signatures, unless indicated as an exception below. All forms should be submitted according to the process indicated below for each type of form. Signature stamps are not allowed for these forms. If stamps are maintained for other purposes, they should be well secured to prevent unauthorized use. Finance will accept by email scanned copies of documents which were signed with original signatures. Originals should be kept on file by the school or department. Email Approval Acceptable - The following forms may be submitted by email from an authorized sender and email will serve as approval: Fixed Asset Forms Payroll forms (excel files) must be submitted electronically as an email attachment from an authorized sender. Signature Designee If a signature is needed in the administrator s absence and a designee has not been determined using a Budget Delegation form, the designee should sign as follows: Their Name for Administrator s Name. Principals may not delegate check signing authority for school fund checks, but the CFO and Director of Finance are both authorized signatures on each school s bank signature card. 30

YEAR-END CLOSE OUT PROCESS PURCHASE ORDER ROLL OVER Most purchase orders will automatically close as of 6/30/xx, but some will be rolled forward to the next fiscal year 6 as follows: 1) All open Capital Outlay Purchase Orders (Fund 4) 2) All open State Technology Fund PO s (State PRC 015) 3) Any other local PO s requested by Budget Administrators and approved by Kevin Lee for rollover for goods to be received or services rendered after 6/30/xx. Please note that rollover of a purchase order does not automatically mean the corresponding budget balance will carryover. Unless approved for carryover in the process below, the expenditures will be booked against next year s beginning budget. BUDGET CARRYOVER Current Year budgeted funds will only carryover to the next fiscal year as follows: Unexpended budget balances in the following programs will automatically be carried forward to the next fiscal year as of 6/30/xx. These carryover balances will be reduced in the new year for any payments made in July or August and accrued back to the prior year. o Fund 4 (all capital project balances) o State: Technology Fund (PRC 015), Summer Reading (PRC 016), and Textbooks (PRC 830) All fund 2 school allotments, other than priority allotments (PRC 807), will be rolled forward. Most local programs will be consolidated and rolled to Instructional Materials (PRC 061), except for Athletics (PRC 882) and Signature Programs (PRC 862) which will carry over to their respective programs. This process will not take place until accruals are completed at the end of August. Please note that while some federal programs allow for carryover of unspent funds, those amounts will be combined with new grants and budgeted by program directors in the new fiscal year. Such funds may not be used to pay for items received or services rendered in the prior year. Any other requests for rollover balances must be submitted to the CFO in writing by 6/30/xx, with a justification as to why the budget should be carried forward. These requests will then be submitted to the Superintendent for approval. EXPENSE ACCRUALS Accounting standards require all expenditures be booked in the year items were received or services rendered. For items received in one year but paid in the next, Accounts Payable will process the expenditure in the new fiscal year and then do a journal entry to book the expenditure in the prior year. If the budget was carried, it will be reduced by the amount of accrued expense. Also note that if any accruals are necessary for items originally ordered from state and federal funds, those will have to be accrued back to a local expenditure code. PREPAID EXPENDITURES For expenses paid in the current year for services in the next, such as workshop registrations, expenses are booked as an asset in the current year, and then reversed and booked as an expense in the new year. 31