ASB Bookkeeper: • The site ASB bookkeeper safeguards money held at school site – • Ensures funds get to the ASB bank account in a timely manner • Responsible for receipts received from ASB advisor until deposited • Prepares proper financial records of financial transactions in accordance with established procedures and policies • Club reports, check registers, deposit registers, etc. • Provides materials to ASB advisors for fund-raisers, and keeps stock on hand (change box, receipt books, tickets, etc.) • Processes purchase orders, payments, and invoices • Prepares bank reconciliations monthly • Upholds ASB laws, procedures and policies • We’ll discuss the bookkeeper’s duties in much more detail soon! 23
FRAUD Black’s Law Dictionary defines fraud as: “all multifarious means which human ingenuity can devise, and which are resorted to by one individual to get an advantage over another by false suggestions or suppression of the truth. It includes all surprise, trick, cunning or dissembling, and any unfair way by which another is cheated.” 24
25 Allegations of ASB Fraud
THAT'S A LOT OF WORK! I THOUGHT IT WAS EASIER TO SPEND MONEY FROM ASB, NOT HARDER! 26
ASB Budgets • Every ASB club must have a budget • Budget is an ESTIMATE • If the budget goes off-track during the year, REVISE it • Budget = Usually one year • Often Forgotten: AT END OF SCHOOL YEAR, prepare NEXT YEAR’S budget (needed to conduct business) • This “next year’s budget” can be as simple as using current year actual revenue and expenditures • Students need to participate in the budget process • Require that a budget is in place and approved BEFORE the club enters into any commitments (i.e., spends any money) • No Budget = No Spending! • If unorganized, budgets are not mandatory • If organized, budgets are mandatory 27
ASB Budgets, cont. Budget CARRYOVER • Possible; HOWEVER, students should spend what they raise • Seed money for next year = OK • Reasonable carryover balances = OK • Multiyear projects with carryover balances = OK • Get permission to carry over and/or set percentage limits • There should be a form to get approval to carry over funds from the prior year 28
What Happens When a Class Graduates? • Funds held in ASB can only be spent on CURRENT students • If graduating: • Spend remaining funds prior to graduation • Gift the funds to another ASB club at the same school site • Gift the funds to the general ASB at the same school site Balances cannot follow students graduating from 8 th grade and • going to high school • Funds stay at same school where they were raised • If class has already graduated, need to clear funds • General ASB unless board policy or constitution says otherwise 29
What Should We Know About Raising Money? • Obtain district governing board approval BEFORE the fund- raiser occurs. This is required by Ed Code • Best Practice: ASB fund-raising events should be approved at the beginning of year, by the board or whomever the board delegates to do so, or the governing board should approve policies and administrative regulations that delineate allowable and unallowable fund-raising events • Ensure that parent organizations coordinate the timing of their fund-raisers with ASB fund-raisers so they don’t compete with each other 30
What Should We Know About Boosters & Parent Organizations 1. Booster/parent organization funds and district funds, including ASB funds, must never be commingled: o The booster/parent organization name, address or any other correspondence should never imply any form of responsibility on the part of the ASB or district. o The booster/parent organization should never be allowed to use district or school site letterhead or TIN as part of any booster/parent organization activity. To do so may create some form of nexus between the booster/parent organization and the district thereby possibly creating some form of direct liability to the district. 31
What Should We Know About – Boosters & Parent Organizations - continued o The district’s tax-exempt status and identification number are not for use by any non-school organizations or groups. o Booster/parent organizations are not legal components of the school entity. Each booster/parent organization should have its own tax identification number (TIN); booster/parent organizations are not allowed to use the school entity’s tax identification number in any way. o Booster/parent organizations are responsible for their own tax status, accounting and financial records, and must establish their own bank account, accounting and operational policies and procedures, and make their own arrangements for an audit if one is needed or required by the district. The booster/parent organization is not audited as part of the district’s annual financial audit. 32
What Should We Know About – Boosters & Parent Organizations - continued Booster/parent organizations should never allow booster/parent organization bank accounts to be opened in the name of an individual or organization member. If a booster/parent organization bank account is opened in the name of an individual, the FTB and IRS may consider those funds earned as personal income to that individual. Booster/parent organizations may donate funds to the student organization(s); however, after they do so, only the student organizations can control how the funds will be used as the funds no longer belong to the booster/parent group. Booster/parent organizations may restrict the use of a donation to student organization(s); however, if funds are restricted, the student organization(s), school principal or designee, superintendent, or governing board of the district may choose not to accept a restricted donation. 33
What Should We Know About – Boosters & Parent Organizations - continued Because booster/parent organizations are separate from the district, they are not under the control of, nor are they the responsibility of, the site administrator, superintendent or governing board. Their funds are not controlled by the district or students, nor should they be involved in the administering or supervising the activities of student organizations. It is best if school staff members do not hold any official position in nonstudent or non-district-sponsored clubs to avoid the appearance of district sponsorship. 34
What Should We Know About – Boosters & Parent Organizations - continued Governing boards are able to approve guidelines for booster/parent groups to follow, and these organizations’ fund-raising activities should be approved by the governing board. California Education Code section 51521 requires that all organizations that conduct fund- raising to benefit clubs, schools, students or the district at the K-12 level have prior approval from the school district’s governing board or the board-assigned designee. The code states the following: No person shall solicit any other person to contribute to any fund or to purchase any item of personal property, upon the representation that the money received is to be used wholly or in part for the benefit of any public school or the student body of any public school, unless such person obtains the prior written approval of either the governing board of the school district in which such solicitation is to be made or the governing board of the school district having jurisdiction over the school or student body represented to be benefited by such solicitation, or the designee of either of such boards. 35
What Should We Know About – Boosters & Parent Organizations - continued To meet this statutory requirement, a school district should adopt board policy and regulations requiring all booster/parent organizations to do the following: Complete and file an application to form a booster/parent organization. Submit for approval annually a copy of the application and an updated plan of activities. Submit a copy of the organization’s adopted constitution and bylaws with the application. Ensure that renewal applications include the following: An annual financial statement for the year just ended; the statement is to include all expenditures and all income for all events and fund- raisers. A budget for the upcoming year. 36
What Should We Know About – Boosters & Parent Organizations - continued A budget plan for the related activities. Allow the district to review and/or audit booster/parent organizations’ financial statements to ensure the organizations’ financial integrity. Authorization of a booster/parent organization should be valid for up to one year; however, if the superintendent considers it necessary, he or she may revoke a booster/parent organization’s authorization to conduct activities in the district. Requests for subsequent authorizations should be presented to the superintendent annually. The booster/parent organization must carry its own liability insurance in an amount equal to or exceeding a minimum determined by the school entity. 37
What Should We Know About – Boosters & Parent Organizations - continued Booster/parent organizations must prepare and adopt a constitution and bylaws. Booster/parent organization officers should be elected according to the structure and process defined in the bylaws. Any rules and regulations developed for the organization must conform to the law, the board of education’s policies and regulations, and the school site’s rules and procedures. All booster/parent organization members must be made aware that no individual should personally benefit from the activities the organization conducts. This concept should be made a part of the bylaws. Booster/parent organizations’ ability to use school facilities at K-12 districts is regulated by California Education Code sections 38130- 38139, known as the Civic Center Act. 38
What Should We Know About – Boosters & Parent Organizations - continued Any profits from fund-raising activities that are not spent for a booster/parent organization’s nonprofit exempt purpose cannot be returned directly to members or their families. In case the booster/parent organization dissolves or terminates, the booster/parent organization’s constitution should provide for the distribution of any excess funds to another nonprofit organization, the ASB or the district. All other booster/parent organization activities are outside the control of the district and its governing board. 39
Boosters & Parent Organizations – Solicitations On School Premises California Education Code section 51520, Prohibited Solicitations on School Premises, applies in the case of booster/parent organizations at K-12 districts that wish to have student help with activities and states: During school hours, and within one hour before the time of opening and within one hour after the time of closing of school, pupils of the public school shall not be solicited on school premises by teachers or others to subscribe or contribute to the funds of, to become members of, or to work for, any organization not directly under the control of the school authorities, unless the organization is a nonpartisan, charitable organization organized for charitable purposes by an Act of Congress or under the laws of the state, the purpose of the solicitation is nonpartisan and charitable, and the solicitation has been approved by the county board of education or by the Governing Board of the school district in which the school is located. Nothing in this section shall be construed as prohibiting the solicitation of pupils of the public school on school premises by pupils of that school for any otherwise lawful purpose. 40
Boosters & Parent Organizations – Solicitations On School Premises – continued California Education Code section 51521, also for K-12 school entities, discusses solicitations on behalf of a school. Ultimately, the K-12 school district’s superintendent and governing board have complete authority over whether any such activity occurs on school district property. Thus, obtaining written permission for any such activities is of primary importance. The following are general criteria for obtaining permission. The purposes of the fund-raising activity, which must be nonpartisan, nonpolitical, nonsectarian, and nondenominational. The manner in which the fund-raising activity will be conducted (for example, demands made on staff time and district materials must be minimal, and the activity must not encroach on instructional time). 41
Boosters & Parent Organizations – Solicitations On School Premises – continued Identification of the sponsors, officers and individuals participating in the fund-raising activity. Disclosure of the identity and location of any booster/parent organization with which the soliciting organization is affiliated or of which it is a subsidiary. 42
Fund-raisers • By law: • Raffles, Bingo, and other games of chance – NOT ASB • Who can do a raffle: • Private nonprofit groups (Not ASB) – Boosters Can • Nonprofit must have a California business license for at least one year • Own tax ID number • Must register annually with Attorney General’s Registry of Charitable Trusts prior to raffle and receive confirmation of the annual registration prior to holding the raffle • Must distribute at least 90% of proceeds to beneficial or charitable purposes • Department of Justice www.caag.state.ca.us • Should a booster/parent organization decide to operate a bingo or raffle activity, California Penal Code Sections 326.5 and 320.5 regulate these events. These regulations are enforced by the licensing agency of each county. – Must be district approved 43
Booster Club/Parent Organization Fund-raisers • ALL FUND RAISERS NEED TO BE APPROVED BEFORE THEY HAPPEN Fund-raising at any school site is directly under the control of school authorities, such as the site administrator, and must be approved by at least the site administrator prior to any activity. Approval may be granted based on completion of some type of application or form. Districtwide projects or fund-raising, such as collection drives, must be submitted in writing and authorized in advance by the district’s governing board at a regular board meeting. 44
Booster Club/Parent Organization Fund-raisers All fundraisers need to have a purpose and an approved understanding before they happen of what the funds will be spent on. Fund-raising activities should be conducted for a specific goal and not simply to raise money for the organization. All fund-raising activities conducted on school premises must adhere to the guidelines established by the board of education and each school site’s individual guidelines. Only organizations that have scheduled fund-raising activities and have obtained prior written approval from the ASB council and school site administrator will be authorized to conduct such activities on district or school premises. 45
ASB - Unallowable Fund-raisers, cont. • Due to lack of insurance coverage (pose liability, safety or risk concerns): • Mechanical or animal rides • Use of darts, arrows, or other weapons • Objects thrown at people (i.e., pie toss) • Dunk tanks • Destruction of objects (e.g., using a hammer) • Trampolines • Ownership issues: • Rental of district property (equipment or facilities to outside groups) • Fees not authorized by the Education Code: • See FCMAT ASB Manual regarding what fees are not allowable • There are new laws in place per AB 1575 • All public schools are required to publish local policies and procedures to implement provisions of AB 1575 • Information is to be included in the annual parental notification 46
ASB - Unallowable Fund-raisers, cont. • Remember: An ASB fund-raiser must be pre-approved and consist of students raising money in order to purchase “extras” for their educational experience • It is not legal for teachers to raise funds to increase their site budgets by fund-raising using the district’s tax ID number. If they do, the funds are considered taxable income to the teacher • There’s a big difference between students fund-raising using the district’s tax ID number and teachers fund-raising using the district's tax ID number: One is legal; the other is not! 47
Donations • ASB can gladly accept donations of money or property if the donation is for appropriate ASB expenditures • But they can’t be: • Required • Mandatory • A prerequisite to participate in a program or activity • All ASB rules and guidelines apply to any received donations • Make sure you know if the district’s board policy on donations has special provisions/instructions for how ASB donations are to be acknowledged or accepted 48
Allowable Expenses • Must be in compliance with the law and local board policy • Must promote the students’ general welfare, morale, and educational experience • Must be directly linked to the students’ benefit • Must be pre-approved • Must be outside of what the school district should provide, or has provided in past, from their own general funding sources • Must benefit a group of students (with few exceptions) 49
Allowable Expenses, cont. • Expenses CANNOT be considered a gift of public funds • Must have a direct or substantial purpose • Misappropriation of public funds is considered a criminal act, with no monetary limit specified • Better to be safe than sorry 50
Allowable Expenses, cont. Gift of Public Funds • Article 16, Section 6, of the California Constitution • Expenditures of school funds must be for a direct and primary public purpose to avoid being a gift of public funds • Private individuals are benefitted only incidentally to the promotion of the public purpose • Approved public purpose must be within the scope of a school district’s jurisdiction and purpose • Expenditures that most directly and tangibly benefit students’ education are more likely justified • Expenditures driven by personal motive are not justified even if they have a long-standing custom or are based on benevolent feelings 51
Allowable Expenses, cont. • To justify the expenditure of public funds, the governing board must determine that the expenditure will benefit the education of its students • If the governing board has determined that a particular type of expenditure serves a public purpose, courts will almost always defer to that finding: Put in board policy • Can be considered a gift of public funds unless in board policy: • Scholarships to college • Donations to charity • Flowers 52
Allowable Expenses, cont. • Examples: • Student magazines and newspaper subscriptions • Supplemental equipment for student use not provided by the school (e.g., telescopes) • Field trips/excursions/outdoor education camps • Extracurricular athletics costs • Social events for students • Awards if there is a district policy allowing them • Substitute teacher if the teacher is absent due to an authorized ASB event 53
Unallowable Expenses Ask these questions: • Does the expense directly promote the general welfare, morale or educational experience of the students? • Does the expense benefit students as a group? • Are you sure the expense can’t be considered a gift of public funds? • If you answer NO to any question above, the expense is probably unallowable NO = Don’t spend from ASB funds!!! 54
Unallowable Expenses, cont. Include: • Regular curriculum and classroom supplies • Salaries/supplies that are the district’s responsibility • Repair and maintenance of district equipment/facilities • Items for employee personal use • Faculty meeting costs • Parent group costs • Employee clothing/attire • Coach uniforms paid by ASB is not recommended • Large awards unless specifically approved in board policy • Employee appreciation meals • Donations to other organizations • Gifts of any kind 55
56 When Things Go Bad
Pandora’s Box – Unmailed Hidden Checks October (20-21) 57 2014
Dear Diary – Who Owes Who? October (20-21) 58 2014
Are Awards Allowed? • Board required to adopt rules and regulations about awards • If no policy or regulations, no awards allowed • Authorized by E.C. 44015 • Awards are allowed to employees for exceptional contributions and to students for excellence • Only student awards should come from ASB • Awards cannot exceed $200 in value unless board policy states a higher amount • Awards are not authorized to community members, parents, or volunteers • Awards are not allowed for birthdays, weddings, funerals or holidays 59
Are Awards Allowed?, cont. • Awards to employees for exceptional contributions are allowed if the employee: • Proposed procedures or ideas that are adopted and result in eliminating or reducing district expenditures or improving operations • Performed special acts or special services in the public interest • Made exceptional contributions to the efficiency, economy or other improvement in operations of the district • Should be paid from district funds 60
Are Awards Allowed?, cont. • FCMAT’s recommendation: Awards are only allowed if there is an approved board policy in place and if award does not violate other district policies (i.e., wellness policy). Only allow student awards from ASB funds. 61
Are Gifts Allowable? • If something is purchased for a specific student or employee and it is not an award, it is a gift. GIFTS ARE UNALLOWABLE, even if small in amount • People have tried to say that if a gift’s value is “de minimis,” trivial or of little value, it would be okay (for example, under $20/person) • They are wrong! A gift is a gift! • Gift certificates are ordinarily characterized as gifts of public funds even when purchased for an event with a public purpose because they confer a tangible private benefit to an individual • Ask merchants or individuals to donate gift certificates to avoid making a gift of public funds • If students want to give gifts, use private funds, not public funds 62
Are Gifts Allowable?, cont. • FCMAT’s recommendation: Gifts are NEVER allowed. 63
Are Donations to Other Organizations Allowed? • Donations are considered a “gift of public funds” • Remember, the funds have been raised under the district’s non- taxable status • Students can still organize fund-raisers to support specific charities if clearly identified as such • The checks should be written directly to the organization/charity • An exception can exist only if district governing board approves a special fund-raising event with the funds clearly segregated within the ASB account Note: Donations are not allowed for needy families. A legal foundation must be established separate from the district 64
Are Donations to Other Organizations Allowed?, cont. • FCMAT’s recommendation: Donations to other organizations are not allowed from ASB funds unless specific governing board approval has been obtained 65
Are Scholarships to College Allowed? • Yes, if the following exists: • Governing board, or authorized designee, approves the scholarship donation • Acceptance must be in writing, including all conditions prescribed by the donor • Statement must also be included regarding the disposition of any remaining balance • Each scholarship and trust account must be established separately • The donation cannot be for specific student(s) • Students may organize fund-raisers to raise money for scholarships • If the district governing board approves a special fund-raising event with the funds clearly segregated within the ASB account 66
Are Scholarships to College Allowed?, cont. • If scholarships are going to be allowed from ASB funds, the following must occur: • There must be an unbiased committee who selects the recipients • The selection criteria must be determined prior to beginning the fund-raising or acceptance of any donations • Scholarship check(s) must be made payable directly to the college 67
Are Scholarships to College Allowed?, cont. • FCMAT’s recommendation: Scholarships to college are not allowed from ASB funds unless the previous criteria have been approved and established in advance 68
Are Employee Appreciation Meals Allowed? • Appreciation meals do not qualify as awards • Attorney General says not “actual and necessary” per E.C. 44032 • Don’t provide a direct and/or substantial purpose -- so would be a gift of public funds 69
Are Employee Appreciation Meals Allowed?, cont. • FCMAT’s recommendation: Employee appreciation meals are not allowed 70
Contracts for ASB • Contract - legally binding document • Those who are authorized to sign contracts under district policy are the same individuals that are allowed to sign ASB contracts • Unless board policy states otherwise • District contract policies and procedures protect the ASB, the students, and their assets 71
What’s a Consultant? • Not an employee • Independent from the district • Disk jockey • Photographer • Is not paid as an employee in ANY other capacity • If the proposed consultant is already a district employee, they cannot be paid as a consultant for this work • ASB must pre-approve the expense before the work occurs • Paid directly by ASB with a vendor check • Fills out W-9 prior to working • Income reported on IRS Form 1099 annually 72
What Happens When a District Employee Does Consultant Work for ASB? • The consultant-type work is paid through district payroll and the ASB then reimburses the district • ASB must pre-approve the expense before the work occurs • The extra work will be reported on the employee’s annual W-2 issued by the district • This is because the same person can’t be paid as an employee and a consultant by the same employer 73
What are Internal Controls? • Policies and procedures designed to provide the governing board and management with reasonable assurance that the district, including ASB, achieves its objectives and goals. They include: • Segregation of duties • Limiting access to assets • Management review and approval • Reconciliations • Maintaining established policies, procedures and standards of conduct 74
AGAIN: WHY ARE ASB’S SUCH TARGETS FOR FRAUD??? 75
Why Are ASB’s Such Fraud Targets ??? What does an ASB or Booster Club have that is highly liquid, transports easily, derived from numerous sources, difficult to trace, and is easily removed??????? 76
Cash • Cash from Fund-raising – (Candy Drives, Auctions) • Cash from Events – (Football Gate Receipts, Dances, Bake Sales) • Cash from Donations 77
78 Booster Club Fraud
What are Internal Controls?, cont. • Appropriate management tone – “tone at the top” • Performance evaluations • Training programs • Efficient and effective accounting and business practices, policies and procedures 79
What are Internal Controls?, cont. • Principal mechanism for preventing and/or deterring fraud or illegal acts, misappropriation of assets, or other fraudulent activities • Can include an array of irregularities characterized by intentional deception and misrepresentation of material facts • Effective internal control processes provide reasonable assurance that the district’s/ASB’s/Boosters/Parent Organizations operations are effective and efficient, that the financial information produced is reliable, and that the organization operates in compliance with all applicable laws and regulations 80
Internal Controls Help Prevent • Paying vendor “buddies” for no work product • Purchasing supply items for personal use • Failure to adequately segregate duties • Failure to limit access to assets or sensitive data • Not recording transactions, resulting in lack of accountability and the possibility of theft • Unauthorized transactions, resulting in skimming, embezzlement or larceny • Collusion among employees where little or no supervision exists 81
Examples of Internal Controls in ASB/Boosters/Parent Organizations • Segregation of duties according to their functions so that one person does not handle a transaction from beginning to end • Those who initiate, authorize or approve transactions • Those who execute the transactions • Those who record the transactions • Those who reconcile the transactions • Those responsible for the item resulting from the transactions 82
Examples of Internal Controls in ASB/Boosters/Parent Organizations-cont. • Purchase order/requisition completed prior to purchase or ASB/school is not obligated to pay for the expenditure • Never pay expenses out of cash receipts Deposit cash and then write a check • Keep the checkbook and extra check stock in a safe, secure place • Void checks that are incorrect or not issued • Never sign checks in advance -- have at least one backup signer (but can be more) • Use checks in proper sequence • Never make check out to “cash” • Check should have two signatures 83
Examples of Internal Controls in ASB/Boosters/Parent Organizations-cont. • Disbursed or paid ONLY if original documents/receipts exist (i.e., proof of purchase) • Service/product/goods MUST be RECEIVED and authorized before payment is made • ASB Student council and each club prepares and maintains a record of each meeting and the action(s) taken in them • Bank reconciliations done within two weeks of receiving bank statement, with proper review and approval afterward • Always use pre-numbered receipt books or tickets • Adequately control where pre-numbered tickets and receipt forms are stored 84
Examples of Internal Controls in ASB/Boosters/Parent Organizations-cont. • Dual cash counts • Always count funds with a witness and countersign the proper deposit forms • Endorse all checks – “For Deposit Only …” • Do not leave funds unattended on a desk • If the office manager or bookkeeper who normally receives cash is not available, assign another individual to receive the deposit and sign for the received funds in their absence. The cash should be double counted by this person • Timely deposits (2-3 days) • Make the bank deposit THAT DAY, if possible! �� • Never leave undeposited money at a school over weekends or holidays • Report overages and shortages • Loss of tickets is the same as loss of cash 85
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Examples of Internal Controls in ASB/Boosters/Parent Organizations-cont. • Budgets for each ASB club • Completion of Revenue Potential forms • Inventory control for vending machines, stores, and concession stands • Proper cash handling and physical chain of custody for all cash receipts • No commingling of receipts from separate events • Immediate delivery of all event proceeds to the ASB bookkeeper • Using pre-numbered tickets, receipt books, or tally sheets • Cash boxes to keep the received money safe 86
Examples of Internal Controls in ASB/Boosters/Parent Organizations-cont. • Safe storage is a MUST • The safest place for money to be is in the bank • Second safest place is a SAFE • FUNDS SHOULD NEVER BE TAKEN HOME, PUT IN A DESK DRAWER, OR EVEN IN A LOCKED FILE CABINET • If you cannot deposit the money in the bank that day - PUT THE MONEY IN THE SAFE WITH A WITNESS PRESENT !! 87
Are ASB Purchase Orders Really Necessary? • YES! Must be issued for purchases to reflect proper approval • ASB not obligated to pay for an expenditure ordered or directly purchased by a teacher, student or other person who has not first received a purchase order with the appropriate approval signatures • You cannot go shopping on your own and expect to be reimbursed • Purchase orders must be pre-numbered and have multiple copies • A check request is NOT pre-approval 88
Booster/Parent Organization Sound Business Practices Booster/parent organizations should adhere to sound business practices and maintain an adequate system of controls just as ASBs should, such as with the following: Financial statements and treasury • The treasurer or designated officer should prepare monthly financial statements that are presented to the organization along with a copy of the most current bank statement and reconciliation. Financial state- ments may include cash receipts, cash disbursements, checking account beginning and ending balances, balance sheets, income statements and other relevant items. 89
Booster/Parent Organization Sound Business Practices – cont. Financial statements and treasury - continued • A budget should be developed at the beginning of the year to project expected revenues and expenses, and should be revised as needed. • An auditor who is independent of the treasurer should be appointed and should report directly to the booster/parent organization board. The auditor should review all of the financial records, journals, check registers, receipts, invoices, bank statements, and other financial information at least annually. 90
Booster/Parent Organization Sound Business Practices – cont. Cash receipts and bank reconciliation • Pre-numbered receipt books and supporting backup documentation. • Preparation of duplicate deposit, cash count and fund-raising forms. • Bank deposits should be made intact and in a timely manner. • Someone other than the individual(s) responsible for depositing funds and writing checks should perform bank reconciliations monthly. 91
Booster/Parent Organization Sound Business Practices – cont. Cash disbursements • Checks should require a minimum of two signatures. • Preparation of duplicate forms such as purchase orders. • All expenditures should be approved by the booster/parent board and the approval noted in the board meeting minutes. 92
Whom Do Internal Controls Protect? • Employees • Volunteers • Students • Your organization’s assets 93
ASB Journal Entries and Transfers • Control is required • Purpose must be documented with a detailed reason • Needs supporting documentation • Should be prepared only with prior written approval • ASB advisor • Principal • Club meeting minutes • Any journal entry that isn’t properly documented or approved is a fraud indicator 94
ASB Minutes Requirements • The student council and each club must prepare and maintain a record of each meeting and action taken in them • Details of proceedings • Actions taken • Demonstrate that policies and procedures are followed by ASB • Need to be concisely and clearly written • If ASB is unorganized, and if meetings are not held, then minutes are not mandatory. But if meetings are held, and decisions are being made at the meetings, then minutes are mandatory 95
ASB Minutes Requirements, cont. • Any information introduced to those attending the meeting should be attached to the original copy and kept on file, such as list of purchase orders, list of checks, financial information, and letters • The club secretary, or whoever took the minutes, should sign the minutes when they are completed • Review and approve at next meeting • Maintain a binder of all of the approved minutes for the school year 96
ASB Bank Accounts • District guidelines must be followed • Best practice = Only district’s accounting office should open bank accounts • District accounting office must be notified when any bank account needs to be opened or closed • ASB bank accounts are for the exclusive use of the ASB organization 97
ASB Bank Accounts, cont. • ASB bank accounts should always be in the name of the ASB organization rather than in the name of any individual • Only ASB funds are deposited into ASB accounts • There must be at least two signatories on each bank account, and these signatories should not include students • Should also not include the bookkeeper 98
Auditors • Good resource: • Annual Audit Report • Report of Internal Controls is within the audit requirements • Report their findings and recommendations to correct procedures • Protect the district by offering a third-party line of defense for why policies and procedures are necessary • Auditors report directly to the governing board 99
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