6610 - STUDENT ACTIVITY FUND

Wisconsin Statutes, §120.16(2) authorizes a school district to receive money raised in "extra-curricular activities". It is commonly held that student activity accounts are considered "extra-curricular activities".

Student activity funds are funds which are being held for the benefit of the students. The funds are under the control of the school board who has a fiduciary responsibility to manage the funds in an appropriate manner. The district holds the funds in an agency capacity whereas it has custodial powers rather than administrative. Acting as agent, the district is responsible for maintaining records and properly accounting for the activity within the agency fund (student activity fund). The district is also responsible for establishing and enforcing policies and procedures over the activity in the accounts. The Board authorizes the maintenance of approved student activity funds as allowed by DPI regulations and the auditor's recommendations.

Student activity funds are generally student-related clubs, classes or activities organized to raise money and/or promote a particular program or project where the purpose is student-related. The activity funds may be used to record returnable fees collected or fees collected at school locations on a temporary basis until turned over to the district for deposit. Funds such as convenience funds (typically called sunshine funds, faculty funds or coffee funds) or parent groups (such as booster club) are not student-related and have no statutory authority for the district to maintain. Gifts in the form of scholarships create a trust agreement, whereas the district acts as administrator rather than custodian, and are accounted for in a trust fund rather than a student activity fund.

It is the nature of student activity funds to record transactions that are small in dollar amount but numerous in the number of activities. They often consist of fundraisers with numerous parties handling money. Their overall dollar amount is generally small and commonly thought of as immaterial to the overall financial statements of the district. The funds generally have what is called decentralized accounting whereas expenditures are made at the school buildings rather than at the central office. Even though the funds are decentralized, internal controls over the funds must be maintained and include the following:

1. Documentation of club purpose: each activity account will have a written documentation of the club’s purpose and proposed fundraising activities.

2. Verification of Board approval of student organization on file.

3. Separate accounts will be established and maintained for each student activity organization.

4. Each organization will have an advisor or identified person responsible for the determination and/or supervision of the student organization and activities.

5. Each advisor will receive, read and understand the district policies involved with student activity accounts.

6. An external audit will be performed on each account annually.

7. District internal controls are reviewed on an ongoing basis.

8. Controls over the exchange of funds consist of the following:

   1. All collected money shall be handled, secured, and deposited in accordance with Policy 6630.

   2. Issuance of receipts for funds collected

   3. Timely bank deposits

   4. District activity account check requisitions are used for purchases

   5. Expenditures are approved by the proper authority

   6. Documentation of all expenses are retained

   7. All purchases are made by district activity account check

   8. No signed blank checks in advance or written for cash

   9. Voided checks are retained

   10. Monthly reports of activity transactions prepared and beginning fund balances reconciled to ending fund balances

   11. Monthly bank statement reconciliations approved by someone independent of one making deposit

   12. Accounting records are open for inspection

   13. Review of reports by the district business office

   14. Deficit balances reported at the year-end will be cleared

9. Funds held in an activity account by organizations or classes which terminate their connections with the school district shall be transferred at the discretion of the building principal.

10. Suspicion of misappropriation of funds will follow the district’s fraud policy.

Detailed records maintained at the sites responsible for the accounts must support student activity fund balances. These funds are subject to the same controls as other funds. DPI requires, as supplementary information to the district’s financial statements, a schedule (by school activity) of the balance at the beginning of the year, total receipts, total disbursements and year-end balance.

Amended 4/24/72
Revised 12/20/06

© Neola 2008