Financial Strategies for District Support Organizations

1. Nick Griswold, Director Financial Services | South Redford School District Financial Strategies for District Support Organizations Financial Strategies for District Support Organizations | South Redford School District

2. Background • Bachelor of Science, Accountancy • Chief Financial Officer Certification • Been in the District 4 years • Internships with University, ISD, and LEA accounting departments. • During internships audited internal departments for LEA and University. Financial Strategies for District Support Organizations | South Redford School District

3. Disclaimers • It is the district’s opinion that district support organizations are self-governing entities that are not under the direct supervision and control of the district. • As independent organizations, district support organizations need to establish their own internal controls to protect their organization’s reputation and the reputations of their members. • The information in this presentation is not a substitute for obtaining professional assistance when prudent. • Conducting this presentation or any other support provided by the district does not make the district liable for the actions of the district support organizations. Financial Strategies for District Support Organizations | South Redford School District

4. What we will cover… • What are “internal controls” and how to document them. • Financial best practices for district support organizations. • How to coordinate to leverage district resources. • Q & A Financial Strategies for District Support Organizations | South Redford School District

5. Internal Controls What are they? | Why do we need them? | How do we document them? Financial Strategies for District Support Organizations | South Redford School District

6. Definition Fundamental Concepts Internal control is a process. Internal control is affected by people. Internal control can be expected to provide only reasonable assurance. Internal control is geared to the achievement of objectives. “Internal control is a process effected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: 1) effectiveness and efficiency of operations 2) reliability of financial reporting” Courtesy: Understanding Internal Control and Internal Control Services, AICPA, September 2009 [Ratcliffe, Landes] Financial Strategies for District Support Organizations | South Redford School District

7. How do we document internal controls? Financial Strategies for District Support Organizations | South Redford School District No wrong answers. Make the process usable for your organization. Ensure that processes are being followed after they are documented. Excerpt from South Redford Business Office Manual:

8. Financial Best Practices for District Support Organizations Financial Strategies for District Support Organizations | South Redford School District

9. Organizational Structure • Each booster group should elect a treasurer who will keep financial records for the booster group. The treasurer should also be one of two co-signers on a booster group bank account check. The treasurer's records should show the amount of money earned from each fundraiser, a record of each deposit made and each check issued by the treasurer. • No individual should realize personal gain from funds raised to benefit students. Financial Strategies for District Support Organizations | South Redford School District

10. Budgeting | Financial Reporting • The booster group governing body should develop an annual budget. The budget should reflect established goals and should be developed collectively. After year-end, an annual report should be presented to the building principal and to the membership detailing the booster groups activities. • Your governing board or responsible budget committee should approve payments before any payments are authorized or contracts for services are awarded. Financial Strategies for District Support Organizations | South Redford School District

11. Budget Example Financial Strategies for District Support Organizations | South Redford School District

12. Budgeting | Financial Reporting • The treasurer should maintain a set of records (i.e., chart of accounts) that clearly report all accounting activity for each separate fundraising activity. This enables revenues from “x” program to be matched against expenditures for “x” program. Financial Strategies for District Support Organizations | South Redford School District

13. Back to Budget Example  Concessions Revenue [cash in]  Concessions Supplies [cost of goods] Concession Income = $500 [revenue – expense] Financial Strategies for District Support Organizations | South Redford School District

14. Budgeting | Financial Reporting • The booster group treasurer should issue financial reports quarterly to the booster group membership. At a minimum, these reports should identify fundraisers conducted, revenues received from each fundraiser, expenditures made relating to each fundraiser, and how profits were used or plan to be used Financial Strategies for District Support Organizations | South Redford School District

15. Financial Reporting Example Financial Strategies for District Support Organizations | South Redford School District

16. Banking | Cash Accounting • Two persons (adults) should count cash from fundraisers immediately after an event. Don't put you or your members in a position where their integrity may be questioned. Have two people perform this task. It is preferred that school personnel not be involved in handling booster funds. Remember: Receipts – Starting Bank = Gross Receipts Financial Strategies for District Support Organizations | South Redford School District

17. Cash Accounting Worksheet Example ABC Elementary PTO Cash Accounting Worksheet October 23, 2012 – Raffles 1. Starting Ticket #__520308 2. Ending Ticket # __521010 3. Total Tickets (2-1) ___702 4. Total Tickets (3) 702 x $2.00/ticket = $1,404 5. Total Cash Collected (Less $50 Bank) = $1,401 6. Over/Short $ (3) Signature 1______________________ Signature 2______________________ Financial Strategies for District Support Organizations | South Redford School District

18. Banking | Cash Accounting • Deposit slips should identify each check separately. This makes the task of tracking back payments easier. • Funds from different fundraisers should not be commingled on one deposit slip. Use a separate deposit slip for each fundraiser or source of revenue. This will assist you in determining the profitability of a specific fundraiser. • Deposits should be made daily when receipts exceed $500. Collections of amounts under $500 should be deposited at least weekly. Don't let funds sit idle. Invest them and keep them safe. Financial Strategies for District Support Organizations | South Redford School District

19. Deposit Example List each check on a separate line with check # and amount 1523 $50 00 Flower Sales List Deposit Description Here Tip: Use duplicates and get a copy of this back as a receipt to attach to copies of check / other documentation Financial Strategies for District Support Organizations | South Redford School District

20. Payments | Writing Checks • No checks should be issued without sufficient documentation (e.g., receipts). Receipts, contracts for goods or services, etc should be maintained by the booster group treasurer and available for audit. Financial Strategies for District Support Organizations | South Redford School District

21. Payments | Writing Checks • Petty cash funds are discouraged. However, if the booster group governing board is of the opinion that a petty cash fund is necessary, the amount kept in petty cash should not exceed $25.00. If a petty cash fund is maintained, a journal should be kept by the treasurer showing the source of money kept in petty cash along with all disbursements, no matter how small. Receipts should be kept of all vouchers of disbursements from petty cash. Financial Strategies for District Support Organizations | South Redford School District

22. Petty Cash Expenditure October 1, 2012 Nick Griswold 10.00 Ten and 00/100xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Office Supplies 10 00 7 91 2 09 Financial Strategies for District Support Organizations | South Redford School District

23. District Resources How to coordinate and leverage district resources. Financial Strategies for District Support Organizations | South Redford School District

24. Purchasing • District can purchase from certain vendors with deep discounts from competitive bidding. Check with your building secretary (MiDeal, REMC, WCPC). • District credit card can be used for online purchases. Payment to the school must be made when order is placed. Financial Strategies for District Support Organizations | South Redford School District

25. Audit | Financial Education • Financial Services department staff are available to answer questions about accounting for your funds. • Also available to audit your books at end of school year. • Available throughout the year to conduct an audit when a treasurer’s or president’s term of office ends. • Provide annual training seminar on proper accounting techniques and best practices. Financial Strategies for District Support Organizations | South Redford School District

26. Q & A Q & A | Final Thoughts | Survey Financial Strategies for District Support Organizations | South Redford School District