SECTION 16: ACTIVITY FUNDS & BOOSTER CLUBS

[Pages:18]Fiscal Procedures Manual

SECTION 16: ACTIVITY FUNDS & BOOSTER CLUBS

Section Contents

Page #

What's New?.....................................................................................................................................................................................................16-2 General Information..................................................................................................................................................................16-2

Forms ........................................................................................................................................................................................................ 16-2 Board Policy ......................................................................................................................................................................................................16-2 Activity Fund Types ........................................................................................................................................................................................16-2

Campus/Department Activity Fund (461) .................................................................................................................................. 16-2 Student Activity Fund or Booster Club (865) ............................................................................................................................ 16-3 Faculty Fund (890)............................................................................................................................................................16-3 Booster Clubs (Fund 865) ............................................................................................................................................................................16-3 Money Handling (Booster Club Only) ......................................................................................................................................... 16-4 Bank Accounts..................................................................................................................................................................................................16-4 Carryover Funds ..............................................................................................................................................................................................16-4 Purchases ...........................................................................................................................................................................................................16-4 Raffles ..................................................................................................................................................................................................................16-5 Sales Tax .............................................................................................................................................................................................................16-5 Purchases Made ................................................................................................................................................................................... 16-5 Revenue Received................................................................................................................................................................................ 16-5

Sale vs. Not a Sale ..................................................................................................................................................................... 16-5 Taxable Sale vs. Non-Taxable Sale ...................................................................................................................................... 16-7 Taxable Sale ................................................................................................................................................................................. 16-7 Tax-Free Days .............................................................................................................................................................................. 16-9 One Day Definition.................................................................................................................................................................... 16-9 Food Sales............................................................................................................................................................................................... 16-9 Monthly Reporting ............................................................................................................................................................................16-10 Exhibits ............................................................................................................................................................................................................. 16-11

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Section 16: Activity Funds & Booster Clubs

What's New?

All forms referenced in this section can be located at GPISD Home Page-Departments-Business ServicesBusiness Services Forms or

Faculty Funds are accounted for in Fund 890 Sales Tax/Calculating taxable amount on Organization Sales Tax Form (page 16-10)

General Information

Galena Park ISD has a centralized process for controlling all revenue and disbursements for Activity (Campus/Student) Funds and Booster Clubs through the District's Business Services Department.

Forms

All forms referenced in this section can be located at GPISD Home Page-Departments-Business ServicesBusiness Services Forms or

Board Policy

The following Board Policy should be referenced for additional information associated with this section of the manual:

Policy Code CFD (LEGAL, LOCAL)

Title: Subtitle Accounting: Activity Funds Management

Activity Fund Types

Activity funds consist of monies received and held by the campus to be expended or invested for the benefit of students in accordance with District policy. Specifically, activity funds accumulate from the collection of student fees and various school-approved fundraising activities. The Campus Principal, Department Budget Manager, or designee is responsible for issuing receipts for all funds prior to their deposit into the appropriate account, (See Section 8: Money Handling for more Information) as well as approving all disbursements. Below are three (3) types of activity funds that are maintained by the District:

Campus/Department Activity Fund (461)

This fund accounts for the collection and disbursement of funds to promote the general welfare of a campus and/or department and the educational development and morale of all students and staff.

The funds are used at the Principal or Budget Manager's discretion.

The District allows these funds to be subdivided, by use of the sub-object dimension of the account code, to track specific revenue and expenditures, if deemed necessary by the Principal or Budget Manager. For example,

0008 ? Library fines/fees and book fair proceeds used to purchase new books or equipment for the library. 00MS ? Campus student vending machine revenue, school picture sale profit, yearbook sales (if no club

exists with elected officers) and campus-wide fundraiser sales for items such as wrapping paper, cookie dough, etc.

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00PE ? Physical Education practice clothing sold to students and then profits spent on PE equipment.

Student Activity Fund or Booster Club (865)

This fund accounts for the collection and disbursement of funds held in a custodial capacity by the District and is the property of specific student groups or clubs, so long as they have:

Periodic meetings where an official record of minutes is maintained Elected a group of officers Decisions on the use of student club funds are the responsibility of the specific student group to whom the funds belong, as long as the decisions regarding the use of the funds do not conflict with Board policy and/or legal regulations or restrictions. These funds can be expended for almost any items that are appropriate for the organization. All funds raised by student organizations must be expended for the benefit of the students. The District is required to provide stewardship by properly accounting for and safeguarding these funds. For more details on Student Clubs see GPISD Webpage-Departments-Fine Arts-Student Activities-Student Clubs.

Faculty Fund (890)

Faculty funds are established with voluntary donations from campus employees for hospitality, condolence, lounge facilities or any other purpose for the sole benefit of the faculty, accounted for in Fund 890 in a separate account. Faculty funds may be expended at the staff's own discretion with administrator approval. It is best practice for the campus to form a committee that makes decisions and approvals concerning the use of faculty funds. Gift cards for faculty or staff members may be purchased only with faculty funds; the purchase of gift cards for staff from any other account is not permitted since the IRS considers gift cards income. Faculty funds are not subject to purchasing and bid laws because they are not considered District funds; they belong to the faculty. Purchases made from the faculty fund account are not tax exempt.

Booster Clubs (Fund 865)

Details for the operation of Booster Clubs are specified in the Booster Club Handbook located on the Fine Arts Website. Any group wishing to organize a Booster Club must send a letter to the Campus Principal that states the goals and objectives of the proposed organization. Once approval is given for the organization to be formed, the group shall submit the Booster Club Checklist (Exhibit 16-01) and all appropriate information required by the prescribed deadline. Booster Clubs are approved only once each year during the month of September. Each Booster Club must submit a copy of their minutes and financial report to the Principal and Fine Arts Office, within five (5) days of each meeting. The Sponsor, Principal and/or Director of Fines Arts, must approve all actions, activities, and financial matters related to the Booster Club.

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Section 16: Activity Funds & Booster Clubs

Booster club funds are the responsibility of the organization's sponsor and approved by the Director of Fine Arts. Funds are expended according to the organization's budget that is submitted each year with the Booster Club Checklist and supporting documentation as long as the use of funds do not conflict with UIL rules, Board Policy and or legal regulations or restrictions.

Money Handling (Booster Club Only)

All money shall be properly receipted, stored for safekeeping, and submitted to the campus or department Financial Clerk in a tamper-evident safeguarding bag labeled for delivery to Fine Arts for courier pickup daily. The courier will deliver the tamper-evident safeguarding bag to the Business Services Department to be logged into the safe until logged out by the Fine Arts Department. The Fine Arts Department will be responsible for verifying the funds and preparing the deposit per the guidelines defined in Section 8: Money Handling. Money refers to cash, currency, checks, money orders, or cashier's checks. District procedures per Section 8: Money Handling states: In order to maintain effective cash control, at least two (2) people must be involved in the function of collecting, receipting and depositing of District funds. The person collecting the money should never receipt the funds to himself or herself. Prior to collecting funds, the Campus Financial Clerk or Bookkeeper must log out a District approved receipt book and provide the account number to be written on the receipt. A Collection Log can be used if the amount collected is $20 and below. If needed, a change fund can be requested (funds issued to make change during a specific event or for a specific group and re-deposited as soon as possible after the event or collection period). See Section 03: Fiscal Management of the Fiscal Procedures Manual for Change Fund guidelines.

Bank Accounts

All Campus/Department Activity Fund, Student Activity Fund, and Booster Club money will be deposited into and disbursed from the District's Depository Bank. No Activity Fund or Booster Club may open a separate bank account.

Carryover Funds

In accordance with District Policy CFD (LOCAL), all unexpended Activity Funds (Campus/Department Activity and Student Activity) shall remain in the appropriate account and carryover to the next fiscal year. If an organization ceases to function or exist, the unexpended funds of the organization shall be credited to the appropriate administrative activity account. Upon dissolution of a Booster Club, all remaining unspent funds will be transferred to the appropriate Campus or Student Activity Fund.

Purchases

All purchases made by an Activity Fund must be from a District approved or allowed vendor. Campus/Department Activity Funds (461), Student Activity Fund (865) Booster Clubs (865) and Faculty Fund (890) must use a District Purchase Order, District Procurement Card, or Warehouse order entry for all purchases made. For Procurement Card transactions, the purchaser must ensure that funds are available in the account prior to making the purchase (see Section 12: Procurement Cards).

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A Student Activity Fund, Booster Club or Faculty Fund cannot purchase Fixed Asset or Inventory Items. They may make a donation to the District (General Fund or Campus/Department Activity Fund) who can then purchase and own the Fixed Asset or Inventory Item they are interested in donating.

Raffles

The District (staff, student organizations and booster clubs) is not allowed under the Texas Charitable Raffle Enabling Act of 1999 to conduct raffles, bingo, or other games of chance.

Sales Tax

Purchases Made

Any purchases made in the name of the school district or by a group of the school district are exempt from sales tax. Exempt organizations are entitled to an exemption only on items purchased and used directly and exclusively in pursuit of the exempt purpose. For school districts, items purchased must relate to the education process. Purchases made by individual members or teachers/coaches of classes or teams have no exemptions even though they are connected with a school or a school organization. Examples are:

Cheerleaders purchasing their own uniforms Band members purchasing their own instrument Science students purchasing their own science display board or supplies In order to be afforded the sales tax exemption, the following forms should be presented: 1. Tax Exemption Certificate ? The Texas Sales and Use Tax Exemption Certification (Exhibit 16-02) is to be

presented each time a purchase is made. It must state that the merchandise being purchased is for the organization's own use in providing education is being made in the name of the organization, and that payment will be made from the organization's own funds. 2. Resale Certificate ? A Texas Sales and Use Tax Resale Certificate (Exhibit 16-03) should be given to the vendor when merchandise is purchased by the school for resale (i.e., fundraisers). Misuse of the sales tax exemption form for personal purchases constitutes a misdemeanor under the Texas Penal Code, Chapter 39, Abuse of Office, and Section 39.02.

Revenue Received

The Revenue Decision Tree (Exhibit 16-04) can be used to determine if revenue received is a sale, or not a sale.

Sale vs. Not a Sale Sale

A sale is the transfer of title or possession of tangible personal property for consideration (usually money). A sale also includes the performance of a taxable service for consideration. All sales (whether taxable or not) must be reported on the Sales Tax Report (this is a two part form which includes the Organization Sales Tax Report Exhibit 16-05 and the Monthly Sales Tax Report Exhibit 16-06). These forms are submitted to the Accounts Payable Department to be reported to the Texas Comptroller of Public Accounts.

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Below are examples provided as a guide, but it is not intended to be an all-inclusive list:

Admissions (i.e., athletic events, banquets, dances, school performances, summer camps, clinics, workshops, project graduation)

Donated items that are sold Fundraisers where the District is the seller, not just the "agent" Parking permits Rental of items (i.e., equipment or uniforms) Rental of facilities Sales of food Sales of merchandise (including items made by students) Sales of services (i.e., car wash) School publication sales Sale of publications (i.e., yearbooks, newspapers, etc.)

The total of all sales (whether taxable or not) are reported on the Sales Tax Report (this is a two-part form which includes the Organization Sales Tax Report Exhibit 16-05 and the Monthly Sales Tax Report Exhibit 16-06). These forms are submitted to the Accounts Payable Department to be reported to the Texas Comptroller of Public Accounts.

Not a Sale

A non-sale is revenue that is not attributed to the transfer of title or possession of tangible property or the performance of taxable service. These sales do not get reported on the Sales Tax Report. Below are examples provided as a guide, but it is not intended to be an all-inclusive list:

Collection of money from students to pay a company for admission or service (i.e., field trips to locations such as Main Street Theater or Houston Zoo, PSAT test)

Commissions from vending machines and recycling (i.e., Coca-Cola, Fresh Brew, Abitibi) Donations of money to the school or school organization, including marathon fundraisers (i.e., lift-a-thon,

jog-a-thon, jump rope for heart, basketball hoops) Dues received from students for club membership Fees, such as:

o ID badge replacement or issuance of temporary badge o Red Cross Cards (i.e., CPR) o Laboratory o Replacement/repair of GPISD property (i.e., calculators, cell phones, laptops, electronic tablets,

musical instrument, locks) o Transcripts o Uniform cleaning o AG stall Fines, such as: o Damages (i.e., calculators, technology equipment, library books, lockers, textbooks, uniforms) o Parking violations Fundraisers when the school group merely receives a commission (i.e., book fairs, school pictures) NSF (Non-Sufficient Funds) check collection or redeposit

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Tuition, such as: o Summer School o Saturday School o Community Education

Vendor sales (see below)

In some fundraising activities, the school or school group is merely acting as an "agent" or sales representative for a for-profit organization. This makes the vendor responsible for the collection and payment of sales tax to the state comptroller. The sales tax would be remitted to the vendor, and the vendor would claim it as their sale and would pay the sales tax to the Texas Comptroller of Public Accounts. The school would not report this type of revenue as a sale. The sum of these collections and payments are not reported on the Sales Tax Report since they are not sales. Examples are:

Vending machine sales where the vendor services the machine (i.e., Coca-Cola, pencils, sticker) School pictures (i.e., Lifetouch) Book fairs (i.e., Scholastic) Great American

Only when the school or school group purchases the merchandise and then resells these items to their customers is the school considered to be the seller. In this case, a Texas Sales and Use Tax Resale Certificate should be provided to the vendor when making the purchase and the sales should be reported on the Sales Tax Report.

Taxable Sale vs. Non-Taxable Sale

The term taxable item is defined to include both tangible personal property and taxable services. Texas sales tax statutes impose tax on the sale, lease, or rental of tangible personal property and selected services. Tangible personal property includes personal property that can be seen, weighed, measured, felt, touched, or that is perceptible to the senses in any other manner. When an individual purchases a tangible item and it becomes the personal property of someone, it is taxable. It is irrelevant if the school logo is on the item or that the item will be utilized by a student in a school group for a school function.

School districts, schools, and school groups making sales of taxable items that do not have a specific exemption must collect and remit the sales tax. The items or activities on the following lists have been identified as being taxable or non-taxable by the Texas Comptroller of Public Accounts when sold or sponsored by a school, by an organization within a school, PTA's, Booster Clubs, and employee associations.

Taxable Sale

Public schools and school-related organizations must collect sales tax on all sales which are not specifically exempted. All non-food items sold through a school-sponsored outlet or by a school-associated organization are subject to sales tax. See Taxable Sale Reference Guide (Exhibit 16-07) for more information.

The following list of taxable sales is not all-inclusive, but is offered as a guide:

Agriculture sales Auction items sold Bakery products when sold with plates or eating utensils (i.e., pies, cakes, cookies, bagels and muffins) Books (i.e., planner)

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Calculators Calendars Clothing Copies Craft sales Cups Directories Equipment (i.e., athletic, band, etc.) Flowers Horticulture sales ID cards Magazines (subscriptions less than six months) Pictures (when GPISD is the seller-Easter Bunny & Santa pictures) Publications (i.e., event programs, posters, yearbooks, etc.) Rentals (i.e., equipment, instruments, uniforms, etc.) Spirit items (i.e., clothing, pennants, car decals, yard signs, etc.) Supplies (i.e., art, hygiene, music, physical education, science, school, etc.) Uniforms (i.e., athletic, band, cheerleader, dance/drill team, physical education, etc.) Vending ? non-edible items when school services the machine (i.e., pencils)

Sales tax must be collected on merchandise other than food products.

If the school assumes responsibility for the activity and/or sale, the school is responsible for ensuring the sales tax is paid. The school may purchase items tax-free and must collect the tax when the items are sold.

Non-Taxable Sale

Public schools and school-related organizations are not required to collect sales tax on sales, which are exempt. See Non-Taxable Sale Reference Guide (Exhibit 16-08) for more information.

The following list of non-taxable sales is not all-inclusive, but is offered as a guide:

Ad sales (i.e., newspaper, program, yearbook) Admission (i.e., athletic events, banquets, dances, school performances, summer camps, clinics, workshops,

project graduation) Discount cards and books Fees (i.e., competition, entry/participation, tournament entry) Food (i.e., candy, cokes, popcorn, cookie dough, ice cream) Permits (i.e., parking) Rental (i.e., facility) Services (i.e., automotive, car wash, cosmetology (Note: Service is not taxable but parts and products sold

are taxable)

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