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Loudoun County Public Schools Student Activity Funds

Administrative and Accounting Manual December 2005

Table of Contents

Introduction ...................................................................................................................................2 Section 1 General Accounting Principles 1.1 Purpose ..................................................................................................................3 1.2 General Information .............................................................................................3

1.3 General Accounting Principles .............................................................................3 1.4 Principles for School Activity Funds ....................................................................4

1.5 Basis of Accounting .............................................................................................5 1.6 Internal Control ....................................................................................................5 1.7 Fiscal Year ...........................................................................................................6 1.8 Audits ....................................................................................................................7 1.9 Duties and Responsibilities ..................................................................................8

1.10 Conflict of Interest ..............................................................................................12 1.11 Fundraisers .........................................................................................................12 1.12 Grants ..................................................................................................................14

Section 2 Activity Fund Account Structure

2.1 Classification of Accounts .................................................................................15 2.2 Types of Funds ...................................................................................................15 2.3 Types of Accounts .............................................................................................16 2.4 Establishing an Account ....................................................................................16 2.5 Overview of Accounting Transactions ..............................................................17 2.6 Social/Sunshine Funds ........................................................................................17

Section 3 Activity Fund Accounting Procedures

3.1 Accounting Procedures .......................................................................................18 3.2 Receipts ...............................................................................................................18 3.3 Cash Transmittals ................................................................................................22 3.4 Bank Deposits .....................................................................................................24 3.5 Disbursements .....................................................................................................26 3.6 Transfers .............................................................................................................31 3.7 Procurement of Goods or Services .....................................................................33 3.8 Donations to School Activity Fund.....................................................................33 3.9 Per Diem Payments .............................................................................................34 3.10 Activity Sponsored Travel Advances .................................................................35 3.11 Cash on Hand ......................................................................................................38 3.12 Bank Reconciliations .........................................................................................42

LCPS Student Activity Funds Administrative and Accounting Manual

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Introduction

The Loudoun County School Board endorses and encourages all schools to utilize the financial resources of activity funds in the school’s educational program. Activity funds differ from public funds raised from traditional local taxing sources. They are neither subject to appropriation nor are they under the direct control of the budgetary process. Most of the accounting principles governing activity funds are comparable to those pertaining to the use of public funds. With proper guidance and accountability, the additional funds made available to a school through its activity funds can mean the difference between offering a student an adequate or a superior educational experience. The purpose of this administrative manual goes beyond the mere endorsement of activity funds. It sets forth a uniform set of administrative and accounting guidelines for the Loudoun County Public Schools. Consideration has been given to the inherent differences between schools because of size, grade level, complexity and staffing. The guidelines contained in this publication offer flexibility in certain accounting methods, while this manual is not intended to be all-inclusive of circumstances encountered. Hopefully, the procedures will aid each school in establishing the most efficient manner to manage the activity funds. The Loudoun County School Board Superintendent is expressly authorized through both state and local policy to develop, implement and monitor all policies and rules pertaining to school activity funds. Individual school principals are directly responsible for overseeing the school activity funds of their respective schools. While many of the duties and routines necessary to appropriately maintain the funds may be delegated to subordinates the responsibility for managing the funds remain with the principal. The Loudoun County School Board, by enforcing this policy, acknowledges the vital roles performed by all school employees in insuring that school activity funds are properly organized, administered and controlled.


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Section 1: General Accounting Principles 1.1 PURPOSE

To provide guidelines for the management of school activity funds.

1.2 SCHOOL ACTIVITY FUND DEFINITION

According to the regulations of the Virginia Board of Education school activity funds are defined as “All funds received from extra curricular school activities, such as entertainment, athletic events, cafeteria, clubs dues, etc., and from any and all activities of the school involving school personnel, students or property are hereby classified as school activity funds.” “Each school should keep an accurate record of all receipts and disbursements so that a clear and concise statement of the condition of each fund may be determined at all times. It shall be the duty of each principal to see that such records are maintained in accordance with these regulations, and rules promulgated by the local school board. The principal or person designated by the principal shall perform the duties of school finance officer or central treasurer.” The term “student activity funds” is synonymous with the term “school activity funds.”

1.3 GENERAL ACCOUNTING PRINCIPLES

Accounting principles are rules that have been adopted to guide activities necessary to the practice of accounting. • Consistency: Accounting information shall be maintained and reported from period

to period in a consistent manner. For example, indiscriminately changing fund entries from month to month or completely altering the school’s fund structure from year to year devalues the use of a school’s financial reports. Through consistent application of accounting information, comparability and decision making processes are improved.

• Timeliness: Accounting data should be entered into the accounting cycle and

financial information reported to decision makers in a timely manner. When important financial information about the activity funds is withheld, the ability to manage the school’s financial accounts is impaired.


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• Reliability: The accounting information must represent the entity’s economic condition. This objective is only accomplished by having complete and verifiable information. A bookkeeper’s accountability is dependent on adequate accounting documentation.

• Completeness: Financial presentations are determined to be a complete disclosure of

all significant financial information unless so stated. The matching process is essential to completeness. Recording all revenues and any corresponding disbursement in the same period constitutes an example of completeness. For example, collecting various revenues from picture sales during the year, but failure to remit and record the offsetting expenses for the cost of the pictures, would be an incomplete financial presentation for an activity fund because the inflated balance in the cash account would, in effect, be misleading.

1.4 ADMINISTRATIVE PRINCIPLES FOR SCHOOL ACTIVITY FUNDS

1. School activity funds shall be used solely in accordance with the purpose for which such funds are collected. No school activity shall be conducted for the sole purpose of producing revenue. It is intended that school activities shall be self-supporting.

2. Projects that generate school activity funds shall, in general, contribute to the

educational experiences of pupils and shall not conflict with the instructional program.

3. Funds derived from the student body, as a whole shall be expended to benefit the

student body as a whole either directly or indirectly. 4. School activity funds shall, in general, be expended in ways that benefit those pupils

currently in school who have contributed to the accumulation of such funds. 5. Student body representation should be encouraged in the management of funds raised

by the student body and expended for its benefit, subject to faculty supervision. 6. The management of school activity funds shall be in accordance with the best

business practices, including sound budgetary and accounting procedures.

7. The Assistant Superintendent of Business and Financial Services determines and sets activity fund accounting procedures.

8. Principals, through their representatives, shall participate in the preparation,

modification, and interpretation of policies, regulations, and procedures affecting student body affairs.


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1.5 BASIS OF ACCOUNTING

Basis of Accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. The accounts and records of the activity funds are maintained on a cash basis of accounting, reflecting only cash received and cash disbursed. Therefore, receivables and payables, inventories, accrued income and accrued expenses; equipment and depreciation are not reflected in the accounting records. Minor additions and replacements of furniture and equipment intended to be paid for out of normally recurring income are included in costs and expenses.

Because the cash basis of accounting does not record an expense until an invoice is paid or record revenue until cash is deposited, the following methodologies are used to capture additional financial information and ensure the accuracy of the Activity Fund Financial Statements.

All invoices should be approved by the principal and paid by the bookkeeper prior to the

end of each month in which the invoice was received. Any invoices received, but unpaid because of a valid business reason at the end of the fiscal year (June 30), should be listed out individually and accompany the standard monthly financial statement for June 30 and submitted to the Accounting Division.

All cash receipts shall be deposited intact on a daily basis, unless the total deposit amount

is less than $25.00. If the daily amount is less than $25.00, the principal may retain the daily cash receipts in a secure location until the total receipts reach $25.00 or until the last working day of the week, whichever occurs first.

1.6 INTERNAL CONTROL The State Comptroller has defined internal control as:

“The conscious inclusion in an agency’s operations of a series of actions to achieve certain specified objectives relating to control over assets and over accounting and record keeping practices. Broadly, the objectives of internal control are to give management reasonable, but not absolute, assurances that assets are safeguarded from unauthorized use or disposition and those financial records are reliable to permit the preparation of financial statements and make meaningful decisions regarding the allocation and use of financial resources.”


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Internal control encompasses continuous and qualified supervision by the Principal to ensure that approved procedures are followed and that the levels of responsibility and accountability are clearly defined. Within this context, reasonable care shall be taken to ensure, through education and training, that key personnel have high levels of competence and integrity. The basic standards of internal control, as defined by the State Department of Education can be summarized as follows:

1. Recording of Transactions: Transactions shall be recorded as executed and shall be

properly classified. 2. Separation of Duties: Key duties such as authorizing, approving, and reporting

transactions, issuing or receiving checks, making payments, and reviewing or auditing such transactions shall be assigned to separate individuals to maximize the effectiveness of internal control and to minimize the risk of loss. Internal control depends largely on the elimination of opportunities to conceal errors or irregularities. Such control, in turn, depends on the assignment of work to such a manner that no one individual is responsible for all phases of an activity or transaction, thereby creating a situation that would permit errors or irregularities to go undetected.

3. Access to Resources: Access to resources shall be limited to authorized personnel.

Access includes both direct physical access and indirect access through the preparation or processing of documents that authorize the use and disposition of resources.

4. Records: Procedures shall be implemented to ensure that records, regardless of media,

be secure from unauthorized use, alteration or destruction, and be retained in accordance with the policies of the State Archive, and be readily auditable.

1.7 FISCAL YEAR

The fiscal year for all activity funds within LCPS is July 1 through June 30.

The reporting period shall be the traditional calendar month. Schools shall include all financial transactions through the end of each month. The accounting records, including business documents, books of original entry, and ledgers shall be closed at the end of the month with in five working days. All corresponding monthly reports shall cover a complete month.


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1.8 AUDITS Loudoun County Public Schools coordinates internal audit practices with the external audit requirements by independent certified public accountants A. External Audits

The Virginia Board of Education mandates an annual external audit conducted by a certified public accountant. The basic objectives of the audit is to provide reasonable assurance, through the examination of sufficient, competent evidential matter, that:

1. The cash basis financial statements of the school activity funds are presented in accordance with Generally Accepted Accounting Principles, are a fair presentation of the school’s financial condition, and are free from material misstatements.

2. The school’s financial activities are in compliance with applicable laws and

regulations. 3. Adequate internal controls have been developed and maintained to determine the

character and extent of audit procedures which will afford a sufficient basis for an expression of an opinion as to the credibility and fairness of the financial statements

4. Cash balances, as stated in the books and records, were actually on deposit or on

hand at the balance sheet date. 5. Fund balances are properly described and classified at the balance sheet date. 6. Collections of the school have been properly receipted, recorded, classified and

deposited promptly. 7. Disbursements are properly authorized and recorded, and remittances are made on

a timely basis. Supporting documentation for the disbursements are maintained and easily identified.

The principal and bookkeeper should facilitate the auditors, in all regard, so as to minimize the time, expense and scheduling of the audit.


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B. Internal Audits

The objectives of the internal auditing function are the following:

1. Review of the reliability and integrity of financial operating information and the means used to identify, measure, classify and report such information.

2. Review of the systems established to ensure compliance with the policies, plans,

procedures, laws, and regulations, which could have a significant impact on operations and reports, and should determine whether the school is in compliance.

3. Review the means of safeguarding assets and, as appropriate, verify the existence

of such assets. 4. Review the operations to ascertain whether results are consistent with established

objectives and goals and whether the operations are being carried out as planned. 5. Communicate any findings or deficiencies found during the internal audit in such

a way as to enhance the objective of improving the school’s operation and management of activity funds.

Internal audits are performed at each school that has a termination of its principal and/or bookkeeper, other than at the school’s year end or fiscal year end.

In addition, “Random” internal audits of activity funds will be conducted to enhance the internal control structure of activity funds.”

1.9 DUTIES AND RESPONSIBILITIES

The principal’s responsibility is for safeguarding, accounting for, and managing the school activity funds. The duties that must be performed in providing proper accounting management and security may be designated to the degree desired by the principal, but the responsibility shall remain with the principal. The fund sponsor manages a defined activity fund project such as a school club or a general fundraising project. The Accounting Division has financial oversight responsibilities for all activity funds.


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The duties that must be performed by the principal or others in order to achieve proper security and management are specified below: A. Principals

Principals shall use, at a minimum, the following management practices:

1. Be familiar with and enforce the provisions of the accounting manual 2. Instruct the bookkeeper or secretary as to duties to be performed and provide

adequate supervision and guidance. 3. Obtain accurate and timely monthly reports from the bookkeeper or secretary

covering the results of operations and the status of school activity funds. 4. Discuss proper financial practices periodically with staff members and

responsible students (treasurers or other involved in financial operations) to include the following:

a. proper budget planning b. prior approval before committing school activity funds c. need for receiving reports d. ticket control e. proper control of funds collected through use of receipts and daily

submission to the bookkeeper or secretary. 5. Personally opens and reviews the monthly bank statement prior to presenting it

to the bookkeeper for a monthly financial reconciliation. 6. Review and analyze, at least monthly, the status and operations of the school

activity funds. The review process should involve the bookkeeper or secretary, department heads and fund sponsors to the extent considered appropriate.

7. Review supporting accounts to ensure that purchases and expenditures are

authorized and supported properly. 8. Ensure that adequate facilities and physical controls are available and are used

for protection of cash and other assets. Principals should have access to all accounting records and assets at all times, independent of the bookkeeper.


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9. Monitor the operation of revenue-producing activities to avoid unanticipated losses.

10. Monitor implementation of approved audit recommendations and management

decisions. 11. Approve all annual school activity budgets. 12. Ensure that other personnel are cross-trained in bookkeeping procedures to

perform those functions in the absence of the bookkeeper.

B. Assistant Principal

Assistant principals should be familiar with the provisions of this manual.

C. Bookkeepers and Secretaries

Under the supervision of the principal or delegate, the bookkeeper or secretary shall receive receipts, deposit, account for, and disburse all funds flowing through the school activity fund accounts, except as otherwise directed by the principal.

1. Deposit all funds promptly and intact. 2. Maintain all required records on a current and accurate basis and ensure that the

principal has access to all accounting records and school assets at all times. 3. Submit reports promptly and accurately in all transactions for school activity

funds at least monthly or more frequently as required. 4. Keep the principal informed of all actual or potential problems. Document the

problems for the principal and document the principal’s instructions concerning resolutions.

5. Cross-train other personnel designated by the principal in daily bookkeeping

procedures. 6. Perform other duties as specified by the principal.

D. Fund Sponsors and Other School Personnel

The principal of each school must appoint a staff member to supervise each activity fund account. Each sponsor shall become familiar with and ensure compliance with the administrative and accounting portion of this manual pertaining to his/her duties and responsibilities. Sponsors who are responsible for activities will review the financial operations and condition of the account periodically. Sponsors are obligated


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to coordinate with school bookkeepers to ensure that proper accounting procedures are enforced.

1. Ensuring that the billings pertinent to the fund, and received by the bookkeeper are correct (including sales tax provisions) prior to final payment.

2. Providing the bookkeeper with copies of contract agreements, etc that are

applicable to obligations of the activity account. 3. Collecting and documenting funds received from students. 4. Transferring such funds promptly to the bookkeeper. 5. Controlling inventories of salable merchandise. This control includes accurate

records of quantity and adequate measures for safeguarding the assets. 6. Enforce ticket control requirements and reporting for events requiring ticket

admission. 7. Providing necessary training to students who are assigned responsibilities for

handling funds to and provide oversight responsibility to those students.

E. Business and Financial Services

The Business and Financial Services department develops, implements, and maintains a school fund activity system.

1. Trains principals, bookkeepers, and other staff in school fund accounting procedures.

2. Selects, implements, and maintains the school activity fund automated

accounting software. 3. Ensures compliance with accounting procedures through an internal audit

program. 4. Coordinates the annual external audit of school activity funds. 5. Prepares annual financial reports consolidating school activity fund activities. 6. Provides principals with written communication describing the findings of

internal and external audits at least annually.


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1.10 CONFLICT OF INTEREST

The principals, directors, department heads, supervisors, teachers, secretaries or bookkeepers shall not authorize or enter into any personal financial transactions with the school that provides a commercial service or product to the school. These prohibited transactions apply to the related parties of the principal including his/her mother, father, brother, sister, spouse, son, daughter, son-in-law, daughter-in-law, brother-in-law, sister-in-law or any member of his/her household. Exceptions to this rule may be granted by the Director of Finance where public exigency is served. Request for either an interpretation or an exception to this rule should be made in writing to the Director of Finance. Further, the above noted parties shall not authorize or permit School Activity Fund monies to be used for loans or to cash personal checks for faculty, staff or students of the school.

1.11 FUNDRAISERS

Fundraising (fundraisers) are activities performed by students with the intent of earning money to support their particular organization through the sale of goods or performance of services.

Each principal shall establish specific rules to be followed at his/her particular school within the scope of the following guidelines:

A. Authorization of Fundraisers

All fundraisers must be approved by the principal or a designated person and comply with Section 8-4 of the School Board Policy Manual. Requests and authorizations must be written. Each request, should as a minimum, provide the following information:

1. Club or organization undertaking the activity. 2. Staff sponsor. 3. Description of the fundraising activity. 4. Justification/reasons for the fundraiser. 5. The name of and prior experience with the vendor(s) providing the product(s)

for resale (if applicable). 6. Beginning, ending and other significant dates.


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7. The location and provision for product or services pick up, delivery and other logistical considerations.

8. A financial summary including expected total net income including estimated

revenues, expenses.

B. Evaluation of Fundraiser Request

The principal must evaluate each fundraiser request and decide whether the request should be approved or disapproved. The following provides the principal with guidelines on evaluating the request:

1. The quality of the vendor(s) and product(s). 2. The appropriateness of the service or product. 3. The duration of the fundraiser. 4. The frequency and number of other fundraisers by the same organization and

school. 5. The level of funds necessary to support the organization’s program. 6. The activity earnings potential. 7. The requisite student effort versus earnings return, other administrative

considerations (i.e. staff time and building usage).

C. Administration of Fundraisers

The operation of a successful fundraiser offers each participating student a valuable learning opportunity. All aspects of managing an economic enterprise are present and must be considered. Plans and goals for the fundraiser must be made prior to its approval. Each fundraiser must be executed, in accordance, with the approved plan. Each fundraiser shall have a plan that:

1. Contains a budget including the cost of product, other expenses and anticipated

sales volume and income. 2. Identifies parties responsible for general oversight, product procurement and

delivery, and other significant functions.


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3. Identifies the method, time and place for:

• the sale for taking of order(s) of the product or service, • the delivery (performance) of the product or service, and • the collection of payment for the product or service.

. 4. Requires a final accounting and establishes specific monetary goals with which

to measure success.

D. Other Fundraiser Considerations

The following concerns all fundraising activities, but are directly applicable to those programs involved with the students' resale of products purchased at “wholesale" from a commercial vendor.

1. Student order forms should be reconciled and records maintained with respect to product distribution and the remittance of funds.

2. The sponsor must secure and control all funds collected by each student. 3. Regardless of an individual’s total sales, limits should be established with

respect to the quantity of product or amount of money in the possession (or responsibility of) an individual at any given time.

4. Sponsors must monitor and ensure compliance with deadlines for product

selling and distribution and collection of money. 5. Neither faculty nor staff should receive any monetary or other benefit from

product vendors. 6. Generally, one fundraiser per activity per year is sufficient. Two may be

authorized after considering the scope of an organization’s program and resources.

1.12 Grants

All grants or donations exceeding $5,000 should be transferred to the Division of Accounting to be recorded in Financial Accounting System.


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Section 2: Activity Fund Account Structure 2.1 CLASSIFICATION OF ACCOUNTS

The activity funds are organized on the basis of fund accounting, whereby each school is considered a separate accounting entity. The operation of each school is accounted for with a separate set of self-balancing accounts that are comprised of assets, fund balance, receipts and disbursements. Resources are accounted for in individual schools based upon the activity funds’ accounting structure.

2.2 TYPES OF FUNDS

The activity “fund” is that which each school allocates its’ resources based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The fund structure employed by LCPS groups each activity account within each school into the following funds:

1. Athletic Activities – The athletic activity fund is used to account for the athletic and

related activities of each school. This fund is maintained by the high schools only and provides cumulative information concerning the high school’s athletic receipts, disbursements, transfers and balances.

2. Class Activities – The class activity fund accumulates all grade-related resources. At

the elementary level, class activities represents grades kindergarten through five and other special classes such as special education and pre-school. In the middle schools, class activities represents grades six through eight and other special class activities, while at the high schools class activities are accounted for by the graduation year.

3. Contributions & Donations – This activity fund accumulates all donated funds to

the schools. In some cases the donated funds are restricted to be used for specific purposes. Such restrictions include memorial funds, grants, scholarships and endowments. The portion of funds restricted for specific purposes are a reservation of fund balance.

4. Fundraising Activities – The fundraising activities fund accounts for all school

related fundraising events. Some of the fundraisers occur annually, while other fundraisers occur on an ad-hoc basis. This fund tracks the receipts and disbursements of the fundraiser and provides the school with a profit/loss analysis of the event. The excess of receipts over disbursements are then transferred to and used by other activities.


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5. Operating Activities – The operating activities fund encompasses many accounts

that are necessary to maintain the school’s activity funds. Many of the receipts and disbursements from this fund are reimbursable to the School Board or represent operating costs of other activities.

6. Student Activities – The student activities fund represents accounts within each

school that are specifically for the students. Academic, club, and social activities are examples of student activity accounts that are accumulated in this fund.

7. Technology Education – The technology education fund represents all of the

resources generated at the Monroe Technology Center. Because these activities are both student and adult related and are for a specific purpose concerning technology training, the accounts are accumulated separately.

8. Other Activities – The other activities fund is used to record receipts, disbursements,

transfers and balances of those activities that do not fall within the definition of the other activities (items 1-7).

2.3 TYPES OF ACCOUNTS

The accounting structure incorporates a chart of accounts that is the standard for all LCPS’ Schools. Within the chart of accounts are two major account categories, Activity Accounts and Control Accounts. Each standard activity account number begins with the activity fund number to which it belongs. Control Accounts represent the assets held by the school. Since activity funds are accounted for on the cash basis of accounting the only asset held by activity funds are cash and investments.

2.4 ESTABLISHING AN ACCOUNT

An activity account may be established at the discretion of the school principal, but must be approved by the Accounting Division. The establishment of new activity accounts should strongly depend on the need and level of accountability. Under no circumstances may the standard chart of accounts be changed. Provisions have been made to allow each school flexibility to account for school specific activities within the standard chart of accounts. All activity accounts will be under the control and direction of the principal. Each account will have its individual general ledger where all receipts, disbursements, transfers and adjustments, for each account are recorded.


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2.5 OVERVIEW OF ACCOUNTING TRANSACTIONS

Each accounting event requires the bookkeeper to record a transaction(s) within the accounting system. Once transactions have been recorded (posted), the correction deletion of the transaction requires an additional transaction(s).

All activity fund transactions are based upon one of the following events:

1. Cash being received by an activity. 2. Cash being disbursed from an activity. 3. Corrections made to a transaction previously posted incorrectly. 4. Receipts and disbursements reported on the bank statement. 5. Recording the movement of cash between bank accounts. 6. Recording the movement of funds between activity accounts.

2.6 SOCIAL/SUNSHINE FUNDS These funds may be collected by staff to pay for the social activities for the staff. For example, funds are collected to pay for flowers in the event a faculty member has an illness or death in the family. These funds may be controlled by rules set by the participants. However, if these funds are recorded on the School Activity Fund Accounting Records, LCPS School Activity Funds guidelines apply and must be followed.


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Section 3: Activity Fund Accounting Procedures

3.1 ACCOUNTING PROCEDURES

Accounting procedures are the rules for recording and documenting all financial transactions. Strict adherence to accounting procedures is mandatory.

3.2 RECEIPTS

Processing receipts in a timely manner is the most important function that a bookkeeper performs. Since most of the receipts are collected in cash, performing the routines for receipts is critical to safeguarding the school’s assets.

A. Organizing Receipt Information

1. Whenever cash is transmitted from one person to another, the receiver shall verify

the amount of cash, sign the receipt and issue a copy of the signed receipt to the provider.

2. Depending upon each school’s volume of transactions, the bookkeeper will

organize daily routines that best meets the school’s needs. In all schools, the minimum organization of receipts will ensure that undeposited cash and receipts are kept in a safe and secure location.

3. The bookkeeper will gather reconciled cash transmittal forms from sponsors,

teachers, athletic directors and others that have submitted daily cash.

4. The bookkeeper will organize transmittal forms and other individual receipt information in chronological order for each bank deposit.

5. The cash and cash equivalents for each cash transmittal form will be stored in an

envelope, cash box or other storage device pending the processing of the daily deposit(s). Each individual receipt must reconcile to the amount of cash and cash equivalents.

6. If the bookkeeper has entered the receipt information into the accounting system

when it was received into the office, a printed receipt will accompany all other receipt information. If the bookkeeper enters and prints receipts in the accounting system at a later time, the daily receipt information will be incomplete until such time that the information is entered.


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B. Processing Receipts

The bookkeeper has several choices to make when processing receipts, a) enter receipt information as it becomes available to the bookkeeper or b) enter receipt information in a batch mode, after the information becomes available. Following are the procedures required to process receipts:

1. Cash receipts should be counted in the presence of the person turning in the money before the receipt is issued. If this is not possible, the funds should be placed in a sealed envelope by the person turning in the money indicating amount enclosed, activity account, and person’s name. The person turning in the receipts should sign and date across the seal. Receipts counted at a later time shall be in the presence of another person.

2. The receipt, if hand written, should be filled out completely and signed by the

bookkeeper before the original is given to the person turning in the funds. If computerized, the receipt information must be entered, verified and posted prior to printing the receipt. In this case, the original signed receipt may be delivered to the person turning in the funds, at a later time.

3. A signed receipt must be issued for all money received, whether collected in the

school or received by mail. 4. An original signed receipt shall be given to the person turning in the funds. A

duplicate receipt may be retained by the bookkeeper on a daily basis or printed later, if needed.

5. Receipts shall be made to the individual from whom the money is received,

rather than to a fund, account, or organization. 6. The composition of money turned in (checks, cash) should be indicated on the

cash transmittal form. When completing the transmittal/deposit form, list each check separately, and maintain currency and coin in the same composition as received, list the total amount of each denomination, (One’s, Five’s, etc.). Coin deposited can be listed as one amount for total of all coin for the deposit. CASH RECEIPTS SHALL NOT BE USED TO CASH CHECKS, MAKE CHANGE OR OTHERWISE BE USED AS A PETTY CASH FUND AT ANYTIME.


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7. Receipts shall be issued in chronological order of the date of the receipt. The

accounting system will automatically assign the receipt number in sequential order, so entering the receipts in chronological order is critical.

8. A physical count of all cash and cash equivalents (checks and money orders)

received must equal all receipts.

C. Athletic & Other Events Charging Admission Special rules are applicable to the sale of tickets to school events.

1. Tickets are “cash items” (they represent money to the school) and should normally be in the custody of the school’s bookkeeper and locked in the school vault/safe. A ticket “inventory” should be taken at least three times a year (beginning and end of the year, end of semester break) for each ticket color and sequence.

2. For each event requiring ticket sales, the bookkeeper should prepare ticket box(es) with pre-numbered tickets and sufficient cash to make change. To establish the required cash, the bookkeeper shall obtain a properly authorized check from the principal, cash the check, issue a receipt to the custodian of the account and record the advance as an asset. The numbers of the first ticket and last ticket on the roll and the cash provided in the change fund should be recorded by the bookkeeper on a reconciliation sheet and retain a copy.

3. The ticket box(es) are delivered to the school athletic director or the responsible party, as approved by the principal (see §1.11A-Authorization of Fund Raiser), will confirm the cash count and ticket numbers.

4. After completion of the event, the event’s responsible party will complete the reconciliation by recording the beginning and ending numbers remaining on the ticket roll and count the cash.

5. Each “ticket seller” shall count and reconcile the cash and tickets in the ticket box in the presence of another person upon receipt and prior to returning the box.

6. The box(es) with tickets, cash and reconciliation is to be returned to the bookkeeper who will follow the appropriate receipting procedure (noted above).

Note: Expenses associated with the any event, must be paid by check. No expenses shall be paid out of cash gate receipts. Gate receipts are to be deposited intact with the bookkeeper.


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D. Voiding Receipts

If a receipt is issued in error or if a receipt is posted to the accounting system in error, the bookkeeper may need to void the receipt. The following should be followed when voiding receipts.

1. If a mistake is made in writing a manual receipt, the original and the duplicate should be clearly marked VOID and both retained by the bookkeeper.

2. If a computerized receipt has a mistake and has been posted, the recorded

transaction must be reversed. 3. If the error is caught before additional receipts are entered with a difference

date, the bookkeeper would re-enter the information as a new receipt and void the incorrect receipt.

4. If the error is not found immediately, the bookkeeper will not void the incorrect

receipt, since the re-entering of a new receipt will cause the receipt number to be out of chronological order. Rather, an adjustment entry must be recorded to correct the original receipt.

E. Returned Checks

If a receipt is deposited to the bank and later returned by the bank due to non-sufficient funds (NSF), account closed, stale date or any other reason, the bookkeeper must record a reversing transaction of the original receipt. The following procedure must be used:

1. The bookkeeper must identify the original receipt that is now being returned by the bank.

2. Using the information from the original receipt, the bookkeeper will record an

adjusting entry in the accounting system to reverse the original transaction. 3. The same account numbers and sub-account numbers must be used to record the

reversing transaction. The bank account number used to record the original deposit will be used in the reversing transaction.

4. The transaction will be recorded in the accounting system as an adjustment and

more specifically, as a negative receipt. The bank account number used to make the original deposit will also be used as a negative receipt.


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5. The bookkeeper will follow up with the individual or company that issued the check to the school and request that the amount be paid to the school by cash, cashier’s check or money order.

6. The amount of fees charged by the bank for the returned check, if any, should

also be collected from the individual or company. 7. The bookkeeper will track all returned checks for eventual payment (manually). 8. When the replacement cash or cash equivalent, plus bank fees, is collected, the

bookkeeper will record the receipt and deposit as if it were a new receipt. 3.3 CASH TRANSMITTALS

Activity funds are derived from numerous cash transactions of students, staff and the general public. In order to provide a reasonable level of assurance that the cash derived from the activities reach the bookkeeper and in turn, the bank, many procedures and internal control practices have been adopted.

The transmittal of cash to and from sponsors, staff, volunteers, the public and the bookkeeper is critical. The following cash transmittal procedure shall be followed by those who are transmitting cash that has been collected from more than one source or individual. This procedure must be followed by all sponsors, athletic directors, teachers, librarians and others, that submit cash collected from more than one student or individual for ticket sales, field trips, fundraising sales, copier charges, and other events, where the actual control and collection of monies has been performed by someone other than the school bookkeeper. If the school bookkeeper collects monies from the student or individual, this procedure does not apply, but rather the bookkeeper will follow the cash receipts procedures. A. Submitting Cash Transmittals

1. The individual submitting cash must count all coins, paper currency, checks and

other forms of cash (cashier’s checks, money orders, etc.). A grand total of all forms of cash (and cash equivalents) must be totaled and submitted. The “Cash Transmittal Form” provides for the tabulation and submission described above.

2. The activity submitting the cash must be identified.

3. The person submitting the cash must be named.

4. The date of the collection of the cash must be provided.

5. A list, roster, count sheet or other reconciliation must accompany the cash

transmittal to substantiate the amount collected and where possible, the individuals that have paid for the activity


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6. The person submitting the cash and cash equivalents must sign and date the cash

transmittal form.

7. All cash transmittal information must be placed in an envelope and submitted to the bookkeeper.

8. Copies of the cash transmittal information shall be retained by the person

submitting the cash and verified against the receipt that will be provided by the bookkeeper. If variances exist, a conference with the bookkeeper should be requested to provide a reconciliation and eventual resolution of the variance.

B. Receiving Cash Transmittals

1. The bookkeeper will designate a safe and secure area to receive all cash transmittals.

2. Upon receipt of the cash transmittals, the bookkeeper will verify all cash and cash

equivalents received against the amounts indicated on the cash transmittal form and the physical count of the cash submitted and provide a signed receipt to the person submitting the transmittal.

3. Any discrepancies will be addressed immediately with the person submitting the

cash transmittal.

4. If no discrepancies exist, the bookkeeper will process the cash transmittal during the processing of daily receipts.

C. Other Cash Transmittals

The transmittal of cash to and from individuals involving cash on hand accounts and petty cash accounts, require the use of a cash transmittal form. When the control and responsibility for cash has transferred, physical counts of the monies being transferred must be performed by both the person submitting the monies and the person receiving the monies. Generally, the following procedure must be followed:

1. The individual submitting cash must count all coins and paper currency by the number of each denomination times the denomination value to equal the amount for each description. A grand total of all cash must be totaled and submitted. The “Cash Transmittal Form” provides for the tabulation and submission described above.

2. The activity submitting the cash must be identified. 3. The person submitting the cash must be named.


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4. The date of the transmittal must be provided. 5. The signature of the individual submitting the cash must be provided. 6. The recipient of the cash will verify the cash transmittal information by

counting all denominations and calculating the totals. 7. If the amounts agree, the recipient will sign and date the cash transmittal form

and provide a copy of the transmittal to the person submitting the transmittal form. If the amounts do not agree, the recipient and person submitting the cash will physically count all cash for verification.

8. If the physical count of cash does not reconcile, the recipient will note cash over

or cash short on the cash transmittal form, sign and date the form, and have the person submitting the cash to initial the cash transmittal form.

9. This procedure must be followed each and every time the cash on hand or petty

cash accounts are transmitted to a different individual. 10. All cash transmittal forms must remain with the cash account in its locked cash

box. 3.4 BANK DEPOSITS

All monies collected must be deposited in the school bank account(s) according to policy. The money should be deposited in the same form (e.g., cash, check, money order) it was received. Under no circumstances should purchases be made or invoices paid or used as a change fund from undeposited cash receipts. No checks shall be cashed from undeposited cash on hand. A. Processing Bank Deposits

1. All checks received should be immediately endorsed on the back of the check

with a restrictive endorsement such as “For Deposit Only, To the Account of (name of school)” Checks should be endorsed exactly as drawn. If it is drawn incorrectly, endorse it exactly as drawn on the “Payee” line, then write or stamp the correct endorsement beneath the first endorsement.

2. Currency and checks collected throughout the day, along with cash transmittal

forms, receipts (either printed or hand written) or other receipt information should be used to prepare the bank deposit slip.

3. The bookkeeper shall review all of the receipt information and verify the

amounts, account number, sub-account number, dates and other information. If


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entered into the accounting system, (but not posted) a deposit edit list must be used to verify this information for each individual deposit prior to posting the receipts. (This is preferred.)

4. Prepare a bank deposit ticket in duplicate. Two copies must be taken to the

bank for validation. The bank keeps the original and the validated duplicate deposit ticket is attached to the deposit register, with copies of the receipts, cash transmittal forms and other receipt information.

5. Indicate the total currency and total coin included in the deposit on the deposit

ticket. List all checks included in the deposit separately on the deposit ticket by the name of the payer. In most cases, the individual checks should be listed. However, if there are numerous checks included, the bookkeeper may insert “see attached tape” and provide the total of all checks on the deposit ticket. If checks are not listed separately, two adding machine tapes of the checks included should be prepared. One tape is given to the bank with the validated copy of the deposit ticket. The other tape is to be kept with the deposit records at the school.

6. The total for each deposit ticket must agree with the total of all receipts, cash

transmittals and other receipt information. 7. The bookkeeper will deposit the funds to the bank and retain the validated

deposit ticket, which is to be attached to the deposit register, receipts, cash transmittal forms, adding machine tape of checks and filed in the cash receipts folder.

B. Reconciling Bank Deposit

1. The deposit edit list or deposit register should agree to each individual deposit

ticket. A deposit edit list can be run once the receipts are entered and should match to each deposit ticket.

2. Once all receipts have been entered into the accounting system and the deposit edit

list has been verified, the bookkeeper will post cash receipts.

3. The bookkeeper may verify that all transactions posted correctly by using the receipts journal report, the receipts register report and/or the deposit register report. At a minimum, the deposit register for the deposit date should be produced and accompany all other deposit information (the deposit register should be the same as the deposit edit list).

4. If all cash receipts are entered correctly, the deposit register report will indicate

each receipt number within each individual deposit for each day.


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5. If the deposit register report does not match exactly to each deposit ticket for each day, perhaps the bank date or the deposit number was entered incorrectly. As long as the total of all receipts reported on the deposit register agrees to the total of all deposits made for the month, the bank reconciliation process will be correct for all deposits. Correctly entering each receipt by deposit number, if you have more than one deposit for a day, and by the deposit date will ensure the accuracy of the deposit records

6. When the bank statement arrives, it shall be first delivered to the principal,

unopened for review. The bookkeeper will then review each deposit listed on the statement should be matched to the deposit register for the month.

7. If missing receipts are detected during the bank reconciliation process, the

bookkeeper must enter the missing receipts as adjustments in the accounting system and make auditing notes that fully explain the transactions.

3.5 DISBURSEMENTS

All disbursements from activity funds must be supported with complete documentation, have approval of the principal and follow procurement policies as defined in the Loudoun County Public Schools Procurement Manual. The internal control over disbursements from activity funds provide reasonable assurance that funds are not misused or misappropriated.

A. Processing Disbursements

The following procedures must be followed for all disbursements of activity funds:

1. The bookkeeper, sponsor, athletic director, librarian or other responsible staff member will ensure that the appropriate activity funds are available for the procurement or ordering of goods and/or services prior to such commitment.

2. The responsible staff member will follow all procurement policies and submit

procurement information (phone quotes, written quotes, etc.) to the bookkeeper when submitting other disbursement information.

3. All disbursements will be supported by the original invoice, sales receipt, or

other documentation that describes the goods or services received, the date received, the activity account responsible and the amount being disbursed.

4. Supporting documentation will be checked as to extensions, totals, pricing, and

evidence that goods or services have been received. 5. The bookkeeper will record all invoice information in the accounting system.


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6. The bookkeeper verifies that all invoice transactions have been entered correctly by using the disbursement edit list.

7. The principal will approve all disbursements by signing either an expenditure

voucher, check request form, and/or school issued purchase order. 8. The bookkeeper will prepare a “select for payment report” to include all

vendors and invoices that is scheduled to have checks issued against. 9. The bookkeeper will print checks for all invoices selected to be paid. 10. All invoices will be paid promptly within discount periods, if applicable. 11. If the vendor sends statements, the charges on the statements should be checked

against the invoices, and the invoices should be attached to the statement to support the disbursements. No payment shall be authorized using a statement alone as supporting documentation.

12. All unpaid invoices and obligations of the school should be paid prior to June

30 school year-end. 13. If for any reason an independent, outside document (such as a vendor invoice) is

not available, an expense documentation memorandum, letter or other substitute must be submitted and include payee’s name, address, activity account to be charged, time/services received, data received, itemized amounts and total amount. The expense documentation memorandum must be counter signed by the principal.

14. After payment, invoices or other supporting documentation, as well as check

requests, expenditure vouchers or purchase orders should indicate “PAID”.

B. Voiding or Correcting Disbursements

The bookkeeper may wish to void disbursement transactions that have been entered and/or posted improperly or to correct a disbursement transaction. To void a check, see the procedure “Stop Payment, Voided Checks, and Replacement Checks”. The following provides procedures to void or correct disbursements:

1. When voiding or correcting a disbursement, the bookkeeper must determine whether the transaction has been posted or if it is in the edit file.

2. If the transaction is in the invoice edit file, the bookkeeper simply edits an

existing invoice to delete the invoice or correct the information.


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3. If the transaction has been posted, the bookkeeper cannot void the disbursement without voiding the check that was issued.

4. If the transaction has been posted, the bookkeeper can correct the activity

account number by recording an adjustment to disbursements.

C. Checks

Checks shall be written only when supported by documents indicating evidence of receipt of goods or services, the appropriate approvals, and supporting documentation. Pre-numbered checks printed with the exact name and address of the school and the banking institutions’ account number shall be used for all disbursements. Issuing checks In issuing a check the following procedures apply:

1. When checks are presented to the principal for signature, all lines should be completed and the supporting documents shall accompany the checks. A select for payment report may be presented as well.

2. Checks must never be signed in advance or in blank.

3. Checks shall never be issued payable to “Cash”.

4. Two signatures are required on all checks issued and the payee cannot be one of the authorized signatures.

5. A vendor or individual should always be the payee.

6. In the spaces provided on the checks and check stub, if manually prepared, the bookkeeper should indicate what the check is for (invoice #, date, etc.)

7. Checks must be signed by the principal and designated second signature, only after a thorough review of the supporting documents.

8. The bookkeeper will retain the office portion of the check stub and attach to the

supporting documentation.

9. The bookkeeper will mail or deliver the check to the payee.


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D. Clearing checks

1. For each fiscal month, the bookkeeper will record each check that has cleared the bank. 2. Using the bank statement issued by the banking institution, the bookkeeper will organize all returned (cleared) checks in check number order.

3. The bookkeeper will verify that each of the cleared check amounts stated on the bank statement agrees with the amount of the check.

4. If any check amount disagrees with the amount stated on the bank statement, the bookkeeper will contact the bank to report the banking error.

5. All correctly stated cleared checks will be recorded in the accounting system as cleared.

6. A cleared check report will be produced to verify the monthly total of cleared checks recorded against the bank statement amount of withdrawals for cleared checks.

E. Write off of Stale-dated/Outstanding checks

Periodically, the bookkeeper will review the outstanding check list to identify all checks that are outstanding and more than 180 days old. Following is the procedure to write-off checks that are determined to be more than 180 days old:

1. Using the outstanding checks list, the bookkeeper will review all outstanding checks and identify those that have an issue date that is more than 180 days prior to the current date.

2. The bookkeeper may contact each vendor for verification concerning the receipt

of each check older 180 days. 3. The bookkeeper will review with the principal the list of possible checks to be

written off and receive the principals’ approval to record the write off for each check.

4. The bookkeeper will void the check and the invoice in the accounting system. 5. Information about the write off should be filed systematically with other stop

payment or voided checks.


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F. Stop Payment, Voided Checks and Replacement Checks The bookkeeper may have requests from vendors to issue replacement checks when the original checks are not received. This process may need to void a check that was issued incorrectly. The following procedures shall be used:

1. Upon requests from vendors, the bookkeeper will verify that the check in question has not cleared the bank. The accounting system allows for the review of the check’s status.

2. Also, the bookkeeper may have a check in hand that has incorrect information

or printed incorrectly. 3. If the check in question has not cleared the bank, the bookkeeper will evaluate

whether a stop payment request should be initiated or not. Usually the amount of the check will be the deciding factor when considering a stop payment. This stop payment fee may exceed the actual amount of the check. If a stop payment is requested, the bookkeeper will call the bank and request the stop payment.

4. For both stop payments and voiding checks, the bookkeeper will find the

original check request form, expenditure voucher or purchase order, along with the supporting documentation of the original check. Using the original information concerning the stop payment check, the bookkeeper will void the check in question, but retain the invoice information, in the accounting system. The stop payment or void information should be noted on the original check request, initialed and dated by the bookkeeper.

5. The bookkeeper will then print a new check using the original invoice

information. 6. Information about the stop payment or voided check should be filed

systemically with other stop payment or voided checks.


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3.6 TRANSFERS

Transfers are simply the movement of cash between two or more bank accounts (Cash Transfers) or the movement of fund balances between two or more activity accounts (Fund Transfers). Transfers can never be made between a cash control account and an activity account. A. Cash Transfers

Cash Transfers are recorded when the use of cash from one bank account or cash-on-hand account is being provided to another bank account or cash-on-hand account. If cash from the checking account is being used to open a savings account, then the movement of the cash from the checking account to the new account is recorded as a cash transfer. If the bank automatically moves cash from the certificate of deposit to the checking account, then interbank transfer is recorded as a cash transfer. All cash transfers must follow these procedures.

1. Cash transfers must have the written approval of the principal. The transfer voucher may be used as the written approval.

2. If new bank accounts or new cash on hand accounts are being initiated, the

bookkeeper should request new account numbers from Accounting. 3. If a check needs to be issued to move the cash from the checking account to

another cash account, a memorandum must be used as the invoice indicating the specifics concerning the new account. The account number recorded in the accounting system for the detail line of the invoice, should always be the new cash account.

4. If the bank moves cash between two or more accounts as an interbank transfer,

the bookkeeper will record the bank transaction as a “cash transfer” in the accounting system.

5. Cash transfers must be recorded in the month that the cash transfer took place. 6. The bookkeeper must reconcile all cash transfers monthly. 7. All cash transfer information should be filed separately in chronological order.


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B. Fund Transfers

Fund transfers are recorded when one activity account is providing funds to another activity account. As an example, profits from a fundraising activity account are usually transferred to other activity accounts that will use the profits. Another example is when funds are transferred between activity accounts to accommodate deficit balances. The following procedures must be followed for fund transfers.

1. Fund transfers between activity accounts must be approved in writing by the principal, and if the principal requires, the transferring sponsor. The transfer voucher may be used for this approval.

2. Fund transfers must be posted in the appropriate accounts in the same month

that the transfer is authorized. 3. Written notification of the transfer should be given to the sponsor of each

activity account affected by the transfer. 4. All fund transfer information should be filed separately in chronological order.

C. Correcting Transfers

At times, the bookkeeper may need to correct transfer transactions that were recorded incorrectly. Unlike the correction of receipts, disbursements, and other incorrectly posted transactions, the correction of transfers cannot be recorded as an adjustment to the accounting system. Corrections to transfer transactions require the bookkeepers to record an additional transfer transaction that reverses the amounts of the original transfer transaction and records the correct transfer transactions. Follow the guidelines below to correct transfers that have been posted incorrectly.

1. If the bookkeeper discovers an incorrect transfer, the bookkeeper should reverse it using the reversal button on the transfer entry screen.

2. The bookkeeper will record another new transfer transaction that will be the

correct information.


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3. The original transfer transaction voucher and the reversing transfer transaction

voucher can be attached together to indicate a voided transaction. 4. The bookkeeper will file all information in the transfer file.

3.7 PROCUREMENT OF GOODS OR SERVICES

All purchase of goods and services by activity funds must adhere to the current School Board’s policy on procurement. The principal of each school must ensure that all sponsors, teachers, athletic directors, librarians and other staff members responsible for procuring goods and services adhere to Loudoun County Public Schools (LCPS) procurement policies and procedures. Refer to the LCPS Procurement Manual for requirements to comply with Federal/State and LCPS policy. The manual can be accessed through the LCPS intranet at the Business and Financial Services home page and clicking on PURCHASING.

3.8 DONATIONS TO SCHOOL ACTIVITY FUNDS Donations to Public Schools are tax deductible.

A. Valuation of Donated Materials

1. Schools should write a letter acknowledging the gift but do not place a dollar value on the donated asset. Instead describe the donated equipment and its general condition. It’s the responsibility of the donor to assign a dollar value of the donation.

B. Donations of Computer Equipment

1. In general schools should avoid accepting the donations of used computers and other types of computer equipment such as printers. In most cases, the

monitor and most allocation costs of used computer costs exceeds the value of donated equipment. Before accepting used computer equipment, schools should contact the Division of Administrative Information Technology and receive advance approval from the Supervisor of Administrative Information Technology.


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3.9 PER DIEM PAYMENTS

On occasion, schools may disburse funds to students who are traveling on behalf of the school and remaining overnight. In lieu of the sponsor receiving an advance for meals and being required to submit disbursement documentation upon returning, the sponsor may, upon the principal’s approval, request per diem payments for the students’ meals or partial offsets for meals. A. Requesting Per Diem Payments

The sponsor of the activity requesting per diem payments for students must follow these procedures:

1. The sponsor must provide a written request to the principal which must include the activity involved, the event or reason for travel, the dates and times of travel, the destination, a list of student names, each meal being requested by sponsor name and amount, a total amount of per diem payments by sponsor and the name to be used on the check, and the date the check is needed.

2. The principal must approve the sponsor’s request by signing the request and

submitting to the bookkeeper. 3. The bookkeeper will verify the calculations on the approved request and provide

a copy of the request to the sponsor.

B. Processing Per Diem Payments

The bookkeeper will process the per diem request as an invoice and produce a check to the sponsor as follows:

1. The bookkeeper will use the request to record an invoice in the accounting system.

2. The approved per diem request information will act as the supporting

documentation, but a check request form or an expenditure voucher must still be approved by the principal to issue the check.

3. The bookkeeper will issue the check to the sponsor. 4. The sponsor will cash the check and disburse the cash to each student for the

amount stated on the request. 5. The sponsor will have each student sign the request (copy) confirming that the

student received the cash.


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6. The sponsor will provide the bookkeeper with a copy of the students’

confirmation of receiving the cash (copy of the request). 7. The bookkeeper will file this copy, along with the supporting documentation for

the check.

C. Changing Per Diem Payments

If for some reason, the amounts per student that has generated the sponsor’s check changes due to a cancellation by a student, or a change in the student’s schedule, etc., the sponsor will have too much cash or not enough cash. In this case, follow these procedures:

1. If the change is detected prior to the sponsor cashing the check, the bookkeeper may void the original check, adjust the invoice amount (with the principal’s approval), and issue a new check.

2. If the original check has been cashed, and additional cash is needed, the sponsor

may request a second check. Excess cash must be returned to the bookkeeper for deposit.

3. If a second check is needed, the bookkeeper will follow the procedures outlined

under processing per diem payments. 4. If cash is returned to the bookkeeper, the bookkeeper will include the cash in the

normal daily deposit, create a receipt using the same account number and sub account number of the disbursement transaction.

5. The bookkeeper will submit the receipt to the sponsor. 6. The bookkeeper will record adjusting transactions to the account transactions to

the accounting system to correct the receipts and disbursements, which have been overstated by the return of the per diem payment. The adjusting transaction will use the same account number and sub-account number as the original disbursement and subsequent receipt

3.10 ACTIVITY SPONSORED TRAVEL ADVANCES

Schools may provide travel advances to sponsors responsible for an activity trip. This travel advance will only be allowed for students’ travel and related expenses while representing the school or activity on a school sponsored trip that includes overnight stays.


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A. Requesting Activity Sponsored Travel Advances

The sponsor of the activity requesting travel advances for students must follow these procedures:

1. The sponsor must provide a written request to the principal which must include the activity involved, the event or reason for travel, the dates and times of travel, the destination, a list of student names, details of estimated expenses being requested by student name and amount, a total amount of travel advance by student and a grand total of travel advance, the name to be used on the check, and the date the check is needed.

2. The principal must approve the sponsor’s request by signing the request and

submitting to the bookkeeper. 3. The bookkeeper will verify the calculations on the approved request and provide

a copy of the approved request to the sponsor.

B. Processing Activity Sponsored Travel Advances

The bookkeeper will process the travel advance as an invoice and produce a check to the sponsor as follows:

1. The bookkeeper will use the request to record an invoice in the accounting

system. 2. The approved travel request information will act as the supporting

documentation for the estimated amount, but a check request form or an expenditure voucher must still be prepared then approved by the principal, to issue the check.

3. The bookkeeper will issue the check to the sponsor. 4. The sponsor will cash the check and be responsible for the cash throughout the

trip.

5. The sponsor will disburse the cash as needed for the student’s travel and related expenses.

6. The sponsor will retain sales receipts, hotel statements, meal tickets, and other

supporting documentation for each disbursement made from the travel advance.


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7. Upon return from the activity, but within 3 days, the sponsor will reconcile the travel advance received to the documented expenses. This reconciliation shall be approved by the principal and used to reimburse any amounts owed to the sponsor or document the amounts owed to the school.

C. Recording Activity Sponsored Travel Advances

1. The bookkeeper will verify the reconciliation and ensure all documentation is provided.

2. If the sponsor’s reconciliation does not agree with the bookkeeper’s analysis,

the bookkeeper will request a conference with the sponsor to resolve all issues. 3. The bookkeeper will either record the returned cash or record an additional

invoice for payment based upon the difference between the travel advance and the actual documented disbursements. If the estimated travel advance exactly equals the documented disbursements, the bookkeeper will not need additional transactions to the accounting system and therefore, can skip to step 9 below.

4. If a second check is needed, the bookkeeper (upon approval by the principal)

will process an additional invoice and print the second check.

5. If cash is returned to the bookkeeper, the bookkeeper will include the cash in the normal daily deposit, create a receipt using the same account number and sub-account number of the disbursement transaction.

6. The bookkeeper will submit the receipt to the sponsor. 7. The bookkeeper will record adjusting transactions to the accounting system to

correct the receipts and disbursements, which have been overstated by the return of the travel advance payment. The adjusting transaction will use the same account number and sub-account number as the original disbursement and subsequent receipt.

8. The bookkeeper will file all travel advance reconciliations, supporting

documentation and other information with the second check information, if applicable, or if cash returned, file with the first check information previously filed.

9. In either case, the bookkeeper should note in the files of the estimated or first

check information, a reference to see either the second check or the receipt that was eventually recorded.


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3.11 CASH-ON-HAND With the principal’s approval, certain cash-on-hand accounts may be established and maintained. The two types of cash-on-hand accounts are the petty cash account and the change fund account. The petty cash account operates as an imprest fund, whereby an initial funding level is established and the total of all cash and supporting disbursements from the fund will always equal the initial fund level. The change fund account will be initially funded as a predetermined amount and will have no disbursements or receipts. Cash-on-hand procedures have been developed to provide additional internal controls over the transmittal, receipt and disbursement of actual cash currency. A. Establishing Cash-on-Hand Accounts

The principal may establish one or more petty cash accounts and may establish one or more change accounts. It is strongly suggested that the minimum number of accounts be established and that the funding level for each account be no more than $50.00.

1. The bookkeeper, sponsor, athletic director, event coordinator, etc. will request in writing, the establishment of the particular cash-on-hand account.

2. The request will provide the type of account being requested (i.e. petty cash or

change fund), the activity for which the cash accounts will be used, the name of the permanent account or a temporary account for a specific one time event, as well as the amount of funding needed for the account.

3. The principal will evaluate the request and determine whether currently

established cash-on-hand or petty cash accounts may be used. The principal may determine a new account is warranted and approve the establishment of the requested account.

4. The principal, upon approval, will provide the request information to the

bookkeeper, along with the approved initial funding level for the account.

5. The bookkeeper will set up the new account in the accounting system.

6. The bookkeeper will create an invoice (based upon the request information) to issue a check to the sponsor (vendor).

7. The invoice header information will indicate the checking account number being disbursed, while the invoice detail information will indicate the new cash account number.

8. After editing the invoice information, the bookkeeper will print the check.


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9. The bookkeeper will issue the check to the sponsor.

10. The sponsor will cash the check and retain the cash in the denominations desired. A metal cash box should be used to store the cash and shall be in control of and responsibility of the sponsor. The cash box must be kept in the school vault/safe when not being used.

B. Petty Cash Disbursements

The sponsor of the petty cash account will be responsible to account for all disbursements. Disbursements of cash from petty cash must comply with the same policies and procedures that have been established for disbursements of activity funds. Following are the procedures to disburse cash from the petty cash account.

1. The sponsor or other responsible staff member of the petty cash account will ensure that the appropriate activity funds are available for the disbursement for goods prior to such commitment.

2. The sponsor or other responsible staff member of the petty cash will approve an

expenditure voucher (hand written) for an estimated amount of cash needed for the purchase, to the individual actually making the purchase. This expenditure voucher will be kept in the petty cash box.

3. The sponsor will ensure that the individual making the purchases is aware that

sales tax can not be disbursed, and therefore, make all purchases exempt of sales tax.

4. After the purchase has been made, the individual will return unused cash to the

petty cash sponsor, along with the original invoice, sales receipt, or other documentation that describes the goods or services received, the date received, the activity account responsible and the amount disbursed.

5. The returned cash and the supporting documentation must equal the expenditure

voucher amount. The supporting documentation will be checked as to extensions, totals, pricing, and evidence that goods or services have been received.

6. The sponsor of the petty cash will note the amount of cash returned on the

expenditure voucher and subtract the amount from the original amount. Once subtracted, the new expenditure voucher amount must equal the total of all supporting documentation.

7. The sponsor will place the expenditure voucher, along with the supporting

documentation of disbursements attached, in the petty cash box.


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C. Petty Cash Replenishment

The petty cash fund will disburse cash and over time deplete the amount of initial cash available. The sponsor will need to request additional cash to replenish the petty cash back to the original funding level. Following describes the process of replenish the petty cash fund:

1. The sponsor of the petty cash fund will monitor the amount of cash available and determine when to request replenishment of the fund.

2. The sponsor will remove the expenditure vouchers and supporting

documentation from the cash box and run adding machine tape of the total amount of cash disbursed.

3. The sponsor will count the remaining cash in the cash box. 4. The amount of remaining cash plus the amount of the disbursements should

equal the established funding level for the petty cash. 5. The sponsor will submit the expenditure vouchers, along with supporting

documentation for approval by the principal. Upon approval, the bookkeeper will prepare a check request in the amount of the total disbursements.

6. The bookkeeper will enter the expenditure vouchers as invoices in the

accounting system, using the sponsor’s name as the vendor.

7. The bookkeeper will issue a check to the sponsor for the total of all expenditures submitted.

8. The sponsor will cash the check and place the cash in the petty cash box. 9. The sponsor will verify that the total of all cash in the petty cash box equals the

initial funding level.


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D. Returning Cash on Hand Accounts

At the end of a school year or the end of the event, the sponsor must return all cash on hand accounts to the bookkeeper. The bookkeeper will deposit the cash into the school’s bank account. The following is the procedure for the return of cash to the bookkeeper:

1. When the sponsor is finished with using the cash on hand account or at the end of the school year, the sponsor will reconcile the cash accounts and submit the cash to the bookkeeper, using a cash transmittal form.

2. The cash transmittal form must be fully completed.

3. The bookkeeper, upon receipt of the cash transmittal form, will count all cash and verify that the cash transmittal is accurate and complete.

4. The bookkeeper will issue a receipt to the individual returning the cash. The

receipt entry will be made using the bank account number in the header portion of the receipt entry and using the cash account number in the detail line entry portion of the receipt. No activity account is being affected.

E. Reconciling Cash on Hand Accounts

All cash-on-hand accounts, whether petty cash or change funds, must be reconciled monthly (at a minimum), by the responsible party. All cash-on-hand accounts must reconcile to the initial funding level. Change funds should always have the exact amount of cash that equals the established funding level, while petty cash accounts will have cash and expenditure vouchers that equal the established funding level.

1. Sponsors of petty cash and change funds must reconcile the account monthly. 2. The cash-on-hand reconciliation form must be used to perform the

reconciliation reference. 3. The sponsor will indicate variances in the cash on hand account by reporting

cash over or cash short. 4. The cash on hand reconciliation form must be submitted to the bookkeeper

monthly.


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5. The bookkeeper will review and file all cash on hand reconciliation forms and

inform the principal of any discrepancies. 6. The bookkeeper should, on an ad-hoc, unscheduled basis, perform a

reconciliation of all cash on hand accounts, as an internal control procedure. The bookkeeper must have access to all cash on hand accounts and perform the reconciliation. The bookkeeper reconciliations may indicate that additional reconciliations are needed beyond the monthly requirement.

7. The bookkeeper reconciliations should be filed along with the sponsors’

monthly reconciliations.

3.12 BANK RECONCILIATIONS

All schools are required to perform bank reconciliations for each bank account used by activity funds. A. Reconciling the Checking Account(s).

The balance shown on the checking account bank statement rarely agrees with the balance on the accounting system. Items may appear on the books, which have not been entered on the bank statement (outstanding checks, deposits in transit) and items can be on the bank statement, which have not been entered on the books (interest income, service charges, returned checks, etc.). Therefore, reconciliation between the balance per bank statement and the balance per books must be prepared upon receipt of the bank statement(s) each month. The following outlines the procedures to reconcile each checking account:

1. The bank statement, when received, shall be delivered unopened to the principal. The principal shall open the statement and review canceled or cleared checks, make a copy of the statement and submit the statement to the bookkeeper.

2. The bookkeeper should review the bank statement for bank entries made and

ensure that all canceled (cleared) checks enclosed agree by amount to the amount of the cleared check on the bank statement.

Loudoun County Public Schools School Activity Funds

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3. The bookkeeper will make necessary adjustment entries into the accounting

system for interest income, service charges, returned checks (NSF checks), and other bank statement entries that have not been previously recorded into the accounting system.

4. All adjustment entries must be made using bank statement date as the bank date. 5. The bookkeeper will ensure that all deposits recorded in the accounting system

equal the bank statement’s deposit amounts. 6. The bookkeeper will ensure that all necessary adjustments were recorded

correctly and can be reconciled to the bank statement entries. 7. The bookkeeper will record the cleared checks in the accounting system using

the actual check returned with the bank statement. (The checks should have been matched to the bank statement amounts in #2 above).

8. The bookkeeper will print the cleared check list from the accounting system and

compare the check amount with the cleared amount (they should equal). This listing of cleared checks should also equal the bank statement’s amount of withdrawals for checks

9. Using the bank statement, the bookkeeper will enter the bank reconciliation

information into the accounting system and print the bank reconciliation proof of cash report, as well as the deposit in transit report, outstanding check register and the other bank reconciliation reports.

10. The bookkeeper will review the bank reconciliation report and ensure the

reconciled bank balance equals the book balance. 11. If the reconciliation does not balance, the bookkeeper must investigate further to

determine missing transactions. 12. Once reconciled, the bookkeeper will submit the bank reconciliation report to

the principal for signature and submit a copy to the Accounting Division.

Loudoun County Public Schools School Activity Funds

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B. Reconciling other Bank Accounts

Other bank accounts may be used to account for savings accounts, money market accounts and/or certificate of deposit accounts. If other bank accounts are being used by activity funds, the bookkeeper must also reconcile these accounts when the bank statement is received as well as the end of the fiscal year.

1. The bookkeeper may provide reconciliations of these bank accounts by simply using a copy of the bank statement, Certificates of Deposits (CD), etc, and adding interest accumulated to prove the beginning balance plus interest equals the ending balance. Print a general ledger report of the accounting system’s account that matches the bank statement account.

2. The bookkeeper may track CD’s by using a spreadsheet that indicates the CD

number, date purchased, interest rate, term, interest accumulated and balance. 3. The bookkeeper may chose to use the accounting system’s bank reconciliation-

proof of cash process for each account. Simply change the bank account number to the CD savings, etc. and enter the prior date (could be quarterly dates), ending date, prior balance, deposits, and withdrawals. Of course, no checks require clearing, but interest income entries may be needed.

loudoun county public schools county public schools ... most of the accounting principles governing...

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