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ACTIVITY FUNDS ACCOUNTINGPROCEDURES MANUALPREFACEThis manual is designed to provide a set of standardized accounting guidelines andprocedures for the administration of the Humble Independent School District ActivityFunds. This manual is to be used in conjunction with the Basic Accounting Manualprovided by EPES Software, Inc.Principals, secretaries, bookkeepers, sponsors, and other personnel involved in thehandling of activity funds are responsible for following the guidelines and proceduresdescribed in this manual.Other materials available for use in administering activity funds are the District BoardPolicy and the Humble ISD Purchasing Policy and Procedure Manual, both of which canbe found on the District’s web page.1
HUMBLE INDEPENDENT SCHOOL DISTRICTACTIVITY FUNDS MANUALSECTION 1: GENERAL INFORMATIONA.Purpose of Activity FundsThe Activity Funds are defined as funds consisting of resources received and held by theschool, as trustee, to expend or invest in accordance with conditions of the trust.Specifically, they are funds accumulated from the collection of student fees, donations,and from various school approved, fund raising activities. Activity Funds are used topromote the general welfare of the school and the educational development and morale ofall students. All funds collected by District personnel from students are defined asActivity Funds and must be handled through the student activity funds and must complywith the guidelines and procedures outlined in this manual.B.Responsibility for Activity FundsAll policies that apply to the administration of District funds apply to theadministration of Activity Funds.1.The school principal is personally responsible for the proper collection,disbursement, and control of all school activity funds. This responsibilityincludes:a. Providing for the safekeeping of the monies in the school. Monies that aremaintained at a school campus location must be maintained in a secure areawithin the vault. If a vault is not available, monies are required to bemaintained in a locked cabinet with restricted key access. Keys or vaultcombinations must be restricted to the Principal and the activity fund clerk.b. Proper accounting for transactions.c. Expenditure of funds in compliance with applicable state laws and local boardpolicy.d. Adequate training and supervision of all personnel designated by the principalto administer activity funds.2. The school principal is not responsible for funds collected, disbursed and controlledby booster clubs, parent, patron, or alumni organizations. These organizations andbooster club funds are not to be accounted for in the schools’ activity funds, nor arethese organizations to be given, or use, the Districts tax ID number.3. The school secretary/bookkeeper is responsible for maintaining adequate records andsupplies pertaining to the student activity funds and the performance of duties in atimely manner.2
4. The account advisors are responsible for managing their respective funds. Thisresponsibility should include following district purchasing policies and procedures,developing fund raising plans, monitoring the financial position of the account,reviewing the financial records, the collecting and safekeeping of funds until turnedover to the bookkeeper, and other fiduciary responsibilities.5. The Finance Specialist’s responsibilities include:a. Training of bookkeepers/secretaries.b. Monthly review of activity fund bank reconciliations to ensure compliance withdistrict polices and procedures as required by the Activity Fund AccountingProcedure Manual for each campus.c. Maintenance of the Activity Fund Accounting Procedure Manual.d. Preparation of monthly consolidated sales tax report of all district activity fundsales.e. Year end activity fund schedules and entries.6. The Internal Audit Department is responsible for the periodic internal audits of eachactivity fund.C.Audit of Activity Funds1. Elementary schools must submit all activity funds records to the Finance Specialist atthe end of the school year.2. Secondary schools should submit only the required annual reports to the FinanceSpecialist at the end of the school year, unless specifically instructed to do otherwise.D.Retention of RecordsAll records should be kept current and in good order for a period of seven years for auditpurposes.3
SECTION 2: BASIC RECORDS AND PROCEDURESA.Activity Fund ReceiptsReceipts are the means of accurately recording cash received and providing support tosubstantiate each bank deposit. Activity Fund cash receipt books may be obtained fromthe District’s warehouse or may be computer generated. No other type of receipt isacceptable under any circumstances. A receipt should be prepared immediately for anycash and/or checks received. Receipts are to be used in pre numbered sequence andprepared in ink.An actual cash count by the person signing the receipt should be made in the presence ofthe person turning in the money. The total of cash, checks, and coin should be shownseparately on the receipt. The person turning in the money should initial the receipt toevidence agreement with the count.B.General Receipting Procedures1. In order to maintain effective cash control, at least two persons must be involved inthe functions of collecting cash, receipting cash, and depositing cash. The person thatcollects cash should not be responsible for receipting that cash to herself/himself andlater, depositing that cash, except where unavoidable.2. An official receipt shall be prepared for any cash or checks received. The personreceiving the money must record all cash and checks collected in triplicate.a. One copy is given to the person submitting the money.b. A second copy is used to record the receipt in the school’s records.c. A third copy is kept in the receipt book.3. The receipt must be completed to include all of the following information.a. School name.a. The date and amount.c. The name of the individual or firm submitting the money (a receipt may not beissued to more than one person)d. An explanation of the purpose for which the money was receivede. The name of the student groupf. The manual signature of the person receiving the money. Signature stamps areforbidden.4.An actual cash count should be made by the person signing the receipt in the presence ofthe person turning in the money, whenever possible. If an emergency arises and themoney cannot be receipted immediately, the funds can be left with the bookkeeper if an4
AF 104 (Tabulation of Monies Collected from Pupils) form has been properly completedand attached to the funds.5.The maker of a check should be indicated on the receipt or on the attached AF 104 formif it is other than the person turning in the money. The payee’s telephone number anddriver’s license number should be included on the check.6.Postdated checks shall not be accepted by the school from any source. All checks must beimmediately endorsed.7.Under no circumstance should a receipt amount or signature be altered. If an error occurs,void that receipt and prepare the next sequentially numbered receipt. All copies of avoided receipt are to remain attached in the receipt book. Computer generated receiptsshould contain all parts, be stamped VOID and filed in numerical order. Receipts shouldnever be pre signed or predated.8.The original copy of the cash receipt shall be given to the person relinquishing orremitting the money. The second copy will be used to support the bank deposit and thethird copy shall be retained in the receipt book. If a check is received by mail from anoutside source for commission, interest, refund, etc., it is not necessary that the originalof the receipt be mailed to comply with this procedure. In these cases, the original of thereceipt should be given to the advisor of the account being increased.C.Receipt of Money by Persons Other Than the BookkeeperOccasionally monies may be collected by an authorized individual other than thebookkeeper (teacher, secretary, clerk, etc., but only as approved by the principal) for suchitems as books, student fees, pictures, etc. In such instances, the following operatingprocedures shall be applicable in addition to the provisions of General ReceiptingProcedures:1. Form AF 104 (Tabulation of Monies Collected from Pupils) may be used for small,multiple collections such as yearbooks, library fines, class pictures, bus trips, etc.Form AF 104 must be prepared in ink.2. The original AF 104 form shall be sent with the money collected to the bookkeeper.The bookkeeper will count the money in the presence of the advisor and prepare anactivity fund receipt once the deposit is verified. The bookkeeper will also sign theAF 104 form.3. Collections shall be submitted to the bookkeeper daily.4. In elementary schools, teachers utilizing Form AF 104 may enter the names of thestudents from whom monies were received. In secondary schools, students must, inthe presence of the collector, manually sign the AF 104 and enter the amount ofmoney turned in.5
5. All money collected must be submitted to the bookkeeper in the same form ascollected. Employee’s personal checks may not be substituted for cash collections.6. All checks collected are to be made payable to the school, never an individual.7. For audit purposes, advisors should keep verified copies of the AF 104 for a period of7 years. The bookkeeper should keep the original for a period of 7 years.D.Receipt of Money by the Bookkeeper1.The activity fund receipts issued by the bookkeeper provide the basic support foractivity fund bank deposits. The following procedures are to be observed inaddition to those specified in General Receipting Procedures.When funds submitted to the bookkeeper have previously been receipted on anAF 104, the bookkeeper shall:a.b.c.E.Tabulate monies collected and reconcile to the AF 104.Issue an official activity fund receipt to the employee when monies receivedhave been satisfactorily verified. The receipt number should be written onthe AF 104 form or receipt attached.Each receipt must be entered into the activity accounting system.Control of Activity Fund Cash Receipt Books1. The bookkeeper shall be responsible for maintaining an adequate supply of receiptbooks, obtained from either the District’s warehouse or a business forms company.2. Receipts should only be issued for money in hand. The signing of a receiptacknowledges acceptance of responsibility for the money.F.Pre numbered ChecksChecks must be used to disburse all funds from the activity fund checking account. Pre numbered checks are obtained directly from the bank or a check printing company asneeded. No more than a two year supply should be on hand at any time. Checks must beprinted with the schools activity fund name. Checks must also have provision for twosignatures, which are required on all checks. Original purchase orders, invoices, etc.,must support all payments and be attached to the accounts payable copy of the check. Theoriginal check is given/mailed to the payee. One copy/stub is kept in numeric order.6
G.Bank Deposit SlipsCompleted deposit slips ensure the funds are deposited in the proper account. As such,these slips, when properly prepared, are vital supporting documents in the maintenance ofaccurate cash records. Deposit slips shall be obtained from the bank and must indicate theschool activity fund name and account number. Deposit slips should include receiptnumbers corresponding to the deposit to allow for a proper audit trail. Currently, theDistrict depository requires that checks be on a separate deposit slip, all currency andcoin up to, but not more than 10 on a separate deposit slip; and all coin in excess of 10be on a separate deposit slip.H.Monthly Bank StatementsA bank statement is a transcript of the official bank records reflecting all dailytransactions affecting the cash balance on deposit during the preceding month. Themonthly statement includes deposits, cancelled checks and other memoranda whichconfirm the additions to and the subtractions from the cash balance during that month.When properly reconciled, the statement serves as official support for the cash balance inthe activity fund records.I.Request for Internal Transfer of Funds (AF 107)This form, when completed, authorizes the transfer of funds from one account to another,as required by interschool purchases (i.e. yearbooks purchased by library or the sharingof fund raising profits.) This form must be signed by both the donor and recipientsponsors and the principal.Prepare the AF 107 in duplicate. The original is kept with your monthly reconciliationand the duplicate is included with the monthly bank reconciliation report sent to theFinance Specialist.J.Additional RecordsThe above section described only the basic records required by the District. Anyadditional records may be utilized either for a specific purpose or for better control overActivity Funds in general, provided the additional records are not used to replace therequired records.The basic records described in Section 2 are exclusive of the necessary forms used inaccounting for activity funds. These forms are specified in Section 21 of this manual.7
SECTION 3: BANKING PRACTICES AND PROCEDURESA.Bank Accounts1. Each school shall have only one bank checking account which shall be entitled“(Name of School) School Activity Fund.” This bank account title must be imprintedon all activity fund checks and deposit slips. All monies received will be depositedinto this account and all disbursements will be made by a check drawn on thisaccount. No other checking accounts are permitted if related to the school’s activityfunds.2. Only Activity Fund transactions may be directed through the Activity Fund bankaccount. Transactions controlled by the cafeteria or by outside organizations such asParent Booster Clubs, P.T.A’s. – P.T.O’s., etc., must be handled through separatebank accounts. Club/class, Courtesy, Band activity accounts are not considered asoutside organizations.3. The bank to be utilized for checking account purposes shall be the District’s approveddepository bank, and business conducted with the bank shall not be in violation ofany Board policies, rules or regulations.4. Surplus funds may be invested in CD’s in the name of the school or in the HumbleIndependent School District investment banks and pools. See Section 14.5. Schools and school organizations are prohibited from borrowing funds or enteringinto deferred payment contracts from any and all sources without the written consentof the Superintendent or his representative.B.Check SignaturesEach bank account shall have three authorized check signers, one of which must be theprincipal. Only one office professional shall have signature authority on the bankaccount. The third signature must be that of another campus administrator. These namesshould be kept on file at the bank. All checks and savings withdrawals must be signedwith two manual signatures, preferably consisting of the principal and bookkeeper. In theevent of the absence of the principal or the bookkeeper due to illness or other reason, theremaining authorized two signatures on the check or savings withdrawal shall be deemedacceptable.The principal will be considered responsible for all financial transactions and propercheck signatures, even in the case of his/her unavoidable absence.8
Checks made payable to an authorized check signer must be signed by the other twoauthorized signers. Under no circumstance shall checks be pre signed by both checksigners until the check has been filled out in its entirety.Bank signature cards are processed through the Finance Specialist in the FinanceDepartment. Changes must be approved by the Assistant Superintendent of Financebefore being submitted to the bank. Under no circumstances are requests for signaturechange submitted through the local branch of the bank.C.Bank Reconciliation1.One of the most important aspects of the financial secretary’s / bookkeeper’s jobis the prompt reconciliation of the activity fund bank account. It is the principal’sresponsibility to see that the bookkeeper or secretary has adequate time tocomplete the monthly bank reconciliation on a timely basis.2.Upon receipt of the monthly bank statement, the balance indicated on thestatement shall be reconciled using the EPES software program. The monthlybank reconciliation must be retained with the activity fund records.3.A copy of the monthly reconciliation and account balances should be sent to theFinance Specialist by the 15th of each month. Reports needed in Finance eachmonth:··········Bank Reconciliation ReportGeneral Ledger ReportSequential List of Receipts – by receipt #Sequential List of Checks – by check #List of Outstanding ChecksSequential List of Activity Fund Transfers with an AF 107Copy of Bank StatementSequential List of Receipts by VendorSequential List of Checks by VendorDeposits in Transit Form9
SECTION 4: DEPOSIT OF FUNDSA.General Operating Policies1.It is the responsibility of the Principal in each school to ensure that all cash onhand is deposited in a timely manner.2.Funds for deposit shall be transported by the Districts police officers to theHumble ISD police station for immediate pickup by armored security service fortransport to the bank the same day. Activity fund monies shall not be kept in anyother off campus location.3.Deposits should be made at least twice weekly. If necessary, additional depositpickups can be made upon request by calling the Humble ISD police station.4.All checks to be deposited should be endorsed as follows:FOR DEPOSIT ONLY(Name of School) School Activity FundAccount #B.5.All cash receipts shall be deposited in numerical sequence.6.Re deposits must be deposited separate from other funds collected, i.e., a separatedeposit slip(s) that includes the check endorser’s name(s).7.It is the responsibility of the Principal to be sure all monies on hand at the end ofthe school year, including petty cash, is deposited prior to closing the books forthe year and leaving for the summer.Procedures for the Preparation of Bank Deposits1.Currently the District depository requires that all checks be on a separate depositslip and all currency and coin, not to exceed 10, be on another deposit slip. Bothdeposit slips and the checks are to be placed in the bottom pocket of a plastictamper proof bag, and the currency and coins in the top portion of the bag.Coin deposits totaling more than 10 and the deposit slip must be placed in aseparate tamper proof coin bag.The outside of the plastic bank bag should be filled out completely and legibly.10
2.Bank deposit slips shall be prepared in duplicate for each deposit. The originaldeposit slip will be retained by the bank; the duplicate copy will be retained bythe bookkeeper. The bank will fax a confirmation of each deposit transaction.3.The following information must be indicated on the bank deposit slip:a.b.C.The date and amount of the deposit.A notation of the cash receipt numbers issued in support of thebank deposit; for example, receipt numbers 500 525, inclusive.4.The sum of the amounts of the supporting cash receipts must be in agreement withthe amount of the bank deposit.5.For deposit shortages and overages, refer to Section 5.N of this manual.NSF Procedure1.When you receive notification from the bank or CheckSmart for a returned item,an entry should be made in the EPES/ACT program.2.Set up an Activity Fund Account called “NSF checks” or “Returned Checks”.3.In the EPES/ACT program, enter a negative receipt entry using the check numberas the receipt number and the date it was returned on the bank statement as thedate. You will use the Returned Checks activity fund account number not theoriginal account number. In the description you will put NSF and the last namefrom the check.4.If you are not using CheckSmart you and/or the Sponsor will need to notify thecheck writer and collect the funds. A 30.00 fee shal
This manual is designed to provide a set of standardized accounting guidelines and procedures for the administration of the Humble Independent School District Activity Funds. This manual is to be used in conjunction with the Basic Accounting
