PUBLIC VS. NON-PUBLIC FUNDS RULES AND REGULATIONS FINANCIAL PROCEDURES FOR LOCAL SCHOOLS PUBLIC VS. NON-PUBLIC FUNDS RULES AND REGULATIONS

Table of Contents Public funds……………………………………………….……...... 3 Non-Public Funds……………………………………………....... 4 Allowable Uses of Public Funds………………….………… 5 Unallowable Uses of Public Funds………………………… 6 Uses of Non-Public Funds…………………………………….. 9 Unallowable Uses of Non-Public Funds………………… 10 Miscellaneous Compliance…………………………..………. 11 Food Purchases…………………………………………….……… 12 Constitutional Amendment No. 558…………………….. 13 Public Fund Raisers……………………………………………… 14 Non-Public Fund Raisers……………………………………… 15 Parent Organizations and Booster Organizations…… 16 Specific Requirements………………………………………….. 17

PUBLIC FUNDS Funds received from public (tax) sources. Funds received from non-tax sources but used for public purposes. Any funds subject to direct control of school principal. Any public funds transferred from Central Office to School. Legislative, City or County appropriations.

NON-PUBLIC FUNDS Not received from public (tax) sources. Not used for public purposes. Subject to intent and authorization of the organization’s members, officers, and sponsors- NOT used for general operations of the schools unless organization/sponsor directs. Principal does not direct use of these funds but does have authority to prohibit inappropriate expenditures. Some donations from private sources are non-public.

ALLOWABLE USES OF PUBLIC FUNDS Professional Development/Training-including refreshments and meals, if extended training. Refreshments for Open House at school where public will attend. Pregame meals. (NOT postgame) Academic incentives-recognition of academic excellence. Athletic/band uniforms for students to participate in school activities. Memberships in professional organizations. School landscaping, furnishings and decorations. *******Subject to Control of Principal*******

UNALLOWABLE USES OF PUBLIC FUNDS Gift items for staff. Flowers for staff and/or families. T-shirts for office staff. Staff Holiday parties/Christmas gifts. Christmas cards. Donations to various organizations. Dues to private clubs.

UNALLOWABLE…PUBLIC…continued Alcoholic beverages. Scholarships for Students. Meals for spouses. Food items for teachers. Coffee and cups for employees. Expenditures for pictures for school office. Expenditures for flower arrangement for school office.

UNALLOWABLE PUBLIC - continued Food for social gatherings. Faculty and staff luncheon. Faculty appreciation gifts. Championship rings. Class prom entertainment.

USES OF NON PUBLIC FUNDS May be used as designated by organization or person or entity making a donation. PTO/ Booster or club should direct expenditures.

Unallowable Uses of Non-Public Funds Purchases for school employees and their families. (Ethics Law) Alcoholic beverages.

MISCELLANEOUS COMPLIANCE You can transfer non-public to public, but NOT public to non-public. If non-public receipts are commingled with public receipts, they all become public. When in doubt, consider the funds public. The principal cannot use or transfer Non-public funds without approval of organization or sponsor. Monthly reports to organization or sponsor!

FOOD PURCHASES May use public funds if: All-day professional training meeting or extended meeting to benefit of district. Open Houses. Public Meetings – Board meetings. May not use for afterschool staff meetings, meetings for staff at beginning or end of school year.

CONSTITUTIONAL AMENDMENT No. 558 May expend public funds for recognition of significant contributions to education. May expend public funds to promote educational excellence by students, faculty, staff and the public. Recognitions may be in form of trophies, plaques, academic banquets and other honors. Teacher retirements. Plaques and other awards for significant academic achievement or significant contribution to school.

PUBLIC FUND RAISERS Typically are school-wide, can be used for all students and are controlled by the principal. All proceeds deposited in public fund. Normal Test: If it is during school hours, on school grounds, or sold to students – IT IS PUBLIC.

NON-PUBLIC FUND RAISERS Proceeds from non-public fund raisers such as picture sales, coupon books, gift wrap, etc., items sold in community after school hours – non-public account. Non public fundraisers can be held on school premises with approval of Principal but must occur after school hours and NOT at public events. DURING SCHOOL HOURS – TO STUDENTS – ON SCHOOL PROPERTY – IT IS PUBLIC

PARENT ORGANIZATIONS and BOOSTER ORGANIZATIONS Parent and parent/teacher organizations provide a vital role in the education of students. In Alabama public schools, the PTA and the PTO are the most common parent organizations. Many parent organizations join a national organization that serves the individual school organizations. Each of the national organizations publishes guidance for the financial operations of the individual school organizations. These organizations must have a separate employer identification number (EIN) and a separate mailing address in order to maintain their own records and accounts outside the control of the school.

SPECIFIC REQUIREMENTS Parent organizations and booster organizations that maintain financial operations outside the control of the school could create a negative image for the school by failing to maintain proper accounting controls. Accountability for the funds these organizations control includes an agreement that:

The organization has obtained an employer identification number from the IRS. The organization provides a report of the annual audit of the organization to the school. The organization makes its financial records available to the school’s auditors and authorized school employees upon request. The organization provides proof of a fidelity bond for the treasurer. The organization provides required financial reports. The organization will not provide any payment or benefit to a school employee (or family member of a school employee) in violation of the State Ethics Law. A school employee may not hold a leadership role or lead the fundraising or maintain the accounting records for Booster Organizations. If an employee does so the funds become PUBLIC funds.