1. Redbook Frequently Asked Questions

2. Presenter Susan Barkley Division of District Support susan.barkley@education.ky.gov 502-564-3930 extension 4437

4. FAQs KDE website – same page as the Redbook http://education.ky.gov/districts/FinRept/Pages/Accountin g-Procedures-for-School-Activity-Funds.aspx http://education.ky.gov/districts/FinRept/Pages/Accountin g-Procedures-for-School-Activity-Funds.aspx Will continue to be updated periodically New information is in red type Publishing date on website and document

5. Purpose of the Redbook Protect funds raised by students Protect students against funding responsibility

6. Key Provisions Item #1 on page 7 – “contributions and collections derived from school-sponsored fundraising activities shall be deposited in the school’s activity fund bank account” Item #5 on page 7 – “fundraising activities are to benefit students, so fundraisers to cover staff payroll and other operating costs are not permitted”

7. Key Provisions Item #1 on page 20 – “school activity funds are raised for a specific function or purpose during a specific fiscal year and must be used for that specific function during that period” Item #2 on page 20 – “due to timing…a school may have to carry forward funds from year to year”

8. Required at School Level Student Activity Funds - Contributions and collections derived from school-sponsored fundraising activities Fundraising by student clubs and student organizations To support student clubs and organizations Expended with input from student clubs and organizations

9. Required at District Level Grants Day care fees Adult education fees Tuition fees Donations (unless board policy allows donations at the school level) Any funding source restricted to an expenditure disallowed by Redbook (except student fundraising)

10. Aside from those requirements…. …there are OPTIONS

11. School Activity Funds Student Activity Funds District Activity Funds School Activity Funds = School Bank Account

12. Student Activity Must be deposited at the school level Raised by student fundraising Expended with input from student groups District Activity Can be deposited at the school or the district Raised by school/district or staff Expended with input from staff

13. Potential Student Activity Funds Funds raised by students Expended by student groups Chorus Club Debate Team Class of 2016 Beta Club Cheerleading Club Band FFA

14. Potential District Activity Funds Support co-curricular and extra-curricular activities Not raised and expended by student groups Gate receipts Book fair Locker fees Parking fees School plays Field trips Picture sales Other commission sales

15. School Bank Account School Activity Funds Subject to Redbook No operational expenditures District Bank Account District Funds Not subject to Redbook Any expenditure that meets “educational purpose” Narrow Allowability Increased Flexibility

16. School Bank Account Reported as Agency Fund on district financial statements Cannot be used for district’s own programs Not included in per pupil expenditures

17. District Activity Funds Deposited in District Bank Account Use special revenue fund if use is restricted, otherwise use general fund Project codes 7XXX available to track funds separately Guidance forthcoming regarding Fund 21

18. Best Practice? How are you handling district activity funds deposited in the district bank account? Submit your best practice on KDE website at http://odss.education.ky.gov/bestpractices/BP_Submit_r1. aspx?view_id=0. http://odss.education.ky.gov/bestpractices/BP_Submit_r1. aspx?view_id=0

19. How Can School Activity Funds be Spent? operating costs (in old Redbook, too) School activity funds shall not be expended for operating costs (in old Redbook, too) Must benefit student clubs or organizations Cannot be used to support the district’s own programs (GAAP) Go back to the purpose of the Redbook

20. Tests Redbook test: Is the expenditure operational in nature? If so, can’t use school funds District test: Does the expenditure have an “educational purpose”? If so, you can use district funds

21. Operating Expenditures Operating transactions are incurred in the course of the operating activities of the institution “It’s what we’re here to do” Anything supporting regular operations

22. Operational vs. Direct Student Benefit Even if there is direct student benefit, you cannot use school activity funds to pay for expenditures which are operational in nature

23. Is the cost incurred solely because of the student group and does the purchase benefit only that group?

24. Operating Expenditures Instructional Expenditures Expenditures for instruction are likely to be operational because that’s what the school is in the business to do: instruction

25. Operating Costs Examples: Renovation or maintenance of school facilities or buses Additions or improvements to buildings or grounds Furniture for offices Professional development Textbooks for general use Salaries for district-created positions Substitutes incurred in normal course of business

26. Transporting Student Groups If paid with school activity funds, driver salary/benefits and fuel only Cannot pay for maintenance or depreciation of school bus unless used only by the student group Example: a charter bus rental

27. Student Fees and Charges “All student fees and charges shall be adopted by the board. The fee shall remain in place until modified or removed by board resolution. All student fees adopted by the board shall be used for the purposes set forth in the motion and shall not be spent for any other purpose.”

28. What is a Fee? Fee Adopted by the board Tracked by individual student May be refunded May be subject to fee waiver requirements Donation A “fee” that is not adopted by the board Cannot be tracked by individual student Cannot be refunded Not subject to fee waiver because it is not a fee

29. Fee Waiver 702 KAR 3:220 Activities meeting that definition require a fee waiver process Trips intersecting with any part of the school day Fees to participate in school-sponsored courses, activities, or programs Use of school property Intramural sports, music, or fine arts Others Fee waiver for students qualifying for free or reduced meals

30. Donating to Specific Students Cannot be done through the school accounts “Donations” can be made directly to parents/students Will not be tax-deductible to donor Donations may be made for fee waivers in general

31. Additional Questions