7
Overview
The objective of this chapter is to serve as a guide for the day-to-day business operations in the individual school, as well as information on reconciling the bank statement and end of period procedures. Even though the volume of transactions may vary between schools, these basic rules will apply to all schools. The School Funds bookkeeping software can also provide guidance in this area. Special topics are also included in this chapter. These are areas in which bookkeepers and principals have frequently asked questions.Potential Problem Areas
Daily cash remittances from teachers: The auditors have included this as a potential problem area in the past audits. State law requires all money received be deposited on a daily basis. There is a section in this chapter on teachers receipting money. Feel free to reproduce those pages and the state statute for the teachers. Teacher Receipts are not sequentially numbered: Receipts written by teachers must contain the date and signature and must be sequentially numbered. If possible supply teachers with pre-numbered receipt books.
Principal not signing supporting documentation for checks: Because purchases can be made only with the principal’s authorization, their signature is physical evidence authorization has been given.
Inadequate supporting documentation for disbursements: an invoice or other documentation must support all disbursements before the check is issued.
Purchasing fixed asset items directly: Board Policy requires all fixed asset type items be purchased through the Purchasing Department by way of a purchase order. This is to insure these items are properly tagged and accounted for.
Ticket sales not reconciling: Tickets sales should be reconciled to cash collected after athletic events or other events where tickets are sold. The reconciliation report should be checked for
mathematical accuracy and verified by two individuals.
Just like any other transactions, a transfer between accounts must also be properly documented. A written request is forwarded to Transfers between
Bank Reconciliation Reconciling your bank statement is the procedure of comparing the end of month bank balance with adjustments to your end of month book balance plus adjustments.
Any differences should be investigated and any necessary corrections made. Journal Entries for bank interest, bank charges and returned checks must be made in your school funds to reconcile to your bank balance.
The bank reconciliation should be completed and sent to the internal auditor by the 15th of the month. School Funds software will walk you through step by step. See example below:
Because the individual school is not a separate legal entity from the Board of Education, employees do not have authority to expend funds for purposes not specifically authorized by the board. The principal is responsible for the schools internal funds and spending is done only with the principal’s knowledge and consent. Disbursements from Club and Class accounts must also have the authorization of the sponsor or treasurer of the Club or Class.
Schools are not authorized to make salary or wage payments directly. An unauthorized purchase or disbursement can become the personal liability of the individual making the purchase or disbursement.
End of month balance on bank statement __________
Add: Deposits not shown on statement __________
Less: Outstanding Checks __________
Adjusted balance per bank __________
End of month balance per books __________
Add: Interest earned __________
Less: Service Charges __________
Adjusted balance per book __________
Returned Checks The most common reason for returned checks is insufficient funds in the account of the person who wrote the check. Non-sufficient-funds checks will require a journal entry in your school Non-sufficient-funds software.
Per Buncombe County Board Policy #503 (IV 3c) Both the face amount of the check and the service charge must be paid in cash or by cashiers check. No more of the same type of goods or services will be furnished until the check amount and service charge are satisfied. The cash or the cashiers check will not be receipted in your school funds software, a journal entry shall be made. This deposit should be on a separate deposit ticket and noted as a -deposit of a NSF check (name). Consult your School Funds software manual for specific instructions on journal entries pertaining to NSF checks.
These charges include service charges and check printing charges. They have already been deducted from the bank account. A journal entry for these charges needs to be entered in your books for the bank statement to match your records. The School funds manual gives specific instructions.
Board Policy 503 allows schools to charge the same service charge that the bank is assessing them for a returned check. When the fee is received, “receipt” it to the same account you typically enter bank service charges.
Bank Charges
Interest Earned Interest earned has already been added to the bank account. Interest must be entered through a journal entry. School Funds software manual will specific instructions for entering interest.
NC Escheats Law School systems and individual schools are subject to the NC Escheats Law that deals with abandoned or unclaimed property. Outstanding checks are considered unclaimed property under this law. Buncombe County Board of Education is required to report and remit those checks that have remained outstanding for one year at June 30 to the State Treasurers Office by November 1st. At June 30 determine those checks that have been outstanding a year. Checks less than $50.00 may be aggregated and listed on the report as one amount. For checks $50.00 and over, prepare a list of the checks and include:
Date check was written Check number
Name of payee
Last known address of payee (Escheats Law requirement) Amount of check.
To create an audit trail you need to void the old checks and write a check to the Board of Education for the total amount. Send the check and the list to Accounting. Document why the checks are being voided and reference the replacement check.
In an effort to keep checks from being outstanding long enough to escheat, investigate a check if it has been outstanding for as long as two months. Notify the payee, either by telephone or letter. An example of a letter used by one school is in the appendix. You may choose to format the letter differently, but it should contain the basic information. If it is determined the check was lost, stop payment on it, void and re-issue it. The software manual will have detailed instructions on how to void a check.
End of Month Procedures
The accounting records should be reconciled with the bank statement on a monthly basis. Be sure all activity for the month (checks, receipts, bank interest and bank charges) have been posted. The bookkeeping software manual will have specific information for reconciling the bank statement and preparing financial statements.
By the 15th of the month send a copy of the financial statement to the internal auditor. Include a copy of the bank statement, a ledger report listing all accounts, a check and receipt register for the month. The principal should sign the Bank Reconciliation.
End of Fiscal Year Procedures
Before June 30, make sure all parking fees, building use fees, payment for extra employment (activity bus driver) and any other money due to the Central Office has been submitted.
All outstanding invoices where the merchandise has been received before June 30 should be paid before year-end if possible. If unpaid at year-end the amounts will be included as accounts payable by the auditor and your audited balances will reflect the expenditure. This includes fall billing for athletic equipment received before June 30 even though the vendor has delayed the due date for payment.
Determine that all money collected by teachers has been received and deposited. All teacher receipt books need to be turned in to the office and kept available for the annual audit.
Principal's End of Year Checklist
Near the end of the school year the principal will receive a checklist containing reports and payments due to the central office before the end of the school year. The May financial statement is included on this list. These items must be received by the central office in order for the principal's check to be released.
An internal audit of individual school funds will be conducted twice yearly, midyear and after the close of the fiscal year. This consists of examining, on a test basis, transactions that have occurred during the year to confirm that North Carolina Public School Laws, Buncombe County Board of Education Policies and standard business practices have been followed. A list of recent violations was presented at the end of chapter two.
Athletic Events : Ticket Sales
Admission tickets should be pre-numbered and kept in a safe place between games. The bookkeeper or principal should keep very strict accounting of ticket numbers issued to the seller, tickets sold, and tickets returned as unsold If it is necessary to sell tickets at more than one location, such as two gates at a game, a separate form should be prepared for each location. A sample of the “Report of Tickets Sold” form is in the appendix.
Board Policy 503 requires the ticket seller to complete a tally sheet when counting the money received at the end of the event. The tally sheet is turned in with the money.
Proceeds from a night performance or game should be deposited in a night depository for safekeeping. The next working day the deposit bag is picked up from the bank, the money is counted and the amount compared with the Tally Sheet and the Report of Tickets Sold or Admissions. An official receipt is written, made out to the ticket seller and deposited to the appropriate account.
It is recognized that errors may occur in making change and that the actual cash received may not always agree with the number of tickets to account for. For this reason any difference in the cash is to be accounted for as an over or under amount and the actual cash received should be shown on the form. Large differences should be investigated.
An audit should be performed on the ticket inventory and the change fund. The numbers should either be on hand or listed as sold. The bookkeeper/treasurer should maintain a ticket log of all issued and returned tickets.
In order to have change in the cash box at the gate to begin selling tickets, the bookkeeper writes a check to the athletic director or the bank. This cash is listed on the “Report of Tickets Sold and Admissions” with the gate receipts and deposited. The bookkeeper will list a deposit to a separate change account as evidence the money was re-deposited.
If the change fund needed for each event is of an amount that will not violate the “less than $50.00” rule, a check can be cashed at the beginning of the season and the money kept in a safe place between games. The bookkeeper may wish to deposit the money during the Christmas and spring breaks or if there are a number of days between events.
Change Fund
Accounting for
Classroom Project
Grants
Classroom Project Grants are awarded each year by the Buncombe County Board of Education. Teachers who are awarded grants will receive instructions on the reports and documentation that are required. Receipts must be retained for all purchases from classroom project grants. These will be submitted to the Bookkeeper as documentation of how the money
Book Clubs Many teachers take advantage of book clubs as a way to offer students the opportunity to buy books at an affordable price. Because it is a school function, the money must go through the books of the school. Teachers should write receipts to the students and take money and receipts to the office on a daily basis. When the order is ready to be placed, the bookkeeper will write a school check for the amount using the order form as documentation.
Another issue with book clubs is that often the club will send prizes to the teacher based on points earned. These belong to the Buncombe County Board of Education rather than the teacher personally. If the item is considered a fixed asset, it should have a number affixed to it and information submitted to the central office for addition to the system.
Purchases of books through these clubs are subject to North Carolina Sales and Use Tax. Sufficient money should be collected to remit to the N C Department of Revenue.
Donations from Individuals or Outside School Related Organizations: Money
A PTO/PTA may wish to donate money to the school towards a particular purchase. Once deposited in the school account, the money becomes “school funds” and is fully subject to all NC Public School Laws, board policies, sound accounting practices and purchasing policies and procedures as school funds from any other source.
Funds given to the school for use as a trust fund or given out as scholarships do not remain in the school’s account. In the past, several schools have submitted these funds to be held at the central office. It is recommended that any new donations of this nature be made through the Buncombe County Schools Foundation with the donor’s check made payable to Buncombe County Schools Foundation.
The reasoning for this is that the Foundation qualifies as a non-profit entity under §501(c)(3) of the Internal Revenue Code, whereas public schools are not recognized as such. Therefore, they cannot acknowledge the gift as tax deductible as required by the IRS. The Foundation’s receipt of the tax-deductible gift will be acknowledged to the donor and to the department or school program for which the money was donated. At that time these funds can immediately be sent to your program or kept at the
Items Donations of items must have prior approval of the Superintendent of Buncombe County Schools. Items become the property of Buncombe County Board of Education.
High School Athletic Playoff
Reimbursement
The Board of Education will reimburse high schools for expenses related to the participation of athletic teams in post-season play. Post-season play is defined as games or contests that extend beyond the regular season and are sponsored/endorsed by the North Carolina High School Athletic Association and receives reimbursement for expenses from the association.
Regulations and procedures are contained in the appendix of this chapter. The amount received from the NCHSAA for expenses will be deducted from the school’s request for reimbursement. Purchases of tangible personal property by schools are subject to sales or use tax when the property is purchased for use or consumption. Some vendors in North Carolina and out of state believe that schools are exempt from sales tax and do not include sales tax at the time of the purchase. When this happens, the school is required to submit the use tax directly to the North Carolina Department of Revenue. The school must be registered with the NC Department of Revenue, Sales and Use Tax Division to remit tax and file the necessary reports. The reports must be filed even if there were no purchases that reporting period. Purchases of items for resale need not include sales tax as long as the school submits a Certificate of Resale (Form E-590) to the supplier. The school is then liable for collecting and remitting to the North Carolina Department of Revenue tax on the sales.
When the school is collecting money for a vendor and retaining a portion or paid a commission, such as a book fair, the vendor is responsible for remitting the sales tax. Fund-raisers where only a service is sold (car wash) are exempt from sales tax. School dance and athletic admissions are also exempt. The school does not pay sales tax on “full service” vending machine operations. Full service means the soft drink or snack machine vendor keeps the machines filled and removes money. The company sends the school a commission check.
Travel
Reimbursements
The State of North Carolina has procedures and policies that apply to business travel reimbursement from state and federal funds. The Buncombe County Board of Education has adopted those same policies and procedures to apply to local funds, Board Policy #575.
A Summary of statutory provisions for Local Education Agency Officials and Employees can be found in the appendix of this chapter. The Superintendent must approve excess lodging costs. Excess lodging cost is allowed when the employee is in a high cost area and unable to secure lodging within the current allowance. In order for employees to receive allowances for meals for partial days of travel either the day of departure or day of return the employee must:
Breakfast...Depart duty station prior to 6:00 A.M.
Lunch...Depart duty station prior to 10:00 A.M. (day of departure) Return to duty station after 2:00 P.M. (day of return)
Dinner...Return to duty station after 8:00 P.M.
Receipts are not required for meals that will be reimbursed at the state-approved flat rates. Receipts are required for lodging and transportation costs (odometer and/or trip meter readings will suffice for travel in a personal vehicle). Receipts are required for registration and material fees and any other incidental fees.
For travel reimbursement from either internal school funds or from centrally controlled funds the following is required:
Prior approved leave forms
Prior approval for out of state travel, if travel was out of state Approved excess lodging or registration form, if amount exceeds allowable rates
Copy of brochure or registration form describing the convention or class
Must be filed and paid within 30 days per Board Policy 575 or approved by the Superintendent.
Disposal Of Records Twice a year, January and June, the board authorizes the disposal of records as requested by individual schools and departments at the Central Office. Send a Request to Dispose of Public Records to Nancy Reichman, the Records Retention Officer. The request would describe the documents, dates covered and quantity. Once approved, maintenance will pick up the records and dispose of
Vending The following memo describes the procedure for submitting vending machine profits to the central office.
The second memo was released when the legislation concerning vending machine operations was passed. It gives details on what the legislature considers “vending operations” and also guidance on how the profits can be spent. In brief, this law requires the profits to be spent on the student population as a whole.
To comply with the state statute:
Vending profit received at the individual schools must be sent to the Central Office by the 10th of the month following the end of a quarter for deposit. The funds will be returned to the school.
The funds must be spent for the students. Appropriate expenditures would include instructional supplies, library books and honor roll rewards. Staff luncheons would not be an allowable use of the funds.
Links Local Travel Form
http://tech.bcsnet/modules/Downloads/d/Documents/Forms/Local _Travel_Form_3.xls
Reimbursement for Travel
http://tech.bcsnet/modules/Downloads/d/Documents/Forms/Reim burse_Formv3.doc
Appendix The following pages contain samples of forms for requests and reports that contain the required information for the topics mentioned in this chapter as well as additional reference materials.
0
School Base Payee Vendor #
Official Travel
Miles Traveled
From To Purpose of Travel
Day of Month Depart. Time Return Time
BUNCOMBE COUNTY BOARD OF EDUCATION SCHEDULE OF LOCAL TRAVEL PAID
Period Covered 1st-31st
STATE OF NORTH CAROLINA
REQUEST FOR
REIMBURSEMENT OF TRAVEL AND OTHER EXPENSES INCURRED IN THE DISCHARGE OF OFFICIAL DUTY-INCLUDING PER DIEM
Attach all necessary receipts and other supporting documents to this form and submit the original. Retain one (1) copy.
School or Department Workshop/Conference
Payee’s Name Vendor # Total Cost
Payee’s Address Budget Expenditure Code Less Advance
Period Covered by this voucher From:
Time Departed:
To:
Time Returned:
Date of Out-of-State Travel
Authorization Reimbursement $0.00
This is a true and accurate statement of expensed incurred in the service of the State. If advance, I understand that appropriate documentation must be submitted within 30 days after trip or I authorize voluntary deduction from my next paycheck.
I certify that the expenses incurred are necessary and proper and amounts claimed are just and reasonable.
CLAIMANT DATE DEPARTMENT HEAD/SUPERVISOR DATE
TRAVEL
(Show each city visited)
TRANSPORTATION SUBSISTENCE OTHER EXPENSES
Day From To (1) Mode Daily Private Car Mileage Amount (2) Type Amount (3) Daily Totals Explanation (parking, taxi, etc.)
Amount P B L A D O/R H P B L A D O/R H P B L A D O/R H P B L A D O/R H P B L A D O/R H
Total Total Total Other
Attachments Required:
Leave Form
(1) Mode of Travel:
P-Privately Owned car ($55 per mile)
(2) Type of Subsistence: In State Out-of-State
(3) Daily total for subsistence not to
BUNCOMBE COUNTY BOARD OF EDUCATIOIN REPORT OF TICKETS SOLD OR ADMISSIONS
School_____________________ Event_______________________ Date____________
1. CASH BOX SET-UP
Color___________ Adult Ticket Numbers_________________ thru__________________ Student Ticket Numbers________________thru__________________ Change Fund……….$_______________ I received the above tickets and change fund:____________________________________
Ticket Seller
Date:____________________________________
2. TICKETS SOLD
To be completed by Ticket Seller
Adult Tickets __________thru___________ @ $________ $____________
Student Tickets _________thru__________ @ $________ $____________
Total $____________
+ Change Fund $____________
+/- Over/Short $____________
= Total from
Tally Sheet $____________
I hereby certify that this report is true and accurate Ticket Seller_______________________________ TALLY SHEET Currency Ones:___________ Fives:___________ Tens:___________ Twenties:________ Currency $__________ Coin Pennies:________ Nickels:_________ Dimes:__________ Quarters:________ Coin$____________ Checks$___________
Account Group Receipts Expenditures
School Store 2XX
Proceeds from sales of all merchandise sold at a profit, such as paper, pencils and books.
Merchandise such as paper and pencils are purchased and sold at profit. expenditure should be made from this fund except to purchase merchandise that will be sold through to store. Any profit on sales should be transferred the General Fund.
Clubs & Classes 3XX
Include activities at club and class or department level, such as plays, dances, parties, carnivals, dues not on an over all school basis. Funds are usually earmarked for legal expenditures at the direction of class concerned. Activities conducted on an overall school basis should be shown under the General account.
Include expenses of activities conducted at class, club or department such as senior class plays, English department activity, etc.
Athletics 4XX
Gate receipts, game guarantees, ticket sales other than at the gate, proceeds from concessions, sale of scorecards and advertising therein, donations made specifically for athletics. Be sure to include taxes collected. Physical Education Funds should not be reported under Athletics. These funds should be reported as a physical education account under clubs and classes.
Include transportation, hotel bills, meals, uniforms, medical supplies, bills, supplies and materials, insurance, taxes, officials’ fees, guarantees, of printing programs or tickets, and other expenses incurred.
Trust 5XX
Include (a) moneys collected for community drives, such as March of Dimes, Easter Seals, etc., and (b) moneys collected for transmittal other than for community drives as well as parking fees, school insurance, lost or damaged textbooks, rents, property deposits, etc. Normally expenditures for these funds should, at the end of the term, be at least as large as receipts, with a zero balance.
Include moneys paid out for organizations or purposes indicated explanations of Trust Funds Receipts.
General 6XX
Proceeds from all activities conducted on an over all school basis, Local Current Expense funds advanced by the board of education, or any activity not specifically classified in another account. This account should be free of “outside earned” money unless the money is to be spent on the overall student body. No transfers are allowed from this account to an account holding “outside earned” money unless correcting an error in posting.
Costs of all activities conducted on an over all school basis or activities specifically classified in another account, such as expenses incurred in on a carnival, certain insurance premiums and expenses not previously covered. This account should be free of “outside earned” money unless money is to be spent on the overall student body. No transfers are from this account to an account holding outside earned money correcting an error in posting.
Activity and Enrichment 7XX
Local Current Expense Funds allocated by the school board and paid over to schools to be used for implementing and supplementing activity programs of the school. No transfers are allowed from this account to accounts holding “outside earned” money unless it is to correct an error in posting.
Include expenses for field trips and group activities, special programs, student government and other organizations representing the school their participation, conducting or performing as well as supplies and materials made necessary by these participation. These funds may not be
equipment, salaries and salary supplements, or the regular Athletic They could be used to supplement travel expenses when participating regional and state tournaments.
Office 8XX
Local Current Expense Funds allocated by the school board and paid over to schools to be used for administrative expenses. Telephone and principal's travel are sub-accounts of the office account. This account may also contain interest earned. No transfers are allowed from this account to accounts holding “outside earned” money, unless it is to correct a posting error.
Include expenses for stationery, stamps, telephone, office supplies materials, and other administrative expenditures.
Transfers Between Accounts
Classification of Accounts
When allowed, transfers between accounts follow the same approval procedures as disbursements. In general, funds may be transferred between accounts within the same account group. Funds allocated to the school's internal accounts in their annual allotment must remain within that designated account group. Therefore, fund transfers are not allowed from the 6XX, 7XX or 8XX accounts to other account groups.
