BACK TO THE BASICS: DISTRICT ACTIVITY FUND KASBO May 2015
Session 7B
DISTRICT ACTIVITY FUNDS
What is it? Operating costs Options for setting up district activity funds Challenges Give us your feedback
WHAT IS IT?
Approved by KDE in FAQ Guide Not mentioned in the Redbook Due to much more stringent guidelines, an optional method to handle some funds giving schools more flexibility in spending Let’s get to the basics!!!!
MOST IMPORTANT
Not mandatory Very flexible guidelines from KDE Each district is different, so hard to compare to your neighbor Does require some board approval Interpretation by auditors is key
WHERE’S THE INFO?
KDE website http://education.ky.gov/districts/FinRept/Pages/A ccounting-Procedures-for-School-ActivityFunds.aspx FAQ Guide KDE Finance Newsletters http://education.ky.gov/districts/FinRept/Pages/F inancial%20Management%20Calendar,%20Fin ancial%20Management%20Manual,%20Insuran ce%20Guidelines,%20Who%20Does%20What %20in%20DDS,%20Finance%20Newsletters.as px
MOST DISTRICTS Student Activity Funds
District Activity Funds
In the old days prior to 2014
School Activity Funds = school bank account
NEW OPTION Student Activity Funds
School Activity Fund in school bank account use with restricted guidelines
Not mandatory, just an option
Every district will set up differently
After 2014
District Activity Funds
Central Office bank account use for educational purpose
REQUIRED AT SCHOOL LEVEL Student Activity Funds - Contributions and collections derived from school-sponsored fundraising activities Fundraising by student clubs and student organizations To support student clubs and organizations Expended with input from student clubs and organizations Examples: Beta Club; FFA; Class of 2016
REQUIRED AT DISTRICT LEVEL
Grants Day care fees Adult education fees Tuition fees Donations (unless board policy allows donations at the school level) Any funding source restricted to an expenditure disallowed by Redbook
OPTIONAL AT DISTRICT LEVEL District Activity Funds – to support co-curricular and extra-curricular activities Not raised by student clubs and student organizations Not expended with input from student clubs and organizations Expended without having to live within Redbook expenditure restrictions Examples: Gate receipts; book fairs; locker fees; picture commissions
REDBOOK - FUNDRAISERS Fundraiser proceeds cannot be used to supplement the staff account, to cover staff payroll or for other operating expenses
OPERATING EXPENDITURES
Operating expenditures are incurred in the course of the operating activities of the district “It’s what we’re here to do” Anything supporting regular operations – the basics
WHAT ARE OPERATING EXPENSES Operating Expenses
Instructional Expenses
Expenditures for instruction are likely to be operational because that’s what the school is in the business to do: instruction
OPERATING COSTS EXAMPLES Renovation, additions, improvements or maintenance of school facilities or buses Furniture for offices Professional development Textbooks and instructional supplies for general use Salaries for district-created positions Substitutes incurred in normal course of business
STUDENT ACTIVITY FUNDS
Deposited at the school level Raised by student fundraising Expended with input from student groups Included in district audit as agency fund Not included in per pupil expenditures on report card
DISTRICT ACTIVITY FUNDS
Deposited at the central office Raised by school/district or staff Expended with input from staff – no student input Shown as special revenue fund if restricted by board or in general fund Included in per pupil expenditures on report card Use project in 7000 range
STUDENT ACTIVITY FUNDS
DISTRICT ACTIVITY FUNDS
District Bank Account School bank account Not subject to Redbook Subject to Redbook Any expenditures that No operational meet “educational expenditures purpose”
Narrow allowability
Increased flexibility
WHAT’S NEXT?
Deciding whether to take advantage of this option What types of expenditures are currently being made out of activity fund money that might need to use the new method? What types of revenue could be placed in the district activity fund for more flexible use?
HOW TO?
KDE is allowing district funds to be placed in a separate line item account in your school activity fund as long as nothing is paid out of the account and it is swept to central office at least once a month intact District activity funds cannot be commingled with any other revenue source
Transportation
Reimbursement from a district activity account can include all transportation costs, including maintenance Reimbursement from a school activity account can only be for driver salary and fuel costs, bus maintenance only if it can be directly and solely attributable to student group
OPTIONS
Fund 1 – General Fund with 7000 projects – not restricted Fund 2 – Special Purpose Fund with 7000 projects – restricted for use so balance carries over each year – mixed in a fund with other projects
OPTIONS
Fund 21 – District Activity Fund – annual fund with 7000 projects – restricted for use so carries over each year with beginning balances Fund 22 – District Activity Fund – multi-year fund with 7000 projects – restricted for use so carries over each year
WHAT IS YOUR DISTRICT DOING? Let’s take about 5 minutes to discuss with your neighbor how your district is handling district activity funds. What fund? What revenue? What expenditures?
CHALLENGES Now that many districts are using district activity funds – What are the challenges? KDE is leaving interpretation to auditors so we might see some inconsistencies across the state.
FEEDBACK
Which revenues are deposited in district activity? What expenditures are being paid? How is tracking at school level accomplished? How are school principals reacting? Can districts pay bills & get checks out timely? Are you sweeping funds from school account to district account? What reports are furnished for board & SBDM?
Ramona Gardner KEDC Finance Consultant
[email protected] (606) 923-0804
