1. September 2016 Office of Secondary Schools and Financial Accounting
ASB Operations
September 2016
Office of Secondary Schools and Financial Accounting

2. Agenda ASB Constitution ASB Budget (Preliminary and Final)
Seller’s Permit
Quarterly Tax Returns
Use Tax
Sales Tax
Bank Reconciliations
Monthly Financials

3. ASB Constitution Law of the ASB Land at Your Site
Administrative Procedure No. 4353, Associated Student Body, General
Constitution and bylaws shall contain:
Criteria for approval of student clubs and organizations, if any, and provision for their general control and activities, including custody of their funds.
Provision for election of officers by students in accordance with regulations approved by the principal.

4. ASB Constitution Constitution and bylaws shall contain (cont.):
Regulations for management of student body funds, including provisions for an annual budget to be developed by a budget committee composed of elected students and faculty members (secondary schools only) (Procedure 2227).
Provisions for a principal to make necessary payments in vacation periods and in emergencies.
Regulations for inventorying merchandise purchased for resale.

5. ASB Constitution
Record Retention: Perpetuity with signature approval of the ASB Officers, ASB Advisor and Principal each year
Resources:
Online ASB Handbook
FCMAT Associated Student Body Accounting Manual Sample ASB Constitution Pages

6. ASB Budget Administrative Procedure No. 2227, Student Body Budget
Budget Philosophy. The ASB budget should be balanced. Overspending is prohibited
Budget Development.
Student-faculty finance committee develops recommended budget.
Best Practices: Online ASB Handbook
Collect the Profit and Loss (P&L) from the prior 3 school years (July 1st- June 30th)
Ensure the committee supports the ASB students in comparing the P&Ls from the prior 3 years
Examine transaction details
Ask questions, discuss and project to the best of your ability, monitoring monthly via monthly reports
Student-faculty finance committee, composed of ASB council students, ASB advisor, faculty members, financial clerk, and a management employee, shall be formed to develop a recommended budget.

7. ASB Budget Budget Development (cont.)
Establish a time schedule so the preliminary budget may be adopted by May 1, and the final budget, no later than October 1.
Develop a procedure to request budget consideration for activities and organizations.
Requests for budget consideration should be accompanied by current inventory of equipment and supplies.
An ASB inventory should always be kept on file and taken at the close of every school year (AP 2360)
Inventory sample
Resources: Online ASB Handbook

8. ASB Budget Budget Approval.
The governing board of the student body approves budget.
Student-faculty finance committee presents recommended preliminary and final budgets in a form includes:
Overall ASB Budget
Summary sheet for each account
Copy of budget for each activity
Record Retention: Prior 3 years and current year with signature approval of the ASB President, ASB Treasurer, ASB Advisor and Principal each year
Summary sheet for each activity showing actual total income and expenditures for preceding year, total estimated income for new budget year, and planned total expenditures for the new budget year.
Copy of budget for each activity showing all sources of estimated income and planned expenditures, dollar-per-item, for the new budget year.

9. ASB Budget
Budget Reporting. Copies of approved preliminary and final budgets kept on file with approval signatures for audit.
Budget Control
Principal may approve necessary budgeted encumbrances for the next year, following approval of the preliminary budget.
ASB expenditure requests submitted on student body requisition with accompanying meeting minutes demonstrating the approval.
ASB Expenditure requests shall be submitted on student body requisition signed by originator of the request, financial clerk, ASB representative, ASB advisor, and principal. Purchase order number shall be assigned before purchase is authorized. Financial clerk’s signature certifies that request is authorized and funds are available.
Copy of budget for each activity showing all sources of estimated income and planned expenditures, dollar-per-item, for the new budget year.

10. ASB Budget Budget Control (cont.)
Budget revision approved by student council must precede expenditures for items not included in the budget, or for over-expenditures for items budgeted.
Authorization for expenditures expires at the end of the fiscal year, except when funds for expenditures are encumbered by outstanding purchase orders. Purchase orders carried over to the next fiscal year (July 1 – June 30) shall be liquidated by November 30.

11. ASB Budget Trust Fund Accounts
Student groups depositing funds in a student body account shall be required to submit club paperwork, including a budget plan, for approval prior to any expenditures.
Requisitions for expenditures from trust accounts require signatures of certificated club advisor, student chairman of specific club or group, financial clerk, and principal or vice principal.
Student groups depositing funds in a student body account shall be required to submit a budget plan for approval prior to any expenditures (preferably at the beginning of the school year). If not feasible, a form requesting authorization to expend funds may be used to show status of account and purpose of proposed expenditure.
Trust fund accounts should never have a negative balance.

12. ASB Required Documents
As Financial Clerks, please request a copy of the following items from your ASB to be on file in your office for when the auditors come to your site
ASB Constitution
ASB Preliminary Budget
ASB Budget
ASB Inventory
ASB Meeting Minutes

13. Seller’s Permit
A seller’s permit is a state license that allows sales to be made in California.
Allows the ASB to issue a resale certificate for purchases of inventory items without paying tax.
General resale certificate
Does not allow buying items for use without paying tax.

14. Seller’s Permit
Use when purchasing tangible items the ASB intends to sell that would ordinarily be subject to tax if sold at retail
PE clothes
Locks
Lanyards
Permit number

15. Seller’s Permit

16. Quarterly Tax Returns Sales Tax
General Rule. Sales of tangible personal property are taxable.
Tax imposed on retailer.
Seller reports and pays the sales tax due on items sold at retail in California.
Tax measured by the gross receipts from the sale.
Sales tax is imposed on the retailer or the person selling the goods. The seller reports and pays the sales tax due on items sold at retail in California. The tax is measured on the gross receipts from the sales. For instance, if the ASB sells PE shirts at orientation, it is responsible for reporting sales tax from the sale. The sales tax owed will be measured by the amount of the gross receipts. If a PE shirt originally sells for $10 but it is sold at the promotional price of $5 for an ASB card holder – the tax would apply to the $5 only.

17. Quarterly Tax Returns Sales Tax
In general ASBs must pay sales tax on what they buy and sell.
When student clubs or groups sell t-shirts or sweatshirts made or designed by the group, the profit is not taxable provided that the sales are intermittent.
ASBs operating a student store selling merchandise are subject to sales tax laws. Sales made in a storefront outlet such as the student store do not qualify as intermittent or irregular.
Publication 18 of the California State Board of Equalization (BOE) provides guidance on the taxability of sales by nonprofit organizations, including ASBs.

18. Quarterly Tax Returns Sales Tax
Meal and food sales
Student meals. Tax does not apply to sales of meals or individual food products to school students when the sales are made by school districts and student organizations operating a restaurant, vending machine, or vending stand in an educational institution. To qualify for the tax exemption, meals must be served to students at a time regularly set aside for meals, not at recess or breaks. (Reg. 1603)

19. Quarterly Tax Returns Sales Tax
Meal and food sales (cont.)
The following food sales are taxable:
Sales of edible nonfood products—such as carbonated beverages—unless the products are sold as part of a meal. (Reg 1603)
Sales of food to students and nonstudents in a place where admission is charged—such as an athletic event—even when the event is held at a school. (Reg 1603)
Sales of meals and food products to nonstudents. (Reg 1603)
Examples of where admission is charged includes athletic events, theatrical play,

20. Quarterly Tax Returns Sales Tax
Yearbooks distributed to students
Tax does not apply to the receipts from distribution of yearbooks. A school district or student organization is considered the consumer of yearbooks it sells. (Reg. 1590)
Tax applies to charges for the preparation of yearbooks. (Reg. 1590)
The yearbooks or catalogs must be prepared for or by the school, district, or organization and distributed to students. There is no restriction on how the profits may be used.
Tax applies to charges for the preparation of yearbooks made to public or private schools, county offices of education, school districts, or student organizations by printers, engravers, photographers and the like. Make sure the invoice for yearbooks includes tax.

21. Quarterly Tax Returns Use Tax
The rate is the same for sales tax and use tax (8.0%).
Tax imposed on consumer.
Consumer owes and pays the use tax due on items purchased without payment of sales tax.
Tax measured by purchase price.
Shipping charges are generally exempt from tax provided they are:
For delivery directly to the purchaser by common carrier, contract carrier, or US Mail;
The invoice clearly lists delivery, shipping, freight, or postage as a separate charge; and
The charge is not higher than the actual cost for delivery.
Use tax is a tax imposed on the consumer rather than the retailer. If the ASB or student club purchases an item for its own use – such as stationary, that item is subject to use tax. If the ASB or student club purchases tangible personal property on the internet and does not pay California tax on it, it owes use tax on that purchase.

22. Quarterly Tax Returns Use Tax
Examples
Untaxed purchases from out of state vendors
Internet retailer
Amazon receipt
Mail order catalog

23. Quarterly Tax Returns Use Tax
Examples (cont.)
Items withdrawn from resale inventory for use
Inventory items purchased with a resale certificate without payment of tax
Items withdrawn from inventory for use other than resale (give away)
Use Tax Due on Cost

26. Bank Reconciliation
Process of matching the balances of cash account in accounting records (QuickBooks) to the corresponding information on a bank statement.
Goal of this process is to ascertain the differences between the two and to book changes in QuickBooks as appropriate.
Should be completed at regular intervals (by the 10th of the following month) to ensure records are correct.
Unlikely that the ending cash balance in QuickBooks will be identical to the ending cash balance per the bank statement due to payments and deposits in transit.

27. Bank Reconciliation QuickBooks guide How to Reconcile the Bank Account
bank reconciliation\How to Reconcile the Bank Account.doc

28. Monthly Financials Secondary schools prepare
Reconciliation report
Trial balance
Balance sheet
Profit and loss report
Elementary schools prepare

29. Monthly Financials Reports signed by principal
Reports shared with ASB advisors and student representatives.
Keep on file with
Student Body EGRY receipts, sub-receipts , or POS report
Bank deposit slip
Journal vouchers
Fundraising request forms
ASB minutes

30. Monthly Financials QuickBooks guides and forms
How to Find and Use Report
monthly financials\How to Find and Use Reports.doc
ASB Reconciliation Check-off List
monthly financials\ASB Recon Check Off List Final.docx

31. Questions?