Red Book Training - Northern Kentucky Cooperative for Educational

Report
ACCOUNTING PROCEDURES FOR
KENTUCKY SCHOOL ACTIVITY
FUNDS “REDBOOK”
Curtis A. Hall
March 21, 2013
Disclaimer
• Incorporated by Reference into 702 KAR 3:130
• Information from this presentation is taken from the
Kentucky Department of Education version of
“Accounting Procedures for Kentucky School Activity
Funds (“Redbook”)
• Proposed Effective Date of approval; July 1, 2013
• State Board has approved the changes submitted after
public comment period; General Assembly has not
given final approval.
• Content presented is meant to be an overview of
Revised “Redbook” and does not replace any concept
or requirement of document.
Welcome
Pre-Assessment
New
Environment
of
Accountability
Today’s Overview
1
• Familiarize yourself with the
enhanced requirements of
the Redbook
2
• Begin to consider necessary
changes at the school and
district level
3
• Begin to develop a plan for
implementation
NEW
REQUIREMENTS
Receipts
• School Treasurer shall never collect
money directly from a student or parent.
• The school treasurer shall not issue a
receipt and make the deposits of the
funds
• Students third grade and above must sign
the multiple Receipt forms (two part
carbon recommended).
• Deposit slips shall not the receipt
numbers in the deposit.
• One interest bearing account at board
approved bank. (Exception: Charitable
gaming – Separate bank account
required)
Fundraising
• Fundraising must benefit students; Payroll,
operational costs prohibited.
• Proceeds must benefit the entire group; No
fundraising tracked by individual students.
• Sponsor complete Fundraiser Worksheet
form and submit to principal one week after
conclusion of fundraising event.
Ticket Sales
• School Treasurer shall not sell tickets.
• Two people (ticket seller, ticket taker) are
required to work the gates. Seller give the entire
ticket to the customer as fee is collected.
• Ticket taker tears the ticket in half, gives half of
ticket to customer and retains half.
• Person in charge of ticket sales, ticket taker, and
school treasurer sign the Requisition and Report
of Ticket Sales form (3 signatures)
Charitable Gaming
• A cake walk is now considered charitable
gaming.
• Licensing Requirements KRS 238.535 and
applications are available at the Department of
Charitable Gaming website.
• One checking account exclusive to gaming
receipts
• Applies to schools and external support/booster
clubs.
Donations
• The Donation Acceptance Form
(new form) shall be completed
stating the purpose of and any
restrictions on the funds
received.
• Equipment or other property
donations will remain at the
school and be included on
school inventory records and
becomes property of the local
board.
• Cash donations shall be
maintained in a separate activity
account and expended as the
indicated by the donor
Expenditures
•
•
•
•
Use of Pre-numbered checks required
No Signature stamps
School Treasurer shall be bonded
School exempt from the payment of sales tax in
Kentucky; employees cannot be reimbursed for
payment of sales tax
• Purchase Orders required to initiate purchase
• Standard invoice must have confirmation
signature of the person receiving the goods.
Expenditures Continued
• School treasurer matches purchase order,
shipping document, and invoice.
• School treasurer shall post to the
disbursement to the Principal’s Combined
Activity Fund Ledger.
• Proper Segregation of duties (Appendix A)
Payment for Services
• Determination of worker status: Employees of
the District or as Independent Contractor
• IRS provides guidance
• Twenty Factors (Pages 12-13)
• Payment for services shall be made by school
check with an accompanying invoice.
• Federal Employer Indentification numbeer
(FEIN) or social security number submitted to
board office; Issuing 1099; Need for w-9 on file
prior to payment
Credit Cards
• Credit Cards may be used only if allowed by
board policy.
• No employee personal purchases using the
school credit cards.
• Follow Board policies and procedures!!!
Allowable and Disallowed
Expenditures
• A guideline appearing on page 16-17 in not
all inclusive but serves as examples.
Inactive Account
Balances
• Process of closing inactive student
organizations, clubs or activity accounts
included on page 17-18
Electronic Receipts
and Payments
• See page 18 for
guidelines
• Establish detailed
policies and procedures
Reporting
Requirements
• Account Balances
– Prior year – July 1
– Negative Balances – Individual accounts and whole fund
cannot end with negative balance.
– If negative after considering payables and receiveables,
written request to district finance officer to cover deficit
by transfer general fund (district) submitted by principal
with signature.
Reporting Continued
• Bank Statement
Reconciliation (monthly
and Annual Financial
Report)
• Monthly Reports
submitted to District
Finance Officer (See
page 20)
• Annual Audit by
Certified Public
Accountant
• Maintain records three
years.
External Support/Booster
Organizations (Pages 21-24; All new)
• Must use external bank
account and obtain
own FEIN number.
• Tax Exempt if obtains
own tax exempt
certificate
• Written by-laws with
officers and terms of
office
• Must submit FEIN
number, names of
officers to the principal at
the beginning of school
year or within 30 days of
the first transaction of
the organization
• Local board members nor
district employees shall
serve as treasurer or
other officer with check
signing authority
•
External Support
Organizations/Booster Clubs
Booster clubs shallContinued
not
• Treasurers of external
enhance or pay for the
salaries or stipends for
any district employee
• Disassociation
permissible (see #16)
organizations should be
bonded.
• Separate insurance for
general liability
• Proof of insurance
coverage must be
submitted prior to
commencing any
fundraising activities
External Support/Booster
Organizations Continued
• Reporting requirements
(see page 23)
– Annual Budget
Worksheet required
– Annual Financial Report
to principal by July 15
• Benefits provided by
boosters are viewed
under Title IX as being
provided by the school
and the school’s
principal is responsible
for ensuring equity.
School Banks
(Pages 24-25)
• A financial institution
that participates in
school banking shall be
licensed to conduct
banking in the
Commonwealth of
Kentucky.
• All School Banks are to
be created/operated
under the FEIN of the
supporting bank.
• Any dividends/interest
for school bank
accounts shall be
subject to IRS Form
1099 reporting
requirements.
• Written partnership
agreement with local
school board
• Written parental
permission required
New Forms
(compared to 2008 Redbook)
• F-SA-14 Student
Refund/Disbursement
Form (Page 48)
• F-SA-18 Donation
Acceptance Form (Page
52)
Resources
• http://education.ky.gov/pages/search.aspx?s
=EDUCATION&k=Redbook
• This slide deck and related resources:
http://www.curtisahall.net
QUESTIONS?

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