3405

The guidelines contained in this section apply to all funds belonging to the school or handles by employees of the South Kingstown School Department for various student activities operating within the school. These guidelines are to be followed by all elementary, middle, and high schools as well as other offices and departments of the South Kingstown School Department. Since these guidelines apply to the more complicated financial activities in the middle and high schools, not all of the comments will apply to the elementary schools. Therefore, elementary schools should follow all applicable procedures outlined in the section. At a minimum, elementary schools must maintain records of all receipts/expenditures and keep all documents on file.

Adequate accounting records shall be maintained at all grade levels in order to provide proper controls over transitions, accountability, and reporting of the Student Activity Funds. It is the intent of these guidelines to recommend a system of bookkeeping procedures for handling the money, and policies governing the school activity accounting.

All schools funds are to be used only for the direct benefits of students. Expenditures from student activity funds for professional books and magazines and personal memberships in professional organizations is prohibited.

For audit purposes, all records must be maintained for at least seven years. All supporting documentation such as invoices, bank statements, and canceled checks must be maintained at the school level.

Student Activity records and financial procedures shall be subject to periodic review by the Business Office and annual audits by outside independent auditors. Audit reports shall be referred to the Central Administration for informative purposes and possible improvement of procedures. Quarterly and annual reports shall be prepared by the Principal and submitted to the Director of Administrative Services. These reports shall reflect the financial condition of the student activity fund.

Student activity funds shall not be used for any purpose, which represents an accommodation, loan, or credit to any person. Personal checks are not to be cashed from student activity funds.

The Principal of each school shall designate one person, in addition to himself or herself who shall be authorized to receive, deposit and account for funds. These rules shall apply to savings as well as to checking accounts. As explained in the “Bank Accounts” Section C, several additional signatures should be listed on the account for emergency situations when on of the administrative signers is not available. Supporting evidence shall be required prior to signing the check or withdrawal slip. Blank checks should never be signed.

All monies from any source must be substantiated by duplicate – copy receipts. (See sample “Cash Receipts Form” on page 11). A receipt will be issued immediately. The first copy of the receipt is to be given to the person/teacher from whom the money is received. The second copy is to be retained by the Principal or his designee as permanent record of money received.

Collections should be deposited daily, if reasonable. Money should never be left in the school over weekends or holidays. All monies collected shall be placed in the school safe for safekeeping. Said monies shall remain in the school safe only until such time as a deposit can be reasonable completed. Monies collected shall not be used to cash checks from any source. All checks to be deposited in the student activity bank account shall be endorsed immediately upon receipt, showing a restrictive endorsement.

Cash receipts for lost books, locks, or other school equipment or supplies paid by the students is not to be deposited in the Pupil Activity Funds, but forwarded to the Business Office for deposit to the School Department’s General Fun, as an offset to the appropriate school’s budget account.

Always issue receipts when monies are received. Cash receipts must include supporting documentation. For example, if Ms. James is organizing a field trip and collecting money from students, the deposit receipt must include a class list of those students who have paid. Other examples would include the number of candy bars, tickets, gifts, etc. sold. At the very least, the receipt must include a brief summary of the reason for the deposit.

All disbursements shall be made on pre-numbered checks which serve as the basis for making an entry and recording a disbursement. Disbursements shall be supported by invoices (not statements) and documentation (see sample “Cash Disbursement Form” on page 12) which bear signatures certifying receipt of merchandise and signature of the principal authorizing the purchase. Accuracy of prices, extensions and totals must be checked prior to payment. When a check has been written, the invoice, and supporting documents, shall be marked “PAID BY CHECK NUMBER “ and DATE OF PAYMENT “ and shall be filed for auditing purposes. NO MONIES ARE TO BE DISBURSED FROM UNDEPOSITED RECEIPTS.

It is possible that proper documentation may not be available at the time a check is requested. For example, a situation may arise when the amount to be paid and the supporting documentation are not available until the day of the function because charges are based upon such variables as actual attendance by the students. In such a situation, when proper documentation is unavailable, the following procedure should be adhered to:

a) Although the practice of requesting a check without all of the necessary information and documentation may occasionally be necessary, it is not a practice that is keeping with good business practices and is a practice that is not encouraged.

b) Although the practice of requesting a check without all of the necessary information and documentation may occasionally be necessary, it is not a practice that is keeping with good business practices and is a practice that is not encouraged.

(a) Therefore, in order to avoid problems in your school between you and your fiscal advisor, a form, “Request for Check Advance from Student Activity Fund” (see page 14) has been prepared that you can complete and sign that will clearly indicate the approximate amount that will be paid, the reason why you are not able to state the actual amount and provide documentation, and a signed statement that the required documentation will; be provided within three days. In all cases, the line on the check indicating the person/company receiving the check (payee) should be completed before the check is issued and signed. Only the dollar amount should be entered at a later date.

The Principal, or designee, shall maintain a complete set of books recording all monies deposited and disbursed. The Cash receipts journal and the Cash Disbursements Journal shall serve as a control whereby the total amount of money deposited and extended for all funds is maintained continuously. All transactions shall be entered and categorized to permit appropriate analysis.

c) On account shall be established for funds other than student activities. This account is to be a general “administrative” account to be used by the principal for expenditures that are for the “direct benefit of students” in the school. This account will be the account used for recording bank interest, bank charges, receipts such as those from pay telephones and soda machines, etc. This account is to be operated in accordance with all of the rules outlined for the student activity funds.

e) Expenditure from individual activity funds will be made only if that specific fund has a sufficient balance to cover the expenditure being requested. Individual activity funds are not to be allowed to “deficit spend” by borrowing funds from other activity funds.

f) Stipends, substitutes, and other compensation must be paid through the South Kingstown School Department’s payroll system (See Section G titled “Payments to Employees, Independent Contractors and Non-Incorporated Businesses”).

h) Any fixed assets (furniture, computers, etc.) purchased must be tagged with a fixed asset tag. Asset information must be sent to the Business Office for record keeping purposes.

i) All checks must have two signature lines printed on their face. It is highly recommended that two administrators sign all checks. Secretaries and teachers may sign if a sufficient number of administrators are not available.

The balance shown by the bank statement will rarely agree with the balance reflected by the books of the fund because of outstanding checks, deposits in transit, bank charges, and possible errors. Thus, the bank statement shall be reconciled with the activity fund books immediately upon receipt of monthly bank statements using the form provided by the bank. The end of each month shall serve as the cut-off date for reconciliation of the bank statement. See section titled “Bank Account Reconciliation” for additional information.

At the end of each quarter, a statement shall be prepared by the Principal or designee. The information contained in the statement shall include the financial status of each activity making up the activity fund. Copies of the statement shall be forwarded to the Business Office for the purpose of reporting the overall financial status of the fund, as well as to provide an internal review.

1. A checking account is to be used for daily or periodic disbursements and a savings account or an approved short-term investment vehicle is to be used for any funds held in reserve for the Student Activity Accounts. It is highly recommended that two school administrators sign all checks and savings withdrawals. Under no circumstances is staff to open student accounts using their own signatures or names of parents. Two signature lines must be printed on each check. If checks with only one signature line are still in use, they should be discarded and replaced with checks with two signature lines.

2. It is recommended that three or four people be authorized to sign checks, withdrawal slips, etc., in the event that one of the authorized signers is out ill, at a conference, etc.

3. As indicated in number one above, all checks, withdrawal slips, etc., must be signed by two administrators. If there is not a sufficient number of administrators available, a secretary or teacher can be one of the authorized signers and can sign in emergency situations. In such cases, however, it is recommended that a copy of the check and backup documentation be available for the principal to review at a later date, since the principal is ultimately responsible for the proper handling of all school funds.

4. If you are opening a new bank account, etc., request for approval to open this account must be made in writing to the Director of Administrative Services. This will allow the Business Office to maintain a current listing of all bank accounts. If the request for a new bank account is approved, the principal must submit to the Business Office, in writing, the following information:

5. (a) Each year at the close of school, all bank accounts must be reconciled for our auditors. A memo with a reconciliation form and date will be sent to each school just before the end of the school year.

(b) When the Student Activity Reconciliation Form is submitted to the Business Office, a photocopy of the front and back of all June 30^th bank statements must be attached to the reconciliation form. A June 30^th bank statement for the prior year and the current year must be attached to each reconciliation form. This will allow the auditors to see the beginning and ending balances.

from the list of authorized signers and replaced with the signature of their replacement or other designated individual. The Business Office must be notified, in writing, of all such changes.

All disbursements from the Student Activity Funds must directly benefit students. The Student Activity Funds should not upfront the cash to pay general school expense and then request reimbursement from the School General Fund. This process circumvents the School Department purchasing system and must be discontinued immediately.

The School Department’s purchasing procedures require that any single purchase of $4,000 or more must be procured through competitive bidding. Please note that purchase requirements shall not be artificially divided so as to constitute a smaller purchase than described above. As a result, if you are contemplating a purchase in excess of $4,000, please contact the Business Office to determine if your purchase must go to bid.

If bidding is required, you will be asked to prepare and submit specifications suitable for the bidding process. All such requests must be submitted to the Business Office at least eight (8) weeks (depending upon the complexity of the bid) prior to the School Committee meeting at which purchase approval by the School Committee is requested. The Business Office will then send out bids. Requests for “Sole Source” purchases (purchases not requiring a bid because they are available from only one vendor) must be submitted ten (10) weeks before the meeting at which purchase approval is being requested. The additional weeks will allow item to determine if the item or service qualifies as a “Sole Source” purchase. If it does not qualify as a “Sole Source” purchase, you will have to submit bid specifications to the Business Office eight (8) weeks prior to the School Committee meeting.

In addition, for purchases between $500 and $4,000, the school must obtain at least three competitive prices and make the award to the vendor with the lowest price meeting the specifications. A record of the quotations should be noted and kept on file with your documentation that backs up your disbursements. No personal purchases may be made through the Student Activity Funds for school board members, staff members or other individuals.

In order to avoid any misunderstanding between the school administration and the graduating class, a policy was developed for the High School regarding the disposition of the funds of the graduating class. Every effort should be made to expend all funds prior to graduation.

It is the responsibility of the class advisor to notify all class officers of the school policy regarding class funds that are not expended prior to graduation. The advisor must inform the class that:

By September 1 following the graduation of the class, any and all funds not expended will be transferred by the Principal from the class account to the Administrative Account and will be disbursed by the Principal for school purposes which benefit the student body. It is the responsibility of the Class Advisor to ensure that all four class officers are aware of the policy on funds disbursement. The Class Advisor is to prepare a document signed by the officers indicating this understanding. This document is to be presented to the Principal by October 1, of the Senior Year. A signed copy of the document will be sent to the Business Office of the South Kingstown School Department. See page 13 for an example of the document.

Monthly – Checkbooks will be reconciled immediately upon receipt of monthly bank statements using the form provided by the bank. Any differences are to be located and adjusted immediately.

When the Student Activity Reconciliation Form is submitted to the Business Office, a photocopy of the front and back of all June 30^th bank statements must be attached to the reconciliation form. A June 30^th bank statement for the prior year and the current year must be attached to each reconciliation form. This will allow the auditors to see the beginning and ending balance.

Due to the requirements of the Internal Revenue Service (IRS), we must report to the IRS payments made to employees, independent contractors, and non-incorporated businesses that exceed $600 per calendar year (January 1 through December 31).

A 1099 Form is required if an individual has received payments for services that total over $600 per year on a system-wide basis. The independent contractor must complete Form W-9 in order to supply the School Department with a tax reporting identification number.

During the first week or two of January, you will be required to submit a list by name and amount paid to such individuals for the preceding calendar year. Since these are important tax-related documents, please be sure the information is accurate and complete. All forms will be kept on file for future audits.

Another area of concern is payments to non-incorporates businesses. Since many business corporations do not always include “Inc.” on their invoices, it is difficult to identify if the business is a corporation. If it is not, we are required to file a 1099 with the IRS. As is the case of Independent Contractors, we will need an annual listing of such payments for the preceding calendar year. The list of payments will be due in the Business Office during the first week in January. All of the requested information must be entered on the forms and signed by the principal. Since these are important tax related documents, please be sure the information is accurate and complete. All forms will be kept on file for future audits. If these businesses have earned $6000 or more on a system wide basis, we are required to file a 1099 form with the IRS.

If the check issued to the teacher is a reimbursement if should not be a problem. However, the teacher should make the purchase first and then request reimbursement and submit the proper documentation for your records (itemized paid invoices). If in some cases, a teacher is unwilling to purchase materials out of his/her own funds, then the teacher will be required to make the purchases within two or three weeks after the issuing of the check and then submit the required documentation to back up the payment. The documentation must be attached to your records within a few weeks of issuing the check.

Since fund raising is a well-established procedure in most schools, accurate records with respect to distribution and receipt of inventories are essential to a successful fundraiser regardless of grade level.