Guidelines for Student Activity Accounts

The Massachusetts Department of Elementary and Secondary Education: Procedures and Audit Guidelines for Student Activity Funds

A Guide for Educators

Prepared by Donald Franke

History and Social Science Department, Sandwich High School (retired)

When the Massachusetts Department of Elementary and this Secondary Education created procedures and guidelines for auditing activity accounts, they had the following goals in mind:

1. protect student activity account funds from being misused or abused,

2. ensure that student activity account funds are kept separate from funds provided for education in the regular classroom setting,

3. establish standard procedures for handling accounts that allow transparency, protecting both the accounts and the people managing them from manipulation by anyone either inside or outside the school community,

4. create a system for reviewing the status of extracurricular activities within the school,

5. and finally, develop student leadership in the process of running an extracurricular activity.

What follows is an attempt to provide educators with a guide procedures and audit guidelines that quickly orients them to what their duties and responsibilities are. It is highly encouraged that everyone involved with student activity accounts take the time to read the guidelines presented in full at this address: http://www.doe.mass.edu/finance/accounting/AuditGuidelines.pdf.

As they read through each section, educators might be a little bit overwhelmed-it looks as if another layer of bureaucracy is being hoisted onto the shoulders of administrators and extracurricular advisors everywhere in the Commonwealth. Though the first stages of developing district wide procedures for student activity accounts are extensive, once a school department establishes all the required guidelines and procedures, the job of managing them involves less guesswork, fewer grey areas when it comes to handling money, and hence provides a great deal more protection for those with manage the accounts. Since the system requires students to be involved in the accounting process, extracurricular activity advisors will have the opportunity to evolve into an oversight mechanism while students carry a great deal of responsibility for managing an activity’s accounts.

The procedures prepared by the Commonwealth do not completely solve any of the challenges districts have faced managing student activity accounts. At the end of the day, everything hinges on people willing to follow the guidelines, and establish a system of checks and balances within the system to ensure that they are followed. This guide will hopefully make that process easier.

I have provided notes that reflect my experience dealing with the procedures for each section. They do not reflect the opinion of the Massachusetts Department of Elementary and Secondary Education.

Part 1. Student Activity Accounts and School Administration

A. The School Committee.

Using the procedures and audit guidelines for student activity funds established by the Massachusetts Department of Elementary and Secondary Education, the school committee of each school district adopts all procedures for how student activity accounts are managed. These include procedures for creating accounts, who operates the accounts, and how account information and history are reported to the public.

In support of these procedures, the school committee will adopt policies that include but are not limited to:

1. how and when student activities are reviewed and approved of so that they can create a student activity account;

2. how inactive accounts will be dealt with;

3. how accounts that show a deficit will be managed;

4. establish procedures for the collecting and dispersing of all monies associated with a student activity account;

5. establish procedures for depositing cash gifts in the student activity accounts;

6. affirm that account funds can only be used by the student activity to handle its expenses;

7. affirm that these expenses can range from supplies to providing stipends all or in part for extracurricular activity advisors;

8. make a distinction between activities that are functioning as a class, and those that might be functioning as an extracurricular activity but may have some opportunity provided by a school schedule to meet during the day;

9. establishing when credit cards can be used for paying some activity expenses;

10. affirming the checks authorized by the school shall be requested to pay for as many student activity expenses as possible, and that these checks cannot be made out to “cash”;

11. establish a process for submitting for a check to pay for expense that includes invoices or purchase orders with supporting documentation;

12. establish how donations from outside sorters sources to support a particular extracurricular activity shall be approved of and handled;

13. establish guidelines for student activity advisors that determine how funds and feasibly collected from students for any activity, and establishes estimates for expenses and reconciliation of expenses for any school trip the cost of each intervals individual student more than $50 to participate in;

14. establish guidelines for what role student treasure of an activity can play in the process of handling student activity funds.

Notes: In many respects, it's all about the forms. Establishing forms for things like deposits and withdrawals, applications for the creation of extracurricular activities, cost estimates and reconciliation reports for field trips, and forms for accepting donations can all be used to express what has to happen in a step-by-step manner, answering a lot of questions anyone in the school community might have.

Allowing extracurricular activities to take donations for their support their programs is something that is relatively new to public schools, and my raise a whole interesting set of questions on its own merits. Clear procedures for allowing this to take place has the potential to answer many questions people might have about issues this might create.

Also, any time you have students involve a process that involves funds, it is wise to make sure that the lines of responsibility are clearly drawn so everyone in the school community understands what if faculty advisors responsibilities are, and what a student treasurers responsibilities can be. Critical to this will be a an established procedure for collecting fees using receipts and receipt books authorized by the school, and the role played by students in both depositing funds and in dispersing checks to vendors.

As with all of these, transparency is at the core of everything.

Finally, Mass ESE as suggested that it is "good practice for school committee for approval activity annually. This should be done before the start of the school year unless activities are created during the year. It will include specific funding resources and the objectives and mission for each activity." Since this is only a suggestion, it does provide a school committee the chance of establishing certain options. Activities are new should probably not be approved of every year. Activities that establish a track record might, for approval every three years, or the discretion of the school committee should certain trends in activity membership or problems with deficit issues for their accounts need to be addressed.

B. The School Principal.

1. The principal is responsible for the administration of all student activity accounts associated with their school. At the heart of the principal responsibilities as a quarterly reconciliation of all accounts to ensure that no account is running any deficit.

2. In support of this critical activity, principals will ensure the deposits are made on a weekly basis into student activity accounts. Principals will also ensure that any money and over to any one responsible for handling deposits, is kept in a safe and secure place until the deposit is made.

3. Finally, the principal will ensure the activity advises and students follow all the rules established by the school committee for the administration of funds.

Notes: It would be wise for principles to meet every year with new advisors to help them understand their responsibilities concerning student activity accounts. Such a meeting would be open to veteran advisers as well perhaps might need a refresher course on what the responsibilities are. Having veterans meet once every two or three years to go over the rules and responsibilities is probably wise given how the simple process of fatigue when it comes to handling forms and reports required by the administration can sometimes lead to mistakes or oversights that are usually unintentional.

The Principal should meet with all extracurricular activity advisors if there are any changes in procedures and audit guidelines provided either by Mass DESE or the school committee on the advice of either the superintendent of schools, the principal, or the general public.

It is recommended that principals, the school committee, the superintendent of schools are on the same page when it comes to how account deficit. This will be of great concern to extracurricular advisors whose accounts might run temporary deficits of one to possibly three weeks in anticipation of certain funds being deposited for activities. The general principal is that all activity funds will be in place in an4 account before funds are disbursed. There may be special circumstances where this is not the case, and the principal want to know what they are tell extracurricular activity advisers about this.

Part 2. Student Activity Accounts and Extracurricular Activities: The Nuts and Bolts of Maintaining Student Activity Accounts.

1. Each activity will have a student treasurer who helps the faculty advisor manage the students activity account. The Student treasurer will sign off on all deposit and withdrawals involving the student activity account, as well as perform the duties listed below at the faculty advisor’s discretion. The extracurricular advisor will ensure that any student treasurer is capable of handling the duties that are listed below;

2. for all deposits and withdrawals from any student activity account the extracurricular will advisable use a standard deposit and withdrawal slip provided by the school administration;

3. the student treasurer under the supervision of the faculty advisor maintain a ledger showing deposits and withdrawals from the student activity account as well as the current balance. This ledger is subject to review by the school admission ministration every quarter of the school year;

4. the student treasurer under the supervision of the faculty advisor will maintain a receipt record using numbered receipts for all fees paid by students for any activities involving the extracurricular activity. Receipts must be provided to all students who provide funds or fees for any extracurricular activity. The total value of all funds or fees shown on each receipt record must equal the total deposit for that activity;

5. any funds in fees collected for a student activity account return over to the school administration within 24 hours. By either the faculty advisor or the student treasurer, whichever the school administration deems appropriate;

6. any funds or fees collected first student activity account will be stored on school grounds until they are handed over to the school administration deposit. These funds are fees must be stored in a safe and secure place until this happens. Under no circumstances can any funds or fees be taken home by either a faculty advisor or a student treasurer (see note below);

7. for any activity involving student travel, faculty advisors must complete the schools travel authorization forms. They must also have each student complete permission slips that are appropriate for the activity;

8. if student travel will cost a student more than $50, the faculty advisor must submit a report on the estimated cost of the activity broken down by the cost for each vendor involved with the activity. When the activity is concluded the faculty advisor must submit a reconciliation report that shows

a. the dates of the trip,

b. what fees students provided in advance of the trip,

c. a complete listing of itemized expenditures paid for the trip including documents that are evidence of payment to vendors for their services,

d. totals of cash or checks expended,

e. notation totals a credit card or open account expenses at applicable,

f. the amount returned a student activities account if investors receive exceed documented expenditures,

g. the amount of additional reimbursement request travel expenses incurred exceed travel advances received,

h. the signature of the person completing the final accountability statement and the signature of the Principal or their designee to indicate that there has been an acceptable final accountability for the trip.

9. An extracurricular activity can engage in fund raising activities provided they follow school committee policies, provided the activities of the students to supplement funds required to successfully conduct the student activity. Any funds raised will be submitted using the deposit process listed above;

10. An extracurricular activity may accept gifts and donations that help support activities operations provided they follow school committee’s policies for expenditures student activity account.

Notes: Since faculty advisors are not allowed to take any funds home, make sure that all funds are collected and handed over to the administration during the school week. If students cannot provide funds in time for the trip due to certain financial constraints, faculty advisors have to make sure that a system is set up to ensure the students do pay the fee, or are provided a scholarship that allows them to participate in the activity.

One critical aspect of paying vendors involve securing a check in time to meet any deadline for payment established by a vendor. The extracurricular advisor must make sure that they understand what the schedule is for securing a check through the system established by the committee so that they know when to submit a request for a check. This is particularly critical for checks that are required to pay vendors involved in any type of student travel. Hotels in particular have deadlines for payments of deposits and balances due that cannot be changed.

Receipts for fees or funds must be collected even for high-volume activities like school dances or other fundraisers that may involve a large number of students.

Finally, there are some extracurricular activities involving field trips that may come up on short notice. The extracurricular advisor, the principal and the superintendent of schools must establish away were these tips can be paid for if a check from the school department cannot be secured by the usual procedures.