CLINIC SESSION: Managing activities funds

CLINIC SESSION: Managing activities funds

The tricky world of school activity funds

The tricky world of school activity funds
Kentucky School Advocate
March 2015 
 
By Madelynn Coldiron
Staff Writer
 
“They can’t do that” was probably the most frequently repeated phrase during a clinic session on the new state regulation governing school activity funds, outlined in a guide for accounting procedures commonly called “The Redbook.”
 
The Redbook acts as an internal control, Ron Flannery of RJ Flannery LLC, told clinic attendees. “It keeps good people from making bad decisions,” he said. Major revisions to the guide took effect in July 2013 and Flannery said more may be on the way.
 
School boards can’t weaken anything in the regulation, though they can strengthen it, he said. Why is it important to pay attention to activity funds? Flannery noted that $25,000-$100,000 runs through an elementary school’s activity fund account in a year, depending on the size of the school. For middle schools, it’s $75,000-$500,000 and for high schools, $150,000 to $1.4 million.
 
“You would probably be surprised to see how much money goes through these accounts,” he said. “And it’s cash.”
 
When school boards are presented with the district’s tentative budget in May, they should also be getting activity fund budgets from the principal of each school, said Flannery, who provides Redbook training and served on a committee that worked on the last revisions.
 
Boards should ensure that fees and other money collected by the school are used for the stated purpose, he said.
 
“Your job is probably to ensure that if a fundraiser approval form does come to you, that it’s being raised for the right purpose and for something appropriate.” Flannery said.
 
It’s also important to distinguish whether the use of the money is strictly for a school activity or if it relates to the district’s bailiwick. There often is confusion on that point. Money collected to benefit maintenance, repair and operations of a school is considered a district responsibility and must be funneled through a district activity fund, not a school activity fund, Flannery said, recommending that boards annually review fees to see through which fund they are channeled. Further, students cannot raise money for operating expenses and the like.
 
Boards must approve all fees charged to students and collected by schools. “Booster clubs can’t charge fees to students,” he noted. Board members also must sign off on any school-wide fundraisers.
 
Booster club parameters also can be a source of confusion. Boards must approve the establishment of all external booster clubs, which also must be insured, and they can set up additional requirements for these clubs. There also are limits to what roles individual school board members and school employees can play in booster clubs.
 
One important Redbook revision makes it clear that fundraising – whether by the school or an external booster club – must benefit all students in the group, whether, for example, a student sells one candy bar or 100.
 
Flannery recommended board members check to be sure their district has a donations policy.
 
Typical policies state that donations to a school over $1,000 must go through the district, he noted. All donations must be reported to the board by the end of the year.
View text-based website