Transcription
Associated Student BodyAccounting Manual, Fraud Prevention Guide and Desk ReferenceFor California K-12 Public Schoolsa n dCommunityCollegesInternal ControlsFraud 2015Laws
Fiscal Crisis & Management Assistance Team1300 17th Street, Bakersfield, CA 93301www.fcmat.org
AssociatedStudentBodyAccounting Manual, Fraud Prevention Guideand Desk Reference2015Fiscal Crisis & Management Assistance Team
Publishing InformationThe Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference waspublished by the Fiscal Crisis and Management Assistance Team (FCMAT)(mailing address: 1300 17th Street, Bakersfield, CA 93301). 2015 by FCMATAll rights reservedThis manual may be reproduced with permission from FCMAT.Ordering InformationBound copies of this publication are available for 40.00 each, including tax and shipping charges.Please send check or purchase order to the mailing address listed above, or pay via credit card using the linkon FCMAT’s website at www.fcmat.org.A complete, printable version of this publication may be downloaded at no charge at www.fcmat.org.ii
ContentsContentsForeword.ixChapter 1 – Introduction .1Intent of the ASB Manual . 1ASB Issues . 2Chapter 2 – Roles and Responsibilities – Administration of an ASB.5The State of California. 5The Governing Board. 5The Superintendent (K-12) or President (Community Colleges). 5The Business Office Staff. 6The Principal/School Administrator. 6The ASB Advisor . 8The ASB Bookkeeper . 9The Student Council . 10The Independent Auditors . 11The Food Service/Cafeteria Program. 11Groups That Should Not Administer or Supervise Activities of Student Organizations . 12Chapter 3 – Laws and Regulations .13Laws and Regulations Overview. 13Importance of Good Business Practices . 14Governing Board Policy and Administration Regulations . 14Recommended Legal Background Knowledge . 15Laws Governing K-12 Food Sales. 19Chapter 4 – Forming an ASB.21ASB Types: Organized vs. Unorganized . 21Elementary/Unorganized ASB Schools. 21Secondary/Organized ASB Schools. 21Student Organization and Club Trust Accounts . 24Minutes of Meetings .25Forms.29Chapter 5 – General Business Practices and Internal Controls.37The Business Operating Cycle . 37Establishing the Bank Account . 37Internal Controls .38Internal Controls Checklists .40Maintaining ASB Records . 50Temporary Loans.50iii
Insurance. 51Whistleblower Hotlines and Fraud Reporting Websites. 51Information Summary, Document Checklist and Questions.53Forms.53Chapter 6 – Budgets and Budget Management .57What Budgets Represent. 57Budget Development.58Budget Monitoring .60Carryover of Unexpended Balances . 61What Happens when a Class Graduates?. 61Forms.63Chapter 7 – Accounting and Financial Management .69Accounting Systems . 69Centralized versus Decentralized Accounting. 70Chart of Accounts . 71Sound Business Practices for Accounting System Management .72Financial Reporting and Closing the Books.72Types of Financial Reports .73Closing the Books . 75District Business Office Support . 75Annual Audit. 75Bank Reconciliations . 77Good Business Practices for Bank Account Management and Reconciliation .78Forms.87Chapter 8 – Fundraising Events .89Approval of Fundraisers.89Revenue Projections for Individual Fundraiser Events.89Typically Allowed Fundraising Events and Revenues. 91Fundraisers That May Not be Allowed . 94Procedures for Reporting Revenue Sources Other than Fundraisers.96Nonstudent Group Fundraising. 96ASB Accounts are not Pass-Through Accounts. 97Fundraising Websites. 97Forms.99Chapter 9 – Class Fees, Deposits and OtherCharges – Grades K-12. 111Allowable Fees. 112Prohibited Fees. 116iv
Charter Schools. 119Chapter 10 – Vending Machines . 121Purpose of Vending Machines . 121Products Sold in Vending Machines . 121Issues for Vending Machines .122Good Business Practices Related to Vending Machine Operations .123Vending Machine Operations .124Advantages and Disadvantages of Various Vending Machine Operations .125Procedures for Managing Vending Machine Stock .125Procedures for Emptying Vending Machines .126Forms.129Chapter 11 – The Student Store . 133ASB Store Operations .133Sound Business Practices for Student Stores .134Sales and Use Tax .136Forms.137Chapter 12 – Gifts and Donations. 145Donations of Cash to a District for a Specific School or Program .145Cash Donations to an ASB Organization .146Donations of Material or Equipment to an ASB Organization .146Donations of Scholarships to an ASB Organization .147Donations to ASBs from Booster Clubs, Foundations, Auxiliary Organizations and Other Parent-TeacherOrganizations .147Good Business Practices for ASB Donation Management .147Tax-Exempt Status.147Forms.149Chapter 13 – Cash Receipt Management and Procedures . 155Good Business Practices for Cash Procedures .155Audit Findings and Preventive Action .155Cash Control Procedures for Fundraising Events .155Cash Control Procedures for the ASB Bookkeeper .160Internal Controls for Cash After Receipt . 161Petty Cash and Change Accounts.163Clearing Account.164Taxes.164Forms.165Chapter 14 – Allowable and Questionable Expenses. 179Examples of Allowable Purchases.179v
Examples of Prohibited Purchases . 180Good Business Practices.184Chapter 15 – Contracts . 185Contract Situations .185Potential Problem Situations .185Role of the Business Office .186Uncompensated Service Agreements.186Booster Clubs, Foundations, Auxiliary Organizations and other Parent-Teacher Organizations.187Good Business Practices .187Chapter 16 – Equipment Purchases and Management . 189Equipment Ownership Options .189Risk Management and Insurance Options .189Inventory Practices .189Forms.191Chapter 17 – Employees and Consultants. 193ASB Employees.193Good Business Practices for ASB Employee Payroll Management.193The ABC Test.195Consultants.195Chapter 18 – Cash Disbursement Management and Procedures. 197Sales and Use Tax.197Internal Controls.197Associated Student Body Sales and Use Tax Applicability. 203Forms. 207Chapter 19 – Cash Controls and Fraud. 213Fundraising and Deposits. 213Checks, Reimbursements and Advances. 215ASB Financial Reports. 217Club Advisors’ Copies of Financial Documents.218Chapter 20 – Charter Schools and ASBs. 221Chapter 21 – Booster Clubs, Foundations, Auxiliary Organizationsand Other Parent-Teacher Associations. 223Auxiliary Organization versus Student Organization at Community Colleges. 225Regulations Governing Booster Auxiliary Organizations. 226Booster Auxiliary Organizations as Nonprofit Organizations with Their Own Tax Identification Number229Financial Guidelines. 230Solicitations on School Premises.231vi
School District Employees. 232Donations for Supplies, Equipment and Transportation. 232Paying Stipends, Salaries and Consultants. 233Forms. 235Chapter 22 – Where to Go for Help . 239Organizations and Online Resources . 239State Agencies . 240National Associations . 240Chapter 23 – Glossary . 241Terminology .241Acronyms .251Chapter 24 – Appendices . 255Sample Associated Student Body (ASB) Constitutions and Bylaws. 255Sample Budgets.277Legal References . 289California Education Codes Specific to K-12 Education. 289California Education Codes Specific to Community Colleges. 307Public Contract Code . 313California Administrative Code, Title 5, Education.321Code of Federal Regulations, Title 7. 325California Penal Code.331Revenue and Taxation Code.341Board of Equalization, Sales and Use Tax Regulations. 343California Constitution, Article XVI, Public Finance. 365Sample Internal Control Reference Checklist .367California School Boards Association Samples. 377Sample Administrative Regulations . 397Chapter 25 – FCMAT Online Frequently Asked Questions Archive and Help Desk. 409vii
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ForewordThe Fiscal Crisis and Management Assistance Team (FCMAT) is proud to present the fourth revision of theAssociated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference. Initially published in2002, the manual continues to be a widely used resource in education. In this revision, FCMAT has addedinformation in response to suggestions from users in the field, ASB workshop attendees, and many questionsreceived and answered via FCMAT’s online help desk. New information is also included based on updatedlaws and clarification related to food service and allowable fees.Established in 1992 by the Legislature as an independent and external state-funded entity, FCMAT helpsCalifornia’s local educational agencies fulfill their financial and managerial responsibilities by providing fiscaladvice, management assistance, professional development, software and products, resources, and other relatedschool business services. FCMAT’s work ranges from the state policy level to the operational level at schools.This manual is an example of FCMAT’s direct support, assistance and leadership to educational agenciesstatewide, including K-12 schools, community colleges, county offices of education, and charter schools.The Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference is designed forschool administrators, associated student body (ASB) and activity directors, fiscal services administrators,office managers and accountants, ASB bookkeepers, secretaries, teachers, students and others who areresponsible for student body activities. This manual responds to the increased demands on today’s schoolleaders to augment funding for students and schools while maintaining fiscal accountability, transparencyand accuracy.The goal of the manual is to answer questions in many areas concerning ASBs, including laws, accounting,purchasing, student stores, vending machines, food sales, clubs, internal controls and overall roles andresponsibilities. It will be especially helpful to new employees and those who have recently been assignedASB responsibilities. Readers are guided systematically through the major steps to initiate and maintain aneffective student body program for elementary, middle, junior and senior high school students, as well ascommunity colleges.This manual is a concise guide to successful student body business management in a complex environment.It focuses on the wide range of decision-making authority of student councils, suggests useful tools andprocedures, provides practical advice, and indicates legal constraints in specific areas. Most important, theAssociated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference suggests the rightquestions to ask and how to assess the answers.FCMAT will continue to publish periodic revisions to this manual. Suggestions about how to improve thisdocument
Procedures Policies Governance Organization Laws . Cash Control Procedures for Fundraising Events . This manual is an example of FCMAT's direct support, assistance and leadership to educational agencies statewide, including K-12 schools, community colleges, county offices of education, and charter schools. .
