KDE issues clarifications on update to 2013 Redbook guidelines on management of spending school activity funds

From the Kentucky Department of Education

In the agency’s Fast Five on Friday (Sept. 13) email to many local and state leaders, Education Commissioner Terry Holliday addressed two issues regarding this year’s Redbook update that have caused some confusion relating to the restriction on expenditures of school activity funds.

Those issues are as follows:

1)         School activity funds may not be spent on operation costs of the school or school district, including maintenance of any kind (facilities, buses, etc.), professional development, or general instructional supplies.

2)         The school activity fund bank account contains funds that are not required to be deposited at the school level.

In many cases, the budgetary issues created by restrictions on school activity funds can be resolved by depositing funds in the appropriate place.  Some funds, such as gate receipts or picture sales, may be deposited at either the school level or the district level.  Since the Redbook applies only to school activity funds, if the district chooses to deposit revenues into the school activity fund bank account instead of the district activity fund when possible, the district is limiting the use of those funds.  Depositing funds in the district activity fund when possible will allow the most flexibility in the expenditure of those funds.

Another reason to account for district activity funds at the district level instead of depositing them in the school activity fund bank account is to accurately report per-pupil expenditures.  Expenditures made from the school activity fund bank account are not included in the school, district, or state per-pupil expenditure figures published annually.  By understating the per-pupil amounts, it appears that less is being spent on our students than is actually occurring.

See the attachment below for more information regarding these two issues.  Questions regarding the Redbook may be directed to Susan Barkley at Susan.Barkley@education.ky.gov or at (502) 564-3930, extension 4437.

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