ASSOCIATED STUDENT BODY ASB ESSENTIALS September 24 and 26, 2019

TOPICS PURPOSE/LAWS ORGANIZED VS. UNORGANIZED CASH COLLECTIONS, RECEIPTS DISTRICT BANKING AND DEPOSITS DONATIONS FUNDRAISING SCHOOL CONNECTED ORGANIZATIONS DISBURSEMENTS SALES TAXES AND USE TAX BANK RECONCILIATION JOURNAL ENTRIES CHART OF ACCOUNTS ACCOUNT 3000 – SURPLUS FUNDS ASB RESOURCES

PURPOSE OF ASB The purpose of ASB is to provide students an avenue to raise funds to support activities that fall outside of the instructional program or what the school district already provides Administration must ensure that ASB funds raised by students be expended for the benefit of the students currently in the school since they contributed to the accumulation of funds Since only a limited number of laws and regulations identify parameters for ASB operations, a significant amount of local flexibility is needed. The District’s Board had been given the authority to establish policies and procedures. The Board delegates their authority to the school’s principal who is responsible for the conduct of student financial activities. Ed. Codes 48930-38, 35564, 51520-21 and District BP 3452

ORGANIZED ASB VS. UNORGANIZED ASB ORGANIZED Secondary Schools Elementary Schools, K-8, Adult Ed., Continuation ROPs Students make the decisions for the raising and spending of funds. The principal and other delegated staff have oversight responsibilities. Principal makes the decisions for the raising and spending of funds Preapproval must be obtained each time before any of ASB funds may be expended. Approvals include the principal, student representative, and ASB advisor. (Education Code 48933). The finance clerk’s signature confirms that funds are available. Preapproval must be obtained each time before any of ASB funds may be expended, approval includes the principal. The ESA’s signature confirms that funds are available.

ORGANIZED ASB VS. UNORGANIZED ASB ORGANIZED Secondary Schools Elementary Schools, K-8, Adult Ed., Continuation ROPs Preapproval - Student Body Requisition Form Preapproval - Elementary Preapproval Form Has a organized student council with elected officers. Develops a charter/constitution, annual budget, holds formal meetings, and keeps minutes. No organized student council, may have an informal student council. Charter/constitution, annual budget, meetings, minutes not required, but recommended to teach students Numerous clubs formed - clubs follow regulations in the ASB constitution. Club advisors completes Club Advisor Checklist. (District AP 6240). May have few clubs

CASH COLLECTIONS/RECEIPTS Refer to handout for Cash Controls Pre Questionnaire Common audit findings Not issuing pre-numbered cash receipts No supplemental receipts No Dual Count What forms to use Point of sale system or pre-numbered cash receipts (Stock #3011/#3016) Supplemental receipts - Examples: pre-numbered tickets, cash register tape, receipt books (Stock #2644), and tally sheets Cash count form w/ dual count

DISTRICT BANKING AND DEPOSITS Banking support managed by Fiscal Control (Supplies, changes to bank signature cards, stop payments) Contacts – See ASB webpage under District Homepage Alternative/backup signors – Controller and Fiscal Control Manager Handouts - Deposit and Coin Deposit Preparation Guides When preparing deposits reference receipt #’s, one deposit can be made up of multiple receipts Common Audit Finding Deposits not timely

DONATIONS Forms – Designation Donation Forms - ASB vs. District (Resource 96000) Donator’s intent determines where donation is deposited (ASB, club, 96000) School connected organizations may raise funds and donate to ASB or the District or purchases items for donation. Thank you letter should be written to the donor Handouts - Key points on donations and fundraising

FUNDRAISING LAWS– K-12 Education Code § 48931 - Grants the governing board the authority to authorize the sale of food by student organizations Education Code § 48932 - Grants the governing board the authority to authorize student organizations to conduct activities, including fundraising during and after school hours Education Code § 51520 - Prohibits teachers or others from soliciting students during the school day or one hour before or after school unless the solicitation has been approved by the governing board and is for a charitable organization or an organization under the control of the district. Teachers and other employees are not an authorized organization and any fundraising would be taxable to that teacher reportable to IRS and Franchise Tax Board. Education Code § 51521 - Prohibits individuals from making solicitations on behalf of the school district or an ASB organization without the approval of the governing board Penal Code section 320.5, Raffles and games of chance not allowed, (if certified by State, PTA, Foundations can conduct raffles)

FUNDRAISING ACTIVITIES ASB Club, all clubs and School Connected Organizations must request and receive approval to raise funds Forms – Found on ASB Webpage under district homepage, Fundraising Request and Revenue Potential Analysis Forms Student participation is voluntary for clubs and School Connected Organizations Students cannot be required to participate and be excluded from an activity funded by ASB funds because he/she did not participate in raising funds Funds are raised to benefit an entire club, not individuals students Fundraising proceeds cannot attributed to specific students on what they raised Non district organizations seeking authorization to solicit as a charitable organization: Once fundraiser has been approved by ASB and Administration, send request to the SDUSD Controller with IRS letter of 501 C 3 status, name of organization and name of student group coordinating the fundraiser Common Audit Finding No Fundraiser Form Approved

SCHOOL CONNECTED (NON DISTRICT) ORGANIZATIONS Foundations, Booster clubs, PTA, PTO, or auxiliary organizations who raise and contribute funds to a club, sports team, district Separate entity of the district, have their own Fed Tax ID, tax exempt status 501 C (3). However, many non district organizations have not applied for or received nonprofit status and do not have their own tax identification number, so it should not be assumed that they are all official groups in the eyes of the Internal Revenue Service (IRS). They may not use the district’s tax-exempt status or open bank accounts using the district’s tax identification number. Principal/sites responsibilities – Administrative Regulation 1230, Fundraiser must be approved by principal Funds and accounts separate from ASB accounts, responsible for their own bookkeeping. Funds must never be commingled

SCHOOL CONNECTED (NON DISTRICT) ORGANIZATIONS Not included in the school entity’s annual audit District has right to review their financial records, but not responsible for oversight of their entity Should have their own website, address (P.O. Box), and letter head. Can maintain lockbox at school Students participation in fundraising activities is voluntary for School Connected Organizations District employees cannot work for school connected organizations during their District work hours, must have prior approval from Human Resources to work for a school connected organization (District AR 1230) It is best if school staff members do not act as officers of nonstudent or non-district-sponsored clubs to avoid the appearance of district sponsorship

ASB DISBURSEMENTS – GENERAL GUIDANCE Student body funds may not be used to purchase instructional supplies and equipment for instructional use In elementary schools ASB funds may be used to finance activities for non instructional periods or to enrich the district’s programs for K-6 students. Education Code 48934 All checks must be pre-approved, Student Body Requisition for Secondary, Preapproval form for Elementary For organized ASBs. – requires preapproval of three people: the principal, the ASB advisor (must be a certificated employee), and a student representative of the ASB organization. Education Code 48933 ASB General Funds shall be expended only for purposes that benefit the entire student body ASB funds shall be expended for the benefit of students currently in the school

DISBURSEMENT CONTROLS Refer to handout for Disbursement Controls Pre Questionnaire Cash Collected by students/advisors should NEVER be used for payments of any kind Two signatures required on all checks (Principal & Finance Clerk/ESA), no signature stamps All checks to a named payee (never to “Cash”) Checks are NEVER to be signed in advance Keep voided checks and cut out the signature Checks should be computer generated by QuickBooks (never hand written) Is supply of unused checks adequately safeguarded? Purchases of $1,500 or more of a specific type of item and services in one school year – obtain 3 quotes Contracts: See handout from Strategic, Sourcing and Contracts (SS&C) – all contracts must be executed by SS&C SS&C website: https://www.sandi.net/staff/strategic-sourcing-and-contracts/contracting-process-point-contact-and-forms

DISBURSEMENT CONTROLS Back-Up Documentation for Purchases and Shipment of Items/Orders Attach check stub with original itemized invoice, not a statement Include student body requisition (Secondary) or preapproval form (Elementary) as backup For received items, ensure packing slip is signed by receiver and saved with backup documentation Items are addressed to the school to the attention of applicable Club or Advisor Items are never to be shipped to a home address

ASB DISBURSEMENTS Questions to ask when deciding whether or not an expense would be allowable: If this situation were to be published on the front page of the local newspaper, would the same action be recommended? Will the expenditure be used to promote the general welfare, morale and educational experience of the students? Have the student agreed to the expenditure before it occurs? Is this expenditure a responsibility of the district? Has the ASB or the district paid for this in the past? Is the ASB being asked to pay for this because the district is making a budget cut? Is this something the district should provide, or is it really an extra that the students want? Who will use the item? Will the expenditure benefit a group of students or the entire student body? Source: FCMAT

SALES & USE TAX FOR ASB Sales Tax – on items you sell Food sales - Yes or No (exceptions carbonated beverages, food sold where admission is charged, i.e. athletic event, concession sales.) Do not apply sales tax at point of sale Student store merchandise sales - Yes or No Yearbooks distributed to students - Yes or No (taxes apply to invoice for printing costs) Tangible goods purchased for fundraising Yes or No – (if invoice includes tax, pay sales tax only on profit, e.g. purchased shirt for $10, sold for $15, apply sales tax on $5) Use Tax – on items you purchase If the goods from a purchase are not resold, ensure that the invoice includes sales tax. If no sales tax is included, use tax is required to be paid separately Use tax is based on the same city/county sales tax rate where the items were received or consumed Use tax generally applies to out of state purchases and Amazon invoices Quarterly Reports - Financial Accountant, sales and use tax reports will be emailed to you quarterly. Remit taxes quarterly to Tiffany Lilley, tlilley@sandi.net (619) 725-7742

ASB MONTHLY BANK RECONCILIATION Objective: Reconcile the Book Balance to the Bank Balance Timeliness – Reconciliations must be completed by the 10th of each month Bank Reconciliation must be approved by principal and include financial statements, journal entries, receipts and disbursement supporting documentation (use monthly checklist) Correct Check Number’s – Confirm check # on QuickBooks to actual printed check # (i.e. Check # 1004 is not 04). Common Audit Findings Bank Reconciliation not timely Bank Reconciliation not approved Missing financial statements Outstanding checks

ASB MONTHLY BANK RECONCILIATION Outstanding Checks (Over 6 months old) Canceling Outdated Checks Stop Payment (contact Jeff Anschutz in Fiscal Control before proceeding) Voided Checks Save all voided checks (cut out signature) and file them with your monthly reconciliation Uncleared Deposits - Review reconciliation for any deposits in transit that did not show up on bank statement In QuickBooks, when you complete your reconciliation, you must see a $0 difference before you select done. If you have a difference and cannot resolve the difference, reach out to the ASB Financial Accountant.

JOURNAL ENTRIES When to use a journal entry: To record a returned (NSF) check To write off a stale dated check Annual inventory adjustment To clear inactive account balances Transferring funds between accounts Income and Expense Summary Closing (profit & loss transfer Account 3900) Print Journal Entry (Select More at the bottom, choose Transaction Journal). Journal entry must be reviewed and signed by principal. Include detail reason for making journal entry and include supporting documentation.

CHART OF ACCOUNTS Standard Chart of Accounts that conforms to Generally Accepted Accounting Principles Listed in numerical order by account groups   Assets - 1000’s Accounts, anything that has value - bank accounts, savings, change fund, accounts receivable, inventory Liabilities – 2000’s Accounts, debts or obligations that ASB owes to others - Sales Tax Payable, Accounts Payable. Also includes Trust Accounts: (e.g. Clubs, scholarships, class accounts), and other Board approved accounts (e.g. lost library book fees, PSAT fees, athletic clearing accounts.) Reminder to remove any faculty/social committee accounts, a recommendation made by our external auditors which our Board accepted.

CHART OF ACCOUNTS Equity Account – 3000’s Accounts, ASB’s net worth - ASB general fund balance, account 3000, Income/Expense Summary (aka retained earnings) Revenue/income - 4000’s accounts – money earned by ASB - yearbooks sales, ASB cards, dance income, student store sales Expenditures - 6000’s accounts – money spent by ASB - yearbooks costs, dance costs, student store costs, supplies

ASB SURPLUS FUNDS ACCOUNT 3000 Surplus funds need to be spent down Only once a year, amounts are posted to Account 3000 for Secondary Elementary schools may post other transactions to Account 3000 that impact all students Recommend 3000 ASB General Fund account be between 10% and 20% of the annual budgeted revenue (income) to cover unexpected expenses and losses. ASB General Fund balances that exceeds 20% are discouraged because funds raised are to be expended for the benefit of those students currently enrolled and who have contributed to the accumulation of such funds. If expenses exceed the revenues as planned in the revised ASB budget, the 3000 ASB General Fund account balance will decrease at year-end due to the net loss.

ASB RESOURCES ASB website found on District Home Page, A to Z Index District ASB websites ASB website found on District Home Page, A to Z Index Secondary ASB Handbook FCMAT ASB Accounting Manual Interactive and FAQs New Email For ASB questions, email audit-asb@sandi.net

HANDOUTS Cash Vault Services – Deposit Preparation Guides Club Sports Information Circular No. 504 Examples of Allowable and Prohibited Purchases Guidelines Donations and Fundraising Permissible School Fees, Fundraising and Donations Pre Questionnaire Cash Receipts and Disbursements Sales and Use Tax Guide Strategic, Sourcing and Contracts Guide

QUESTIONS For future trainings, we welcome your input for topics that were not covered or any other comments for improvement.

THANK YOU FOR ATTENDING PRESENTERS: Accounts Payable Department– Sherrie Shumaker, Manager (1099 Reporting) Fiscal Control Department, Operations Auditor - Susan Jarrold (ASB Guidelines) Food and Nutrition Services – Melanie Moyer (Competitive Food Sales)