INTERNAL ACCOUNTS

MANUAL

for

LEON COUNTY SCHOOLS

INTRODUCTION

The procedures and guidelines set forth in this manual were developed in compliance with existing Florida Statutes, Florida State Board of Education Administrative Rules and Policies and Administrative Regulations - School District of Leon County Florida. These procedures are to be used by the principals and bookkeepers in establishing and maintaining internal controls over internal accounts.

Chapter One of this manual highlights the existing policies governing the administration of Internal Accounts. Chapter Two contains the operating procedures that are be followed in the financial administration of Internal Accounts and the necessary internal control requirements. Chapter Three includes samples of forms used in administering internal accounts. Appendix A is a copy of Chapter Seven -School Internal Funds, from the Financial and Program Cost Accounting and Reporting for Florida Schools (1997 version) issued by the Department of Education (usually referred to as the “Red Book”). It is intended to be the primary source of instruction for financial administration of internal accounts. Periodically, this manual is updated by the State Board of Education. Appendix B contains a sample of forms referred to in this manual. A set of originals is provided with this manual and may be used as a guide in preparing forms exclusively for your school.

CHAPTER ONE

(Statutes, Rules and Policies)

1.0 FLORIDA STATUTES

1.0.1 SECTION 237.02(4) Internal Funds

(a) The school board shall be responsible for the administration and control of all local school funds derived by any public school from all activities or sources, and shall prescribe the principles and procedures to be followed in administering these funds consistent with regulations adopted by the State Board of Education.

(b) The State Board of Education shall adopt regulations governing the procedures for the recording of the receipts, expenditures, deposits, and disbursements of internal funds.

1.1 FLORIDA STATE BOARD OF EDUCATION ADMINISTRATIVE RULES

1.1.1 RULE 6A-1.001 District Financial Records

The superintendent of schools of each school district shall be responsible for keeping adequate records and accounts of all financial transactions in the manner prescribed by the Commissioner in the publication titled, “Financial and Program Cost Accounting and Reporting for Florida Schools, 1997,” which is hereby incorporated by this rule and made a part of the rules of the State Board. Copies of the manual may be obtained from the Educational Products Distribution Section, Department of Education, The Florida Education Center, Tallahassee, Florida, 32399, at a cost to be established by the Commissioner but which shall not exceed actual costs.

1.1.2 RULE 6A-1.085 Basic Principles of Internal Fund Accounting

(1) Monies collected and expended within a school shall be used for financing the normal program of school activities not otherwise financed, for providing necessary and proper services and materials for school activities and for other purposes consistent with the school program as established and approved by the school board. Such funds are the responsibility of the school board and it shall be the duty of the school board to see that they are properly accounted for through use of generally recognized accounting procedures and effectively administered through adherence to internal funds policies of the school board and applicable Florida Statutes and provisions of “Financial and Program Cost Accounting and Reporting for Florida Schools” as incorporated by reference in Rule 6A-1.001, FAC. Funds collected in connection with summer program activities, funds derived from school athletic events, gifts, and contributions made by band or athletic booster clubs, civic organizations, parent-teacher organizations, and commercial agencies, and all other similar monies, properties, or benefits shall be included in internal funds of the school based upon policies adopted by school districts or as provided in “Financial and Program Cost Accounting and Reporting for Florida Schools” (the “Red Book”).

(2) When a demand deposit balance in the fund exceeds the FDIC insurance protection, additional collateral shall be provided as required by Florida Statutes.

(3) Internal funds which are temporarily idle shall, as required by law, be invested pursuant to policies of the school board using any medium of investment legal for public funds, and may not exceed insurance protection or other legal collateral limits provided for such public funds.

1.1.3 RULE 6A-1.087 School Board Responsible for Internal Funds

The school board shall be responsible for the administration and control of the internal funds of the district school system, and in connection therewith shall:

(1) Adopt written policies governing the receipt and disbursement of all internal funds and for the accounting for property pursuant to Chapters 230, 235, and 274, Florida Statutes.

(2) Provide for an annual audit of internal funds by a person certified by the state board of accountancy as a certified public accountant or a public accountant, or qualified internal auditing staff employed by the board. The auditor shall submit a signed, written report to the school board covering internal funds which shall include any notations of any failure to comply with requirements of Florida Statutes, State Board of Education regulations and policies of the school board, and commentary as to financial management and irregularities. Such audit shall be presented to the school board while in session and filed as a part of the public record.

1.1.4 RULE 6A-1.091 Purchases from Internal Funds

Pursuant to section 237.02(1)(2)(4), Florida Statutes, and regulations of the State Board of Education the requirements pertaining to purchases and securing bids on purchases made from public tax funds by the school board shall be observed when purchases are made from internal funds, except that approval by school board of internal account vouchers for payment is not required unless otherwise specifically provided for by school board regulation. The school board may by regulation place more strict requirements pertaining to purchases from internal funds than is required by the general or any special law relating to purchases from tax funds. The board may delegate by regulation to such individuals as it may deem appropriate the making of such purchases from internal funds and the securing of quotations and awarding of contracts. Insofar as possible, purchases of the same or a similar nature to be used in more than one school should be combined and purchased only after approval by the school board. Purchases made from funds handled in trust for individuals such as purchases of class jewelry, school annuals, cards and invitations, insignia, caps and gowns, etc., shall be exempt from the foregoing requirements relative to purchases; however, all such funds shall be deposited in the internal funds and shall be subject to the regular individual school audit.

1.2 POLICIES AND ADMINISTRATIVE REGULATIONS SCHOOL DISTRICT

OF LEON COUNTY FLORIDA

1.2.1 POLICY 6.03 Internal Accounts.

(1) Internal Funds. Internal funds shall be composed of monies collected and expended within a school other than elementary and secondary lunchroom monies. Funds generated solely by parent-teacher organizations, booster organizations, or faculty groups may remain separate from internal funds; however, contributions from such organizations shall become internal funds. Funds voluntarily placed in the internal accounts shall be subject to all internal account policies and procedures.

(2) Administrative Responsibility. The principal shall be responsible for internal accounting in the school and all internal accounts shall be audited annually. The school board shall provide for the bonding of school employees who handle school monies.

(3) Fund Use. Funds derived from the student body as a whole shall be expended to benefit the student body as a whole rather than a specific group of students or an organization. Funds collected shall, insofar as is practicable, be spent to benefit those students currently in school from whom the funds were collected and for the purpose collected.

(4) Fund-Raising Projects. All fund-raising projects and activities by the school, or by any group within, or in the name of the school, shall not be in conflict with the overall instructional program. Such projects shall have the prior approval of the principal. Accountability must be provided for all items purchased for resale in such fund-raising projects. Raffles or other games of chance involving prizes of significant value shall not be authorized.

(5) Cooperative Agreements. Prior to a cooperative activity involving an external organization, there shall be written agreement between the school and the outside organization. This agreement should include the responsibilities to be shared in the activity and the financial obligations of both parties.

(6) Future Liabilities. The School Board of Leon County is the only authority which can obligate public funds beyond a fiscal year. No principal, or any other employee, is authorized to sign promissory notes, lease-purchase agreements, or any contracts containing commitments for payments in future school years.

(7) Safekeeping of Monies. All monies received shall be recorded, deposited and reconciled to the proper accounts.

(8) Commercial Competition. Student body functions shall be conducted in such a manner so as to offer a minimum of competition to commercial firms, while still benefiting the student body.

(8) Expenditures. All expenditures from internal funds shall be made by check, except that provision may be made by express approval of the prinicpal for the use of a small petty cash fund when circumstances warrant. Invoices or other approved substantiating evidence shall be required for all payments from internal funds, including payments from petty cash. All checks are to be signed by two (2) persons, the principal and the designee.

(10) Purchases. Purchases from internal accounts which do not exceed $1,500 are not required to be processed through the Purchasing Department but shall be made on the basis of the best offer from several suppliers. Purchases that exceed $1,500 shall be submitted to the Purchasing Department for full processing. Purchases involving alterations of permanent structures or sites, safety, or significant usage of utilities, shall be referred to the appropriate school district administrator for approval.

(11) Administrative Office. No item of equipment or furniture, such as draperies, sofas, desks, rugs, chairs or ornamental items may be purchased for the school's administrative offices from general student funds unless prior written approval has been received from the superintendent or his designated representative.

(12) Property. All purchases from internal funds, other than tokens of appreciation, shall remain the property of the Leon County School Board.

(13) Credit Cards. No school shall enter into a contractual arrangement for credit cards.

(14) Employee Pay. Direct salary payments and non-recurring "wages" shall not be paid to employees out of internal funds. All such payments must be processed through the District Payroll Department utilizing the reimbursement procedures as provided in the internal accounts manual.

(15) Loans. Internal funds shall not be used to grant personal loans to individuals.

(16) Tickets. Pre-numbered tickets shall be used at school functions where an admission price is charged and all tickets acquired must be accounted for by perpetual inventory records.

(17) Faculty Funds. Faculty funds or staff funds shall be accumulated by activities that exclude student participation. Such funds shall not be over-expended except by written approval of the superintendent or his designated representative.

(18) Faculty Expenses. General student funds shall not be used to pay expenses of faculty members to attend professional meetings or conventions.

(19) Travel. Travel expenditures shall be governed by the following principles:

(a) avoidance of unnecessary travel;

(b) joint travel in a single vehicle whenever feasible;

(c) limitation of expenditures for reimbursements from all sources to the maximum amounts currently authorized by the Board.

Cash advance for travel shall not be encouraged. In those cases in which cash advances are necessary, all receipts and excess advance shall be remitted to the bookkeeper within three days of return to school.

(20) Gifts. School organizations may purchase gifts for faculty sponsors, principals, or other staff members providing at least one-half of the cost of such gifts is raised by current contributions from the organization's members. General funds may be used to purchase gifts for outstanding service of persons not employed by the Board. All gifts shall be limited to one hundred dollars ($100) per person each year.

(21) Transfers of Funds. Transfer of funds from one student activity account to another student activity account must be accompanied by written authorization from the officer releasing the funds.

(22) Inactive Accounts. Any balance on deposit by an inactive class, club, or organization, that is not committed to a specific project, shall be transferred to the general internal fund when inactive status has been clearly determined by the principal.

(23) Semi-annual Financial Report. The principal shall file a semi-annual and annual financial report with the internal accounts auditor by specified deadlines following the last days of December and June.

(24) Accounting Procedures. The methods, procedures, and guidelines for internal accounting shall be outlined in manuals issued by the Superintendent or designee.

(25) Audit Response. Within twenty (20) workdays after receipt of the annual internal accounts audit, the principal shall submit a written reply to the internal accounts auditor. The reply shall give explanations and/or actions taken, or to be taken, for any deficiencies cited in the audit.

Statutory Authority:s. 230.22(20), F.S. Law Implemented s. 37.02(4), 236.02(1), F.S.; Rules 6A-1.085, 6A-1.087, and 6A-1.091, FAC.

1.2.2 POLICY 6.10 Parent/Booster/Foundation Organizations, (EXCERPTS)

(1) Definitions

(a) A direct-support organization is an organization that meets the statutory definition in Section 237.40(1)(a), Florida Statutes, and is excluded from this section.

(b) School-sponsored activities are defined to be those activities utilizing students directly in the solicitation of funds.

(2) Fund Raising.

(a) Contributions and collections derived from school-sponsored fund-raising activities (those involving the use of students for the fund-raising activities) conducted by parent-teacher organizations, booster clubs and other related organizations shall be deposited in school internal funds.

(b) Such activities requiring funds to be deposited in internal funds must receive prior approval of the principal. Any allocation of gross profits minus expenses shall be evidenced by prior written agreement.

General Authority: s. 230.22, F.S. Law implemented: s. 237.02(4), 236.02(1), F.S.; Rules 6A-1.085, 6A-1.087, and 6A-1.091.

CHAPTER TWO

(Internal Controls and Internal Accounts Procedures)

2.0 ACCOUNTING SYSTEM

In establishing a system of accounting/bookkeeping for the administration of internal accounts, each school bookkeeper should select an accounting system, manual or automated, which will enable them to effectively and efficiently handle their accounting needs. There are currently several accounting software packages available which are designed specifically for handling internal accounts for schools in the State of Florida. Information regarding these systems is available by contacting Internal Auditing.

Once a system is selected, the bookkeeper/finance manager is responsible for obtaining the necessary training to become proficient in the use of that system.

2.1 CHART OF ACCOUNTS

Each school should design its internal accounts within the framework of the following control accounts as designated in SECTION IV of Chapter Seven - School Internal Funds of the Financial and Program Cost Accounting and Reporting for Florida Schools included in Appendix A of this manual:

CHART OF ACCOUNTS

SCHOOL INTERNAL FUNDS

Control Account Student Activity

Number /Project

00000 Cash

10000 Athletics

20000 Music

30000 Classes

40000 Clubs

50000 Departments

60000 Trust

70000 General

2.2 CASH RECEIPTS

2.2.1 Checking Account

A checking account will be established at a qualified school depository. Guidance in selecting an approved financial institution can be obtained from management staff within the district’s Finance Department. Interest-bearing checking accounts with no monthly service charges are available at most banks.

Only one checking account is to be maintained by each school. All receipts and disbursements are to be handled through this account. The total amount on deposit should not exceed the federally insured maximum. Two signatures are required to be affixed to all checks drawn from internal accounts. It is required that at least three responsible persons in a school have signature authorization over the checking account, one of which must be the principal. This will facilitate the conduct of financial transactions in the event one person who is authorized to sign checks is not available.

When a person who is authorized to sign checks leaves the employ of the school, the bookkeeper/finance manager is to notify the bank or savings and loan association in writing that the person leaving is no longer authorized to sign checks. The person leaving should not be permitted to sign checks for a period prior to the termination date sufficient to allow all checks bearing his/her signature to clear. A new signature card needs to be established for the new authorized signer.

In accordance with Florida Statutes any excess funds not required for daily operations should be invested at an optimum rate.

All monies deposited in a savings account are to be transferred from the checking account. Receipts are not to be deposited directly to the savings account. All withdrawals from savings are to be deposited in the checking account. Payments are not to be made directly from savings. Two signatures are required for withdrawals from savings accounts.

2.2.2 Cash Collections

All monies generated by school activities must be properly safeguarded and the person having custody of the money is to be held fully accountable for it.

The initial collection of monies should not be the responsibility of the school's bookkeeper. It is preferable that a teacher or other school employee receive money, document the transaction with a receipt and turn in the day's collection to the bookkeeper for safekeeping and deposit.

Monies collected from school activities are to be turned in intact to the school bookkeeper on the day it is collected or no later than the first school day following the collection. Employee's personal checks are not to be substituted for cash collected from students.

Persons responsible for collecting money must document the receipt in one of the following manners:

Verify mathematical accuracy of the Report of Monies Collected.

Verify cash count and agree with Report of Monies Collected.

When donations are received, a signed letter or official minutes should be secured from the individual or organization to establish the purpose of the funds, even if the funds are to be used at the principal's discretion.

Report(s) of Monies Collected will be filed in receipt number order per deposit slip (each school deposit slip attached to appropriate Report(s) of Monies Collected).

2.2.4 Deposits of Receipts

Deposits should be made daily. If, however, the cash on hand is not of an amount to warrant deposit, it should be placed in the school safe. At a minimum, it is recommended that cash receipts be deposited within three days of receipt. A deposit must be made on the last day of the week so that no money is kept in the school over the weekend and on the last day of the month to facilitate the closing of the books.

Each day's receipts are to be deposited intact, that is in the same form as they were collected. The total day's receipts must equal the amount reflected on the deposit slip for the day. Deposit slips are to be prepared in duplicate. One copy is for the bank (or savings and loan association) and the other to be validated by the bank (or savings and loan association) at the time of the deposit for school files.

2.2.5 Returned Checks

Those checks deposited by the school that are returned for non-sufficient funds (NSF) or for other reasons are to be handled as follows:

1. When the bookkeeper receives a returned check from the bank, credit the checking account and debit the activity account for the amount of the returned check.

2. Contact the person from whom the check was received and inform him or her that the check has been returned and for what reason. Every effort must be exerted to obtain payment of NSF checks.

3. If the check maker so desires, re-deposit the check. At this time, debit the checking account and credit the activity account. Prepare a separate deposit slip and mark prominently on the face of the deposit slip "RE-DEPOSIT." Do not include redeposits in the day's receipts totals.

4. The principal is responsible for seeking reimbursement for any unpaid check returned by the bank. A check can be declared uncollectible and written off the books only by action of the school board or designated officer. This action will be taken only after every legal and reasonable effort at collection by the principal has been exhausted. The school principal may require payment for school obligations in cash, money order, or other form of guaranteed payment if it is deemed necessary.

5. Worthless check procedure. See Appendix B for sample form to be used to collect funds for NSF check.

NOTE: All checks not collected by June 30th, must be written off as outlined above before closing the books. Although a check has been written-off, efforts should continue to be made for a sufficient period of time to collect the amount owed.

2.2.6 Sales Reports

An analysis of each item sold by the school must take place yearly. If the school finds that it is difficult to maintain control on a certain item, the teacher/sponsor should complete the sales report as often as necessary. When the price of an item changes, a new beginning inventory and sales report must be completed.

2.2.7 Vending Machine Sales

The commissions from vending machines that have student access are to be accounted for in the school’s internal accounts. Generally, the commissions are to be expended for the student body as a whole. The commissions from the machines located in the teachers' lounge may be used for the benefit of the teachers. No receipts need to be issued for commissions on vending machine sales. Commissions from vending machine sales should be listed on the Report of Monies Collected form.

2.3 CASH DISBURSEMENTS

The school is not responsible for an expenditure made by a student, parent or employee who has not first received an approval from the principal.

General guidelines concerning expenditures are explicitly provided in Board policies. Prohibited practices include:

1. Issuing a check without first securing an itemized invoice or receipt (except for advances for field trips or travel).

2. Using a statement as the basis for payment.

3. Signing a blank check or a check made out to "cash."

4. Using a personal check copy as support when the check has not been canceled.

If it is necessary to issue a stop payment on a check issued out of internal funds, the stop payment should be completed and issued promptly using standard banking practices for the bank holding the school’s accounts. It is suggested that any required forms for this process be obtained from your bank.

2.3.1 Purchase Orders

Tangible items of significant value, which the school should receive and verify prior to payment of vendor, should be ordered by purchase order. The purchase order system follows:

· Vendor

· Activity to be charged for goods purchased

· Amount of purchase

2.3.2 Check Requisitions

The check requisition form is to be used to initiate every expenditure from internal funds even when a purchase order is not issued. The person initiating the request for payment should prepare the form and present it to the bookkeeper for processing. The check requisition must be sufficiently documented before the check is drawn by attaching the following:

1. Invoice from vendor indicating:

a. Date of purchase or service

b. Unit price if applicable

c. Detail of purchase or service

d. Total amount due

2. Signature of person certifying receipt of goods/service.

Disbursement support records should be filed in check number order.

2.3.3 Student Refunds

Whenever multiple refunds are to be made, it is permissible to prepare one check payable to the person responsible for the activity for which the refund is approved. This person should cash the check and make the refunds in cash.

Each person's signature and amount of refund due is to be listed and attached to the check requisition as sufficient documentation. All other refunds are to be paid with a check made payable to the individual. An explanation on the face of the check requisition form and the receipt number or a copy of the receipt is sufficient documentation. A notation should also be made on teacher’s copy of the student’s receipt (yellow copy).

2.3.4 Petty Cash

It is sometimes necessary to establish petty cash funds for small purchases from internal funds. The use of such funds should be limited to situations where there is a consistent volume of small payments. Each petty cash fund must be approved by the principal.

Document the establishment of the petty cash with a check requisition. Create an account "Advance for Petty Cash" in the cash category (0000 series of the chart of accounts) by issuing a check to the individual responsible for the fund. The petty cash activity account is to record only the initial advance; advances to increase the fund, if any; return of advances to decrease or to close the account.

Encumber the amount of petty cash from the related activity account. The activity account balance should never be allowed to fall below the amount of the petty cash fund. When the fund is near depletion, the holder should prepare a check requisition and attach supporting documents for expenditures and present to the bookkeeper for replenishment. The reimbursement is to be charged to the activity account liable for the expenditures. Do not enter the transaction in the petty cash account.

All petty cash funds must be returned and cleared out at the end of the school year. The holder is to turn in the amount of the fund in cash and/or paid receipts. Deposit the cash returned into the petty cash internal account using a separate Receipt of Monies Collected (ROMC) to document the transaction.

2.3.5 Change Funds

Change funds are funds established so that operating activities will be able to make change for their customers. The change fund should not be confused with a petty cash fund. Petty purchases cannot be made from a change fund.

Create the change fund by issuing a check to the person responsible for the activity. Establish an account "Change Fund" in the cash category, and charge the initial issuance to this account. Document the transaction with a check requisition.

The change fund is to be returned in full when the activity for which the fund was created is over and always at the end of the school year. Deposit the return in the internal account and prepare a separate Receipt of Monies Collected form prominently marked "RETURN OF CHANGE FUND."

2.3.6 Sales Tax

For any questions regarding sales tax, please contact the Department of Revenue at 488-1234 or 488-6800.

All items sold by a public school or a school organization are taxable unless specifically exempt. Some exempt items are:

Admissions to an event if all talent is drawn from the students or school personnel.

Sale of schoolbooks, including textbooks, workbooks, yearbooks, magazines, directories, bulletins, papers, and similar publications to the students.

Subscriptions to magazines entered as second class mail sold for an annual or longer period of time.

Groceries, including the following, are exempt: bakery products, berries, bread, butter, canned food, cereal and cereal products, cocoa, coffee, condiments, desserts, eggs, fish and fish products, flour, fruit juices, fruit, grits, jams, jellies, meal, meat, melons, milk, nuts, oleomargarine, poultry, relishes, salt, seafood, etc. Such decorative, reusable containers as a cheese crock are taxable.

Band uniforms, athletic uniforms and equipment, caps and gowns and other items of clothing bought and paid for by a school with ownership and title remaining in the school are exempt. (The sale, lease or rental of these items is taxable.)

Organizations whose accounting records are outside the school internal accounts may not use district or school sales tax exemption numbers. Generally, PTO's/PTA's have their own sales tax exemption number. Schools, grades K-12, and their respective PTA's have been granted the privilege of paying tax to their suppliers on school materials and supplies that they purchase for resale to students, and the tax is passed on to the student as part of the selling price. School organizations which sell candy to raise money for their various activities should pay tax to their suppliers on the cost of the candy. The distinct advantages of this method are: (1) sales tax applied to the wholesale price results in lesser tax and (2) it relieves the school of the obligation to report sales tax to the State for this fund-raiser. For additional confirmation please contact the Department of Revenue.

2.3.7 Internal Revenue Service Requirements

Periodically, schools engage the services of individuals for various activities. Internal Revenue Service requires a Form 1099- Miscellaneous Income be prepared for individuals paid in excess of $600 for a calendar year. Since internal funds are resident at the individual school, it then is encumbent upon the school to track information relating to this requirement. Coordination with the district Finance Office should be done to ensure proper capture and reporting of this information.

2.3.8 Admission Tickets

At all school sponsored events where an admission price is charged, sale of tickets is required for cash control.

One person is to be custodian of admission tickets. The person having custody of the tickets is to take appropriate measures to safeguard the tickets. A detailed record is to be maintained for issuance of tickets and return of unused tickets. This record should contain a perpetual inventory of tickets on hand by color code (price) and serial number. Resale of previously used tickets is prohibited.

All tickets acquired must be pre-numbered, pre-priced and color coded. Different colors are to be used when more than one admission price is charged for a single event. Do not use priced tickets for complimentary admission. Under special circumstances, tickets may be made up on campus. Approval for this exception should be done through the Principal.

Tickets are to be issued to the sponsor of the event. The sale of tickets by the bookkeeper is strictly prohibited. The person selling the tickets should not be the person responsible for collecting them at the door/gate. The sponsor is held totally accountable for tickets issued.

A ticket sales report for each event must be executed and presented to the school bookkeeper for filing as a part of the audit records. Ticket inventory records and remaining tickets must also be on hand for audits. The loss or theft of tickets is to be reported to the internal auditor as soon after the occurrence as possible.

All monies generated by the event are to be deposited with the school bookkeeper intact. No expenditures are to be made from receipts.

2.3.9 Reimbursement for Extra Duty

Regular district employees performing extra duty such as ticket-taking will be paid by district warrant rather than internal account check.

The calculation that includes employer's benefits will change periodically. The district’s Payroll Department should be consulted for the current factor to be used in making calculations for extra-duty.

2.3.10 Travel

The following practices are required for travel payments from internal accounts:

1. District travel vouchers must be completed for each adult who is paid for travel expenses. District employees must attach an authorized leave form.

2. District travel vouchers do not have to be completed for each student or group of students.

3. Cash advances will be allowed only for Leon County employees and students on student trips.

Cash advances for travel shall not exceed the estimated per diem or lodging and meals, mileage, common carrier and registration expenses. Any prepayments are not to be included in the advance cash payment.

The basis of the advance will be computed on the check requisition which is signed by the traveler and the principal.

All receipts, excess advance funds and a completed district out-of-county travel form must be remitted to the bookkeeper within three days of return to school.

4. When out-of-county travel by students is necessary in the pursuance of an approved student activity, advance travel arrangements shall be made if possible. Advance arrangements shall include transportation, meals, registration or entrance fees, and lodging.

Checks may be prepared in advance for the exact amount and made payable to the corporation or proprietor providing the service. The faculty sponsor, accompanying the students, shall be the temporary custodian of the checks and responsible for obtaining an invoice for the exact amount of the check from the corporation or proprietor upon presentation of the check.

When advance arrangements for meals or lodging are impractical because service to be rendered is enroute, or student group is of such number as to make prior knowledge of the exact number impossible, advancements may be made to the faculty sponsor for distribution to the student. Each student shall sign a signature sheet certifying that he/she received the meal or lodging allowance.

Disbursement support must include the names of all persons covered by payment to motel, restaurant, amusement park or other organization.

5. The cost of meals and/or lodging in registration fees shall be deducted from the per diem or meal allowance.

6. When payment cannot be made on the basis of per diem, actual costs may be paid to the employee for receipts which represent clear verification from the person or company paid. An example of this requirement follows:

Lodging (Not a Confirmation Notice)

All charges and payment

Dates of stay

Name of motel

7. Travel payment for the use of private or employee vehicle may be made on the basis of the district per mileage rate or on the basis of gas receipts. When gas receipts are the basis for payment, the receipts must have date of purchase, name and location of station and the amounts paid.

8. Scouting payments must be supported by one of the following:

Copy of game program cover (preferable)

Meal receipt verifying location of game

Gas receipt verifying location of game

CHAPTER THREE

(Financial Reports and Forms)

3.0 FINANCIAL REPORTS

3.0.1 Monthly Bank Reconciliation

Upon receipt of the monthly checking account bank statement, the statement balance is to be reconciled to the monthly report. Bookkeepers should use the reconciliation form provided in this manual or included with their automated accounting system.

1. Arrange the canceled checks in numerical order and determine outstanding checks including outstanding checks from prior months.

2. Arrange the deposit slips in chronological order and determine whether all deposits have been recorded accurately on the statement.

3. In the proper spaces on the reconciliation form, complete the following information:

a. Beginning balance (ending balance from the prior month's reconciliation).

b. Total monthly deposits and disbursements (from the month-to-date columns of the journal or from the computer generated monthly detailed transaction summary).

c. Other reconciling items (record any transactions that the bank or savings and loan handled, but were not entered in school books; such as, interest, returned checks, redeposits, service charges, etc.

d. Outstanding checks and deposits.

e. Ending balance (complete steps in reconciliation process).

f. Compare and reconcile the ending balance per the reconciliation with the ending balance stated by the bank or savings and loan association.

All items returned by the bank or savings and loan association should be filed with the checking account statement on which they appear.

3.0.2 Interfund Transfers

Interfund transfers are made to transfer funds from one account to another. The transfer is a receipt of the fund to which the money is transferred and a disbursement to the account from which it is transferred. It is not, however, considered a receipt or expenditure of the activity fund of the school.

Interfund transfers are to be handled by means of a journal entry. All journal entries should be supported by a check requisition bearing the signatures of the principal, the teacher/sponsor and the treasurer of the club/department from which the monies are transferred. Interfund transfers should be reported separately on the principal’s monthly financial report and the semi-annual/annual financial reports.

All interfund transfers/journal entries should be sequentially numbered beginning with No.1 for each fiscal year.

3.0.3 Principal’s Monthly Financial Report

A monthly financial report is to be prepared by the bookkeeper/financial manager for review and approval by the principal. This report should include activity account balances which have been reconciled to the cash control account. This report should submitted to the principal along with the monthly bank account reconciliation. A suggested format for this report is included in Appendix A of this manual. You may also use the monthly financial statement included in your automated accounting system to satisfy this reporting requirement.

3.0.4 Semi-Annual/Annual Financial Reports

The financial report on internal accounts shall be due as specified in Board Policy 6.03. All interest from checking and savings accounts is to be included in an interest account in the general fund. Interest is not earned until the date recorded on bank statements.

Interfund transfer totals are to be excluded from the total receipts and disbursements on these reports.

The report completed for December 31 covers July 1 through December 31. The report completed for June 30 covers July 1 through June 30 (Fiscal Year).

3.0.5 Audit Reports and Responses

Board policy authorizes 20 workdays to respond to internal audit comments. The following are guidelines for such responses.

1. Discuss any disagreement at the time when the auditor reviews concerns with the bookkeeper or at the time the exit conference takes place. If the auditor agrees with the new information or understanding, the preliminary audit report will be revised accordingly.

2. Take down notes in the exit conference and handle the response immediately following the audit exit while it is fresh in your mind.

3. When there are many comments that require a response, number each audit comment and refer to the statement to which you are responding.

4. Give explanations and/or actions taken, or to be taken, for any deficiencies cited.

5. Follow-up on audit comments should be assigned to personnel who will have input on improvement.

6. Documentation supporting the audit response may be attached, but will not be placed in the Board agenda packet. NOTE: Audit workpapers are treated the same.

7. The audit response should be on school letterhead and must be signed by the principal.

8. If the auditors find an audit response inaccurate according to their work papers, they may so note and initial the response.

3.1 RECORDS RETENTION AND DISPOSITION

3.1.1 Disposal of Records

Upon receipt of the records after audit by the internal auditor, audit record containers are to be marked denoting the fiscal period involved. The basic retention time period for such records are: