Associated Student Body
2015
Accounting Manual, Fraud Prevention Guide and Desk Reference
Internal Controls
Fraud Prevention
Procedures
Policies
Governance
Organization
Laws
F o r C a l i F o r n i a K - 1 2 P u b l i C S C h o o l S a n d C o m m u n i t y C o l l e g e S
Associated
Student
Body
Accounting Manual, Fraud Prevention Guide
and Desk Reference
2015
Fiscal Crisis & Management Assistance Team
ii
Publishing Information
e Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference was
published by the Fiscal Crisis and Management Assistance Team (FCMAT)
(mailing address: 1300 17th Street, Bakerseld, CA 93301).
© 2015 by FCMAT
All rights reserved
is manual may be reproduced with permission from FCMAT.
Ordering Information
Bound copies of this publication are available for $40.00 each, including tax and shipping charges.
Please send check or purchase order to the mailing address listed above, or pay via credit card using the link
on FCMAT’s website at www.fcmat.org.
A complete, printable version of this publication may be downloaded at no charge at www.fcmat.org.
iii
Contents
Contents
Foreword ...................................................................................................................................................ix
Chapter 1 – Introduction .......................................................................................................................1
Intent of the ASB Manual ................................................................................................................................... 1
ASB Issues ................................................................................................................................................................ 2
Chapter 2 – Roles and Responsibilities – Administration of an ASB .............................................5
The State of California .......................................................................................................................................... 5
The Governing Board ............................................................................................................................................. 5
The Superintendent (K-12) or President (Community Colleges) ................................................................ 5
The Business Ofce Staff ..................................................................................................................................... 6
The Principal/School Administrator .................................................................................................................... 6
The ASB Advisor ...................................................................................................................... ............................... 8
The ASB Bookkeeper ........................................................... ................................................................................. 9
The Student Council ........................................................... ................................................................................. 10
The Independent Auditors ................................................................................................................................. 11
The Food Service/Cafeteria Program ............................................................................................................... 11
Groups That Should Not Administer or Supervise Activities of Student Organizations .................. 12
Chapter 3 – Laws and Regulations ....................................................................................................13
Laws and Regulations Overview ....................................................................................................................... 13
Importance of Good Business Practices ........................................................................................................ 14
Governing Board Policy and Administration Regulations .......................................................................... 14
Recommended Legal Background Knowledge ............................................................................................ 15
Laws Governing K-12 Food Sales ...................................................................................................................... 19
Chapter 4 – Forming an ASB ................................................................................................................21
ASB Types: Organized vs. Unorganized ........................................................................................................ 21
Elementary/Unorganized ASB Schools ............................................................................................................ 21
Secondary/Organized ASB Schools .................................................................................................................. 21
Student Organization and Club Trust Accounts .......................................................................................... 24
Minutes of Meetings ...........................................................................................................................................25
Forms ...................................................................................................................... ..................................................29
Chapter 5 – General Business Practices and Internal Controls...................................................37
The Business Operating Cycle .......................................................................................................................... 37
Establishing the Bank Account ........................................................................................................................ 37
Internal Controls ..................................................................................................................................................38
Internal Controls Checklists ..............................................................................................................................40
Maintaining ASB Records ..................................................................................................................................50
Temporary Loans ..................................................................................................................................................50
iv
Insurance ................................................................................................................................................................. 51
Whistleblower Hotlines and Fraud Reporting Websites ............................................................................ 51
Information Summary, Document Checklist and Questions ....................................................................53
Forms ...................................................................................................................... ..................................................53
Chapter 6 – Budgets and Budget Management ...............................................................................57
What Budgets Represent ...................................................................................................................................57
Budget Development ............................................................................................................................................58
Budget Monitoring ........................................................... ....................................................................................60
Carryover of Unexpended Balances ............................................................................................................... 61
What Happens when a Class Graduates? .................................................................................................... 61
Forms ...................................................................................................................... ..................................................63
Chapter 7 – Accounting and Financial Management ......................................................................69
Accounting Systems .............................................................................................................................................69
Centralized versus Decentralized Accounting...............................................................................................70
Chart of Accounts ................................................................................................................................................ 71
Sound Business Practices for Accounting System Management ............................................................72
Financial Reporting and Closing the Books ...................................................................................................72
Types of Financial Reports ................................................................................................................................ 73
Closing the Books ................................................................................................................................................ 75
District Business Ofce Support ..................................................................................................................... 75
Annual Audit ...........................................................................................................................................................75
Bank Reconciliations ...........................................................................................................................................77
Good Business Practices for Bank Account Management and Reconciliation ...................................78
Forms ...................................................................................................................... ..................................................87
Chapter 8 – Fundraising Events ..........................................................................................................89
Approval of Fundraisers.......................................................................................................................................89
Revenue Projections for Individual Fundraiser Events .................................................................................89
Typically Allowed Fundraising Events and Revenues ................................................................................... 91
Fundraisers That May Not be Allowed ..........................................................................................................94
Procedures for Reporting Revenue Sources Other than Fundraisers .....................................................96
Nonstudent Group Fundraising .........................................................................................................................96
ASB Accounts are not Pass-Through Accounts ............................................................................................. 97
Fundraising Websites ...........................................................................................................................................97
Forms ...................................................................................................................... .................................................. 99
Chapter 9 – Class Fees, Deposits and Other
Charges – Grades K-12 ...................................................................................................................... 111
Allowable Fees ...................................................................................................................................................... 112
Prohibited Fees ..................................................................................................................................................... 116
v
Charter Schools ................................................................................................................................................... 119
Chapter 10 – Vending Machines ....................................................................................................... 121
Purpose of Vending Machines ........................................................................................................................121
Products Sold in Vending Machines .............................................................................................................. 121
Issues for Vending Machines ..........................................................................................................................122
Good Business Practices Related to Vending Machine Operations ..................................................... 123
Vending Machine Operations ...................................................................................................................... ... 124
Advantages and Disadvantages of Various Vending Machine Operations ........................................125
Procedures for Managing Vending Machine Stock ..................................................................................125
Procedures for Emptying Vending Machines .............................................................................................126
Forms ...................................................................................................................... ................................................ 129
Chapter 11 – The Student Store ..................................................................................................... 133
ASB Store Operations ...................................................................................................................... ................. 133
Sound Business Practices for Student Stores .............................................................................................134
Sales and Use Tax .............................................................................................................................................136
Forms ...................................................................................................................... ................................................ 137
Chapter 12 – Gifts and Donations ................................................................................................... 145
Donations of Cash to a District for a Specic School or Program ......................................................145
Cash Donations to an ASB Organization ....................................................................................................146
Donations of Material or Equipment to an ASB Organization .............................................................146
Donations of Scholarships to an ASB Organization ................................................................................147
Donations to ASBs from Booster Clubs, Foundations, Auxiliary Organizations and Other Parent-Teacher
Organizations .................................................................................................................................................... 147
Good Business Practices for ASB Donation Management ..................................................................... 147
Tax-Exempt Status ............................................................................................................................................. 147
Forms ...................................................................................................................... ................................................ 149
Chapter 13 – Cash Receipt Management and Procedures ....................................................... 155
Good Business Practices for Cash Procedures ...........................................................................................155
Audit Findings and Preventive Action ...........................................................................................................155
Cash Control Procedures for Fundraising Events ...................................................................................... 155
Cash Control Procedures for the ASB Bookkeeper ..................................................................................160
Internal Controls for Cash After Receipt .....................................................................................................161
Petty Cash and Change Accounts ..................................................................................................................163
Clearing Account .................................................................................................................................................164
Taxes.......................................................................................................................................................................164
Forms ...................................................................................................................... ................................................ 165
Chapter 14 – Allowable and Questionable Expenses .................................................................. 179
Examples of Allowable Purchases ..................................................................................................................179
vi
Examples of Prohibited Purchases ............................................................................................................... 180
Good Business Practices ........................................................... ......................................................................... 184
Chapter 15 – Contracts .................................................................................................................... 185
Contract Situations ............................................................................................................................................185
Potential Problem Situations ........................................................................................................................... 185
Role of the Business Ofce .............................................................................................................................186
Uncompensated Service Agreements ............................................................................................................ 186
Booster Clubs, Foundations, Auxiliary Organizations and other Parent-Teacher Organizations ..187
Good Business Practices ..................................................................................................................................187
Chapter 16 – Equipment Purchases and Management ............................................................... 189
Equipment Ownership Options .....................................................................................................................189
Risk Management and Insurance Options .................................................................................................189
Inventory Practices ............................................................................................................................................189
Forms ...................................................................................................................... ................................................191
Chapter 17 – Employees and Consultants ..................................................................................... 193
ASB Employees ....................................................................................................................................................193
Good Business Practices for ASB Employee Payroll Management ........................................................193
The ABC Test .......................................................................................................................................................195
Consultants ...........................................................................................................................................................195
Chapter 18 – Cash Disbursement Management and Procedures............................................. 197
Sales and Use Tax ..............................................................................................................................................197
Internal Controls ..................................................................................................................................................197
Associated Student Body Sales and Use Tax Applicability ..................................................................... 203
Forms ...................................................................................................................... ............................................... 207
Chapter 19 – Cash Controls and Fraud ......................................................................................... 213
Fundraising and Deposits .................................................................................................................................213
Checks, Reimbursements and Advances ......................................................................................................215
ASB Financial Reports ........................................................................................................................................ 217
Club Advisors’ Copies of Financial Documents ...........................................................................................218
Chapter 20 – Charter Schools and ASBs ....................................................................................... 221
Chapter 21 – Booster Clubs, Foundations, Auxiliary Organizations
and Other Parent-Teacher Associations ......................................................................................... 223
Auxiliary Organization versus Student Organization at Community Colleges .................................. 225
Regulations Governing Booster Auxiliary Organizations ......................................................................... 226
Booster Auxiliary Organizations as Nonprot Organizations with Their Own Tax Identication Number
229
Financial Guidelines ........................................................................................................................................... 230
Solicitations on School Premises .....................................................................................................................231
vii
School District Employees ............................................................................................................................... 232
Donations for Supplies, Equipment and Transportation ........................................................................ 232
Paying Stipends, Salaries and Consultants ................................................................................................. 233
Forms ...................................................................................................................... ............................................... 235
Chapter 22 – Where to Go for Help ............................................................................................. 239
Organizations and Online Resources .......................................................................................................... 239
State Agencies ................................................................................................................................................... 240
National Associations ...................................................................................................................................... 240
Chapter 23 – Glossary ...................................................................................................................... 241
Terminology ......................................................................................................................................................... 241
Acronyms ..............................................................................................................................................................251
Chapter 24 – Appendices .................................................................................................................. 255
Sample Associated Student Body (ASB) Constitutions and Bylaws ..................................................... 255
Sample Budgets ................................................................................................................................................... 277
Legal References ............................................................................................................................................... 289
California Education Codes Specic to K-12 Education.......................................................................... 289
California Education Codes Specic to Community Colleges ................................................................ 307
Public Contract Code ........................................................................................................................................ 313
California Administrative Code, Title 5, Education ...................................................................................321
Code of Federal Regulations, Title 7 ............................................................................................................ 325
California Penal Code ........................................................................................................................................331
Revenue and Taxation Code ............................................................................................................................341
Board of Equalization, Sales and Use Tax Regulations .......................................................................... 343
California Constitution, Article XVI, Public Finance ................................................................................. 365
Sample Internal Control Reference Checklist ............................................................................................ 367
California School Boards Association Samples .......................................................................................... 377
Sample Administrative Regulations ............................................................................................................. 397
Chapter 25 – FCMAT Online Frequently Asked Questions Archive and Help Desk ........... 409
viii
ix
Foreword
e Fiscal Crisis and Management Assistance Team (FCMAT) is proud to present the fourth revision of the
Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference. Initially published in
2002, the manual continues to be a widely used resource in education. In this revision, FCMAT has added
information in response to suggestions from users in the eld, ASB workshop attendees, and many questions
received and answered via FCMAT’s online help desk. New information is also included based on updated
laws and clarication related to food service and allowable fees.
Established in 1992 by the Legislature as an independent and external state-funded entity, FCMAT helps
California’s local educational agencies fulll their nancial and managerial responsibilities by providing scal
advice, management assistance, professional development, software and products, resources, and other related
school business services. FCMAT’s work ranges from the state policy level to the operational level at schools.
is manual is an example of FCMAT’s direct support, assistance and leadership to educational agencies
statewide, including K-12 schools, community colleges, county oces of education, and charter schools.
e Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference is designed for
school administrators, associated student body (ASB) and activity directors, scal services administrators,
oce managers and accountants, ASB bookkeepers, secretaries, teachers, students and others who are
responsible for student body activities. is manual responds to the increased demands on today’s school
leaders to augment funding for students and schools while maintaining scal accountability, transparency
and accuracy.
e goal of the manual is to answer questions in many areas concerning ASBs, including laws, accounting,
purchasing, student stores, vending machines, food sales, clubs, internal controls and overall roles and
responsibilities. It will be especially helpful to new employees and those who have recently been assigned
ASB responsibilities. Readers are guided systematically through the major steps to initiate and maintain an
eective student body program for elementary, middle, junior and senior high school students, as well as
community colleges.
is manual is a concise guide to successful student body business management in a complex environment.
It focuses on the wide range of decision-making authority of student councils, suggests useful tools and
procedures, provides practical advice, and indicates legal constraints in specic areas. Most important, the
Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference suggests the right
questions to ask and how to assess the answers.
FCMAT will continue to publish periodic revisions to this manual. Suggestions about how to improve this
document and make it more useful are always welcome.
FCMAT acknowledges the many people who have taken part in producing this manual and keeping
it updated so that it remains useful in the eld. eir time, dedication and shared expertise have been
invaluable.
Joel D. Montero, Chief Executive Ocer
Fiscal Crisis and Management Assistance Team
x
Chapter 1
–
Introduction 1
Chapter 1
Chapter 1 – Introduction
California law allows students in California’s public schools to raise money and make decisions about how
they will spend this money. Student organizations established to raise and spend money on behalf of students
are called Associated Student Body organizations, or ASBs. ASBs must be made up of current students and be
located at the school where the funds are maintained. e funds raised and spent by student organizations are
called associated student body funds or ASB funds. In the minds of public school ocials, parents and the
general public, ASB funds may be thought of as small proceeds from a few bake sales, magazine sales, dances
or car washes a year. However, in many cases ASB funds have become big business for student organizations
and fund much more than people realize. An ASB at a large high school or a community college may raise
millions of dollars a year.
ASB organizations and the management of ASB funds present students with opportunities not only to
raise and spend money, but also to learn the principles of operating a small business and acquire leadership
skills while making a contribution to their school and fellow students and improving their own educational
experience. As students and sta work together to plan projects and activities, students also learn project
planning.
It takes work and management by many individuals to ensure that an ASB is operated correctly. is
manual provides information on how to run a successful ASB organization in a user-friendly format to
guide district business oce support sta, principals/school administrators, ASB and activity directors, scal
administrators, oce managers and accountants, ASB bookkeepers, secretaries, students and others who are
responsible for student body activities.
Intent of the ASB Manual
Each of this manual’s 25 chapters covers one or more critical areas in the administration of ASB. e manual
is intended to be a comprehensive guide to student organization operations and was written for those involved
in ASB operations. It includes sample forms and procedures that may be copied directly from the manual
or modied for an entity’s own use. e manual can be used by K-12 school districts, charter schools and
community colleges because all of these public entities can have ASBs in their schools. Although the manual
may seem oriented to K-12 districts, all guidance related to internal controls and best business practices can
also be used by charter schools and community colleges.
Because current laws do not cover everything that occurs in ASB operations, the guidance in this manual
goes beyond the law and ocial regulations to include information based on good business practices, sound
internal controls, and the practices of successful ASB operations in many districts throughout California.
Educational entities with successful ASB operations have the following:
• Comprehensive board policies and administrative regulations regarding ASB operations and funds
that provide guidance beyond what is in the law, including district procedures, best practices and
internal controls.
• A comprehensive and user-friendly ASB manual that provides guidance for all individuals involved
in day-to-day ASB activities.
• A signicant level of oversight and support from the district’s business oce.
• Annual training for all sta members and students who work with ASB operations.
• Standardized processes and procedures at all sites.
2 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
is manual can be used by educational entities to achieve successful ASB operations because:
• e manual covers the policies, procedures and internal controls that should exist when handling
ASB funds and operations, and includes sample forms and procedures.
• e manual can be used as the basis for a district’s comprehensive board policy and administrative
regulations, or the governing board can adopt a policy that requires the sta to adhere to the
guidance in the manual.
• e manual is suciently comprehensive to provide guidance for both district oce and school
sta if the district has not produced its own manual for ASB operations.
• e manual includes information on eective oversight and support from the district’s business
oce sta.
• e manual can be used as the basis for annual training either by a district’s business oce sta or
by a trainer from outside the district.
• e manual includes sample forms in most chapters to help districts as they develop their own
standard forms and procedures for communication and audit purposes.
is FCMAT Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference may
also be adopted to supplement a district’s board policy or procedures regarding student organizations and
booster auxiliary organizations. Sample board policy language for this is as follows:
e Governing Board adopts on an ongoing basis the most recent Fiscal
Crisis and Management Assistance Team (FCMAT) Associated Student Body
Accounting Manual, Fraud Prevention Guide and Desk Reference as the
District’s ASB Manual as part of district ASB board
policy. In the event of any conict between the most recent FCMAT Associated
Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
and the District ASB processes or procedures, the policies
and procedures established in the District will prevail.
is type of language gives a district clarity and the exibility to follow its own policies and procedures when
they dier from those in the FCMAT Associated Student Body Accounting Manual, Fraud Prevention Guide
and Desk Reference.
ASB Issues
Many issues can occur with ASB funds and operations if not managed appropriately. First, in sharp contrast
to other funds that the district usually receives in the form of checks or wire transfers, most ASB funds
are received in cash. It is always easier for fraud, abuse or human error to occur when dealing with cash, so
internal controls are extremely important. However, internal controls over ASB funds are often overlooked or
found to be inadequate.
Other issues arise as a result of decentralized student fundraising and operations by many individuals and
groups throughout the district, without adequate communication, guidance and standardization. In addition,
sta and students involved in ASB are often asked to use proper accounting procedures and internal controls
even though they are not accountants and have probably received little or no guidance or training regarding
the importance of correct procedures and controls and what could occur if they are not followed. Appropriate
communication, standardization, training and oversight are critical to ensure that the correct processes and
procedures are followed.
Chapter 1
–
Introduction 3
Local communities, parents and other members of the public often pay close attention to ASB issues and are
typically sensitive when they occur. e media are also often quick to report on ASB issues because the funds
are raised by students and for students.
e district is ultimately responsible for how ASB funds are handled and spent. us, board policy,
procedures and internal controls must start with the district, and proper oversight and follow-up must take
place to ensure that issues do not occur.
4 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 2
–
Roles and Responsibilities—Administration of an ASB 5
Chapter 2
Chapter 2 – Roles and Responsibilities – Administration of an ASB
Many individuals and entities are involved in administering and supervising the activities of student
organizations.
The State of California
e State of California is responsible for establishing the laws and regulations that govern the activities of
local educational agencies (LEAs), including student organizations. e Legislature writes the laws, and state
agencies enact regulations based on those laws.
e California Department of Education (CDE) develops policies regarding any legislation or regulations
enacted as a result of the law; these are codied in Title 5 of the California Code of Regulations for K-12
school districts. For community colleges, the California Community Colleges Chancellor’s Oce (CCCCO)
functions as the oversight agency.
No one state agency monitors the operations of ASB organizations. Rather, the state relies on districts’
governing boards to ensure that ASB activities are carried out within the law, based on a district’s internal
policies and procedures. is is reviewed during a district’s annual independent audit performed by an
external certied public accountant (CPA) rm.
The Governing Board
e governing board of the school district, charter school or community college is ultimately responsible for
everything that happens in the district, including the activities of student organizations. Under Education
Code section 48930 for K-12, and section 76060 for community colleges, the governing board has the
authority to approve the formation of a student body organization within the district. is means that
governing boards are not required to allow student body organizations to exist. Many districts have chosen
to stop student fundraising and organizations as a last resort because of continual and severe noncompliance
issues, including fraud.
In assuming the authority the Education Code gives them, governing boards establishes parameters for
district operations through board policies and regulations. ese policies and regulations must specify how
the student body organization will be established, how the organization’s activities will be supervised, and
how the organization’s nances will be operated and managed. e district’s administration is responsible
for establishing and monitoring the procedures to carry out the policies and regulations adopted by the
governing board.
Students are raising funds for their own benet and are able to make decisions about the funds (with
co-approval from an administrator); however, when there is a conict, governing board policies and
regulations override ASB decisions because ultimately the funds are under the governing board’s authority.
A comprehensive board policy is the cornerstone of sound practices in student organizations. is is most
eectively achieved by establishing a comprehensive district ASB manual for all student organizations to
follow, and referencing it in board policy that requires all sta to follow the manual’s guidance. Sample board
policies are provided in the appendices of this manual (Chapter 23).
The Superintendent (K-12) or President (Community Colleges)
e superintendent or president of a district is responsible for ensuring that board policies are implemented
and that sta follow those policies. In addition, the superintendent or president is responsible for establishing
the procedures by which sta remain in compliance with board policy. is is normally done by establishing
administrative regulations.
6 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
e superintendent or president should communicate and make certain that:
• ey act as the supervisor of the student body organization’s activities.
• All district sta are familiar with and understand the importance of following all policies
established by the governing board, including those regarding ASB.
• All district sta understand the importance of problems noted in the annual audit.
• Immediate action is taken to investigate any allegations of impropriety regarding ASB funds.
Appropriate action is taken if the allegations are conrmed.
The Business Ofce Staff
District business oce sta are responsible for general oversight of student body activities. In this capacity,
the business oce sta should:
• Serve as a resource and answer questions from the school sta.
• Develop and update the district’s ASB manual based on input from the school sta, student
organizations and district auditors. Questions asked throughout the year and the ndings noted by
the auditors should also be taken into consideration when updating the manual.
• Provide training at least annually on the district’s ASB manual or procedures. is includes
providing new sta members and student council members with copies of the district’s ASB
manual and training during the year.
• Make periodic visits to schools to review the procedures in operation and answer questions. It is a
good practice to visit each school at least once a year and more often if the school appears to have
problems or continues to have audit ndings year after year.
• Obtain and review nancial reports from the schools at least quarterly.
• Review the reconciled bank statements for all ASB accounts at school schools regularly, preferably
monthly.
• Work with the schools’ sta to respond to problems and audit ndings noted by the auditors in the
annual audit and develop corrective actions to resolve the issues.
• Follow up on all issues related to administration of student organizations.
• Develop accounting procedures for recording and controlling the student body organization’s
nancial transactions.
• Periodically review procedures to make sure they conform to prescribed accounting procedures;
take into consideration any input from school sta, student organizations and district auditors
when updating policies and procedures.
The Principal/School Administrator
e principal/school administrator is the most important person when it comes to managing a school.
Regardless of the school level or size of the school, the principal/school administrator is directly responsible
for student body organization nancial activities and must make sure that they conform to established laws,
policies and procedures that aect the student body, including those specic to the district.
Although the principal/school administrator has ultimate responsibility for all activities at the school,
including ASB, many ASB management functions may be delegated to other sta members depending on the
grade level and size of the school, unless board policy or law does not allow such delegation. At elementary
schools, this designee is often a teacher or secretary. In secondary schools, the designee is usually an assistant
Chapter 2
–
Roles and Responsibilities—Administration of an ASB 7
principal or ASB advisor. e principal/school administrator must maintain nal approval authority for ASB
projects and activities because of the school’s educational and legal obligations to its students.
Unorganized ASBs
Under the supervision of the superintendent, the principal/school administrator is responsible for the
activities at the school (see Chapter 4 for full denitions of unorganized and organized ASBs). In elementary,
adult education, continuation, special education, regional occupational programs (ROPs) and K-8 schools
(unorganized ASB) the students do not govern themselves, so the principal/school administrator is primarily
responsible for all ASB activities, including the following:
• Communicating the student organization policies and procedures to the sta and students, and
enforcing the policies and procedures.
• Assigning and supervising a school sta member (often the school secretary or the attendance clerk)
to perform school nancial tasks related to ASB and maintain adequate records of ASB activities,
including the deposit of funds.
• Receiving and reviewing the monthly bank reconciliation prepared for the ASB bank account and
any other nancial information and statements for the ASB funds, including budgets and nancial
reports.
• Deciding how many fundraising events will be held each year and, before approving them,
ensuring that they are appropriate for the students and the community.
• Scheduling and receiving proper approval for fundraising events.
• Making decisions about how the funds raised will be spent, and approving the use of the funds
before they are spent.
• Delegating responsibility for operating the fundraising event to a responsible adult.
• Monitoring the results of the fundraising activities.
• Ensuring that all ASB funds are raised and spent in accordance with applicable laws and the
district’s policies and procedures.
• Working with the district’s business oce to provide training, implement good business practices,
ensure internal controls, and resolve audit ndings.
• Working with the student organization to develop methods for securing cash collected after hours
and on non-school days.
• Ensuring that proper cash control procedures are established and followed at all times.
• Reporting any suspected fraud or abuse to the district’s business oce.
e principal/school administrator may delegate some or all of these activities to a school employee such as
a vice principal, teacher, or classied school support sta member. Because cash is involved, the principal/
school administrator should ensure proper internal controls by requiring that a second school employee be
involved in the following:
• Decisions about the use of ASB funds.
• Handling all cash.
• Signing checks to spend the student funds.
Organized ASBs
For middle, junior and high schools (organized ASB), the responsibilities of the principal/school adminis-
trator are dierent because the students are much more active in governing the ASB activities, with oversight
8 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
from the principal/school administrator and other school employees. e principal/school administrator is
responsible for the following major duties, many of which are delegated to an ASB advisor:
• Communicating the student organization policies and procedures to the sta and students, and
enforcing the policies and procedures.
• Ensuring that a student council is established, that it approves all new clubs, and that every club
and the student council has a certicated advisor.
• Providing supervision to the ASB advisors.
• Reviewing and approving constitutions for each club on campus.
• Making certain that minutes are kept of all ASB and club meetings.
• Supervising the ASB bookkeeper or similar position. is position will perform school nancial
tasks related to ASB, maintain adequate records of ASB activities, deposit funds into the bank, pay
invoices, reconcile monthly bank statements, and prepare monthly nancial statements.
• Receiving and reviewing the monthly bank reconciliation prepared for the ASB bank account and
any other nancial information and statements for the ASB funds, including budgets and nancial
reports.
• Ensuring that all ASB funds are raised and spent in accordance with applicable laws and the
district’s policies and procedures, and approving the use of the funds before they are spent (the
assigned ASB advisor and the student representative of the club spending the funds must also
approve use of the funds).
• Deciding how many fundraising events will be held each year and, before approving them,
ensuring that they are appropriate for the students and the community.
• Scheduling and receiving proper approval for fundraising events.
• Working with the district’s business oce to provide training, implement of good business
practices, ensure internal controls and resolve audit ndings.
• Working with each student organization to develop methods for securing cash collected after hours
and on non-school days.
• Ensuring that proper cash control procedures are established and followed at all times.
• Reporting any suspected fraud or abuse to the district’s business oce.
e principal/school administrator may delegate some or all of these activities to a school employee such as a
vice principal or teacher.
The ASB Advisor
In secondary schools and community colleges, each student club will have an
advisor; this is in addition to the advisor who is responsible for the general
student council (also called the leadership class in many high schools). Every
ASB advisor, whether for a specic student club or the general student council,
must be a certicated employee of the district and must be aware of all laws,
policies and procedures that aect the student body, including those specic
to the district, to ensure they are followed. e advisor will act as a liaison to
the faculty, administration, student body and community in matters relating
to ASB, and keep the principal/school administrator and sta apprised of the
organization’s activities.
Fraud Alert
When the ASB advisor
relinquishes their
responsibilities and has
the ASB bookkeeper
perform the ASB
advisor functions,
separation of duties
diminishes and the
opportunity for fraud
increases.
Chapter 2
–
Roles and Responsibilities—Administration of an ASB 9
For organized ASBs, an advisor’s responsibilities will include:
• Providing guidance and direction, and being knowledge about how ASBs operate so legal
responsibilities are understood.
• Overseeing the election/selection of ocers and committee chairs, as well as ensuring that they
understand and carry out their duties.
• Approving expenditures along with the student representative and the board designee.
• Ensuring that the clubs are meeting and keeping minutes.
• Reviewing with the students all budgets, nancial reports and transactions.
• Working with the students when preparing the annual budget and revenue projection estimates.
• Ensuring that only valid expenditures are made and authorized from the dierent clubs’ funds.
• Ensuring that every organized club has a constitution in place and follows it.
• Providing supervision to ensure student safety and compliance during ASB activities.
• Ensuring that student organizations secure in a school safe any cash collected after hours and on
non-school days.
• Ensuring that proper cash control procedures are established and followed at all times.
• Reporting any suspected fraud or abuse to the district’s business oce.
As the principal/school administrator’s designee, the ASB advisor frequently is directly responsible for all of
the functions listed above and ensures that all required procedures are followed. e ASB advisor(s) works
directly with students in clubs and the student council on a day-to-day basis, supervising the activities of
the student council and the clubs and serving as a link from the student council and the clubs to the ASB
bookkeeper and the principal/school administrator.
When any ASB organization or club holds fundraising events, the ASB advisor is responsible for ensuring
that adequate planning and internal controls are established and that all of the funds are properly accounted
for and given to the ASB bookkeeper with all the necessary paperwork at the end of the event. Because of the
age of the students, the ASB advisor in an unorganized student body organization will do many more of the
tasks, while the advisor in an organized ASB or at a community college will mainly oversee students doing
the tasks. Regardless of the age of the students in the organization, it is important that they be involved as
much as possible in the various responsibilities so that student body activities serve not only as fundraisers but
also as learning opportunities.
Additional duties of the ASB advisor include the following:
• Helping students prepare the annual budget and revenue projection estimates for fundraisers.
• Ensuring that adequate internal controls are in place.
• Approving expenditures (in organized ASBs, student representative(s) and a board designee will
also need to approve).
• Ensuring that all laws, policies and procedures are followed.
The ASB Bookkeeper
At each school, a sta member is responsible for maintaining the accounting records for the ASB funds and
safeguarding the funds at the school until they are received at the bank. In elementary schools, the school
secretary or an attendance clerk may serve as an ASB bookkeeper. Middle, junior and high schools, and
community colleges, will usually have a sta person whose only responsibility is to maintain the accounting
records for student organizations.
10 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Regardless of which employee is assigned to be ASB bookkeeper, or the exact title that employee might hold,
the employee responsible for ASB bookkeeping (referred to as ASB bookkeeper in this manual) is responsible
for ensuring that:
• When receipted funds are properly counted, conrmed, documented and then turned over to the
ASB bookkeeper, all ASB funds are safeguarded while at the school until deposited in the ASB
bank account in a timely manner (within a few days of receipt).
• Adequate nancial records are prepared and maintained for all ASB nancial transactions in
accordance with established policies and procedures.
• Expenditures are approved in advance of any spending and paid only after receiving appropriate
documentation of expenditures, which should include but not be limited to preapproved purchase
orders, invoices, packing slips, and student council minutes.
• e bank reconciliation is completed each month.
• Materials are provided to ASB advisors for fundraisers, and stock is kept on hand (change box,
receipt books, tickets, etc.).
• Purchase orders, payments, and invoices are processed.
• Laws and the district’s policies and procedures related to ASB funds are followed.
• Business policies, procedures and internal controls related to ASB, such as those for accounting,
purchasing, budget, and payroll, are known and followed.
• Any suspected fraud or abuse is reported to the principal/school administrator or the district’s
business oce.
e ASB bookkeeper position is often perceived as a simple bookkeeping position but it is more than that.
e ASB bookkeeper also acts as a controller and is the gatekeeper for student funds. e ASB bookkeeper
must be strong-willed enough to refuse and disallow deposits, reimbursements or other transactions when
policies and procedures are not followed.
Both the ASB advisor and bookkeeper must work together and support each other in keeping their duties
separate and when policies and procedures are not followed.
The Student Council
In middle, junior high and high schools, as well as community colleges, a student council (often called a
general student council or leadership class) must oversee all of the student clubs in the school. e student
council represents the students and has primary authority over student funds, with guidance from, and
adherence to, district policy.
A successful student council will understand and respect the value of faculty and student participation;
everyone needs to participate and work together for success to occur.
e main responsibilities of the student council include the following:
• Developing and adopting the annual budget for the student council/leadership class.
• Authorizing the budgets for all student clubs.
• Authorizing fundraising events for all student clubs, with additional authorization from the
principal/school administrator if required in that district. In some districts, the student council
is not given this authority; rather, it is notied of what the principal/school administrator has
approved.
Chapter 2
–
Roles and Responsibilities—Administration of an ASB 11
• Approving expenditures, in addition to approval from a board designee and the ASB advisor. In
some districts the student council will approve expenditures from all student funds before the
spending occurs; in others the general student council approves after the fact; and in others it does
not approve any expenditures (for student clubs) but is informed of them. e student council must
approve its own expenditures before spending occurs.
• Reviewing nancial reports and bank reconciliations from all student clubs.
• Approving new clubs (in addition to approval from the principal/school administrator).
• Approving who will be student council auxiliary members for other functions, such as head of
lighting and head of sound.
• Approving the student council’s policies and procedures and determining how student council
members will perform their duties, as well as the consequences for nonperformance of duties.
e student council in an unorganized ASB is not usually as active and does not normally adopt the annual
budget, authorize fundraising events, approve expenditures, review nancial reports or approve new clubs.
e principal/school administrator or designee normally has full responsibility for these functions, even
though the students may give input.
The Independent Auditors
e district’s independent auditors, who perform the annual nancial audit of the school entity, also have
responsibility to audit ASB funds and student activities as part of the annual audit. e auditors scrutinize
the ASB funds and, if they identify a problem or signicant weakness in how ASB funds were managed
during the school year, they will report the weakness to the district’s chief business ocial. Any material
ndings will be included in the nal annual independent nancial report as an audit nding. Each nding
will be accompanied by the auditor’s recommendation for how to correct the weakness. e district must
provide a written response to the audit nding and the auditor’s recommendation, and develop an action plan
to ensure that the nding does not occur again.
Audit ndings should be taken seriously and the action plan followed so that the nding is not repeated
in subsequent years. If a nding occurs at one school but not another, it is important that all individuals
involved with ASB at all schools know what the ndings were so that their own operations can be reviewed
and adjusted if necessary. is helps prevent the audit nding from being repeated in future years at any
school. Audit ndings should be used as a tool to strengthen operations throughout the district with
follow-up to ensure that issues do not recur.
e auditors can also be used as a resource throughout the year when questions, internal control concerns
or unique issues arise. Because the auditors are familiar with the district’s operations and with student body
operations in other districts, they can provide valuable advice and insight.
If there is a suspicion that fraud may be occurring, the district can contract with the auditors or other
agencies to investigate the possible fraud and provide a written report.
The Food Service/Cafeteria Program
e relationship of the ASB to a district’s food service/cafeteria program is often thought of as competitive,
but in reality the two programs should work together because both benet the same students. Food
regulations are numerous and often confusing to student groups. Because the food service/cafeteria program
must follow most of the same regulations, its sta should be considered experts and partners who can help
ensure that any food or beverage sold by students meets nutritional requirements and complies with local,
state and federal laws.
Because student groups must follow specic rules, including those regarding noncompetitive sales and
whether items can be prepared on site at the K-12 level, the food service/cafeteria program sta can help
12 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
ensure that all sales are in compliance and that students are being served safely and correctly. ese
regulations were not developed by the food service/cafeteria program but are the result of legislation. If
the laws are not followed, the district can be penalized with reduced funding to the food service/cafeteria
program, which aects all of the district’s students.
Groups That Should Not Administer or Supervise Activities of Student
Organizations
Booster Clubs, Foundations, Auxiliary Organizations and other Parent-Teacher Associations
e relationship between booster clubs, foundations, parent-teacher associations, auxiliary organizations
and student organizations is often confusing. Student organizations are legally considered part of the
school district and/or community college, but booster clubs, foundations, auxiliary organizations and other
parent organizations are not. ese nonstudent organizations are established to support the school district
or community college and its students, and they may raise funds and donate these funds to the district or
purchase items with their funds for donation or assistance to the district; however, they are separate legal
entities. Funds raised by booster clubs, foundations, auxiliary organizations or parent-teacher groups should
not be deposited into or commingled with the funds or bank accounts of the student organization or the
district; rather, they should be deposited into the organization’s own bank account. ese organizations
can donate funds to the ASB, but once they have done so, the ASB decides how to use the funds, following
district policy, procedures and applicable laws. It is critical that student groups and parent groups keep their
activities and funds separate even though they are supporting the same students.
More information on this subject is contained in Chapter 21.
Chapter 3
–
Laws and Regulations 13
Chapter 3
Chapter 3 – Laws and Regulations
is chapter provides a brief overview of the sections of the California Education Code, Title 5 of the
California Administrative Code, California Constitution, Internal Revenue Code and the Penal Code that
aect ASB operations at all levels (K through community college). Full citations of the relevant code sections
cited are included in the appendices of this manual.
In addition to state laws and regulations that must be followed, there should be local school district board
policies, administrative regulations and procedures that have the eect of law in that specic school district
relative to how ASBs are managed and operated. To run a successful ASB, it is important that all of the
people involved with the ASB be familiar with the laws and the local district rules that govern ASBs.
State and federal laws and local district policies, procedures and administrative regulations are subject
to continual review and change. is manual includes the full text of all major California state laws
and regulations that directly aect ASB operations as of December 31, 2014. is list is included in the
appendices. e reader may also wish to check the Internet for changes to state law. Many websites, including
http://leginfo.legislature.ca.gov/faces/codes.xhtml, www.calregs.com and www.oal.ca.gov, have references or
lists of California laws and regulations.
Laws and Regulations Overview
Education Code
e California Education Code is one of 29 sets of code in the state and is the primary body of law for
kindergarten through community college governance. ASB management is referenced in many of the code’s
sections. Laws in the Education Code must go through a formal process before being chaptered or signed into
law by the governor. ese laws are also known as statutes.
California Code of Regulations – Title 5
A regulation is a rule adopted by a state regulatory agency to implement, interpret, or make specic the law
enforced or administered by it, or to govern its procedure. e California Code of Regulations (CCR), also
known as the California Administrative Code, has the force of law.
Regulations in the CCR are adopted by a state regulatory agency, approved by the California Oce of
Administrative Law, led with the secretary of state and then signed by the governor. e CCR is separated
into 28 sections called titles. e education section is known as Title 5.
Penal Code
e Penal Code is the primary body of law for issues related to crimes and criminal activity. e portions of
the Penal Code relating to games of chance, such as lottery and bingo, are important to ASB operations.
Revenue and Taxation Code
e state Revenue and Taxation Code (RTC) identies what constitutes a sale and what is subject to state
sales tax. Based on this code, ASBs must pay sales tax on what they buy and sell, with few exceptions.
Publication 18 of the California State Board of Equalization (BOE) provides guidance on the taxability of
sales by nonprot organizations, including ASBs. Publication 18 can be found on the BOE website at http://
www.boe.ca.gov/pdf/pub18.pdf.
Internal Revenue Code
Although ASB operations are not guided by the Internal Revenue Code (IRC), if teachers or other adults
are conducting fundraising independent of the ASB or an approved booster/auxiliary organization to make
14 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
donations to the ASB or to increase class budgets, that income is considered taxable. e United States Tax
Law can be found online at http://www.fourmilab.ch/ustax/.
California Constitution
In the absence of a statute granting public local educational agencies (LEAs) the legal authority to make a
special expenditure (i.e., for food, clothing, awards, etc.), the legality of any expenditure is determined by
the “gift of public funds” provision in the California Constitution, Article 16, section 6. is constitutional
provision prohibits making any gift of public money to any individual (including public employees),
corporation, or other government agency. It states, “ . . . the Legislature shall have no . . . power to make
any gift, or authorize the making of any gift, of any public money or thing of value to any individual . . .
whatever . . .”
Expenditures of school funds must be for a direct and primary public purpose to avoid being a gift. An
approved public purpose must be within the scope of a school district’s jurisdiction and purpose, which does
not extend to purposes such as aid to the indigent or the promotion of social welfare, though these may be
lawful public purposes for other agencies.
On the other hand, it is also well established that expenditures of public funds that involve a benet to
private persons (including public employees) are not gifts within the meaning of the California Constitution
if those funds are expended for a public purpose. is means that public funds may be expended only if
a direct and substantial public purpose is served by the expenditure and private individuals are beneted
only incidentally to the promotion of the public purpose. To justify the expenditure of public funds, an
LEA’s governing board must determine that the expenditure will benet the education of students within its
schools. Expenditures that most directly and tangibly benet students’ education are more likely justied.
Expenditures driven by personal motives are not justied even if they have been a longstanding local custom
or are based on benevolent feelings.
If the LEA’s governing board has determined that a particular type of expenditure serves a public purpose,
courts will almost always defer to that nding. us, if the district has a board policy stating that specic
items are allowable (e.g. scholarships or donations), there is more certainty that the expenditure might be
considered allowable. Unless such a policy exists, examples of items that would be usually considered a gift of
public funds include owers, candy, advertisements for private award ceremonies, and donations to charity.
Importance of Good Business Practices
e laws and regulations that govern ASB activities and funds are not suciently comprehensive to provide
guidance for all areas in which questions arise. us, while this manual conforms to the laws and regulations,
it also provides guidance in areas where formal legal guidance is inadequate or nonexistent. is supple-
mentary guidance is based on sound business practices, internal controls and eective procedures used by
successful LEAs throughout California. Because the additional guidance is not based on laws or regulations,
local school administrations may change these recommended practices to better suit the operating
environment of each individual LEA.
Governing Board Policy and Administration Regulations
Because only a limited number of laws and regulations in the Education Code, Penal Code, California
Constitution and California Code of Regulations identify parameters for ASB operations, a signicant
amount of local exibility is needed. e governing board has nal authority over everything that occurs
in the district, including ASB operations. is includes authority to decide whether ASB organizations will
exist in the district, and if so, how all ASB operations and activities will be supervised, and ensuring that
clear guidelines and processes are developed to enable ASB organizations to operate eciently and eectively
for the benet of students. e recommended procedure for providing these guidelines and processes is
Chapter 3
–
Laws and Regulations 15
for the governing board to develop and adopt clear and understandable board policies and administrative
regulations, as well as an ASB manual, for district sta, students and other stakeholders to follow.
Because most ASB operations relate directly to business management functions, the district’s chief business
ocial should take a lead role in ensuring that the district has appropriate board policies and administrative
regulations regarding the operation and management of the organization’s nances. In addition, all
individuals involved with the ASB should receive training at least every two years on ASB laws, policies,
regulations, internal controls and good business practices. e district’s business oce should take the lead
in ensuring that this training is provided. ASBs must be made aware that district policy applies to them, and
people involved in ASB must understand that district board policies and regulations are an additional set of
laws that ASB organizations must follow. All district board policies that apply to general district operations
apply to ASB as well, unless there is a policy stating otherwise.
Local school leaders should be encouraged to suggest innovative ASB practices, ASB fundraisers, and ASB
management operations that will promote the general welfare, morale, and educational experiences of
students. Successful ASB management is a collaborative eort between and among students, student leaders,
teachers, activity directors, advisors, school site leaders, school sta, and the district’s central oce.
Recommended Legal Background Knowledge
LEAs must ensure that ASBs are in compliance with the areas of ASB operations specically addressed in
the law. For this reason, it is important that principals/school administrators, ASB advisors, and district
administrators understand the provisions of the law, which are listed in their entirety in the appendices of this
manual.
ese laws and regulations cover three major areas related to ASB operations:
• General Guidance
• Fundraising Activities
• Food Sales in Schools
e following summary gives a brief overview of the sections of the California Education Code applicable to
grades K-12:
General Guidance Provisions of Law – K 12
Education Code § 48930 Grants the governing board the authority to allow groups of students
to organize a student body organization. Also discusses the purpose and
privileges of student body activities.
Education Code § 48933 Gives guidance on where the ASB organization may deposit or invest its
funds.
Requires that ASB funds be spent with the preapproval of three people:
an employee or ofcial of the school district designated by the governing
board, the ASB advisor (must be a certicated employee), and a student
representative of the ASB organization.
Education Code § 48934 Allows ASB funds to be used to nance activities for noninstructional
periods or to augment or enrich the district’s programs for K–6
students.
Education Code § 48936 Provides guidance on uses of student funds, such as loans to other ASB
organizations in the district or loans for permanent improvements to
school district property.
16 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Education Code § 48937 Requires the governing board to provide for the supervision and auditing
of the ASB funds.
Allows the governing board to use the school district staff for ongoing
audits of ASB funds.
Education Code § 48938 Authorizes the governing board to appoint an employee to act as trustee
for unorganized ASB funds in elementary and continuation schools,
special education or regional occupational programs, or in adult classes.
Education Code § 35564 Applies only when a school district is reorganized, i.e., when two school
districts are legally combined or boundaries are changed. The section
provides guidance on how the ASB funds are split.
Fundraising Activities Provisions of Law – K-12
Education Code § 48931 Grants the governing board the authority to authorize the sale of food
by student organizations.
Education Code § 48932 Grants the governing board the authority to authorize student organiza-
tions to conduct activities, including fundraising during and after school
hours.
Education Code § 51520 Prohibits teachers or others from soliciting students during the school
day or one hour before or after school unless the solicitation has been
approved by the governing board and is for a charitable organization or
an organization under the control of the district.
Education Code § 51521 Prohibits individuals from making solicitations on behalf of the school
district or an ASB organization without the approval of the governing
board.
Chapter 3
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Laws and Regulations 17
e following summary gives a brief overview of the sections of the California Education Code that apply to
community colleges:
General Guidance Provisions of Law – Community Colleges
Education Code § 76060 Grants the governing board the authority to allow groups of students
of a community college to organize a student body organization. Also
discusses the purpose and privileges of student body activities.
More than one student body organization may be authorized by the
governing board if it is found that the day students and the evening
students each need their own student body association, or if geographic
circumstances make having one association impractical or inconvenient.
The community college may assume the responsibilities for the ASB
activities if the student body association is dissolved. If this occurs,
an employee who was employed to perform such ASB activities shall
become a member of the classied service of the district in accordance
with Section 88020.
Education Code § 76060.5 If a student body association is established, an election can be held to
establish a student representation fee of $2 per semester. The election
shall be open to all regularly enrolled students of the community college.
An afrmative vote by the majority of the voting students is sufcient
to establish the fee, except in special circumstances. The fee may be
terminated by a majority vote of the students voting in an election
held for this purpose, open to all regularly enrolled students of the
community college.
The student representative fee shall be collected by the college,
deposited into a separate fund, and kept in custody by the chief scal
ofcer of the college. The fee shall be expended to provide for the
support of governmental affairs representatives who may be stating their
positions and views before city, county and district governments. An
administrative fee up to 7% may be retained by the college.
A student may refuse to pay the student representation fee for religious,
political, nancial or moral reasons if the refusal is submitted in writing
at the time the student pays their other fees.
Education Code § 76061 For a student to be elected an ofcer in student government, they must
be enrolled at the college at the time of the election and throughout
their term with a minimum of ve semester units and must meet
and maintain the minimum standards of scholarship prescribed for
community college students.
Education Code § 76062 Grants the governing board the authority to authorize student organiza-
tions to conduct activities, including fundraising activities.
Education Code § 76063 Gives guidance on where the ASB organization may deposit or invest its
funds.
Requires that ASB funds be spent subject to procedures established
by the student body organization and with the prior approval of three
people: an employee or ofcial of the community college district
designated by the governing board, the ASB advisor (must be a certi-
cated employee), and a student representative of the ASB organization.
18 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Education Code § 76064 Provides guidance on uses of student funds, such as loans to other
ASB organizations in the community college or investing money for
permanent improvements to community college district property.
Education Code § 76065 Requires the governing board to provide for the supervision and auditing
of the ASB funds.
Education Code § 76067 Allows student political organizations afliated with a political party on
the State of California ballot to hold meetings on a community college
campus and to distribute bulletins and circulars about the meetings
provided that there is no endorsement of the organization by school
authorities and no interference with the college district’s regular
education program.
Education Code § 72673 Applies when a student body organization is formed differently than
described in the above Education Code provisions related to community
college ASBs; the organization is instead called an auxiliary organization,
with different rules and guidelines.
e following Penal Code sections apply to K-12 LEAs and to community colleges:
Penal Code § 319 Denes lotteries. A subsequent opinion from the California attorney
general states, “The elements of an illegal lottery are consideration, prize
and chance.”
Penal Code § 320 States that any person who contrives, prepares, sets up, proposes or
draws any lottery is guilty of a misdemeanor.
Penal Code § 320.5 Establishes that California public schools are not eligible to participate in
lotteries or games of chance.
Penal Code § 326.5 Authorizes bingo games run by charitable organizations but states, “No
minors shall be allowed to participate in any bingo game.”
Applicable Taxes
In general, student organizations (and educational agencies) must pay sales and use tax for all items purchased
and consumed by the organization. ere are, however, some exceptions, such as when sales are irregular or
intermittent. Further details are included throughout this manual.
ASB Organizations are Tax-Exempt
Because student organizations are legally part of the school district, they are exempt from income tax just
as the district is because of its status as a governmental organization. e district is not a private 501(c)(3)
nonprot organization, but enjoys tax-exempt status by virtue of being a government entity.
Many external organizations that donate to a student organization will request a tax identication number
because they assume that this number is needed to claim a tax deduction on their annual income tax return.
e district’s tax identication number is not needed for any donor to claim a deduction and should not be
given out. Government organizations are not required to share their tax identication numbers. All requests
for the tax identication number should be forwarded to the district’s business oce, unless the schools have
been provided with a letter to send out when asked for this information.
Chapter 3
–
Laws and Regulations 19
Laws Governing K-12 Food Sales
Food sales are one of the most popular methods of fundraising, as well as one of the most regulated and
complex in K-12 LEAs. e state and federal governments regulate food sales to protect the categorically-
funded school nutrition programs and to help ensure good nutrition, which helps students learn. Beverages
are considered food and are also subject to restrictions. Foods sold on campus but not as part of the school
nutrition program are called ‘competitive foods’ as dened in the Code of Federal Regulations (CFR), Title 7,
section 210.11.
During the past decade, California has passed many laws that create stricter standards for competitive
foods than federal regulations require. However, the federal Healthy, Hunger-Free Kids Act of 2010, which
made major nutrition changes to the National School Lunch and School Breakfast programs, has also
required schools throughout the nation to adhere to much stricter rules regarding the nutritional quality
of competitive foods. ese changes are the rst federal update to competitive food sales in 30 years. ese
rules are referred to as “Smart Snacks in Schools” and became eective July 1, 2014. Whenever there is a
discrepancy between state and federal law, the stricter law applies.
In addition, California Assembly Bill (AB) 626 was signed into law in October 2013 and made eective
on January 1, 2014. is legislation updated California Education Code sections 49430–49434 related to
competitive foods and beverages, and deleted others that were obsolete. is was an attempt to make the
regulations more understandable to the public, but they are still tedious to read. Many of the resources on the
California Department of Education website continue to be updated to reect changed or new laws such as
this.
e regulations apply to food and beverages sold to students by students during the school day. Public
schools participating in the National School Lunch Program, the School Breakfast Program, the Special Milk
Program, the Food Distribution Program, or any USDA meal program must follow these regulations. e
only other food sales to students outside of the USDA food program that may occur during the school day on
school premises are sales by the district’s food service or cafeteria program, referred to as non-program foods.
e laws and regulations allow only limited food sales on campus during the school day. ese limitations do
not apply to vending machines accessible only to adults, such as in the teachers’ lounge.
Charter and private schools used to be exempt from competitive food sale regulations under California law,
even if they participated in the school meal programs. However, because of the new federal laws created by
the Healthy, Hunger-Free Kids Act of 2010, all schools participating in the school meal programs must follow
these new regulations.
A district wellness policy must include guidelines regarding competitive food sale regulations. Districts have
the option to implement even stricter standards than laws mandate. Clubs within the ASB organization that
carry out food sales should have a copy of their district’s wellness policy so that they can be aware of any
requirements the district may have adopted.
e California Department of Education maintains a comprehensive website with information related to
food and beverage sales and has a variety of manuals, guidance and other resources to help educational
agencies understand the many guidelines that must be followed. e website is http://www.cde.ca.gov/ls/nu/
sn/mgmb.asp.
e CDE’s web page titled “Healthy Eating & Nutrition Education” (http://www.cde.ca.gov/ls/nu/
he/) has a link to the department’s “Competitive Foods and Beverages” page (http://www.cde.ca.gov/ls/
nu/he/compfoods.asp), which links to a wide variety of topics related to competitive food and beverage
requirements.
20 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Parent Groups
Parent groups (e.g., booster clubs, foundations, auxiliary organizations and other parent-teacher organiza-
tions) must ensure that they follow the same food and beverage restrictions as student groups when selling
to students on campus during the school day. In addition, each district’s unique wellness policy may contain
rules and regulations that non-student groups must follow.
With all the state and federal regulations surrounding food and beverage sales on school campuses, it may
be easier for groups to sell non-food items at fundraisers, and this is highly recommended by the California
Department of Education; however, as long as all regulations, including district board policy, are followed,
schools may conduct food or beverage sales.
Forms
Click here for downloadable sample board policies and information on allowable and prohibited activities and
uses of funds for ASB.
Chapter 4
–
Forming an ASB 21
Chapter 4
Chapter 4 – Forming an ASB
ASB Types: Organized vs. Unorganized
ASB organizations are classied as either organized or unorganized. In general, unorganized ASBs are those
in which the students do not govern the ASB organization, whereas organized ASBs are those in which the
students organize their activities around student clubs and a student council and have more authority to make
decisions. e requirements for unorganized ASBs are usually not as complex or specic as for organized
ASBs. Except where noted, guidance in this manual applies to both types of organizations.
Community colleges are able to form student organizations just as K-12 educational agencies are. e goal
is the same: to raise money for extracurricular activities beyond what the educational agency can provide.
However, the students are older, attend classes at many dierent times and days, and can be full- or
part-time. ey are not classied as either organized or unorganized in the California Education Code or
other references on the subject. Because of the age of the students, as well as the large amount of funds raised,
in FCMAT’s opinion community college ASBs should operate as if they are organized ASBs and should
follow all processes and procedures in this manual that are applicable to organized ASBs.
Although it is allowable for an unorganized ASB to operate as if it is an organized ASB, it is not appropriate
for an organized ASB to operate as if it is unorganized. If it is decided to run the unorganized ASB as
organized, it is up to the district whether that means that all rules pertaining to organized ASBs will apply,
or only some (for example, the principal/school administrator could still make all decisions without students
voting, but there could be a student council). If there is a student council that votes on decisions at meetings,
minutes should be taken to document those decisions.
Elementary/Unorganized ASB Schools
In elementary schools the ASB organization is called unorganized because, as a rule, the students do not
govern the ASB organization. Usually there is only the primary student body organization and no additional
clubs with a more focused agenda. Adult education, continuation, special education, regional occupational
programs (ROPs) and K-8 schools are also considered to have unorganized ASBs.
Although students in unorganized ASBs raise funds, they usually have more limited involvement in making
decisions about the fundraising events and how the funds are to be spent. e governing board delegates
the authority to oversee the raising and spending of funds to the principal/school administrator or another
school employee, who is able to make all of the decisions related to the ASB operations and funds. Although
authority is delegated to the principal/school administrator, the rules and guideline regarding fundraising and
allowable expenditures remain the same as those for organized ASBs.
Secondary/Organized ASB Schools
Student organizations in middle, junior and high schools are called organized because the students organize
their activities around student clubs and a student council. Community college students also organize their
activities around student clubs and a student council. At both community colleges and secondary schools,
there is oversight by district administrators and advisors.
Organized ASBs normally have individual clubs under the primary student body organization, each with its
own focus and organizational requirements. Students in organized ASBs are primarily responsible for their
organizations; the student council and student club leaders hold formal meetings, develop budgets, plan
fundraisers, decide how the funds will be spent, and approve payments. e students make the decisions and
have primary authority over the funds; the school administrators, ASB bookkeeper and club advisor(s) assist,
advise and co-approve student decisions.
22 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
It’s All About Students
Student body organizations exist for students. It’s all about students:
• Fundraising
• Participating
• Doing
• Learning
• Experiencing
• Making decisions (if an organized ASB)
Sta associated with student body organizations are important to their success, but the organization exists
because of students, and students must be involved every step of the way.
In organized ASBs, and unorganized ASBs with a student council, the student council is composed of the
student leaders who are selected by their fellow students and who are responsible for the decisions they make
and are advised on. e role of the ASB advisor and school principal/school administrator is not to make the
student council’s decisions but to guide and advise the student council and the individual student clubs so
they follow laws, regulations and district board policy.
e principal/school administrator and advisor should understand that the will of the students should come
rst unless there is a specic conict with laws or regulations, district policy, student safety, school culture,
or other specic reason to deny an event, expenditure or other student council or club decision. Denial of a
student council or club decision should not occur simply because the principal/school administrator or ASB
advisor dislikes or disagrees with the decision; a valid reason is required.
To promote good governance, the principal/school administrator should require students who wish to
form a new club at the school to submit a formal application that has the endorsement of the certicated
employee (a teacher or other faculty member employed by the district) who agrees to serve as the club advisor
for the entire school year. e Education Code requires that advisors be certicated employees of the local
educational agency (LEA). Additional information that should be gathered includes the title, powers and
duties of the ocers, the manner of their election, the scope of proposed activities, and the name of the
organization. e Application for Student Club form at the end of this chapter can be used for this purpose.
All clubs, even those formed for students to do activities together (e.g., chess or checkers) rather than
fundraising, should be approved by the principal/school administrator, even though there are no fundraisers
or other nancial activity planned. is is so that there are no student club meetings on campus that the
principal/school administrator has not approved or allowed, which is more of a liability issue than a nancial
one. e same Application for Student Club form can be used.
Some LEAs require an application for all ASB organizations annually so that there is a clear record of the
current ocers, members and advisor and to ensure that the most current constitution, bylaws and budget
are on le. Keeping this information current is a sound practice that could be accomplished simply by using
the sample Club Information Sheet form, or Application for Student Club form, provided at the end of this
chapter.
e student council and each club should prepare and adopt an ocial constitution that is written in general
terms and can be clearly understood. e constitution is a written document that denes how a council or
club is organized and sets forth the fundamental laws and principles under which it will operate. It should
include an organization’s name and purpose, and explain who members can be, how ocers are elected,
how often meetings will be held, what types of committees will exist, and other related information. e
constitution presents the framework within which the organization will operate and should clearly state all
Chapter 4
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Forming an ASB 23
of the policies and rules for student governance of the student organization or club. It will dene the general
purposes and outline the council or club’s organization and administration.
Bylaws are rules adopted by a group for its own meeting or aairs and will usually change more often than
a constitution does. Bylaws usually identify operational parameters, parliamentary authority for meetings,
election speech and campaign specications, balloting procedures, specics on time and location of meetings,
and other related items. e bylaws are often part of the constitution rather than a separate document.
At a minimum, the constitution should include the following:
• e name of the organization.
• e purpose or mission of the organization.
• e powers of the organization, and when the principal/school administrator has the right to veto.
• e type of activities that the organization will conduct.
• e membership requirements for the organization, including qualications and eligibility
requirements. Restrictions should be clearly spelled out.
• e denition of quorum.
• How the constitution is adopted and amended.
• Information on the ocers and meetings.
• Information on elections including the time, methods and procedures for nomination, campaigns,
and election of members.
• e titles and terms of oce of the ocers.
• Description and duties of ocer positions.
• How ocers are elected and installed, as well as qualication and eligibility requirements.
• Whether or not the club/organization will be represented on the student council.
• How representatives other than ocers will be selected.
• e qualications for eligibility on the student council.
• e term limits on the student council, procedures for removal of ocers, and procedures for lling
vacated oces.
• How the club advisors will be appointed.
• e time, frequency, and place for regular and special meetings.
• Whether parliamentary procedure will be followed, as well as who may veto the organization’s
proposals or actions.
• How and when the budget is prepared.
• How expenses are approved.
• e budget approval process and information about how the budget will be monitored and
updated.
• What types of nancial statements and reports will be generated and distributed.
• How committees will be appointed, a description of any standing committees, and provisions for
the formation of special committees if needed.
• How clubs within the student body organization will be formed, including their purpose, method
of organization and discontinuance; nancial activities; and requirements for constitution and/or
bylaws.
24 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Sample constitutions and bylaws for high schools, middle schools, community colleges and clubs are included
in the appendices of this manual.
Once the constitution and bylaws have been approved, they apply to that club, should be adhered to, and
should be changed only as needed. All constitutions should include a procedure for how the articles and
bylaws can be amended. After a change has been proposed and a draft prepared, the student body should
review and discuss the issues before a nal vote is taken. Proposed amendments or revisions usually require a
two-thirds vote of the student body or club, but the constitution should list the specic requirement.
Student Organization and Club Trust Accounts
To become a recognized part of the student body organization, a club, like the student council, must be
composed entirely of currently enrolled students. ese clubs, also known as trust accounts for nancial
purposes, must have the approval of the student council and the principal/school administrator, at the
district governing board’s direction. All clubs should follow regulations in the ASB constitution related to the
formation of school clubs. Any group of students may apply for permission to form a club by submitting an
application (as discussed above), a proposed constitution, a budget, and any other required documents. e
student council’s ASB constitution and bylaws should specify what needs to occur.
ere are generally three types of ASB trust accounts in schools:
• Class groups, such as the Freshman Class, or the Class of 2017
• Scholarships and memorials
• Clubs
Club Requirements
All clubs (also known as trust accounts), with the exception of scholarship accounts, must be composed
of students located at that school, formed as outlined in the student council ASB constitution and district
governing board’s requirements. Students must play a major role in the club, and each club or class group
must have the following:
• A purpose
• Regular formal meetings that include approved meeting minutes*
• An approved constitution that outlines policies, rules, and operational parameters*
• An ASB club advisor*
• Elected student ocers*
• An approved budget*
• All expenditures approved in advance by authorized individuals (which individual(s) are authorized
depends on whether the organization is organized or unorganized)
Education Code mandates that the club advisor be a certicated employee of the school district in which
the ASB resides. All clubs operate under the same regulations and have the same requirements as the student
council organization, and clubs (in an organized ASB) will report to the student council.
If a group does not meet the club requirements listed above, it is not a club and should not be accounted for
or included in the ASB account. Non-ASB accounts or funds, including but not limited to pass-through or
clearing accounts, may be accounted for at the school level using district accounting system resource 9000 or
other district-approved chart of accounts coding set aside for local designations. Non-ASB activities should
not be accounted for in the ASB nancial records.
*optional for unorganized ASBs.
Chapter 4
–
Forming an ASB 25
Sports and Athletic Clubs
For any sports revenues and expenditures to be accounted for and part of the ASB account, the sport
must meet the same ASB club requirements. Each sport may be a separate club with its own constitution,
certicated advisor, budget and other required elements, or multiple sports can be organized as one athletics
club, with each sport having representation in the club. e athletics club must be led by enrolled students.
Each sport in the athletics club should elect at least one delegate or commissioner to be a member of the
club’s student leadership, thus ensuring that each sport receives representation. Each sport represented in the
athletics club may then be accounted for in the ASB accounting record as a sub-account of the athletics club.
If the athletic director of the school is a certicated employee of the district, the athletic director may serve as
club advisor.
Inactive Clubs
All ASB trust accounts are part of the general ASB, so if a club becomes inactive or all students in the club
graduate, the remaining funds would revert to the general student council unless the club’s constitution or
a decision made by students before the club became inactive provides specic instructions to do otherwise.
It is best if the district’s ASB board policy or the ASB constitution and bylaws state what is to be done with
the funds of a club that has become inactive (for example, they should be transferred to the general student
council to make a decision), as well dene what constitutes an inactive club (e.g., any club that has no
nancial activity for more than 18 months). If the board policy and constitution are silent about inactive
clubs, it is appropriate for the general student council to decide on the use of the funds after a reasonable
amount of time has passed (e.g., 18 months). If possible, the funds should be used for the same type of
purpose for which they were originally raised. If that proves too dicult because the club is now inactive,
FCMAT recommends that the funds be used in a way that will benet the most students at the school.
Minutes of Meetings
Because there is a formal process of student governance for organized student bodies, the student council
and each club must prepare and maintain a record of each meeting. ese records are called minutes, and
they serve as the record of each meeting and the actions taken, and demonstrate that the student council or
club has followed ASB policies and procedures as well as current law. Minutes should be kept in a permanent
record book or notebook for future reference. A standard format for meeting minutes is provided at the end
of this chapter.
Minutes should include details of proceedings, including nancial matters pertaining to the budget, approval
of fundraising ventures, and expenditure authorizations. Minutes are not a verbatim transcript of every word
spoken; rather, they are a concise documentation of the essential matters discussed at each meeting so there is
a record of what occurred. e minutes should be clearly written so they can be read and understood in the
future. Abbreviations should be avoided because future readers may not understand them.
Good Business Practices for Meeting Minutes
Although the form of minutes may vary from organization to organization, they should document at least the
following information:
• Name of the club or organization holding the meeting.
• Date, time, and place of the meeting.
• Kind of meeting (regular, special, etc.)
• Names of those in attendance.
• Name of the presiding ocer.
• Minutes from the previous meeting read, amended and/or approved.
26 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• What was discussed or reported on during the meeting.
• Report on activities of standing committee(s) or special committee(s).
• What action was taken during the meeting, e.g., the budget was amended or the expenses were
approved.
• e results of any votes taken, including who made a motion, who seconded the motion and
anyone in opposition, if applicable.
• Reporting on any communication to the ASB.
• Listing of any unnished business.
• Date and time of next meeting.
• What time the meeting adjourned.
• Who prepared the minutes.
Any information provided to those attending the meeting, such as purchase order lists, check registers,
bylaws, project outlines and letters, should be attached to the original minutes and kept on le. e club
secretary, or whoever took the minutes, should also sign the minutes when they are completed.
At the next regularly scheduled student council or club meeting, the students should review and approve
the minutes of the previous meeting. e secretary should maintain a binder of all of the approved minutes
for the school year. A sample ASB meeting minutes record is included at the end of this chapter. e sample
can be modied for either general student council use or for a club meeting record. Also included at the end
of this chapter is a document titled “Let’s Get the Meeting Moving,” which some districts use to help clubs
understand how to run a meeting and what should be discussed.
New Schools
ere is no law or other code reference regarding how to establish student body funds when a new school
opens. Because there is no ocial guidance, it is a district decision and is handled dierently across the state.
FCMAT provides the following examples of how to establish student body funds at a new school if district
policy is silent on the subject:
• A district might allocate startup funds for the new student body out of the district’s unrestricted
general fund; the new ASB may get to keep these, or may be required to pay them back once it is
able to do so.
• Other student body organizations might give temporary loans to another ASB in the same district,
per Education Code section 48936; these must be repaid within three years. is allows a new ASB
to establish itself and repay the funds within a reasonable time.
• If some of the new school’s students come from one of the district’s other schools, a district may
decide to transfer some student body funds with the transferring students on a per-pupil basis. If
this is done, FCMAT suggests using the allocation model discussed in Education Code section
35564 as it is fair and equitable. Although this code section pertains to the allocation of organized
ASB funds when a school district is reorganized, the allocation method it provides can still be used.
• Existing schools in the district could conduct a fundraiser together and then divide the funds
among all district schools, including the new school.
• e new school could conduct an ASB fundraiser to generate its own startup funds, though it
would need to be given a temporary allotment of cash to purchase the supplies for the fundraiser.
Because the formation of an organized ASB and election of ocers at a new school should involve all of the
students who will be attending the new school, the timing of the ASB formation depends on where those
Chapter 4
–
Forming an ASB 27
students are transferring from. If they are all on one campus, an ASB can be formed before the move to the
new campus. However, if students are coming from multiple schools it is more complicated. Whatever the
method and timing of the ASB formation, all students should participate, and adults should not determine
who will be the ASB ocers.
In addition to funds, a functioning ASB requires a certicated employee of the district to act as ASB advisor,
an employee or ocial of the school district whom the governing board has designated (Education Code
section 48933), and student representatives. When all of these things are in place, the formation of the ASB
can begin.
As indicated above, there are many dierent possible methods for funding a new school’s ASB, but none of
them are mandated. us it is best that a discussion occur at the district level because the method chosen
could set a precedent if additional schools open in the future. If new schools have been opened in the past, it
is important to verify what occurred in those cases for the new ASB because that might set the precedent to
be followed.
28 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 4
–
Forming an ASB 29
Application for Student Club (for new clubs)
Name of School ____________________________________________________
Associated Students
Application for Student Club
(PLEASE PRINT)
Fiscal Year: __________________
I. We the students of the______________________________ (name of the school), request permission to
form a student club. A list of the students sponsoring this application is attached to this application.
II. This club will be called ___________________________________________________________
and will have as its purpose: ______________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
III. Mr./Ms._____________________________________ (name of certicated faculty member) will serve as
the advisor for this club for the ______________ school year.
IV. We have attached:
A copy of the proposed constitution for this club.
A copy of the proposed budget for this club for the current school year.
Title, powers and duties of the ofcers and the manner of their election.
Scope of proposed activities.
List of students who are interested in starting this club and interested in becoming members.
V. Submitted by:
Student Club Representative:
Signature, Title and Date
Club Advisor:
Signature, Title and Date
30 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Approved by:
Principal/School Administrator:
Signature, Title and Date
ASB Student Council President:
Signature, Title and Date
Recorded in ASB Student Council Minutes on (date):
Chapter 4
–
Forming an ASB 31
Club Information Sheet (for clubs approved in the past)
Name of School ____________________________________________________
Associated Students
Club Information Sheet
(PLEASE PRINT)
Fiscal Year: ___________________________________________________
Name of Club: _________________________________________________
Name of Club Advisor: __________________________________________
Names, elected position, and contact phone number of all ASB Club Ofcers:
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
Day and Time of Club Meetings: ______________________________________________________
Place of Club Meetings: _____________________________________________________________
Please Attach:
A copy of the approved club constitution.
A copy of the approved club budget for the current school year.
Submitted by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Approved by:
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
ASB Student Council President: _______________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on:
Date
32 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Student Council or Club Meeting Minutes
Name of School_____________________________________________________
Name of Club_______________________________________________________
Associated Student Body Minutes
Meeting Date: _______________ Meeting Time: _______________ Location: __________________
Kind of Meeting (circle one): Regular Special Other
The meeting was called to order by: _______________________________________
The minutes of the meeting dated __________________________ were read and approved (corrected and
approved) on ____________________________
Presiding Ofcer: _________________________________
Roll Call by: _____________________________________
# of Members Present: ________ # of Members Absent: ______
Meeting Attendees (attach separate list):
____________________________________________________________________
The following purchase orders were approved (list below or attach separate list):
Purchase Order
Number
Vendor Name Amount Club Purpose of
Expenditure
Motion by: Second by:
Vote Count: Number For: Number Opposed: _________
Chapter 4
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Forming an ASB 33
The following invoices were submitted for payment (list below or attach separate listing):
Check Number Payable To Amount Club Purpose of
Expenditure
Motion by: _________________________ Second by: ______________________________
Vote Count: __________ Number For: _________ Number Opposed: ___________
Other motions:
Motion by: __________________ Second by: ________________________
Vote Count: __________ Number For: _________ Number Opposed: ___________
Communication and Reports:
Old Business: _______________________________________________________
New Business: ______________________________________________________
Unnished Business: _________________________________________________
Announcements: ____________________________________________________
Submitted by: _______________________________________________________
ASB Secretary: ______________________________________________________
(Signature and Date)
ASB Club Advisor: ____________________________________________________
(Signature and Date)
Forwarded to ASB Student Council Minutes on: _______________________
Date
Signed ofcial copy placed in binder for ofcial record on: ______________________
Date
34 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Instructions for Structuring Meetings
LET’S GET THE MEETING MOVING!
1. Call to Order
e meeting is called to order by the president, who rises and says, “e meeting will please come to
order.”
2. Roll Call
To determine if a quorum is present.
3. Minutes
e minutes of the last meeting are read, and approved if correct.
Example: e president says, “e secretary will read the minutes of the last meeting.” After the
reading, the president asks, “Are there any corrections or additions to these minutes?” “If not, they
stand approved as read.”
If there are corrections, the president informally directs corrections be made.
“e minutes are approved as corrected.”
e secretary signs the minutes, “Respectfully submitted.” ey may be initialed by the president.
4. Reports of Ocers
e president makes announcements by reading the president’s report.
e secretary informs the group of any letters the group has received. Each communication should be
handled by a main motion before another is read.
e treasurer reports on receipts and expenses paid. ese are “received and placed on le.” No vote is
taken on reports “placed on le.”
5. Reports of Committees
e reports of committees are called for by the president.
Standing committees
Special committees (temporary)
Procedure: In each case, the president calls upon the chairperson of the committee to make the report.
e report is read.
After this has been done, the president says, “is report will be placed on le. Any action required in
this report will be taken care of under the proper order of business.”
6. Unnished Business
is is any business postponed from a previous meeting. Discussion follows the motion and then a vote
is taken.
7. New Business
is includes any ideas not presented previously. It is moved and discussed by the members.
Example: President states, “We are now ready for the new business of the meeting, which includes the
decision about the admission fee for the party. Will someone make a motion so that we may discuss the
question?”
Member says: “I move that the admission fee for the party be fty cents.”
Chapter 4
–
Forming an ASB 35
Second member: “I second the motion.”
President: “It has been moved and seconded that the admission fee for the party be fty cents. Is there
any discussion?” Discussion follows. One member calls “Question,” which means that the president
must ask, “Are you ready for the question?” (Ready to vote). Or the president acts on personal initiative
and, if there are no objections, brings the matter to a vote.
8. Announcements
Announcements are shared about committee meetings or other items of interest.
9. e Program of the Meeting
Example: Guest speaker, movie, slide presentation, etc.
10. Recap
Reminder of next steps/tasks assigned
11. Adjournment
is happens after a motion to adjourn is made and carried, (or if business is nished). e presiding
ocer declares the meeting adjourned.
36 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 5
–
General Business Practices and Internal Controls 37
Chapter 5
Chapter 5 – General Business Practices and Internal Controls
ASB organizations oer students the opportunity to learn about business principles and practices, as well
as to raise funds to enhance their educational experience. Students can gain valuable experience learning
banking policies and procedures, preparing budgets, understanding what bookkeeping entails, disbursing
money, and auditing accounts. Student organizations are no dierent from other organizations in that they
must follow sound business practices to ensure condence in their governance and nancial management
and to ensure success. Just as a business is responsible to its owners and a school district is responsible to the
public, student organizations are responsible to all students and must ensure that the funds generated are
used eectively and accounted for in accordance with student council governing body and district policies
and procedures. Sound business practices help ensure compliance, eectiveness and accountability.
The Business Operating Cycle
Businesses operate on a cycle that begins when the organization is formed. e business operating cycle
consists of various phases that normally recur each year, such as posting transactions, closing the books and
preparing nancial reports. ASB organizations operate on a yearly cycle, just as businesses do, but as is the
case with local educational agencies, the year runs from July 1 to June 30 rather than from January 1 to
December 31.
Successful businesses pay close attention to the various stages of their operating cycle and ensure that
good procedures are used at each stage. To ensure that the ASB organization is ecient and eective, all
individuals involved in ASB must understand the ASB operating cycle and how to establish eective policies
and procedures for each stage.
Establishing the Bank Account
At a minimum, each school that has an ASB organization will need a checking account at a local bank. In
middle, junior high and high schools, as well as community colleges, a savings account or money market
fund may also be established because of the large amounts of money raised. Education Code sections 48933
(K-12) and 76063 (community college) provide guidance concerning where the ASB organization may legally
deposit or invest its funds.
Good Business Practices for Bank Account Management
Because the ASB organization is opening the bank accounts using the district’s federal employer identi-
cation number, district guidelines must be followed. Best practice is for only the district’s business oce to
open or close bank accounts. At a minimum, the district’s business oce should be notied when an ASB
opens or closes an account. Most local educational agencies (LEAs) have a specic procedure for opening
bank accounts, so those responsible for ASB operations need to be familiar with their district’s policy. e
district’s business oce should maintain an up-to-date list of all of the district’s bank accounts, including
ASB accounts.
ASB bank accounts should be held in the name of the ASB organization, not in the name of any individual.
ese bank accounts are for the exclusive use of the ASB organization, and the principal/school administrator
should establish procedures to ensure that only ASB funds are deposited into these accounts. ere must be at
least two signatories on each account, and these signatories should not include students. Bookkeepers should
also not be signatories on the accounts because they are involved with so many other steps in the process
that this would prevent a proper segregation of duties for internal controls. Most districts will have at least
one backup signatory, often someone in the district oce, because schools usually close during summer and
holidays but checks will still need to be issued during those times.
38 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Clubs should not be permitted to open their own bank accounts; rather, they are all part of the original ASB
bank account rst set up when the student council account was opened.
Whenever possible, the funds should be placed in interest-bearing accounts.
As funds on hand in the ASB bank account approach the maximum amount insured by the Federal Deposit
Insurance Corporation (FDIC), the ASB should consider reducing its risk of loss by opening additional bank
accounts in other banking institutions. As of 2008, the maximum amount insured by the FDIC at any one
banking institution was $250,000; however, this level may change and ASB advisors should consult with
their bank to ensure that the ASB funds are within the insurance limits.
Internal Controls
Denition and Importance
Internal controls are the foundation of sound nancial management. ey include the policies and
procedures that help provide reasonable assurance that the district, including ASB, achieves its objectives and
goals by doing the following:
• Ensuring that operations are eective and ecient.
• Safeguarding and preserving the organization’s assets.
• Promoting successful fundraising ventures.
• Protecting against improper fund disbursements.
• Ensuring that unauthorized obligations cannot be incurred.
• Providing reliable nancial information.
• Reducing the risk of and promoting the detection of fraud and abuse.
• Protecting employees and volunteers.
• Ensuring compliance with applicable laws and regulations.
• Ensuring the accurate documentation of all transactions.
As shown throughout this manual, it is critical to establish eective policies and procedures—internal
controls—for ASB organizations. Internal controls not only protect assets such as money and equipment,
they also protect people. For example, establishing good internal controls for fundraising events signicantly
reduces the risk that anyone participating in the event will be accused of any impropriety. Disagreements
between principals or other school administrators, advisors, faculty, parents, students and/or community
members sometimes result in false accusations. ese accusations can be dicult or even impossible to
disprove if the organization does not have sound internal controls. Once a person is accused of wrongdoing it
is dicult to clear one’s reputation, even if the accusation is false.
Internal controls include segregating duties according to employees’ functions so that one person is not
handling a transaction from beginning to end. is is a critical part of a system of checks and balances.
Functions that need to be segregated include the following:
• ose who initiate, authorize or approve transactions.
• ose who execute the transactions.
• ose who record the transaction.
• ose who reconcile the transaction.
• ose responsible for the item resulting from the transaction.
Chapter 5
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General Business Practices and Internal Controls 39
To ensure proper internal controls, the duties of custody, recording, and reconciliation should be kept
separate. For example, if the ASB bookkeeper collects cash, records activity in the nancial system, prepares
the deposit slip and reconciles the bank account, with no one else involved in verifying these transactions,
there is a denite lack of internal control because there is no separation of duties, especially if no one other
than the ASB bookkeeper is also reviewing the bank statement and comparing it to the original cash receipt
documentation. is lack of segregation of duties exposes the ASB to higher risk of cash skimming, delayed
deposits, or other errors or irregularities.
Internal controls are also aected by the practices and attitudes of management. One should be able to
answer the following questions in the armative:
• Does the principal/school administrator set a good example by following established policies?
• Does the ASB advisor ensure that students follow the established policies and help students
understand the reasons behind the policies and procedures?
• Does the district business oce provide continual assistance and sta development training for all
sta members involved in ASB management?
• Does the principal/school administrator or advisor take action when an infraction occurs?
e basic components of internal controls include the following:
• Segregation of duties
• System of checks and balances
• Sta cross training
• Use of prenumbered documents
• Asset security and restricted access
• Timely reconciliations
• Inventory records
• Management review and approval
• Comprehensive annual budget
• Same expectation that all sta, including administrators, will follow all internal controls
To help ensure adequate internal controls, an LEA needs to establish, implement and maintain ecient
and understandable policies and procedures based on laws, regulations and sound business principles, and
communicate them to those involved (e.g. advisors and students). It is critical that employees be aware of the
proper internal accounting control expectations. All individuals who are expected to carry out the policies
and procedures should be trained; more than one person should be trained for each job (cross training).
It is important to provide assurance to management that the internal control system is sound. Adequate
documentation of all procedures should be prepared and maintained, such as an ASB manual and standard
forms, to provide proof of what is occurring. Periodic monitoring (i.e. internal audits) should be performed
throughout the year, including oversight by the principal/school administrator, ASB advisor and the district
business oce. e annual independent audit provides both another monitoring device and a regulatory
check of state and federal compliance.
If problems with internal controls are identied, action should be taken as soon as possible to correct
any inecient or problematic processes or procedures. Standardization should also not be overlooked: if
something works well, it should be used districtwide rather than each school creating its own procedure.
40 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Internal controls are the principal mechanism for preventing and/or deterring fraud or illegal acts, misap-
propriation of assets, and other fraudulent activities. Good internal controls do not completely eliminate
the chance that errors or fraud will occur, but they reduce the risk to an acceptable level. Eective internal
controls provide reasonable assurance that the district’s and ASB’s operations are eective and ecient,
that the nancial information is reliable, and that the organization operates in compliance with applicable
laws and regulations. Few entities have perfect internal control structures in place, so it is imperative that
management develop techniques to oset any weaknesses that exist.
Internal Controls Checklists
Two dierent internal controls checklists are provided for use in evaluating the internal controls for an ASB
organization by each participant’s function or job responsibility. ese checklists should be used in addition
to other internal controls, including the district oce’s internal audits of ASB operations at the dierent
schools and the independent annual audit at the end of each year.
e following internal controls checklist is an easy way for those with responsibility for ASB organizations
to review the responsibilities of their position. A “no” answer to any of the checklist questions indicates a
possible internal control weakness that the responsible person should address. e appendix of this manual
contains an additional checklist that is divided by function.
e underlying premise of eective oversight and internal controls is that the business oce provides overall
coordination, training, assistance, internal control review, support and monitoring that results in a “yes”
response to every item listed below.
ese questions are intended as a helpful guide to educational agencies. In some cases, depending on
individual structure, a question for one position, oce or individual school would be more appropriately
answered by another position or oce. What is important is that proper controls are in place and there is a
clear distinction about who is responsible for what.
Chapter 5
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General Business Practices and Internal Controls 41
Internal Controls Checklist by Job Responsibility
A “No” response to any of the following questions may indicate an internal control weakness. e district
should perform a self-evaluation and investigate all potential weaknesses, and ensure that controls are put
into place so that the weakness will no longer result in internal control issues.
District Business Oce Sta YES NO N/A Comments
1. Does the district have a comprehensive
board policy and administrative regulations
that provide rules and regulations for ASB
governance and operations? o o o ____________________
2. Does the district have a comprehensive ASB
manual with detailed procedures? o o o ____________________
3. Has the FCMAT ASB Account Manual,
Fraud Prevention Guide and Desk
Reference been adopted as part of the
district’s ASB policies and procedures? o o o ____________________
4. If the district has a comprehensive manual,
is it reviewed and updated, if necessary, at
least annually? Does the update address
areas of concern or confusion identied in
the previous year’s audit? o o o ____________________
5. Does the business oce provide annual
ASB training for all school and district
employees who work with ASB activities,
and retain a signed and dated training
attendance log as proof that employees
received training? o o o ____________________
6. Do members of the business oce sta
periodically (at least annually) visit each
school to provide support and to review the
ASB procedures used at the school? o o o ____________________
7. Has the district ensured that school
employees and students know whom to call
in the district business oce if they have
questions or concerns about ASB and are
unable to get answers at the school? o o o ____________________
8. Has the business oce taken immediate
action to correct annual audit ndings
related to ASB activities? Are the school
sites involved in developing action plans to
ensure that the ndings do not recur? o o o ____________________
42 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
YES NO N/A Comments
9. Are all proposed fundraising events
approved by the governing board or its
designee at the beginning of each school
year? Is this list updated throughout the
year? o o o ____________________
10. Does the business oce’s sales tax report
include the sales and use tax for the student
store and other purchases? o o o ____________________
11. Before any disbursement is issued to any
independent contractor, does the business
oce have on le a valid and signed
IRS Form W-9, Request for Taxpayer
Identication Number and Certication? o o o ____________________
12. Does the business oce issue 1099s for all
independent contractors paid with ASB funds? o o o ____________________
13. Has the business oce developed standard
forms, processes and systems for ASB
operations districtwide? o o o ____________________
14. Does the business oce receive and review
periodic nancial statements from the ASB
organizations and sign and date that they
have reviewed the documents? o o o ____________________
15. Does the business oce review the monthly
bank reconciliations from the site ASBs? o o o ____________________
16. Does the district have access to an
independent third-party fraud reporting
whistleblower website and telephone hotline? o o o ____________________
Signature __________________________________________ Date ________________________
Chapter 5
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General Business Practices and Internal Controls 43
Principal/School Administrator
e principal/school administrator is the primary manager and responsible person at the school site. is
is where the ultimate responsibility lies for all activities on campus, from test scores and athletic events to
parental satisfaction with teachers in the classroom. Many principals/school administrators delegate the
responsibility and authority for ASB coordination and management to others, such as a vice principal, ASB
advisor, club advisor and/or a teacher or other sta. is varies by school level and school size.
Some items listed as internal control questions for the principal/school administrator are equally important
for the ASB advisor with delegated responsibilities.
Questions below that are more relevant to secondary schools or to schools with organized ASBs contain the
notation [Secondary].
YES NO N/A Comments
1. At the beginning of each year, do you spend
some time at a sta meeting discussing ASB
issues, operations and internal controls at
the school (e.g., what is allowed and
what are the procedures)? o o o ____________________
2. Do you spend time each month discussing
ASB activities with the ASB bookkeeper,
particularly problems that are developing? o o o ____________________
3. Do you report any questionable or
suspicious activities to the district’s business
oce for investigation? o o o ____________________
4. Do you verify that only ASB funds are
maintained in ASB bank accounts? ASB
bank accounts should not include PTA or
booster club money, donations to non-ASB
entities, or faculty charitable funds. o o o ____________________
5. Is a formal application required from any
students who want to establish a new club
at the school? [Secondary] o o o ____________________
6. Is each club advisor a certicated sta
member of the district? o o o ____________________
7. Do the student council and all clubs have a
constitution that establishes the policies and
rules for student governance of the council
or club? [Secondary] o o o ____________________
8. Are all clubs required to prepare and
maintain minutes of all club meetings, with
all necessary items noted? [Secondary] o o o ____________________
9. Are the student council and each club
required to prepare, adopt and monitor a
budget for the scal year? [Secondary] o o o ____________________
44 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
YES NO N/A Comments
10. Do you ensure that only allowable expenses
are paid from ASB funds? o o o ____________________
11. Do you use a purchase order form with one
required approval signature (unorganized)
or three required approval signatures? [Secondary] o o o ____________________
12. Are purchase orders dated and approved
before the item is purchased? o o o ____________________
13. Do you ensure that students are approving
expenditures and that adults (teachers,
advisors or coaches) are not making the
decisions? [Secondary] o o o ____________________
14. If food is sold in the student store, has
it been approved by the director of food
services? [Secondary Only. Primary grades
cannot sell food daily.] o o o ____________________
15. Do you verify that all ASB bank accounts
are reconciled within two weeks of receipt
of the bank statement? o o o ____________________
16. If bank account reconciliations are not
performed within two weeks of receipt
of the bank statement, is a reconciliation
completion promise date obtained and
followed up to ensure the bank
reconciliation is completed? o o o ____________________
17. Are you one of the individuals authorized to
sign ASB checks? Who are the other
approved signers? o o o ____________________
18. Do you know whom the board has
approved to sign contracts? Up to what amount? o o o ____________________
19. Do you review the bank reconciliations
each month and initial the bank statement
as well as the reconciliation as evidence
of your review? o o o ____________________
20. If you clearly delegated specic
responsibilities and authority to an ASB
advisor or advisors, do you meet regularly to
coordinate and collaborate regarding school
site needs and activities? o o o ____________________
21. Is there a safe at the school with limited
access that is adequate to hold all cash
receipts until deposit? o o o ____________________
Chapter 5
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General Business Practices and Internal Controls 45
YES NO N/A Comments
22. Are bank deposits made within a few days
of receipt, but at least weekly? o o o ____________________
23. Do you review ASB nancial reports monthly? o o o ____________________
Signature __________________________________________ Date ________________________
ASB Advisor
e ASB advisor is a vital contributor to the success of ASB operations. is position is used in dierent ways
in dierent LEAs statewide.
In numerous secondary schools, the principal/school administrator has delegated signicant responsibility
and authority to the ASB advisor. When this is the case, a number of the items identied above as internal
control questions for the principal/school administrator apply to the ASB advisor.
YES NO N/A Comments
1. Do you feel that the district sta and/or
the principal/school administrator have
adequately explained your responsibilities? o o o ____________________
2. Do you know where to go for help if you
have questions about ASB policies or procedures? o o o ____________________
3. Are you a certicated sta member of the district? o o o ____________________
4. Do you ensure that careful minutes are
taken at each club meeting, with all
necessary items noted? o o o ____________________
5. Do you help your club prepare and monitor
an annual budget? o o o ____________________
6. Do you monitor spending during the year
to ensure that the club will not end the year
with a large carryover balance or a negative balance? o o o ____________________
7. Do you work with your club to ensure that
fundraisers are appropriate and adequate
controls are in place to make them successful? o o o ____________________
8. Do you work with the students to establish
and implement cash receipt control
procedures for each fundraising event? o o o ____________________
9. Is potential revenue projected for each
fundraising event? o o o ____________________
46 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
YES NO N/A Comments
10. Do you ensure that cash receipts are given
to the ASB bookkeeper immediately, or as
soon as possible, after the fundraising event? o o o ____________________
11. Do you ensure that those responsible for
the fundraising event have had two people
count all funds raised and that both
individuals sign and date the fundraising
cash collection form? o o o ____________________
12. Do you count the cash receipts in the
presence of a second person, and do you
both sign and date the form indicating that
the counted funds are accurate? o o o ____________________
13. Do you keep duplicate copies of cash count
forms, and all other forms that are part of
the nancial process? o o o ____________________
14. Do you understand what types of expenses
ASB funds are allowed to be used for? o o o ____________________
15. Are you one of the individuals who
preapproves expenditures (with a student
representative and the principal/school
administrator) via a purchase order? o o o ____________________
16. Do you review ASB nancial reports monthly? o o o ____________________
17. Are you one of the authorized signers of the
ASB checks? Who are the other approved signers? o o o ____________________
18. If you are the advisor for the student store,
are additional internal controls in place,
such as comparing sales to inventory,
periodic inventory of goods, and
review of pricing policy? o o o ____________________
19. Does the district provide sta development
and training opportunities for you
throughout the year? o o o ____________________
Signature __________________________________________ Date ________________________
Chapter 5
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General Business Practices and Internal Controls 47
ASB Bookkeeper
Many accounting functions need to be performed for ASB operations. In the best-case situation, a
person with adequate time and appropriate technical skills and knowledge will be assigned to perform
these functions. e sta member performing the following tasks may not have the ocial title of ASB
Bookkeeper, but for purposes of this checklist, that is the title used for the person performing the ASB
accounting functions at the school.
YES NO N/A Comments
1. Do you have sucient time to devote to
ASB recordkeeping? o o o ____________________
2. Do you provide each club with information
on the revenues and expenses to date each
month? Is this also provided to the ASB
advisor, principal/school administrator and
ASB treasurer? [Secondary] o o o ____________________
3. Do you understand the appropriate internal
controls for cash receipts from each type of
fundraising event? o o o ____________________
4. Do you ensure that students and sta
establish cash receipt control procedures for
each fundraising event? o o o ____________________
5. Do you maintain an adequate stock of
supplies for cash receipt control procedures,
such as prenumbered tickets, prenumbered
receipt books, and duplicate carbon cash count forms? o o o ____________________
6. Do you ensure that the advisors turn in
the appropriate documentation for the
fundraising event in addition to the cash
collected? is documentation includes
reports on tickets issued and other items. o o o ____________________
7. Do you ensure that all cash count forms for
fundraising and all events where funds are
collected are counted and signed before you
take custody of the deposit? o o o ____________________
8. If a startup cash change box is issued, does
the person(s) receiving the change count the
startup cash in front of the ASB bookkeeper
and sign indicating that the startup change
is accurate? o o o ____________________
9. Is cash deposited into the bank account
within a few days after it is collected and received? o o o ____________________
10. Are all expenses approved in advance? o o o ____________________
11. Do you have copies of the signed purchase orders? o o o ____________________
48 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
YES NO N/A Comments
12. Is the purchase order dated and approved
prior to the purchase? o o o ____________________
13. Are the checkbook and the check stock
stored in a locked le cabinet or safe? o o o ____________________
14. Is there a log that identies the individuals
who have access to the ASB safe? o o o ____________________
15. Are expenses paid only with an original
invoice and a document that veries that
the goods were received? o o o ____________________
16. Are two signatures required on all checks?
Are there backup signers? o o o ____________________
17. Are checks made to vendors and employees
only for reimbursements (not to cash)? o o o ____________________
18. Is a record maintained of all equipment
purchased with ASB funds? o o o ____________________
19. Do you have a process to determine whether
a worker is an employee or an independent contractor? o o o ____________________
20. Are all employees who perform work for the
ASB paid through the district’s payroll and
then invoiced to ASB? o o o ____________________
21. Is an IRS Form W-9, Request for Taxpayer
Identication Number and Certication,
obtained from all independent contractors
before any disbursements are issued to them? o o o ____________________
22. Do you reconcile all bank accounts within
two weeks of receipt of the bank statement? o o o ____________________
23. Are all outstanding deposits and checks
identied and do they clear the bank in a
timely manner? (deposits should remain
outstanding for no more than two or three days). o o o ____________________
24. If any journal entries or transfer entries are
part of the bank reconciliation, are those
entries authorized? o o o ____________________
25. Does the district provide sta development
and training opportunities for you
throughout the year? o o o ____________________
Chapter 5
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General Business Practices and Internal Controls 49
YES NO N/A Comments
26. Is there a knowledgeable contact person in
the business oce to coordinate answering
your questions and providing assistance? o o o ____________________
27. Is the ASB recordkeeping computerized? If
so, is the accounting software adequate to
meet the needs of the district and clubs? o o o ____________________
28. Is the computer on which the ASB
accounting software resides user ID and
password protected? o o o ____________________
29. Is the ASB accounting software protected
by requiring a user ID and password for access? o o o ____________________
30. Are ASB computer and accounting software
passwords safeguarded, not given out, and
changed periodically? o o o ____________________
31. Are only ASB receipts deposited into the
ASB account (e.g., not library nes or
principal’s/school administrator’s
discretionary accounts)? o o o ____________________
32. Are you being listened to when you express
concerns about expenditures or other items? o o o ____________________
33. When money is brought to you from
fundraisers, are you given time to count
it in the person’s presence and do you
both sign and date the cash count form
indicating that the funds agree? o o o ____________________
Signature __________________________________________ Date ________________________
In addition to sound internal controls, access to the oce where ASB transactions are processed at the school
(e.g., the ASB oce or bookkeeper’s oce) should be adequately controlled. Easy or unobstructed access to
the ASB oce creates the opportunity for fraud. At the same time, the ASB/bookkeeper’s oce needs to be
accessible enough to conduct business and meet clients’ needs. Access controls allow the ASB bookkeeper to
control who enters the ASB oce, especially during times of heavy trac. A split door is a simple solution
that allows visual access and the ability for the ASB bookkeeper to answer questions without having to grant
others access to the oce.
Finally, strong internal controls promote the perception that detection of fraud is more likely. ose who
believe they may be caught committing fraud may be less likely to do so. Limiting access and installing
surveillance cameras with warning signs oer strong visual deterrents to a potential thief.
An Information Summary, Document Checklist and Questionnaire form is provided at the end of this
chapter to further help improve sound internal controls.
50 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Maintaining ASB Records
Like any business, the ASB organization must maintain accurate records. e records are the history of what
occurred during the year. Although the annual audit is usually completed within six months of the close
of the school year, other groups and individuals, including the Internal Revenue Service (IRS), may have
questions about or request an audit of the ASB organization a year or more after the school year has ended.
Good Business Practice for Record Retention
e business oce should have a complete list of which documents need to be maintained and for how long.
A variety of legal and procedural requirements, established in statute or locally by each LEA, aects the
retention of records. If the business oce does not have specic guidelines, it is a good practice to maintain
all ASB information for at least four years from the date of the audit, unless the information is considered
a permanent record. Permanent means that these records should never be destroyed. e principal or other
administrator at each school should ensure that there is a safe place to store permanent ASB records inde-
nitely and nonpermanent records for four years.
A sample record retention guideline follows.
Retention Guidelines for Student Body Records
Record Retention Period
ASB Constitution, Bylaws and Charters Permanent
Equipment Inventory Permanent
Club and Council Minutes 4 Years
Budgets 4 Years
Invoices and Approval Documents 4 Years
Bank Statements, Deposit Slips, Cancelled Checks and other Banking Records 4 Years
Financial Statements and other Accounting Records 4 Years
Education Code section 35254 allows a school district’s governing board to make photographic, microlm,
or electronic copies of any records of the district. e original records may be destroyed after they have been
copied via photographic, microlm or electronic methods and the copies kept in the district’s les; however,
no original record needed for any required audit shall be destroyed before the second July 1st after the audit is
completed.
In addition, Title 5 CCR 16021(c) requires that when an original record is photographed, microphotographed
or otherwise reproduced, the copy be classied as permanent. e original record, unless classied as an
optional, or class 2, record, may be classied as disposable, or class 3, and may be destroyed if the following
conditions are not met:
• e reproduction was on a type of le approved for permanent, photographic records by the United
States Bureau of Standards.
• Under the provisions of Evidence Code section 1531, the superintendent attached to or
incorporated in the microlm copy a signed and dated certication of compliance.
• e microlm copy was made permanent and placed in a conveniently accessible le for
examination.
Temporary Loans
Temporary loans can occur within the ASB account in accordance with Education Code sections 48936
(K-12) and 76064 (community college), which describe alternative uses of student funds including loans, with
or without interest, for a period not to exceed three years.
Chapter 5
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General Business Practices and Internal Controls 51
Whether a specic ASB can participate in a temporary loan depends on district policy because the Education
Code that allows such loans is applicable only if a district’s governing board allows temporary loans. If board
policy is silent on this issue, check with the district’s business ocial; in some such cases, board policy may
need to be changed to allow this option.
Education Code sections 48936 and 76064 apply to loans between clubs; this is for ASB organizations, not
loans between an ASB organization and a non-ASB organization. If a loan will occur between ASB clubs
because district policy allows such loans, an agreement between the ASB clubs should be crafted and should
clearly describe the consequences if the club does not repay the loan on time. e Education Code states that
the loan period should not exceed three years. However, if the loan involves a class with students who will
graduate in less than three years, the agreement should not extend past the students’ graduation date so that
future students will not be committed to repaying the outstanding obligations that former students incurred.
Both the club loaning the money and the club accepting the loan will, at a minimum, need to approve
the transaction in their respective meeting minutes. e club loaning the money will need to comply
with Education Code 48933 and 76063, which state that the expenditure of the funds are subject to the
procedures established by the ASB and which require that ASB expenditures be preapproved by three people:
an employee or ocial of the school district designated by the governing board, the ASB advisor (must be a
certicated employee), and a student representative of the ASB organization. e minutes are to memorialize
the entire club’s intent to loan the funds, including identifying to whom the loan is being made and its terms,
but more than the club’s permission will be needed per the Education Codes sections cited above.
e club accepting the loan should also approve the transaction because there should be evidence that the
club understands that the transaction is a loan to be paid back to the loaning entity, the terms of the loan,
and the consequences if it is not repaid.
Insurance
Just as the school district has insurance to protect its operations, the ASB also must have adequate insurance.
e responsibility for the ASB insurance coverage rests with the district’s governing board, which normally
delegates the responsibility to the district’s business oce. e business oce should help determine the types
of insurance the student organization needs and ensure that the district’s insurance policy contains adequate
protection. Although the district can charge the ASB if any additional costs are incurred to cover the ASB,
most districts pay for these costs out of their central budget rather than invoicing the ASB.
ASB organizations should have the following insurance coverage:
• Fire insurance covering the physical property purchased by the student organization.
• eft insurance covering the funds and physical assets of the student organization.
• Workers’ compensation insurance for any ASB employees.
• Fidelity bonding insurance protecting the organization against losses due to employees’ or
members’ actions.
• Property and liability insurance protection for the organization.
• Federal Deposit Insurance Corporation (FDIC) bank account balance insurance.
Whistleblower Hotlines and Fraud Reporting Websites
All ASBs should consider establishing or becoming part of an independent third-party whistleblower hotline
and/or web-based fraud reporting service. e creation and/or use of fraud reporting services is essential to
establishing an understanding that there is a likelihood of being detected if fraud is committed. Fraud experts
believe that the greater the perceived probability of detection, the less likely it is that fraud will occur; people
who think they might get caught committing fraud are less likely to try.
52 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 5
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General Business Practices and Internal Controls 53
Information Summary, Document Checklist and Questions
e following form has been developed to help ASBs maintain accurate information regarding general
business operations and specic activities of all clubs at a school. When used in conjunction with one of the
internal control checklists provided in this manual, it can help management be better aware of how a district’s
internal control structure and operations are set up in order to identify and correct any potential weaknesses
or issues in ASB operations.
Organization
Fiscal year: July 1, 20 __________ - June 30, 20 _______
School Name: _________________________________________________
Principal/School Administrator: ____________________________________
ASB Bookkeeper: ______________________________________________
ASB Advisor: __________________________________________________
Yes No
Board Policy allowing ASB Operations o o
Board Policy
Approved by Board of Education on: _________________________
Date
Administrative Regulations
Approved by Board of Education on: _________________________
Date
Is there an ASB constitution/bylaws for the general ASB? o o
Is there a constitution for each club/trust account? o o
Are only ASB funds maintained in ASB bank accounts? o o
Financial & Accounting
Accounting software name: _______________________________________
Accounting software version: ______________________________________
Names of individuals who have ASB accounting software access:
_________________________ ______________________________
_________________________ ______________________________
_________________________ ______________________________
Does each school have an ASB safe? o o
54 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Yes No
Names of individuals who know the combination to the ASB safe:
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
Are there any unapproved copies of the ASB accounting software? o o
(There should be only one working copy of the software)
Is the ASB accounting software backed up daily and the backup
copy kept in a separate and secure location? o o
Financial Statements for each approved club
Submitted monthly to the district ofce? o o
Reviewed, signed and dated by the district ofce? o o
Provided monthly to each club/trust? o o
All transactions, including transfers and journal entries, properly approved? o o
Bank Statements and Bank Reconciliations
Reconciled monthly within two weeks of receipt of bank statements? o o
Reviewed and approved by the principal/ASB advisor and district ofce? o o
Reconciling journal and transfer entries authorized? o o
Signed and dated by the individual performing the bank reconciliation? o o
Signed and dated by the individual reviewing/approving
the bank reconciliation? o o
Annual Budget
Prepared? o o
Approved? o o
Budget vs. actual results compared/reviewed regularly? o o
Budget adjusted when actual amounts vary signicantly? o o
Carryover limited so it is not excessive? o o
Minutes
Are minutes are prepared for club meetings (organized and general ASB)? o o
Minutes Authorize
Fundraising? o o
Purchases? o o
Establishment of clubs? o o
Chapter 5
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General Business Practices and Internal Controls 55
Yes No
Are the minutes approved by the club after they are reviewed for correctness? o o
Are the minutes shared with the general ASB? o o
Fundraising, Sales and Purchases
Are all club fund-raising activities approved and operated as stated in district policy? o o
Cash Count Forms and Deposits
Are fundraising cash boxes checked in/out? o o
Is the cash box startup cash counted and signed off on the cash count form
by the person(s) receiving the cash box? o o
Are starting/ending cash reconciled? o o
Are all cash and funds collected pre-counted and do those
responsible for the event sign off on the cash count form before
cash is submitted to the ASB bookkeeper? o o
Has the fundraising club advisor kept their copy of the cash count form
after signing off that the funds have been counted and before submitting
the conrmed deposit to the ASB bookkeeper? o o
Has the ASB bookkeeper conrmed that the cash count form has been
properly completed before accepting the funds for deposit? o o
Has the ASB bookkeeper counted the funds in the presence of the
individual(s) to conrm that the funds collected are accurate, and have both
the ASB bookkeeper and witnesses resolved any differences and
signed the cash count form indicating that the deposit is accurate? o o
If the cash counted by the ASB bookkeeper and witness differs by
less than $5, the ASB bookkeeper may adjust the deposit and both
the witness and ASB bookkeeper should initial and date all cash
count form changes.
If the cash counted by the ASB bookkeeper and witness differs by
more than $5, the ASB bookkeeper should ask the club advisor to
re-initial both the ASB bookkeeper’s copy and the club advisor’s
copy of the cash count form.
These cash count form and deposit counting and signing procedures
are an important safeguard against fraud, help protect both the ASB
bookkeeper and advisor from allegations of fraud, and help establish
the chain of custody in order to identify fraud.
Revenue Projection for Fundraising Activities and Other Events
Completed? o o
Approved? o o
Ticket Control (dance, etc.)
Completed? o o
Approved? o o
56 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Yes No
Student Store Inventory
Is inventory performed regularly? o o
Do students count and sign off for each of their own cash register cash-outs? o o
Are student store deposits recorded on a cash count form and witnessed and
signed by the student store representative and the witness? o o
Purchases and Disbursements.”
Is a purchase order prepared for every ASB disbursement? o o
Are purchase orders dated and approved prior to the purchase? o o
Are received goods reconciled? o o
Are W-9 forms received and signed before payment is sent
to any independent contractor? o o
Is the check register periodically reviewed to conrm no missing checks? o o
Are bank statement cancelled checks periodically reviewed to conrm
that the payee on the check is the same as in the check register? o o
Year End
Electronic Backup
Accounting program data? o o
Spreadsheets and other electronic data? o o
Backup copy documented and stored safely? o o
Listings Printed
Accounts receivable? o o
Accounts payable? o o
Student store inventory? o o
General ledger detail report? o o
Chapter 6
–
Budgets and Budget Management 57
Chapter 6
Chapter 6 – Budgets and Budget Management
What Budgets Represent
e district’s governing board must establish procedures to be followed in preparing and controlling student
body organization budgets. A budget is a nancial plan for a specic period of time that estimates annual
expenses and income and allows an ASB organization to estimate at the beginning of the school year what
its nancial position will be at the end of the year. When preparing a budget, clubs should be reminded
that neither large surpluses nor decits are allowed when budgeting. Proper budgeting requires adherence to
denite, well-understood business procedures.
For elementary and other schools with unorganized ASBs, budgets are not usually necessary (though they are
encouraged as a budgeting tool and learning experience) because normally only a few fundraising events are
held, and the funds are often raised before any commitments are made or any money is spent.
e operations at middle schools, junior high schools, high schools and community colleges, are dierent:
budgets are required for each club. For example, the student council may have to make commitments and
requests to enter into contracts at the beginning of the year before any funds are raised. A budget allows the
organization to estimate how much income it will raise that year and compare the income to the planned
expenses. It is important to establish a procedure and practice requiring budgets to be in place and approved
before the club enters into any commitments or requests that contracts be entered into.
Budgets are usually prepared for a one-year period. e general student council and each individual club need
to develop a budget document with their annual goals and a plan for achieving those goals by deciding the
following:
• Estimated revenues: What fundraisers will we have?
• Estimated expenses: What will the fundraisers cost us to hold?
• Estimated ending reserves and club carryover: Is there enough left over to accomplish the goals
we’ve outlined?
e budget allows students to determine if they will raise enough funds during the year to cover their
anticipated expenses. Because ASB organizations also provide an opportunity for students to learn about
business operations, a budget is one of the tools of business that students can learn to use. Budgeting is also a
life skill needed to manage one’s own personal nances.
At the beginning of each school year (or the preceding spring), the student council and each club should
decide what they want to do that year. For example, the student council may decide that they want to
beautify two or three parts of the campus during the year. e students estimate that the beautication
projects will cost about $8,600. ey determine that they will hold a fall festival, a winter dance, and a spring
dance to raise the necessary funds. ey want to begin the rst project in December. Once the students
have decided on their goals for the year, they can develop a budget that estimates the income from each
fundraising event, the expenses it will take to run the fundraising events, and the expenses of the planned
projects. A budget allows the students to see whether they will have enough funds to cover their expenses for
the year. After preparing the budget, the students may determine that they will only be able to complete one
project during the year or that they may have enough money to do more projects than they had originally
planned.
FCMAT recommends that a club be prohibited from spending any funds until the club has an approved
budget for the year. is is a way to ensure that all clubs have established budgets.
58 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
A budget alone is not adequate to show an expenditure as preapproved by the appropriate individuals,
which is required by Education Code section 48933(b). Budgets are critical internal control and planning
documents, but they are a plan, not a form of expenditure approval. A budget does not list specic vendors,
itemized amounts for purchases that will be made, or who will make them; it lists estimates. A budget also
does not show adequate approvals. Using a purchase order or expenditure approval form is the appropriate
way for an ASB to ensure adequate preapproval with enough detail to know who is making the purchase,
what the specics of the purchase are, and from which vendor it will be made.
All club members, teachers, advisors and other sta must understand that they cannot obligate ASB funds
until a purchase order is prepared and approved by the student club representative, a certicated employee of
the district (who is the advisor), and a school principal or other administrator or other board designee before
the purchase is made. ese three required signatures are listed in Education Code section 48933(b) for K-12
and section 76063 for community colleges, and they must be obtained for an expenditure to be considered
preapproved. e only way to prove that this Education Code is followed is by having a purchase order or
other expenditure approval form containing all three signatures.
A sample budget can be found in the appendices in Chapter 24 of this manual. A budget is broken down into
four parts.
• Part I: Estimated Revenues
• Part II: Estimated Expenses
• Part III: Ending Balance and Carryover
• Part IV: Budget Approval
Following are the steps in preparing each part of the budget:
Budget Development
Directions for budget preparation are specically related to the suggested budget development forms included
in this manual. Refer to the budget development forms (presented later in this chapter) starting with the
Sample Budget form.
e student council, with assistance from the ASB advisor, plans for and prepares the budget. e ASB
bookkeeper should not prepare the budget.
Part I – Estimated Revenues
e advisor for each club and the club ocers should review plans for the school year and complete an
estimate of actual revenue for each event. Prior year data can usually be obtained from the ASB bookkeeper
or the school secretary.
1. e advisor and students should use the account numbers and account descriptions that the school
establishes in its unique chart of accounts. Chapter 7, Accounting and Financial Management, includes
information on how to establish a complete chart of accounts for the school. Clubs should use the
titles to match the actual fundraiser events they are planning. ey should not combine the projections
if multiple occurrences of one type of event are planned (such as spring and fall car washes). Each
fundraiser should be entered separately.
2. e rst two columns in Part I are used for the appropriate account number and description.
3. e third column is a place to enter the revenues from the previous year. is information is helpful
when the fundraising operations of the organization remain fairly constant from year to year.
Comparing the actual revenues received in one year to the amounts budgeted for the new school year is
a good way to evaluate whether the budgeted revenues are reasonable.
Chapter 6
–
Budgets and Budget Management 59
4. e last column in Part I is for the estimated revenues for the new school year. Before the students
can estimate the revenues, they must determine where the revenue will come from. For example, does
the club or student council usually receive donations each year, or will all of the revenue come from
fundraising events?
5. For the revenue that will come from fundraising events, the students need to prepare an estimate of the
revenue for each event. e Fundraising Event Prot form found in Chapter 13 can be used for this.
e students should prepare one form for each fundraising event. In addition, the form indicating that
the fundraiser has been approved should be attached. In some districts, these two forms are combined
into one, which is an acceptable practice.
6. e students should prepare a Fundraising Event Prot form for all approved fundraisers, even those
added later in the year and not included in the original budget.
7. After the students have completed the estimates of revenue for each fundraising event and determined
the other sources of revenue, they can enter the information line by line in the revenue section.
8. Once all of the information in Part I is complete, the students should total the revenues from all
sources and enter the amount on the Total Revenues line.
9. When estimating revenue it is always best to use the most conservative number. For example, if the
student council has received donations of between $500 and $2,000 in the past few years, use $500 in
the initial budget. e budget can always be adjusted to a higher amount later if the initial estimate
was low.
Part II – Estimated Expenses
e advisor and students should use the account numbers and account descriptions that the district has
established in its chart of accounts. Chapter 7, Accounting and Financial Management, includes information
on how to establish a chart of accounts for the student body organization. e rst two columns in Part II are
for the appropriate account number and description.
1. e students should review the club’s past years’ expenses to determine the types of expenses the
organization usually incurs each year (e.g., supplies and postage).
2. When estimating expenses, the students should include any items that the organization may reasonably
have to pay during the school year, together with the cost of planned projects.
3. e students should include the expenses for each fundraising event that they estimated when
preparing the Fundraising Event Prot form.
4. Once all of the information in Part II is complete, the students should total the expenses and enter the
total on the Total Expenses line.
When estimating expenses it is best to budget the maximum amount an item is likely to cost and adjust the
budget once the actual cost is determined.
Part III – Ending Balance and Carryover
1. e rst line in Part III is to compute the dierence between the estimated revenues and the estimated
expenses. When the estimated revenues equal or exceed the estimated expenses, the budget is balanced
or there is an excess, which is the desired result.
2. e advisor should ensure that the students prepare a balanced budget. If the club had a signicant
amount of carryover from the prior year, it is acceptable for the expenses to exceed the revenues by the
amount of the prior year’s carryover. Funds should be carried over only when there is a denite plan
60 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
and purpose for the use of the funds. Examples include long-term projects or events that span years or
occur early in the next school year.
3. If the students nd that the expenses exceed the revenues they have budgeted and there is no carryover
from the previous year to cover the shortfall, they need to review and reduce expenditures to balance
the budget or plan to hold additional fundraisers to make up the dierence.
4. e second line in Part III is to enter the amount of the ending balance, if any. is amount is the
carryover from the previous year.
5. On the third line in Part III, the dierence between the estimated revenues and expenses on line 1 and
the carryover from the prior year on line 2 are added together to determine the amount of the projected
ending balance. is is the amount that the students estimate will be available at the end of the school
year based on the estimates in the budget. is amount becomes the estimated carryover for the next
school year, unless it is spent in the current year.
Part IV – Budget Approval
e advisor should help the students prepare the budget. Once the budget is complete, the advisor and a
student representative of the club should sign and date the budget. is signature indicates that the advisor
has reviewed the budget and determined that it is reasonable and realistic. A budget should not be approved
if it does not show a positive ending balance (unless the club is graduating or becoming inactive; then the
budget can end without a fund balance). A budget should never be approved with a negative ending fund
balance. e student council or club (depending on whose budget it is) should vote on the budget and include
that vote in their meeting minutes before submitting the budget to the student council/leadership class. e
student council/leadership class should approve all submitted budgets for each club.
Once the budget is approved by the students, the advisor and the student council, it should be sent to the
district’s business oce for approval. In many districts, the governing board receives all ASB budgets and
they are part of a public forum at an ocial district board meeting. In other districts, the governing board
has delegated another administrator, such as the superintendent or business manager, to review and approve
all budgets. Individuals involved with the ASB should be familiar with their district’s budget review and
approval policy and practice.
Budget Monitoring
Budget monitoring is the process of comparing the budget to the actual revenues and expenses at a point in
time to determine whether the revenues are coming in as expected and that the expenses are not exceeding
the amounts authorized in the budget. e students and advisor should monitor the budget at least monthly
so that there is adequate time to adjust plans if the budget is not realistic or if the planned goals will not be
met because of lower than projected revenue or higher than projected expenses.
e Budget Monitoring form at the end of this chapter shows the original budget and the actual revenues and
expenses on the date the form is prepared. It provides an easy way to see how the club is doing nancially.
If problems are noted in either the revenue or expense categories during budget monitoring, the students can
revise the budget. For example, if the students had planned their rst fundraising event for October and the
event had raised $1,500 less than they budgeted, they will need to revise the budget. ey will need to reduce
the amount of revenue in the budget and reduce the planned expenses for the year, unless there is additional
revenue or carryover from the previous year to cover the shortfall or an additional revenue-creating event will
be planned.
e students should revise the budget whenever any signicant changes in the estimated revenues occur
or any increases in expenses are expected. A rule of thumb to use for signicant change is a variance of 10
percent or more. To show the changes in the budget, the students can use the same form that was used to
Chapter 6
–
Budgets and Budget Management 61
prepare the budget. e advisor and/or principal/school administrator should also approve all changes to the
budget. Again, individuals should be familiar with board policy in their district so they can know if further
approval of revised budgets is required, such as approval by the student council or the district’s business
oce.
Carryover of Unexpended Balances
Carryover is the amount of money the club has at the end of the year after all of the revenues are deposited
and all of the bills have been paid. It is also called the ending balance.
e principal/school administrator, advisor and students should ensure that the funds raised by students
during a given school year are spent on behalf of those same students while they are at the same school. In
one elementary school, the students raised more than $4,000 each year; however, only about $1,000 was
spent each year. Within a few years, the ASB organization had an ending balance of $12,000. is practice
is clearly contrary to the intent of the law. Funds should be spent for the benet of the students who are
enrolled when the funds are raised.
Reasonable carryover balances often are used to start a project in a new year (often called seed money). A club
may also raise funds for a large project for which it takes more than one year to raise adequate funds. Large
or excessive carryover balances without a plan of intended use should be discouraged. us, a good practice
would include a regular review of carryover balances to be certain that the funds are spent for the benet of
the students enrolled when the funds were raised.
Good Business Practice for Budget Carryover
e governing board should include a limit on carryover in its ASB board policy. Some districts include this
limit in their own district-generated ASB manual or request that it be included in the clubs’ constitutions.
If a district has already provided guidance about this issue, that guidance should be followed. However, if a
district’s board and/or administration has not included language regarding carryover balances, it is suggested
that this issue be brought to their attention. A good rule of thumb guideline could be something like the
following: “No student club or organization may carry over more than 20 percent of the total amount raised
in a given school year without a spending plan that has been approved by the district’s business oce.” Under
this rule, for example, if the total club revenues were $4,000 in a given year, the club could carry over up to
$800 without an approved plan.
ere may be circumstances in which it would be appropriate for a club to carry over more than 20 percent
of the funds raised that year. For example, if the club wants to participate in a band competition and parade
festival overseas, it could take them two years or more to raise the funds. If the club has voted for this project,
and the advisor and the school principal or other administrator have approved it, it may be appropriate for the
business oce to approve the carryover of funds.
e Budget Carryover Request form is the form that the student club (organized ASB) or school principal or
other administrator (unorganized ASB) should submit to the district business oce in April or May of each
school year to request approval to carry over more than the allowed district amount (e.g. 20 percent).
What Happens when a Class Graduates?
Education Code sections 48930 (K-12) and 76060 (community college) tell us that the purpose of ASB is
to conduct activities on behalf of the students, clearly indicating that the funds held in ASB can only be
spent for current students. Also inferred from this is that the funds are held for current students at the same
school at which the funds were raised. If cash balances exist for classes that have already graduated, those
accounts need to be cleared. If there is no provision in the ASB constitution or board policy stating the fund
or account to which the remaining funds should be transferred after a class graduates, it is suggested that the
funds be transferred to the general ASB account at the same school. e ASB constitution or board policy
should be revised to provide guidance for similar circumstances in the future.
62 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
e funds should not be transferred to the students’ new school upon graduation. For example, if an 8th
grade class has remaining funds when they graduate, the funds should not follow the students to their new
high school. e funds need to remain at the school where they were raised. If the 8th grade students do not
spend their remaining funds prior to graduation, they should gift the funds to an existing ASB club at their
school, or decide how to spend it before graduation. Otherwise, the funds should revert to the general ASB at
the school and the student council will decide on the use of the funds.
It is a good practice to review outstanding balances a few months before a class graduates. If there is a
projected remaining balance, the class that is about to graduate should do one of the following:
1. Spend the remaining funds on allowable expenditures prior to their graduation.
2. Gift the funds to another ASB club at the same school. Many times the outgoing seniors gift the funds
to the upcoming freshman class so that they have seed money to begin their freshman year.
3. Gift the funds to the general ASB at the same school (this is also what will happen if the graduating
class does nothing, even if the ASB constitution and policy are silent on the issue).
Chapter 6
–
Budgets and Budget Management 63
Budget
Name of School_____________________________________________________
Name of Club_______________________________________________________
Budget Development
Fiscal Year: _____________
Budget Adoption or Revised Budget
(Circle one)
As of: _______________
Date
Part I: Revenues
Account Number Account Description Prior Year Budgeted
Revenue
Current Year Estimated
Revenue
Total
Part II: Expenses
Account Number Account Description Prior Year Budgeted
Expense
Current Year Estimated
Expense
Total
Part III: Ending Balance and Carryover
Difference between total revenues and expenses: ____________________
Plus carryover (ending balance) from prior year: ____________________
Projected ending balance: ____________________
64 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Part IV: Budget Approval
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Approved by:
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
ASB Student Council President: _______________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
Approved by business ofce: _________________________________________________________
Signature, Title and Date
Chapter 6
–
Budgets and Budget Management 65
Budget Monitoring for ASB or Club
Name of School_____________________________________________________
Name of Club_______________________________________________________
Budget Monitoring
Fiscal Year: _____________
As of: _______________
Date
Part I: Revenues
Account Number Account Description Budgeted Revenues Revenues Received to Date
Total
Part II: Expenses
Account Number Account Description Budgeted Expense Actual Spent to Date
Total
Part III: Ending Balance and Carryover
Difference between total revenues and expenses: ____________________
Plus carryover (ending balance) from prior year: ____________________
Projected ending balance: ____________________
Part IV: Budget Approval
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
66 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Approved by:
Principal/School Administrator: _________________________________________________
Signature, Title and Date
ASB Student Council President: ________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
Chapter 6
–
Budgets and Budget Management 67
Budget Carryover Request
Name of School_____________________________________________________
Name of Club_______________________________________________________
Request to Carry Over Excess Ending Balances
Fiscal Year: _______________
As of: _______________
Date
I. The following organization requests approval to carry over an amount in excess of the district’s approved
20 percent limit.
Club/Organization: ___________________________________________________________
Club Advisor: ________________________________________________________
II. Calculation of Excess Carryover
A. Total estimated annual revenues: __________________________
B. Multiplied by 20 percent (Allowed Carryover %): __________________________
C. Equals Amount of Allowed Carryover: __________________________
D. Amount of Requested Carryover: __________________________
III. Explanation
Provide an explanation of the need to carry over amounts in excess of the 20 percent limit. Explain
how student approval was obtained, and when the club will use the excess funds. Attach explanation
on an additional page.
Budget Carryover Request Approval
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Approved by:
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
ASB Student Council President: _______________________________________________________
Signature, Title and Date
68 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Recorded in ASB Student Council Minutes on: ________________________
Date
Approved by business ofce: ________________________________________________________________
Signature, Title and Date
Chapter 7
–
Accounting and Financial Management 69
Chapter 7
Chapter 7 – Accounting and Financial Management
Accounting Systems
Every ASB organization must have an accounting system to record the money raised and spent. Accounting
systems are either manual or computerized. e decision of which system to use is important because the
system must provide assurance that adequate and eective internal controls are in place while maintaining
an accurate and detailed record. If a computerized accounting system is used, the general summary of all
funds will need to be shown, as well as the distribution of assets in the bank and other places, with individual
activities’ account information and balances. If a manual system is used, a single columnar book, bound or
loose leaf, is recommended for keeping accounts.
is chapter briey denes the two types of systems and indicates which systems ASBs usually use.
e simplest accounting system is the checkbook and manual ledger. For elementary schools and other
unorganized ASBs that have only a few fundraising events each year, a checkbook may provide an adequate
accounting system. In secondary schools and community colleges (organized ASBs), a more complex system
is needed because many student clubs require separate accounting.
Manual Accounting Systems
e simplest and least expensive system is a checkbook and a set of
ledger cards. e ledger cards are used to record the transactions by
club; the revenues are posted as additions on the ledger cards and the
expenses are posted as deductions. is type of system was commonly
used before computers were readily available. Manual systems are now
found mostly in unorganized ASBs because of the limited amount of
transactions. is type of system can work, but it requires a signicant
amount of time to maintain, and the risk of error is high because all of
the transactions are posted manually.
Even with manual sets of books, a backup of those books must
be maintained. Photocopying or scanning the general ledger
and subsidiary journals for archiving in a district reproof safe is
recommended.
Computerized Accounting Systems
Most organized ASBs use one of several computerized accounting
systems developed specically for ASB records and accounting
transactions.
Although computerized accounting systems are more expensive and
require ongoing support, they enable the organization to produce
more accurate reports, allow stronger controls over the data, and can save an enormous amount of time
when producing information. Some accounting software packages are used by organized ASBs throughout
California and are designed specically for ASBs. Other software systems range from spreadsheet applications
to accounting software. Some districts have developed their own proprietary accounting software. Large
schools with multiple organized ASB clubs and trust accounts are best served by computerized accounting
systems that specialize in ASB operations and allow separate accounting for each club. e California
Association of Directors of Activities (CADA), the professional organization for ASB advisors, can provide
information about which districts use which products.
Fraud Alert
Beware of multiple copies of
accounting data located on the
same computer drive or anywhere
else. Using the guise of needing
a second set of electronic books
to practice accounting entries,
perpetrators will carry out any
number of frauds. Multiple sets
of electronic books are most
commonly used to create bank
reconciliations. Some perpetrators
of fraud have used up to six
sets of books to prepare bank
reconciliations, reprint checks,
provide understated club nancial
records, and carry out many
other fraudulent transactions and
reports.
70 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
e importance of backing up data cannot be overemphasized. Whether it is stored on a district server or
locally on the ASB oce computer, electronic accounting information must be backed up to a secondary
storage device at least weekly and preferably daily. Secondary backup storage devices such as compact disks
(CDs), portable ash drives, portable hard drives and internet cloud backup services all provide ecient
media for backups that can be stored in a district’s reproof safe or online. All nancial data should also be
backed up daily, and a copy of all ASB computer les, which may contain other valuable data, should be
backed up annually.
Journal Entries and Transfers
Because so many ASBs use computerized accounting systems, greater control of journal entries and transfers
is required. Journal entries and transfers should be prepared only with prior written approval from the ASB
advisor, principal/school administrator, or a student representative. Such entries should never be made
without someone else’s knowledge and approval.
Because journal entries and transfers are made to correct or change a previous
accounting entry, great care should be taken to properly document their
purpose so that future questions or issues do not occur. In accordance with
standard accounting practices, the detailed reason for the journal entry or
cash transfer, with all supporting documentation showing why the entry is
necessary, should accompany the transaction and be retained. is is true
whether a journal entry is used to transfer resources between clubs, correct an
error, or document an extraordinary event such as a theft or loss.
Some ASBs consider transfers less critical than journal entries, but this is not
the case; both are equally signicant and should be thoroughly documented
and approved, because failure to do so can cause serious issues in the future.
Accounting for Theft or Loss
In cases of theft, or misplaced or lost deposits, the amount of funds and club
identity may or may not be known.
• When the amount of loss and the club is known, the following options
are available:
• Corresponding increasing and decreasing journal entries may be
considered to identify the club’s loss, and a theft loss account may
even be created to separately track the transaction. Corresponding
increasing and decreasing entries will identify the loss but will
have no net eect on the club’s account.
• Some clubs may want to document a theft loss as an expense
and place the other side of the transaction in another account that they are willing to reduce,
decreasing the club’s account.
• Some ASBs may choose to account for this type of transaction within their cash over-short
account.
• When the amount of loss and the club is unknown, an increasing and decreasing estimated journal
entry may be considered to minimally identify an estimated loss and may be recorded within some
miscellaneous account type.
Centralized versus Decentralized Accounting
Because governing boards are ultimately responsible for everything that happens in a district, including the
activities of and guidelines for student organizations, they have a duciary duty to ensure that sponsored
Fraud Alert
Any journal entry that is
not properly documented
is a fraud indicator. While
mistakes may be made, even
corrections to journal entries
should be printed, signed
and approved. Failure to
document journal entries and
obtain approval allows a fraud
perpetrator to completely
manipulate the accounting
records. In the absence of
proper approval procedures,
perpetrators of fraud can
and will enter numerous
transactions allocated over
many clubs and accounts,
all disguised to make the
transaction so complex and
tedious that it is difcult to
follow.
Chapter 7
–
Accounting and Financial Management 71
activities and accounting are performed in a correct and accountable manner. At the same time, governing
boards are not ultimately responsible for ASB expenditure decisions; the students are, with assistance and
co-approval from specic sta as noted in the Education Code. For expenditures to qualify as an allowable
use of student funds, they must meet the following criteria:
• ey must be in compliance with applicable laws and district policy.
• ey must directly promote and benet the general welfare, morals and educational experience of
the students.
• ey must not be used for expenses that are the district’s responsibility, or expenses that have been
paid for from the district’s own funding sources in the past.
• ey must benet a group of students (with few exceptions).
• Students must be involved in decisions regarding how the ASB funds are to be spent (organized
ASB).
e most important question that should be asked is, “Is this something the district should provide, or is it
really an ‘extra’ that the students want?”
e district is responsible for ensuring that ASB funds are safeguarded at the school and deposited in the
bank in a timely manner; for maintaining adequate ASB nancial records and nancial transactions; for
ensuring that the district’s ASB policies and procedures are followed; and for reporting any suspected fraud
or abuse. ese duties are usually performed by an ASB bookkeeper. In addition, an ASB advisor should
supervise club activities and serve as the liaison between the club and the ASB bookkeeper and principal/
school administrator.
Who Pays for the ASB Bookkeeper?
Because governing boards have a duciary duty to ensure that ASB operations are performed in a correct and
accountable manner, the district usually pays for the ASB bookkeeper’s and ASB advisor’s services because
their roles ensure that ASB organizations follow board policy and handle funds appropriately. e district’s
governing board must ensure that ASB funds are monitored and safeguarded.
Most ASB accounting is decentralized, meaning that the accounting for student organizations is done at the
schools where the clubs exist. e advantage of this is that the students can learn how accounting works, and
information can usually be obtained more quickly and can be easily communicated among student clubs,
advisors and the bookkeeper.
When ASB accounting is centralized, the accounting for student organizations is handled at a location
other than where the clubs exist, such as at the district oce. is method is more ecient in producing
standardized accounting and reporting, can improve the elements of internal control, and can provide
signicantly improved budgetary controls. However, it is dicult for students to be as involved, and
operations are not as ecient.
Chart of Accounts
Regardless of the accounting system selected or whether accounting is centralized or decentralized, each
ASB needs to use a structured chart of accounts that conforms to generally accepted accounting principles
and denes and dierentiates categories of revenues and expenditures as well as assets and liabilities. A chart
of accounts organizes all account groups or categories of money numerically. ere is a common schematic
for ordering the chart of accounts that, when used correctly, helps all involved parties better understand
the nancial health of the ASB, and its clubs. Two sample charts of accounts are included at the end of this
chapter: one is suitable for a small ASB, and the second is designed for a larger ASB. A standard chart of
accounts should be used for all schools and clubs.
72 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
ASB charts of accounts will have several groups of accounts within the following categories:
Assets
Assets are usually dened as anything the ASB owns or controls that has value, either tangible or intangible.
Assets are a resource of the ASB and can be further segregated into current assets and xed assets. Current
assets are readily available or liquid, such as cash in a bank or in savings. Fixed assets are of a more permanent
nature, such as a piece of sound system equipment.
Liabilities
Liabilities are obligations, or debts, the ASB owes to other parties (i.e., unpaid legal obligations). ese
include invoices to vendors for items received but not paid for, as well as sales tax balances due to the state.
When a liability is paid or settled, a transfer or use ofassets (i.e. cash) will occur.
Trust Accounts
Trust accounts are managed by one entity for the benet of another, so in the case of an ASB, these are
amounts that the ASB is holding on behalf of individually approved clubs. ese include scholarship
accounts.
Equity
Equity accounts represent the net worth of the ASB. e equity is the dierence between the total assets and
the total liabilities.
Revenue
Revenue is the amount of money received from the sale of goods or services, or money raised from
fundraising activities. is is the money earned by the ASB.
Expenses
Expenses are the costs incurred for the purchase of goods or services. is is the money spent by the ASB.
Fund Balance
Fund balance is the amount remaining after all revenues, expenditures and carryover from the prior year are
calculated and accounted for. is is unspent and uncommitted ASB money.
Sound Business Practices for Accounting System Management
e district’s business oce should standardize the chart of account and the accounting systems for all ASBs.
is ensures that the accounts and the system are appropriate for use in ASB activities and will be consis-
tently used throughout the district.
Computer Hardware and Software Purchases for Accounting Functions
With student council and district approval, it is legal and appropriate for an ASB to purchase computer and
software systems for its operations. It is equally legal and appropriate for the district to provide the requisite
hardware and software for daily business use. e decision to purchase computer systems for ASBs and to
determine the funding source for this type of purchase can be made at the local level, but only with district
approval of which system is purchased and how it is funded.
Financial Reporting and Closing the Books
Financial reports are the most important monitoring devices that businesses and public agencies use to
determine their scal position. e timing and composition of these reports varies with the type and size of
the entity. A range of industry standards aect how nancial reports are structured, prepared and presented.
A similar structure exists for the nancial reporting for ASB organizations.
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Accounting and Financial Management 73
Periodic nancial statements must be prepared to help principals and other school administrators, ASB
advisors, and students understand the ASB’s nancial position. e size of the ASB operations and the grade
level of the school often determine the type and frequency of nancial reports. e governing board policy
also may determine how and when nancial reports are prepared. e district’s business oce should also
receive copies of the periodic nancial statements as part of their oversight responsibility.
e business year for all ASB operations is July 1 to June 30. is is formally called the scal year, for both
ASB operations and the district.
Standard for Unorganized ASB Operations
Because the amount of money in unorganized school ASB accounts is often small, periodic nancial
statements are not as important. At a minimum, the ASB will have to provide summary nancial information
at the end of the year for the auditors. However, if an unorganized school ASB operation has annual
nancial activity of $25,000 or more, nancial statements should be provided throughout the school year as
recommended below for organized ASB operations.
Standard for Organized ASB Operations
In schools with organized ASBs, it is important that the principal/school administrator, advisors and students
review their nancial status periodically. Best practices for organized ASBs dictate that the nancial reports
showing the ASB’s nancial status be reviewed monthly; in no case should the nancial status be reviewed
less than quarterly. A monthly reporting requirement is most common and is recommended by FCMAT. is
means that reports should be produced for all clubs, as well as the general ASB.
e district’s business oce sta should also give input into the decision about how often nancial reports are
produced and reviewed, who should review them, and their distribution.
Types of Financial Reports
Normally, it is the ASB bookkeeper’s responsibility to produce the nancial reports. e bookkeeper is
responsible to many customers, each of whom has a unique set of needs and responsibilities related to those
reports:
• Principal/School Administrator: e principal/school administrator must review and approve
(indicated by their signature) all nancial reports throughout the year and ensure that all required
reports and submissions are made to the district’s business oce as requested.
• Student Council: For organized ASBs, the student council must review, approve and enter into
their meeting minutes the monthly and annual nancial reports for their own information, and for
the various clubs’ information.
• Individual Clubs: For organized ASBs, each club must review, approve and enter into their meeting
minutes their monthly and annual nancial reports.
• District Business Oce: e district’s business oce must receive the approved nancial statements
at least quarterly, although monthly is recommended.
ere are two basic industry-standard nancial reports. ey are most useful when they are prepared properly
and explained clearly:
• Prot and loss statement, which compares ASB revenue to expenses
• Balance sheet, which summarizes the assets and liabilities of the ASB
74 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Prot and Loss Statement
e prot and loss statement provides a nancial picture of an organization at a specic point in time, such as
the end of a month, and includes all nancial activity from the beginning of the scal year through the end
of that month. is statement compares actual revenue to actual expense. It is best used when it also includes
the projected budget for the same revenues and expenses.
e comparison of the budget to the actual revenues and expenses is probably the most useful nancial
statement for showing how the club is doing at any point in time. In addition to preparing nancial
statements at various times throughout the school year (e.g.. monthly), a year-end nancial report should
always be prepared at the end of the scal year and should include a summary of the nancial activities of all
trust accounts and clubs.
e principal/school administrator or designee should do the following with each report:
• Review the year-end report to ensure that it balances; that is, that the revenues less expenditures
equals the net prot/loss and that beginning balances are reconciled with ending balances from the
prior year.
• Review and investigate any excess of expenditures over revenues, both budget and actual, at both
the individual club and ASB levels, to ensure data accuracy and an understanding of the deciency.
• Review any encumbered purchase orders that appear out of the ordinary, especially if unexpected.
• Initial and date the report as evidence of their review.
Balance Sheet
A balance sheet is an important document used by businesses, public agencies and municipalities of all sizes
worldwide. It is the main indicator of scal solvency and a tool for making future business decisions. e
balance sheet has similar value in ASB management.
e balance sheet statement lists all of the assets and liabilities of the ASB organization on a specic date. e
assets are what the ASB owns, such as the following:
• Cash in the bank
• Savings deposits
• Student store inventory
• Anything else of value
e liabilities are what the ASB owes, such as the following:
• Unpaid bills to vendors for merchandise received
• Unspent balances in club accounts
• Sales tax payments due
• Other bills owed
e fund balance indicates the ASB’s net resources available for future projects and activities. As periodic
nancial reports (including a balance sheet) are prepared during the year, the line titled “prot or loss to date”
indicates the success or failure of fundraising up to that point in time. A sample balance sheet is included at
the end of this chapter.
e principal/school administrator or designee should do the following:
• Review the balance sheet to determine that assets less liabilities equals equity/fund balance.
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Accounting and Financial Management 75
• Review assets and liabilities for reasonableness and investigate any anomalies or anything that
appears out of the ordinary.
• Initial and date the report as evidence of their review.
Closing the Books
Without exception, every business, whether private enterprise or public agency, must close its books at the
end of each scal year. At the end of June, the ASB books must also be closed for that school year, which
means posting all nancial transactions for that year. For organized ASBs, this is normally done by the
bookkeeper. For unorganized ASBs, it is usually the school secretary or similar position.
To close the books, the following must be completed by June 30:
• Collect all undeposited money from fundraising events and deposit the funds into the bank.
• Pay all outstanding invoices for goods and services received.
• Contact the vendor for any outstanding purchase orders. Obtain an invoice for purchase orders that
have been delivered by the vendor but not invoiced. Pay these invoices.
• Ensure that the ASB advisor and students take a nal inventory of the student store and any
vending machine stock on hand.
• Balance the inventory count with the book value of the inventory. Make adjusting entries as
needed.
• Verify and balance all trust and club accounts. Coordinate this bank reconciliation with the ASB
advisor and with individual club sponsors. Make adjusting entries as needed and verify data.
• Prepare the nancial statements for the scal year.
• Distribute the nancial statements according to district guidelines.
District Business Ofce Support
Preparing nancial reports can be challenging and sometimes intimidating for students and sta involved in
ASB operations. An understanding and supportive district business oce sta should have the expertise and
responsibility to ensure that ASB personnel are trained and oer them assistance. e annual meeting and
training sessions sponsored by the district’s business oce should include a review of the nancial reports for
ASBs. Similarly, the business oce should provide the ASB with technical assistance throughout the year as
questions and concerns arise.
Annual Audit
e governing board must ensure that all district funds are audited annually by an external, independent
auditor approved by the State Controller’s oce. e independent auditors report directly to the governing
board. As part of that annual audit, student body funds will be reviewed and audited. e Education Code
also states that the governing board shall provide for the supervision of ASB funds, and may provide for
internal audits of ASB funds by school district personnel (E.C. 76065 for community colleges and 48937
for K-12). is can be done using a district internal control plan and a certied public accountant or public
accountant licensed by the California State Board of Accountancy. e audits must include a study of
nancial procedures and controls to ensure conformance with the law, and must verify all outstanding bank
accounts.
Annual audits, whether internal or external, are essential to the district’s oversight responsibilities. ese
audits help the district’s administration ensure that appropriate procedures and controls are in place. Audit
ndings alert the district oce to weaknesses in the system that must be addressed and procedures that
must be corrected. Audits also protect the district by providing a third-party defense for why policies and
76 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
procedures are necessary. Sta at all schools who work with the ASB must be made aware of all audit ndings
and should participate in the steps needed to ensure that they do not recur. is includes ndings related to
schools other than their own so that they are made aware of the issues and can prevent or correct improper
procedures at their own school.
Independent auditors will follow audit procedures established by the State Controller’s Oce to ensure that
student body nancial transactions are recorded accurately in the ASB’s nancial records. To do so, the
independent auditor should do the following:
• Review records and systems for adequacy of internal controls and conformity with generally
accepted accounting principles (GAAP).
• Ensure that the bank reconciliations are performed within two weeks of receiving the bank
statement.
• Read meeting minutes and note matters pertaining to the audit.
• Determine if the district’s governing board has adopted rules and regulations regarding how the
student body is governed.
• Verify assets, liabilities, revenues, expenditures and equity.
• Determine whether fundraisers were approved in advance by the governing board or its designee
and were in the student body’s best interest.
• Determine if revenue projections were completed for all fundraisiers.
• Reconcile recorded receipts with the value of what was actually charged during fundraisers (e.g. the
value of items or ticket prices for entertainment).
• Check for commingling of ASB funds with non-ASB funds.
• For all fundraisers, ensure that cash controls (tickets, receipt books, tally sheets) were used and
reconciled with collected cash.
• Ensure that receipts were credited to the proper club account.
• Determine that student funds were not used for expenses that are the district’s responsibility.
• Ensure that all expenditures were approved in advance by the appropriate individuals.
• Determine if budgets for all clubs and the student council were prepared and appropriately
approved.
• Ensure that a policy or policies require student body revenues and expenditures to be clearly
distinguished from those of the district.
• Verify that cash is always double counted.
• Ensure that deposits are kept secure in a locked safe, and for no more than a few days, until they
are brought to the bank.
Following are some of the annual audit ndings that commonly occur in districts throughout the state:
• ASB budgets are not prepared.
• Little or no supervision over budget preparation.
• Revenue projections are not prepared.
• Revenue projection actual results are not monitored and compared to projected results.
• Prenumbered receipt books and/or receipts are not used.
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Accounting and Financial Management 77
• Receipt books are not logged in and out with signatures.
• Cash counts are not recounted.
• Prenumbered tickets are not used.
• e number of tickets sold is not reconciled to tickets collected.
• Deposits received are not taken to the bank for deposit within the time specied in district
guidelines.
• Purchase orders (or other preapproval form) are not used.
• e actual purchase date is prior to the purchase order date.
• e three signatures required for organized ASB expenditures are not obtained prior to purchase.
• A lack of conrmation that the product purchased was received prior to payment being made.
• Checks are made out to cash.
• Check stock is visible and unsecured.
• Bank reconciliations are not prepared regularly or on time.
Because they review a sampling of transactions, auditors will not nd every instance when things are not
being done appropriately. Incorrect procedures not detected by the auditors should nonetheless be corrected.
Issues need to be corrected before something goes wrong. is protects everyone involved with ASB. e
auditors are a good resource when questions arise because they are familiar with rules, regulations, and best
practices.
e ASB audit is part of the school district’s audit, and the cost should be paid by the school district.
Bank Reconciliations
Timely and accurate bank account reconciliations and review are prudent and necessary. Each ASB organi-
zation will have at least one bank account with monthly statements. Bank account statements may be sent
directly to the school, or to the district oce, which then forwards them to the school. Normally the ASB
bookkeeper is responsible for reconciling all ASB bank statements to checkbooks and general ledger accounts.
Challenges of Bank Account Reconciliations
Sta members typically report diculties with bank account reconciliation, and auditors often nd problems
in this area at year end. In addition to a regular bank account reconciliation process, a reconciliation between
all club balances and the total bank account balances needs to be performed; this makes the process more
dicult.
For example, consider a situation in which there is a reported $5,000 balance in the combined ASB checking
and savings accounts, yet the ASB bookkeeper reports total club balances of $6,000. Can this occur? If it
does, who takes what action?
Some of the challenges reported by sta and auditors are listed below, and immediately following are
recommended best practices that help prevent these challenges from aecting other ASB operations.
Reported challenges include the following:
• e bank account is not reconciled each month in a timely manner.
• No one reviews the bank reconciliation after it is prepared by the ASB bookkeeper.
• e total in all club accounts diers from the total of the bank accounts.
• No one prepares a monthly report showing all cash balances and all club balances.
78 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• No one is certain if there is enough money for an upcoming activity (e.g. the senior class picnic).
• e ASB treasurer does not make a monthly report to the student council regarding all bank
accounts and all club and trust account balances.
Good Business Practices for Bank Account Management and Reconciliation
For all accounts maintained by the student organization(s), reconciliations between nancial institution
account balances and student organization records should be performed for every period for which a
statement is received (e.g. monthly). Control measures should be established to ensure that bank reconcilia-
tions are performed on time and accurately, and that sucient separation of duties exists.
Best practices for bank account management and for bank reconciliations are as follows:
• e ASB bookkeeper should reconcile the total amount in the club accounts with the checkbook or
general ledger monthly.
• e ASB treasurer should provide monthly reports on bank account balances and all club and trust
account balances. is report should be entered into the student council minutes.
• e principal/school administrator or ASB advisor should ensure that the bank statement is
reconciled within two weeks after the statement arrives.
• e principal/school administrator or ASB advisor should compare the bank statement and the
checkbook or general ledger to ensure that the totals match the numbers on the bank
reconciliation.
• e principal/school administrator or ASB advisor should
verify that outstanding items are cleared in the following
month.
• e principal/school administrator or ASB advisor should
ensure that any journal entries made were properly approved
and authorized.
• e principal/school administrator or ASB advisor should
initial and date the bank reconciliation and the bank
statement as evidence that they were reviewed and that the
totals are identical.
• e district’s business oce should conduct a monthly review
of ASB bank reconciliations prepared at the school sites. is
should include the reviewer from the business oce signing
and dating the reconciliation when the review is complete.
e ASB bookkeeper performs the bank reconciliation by
comparing the transactions posted by the bank to the transactions
posted in the ASB books (checkbook or general ledger) for the same
period.
e ASB Bank Reconciliation Worksheet at the end of this chapter
has been developed for use when performing this task. Instructions
for using this worksheet are as follows:
1. On line A, record the ending balance shown on the bank
statement.
Fraud Alert
Even with established timelines for
completing and submitting bank
reconciliations, many ASBs are
allowed to continue for many months
before the district ofce makes them
accountable for late reconciliations.
Numerous excuses are given for late
bank reconciliations, but too often they
are late because the prospective thief
needs time to alter the books.
When the bank reconciliation is late,
offer assistance and/or provide a new
deadline such as the next day. One
late bank reconciliation may not be
a problem; however, many nancial
frauds in ASBs are connected to
inaccurate and late bank reconciliations.
The honest person who is late with a
bank reconciliation will not object to
receiving assistance because they have
nothing to hide. Resistance to help and
continued excuses are a fraud indicator
that should always be taken seriously.
Chapter 7
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Accounting and Financial Management 79
2. On line B, record any deposits made by the ASB bookkeeper that don’t show on the bank statement as
of the ending date (i.e. that are outstanding). In addition, review the deposits in transit on last month’s
bank reconciliation to conrm that the bank has posted them to the ASB account.
3. On line C, total the deposits in transit.
4. On line D, record all of the checks that have been written and recorded in the student body books but
have not cleared the bank as of the ending date (i.e. that are outstanding). Review the outstanding
checks on last month’s bank reconciliation, and post on this month’s bank reconciliation those that
have not yet cleared the bank. Checks that are outstanding longer than one year should be stale dated
and returned to the ASB cash balance.
5. On line E, total the outstanding checks.
6. On line F, compute the reconciled bank balance. Add the amount on line A and the amount on line C,
then subtract the total of the outstanding checks on line E.
7. On line G, record the amount in the ASB checkbook or general ledger. at amount must be as of the
same date as the ending date on the bank statement.
8. On line H, add the interest and any other amounts added by the bank.
9. On line I, total all of the amounts from line H.
10. On line J, record the bank charges deducted by the bank. Also, record the returned checks and
returned check charges.
11. On line K, total all of the bank charges.
12. On line L, compute the ending balance. Add the amount on
line G and the amount on line I and deduct all bank charges
on line K.
e bank account is not considered reconciled until lines F
and L show the same amount.
13. Post the interest and the bank charges to the checkbook or
the general ledger.
e ASB bookkeeper nishes the bank reconciliation by balancing
all the general ledger accounts, including all club and trust
accounts, and provides copies of the bank reconciliations to the
principal/school administrator, ASB advisor and business oce.
e bookkeeper should also prepare a report of bank account and club and trust account balances for the
ASB treasurer to present at the student council’s monthly meeting. e ASB bookkeeper should also provide
each club advisor with a monthly nancial report that shows year-to-date activity and summary balances.
A more complete discussion of nancial reports can be found in the Financial Reporting and Closing the
Books section of the preceding chapter.
Fraud Alert
Bank statement reconciliation fraud is
as easy as recording a deposit, stealing
the money, showing the deposit as
outstanding, and then creating a journal
entry to write off the missing funds.
Everyone reviewing bank reconciliations
should be alert for deposits that are
outstanding for longer than two or
three days and for journal entries that
clear cash from the bank reconciliation
cash account.
80 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chart of Accounts for Small ASBs
Asset Accounts • 100–199 Equity Accounts • 300–399
101 Cash in Bank, Checking 310 Fund Balance
103 Petty Cash
105 Cash in Bank, Savings Revenue Accounts • 400–499
107 Change Account 401 Student Body Card Fees
109 Accounts Receivable 403 Student Store Sales
111 Student Store Inventory 405 Yearbook Sales
113 Equipment 407 Social Events & Activities
115 Other Assets 409 Vending Machine Sales
411 Interest Earned
413 Other Revenue
Liability Accounts • 200–224
201 Accounts Payable
203 Sales Tax Payable
Expense Accounts • 500–599
501 Student Store Purchases
Trust Accounts • 225-299 503 Yearbook Publication
225 Scholarship Account A 505 Social Event Purchases
227 Scholarship Account B 507 Vending Machine Purchases
235 Class of 2015 509 Supplies and Purchases
237 Class of 2016 511 Depreciation
239 Class of 2017 513 Other Expenses
241 Class of 2018
245 Club A
247 Club B
249 Club C
251 Club D
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Accounting and Financial Management 81
Chart of Accounts for Large ASBs
Asset Accounts • 1000–1999
Current Asset Accounts • 1000–1699
Bank Accounts • 1000–1199
1001 Bank of America, Checking Account # XXXX
1003 Bank of America, Savings Account # XXXX
1005 Bank of America, Money Market Account # XXXX
1103 United California Bank, Savings Account # XXXX
1105 United California Bank, Money Market Account # XXXX
Other Current Asset Accounts • 1200–1699
1201 Petty Cash Fund
1203 Change Fund
1301 Accounts Receivable
1303 Accounts Receivable Interest
1305 Accounts Receivable Bad Checks
1307 Accounts Receivable Yearbooks
1401 Inventory Student Store
1403 Inventory Vending Machines
1405 Inventory Snack Bar
1501 Other Current Assets
Fixed Assets • 1700–1999
1701 Equipment ASB Ofce
1703 Equipment Student Store
1705 Other Equipment
1801 Other Fixed Assets
Liability Accounts • 2000–2999
Accounts Payable Accounts • 2000–2099
2001 Accounts Payable Vendors
2003 Accounts Payable District Salary Reimbursement
2005 Sales and Use Tax Payable
2007 Other Accounts Payable
Trust Accounts • 2100–2199
2101 JFK Memorial Scholarship
2103 Mary Smith Memorial Scholarship
2105 Ming Kim Memorial Scholarship
2105 Frank Diaz Memorial Scholarship
2107 Tony Petrali Memorial Scholarship
2109 Susan Thomas Memorial Scholarship
82 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
2111 Clearing Account – Field Trips
2113 Clearing Account – Athletics
2115 Clearing Account – Other
Student Class Accounts • 2200–2299
2201 Class of 2014
2203 Class of 2015
2205 Class of 2016
2207 Class of 2017
Club Accounts • 2300–2399
2301 Marching Band
2303 Black Student Union
2305 Latino Student Leaders
2307 Art Club
2309 Cheerleader Club
2311 California Scholarship Federation Club
2313 Filipino American Club
2315 Drill Team
2317 Orchestra Club
2319 Computer Club
2321 French Club
2323 Future Teachers Club
2325 MESA Club
2327 Spanish Club
2329 Speech Club
2331 Female Soccer Club
2333 Track Club
2335 Luau Student Association
2337 Travel Club
2339 Native American Culture Club
2341 Drama Club
2343 Football Club
2345 Basketball Club
2347 Yearbook Club
Equity Accounts • 3000–3999
3001 Fund Balance
Revenue Accounts • 4000–4999
4301 ASB Cards
4303 ASB Dance Revenue
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Accounting and Financial Management 83
4307 Championship Playoff Gate Receipts
4309 Yearbook Sales
4311 Yearbook Advertisements
4313 Homecoming Dance Revenue
4315 Interest Earned
4319 Donations
4321 ASB Fundraising
4323 Luau Revenue
4325 Carnival Revenue
4327 Copy Machine Commission
4329 Talent Show Revenue
4331 Car Wash Revenue
4333 Student Store Sales
4335 Student Store Over and Short
4337 Vending Machine Revenue
4339 Vending Machine Over and Short
4341 Snack Bar Sales
4343 Snack Bar Over and Short
4345 Snack Bar Commissions
4347 Inactive Clubs – Fund Close Out
Expenditure Accounts • 5000–5999
5301 Athletics – Boys
5303 Athletics – Girls
5305 Championship Playoff Expenses
5307 Athletic Equipment and Supplies
5309 Athletic Trophies
5311 Athletic Awards Program
5313 CIF League Dues
5315 Band and Music
5317 Cheerleaders
5319 ASB Dance Expense
5321 Luau Expense
5323 Carnival Expense
5325 Spring Musical Expense
5327 Talent Show Expense
5329 Yearbook Publication Expense
5331 Academic Teams Expense
5333 Audio Visual Expense
5335 Armored Car Service
5337 Community Service
5339 Over and Short
84 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
5341 Student Activities
5343 Student Government
5345 Speakers
5347 Postage
5349 Transportation
5351 Conferences
5353 Leadership Camp
5355 Student Store Purchases
5357 Student Store Returns
5359 Student Store Taxes
5361 Snack Bar Purchases
5363 Snack Bar Returns
5365 Snack Bar Taxes
5367 Vending Machine Purchase
5369 Vending Machine Returns
5371 Depreciation
5373 Other Expenses
Chapter 7
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Accounting and Financial Management 85
Balance Sheet – Small ASB
Associated Student Body
Balance Sheet
As of May 31, 2015
Assets Liabilities
Cash in Bank, Checking $8,000 Accounts Payable $5,000
Cash in Bank, Savings 2,500 Total Liabilities $5,000
Petty Cash 25
Student Store Inventory 350 Fund Balance
Total Assets $10,875 Fund Balance as of July 1, 2014 $3,000
Net Gain (Loss) to Date 2,875
Fund Balance as of May 31, 2015 5,875
Total Liabilities and Fund Balance $10,875
86 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
ASB Items for the Annual Audit
e following items, and any other items requested, should be available for review by district auditors during
the annual independent audit:
• Copy of the annual nancial report that includes a list of the trust account balances.
• Copy of the ASB budget for all clubs/trust accounts and budget revisions/updates.
• Schedule of accounts receivable which lists names and amounts due as of June 30 (do not include
any amounts payable by trust accounts).
• Schedule of accounts payable that lists names and amounts owed to others as of June 30 (do not
include any amounts payable to trust accounts).
• Detailed analysis of any adjustments to the beginning fund balance.
• Copies of the inventory (e.g. student store, vending machines, ASB equipment and other items).
• Bank statements for checking account(s) reconciled from July of the preceding year to July of
current year.
• Interest earned on passbook savings account(s) through June 30.
• List of all petty cash funds and the name of the custodian of the funds.
• Ocial ASB minutes for all clubs/trust accounts.
• Price lists used during the year for ASB card discount tickets and yearbooks, and the number sold
at each price.
• Support for expenditures, including original detailed invoices and approved purchase requisitions.
• Support for revenues, including cash register reconciliations, ticket control, tally sheets, receipt
books and deposit information.
• Equipment inventory lists.
• Written procedures for ASB functions, if available.
Chapter 7
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Accounting and Financial Management 87
Bank Reconciliation Worksheet
Name of School: _____________________________________________
ASB Bank Reconciliation Worksheet
Name of Bank: ___________________________________
Account Number: _________________________________
For the Month of: _________________________________
A. Ending Balance G. Balance per
per Bank Statement _______________ Accounting Records: ___________
B. Plus Deposits in Transit: H. Plus Interest:
I. Plus Adjustments:
C. Total Deposits in Transit: J. Total Adjustments:
D. Less Outstanding Checks: K. Bank Charges:
Date Check # Amount
L. Total Bank Charges:
88 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
E. Total Outstanding Checks:
F. Ending Balance (A + C – E): M. Ending Balance (G + H + J + L):
Reconciliation prepared by: ___________________________________________________________
(Name, Title, Date)
Reconciliation Reviewed by: __________________________________________________________
(Name, Title, Date)
Review by ASB: _____________________________________________________________
(Name, Title, Date)
Review by District Business Ofce: _____________________________________________________
(Name, Title, Date)
Chapter 8
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Fundraising Events 89
Chapter 8
Chapter 8 – Fundraising Events
Although ASB organizations may receive some donations, the primary revenue source for student organiza-
tions is fundraising events. Elementary schools usually hold traditional fundraising events such as book
fairs and walkathons. At middle schools, junior high schools, high schools and community colleges, the
students’ involvement and the need for extra funds mean that the number and types of fundraising events are
constantly expanding.
Approval of Fundraisers
California Education Code sections 48932 (K-12) and 76062 (community colleges) allow the governing
board to authorize student body organizations to conduct fundraising activities. ese sections of the law
make it clear that the governing board is responsible for approving fundraising events. Before approving
any events, the board must consider many issues such as student safety, whether the insurance company
is comfortable with the event and whether the event is appropriate for the educational experience of the
students. Board members may also have concerns about the number and type of fundraising events and
whether these events interfere with the normal conduct of the schools. For example, it would not make sense
for all of the high schools in the same district to hold a fundraiser or entertainment such as a school play or
spaghetti feed on the same Friday night in September because participation would not be as high. For these
reasons and as a good practice, the governing board should review and approve the ASB fundraising events
at the beginning of each school year or designate an administrator to do this so that conicts can be avoided.
As the year proceeds, any additional fundraisers would also need to be approved. Another method is for the
board to approve policies and administrative regulations that delineate allowable and prohibited fundraising
events; the board would still need to designate an administrator to approve all fundraising events in advance.
It is also important that nondistrict organizations such as booster clubs, foundations, auxiliary organiza-
tions and other parent-teacher organizations coordinate the timing of their fundraisers with student body
fundraisers so that they are not in competition with each other.
Good Business Practices for Fundraising Approval
e principal/school administrator or ASB advisor should ll out some type of documentation at the
beginning of each school year indicating the number and types of fundraising events that each school’s
student organizations will hold that school year. Two sample forms are presented at the end of this chapter.
ese forms should be sent to the district’s business oce upon completion. Depending on board policy
and/or practice, the business oce can compile these forms and either prepare a resolution for the governing
board to authorize the fundraising events, or send the information to the governing board’s designee for
approval of all listed events. If there are changes in the number or types of events during the year, the
principal/school administrator should submit a revised form that the board or its designee may approve.
Districts should have rules regarding how to obtain unsold items from a student fundraiser (i.e. the students
either did not turn in the money from a fundraising event or did not turn in the unsold items). e rst step
is to include a statement in the documents provided to students and their parents at the beginning of the
fundraiser indicating that they are responsible for returning unsold items as well as all cash, and the steps that
are authorized if they are not returned; the parents should sign in acknowledgement. e district oce and
the schools’ ASBs need to have policies and rules for this that are consistent with one another so that there are
no conicts.
Revenue Projections for Individual Fundraiser Events
It is important for all student organizations, whether organized or unorganized, to have adequate internal
controls over their fundraising events, properly evaluate the eectiveness of those events, and decide between
often conicting activity/fundraising requests. A revenue potential form (also known as a fundraiser versus
90 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
actual report or a reconciliation after actual report) can help with this task and account for a fundraiser’s
nancial activity. A revenue projection/revenue reconciliation is an important internal control, and most
external auditing rms will indicate audit ndings if some form of a revenue projection/revenue reconciliation
is not done for each fundraiser. In addition, this form serves as a sales plan that includes expected sales levels,
sale prices per unit, expected cost, and net income; thus it assists with planning and budgeting. Because
Education Code sections 48932 and 76062 require that the governing board approve fundraising events,
this same Revenue Potential form can also be compiled and submitted to the board or board designee for
approval, used to ensure that the principal/school administrator is informed and approves of all fundraising at
the school, and used to keep the bookkeeper informed about when they can expect to receive funds.
Each fundraiser needs to operate within a budget; a revenue potential form can serve as a fundraiser’s
budget document. Without a budget, it is easy to overspend and nd that all of the students’ hard work of
raising funds was to no avail because more funds were spent than raised. To complete the form, revenue
and expenses will need to be estimated and then compared to ensure that in most cases total revenues are
higher than total expenses. If they are not, then expenses will need to be decreased, or revenue will need
to be increased. Some activities may be held even if they do not make a prot because they are found to be
worthwhile, but funds will have to be raised elsewhere to cover the loss.
A sample Revenue Potential form is provided at the end of this chapter.
Parameters for Fundraising Events
Fundraising events should contribute to the educational experience and should not conict with the school’s
educational program. Students should participate and make contributions to fundraising events voluntarily.
ey cannot be required to participate in fundraising events, and cannot be excluded from an activity funded
by ASB funds because they did not participate in raising funds. In addition, fundraising proceeds cannot be
attributed to specic students based on what they raised. e funds are raised to benet the entire club or
student group, not individual students.
As a good practice, an elementary principal/school administrator may consider obtaining written permission
from guardians or parents for their students to participate in fundraising activities. is usually is not
necessary for secondary students.
Door-to-Door Sales
e California Code of Regulations, Title 8, section 11706, allows minors under age 16 to engage in door-
to-door sales for newspaper or magazine subscriptions, or of candy, cookies, owers or other merchandise or
commodities, only under the following conditions:
1. e minors must work in pairs, as a team, on the same or opposite side of the street.
2. e minors must be supervised by an adult, with one adult for every crew of ten or fewer minors.
3. e minors must be within the sight or sound of their adult supervisor at least once every 15 minutes.
4. e minors must be returned to their respective homes or meeting places after each day’s work.
Frequency and Scheduling of Fundraising Events
e governing board and the principal/school administrator need to consider how many fundraising events
the students should hold during the school year. is can be a local decision. For example, a principal/
school administrator at an elementary school expressed concern that her predecessor had been holding one
fundraising event each month. She felt that this level of fundraising was detracting from the educational
program at the school.
For organized ASBs, scheduling fundraising events requires review, management and coordination by the
student council, ASB advisor, and principal/school administrator. Clubs on campus need to know which
Chapter 8
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Fundraising Events 91
fundraising events are already scheduled before requesting permission to conduct another fundraiser so they
do not conict in timing or type. Only so many magazines can be sold in a community during a single
month. Many districts publish an event schedule that lists all ASB fundraisers for the year at each school
and that can be reviewed before scheduling any additional events. e district’s business oce will often
maintain the event schedule because they frequently receive the paperwork submitted for board approval of
the fundraiser.
Typically Allowed Fundraising Events and Revenues
In most school districts, the following types of fundraising events (or revenues) are generally considered
appropriate for ASB accounts:
• Athletic events
• Concession sales
• Entertainment
• Advertising
• Publications
• Student stores
• Cultural events/international fairs
• Limited food and beverage sales
• Vending machines
• Car washes
• Book fairs
• Dances
• Merchandise sales
• Scholarships and trusts
• Gifts and grants
• Interest earned
• Sale of surplus items
Some of these fundraisers are further explained below. Suggestions and tips for good business practices are
included along with potential pitfalls to avoid. e intent is to be certain that reasonable safeguards and
internal controls have been built into the event to ensure that the students will benet from the activity.
Good business practices suggest that the principal/school administrator or designee review and approve in
advance any materials, performances and publications that will be part of the fundraiser. Legal questions
should be referred to the district’s legal counsel.
Athletic Events (usually organized ASB): A school may use any school-sponsored athletic event as a source
of revenue as long as the event is in compliance with league agreements. Income can come from various
sources such as ticket sales, sales of programs, and concessions. is does not mean the ASB will always be
the recipient of revenues from all aspects of athletic events. e governing board decides which club, parent
organization or district account will receive the dierent types of revenues.
One frequent problem with athletic events is that the funds are deposited into an ASB bank account, but a
coach wants full control over the funds. ASB funds must benet students, and although athletic events are
an allowable ASB activity/expenditure, students must control how the funds are spent, with co-approval by
92 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
authorized adults. If it is an ASB activity, an ocial student club (i.e. one that has a constitution, budget,
certicated club advisor, and ocial meetings and minutes) must sponsor the events and control the funds.
e coach can be the club advisor if they are certicated and if the principal/school administrator agrees to
it. If the event is non-ASB and sponsored by the district, an athletic booster club or other parent group, the
decisions can be made by the adults or the coach(es), but the funds must be deposited into a separate account,
(e.g. district, booster club or parent club nondistrict account), not the ASB account.
Concession Sales (usually organized ASB): Concession sales at student body activities such as athletic events
or dances are another popular way for the ASB to raise funds. e students may operate the concession stands
themselves or they may enter into an agreement with an outside agency to run the stand (e.g., booster club,
foundation, auxiliary organization, other parent-teacher organization, or commercial vendor). If an outside
agency operates the concession stand, the school will often contract with the agency to split the prots based
on an agreed-upon formula. If the concession sales are after the school day, the numerous food laws regarding
quantity sold and nutritional requirements are not in force. However, if the event is during the school day, these
nutritional regulations must be followed for grades K-12 (see Chapter 3 for nutrition rules and regulations).
Entertainment: Entertainment includes concerts, dances, variety shows, and other events where an
admission fee is charged. e principal/school administrator or designee should approve the content of any
entertainment event in advance and ensure that the admission charge is a xed amount that permits the
maximum number of students to attend.
Advertising: e ASB organization may sell space in a school newspaper, yearbook, athletic or entertainment
programs, athletic eld billboards, or other school publications, unless the district has policy stating
otherwise. e principal/school administrator or designee should approve the content of advertising to ensure
that it is suitable for a student publication or event. Appropriate contracts need to be entered into and an
invoicing system developed so that all applicable revenue is collected.
Publications: e ASB organization may sell publications such as yearbooks, literary magazines, and school
newspapers. e principal/school administrator or designee should review the content of all school publica-
tions prior to the publication date. ese publications may be sold to students and the general public. e
ASB organization may want to establish a price for students that is lower (discounted price) than the price
charged to the general public. e goal should be to ensure that the maximum number of students can
purchase them.
Student Stores: Student stores often are set up at secondary schools to sell items that students need each day
or to sell items that have the school logo on them such as hats, shirts and backpacks. Food can also be sold if
all applicable laws and board policies are followed. Chapter 11 discusses student stores.
Cultural Events/International Fairs: ese events usually include food and beverages, and must comply
with various state laws and local district policy regarding which food and beverage items can be oered and
how often such sales can occur. In general, all student clubs are allowed to participate in schoolwide events
where they can raise money and showcase club goals. Rules regarding selling food and beverage items are
contained in Chapter 3.
Limited Food Sales: Although food and beverage sales have always been considered a good way to raise
money, the sale of these items is becoming increasingly complicated and limited because of state laws
regulating food and beverage sales in grades K-12. Legal issues regarding food and beverage sales are covered
in Chapter 3.
Vending Machines: Vending machines have been considered a good way to raise money with a limited
investment of time, but the sale of food and beverage items is becoming increasingly limited and prots are
declining. Consideration must be given to contracts and inventory control; this area is discussed further in
Chapter 10.
Chapter 8
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Fundraising Events 93
Scholarships and Trusts: Outside donors often give schools funds to establish a scholarship. e student
council may accept scholarships and trusts with the approval of the governing board or authorized designee.
e acceptance should be made in writing, with all conditions the donor is requesting clearly described.
A separate account should be established within the student organization’s accounting system, and the
requirements of the scholarship should be documented and retained at the school. A statement should also
be included regarding the disposition of any remaining balance at the close of the period for which the fund
is established. FCMAT recommends that the remaining balance not be given back to the donor because the
donor probably received a tax deduction for the scholarship donation; rather, the remaining balance should be
moved to a dierent ASB account or used for an additional scholarship, depending on what the disposition
statement indicates is to be done.
Included at the end of Chapter 12 is a scholarship fund information sheet to be lled out when a scholarship
or memorial is started so that future actions are clearly understood by all. Chapter 12 also contains additional
information about scholarships.
Gifts and Grants: Money, material or equipment may be accepted by the student body organization with
the approval of the governing board or designee. e items received must have a legitimate use in the
school program, with consideration given to installation and maintenance costs before equipment items are
accepted. is area is further described in Chapter 12.
Interest Earned: Interest may be earned on checking accounts, savings accounts and other investments that
meet legal requirements per the Education Code. Interest earned may be prorated to the various student
activity accounts or credited as revenue to the general student body account. Checking account balances
should also be reviewed to determine whether excess funds should be invested in accounts that earn higher
interest.
Sale of Surplus Items: Sometimes an ASB club may want to sell items they have purchased in the past that
are no longer of use to them; or they may want to sell an item below cost; or give away an item that they
purchased to sell at a prot but have been unable to sell at a price that enables them to recover the cost paid.
Education Code sections 17545 through 17547 state that the governing board of any school district may sell
any personal property belonging to the district if the property is no longer required for school purposes, or if
it will be disposed of due to the purchase of a replacement, or if it is unsatisfactory or no longer suitable for
school use. A sale cannot occur until public notice has been given, unless the value does not exceed $2,500.
When sold, the board shall sell the property to the highest responsible bidder, or shall reject all bids.
Governing boards may choose to sell personal property by means of a public auction conducted by employees
of the district or other public agencies, or by contract with a private auction rm.
Based on these provisions, if the items to be designated as surplus were purchased with ASB funds, FCMAT
agrees that the proceeds from any surplus sale are appropriate ASB revenue. If the funds are to be placed
in ASB accounts, this would then be considered an ASB fundraising event and, per the Education Code,
the governing board or their designee would need to approve this fundraising event in accordance with
established policy as described in this chapter. is is the rst step because a sale cannot proceed unless the
governing board is willing to approve the raising of funds by selling surplus property.
If the governing board or their designee has approved the sale of surplus items as a fundraiser, or selling items
at a loss, the items will need to ocially be declared surplus property. e ASB is considered a part of the
district because it uses the district’s tax identication number, so if ASB funds were used to purchase the
items originally, the Education Code provisions regarding the sale of personal property must be followed.
us if the governing board agrees that the items are no longer required for school purposes, or are no longer
needed because they will be replaced, or are unsatisfactory or no longer suitable for school use, the item or
items can be designated as surplus. e items are to be sold to the highest responsible bidder, and public
notice must be given before the sale unless the value does not exceed $2,500.
94 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Because of the specics of the Education Code and how sales shall occur, the ASB will need to work with
the district’s business or purchasing oce to ensure that the correct steps are followed. A district’s business
oce sta usually have experience in drafting such items for placement on the board’s agenda. e fundraiser
cannot occur until all of the correct steps are followed.
Fundraisers That May Not be Allowed
e following are some of the types of fundraising events that governing board members and principals or
other school administrators may not or should not authorize. ese items need to be reviewed and discussed
at the local level if ASB groups wish to consider them.
Cannot Allow:
• Raes or games of chance.
In California, charities and certain other private nonprot organizations may conduct raes to raise
funds for benecial or charitable purposes. However, school entities, including student clubs, are not
authorized to participate in raes because they are not nonprot organizations exempt from state tax
as dened in the Franchise Tax Code. Rather, school entities are exempt from tax by virtue of being a
government entity.
It is possible for a private, nondistrict, non-ASB nonprot group, such as a booster club, foundation,
auxiliary organization or other parent-teacher organization to conduct raes as long as the organi-
zation is a tax-exempt nonprot organization with an approved tax identication number pursuant
to Revenue and Taxation Code 23701d. e organization must have been licensed to do business in
California for at least one year before holding the rae and must register with the attorney general’s
Registry of Charitable Trusts before conducting the rae, and ensure that written conrmation of the
annual registration is received before holding the initial rae. ese nonprot groups must register
every 12 months and, for any given rae, must ensure that the eligible organization uses at least 90
percent of the gross receipts from the sale of rae tickets for charitable purposes. e group must
also submit an annual report for all raes conducted during the reporting year (September 1 through
August 31) by September 1; the report must include gross receipts, expenses, net prot, and the
charitable purpose for which they used the money. e rae tickets and stubs must be numbered, and
adults must supervise the drawing, which may not be conducted over the Internet.
What is a rae? If a participant is required to purchase a ticket to have a chance to win a prize, the
drawing is a rae and is subject to the provisions of Penal Code section 320.5 and related regulations.
Penal Code section 320.5, subdivision (m) states that a rae is exempt from registration with the
attorney general’s oce only ifallof the following are true:
a. It involves a general and indiscriminate distribution of the tickets;
b. e tickets are oered on the same terms and conditions as the tickets for which a donation is
given; and
c. e scheme does not require any of the participants to pay for a chance to win.
Many school groups print tickets with the words “suggested donation” on them and call it a drawing
rather than a rae. is does not make it legal unless the group is prepared to give anyone who
requests a ticket as many tickets as they want for free (no donation). And even if a district does this, it
still runs the risk of someone challenging the issue because it still has the appearance of a rae. e
only way to have a legal rae is to work with an eligible nonprot organization that has its own tax
identication number, registers with the attorney general annually, and disburses 90% of the gross
prots generated by the sale of the rae tickets to a charitable purpose, as outlined above.
Chapter 8
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Fundraising Events 95
Penal Code section 320.5 governs which organizations qualify and how the raes must be conducted.
FCMAT is often asked if 50/50 raes are legal. e quick answer is no, because 90percent of the
gross ticket sale revenue is not used for charitable purposes; instead, 50 percent of ticket-sale revenue is
awarded as the prize and 50percent is retained by the organization conducting the rae. Penal Code
section 320.5 is a criminal statute, so violations may be forwarded to the local district attorney, city
attorney, or county counsel for investigation and possible prosecution. In addition, the attorney general
may take legal action, under the provisions of the nonprot corporation law, for breach of duciary
duty or waste of charitable assets. e organization’s rae registration may also be suspended or
revoked. For more information, see section 419.2(a) (2) of the rae regulations, which can be found on
the Oce of the Attorney General’s website atoag.ca.gov/charities/raes.
May Not Allow:
• Activities that pose liability, safety or risk concerns
Some fundraisers may not be allowed because risk or health and safety concerns prevent the district
from obtaining insurance coverage (if the insurance carrier will cover the event, then a district may
decide to allow it). Examples include:
• Mechanical or animal rides.
• Use of darts, arrows, or other weapons.
• Objects thrown at people (e.g. pie toss).
• Use of water tanks into which a person is dunked.
• Destruction of cars or similar objects with hammers.
• Trampolines or mini-trampolines.
When the governing board or district sta members have concerns about potential fundraising events
and questions about whether the activity will be covered by the district’s insurance, they should
contact the district’s risk manager to determine if the district’s insurance will cover any accidents that
occur during the event. For example, if the senior class wanted to bring in a traveling carnival as a
fundraising event, the district should consider all of the potential liabilities. Will the district’s insurance
cover any damage to property caused by the carnival rides? What happens if someone is injured on
a ride or becomes ill from eating food served at the event? Insurance coverage should be determined
when fundraising ideas are rst discussed, not when a decision has already been made to hold the
event. Some districts require the risk manager to sign o on all ASB fundraising events prior to formal
approval to ensure that insurance coverage will not be an issue.
Should Not Allow
• Rental of district-owned equipment or facilities to outside groups
In most local educational agencies (LEAs), the equipment and facilities are considered the property of
the LEA. e district’s business oce oversees the use of district equipment and property. If proceeds
are collected for their use per the district’s board policy regarding use of facilities, they are deposited
into the LEA’s general fund. e board policy should address who has the authority to rent district
equipment or property and who has the authority to spend the rental fees collected. Most district
facilities use policies describe the steps required to use district facilities and equipment. Any rental
revenue collected is not considered ASB money because the students do not own the facilities and, for
insurance and inventory reasons, rarely retain ownership of equipment they purchase.
96 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• Collection of AP testing fees within ASB
If a district reviews all of the allowable fee rules and requirements in Chapter 9 of this manual and
determines that an AP exam fee is appropriate and allowable, FCMAT’s opinion is that all such exam
fees should be deposited into the district’s accounts, from which the AP testing expenditures should
also be paid. AP test costs and fees do not belong in the ASB accounts because these fees are not
student fundraising activities.
Fundraising Ideas
Schools at all levels have had many successful fundraising events throughout the years. What is successful
at one school may or may not be successful at another. Success is often the result of good planning and
organization, support from school administration and the district business oce, and communication and
collaboration among all interested parties.
Board Guidance and Approval
Although everyone understands that the goal of fundraising activities is to raise money, it is more dicult
to gain a full understanding of which fundraising activities are allowable and who should benet from
the proceeds. e governing board of a K-12 school district has the authority to authorize an ASB to
conductfundraising activities, and the authority to approve thefundraising events. e governing board
or its administrative designee should approve fundraising events annually, and the district should have
board-approved policies and administrative regulations that delineate allowable and prohibited fundraising
events. Approvals for fundraising activities should clearly identify not only the activity or event but also the
beneciary of the proceeds.
Procedures for Reporting Revenue Sources Other than Fundraisers
Although the primary revenue source for student organizations is individual club fundraising events, funds
are also received from other sources. It is important that student organizations recognize all of the revenue
sources and establish control procedures for each. e control procedures may vary depending on the revenue
source, and can include revenue from student stores, vending machines, and gifts and donations. ese
sources are all covered in other chapters of this manual.
Each revenue source must be identied and included in the budget of an individual club or of the ASB
general student council. is ensures that the student organization is aware of the revenue and therefore will
include it in periodic budget reviews. In addition, each revenue source must be allocated to a specic use.
Nonstudent Group Fundraising
Student body funds and the funds of nonstudent organizations (booster clubs, foundations, auxiliary
organizations and other parent-teacher organizations) should never be commingled. Student body funds are
never to be used to “front” money for nonstudent body fundraising expenses. Nonstudent organizations shall
be responsible for the collection of their own money and tickets, their own bank account and audit, and other
items.
Nonstudent organizations are not to solicit funds on behalf of a school or its students during the school day
without prior approval by the school board or its designee for each individual fundraising event.
Unless board policy or practice states otherwise, students can help with nonstudent organization fundraisers.
It is important when students are involved that the donors understand this is a nonstudent fundraiser. e
state Legislature passed the disclosure law (Business and Professions Code 17510 to 17510.95) to safeguard
the public against fraud, deceit and unwelcome demands, and to foster and encourage fair solicitations for
charitable purposes so that donors will know what portion of the money will be used for charitable purposes.
is law requires volunteers older than 18 years of age to present potential donors or buyers with information,
Chapter 8
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Fundraising Events 97
including the purpose of the solicitation and the address from which further information about revenues and
administrative expenses may be obtained.
ASB Accounts are not Pass-Through Accounts
Many schools use the ASB account as a pass-through account or clearing account, making a deposit into ASB
and then later journaling that amount out of ASB and moving it to another district account. ASB accounts
are not and should not be used as pass-through or clearing accounts. Money should only be deposited into
ASB accounts if it is ASB funds (raised or donated to ASB) and will be used for appropriate ASB purposes.
ASB accounts are often found to contain funds that have been deposited for a principal’s or other school
administrator’s or teacher’s discretionary account, or that have been raised from a nonstudent fundraiser. An
adult’s name on an account clearly indicates that the funds have been raised or will be spent based on the
adult’s decision, not the students’. ASB funds are to benet the students, and to provide items and activities
that augment their educational experience, not to supplement an adult’s budget.
Fundraising Websites
Online fundraising is an emerging issue.e number of fundraising websites is increasing, as is their use by
school district employees to raise funds for educational programs, even though there are often no district
guidelines or controls related to their use. Increasingly, individual sta members are establishing their own
accounts for specic classrooms, clubs or programs without fully understanding the potential issues or
implications.
Donations via online fundraising websites are individual campaigns and thus are considered personal
giftsand so arenot taxedas income to the recipient in the United States. Anyone can raise money online
using a personal fundraising campaign via a fundraising website; users often raise money for themselves or for
friends they want to help.
ese websites can also be used by nonprot organizations, or to raise money for an individual’s favorite charity,
but only if those donations are made to a certied charitycampaign; otherwise, the donations are not eligible
to be claimed as a tax deduction. To be certied, donations must be made to a legally registered nonprot or
charity listed on the online fundraising site. For example, gofundme.com certied charity campaignspartner
with FirstGiving, andcan be set up for any501(c)(3)registered in the U.S.If a nonprot organization is already
listed in gofundme.com’s database, it can be found by searching for a specic tax identication athttp://www.
gofundme.com/charity-donations. If a nonprot’s 501(c)(3) tax identication is not in their system, the nonprot
will need to register with FirstGiving.Until an eligible nonprot organization with 501(c)(3) status sends a copy
of its letter of determinationto NPO@rstgiving.com and the charity list is updated to include that nonprot
organization, a certied charity campaign cannot be set upon gofundme.com, and the donations are not
tax-deductible to the donor, even if the funds are being donated to a district.
Most online fundraising entities deduct a fee from each donation they receive. In contrast, a donation directly
to the school for programs or expenditures incurs no such fee and thus the amount the school receives
is larger. If donation websites are used, donors need to understand that an amount less than their entire
donation will be given to the program or club for which it is intended because a fee will be deducted rst.
Districts should establish guidelines and policies that prohibit sta from starting their own campaigns to
raise funds via online fundraising sites with the intent to later donate the funds to a school program or
ASB, unless the district has approved the use of the online fundraising site. A district should approve the
use of such a fundraising site only if the district has been listed on the site as a registered or certied charity
campaign. Otherwise, the people giving the funds to the online site cannot claim a tax deduction for their
donations. If the district is not listed as a registered or certied charity campaign on a donation website, the
only way donations to the district can be tax-deductible is if they are donated directly to the district rather
than through the online entity.
98 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 8
–
Fundraising Events 99
Request for Approval: Fundraising Event
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Request for Fundraiser Approval
Fiscal Year: _______________
Date this form is completed: ___________
Proposed event: ___________________________________________________________________
Description of fundraiser: ____________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
Requesting Club/Organization(s): _____________________________________________________
Proposed Date(s) of Event: ______________________________________
Club Contact Person: _______________________________________________________________
ASB or Club Advisor: _______________________________________________________________
Location of Proposed Activity: ________________________________________________________
Status of Event (circle one): New Event Held Previously (Years): __________
Budget Plan for Activity (Attach Description)
Revenue Potential form completed? o Yes o No (attached form if completed)
Other Background Information (such as other schools or clubs that have held similar events):
________________________________________________________________________________________
________________________________________________________________________________________
Approval
Submitted and Approved by:
Student Club Representative: ________________________________________________________________
Signature, Title and Date
Club Advisor: _____________________________________________________________________
Signature, Title and Date
Student Council Recommendation oYes oNo
100 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Student Council Representative: _____________________________________________________________
Signature, Title and Date
Principal/School Administrator or Designee Recommendation: o Yes o No
Approved by:
Principal/School Administrator: _______________________________________________________________
Signature, Title and Date
ASB Student Council President: ______________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
Presented to District Ofce, if applicable, on: _________________________
Date
Reason for disapproval, if applicable: ___________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
Chapter 8
–
Fundraising Events 101
Request for Approval: Fundraising Event with Revenue Projection Information
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Request for Fundraiser Approval and Revenue Projection
Fiscal Year: _______________
Note: To be approved, applications must be submitted at least four (4) weeks prior to requested date.
Applications must be approved by principal/school administrator prior to the activity/ fundraiser.
Date form submitted: _______________________
PROPOSED ACTIVITY:
Name of activity or type of fundraiser: ____________________________________________
Location of activity: ___________________________________________________
Facilities needed: _____________________________________________________
Items to be sold:______________________________________________________
Date of activity:
First choice: _______________________ Alternate date: ____________________
Time of activity: From _________ a.m. /p.m. To: _________ a.m. /p.m.
Ticket selling price: $ _________
Cash box/Tickets required? o Yes o No
Number of items purchased for sale: ______________ @ $ ______ each = $ ____________
ASB purchase order required? o Yes o No
How much income is anticipated? $ ___________ How much expense is anticipated? $ __________
How will prot be used? ______________________________________________________________
_________________________________________________________________________________
Note: Revenue analysis (fundraiser versus actual statement) is due two
weeks after close of activity/fundraiser.
102 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Approval
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _____________________________________________________________________
Signature, Title and Date
Student Council Recommendation: oYes oNo
Student Council Representative: ______________________________________________________
Signature, Title and Date
Principal/School Administrator or Designee Recommendation: o Yes o No
Approved by:
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
ASB Student Council President: _______________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
Presented to District Ofce, if applicable, on: _________________________
Date
Reason for disapproval, if applicable: __________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
Date approved for/recorded on master calendar (If applicable): _______________________
Chapter 8
–
Fundraising Events 103
Revenue Potential (Fundraising Budget versus Actual Statement)
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Revenue Potential/Fundraising Budget versus Actual Statement
Fiscal Year: _______________
Name of Event: _______________________________________________________
Date of Event: ______________________
Date Form Completed: _____________________
EXPECTED REVENUE: BUDGET ACTUAL DIFFERENCE
Sales quantity x Sales price $ $ $
OTHER REVENUE:
Donations, Sales of ads, etc. $ $ $
TOTAL REVENUE (A) $ $ $
EXPENSES:
Product quantity x Cost
(per invoice)
$ $ $
OTHER EXPENSES:
Freight $ $ $
Advertising $ $ $
Other $ $ $
TOTAL EXPENSES (B) $ $ $
104 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
OTHER: (C)
Items Donated or Given as Prizes –
Quantity x Cost
$ $ $
TOTAL PROFIT (A-B-C) $ $ $
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: ______________________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
Chapter 8
–
Fundraising Events 105
Student Body Fundraising Schedule – Report to Governing Board and/or Designee
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Student Body Fundraising Schedule
Fiscal Year: _______________
Date Form Completed: ___________
Event Sponsoring
Club
New
Event
One
Time
Event
Ongoing
Event
Date of
Event
Club Advisor Estimated
Gross
Revenue
Actual
Net
Revenue
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
106 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Fundraising Event Prot/Revenue Projection
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Fundraising Event Prot
Fiscal Year: _______________
Name of Event: _____________________________________________________________
Date of Event: ______________________
Date Form Completed: _____________________
Part I: Revenue
Estimated Sales Actual Sales Difference
Revenues Number Unit
Price
Total
(# x price)
Number Unit
Price
Total
(# x
price)
Units Dollars
Number of tickets sold
Number of items sold
Other Revenues
Advertising
(describe)
(describe)
Total All Revenue
Shortages
Given away (attach
documentation)
Lost (attach
documentation)
Stolen (attach
documentation)
Damaged/Returned
Remaining Unsold
Total all losses
Total Revenue
(Revenue - Shortages)
Chapter 8
–
Fundraising Events 107
Part II: Expenses
Estimated Cost of Sales Actual Cost of Sales Difference
Expenses Number Unit
Price
Total
(# x price)
Number Unit
Price
Total
(# x price)
Units Dollars
Cost of Items Sold
Other Expenses
Supplies
Advertising
Custodial Overtime
Fees
(describe)
(describe)
Total Expenses
Part III: Net Prot for this Activity _________________________
Net prot is the difference between total revenues and total expenses.
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
108 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Revenue Projection
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Revenue Projection
Fiscal Year: _______________
Name of Event: _____________________________________________________________
Date of Event: ______________________
Date Form Submitted: ______________________
SALES PROJECTION AND SUMMARY Item #1 Item #2 Item #3 Item #4
Pre-Event Information
1 Description of items sold
2 Number of individual units received
3 Less items given away (attach documentation)
4 Less items lost/stolen (attach documentation)
5 Potential items for sale (line 2-3-4)
6 Sale price per individual item $ $ $ $
7 Total revenue potential (line 5 x 6) $ $ $ $
Post-Event Information
8 Unsold items on hand (attach count)
9 Calculated revenue from sales (line 8 x 6) $ $ $ $
10 Actual proceeds from sales (see below) $ $ $ $
11 Cash shortage or overage $ $ $ $
Chapter 8
–
Fundraising Events 109
Proceeds From Sales Item #1 Item #2 Item #3 Item #4 Total $
1 Gross cash count $ $ $ $ $
2 Less change fund $ $ $ $ $
3 Proceeds from sales (line 1-2) $ $ $ $ $
Explanation of differences in cash counts/proceeds: ______________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
Explanation of differences in projected sales: ____________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
Submitted and Approved by:
Student Club Representative: __________________________________________________
Signature, Title and Date
Club Advisor: ________________________________________________________
Signature, Title and Date
Principal/School Administrator: _________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
Distribution:
Pre-event – Copy of form, with header and pre-event information completed, attached to activity
request form.
Post-event – Original submitted to ASB bookkeeper, copy retained by club advisor.
110 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 9
–
Class Fees, Deposits and Other Charges
–
Grades K-12 111
Chapter 9
Chapter 9 – Class Fees, Deposits and Other
Charges – Grades K-12
ere is considerable confusion regarding fees, deposits and other charges, and how they relate to K-12
education. Because many fees are deposited into ASB accounts, a discussion is merited to provide clarity.
Inclusion of this topic in the ASB manual, however, does not imply that the legally permitted fees, deposit
and other charges belong to ASB. In fact, most of the allowable fees belong to the school district and should
be deposited accordingly. is chapter is intended to educate readers about what is allowable in grades K-12,
regardless of where the money should be deposited.
Public educational agencies have had to survive budget cuts year after year because of decreasing enrollment,
decreases in state funding and various other factors; therefore, these agencies continue to nd dierent ways
to increase revenues. However, public educational agencies have limited options when charging student fees,
and legal guidelines are in place regarding items for which fees can be charged. Before assessing or charging
a fee or deposit of any kind, a public educational agency must ensure that it is legal. ere have been various
lawsuits and challenges in this area because of the large number of reports from parents that schools were
charging students illegal fees. e most publicized of these lawsuits resulted from a statewide investigation
by the American Civil Liberties Union (ACLU), which found that more than 50 school districts listed illegal
fees on their websites. After the ACLU lawsuit, various laws were passed including AB 1575 (Stats. 2012, c.
776), and the California Department of Education (CDE) updated Fiscal Management Advisory 12-01 with
Fiscal Management Advisory (FMA) 12-02 in April 2013. Since then, the CDE has provided regular updates
to reect the most recent legislation. e CDE’s latest guidance, and the most recent court interpretations,
can be found at http://www.cde.ca.gov/re/lr/fm/.
e California constitution provides for a free public school system. Since 1874, the California Supreme
Court has interpreted this to mean that students are entitled to be educated at the public’s expense [Ward v.
Flood, 48 Cal. 36, 51 (1874)]. Any fees charged for educational activities would clearly be in violation of this
free school system guarantee, including fees for textbooks, materials and/or supplies. Title 5, California Code
of Regulations, section 350, specically states:
A pupil enrolled in a school shall not be required to pay any fee, deposit, or
other charge not specically authorized by law.
e state board of education has also stated that pupils enrolled in public schools shall not be required to
pay any fee, deposit or other charge unless it is specically authorized by law. is understanding is based on
Article IX, Section 5 of the California constitution, which provides for a free public school system, stating the
following:
e Legislature shall provide for a system of common schools by which a free
school shall be kept up and supported in each district at least six months in
every year, after the rst year in which a school has been established.
e California Education Code (EC), as amended by Assembly Bill (AB) 1575 in 2012, states that a pupil
enrolled in a public school shall not be required to pay a pupil fee for participation in an educational activity
[EC Section 49011(a)]. An educational activity is dened as an activity oered by a school, school district,
charter school or county oce of education that constitutes an integral fundamental part of elementary and
secondary education, including, but not limited to, curricular and extracurricular activities [EC Section
49010(a)].
e attorney general’s oce has also made it clear in many of their opinions that public educational agencies
cannot levy fees as a condition of participation in any class, whether the class is elective or compulsory.
112 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Prohibited fees include security deposits for locks, lockers, books, class apparatus, musical instruments,
uniforms, or other equipment. Because of the Hartzell v. Connell case, [35 Cal. 3d 899, 910-911 (1984)], the
California Supreme Court stated that students may not be charged fees for participation in either curricular
or extracurricular activities. Whenever a curriculum or extracurricular program is adopted, all supplies, both
necessary and supplemental, must be provided free of charge by the district because these activities are an
integral component of public education. Based on a footnote in the Hartzell case, it is permissible to charge
fees for school- or district-sponsored activities that are purely recreational rather than educational and at
which attendance is optional, such as an after-school dance or a weekend athletic event.
A pupil fee is a fee, deposit or charge imposed on pupils, or a pupil’s parents or guardians. Examples of
unlawful fees are included later in this chapter. It is important to note that fee waivers do not make unlawful
fees permissible; school districts and schools cannot establish a two-tiered educational system by requiring
a minimum educational standard and then telling students and parents that there is also a second, higher
educational standard that pupils can obtain or strive for if they pay a fee or purchase additional supplies
that the school district or school does not provide. us it is not permissible for a class to have a project
that students will be graded on, but then oer an additional project that can be done if fees are paid for the
materials and/or supplies for it. All students in the class must have the same opportunity to make all of the
projects and receive all applicable materials for free. Money cannot determine who gets to do what projects.
A district or school shall not oer course credit or privileges related to an educational activity in exchange for
money or donations of goods or services from a pupil or a pupil’s parents or guardians. In addition, a school
district or school shall not remove course credit or privileges related to educational activities, or otherwise
discriminate against a pupil, because the pupil’s parents or guardians did not or will not provide money or
donations of goods or services to the district or school. [EC Section 49011(b)]
Schools can always ask for voluntary donations of funds or property, and voluntary participation in
fundraising activities, as long as a student’s ability to participate in a school activity, either curricular or
extracurricular, is in no way determined based on whether a donation was made [EC Section 49011(c)].
When asking for donations or fees, schools and districts should consider working with their own attorneys to
ensure compliance with these important laws. Many schools send out donation requests with wording that
indicates the donation is required rather than voluntary; this is in essence the same as a fee.
Allowable Fees
e prohibition on pupil fees does not include fees, deposits or other charges that have been otherwise
allowed by law [E.C. section 49011(e)]. e Legislature has passed numerous laws allowing certain fees, and
these are included in the Education Code, which means that they are not forbidden by the California Code
of Regulations Title 5 prohibition discussed above. us schools are allowed, but not required, to charge
the fees listed below. Although these allowable fees are discussed in this manual, it does not mean that they
should be deposited into ASB accounts. Very few fees should be deposited into ASB accounts; rather, they
are usually district revenues. In fact, when reviewing fees that have been deposited into ASB accounts, it is
common to nd that the fees collected were not legal, or that they were improperly deposited into an ASB
account rather than a district account.
e following fees can be levied as authorized in the Education Code sections cited:
• Fees for transportation to and from school, if the district provides this for students by the district.
ese statutorily authorized fees are allowable and do not violate the constitutional free school
guarantee, according to the California Supreme Court, because it is a service, not an essential part
of school activity or an educational activity [Education Code section 39807.5(b), (d), and (f)].
• ese fees can also be charged for transportation between school and regional occupational
centers, programs or classes.
Chapter 9
–
Class Fees, Deposits and Other Charges
–
Grades K-12 113
• If pupils are required to ride a bus for extracurricular activities, then fees cannot be charged.
But if riding the school bus to an event is optional and pupils are also allowed to use other
means of transportation, then a fee can be imposed.
• By law, school districts must exempt from transportation charges pupils of parents and
guardians who are indigent as set forth in rules and regulations adopted by the board. ere
must also be a waiver provision based on nancial need.
• Fees may not be charged for students with disabilities whose special education individualized
education program (IEP) includes transportation as a related service necessary for them to
receive a free appropriate public education.
• e fee cannot exceed the statewide average nonsubsidized cost per pupil.
• Fees for transportation of pupils to and from their places of summer employment in connection
with any summer employment program for youth (Education Code section 39837).
• Charges for food served to pupils, subject to free and reduced-price meal program eligibility and
other restrictions specied in law (Education Code sections 38082 and 38084).
• Fees at not less than cost for materials for adult classes, including materials necessary to make items
that will become the property of the student who made the item (Education Code sections 52612,
52615 and 17552).
• Fees for an adult enrolled in any class except classes in elementary subjects and classes for which
high school credit is granted when taken by a person not holding a high school diploma [Education
Code section 52612(a)].
• Fees may be charged for materials and textbooks or a refundable deposit on loaned books in
classes for adults (Education Code sections 52165 and 60410).
• Adult students may be charged a fee for all or part of the cost of transportation (Education
Code section 39801.5)
• Class materials necessary for the making of articles by persons enrolled in adult classes. e
materials shall be sold at no less than the cost to the district. Any article made is then the property
of the person who made it (Education Code section 17552).
• A high school district can impose charges for textbooks used in adult classes, or a refundable
deposit can be imposed on loaned books (Education Code section 60410).
• Deposits for school band instruments, music, uniforms and other items for use on an excursion to a
foreign country (Education Code section 38120).
• Payment for the replacement cost of any real or personal property belonging to a district (such as
books or supplies) loaned to a pupil that the pupil fails to return or that are willfully cut, defaced
or otherwise damaged, up to an amount not to exceed $10,000, which is adjusted annually for
ination (Education Code sections 19911 and 48904(a)(1)).
• When the minor and parent are unable to pay for the damages or to return the property, the
school district or private school shall provide a program of voluntary work for the minor in
lieu of payment of monetary damages.
• e State Superintendent of Public Instruction (SPI) is required to annually adjust the
original $10,000 liability limit specied in EC Section 48904(a)(1) to reect the percentage
change in the Implicit Price Deator for State and Local Government Purchases of Goods
and Services for the United States, as published by the United States Department of
Commerce for the 12-month period ending in the third quarter of the prior scal year.
• Tuition fees charged to pupils whose parents are actual and legal residents of an adjacent foreign
country or an adjacent state. e pupils may be admitted to a school but shall be required to
114 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
reimburse the district for the cost of educating the pupil. (Education Code sections 48050 and
48052).
• Tuition fees may be collected from foreign students attending a district school pursuant to an F-1
visa, equal to the full unsubsidized per-capita cost of providing education during the period of
attendance [8 United States Code (USC) section 1184(m)(1)].
• Reimbursement for the direct cost of materials provided to a student for property the student has
fabricated from such materials to take home for their own possession and use, provided that the
reimbursement or fee does not exceed the direct cost of the materials used and provided that the
school district’s governing board has authorized such sales pursuant to an adopted board policy.
is applies to classes such as woodshop, art or sewing in which an item is kept by the pupil, but
not when the items remain at school. It also does not apply to food in home economic classes,
which is eaten as part of the course work (Education Code section 17551).
• is section does not authorize a blanket general fee to cover multiple items, nor does it
mean there is an obligation to purchase the item. is section must be read together with the
constitutional free school guarantee and the statutes requiring schools to provide necessary
school supplies and instructional materials. Whenever students fabricate products in a class
such as woodshop or sewing, the wood or cloth for such products must be furnished free of
charge. If the student decides to take a particular item home, the law authorizes the district to
sell that item to the student for the cost of the materials, if a board policy exists allowing this.
If there is such a policy and the student does not want to take an item home, the district keeps
the item and cannot charge or otherwise penalize the student.
• e school district’s board-adopted policies and guidelines should specify the conditions for
implementing this section, keeping in mind the free school guarantee.
• Charges for safety glasses, for a pupil to keep, as long as the school provides them free of charge for
use in specied courses or activities involving the use of hazardous substances likely to cause injury
to the eyes (Education Code sections 32030-32033).
• Fees for the sale or lease of Internet appliances or personal computers to parents to provide access
to the school district’s educational computer network, at no more than cost, so long as the district
provides network access for families who cannot aord it. An Internet appliance is a technological
product that allows a person to connect to or access an online educational network. e Internet
appliances and personal computers referred to in this section are deemed supplemental and not an
essential part of the school district’s educational program (Education Code section 17453.1).
• Fees for an optional ngerprinting program for students in kindergarten or other newly enrolled
students if the fee does not exceed the actual costs associated with the program (Education Code
section 32390).
• Fees for community classes in civic, vocational, literacy, health, homemaking, and technical and
general education, not to exceed the cost of maintaining the community classes. ese include
classes such as dance, music, theatre, visual arts, handicraft, science, literature, nature study, nature
contacting, aquatic sports and athletics. ese classes are primarily intended for adults and are open
only to minors whom the governing board believes will prot from such classes (Education Code
sections 51810, 51811 and 51815).
• Fees for the actual cost of duplicating public records, pupil records, or a prospectus of the school
curriculum. ere are two exceptions: First, no charge shall be made for furnishing up to two
transcripts of former pupils’ records or up to two verications of various records of former pupils.
Second, if the cost would eectively prevent the parent of a special education pupil from exercising
the right to receive copies of pupil records, the copies shall be reproduced at no cost [Education
Code sections 49063(h), 49091.14, 49065 and 56504; Government Code section 6253(b)].
Chapter 9
–
Class Fees, Deposits and Other Charges
–
Grades K-12 115
• e phrase, “direct costs of the duplication” means that a local agency may recover only
the actual cost of copying documents; it does not include ancillary tasks associated with the
retrieval, inspection and handling of the le from which the copy is extracted. [North County
Parents Organization et. al. vs. Department of Education 23 Cal App 4th (1994)]
• School districts must specify the cost, if any, which will be charged to the parent for
reproducing copies of records in a parental notice upon enrollment and in the annual
notication of parents of their rights required by the Education Code 48980. [Education
Code section 49063(h)]
• Charges for required medical and accident insurance for athletic team members that is not paid by
school district or student body funds, so long as there is a waiver for nancial hardship (Education
Code sections 32220-32224).
Education Code section 32221.5 states:
(a) A school district that elects to operate an interscholastic athletic team
or teams shall include the following statement, printed in boldface type of
prominent size, in oers of insurance coverage that are sent to members of
school athletic teams:
“Under state law, school districts are required to ensure that all members of
school athletic teams have accidental injury insurance that covers medical and
hospital expenses. is insurance requirement can be met by the school district
oering insurance or other health benets that cover medical and hospital
expenses.
Some pupils may qualify to enroll in no-cost or low-cost local, state, or federally
sponsored health insurance programs. Information about these programs may
be obtained by calling ________ (Insert toll free telephone number).”
• Fees for eld trips and excursions in connection with courses of instruction or school-related
social, educational, cultural, athletic or school band activities, so long as no pupil is prevented from
making the eld trip or excursion because of a lack of sucient funds [Education Code section
35330(b)].
• Fees should be collected on a voluntary basis only.
• A school must not require that a student pay an admission charge to an exhibit, fair, theater or
similar activity for instruction or extracurricular purposes when a visit to such places is part of
the district’s educational program [Ops. Cal. Atty. Gen. No. NS-2469 (1940)].
• No student may be left behind due to insucient funds, nor may a student be left behind for
failing or refusing to participate in fundraisers.
• Fees for medical or hospital insurance made available by the school district for eld trips.
[Education Code section 35331(b) (2)].
• Fees for outdoor science camp programs, as long as no pupil is denied the opportunity to
participate because of nonpayment of the fee (Education Code section 35335).
• Fees for Advanced Placement and International Baccalaureate Diploma examinations for college
credit, as long as (1) taking the exam is not a course requirement and (2) the exam results have no
impact on a pupil’s grade or credit in a course. A district may pay all or part of the cost of the AP
test fee for an economically disadvantaged high school pupil or the IB test fee for a low- or middle-
income pupil. (Education Code sections 52242 and 52922.)
116 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• Fees for childcare and development services, except that no fees shall be assessed to students
enrolled in the program for severely disabled children, as stated in Education Code section 8250(d),
or families receiving CalWORKs cash aid (Education Code sections 8350 and 8350.5)
• Fees for state preschool, except that no fees shall be assessed to families of students placed in state
preschool by an IEP [Education Code sections 8239, 8250(d) (3), 8263(g), (h), 8265, 56000] or
families receiving Cal Works cash (Education Code sections 8350 and 8350.5).
• Fees for supervision of children before and after school, except that no child who desires to
participate shall be denied the opportunity to participate because of the inability to pay the fee
(Education Code sections 8487 and 8488).
Prohibited Fees
California Education Code section 38118 states, “Writing and drawing paper, pens, inks, blackboard,
blackboard erasers, crayons, lead pencils and other necessary supplies for the use of the schools shall be
furnished under direction of the governing board of the school districts.” e attorney general has issued an
opinion that art material for art classes and mechanical drawing sets, cloth for use in dressmaking classes,
wood for carpentry classes, gym suits for physical education classes, bluebooks necessary for nal examina-
tions, and paper on which to write a theme or report when such a theme or report is a required assignment,
are necessary supplies. erefore, if a school district requires pupils to use any of the prior mentioned items,
the school district must provide them without charge so that the pupil can participate in regular classroom
work in the particular subject involved. [Ops. Cal Atty. Gen. No. NS-4114 (1942)].
e attorney general’s use of the term “school supplies” excludes items or materials that are essential
regardless of whether the person is a student. For example, a district is not obligated to furnish corrective
lenses and clothes because these items are needed regardless of whether the person is a student.
Public schools can recommend, and even make available, strictly optional materials for the students’ personal
benet. e law allows parents, other individuals and school districts to purchase instructional materials from
the state-adopted lists (Education Code section 60310). Also, teachers may make available a list of suppliers
for tutorials, books, supplemental educational materials, or may sell inexpensive quality paperback literature
for leisure reading. Teachers may encourage students to use appropriate study aids as long as these purchases
are strictly optional and in no way part of the regular instructional program. Materials are not considered
necessary supplies if they are not part of the adopted curriculum or part of an established extracurricular
program, and there is no penalty for failure to use or purchase the materials. On the other hand, when
such enrichment literature or materials are used as supplemental instructional material for a class or are an
established part of an extracurricular activity, it then becomes a necessary supply which must be provided or
loaned free of charge. Whether a grade is assigned or not is not the crucial point; it is the participation that
counts and whether the material used in the instructional or extracurricular activity becomes a necessary
school supply.
e opinions of the attorney general indicate that charges may not be levied for the following [See, e.g., Ops.
Cal. Atty. Gen. No. NS 2469 (1940)].
• A security deposit, or other payment, that a pupil is required to make to obtain a lock, locker, book,
class apparatus, musical instrument, uniform, or other materials or equipment. e law does allow
the district to charge students for lost or damaged school property after the fact, but not before the
issuance and loss.
• A deposit to guarantee that the district will be reimbursed for loss to the district in case of
breakage, damage to, or loss of school property.
• An admission charge to an exhibit, fair, theater or similar activity for instruction or extracurricular
purposes when a visit to such places is part of the district’s educational program.
Chapter 9
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Class Fees, Deposits and Other Charges
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Grades K-12 117
• A fee charged to a pupil as a condition for enrolling or registering for school, class or course of
instruction, or as a condition for participation in a class or an extracurricular activity, regardless of
whether the class or activity is elective or compulsory, or is for credit. is includes fees or tuition
for attendance in a summer or vacation school, a registration fee, a fee for a catalog of courses, a fee
for an examination in a subject, a late registration or program change fee, a fee for the issuance of a
diploma or certicate, or a charge for lodging.
• Membership fees in a student body or any student organization as a condition for enrollment or
participation in athletic or other curricular or extracurricular activities sponsored by the school
(ASB cards may be sold to allow discounts or free entrance to games and social events, but not in
order to join athletics or other curricular activities).
• Fees to enroll and/or participate in activities of career technical student organizations which are
part of a career technical class or course of instruction oered for credit (Education Code section
52375).
• Fees for transportation associated with activities of career technical student organizations which are
part of a career technical class or course of instruction oered for credit when those activities are
integral to helping the pupil achieve the career objectives of the class or course (Education Code
section 52373).
• e exception to this is when the transportation is between the regular full-time day schools
the pupil would attend and the regular full-time occupational training classes they attend that
are provided by a regional occupational center or program (Education Code section 39807.5).
• Charges for textbooks and workbooks, except for classes for adults (Education Code sections 60070
and 60410).
• Charging an apprentice or their parents or guardian for admission or attendance in any class,
pursuant to section 3074 of the Labor Code (Education Code section 48053).
• A purchase that a pupil is required to make to obtain materials, supplies, equipment, or uniforms
associated with an educational activity [Education Code section 49010(b) (2)].
• Charging for school supplies, materials and equipment needed to participate in educational
activities (including classes).
• Charging for mandated standardized gym suits for physical education classes. A student’s
grade cannot be aected by not wearing the standardized clothes when the failure to wear the
standardized clothes is beyond the student’s control [Education Code section 49066(c)].
• Fees to enroll and/or participate in activities of career technical student organizations which are
part of a career technical class or course of instruction oered for credit. is section shall apply to
activities which occur both during and outside of the regular school day (Education Code section
52375).
• Fees to process an interdistrict transfer request from a pupil residing in another district [Ops. Cal.
Atty. Gen. No. 04-501 (2004)].
• Reimbursement for lost average daily attendance (ADA) revenue for absences from school [Ops.
Cal. Atty. Gen. No. 96-1004 (1997)]. e original opinion referred to ADA lost for unexcused
absences only. Since then, the law has changed such that ADA cannot be earned for unexcused or
excused absences [EC Section 48205(d), amended by Cal. Stats. 1999, c. 312 (S.B. 1208), Section
1]. Presumably the previous opinion likewise applies to ADA lost because of excused absences.
On April 20, 1984, the Hartzell vs. Connell California Supreme Court decision raised serious questions about
the imposition of nonstatutory fees for extracurricular activities. e lead opinion on this matter is that
fees may be charged for activities that are recreational and optional, but not for those that are educational.
118 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Because extracurricular activities are described in the opinion as an integral component of public education,
they are a part of the educational program and thus must be free. e court further stated,
[e] imposition of fees as a precondition for participation in nonstatutory
educational programs oered by public high school districts on a noncredit
basis violates the free school guarantee. e constitutional defect in such fees
can neither be corrected by providing waivers to indigent students nor justied
by pleading nancial hardship.
It is also the opinion of the CDE and the Hartzell vs. Connell decision that a school district may not charge
a fee or require students to purchase necessary materials even if the district maintains a special fund to assist
students with nancial need or waives such a fee or charge for students with nancial need, because the fee or
charge remains a condition for all other students not being assisted nancially. A fee waiver policy for any
students, including those deemed needy, does not make the fee permissible [Hartzell v. Connell, 35 Cal.
3d 899, 912-913 (1984)]. Requiring low-income students and their families to apply for a waiver is considered
discriminatory. e requirement to ll out a waiver discourages many students from attempting to enroll in
a class because they are embarrassed to ask for a waiver, but also do not want to put their family in nancial
distress.
A district cannot require students to purchase or pay for a cap and gown as a condition of participation in
a graduation ceremony, because the California Supreme Court has found that the high school graduation
ceremony is “an integral part of the educational process” because it recognizes cumulative academic
achievement. Because the graduation ceremony is an educational activity, pursuant to Education Code
section 49010(a), a pupil fee cannot be charged. Education Code section 38119 only authorizes districts to
rent caps and gowns from a supplier and provide them free of charge to students. erefore, a cap and gown
fee is not “otherwise allowed by law” per Education Code section 49011(a). e CDE has recommended
that a district that requires students to wear a cap and gown at the ceremony inform students that: (1) the
district will provide caps and gowns for graduating seniors for use during the ceremony, and (2) students also
have the option to purchase an appropriate cap and gown from a vendor. No student should be required to
self-identify as indigent in order to receive a cap and gown from the district.
Regarding gym or physical education clothes, Education Code section 49066(c) states, “No grade of a
pupil participating in a physical education class may be adversely aected due to the fact that the pupil
does not wear standardized physical education apparel where the failure to wear such apparel arises from
circumstances beyond the control of the pupil,” such as lack of sucient funds. e California Department
of Education has stated the position that a school district may require students to purchase their own gym
clothes of a district-specied design and color so long as the design and color are of a type sold for general
wear outside of school. Once the required gym uniforms become specialized in terms of logos, school name
or other similar characteristics not found on clothing for general use outside of school, they are considered
school supplies and the district must provide them free of charge.
Education Code section 49011(b)(4) bars a school district or school, including a charter school, from
requiring parents to perform volunteer hours as a condition of allowing their child admission, enrollment,
continued enrollment, sibling preference, attendance, participation in education activities or receipt of credit
or privileges related to educational activities. Although Education Code section 49011(c) allows school
districts, schools and charter schools to request that parents volunteer a specic number of hours per school
year, and to identify the benets to the school district or school because of these volunteer services, such
requests may not be coercive or imply negative consequences to a student or parent who does not volunteer.
e subject of fees, deposits and other charges is complicated and can attract increased attention, especially
when state funding declines and school agencies try to generate additional revenues. School agencies
considering any type of fee not specically authorized by statute should ask whether it relates to an activity
that is an integral component of public education. If the agency is not sure whether a specic fee should be
Chapter 9
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Class Fees, Deposits and Other Charges
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Grades K-12 119
charged, it should obtain a legal opinion on the matter as this is likely much less costly than a lawsuit against
the district because of illegal fees.
FCMAT strongly recommends that school districts, county oces of education and charter schools take the
following steps to ensure compliance with pupil fee laws:
1. Review the CDE’s scal management advisory guidance.
2. Provide additional training to administrators, teachers and sta to ensure compliance with pupil fee
laws.
3. Remind teachers to update websites and course syllabi to ensure compliance with pupil fee laws.
4. Remind athletic coaches and other extracurricular activity advisors to update policies, websites and
written handouts to ensure compliance with pupil fee laws.
Charter Schools
Education Code section 47605(d) prohibits a charter school from charging tuition, but does not mention
fees or other charges. Although charter schools are exempt from most laws governing school districts
per Education Code section 47610, the California Constitution cannot be rendered inapplicable by the
Legislature. erefore, the California constitution’s guarantee of a free public education (Article IX, Section
5) also applies to charter schools. In 2012, AB 1575 made it clear that the prohibition on pupil fees applies to
charter schools [Education Code sections 49010(a) and 49011(d)].
Charter schools may only charge those fees specically authorized in Education Code sections that have
been made applicable to charter schools. For example, charter schools can charge fees for food and eld trips
because those Education Code sections apply to charter schools [Education Code section 35330(d) (eld
trips); Education Code section 49430.7(a) (2) (food)]. However, charter schools cannot charge the “other fees
authorized by law” that districts can, except for fees related to activities that are not an integral component of
public education.
120 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 10
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Vending Machines 121
Chapter 10
Chapter 10 – Vending Machines
Vending machines are set up and managed in various ways in school agencies. In some cases ASBs operate
the vending machines and in others the district, food service/cafeteria programs, booster clubs, foundations,
auxiliary organizations or other parent-teacher organizations operate them. Vending machines are found on
school campuses, in district oces and at athletic events.
Purpose of Vending Machines
Vending machines have two purposes: to provide a product or supply that students and sta can use, and to
raise funds by providing a prot on the sale of those products.
Products Sold in Vending Machines
A variety of items may be sold using vending machines, ranging from beverages and foods to school supplies
such as pens and pencils. Food and beverage vending machine sales must comply with state laws, which have
greatly reduced the variety of drinks and snacks that can be oered, and which prohibit selling items that
compete with the food service/cafeteria program.
e California Childhood Obesity Prevention Act of 2003 and Education Code section 35182.5 regulate the
use of vending machines and establish limits on the sale of specic food and beverage items in grades K-12
including the following:
Elementary Schools
• Bans during the entire school day the sale of all food and beverages not dened as healthy.
• Vending machines may be used to sell only healthy food and beverages.
• Bans during the entire school day the sale of all food and beverages considered in competition with
the food service/cafeteria program.
• Permits the sale of healthy beverages, which include water, non-fat or 1% milk, 100% fruit juice,
and fruit-based drinks with no less than 50% fruit juice and no added sweeteners.
• Allows the sale of unhealthy food and beverages for fundraising under two circumstances: sale by
pupils o school grounds, and sale by pupils on school grounds at least 30 minutes after the end of
the school day.
Junior High, Middle and High Schools
• Bans during the entire school day the sale of all food and beverages not dened as healthy.
• Vending machines may be used to sell only healthy food and beverages.
• Limits the type of foods and beverages and the number of sales allowed each day.
• Permits the sale of healthy beverages, which include water, non-fat or 1% milk, 100% fruit juice,
and fruit-based drinks with no less than 50% fruit juice and no added sweeteners.
• High school only: electrolyte replacement beverages with no more than 16.8 grams of added
sweetener per eight-ounce serving and limited to a 12-ounce portion. Not allowed at middle
or junior high schools.
• e sale of these permissible drinks can occur from one half hour before school to one half
hour after the end of the school day. ese items may be sold during the school day, including
during meal times, if they comply with the competitive food sales laws mentioned in the food
services section applying to secondary schools. ere is an allowance for one organization a
day to sell no more than three types of approved foods or beverages. If revenue from a vending
122 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
machine is going to a student organization, the vending machine may be the one per day
allowable sales entity; the organization could not do this and sell food daily from a student
store.
• Prior to the Healthy, Hunger-Free Kids Act of 2010, school organizations were allowed to partner
with food service/cafeteria programs and share prots. is is no longer allowed. Prots from Child
Nutrition Programs must accrue only to that fund, and prots from other organizations need to be
coded to their specic funds.*
• Allows the sale of unhealthy food and beverages for fundraising under two circumstances: sale by
pupils o school grounds, and sale by pupils on school grounds at least 30 minutes after the end of
the school day.
* For detailed information regarding revenue from the sale of non-program food (child nutrition departments) and competitive sales
(all other organizations) see the reference in Management Bulletin #SNP-12-2014 at http://www.cde.ca.gov/ls/nu/sn/mbsnp122014.asp
Issues for Vending Machines
e school board should create a policy to provide direction and parameters regarding how vending machines
may be used in the district. e areas for policy direction should include the following:
1. How and where vending machines may be placed, indicating the responsibility or sponsorship through
the following:
• ASB.
• Food service/cafeteria program.
• Booster club, foundation, auxiliary organization or other parent-teacher organization.
• Shared or joint sponsorship between two or more organizations or groups.
2. Products permitted:
• Exclusive product selection or endorsement, in compliance with the Education Code.
• Nutritional value of products, in compliance with state and federal regulations (SB 12 and SB
965; Education Code sections 49431 and 49431.5).
3. Contract arrangements:
• Installation, maintenance, quality, quantity, commission rates, and selection of vendor and
products, in compliance with the Education Code and Public Contract Code.
• Adherence to competitive bid requirements.
• Contract terms and conditions.
• Contract review parameters and signatory authorization.
4. Financial management:
• Periodic nancial statements.
• Internal control procedures, in compliance with the Education Code.
• Inventory management.
• Audit guidelines.
Chapter 10
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Vending Machines 123
Good Business Practices Related to Vending Machine Operations
Because of the many dierent ideas and options for vending machine operations, it is suggested that the
district’s business oce rst meet with principal or other school administrators and advisors to determine
which options and practices would best meet the needs of the students and programs. To ensure successful
operations, best practices unique to individual district and school needs should be identied. Board policies
and administrative regulations may include items such as the following:
• Overall guidelines for key vending machine management.
• Administrative regulations describing who does what when.
• Administrative regulations regarding new ideas and where to get help with new situations as they
arise.
e procedures described on the following pages are also strongly recommended to ensure successful vending
machine operations for ASB organizations.
e good business practices presented indicate when the business oce should take the lead and when
primary responsibility rests with the school site.
Good Business Practices for Business Ofce Leadership
e district’s business oce should do the following:
• Actively support school site ASB vending machine management by hosting annual meetings to
discuss vending machine operations.
• Review board policies and administrative regulations annually with school ASB leaders. In
collaboration with the school ASB leaders, the district’s business oce should propose and draft
new policies or regulations to facilitate practices that benet student organizations.
• Provide annual training on all aspects of ASB nancial management, including vending machine
operations.
• Assign a specic sta member to be the contact for all ASB nancial management questions.
• Review bids, specications and requests for proposals on all vending machine options and
operations.
• Review all contracts of agreement, including annual contract renewals, for legal suciency and for
maximum prot margin with minimal risk to student funds.
Good Business Practices for School Site ASB Leadership
e school should do the following:
• Develop a collaborative relationship with the district’s business oce sta member assigned to work
with ASB operations.
• Attend and actively participate in annual meetings and trainings hosted by the district’s business
oce.
• Be familiar with board policies, administrative regulations and district procedures related to
vending machine operations.
• Bring all questions to the attention of the district’s business oce, and request assistance with all
problems.
• Determine which items will provide maximum benet to students.
124 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• Learn the rules and practices of sound inventory management. For example, monitor the inventory
turnover and shelf life of individual products; conduct inventory counts regularly; store inventory
stock in a secure place; and have two people count cash and stock/restock vending machines.
• Review and update the sale price of products to ensure an adequate prot margin for students.
• Consider inventory needs during holidays and other times when school is not in session.
• Do not use vending machine items as a reward or payment for services (e.g., handing out free items
to students who chalk the lines on the football eld before games).
• Remember rules and good business practices related to risk management, such as not allowing
students to drive to the store to replenish vending machine inventories.
Vending Machine Operations
An ASB may set up vending machines several ways, depending on how and where the machine is to be used.
e four main options for vending machine management are as follows:
• Option I – e ASB purchases, stocks, operates and manages the machines.
• Option II – e ASB leases or rents the machines, and stocks, operates and manages them.
• Option III – A contracted third party owns, operates and manages the machines, and pays a
commission to the ASB.
• Option IV – e district’s food service/cafeteria program or the district itself operates the vending
machines; the ASB is not involved with the vending machines.
For options I, II and III above, in which the ASB operates the vending machines, the following explanations
will help districts determine the most successful option for a particular situation or operation.
Vending Machine Management – Option I
e ASB organization may purchase the vending machines. In this case, the ASB organization is responsible
for keeping the machines lled and handling the money. Stock is purchased, stored, and inventoried by the
ASB. Included with this option are maintenance and repair costs. At some point, the ASB would probably
need to set aside funds to replace the vending machine if the desire is to continue fundraising.
e ASB has sole discretion to establish product prices and thus determine prot margin, within any district
policy limits. Liability insurance for loss or damage, particularly vandalism, would be a cost of owning and
using the machine as a fundraiser.
Under this option, the club sponsoring the vending machine would count as the one group conducting daily
sales, so no other club could sell food and/or beverages daily.
Vending Machine Management – Option II
e ASB organization may contract with a vending machine company to rent or lease the vending machine.
In this case, the ASB organization is responsible for keeping the machines lled and handling the money.
is would include purchasing, storing and keeping inventory records of the stock.
e primary dierence between options I and II is that under option II the ASB does not own the vending
machines and probably would not have the primary responsibility for any machine repair, maintenance or
replacement. e lease or rental agreement with the vendor would specify machine repair and replacement
terms, including each party’s risk management responsibilities.
Under this option, the club sponsoring the vending machine would count as the one group conducting daily
sales, so no other club could sell food and/or beverages daily.
Chapter 10
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Vending Machines 125
Vending Machine Management – Option III
e ASB organization may contract with a vending machine company to install a machine at a school, ll the
machine and take the money out of the machine. e contract must indicate the terms of the agreement. e
ASB would receive a commission, usually based on the vending machine sales.
e district should consider including provisions in its contract that answer the following questions:
• How much will the ASB organization receive from the sale of each item?
• If the vending machine company raises the price of the product, does the ASB receive a portion of
the increase?
• What products will be stocked?
• What happens if the machine is vandalized?
• Who is responsible for giving refunds to students when the machine loses money that is deposited
or when the change feature of the machine malfunctions?
e contract should also include a provision that allows members of the ASB organization and the school
sta to periodically observe the company’s personnel emptying the machine. is allows the ASB to verify
that it is receiving the correct amount of revenue.
Under this option, the club sponsoring the vending machine would not count as the one group conducting
daily sales, so another club could sell food and/or beverages daily.
Advantages and Disadvantages of Various Vending Machine Operations
Option III is obviously the easiest for the ASB organization, but it also results in less income.
Under the rst two options, the ASB organization must purchase the items to sell, be responsible for the
procedures (internal controls) for taking the money out of the machine, and restock the machine. Each of
these functions takes time when performed in accordance with good business practices.
If the ASB is responsible for stocking the machine and handling the money, the organization needs to
establish procedures for the following:
• Managing stock
• Emptying machines
In addition, if the ASB is responsible for the machines, the food laws regarding how many groups can
sell food and beverages and how often will apply. For example, a vending machine that is available every
day during school hours will count as the one group doing daily sales (see the Food and Beverage and
Competitive Food Sales charts in Chapter 3 for an outline of the various laws) if the group stocks and
manages the machine.
Following is an outline of good business practices and proven procedures for managing stock and emptying
machines.
Procedures for Managing Vending Machine Stock
If the ASB organization is responsible for stocking the machine, it should buy items in large quantities
whenever possible because this usually provides a lower cost per item. However, food and beverages
have a limited shelf life, so a two- or three-month supply is recommended as reasonable for these items.
Recommended procedures for maintaining stock are as follows:
1. Store all items in a secure area where the access is limited.
126 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
2. Maintain a log of all items held in the storeroom (see the sample Vending Machine Inventory Log at
the end of this chapter). Record the items in columns A and B of the log when they are purchased.
3. Compute the cost per item for the items purchased, and record it in the cost per item column.
4. In column C of the Vending Machine Inventory Log, record the items taken from the storeroom.
5. Use the inventory balance column on the Vending Machine Inventory Log to maintain a total of the
number of items that should be in the storeroom at any time. Update this column each time items are
purchased or taken from the storeroom. is is accomplished by adding items purchased to the amount
on the previous line in the inventory balance column and deducting items taken out of stock from the
previous line in the inventory balance column.
6. Take a physical inventory, or count, of the items in the storeroom
once a month. Compare the number of items in the storeroom to the
amount remaining in the inventory balance column of the Vending
Machine Inventory Log.
7. Record the inventory in the last two columns of the log to provide a
record that the inventory was taken. Two people should always count
the inventory and initial the box marked “Initials.” e ASB advisor
and the students should determine the reasons for any discrepancies
between the amount shown in the inventory balance column and
the count of the items remaining, which is shown in the “number of
items in inventory” column.
8. e ASB advisor should contact the principal/school administrator
and the business oce for assistance if any signicant discrepancies
are noted or if help is needed with inventory management.
Procedures for Emptying Vending Machines
When it is time to take the money out of the vending machine, the machine is also restocked. e number
of times the students will perform this procedure will depend on the volume of sales. e following are
recommended procedures for restocking and counting the money.
1. Two students or school sta members should have this responsibility; no one should restock or take
money out of the vending machine alone.
2. One person counts the money and records it on the ASB Cash Count form (see sample form at the
end of Chapter 13). e total amount of money taken from the machine is recorded on line F of the
Vending Machine Control Sheet.
3. e second person counts the number of items remaining in the machine and records this information
on line B of the Vending Machine Control Sheet.
4. e second person takes the inventory needed to stock the machine from the storeroom where the
stock is kept.
5. e second person stocks the machine and completes the information on line H of the Vending
Machine Control Sheet.
6. When each person has completed their work, they trade duties and verify the counts made by the other
person. Each person then signs the Vending Machine Control Sheet.
Fraud Alert
A common fraud is to remove
coins and cash from the vending
machine funds collected. The
funds pilfered are usually in the
$5-$40 range depending on the
number of vending machines
and frequency of collection.
This type of fraud is easy to
reduce by reviewing the vending
machine inventory count sheets
and periodically recounting
vending machine inventory to
conrm that the counts are
correct.
Chapter 10
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Vending Machines 127
7. Line A is entered from line I of the Vending Machine Control Sheet that was completed the last time
the machine was stocked.
8. Lines C, D, E, F, G, and I are entered and computed.
9. Any signicant discrepancy on line G is reported to the ASB advisor and the principal/school
administrator, and is investigated immediately by the ASB advisor. e business oce also is advised
immediately.
10. e ASB advisor signs the Vending Machine Control Sheet upon completion of the process.
11. e information on the Vending Machine Control Sheet is used as the beginning point the next time
the machine is emptied and restocked.
12. If the school has more than one vending machine, separate control sheets are used for each machine.
ese procedures can vary depending on the type of vending machine the ASB has. If the machine has
automated product counters, the students would verify the accuracy of that data.
128 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 10
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Vending Machines 129
Vending Machine Control Sheet
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Vending Machine Control Sheet
Fiscal Year: _______________
Machine Number: ____________ Machine Location: ______________________________
Number of items in the machine at the last count A ________________________
(Report Line I from the previous report here on Line A)
Date this report prepared: ___________________
Date of the last report: ________________
Number of items in the machine on __________________ B ________________________
Date
Total number of items sold (A minus B): C ________________________
Price of items sold: D ________________________
Cost of items sold (C times D): E ________________________
Amount of cash taken from the machine: F ________________________
(This amount comes from the ASB Cash Count form)
Difference between the amounts sold and cash count: G ________________________
Number of items added to the machine: H ________________________
Total number of items in the machine (B plus H): I ________________________
Report prepared by: _________________________________________________________________
Signature, Title and Date
Items counted by: __________________________________________________________________
Signature, Title and Date
Items counted by: __________________________________________________________________
Signature, Title and Date
130 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
Chapter 10
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Vending Machines 131
Vending Machine Inventory Log
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Vending Machine Inventory Log
Fiscal Year: _______________
Date this report prepared:
Machine Number: _________________________
Machine Location: ______________________________________________
This inventory log is for the following item (soda, juice, etc.): _________________________________
Date
Total Cost
of Items
Purchased
Number
of Items
Purchased
Cost per
Item
Number
of Items
Taken
from
Stock
Inventory
Balance
Date of
Inventory
Count
Number
of
Items in
Inventory
Initials of
Persons
doing
Inventory
132 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Report prepared by: _________________________________________________________________
Signature, Title and Date
Items counted by: __________________________________________________________________
Signature, Title and Date
Items counted by: __________________________________________________________________
Signature, Title and Date
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on (date): ___________________
Date
Chapter 11
–
The Student Store 133
Chapter 11
Chapter 11 – The Student Store
e student store is a popular fundraising mechanism at secondary schools and community colleges. A
student store is usually operated by students and sells items that students use during the school day, such as
pencils, paper, binders, limited snacks and beverages that meet state nutritional standards, and items that
have the school logo such as hats, scarves and sweatshirts. Student stores raise funds for the student organiza-
tions while also providing a valuable service for students.
ASB Store Operations
e student store is usually operated as a fundraising event for the entire student body. For this reason,
the student council usually sponsors and operates the store, though a group of clubs may also operate the
student store. Guidelines and procedures will need to be developed regarding how revenues from the store are
allocated, budgeted and spent. ese decisions should be documented in meeting minutes and in the ASB’s
internal procedures at each school where stores are operated.
e sales volume and the prot level of a student store usually depend on the following:
• e size of the school
• e physical size of the store
• e number of products available
• e days and hours of operation
• Student leadership and the counseling role of the ASB advisor and bookkeeper
Student store hours of operation should be decided jointly at each school by the student organization, ASB
advisor and principal/school administrator.
e student store is a fundraiser that augments the ASB organization and should operate only inasmuch as it
enhances the students’ educational experience. Because of the unique objective of a student store, consider-
ations must extend beyond prot per square foot. Conicts with class schedules, operational challenges, and
appropriate supervision are all considerations that may point toward a smaller and more ecient student store
operation rather than a larger one.
Organized versus Unorganized
In organized ASBs, the student organization must actively participate in decisions about student store
operations and how the revenue is generated and used. In an unorganized ASB, the students are much less
active and take a lesser role in decisions regarding the store. In both organized and unorganized ASBs,
however, a careful cost-benet analysis will be required for decisions. Cost evaluations should take into
account more than simply dollars spent; the analysis should include sta time, management eort, eects on
facilities and the student population, and other considerations.
Food Sales
Because of the laws and restrictions related to the sale of food and beverages at K-12 schools, the ASB advisor
and the students should always seek counsel from the district’s food service/cafeteria program director to
determine which food and beverage items can be sold in the student store. is will ensure compliance with
state regulatory code and with the district’s goals related to student nutrition.
Food and beverage sales cannot compete with the school lunch program. California Administrative Code
section 15501 authorizes only one student organization at middle and high schools to sell food and beverage
items daily. e code must be followed, so if these types of items are sold daily in the student store, that
134 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
constitutes the one student organization authorized by the code. e district’s food service/cafeteria program
can help ensure an understanding of and compliance with all district, state and federal regulations.
Chapter 3 provides more detailed legal guidance on food and beverage sales by ASB organizations.
Clothing Sales
Non-mandated clothes for physical education classes are often sold in student stores. is is a convenient
place for such sales because it eliminates the need for cash boxes, tracking procedures and inventory security
at other locations at the school. Most organized ASBs will also sell other clothing items with the school name
or mascot on them. ese are also appropriate sale items for the student store.
Regarding gym or physical education clothes, Education Code section 49066 states, “No grade of a pupil
participating in a physical education class may be adversely aected due to the fact that the pupil does not
wear standardized physical education apparel where the failure to wear such apparel arises from circum-
stances beyond the control of the pupil,” such as lack of sucient funds. e school district may require
students to purchase their own gym clothes of a district-specied design and color if they are of a type
sold for general wear outside of school and can be purchased anywhere, not just at the student store or the
district. Once the required gym uniforms become specialized in terms of logos, school name or other similar
characteristics not found on clothing for general use outside of school, they are considered school supplies and
the district must provide the uniforms free of charge. erefore, if physical education clothes with the school
mascot and name on them are sold, their purchase cannot be mandated.
School Supplies
Student stores can sell school supplies such as pencils, pens, folders and
other items. However, no item carried in the store can be mandatory for
students because this would constitute a fee for public education, which is
not allowed by law.
Event Sales
Events such as yearbook sales and payments for senior trips, school dances
and similar items can all be carried out through the student store. e
internal controls for the store must allow proper tracking and accounting
of these types of sales. Once the controls are established, having the store
carry out the sales can greatly simplify the administrative burden these
events can create.
Sound Business Practices for Student Stores
Although a student store is more complex and usually has many more
transactions than most of the fundraising events held by students, trans-
actions should be recorded in ASB accounts just like other fundraisers.
e accounting methods, internal controls and rules used for other
transactions and fundraisers should be followed for the store, including
the requirement of prior student council approval for all purchases.
Responsible administrative sta should review these methods, internal
controls and rules at least once a year to ensure they are adequate.
Like any privately owned store, student store operations are susceptible
to theft. e following good business practices for internal controls apply
specically to a student store and can help reduce the risk of theft.
Fraud Alert
Student stores are often a fun
and fast-paced location that offer
many opportunities for friends
of those operating the store
to enter and remove inventory
undetected. When this occurs
and is discovered, those working
in the store are often blamed for
inventory shortages. In addition,
because student stores are a
cash intensive operation, it is
very common for petty thieves
to simply not ring up sales and
pocket the cash. The strongest
deterrent to unexplained
inventory shortages or theft is a
video surveillance system. If the
ASB cannot afford a surveillance
system, consider purchasing signs
that state that there is a surveil-
lance system. Sometimes the
perception of detection is enough
to deter theft.
Chapter 11
–
The Student Store 135
Location and Security
e principal/school administrator should provide a space for the student
store with a layout that prevents theft, damage or other loss of items for sale
and items used to support the store’s operations. Items should be secured
during the school day and on evenings, weekends and holidays when
the student store is closed. is should apply to both inventory and cash
receipts.
Stock and Pricing Policies
e ASB advisor and ASB bookkeeper will need to work with the students
to maintain a detailed record of all items purchased for the student store.
e ASB advisor should also work with students to determine what types of
items to purchase for the store and an appropriate sales price for each item.
Past sales should be evaluated each year to determine any changes in pricing
or in items stocked. is is an opportunity for students to learn about retail
operations.
Cash Handling
Unless the volume of the store is very low, it is a good idea to purchase and
use a cash register.
As sales are made each day, the students should maintain a record of the
number and types of items sold and the amount of cash received. Some
cash registers have a feature that tracks the types of items sold and the cash
collected. If there is no cash register, or if the cash register does not have this
tracking feature, the students will need a manual tally sheet or ticket control
of the items sold throughout the day. e Student Store Daily Sales form at
the end of this chapter can facilitate daily reconciliation of items sold with
cash collected.
As items are sold, the student records the sale on the Student Store Daily Sales form. At the end of the
day, the marks are totaled and multiplied by the sale price of each item. e total value of all sales is then
compared to the cash collected. e ASB advisor and the students should immediately determine the
reason for any signicant dierences reported on the Student Store Daily Sales form. Procedures should be
established for daily reconciliation of cash registers/cash box collections and total sales receipts. Scheduled
deposits should be made and nightly security established for all cash on hand. An ASB Cash Count form
(found in Chapter 13) and register tapes should accompany all deposits.
Inventory Count and Management
At least once a month, students should take a physical inventory of all items in the student store and compare
the physical number remaining to the calculated number remaining. e Student Store Daily Inventory Log
form at the end of this chapter is designed for this task.
Two students should count the inventory and record their counts on separate inventory forms. e students
should then compare the two counts and recount any that do not agree.
After the count is complete, the students should compute the amount remaining in inventory using the
Student Store Monthly Inventory Calculation form. is form is used to compare the monthly physical
inventory of goods to the number of items that should be in the store based on the recorded daily sales and
receipts.
Fraud Alert
Student store cash is easily
taken. Students who operate
cash registers and sell
inventory, as well as advisors
who handle the cash, can
easily be accused of theft
because they have access and
opportunity to remove cash.
Each student should count
their own cash with a witness
and reconcile cash and
inventory at the end of each
shift. Advisors should only
count cash with a witness,
and both the advisor and the
witness should sign two copies
of the Cash Count form.
After the cash is counted, the
deposit should be sealed and
the advisor and the witness
should take it to the ASB
bookkeeper for deposit.
136 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
e students and the ASB advisor should investigate any signicant dierences noted on this form. e ASB
advisor and the principal/school administrator should seek the assistance and counsel of the district’s business
oce if they cannot determine and correct the cause of discrepancies in student store inventory.
Accounting
Procedures need to be established to ensure that the daily receipts are allocated to the proper ASB account.
is is important for student stores that conduct event sales for which the receipts go to a specic fund or
club instead of into a general fund for the student organization.
Training and Practices
A discussion of student store operations should be a standing agenda item at the periodic meeting of the
district’s business oce and ASB leaders. is discussion should include practices, successes and areas where
assistance is advisable. Everyone benets when there is a successful ASB student store operation: the district,
the school and, most important, the students.
Sales and Use Tax
Although school districts are exempt from federal and state income taxes, they must pay California sales
tax on gross sales. ASB organizations are exempt from collecting sales tax when the sales are irregular or
intermittent, such as sales at football games or annual rummage sales. Because student store sales are neither
irregular nor intermittent, they are not exempt.
Sales tax is normally paid when goods are purchased at retail, so when the goods are resold, sales tax is due on
the dierence between the purchase price and the resale price.
e district’s business oce les a sales tax return periodically for the sales tax it has collected. It is most
ecient for the district to include on the same return any sales tax due on student store sales. e district’s
business oce sta should obtain the necessary information from the student store sales and report the sales
tax when it is due. is also ensures greater accuracy when preparing the sales tax form.
Use tax must be paid on items purchased from a retailer but for which sales tax was not paid at the time
of purchase. is usually occurs when goods are purchased from out-of-state vendors. Just as the district’s
business oce les a periodic sales tax return, it also les a use tax return. It is most ecient to include the
student store’s information on the district’s use tax return.
Additional information about both sales and use taxes can be found on the State Board of Equalization
website at www.boe.ca.gov.
Chapter 11
–
The Student Store 137
Student Store Daily Sales
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Student Store Daily Sales
Fiscal Year: _______________
Date this report prepared: _____________
Item
Number Sold
Unit Price
Total Dollar Value of
Units Sold
Item
Number Sold
Unit Price
Total Dollar Value of
Units Sold
Item
Number Sold
Unit Price
Total Dollar Value of
Units Sold
Item
Number Sold
Unit Price
Total Dollar Value of
Units Sold
Reconciliation of daily sales to the cash collections:
Total dollar value of units sold: ______________________
Total cash collected: _______________________
Difference: _________________________
138 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Explanation: ______________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
Report prepared by: __________________________________________________________
Signature, Title and Date
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Chapter 11
–
The Student Store 139
Student Store Daily Inventory Log
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Student Store Daily Inventory Log
Fiscal Year: _______________
Date this report prepared: _____________
Item
Total Number
Counted
Item
Total Number
Counted
Item
Total Number
Counted
Item
Total Number
Counted
Item
Total Number
Counted
Item
Total Number
Counted
Item
Total Number
Counted
Item
Total Number
Counted
140 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Report prepared by: _________________________________________________________________
Signature, Title and Date
Items counted by: __________________________________________________________________
Signature, Title and Date
Items counted by: __________________________________________________________________
Signature, Title and Date
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Chapter 11
–
The Student Store 141
Student Store Monthly Inventory Calculation
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Student Store Monthly Inventory Calculation
Fiscal Year: _______________
Inventory for the month of: ___________________
Date this report prepared: ___________________
Item: (e.g. pencil, paper, etc.)
Inventory Count from
Last Month
A
Items Added During the
Month
B
C
D
E
F
Total (A+B+C+D+E+F) G
Less Total of Items Sold
(From Daily Sales Forms)
H
Difference (G minus H) I
Inventory Count
(From Student Store
Inventory)
J
Difference (I minus J) K
Report prepared by: _________________________________________________________________
Signature, Title and Date
Items counted by: __________________________________________________________________
Signature, Title and Date
Items counted by: __________________________________________________________________
Signature, Title and Date
142 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Chapter 11
–
The Student Store 143
Student Store Sales and Inventory Reconciliation Worksheet
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Student Store Sales and Inventory Reconciliation Worksheet
Fiscal Year: _______________
Date this report prepared: _____________
Beginning inventory at sales value: _______________________
Plus: Purchases made during period at sales value:
(For example, if you purchased 20 drinks at varying
prices from Costco and sell them all for $1 each,
Your addition to inventory would be $20).
Purchase values (maintain records for review including
purchase invoice and item pricing): _______________________
Less: Deposits made during the period from sales: _______________________
Plus: Sales taxes included in deposits from sales: _______________________
Less: Documented surplus, destroyed, stolen, etc.
inventory at sales value (maintain detailed records): _______________________
Equals: Inventory sales value to account for at end of period: _______________________
Physical count of inventory on hand at sales value: _______________________
Difference: _______________________
Explanation regarding difference: _____________________________________________________________
________________________________________________________________________________________
Report prepared by: _________________________________________________________________
Signature, Title and Date
Items counted by: __________________________________________________________________
Signature, Title and Date
Items counted by: __________________________________________________________________
Signature, Title and Date
Submitted and Approved by:
Student Club Representative: __________________________________________________
Signature, Title and Date
Club Advisor: ________________________________________________________
Signature, Title and Date
144 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 12
–
Gifts and Donations 145
Chapter 12
Chapter 12 – Gifts and Donations
Gifts and donations from parents, students, community members and business entities are vital contributions
to California public schools. ese gifts are made in a variety of ways and for a variety of purposes. Although
ASBs are frequently the recipients of gifts and donations, donations should be deposited into the school site’s
district donation account, not accounted for through ASB, unless they supplement ASB fundraising. ASB
accounts are set up primarily for fundraising revenue and the spending of that revenue. If donations are the
only revenue source, it is not necessary to set up an ASB club and account; a district’s donation account can
be used.
Donations can in no way be mandated or made a prerequisite to participating in a club, activity, program or
event.
Typically, gifts and donations are made to the district or student body for one or more of three uses:
• For use at a specic school
• For use in a specic program
• For student activities
Gifts and donations may be in the form of cash, scholarships, equipment or supplies. When a donation is
made at the school, it is important for the principal/school administrator or designee to determine whether
the donation is meant for the school entity for exclusive use at that school, or if the donor intends the
donation to be given to the ASB organization. e donor may not understand the importance of identifying
specically for whom the donation is intended, so it is important for the employee who accepts the donation
to be able to explain the dierence and ensure that the funds are accounted for correctly. Only funds raised
by or donated to the ASB should be deposited into the ASB account to be used for ASB purposes.
ere is a signicant and practical dierence between a donation to the school entity or school site and a
donation to the ASB organization. In the former case, funds are allocated to a school or program, there is
more latitude regarding what the funds can be used for, and adults always decide how the funds will be spent.
In the latter case, funds are deposited into ASB accounts and students decide how the funds will be spent
to enhance their educational experience, with the adults’ assistance and co-approval (unless this is for an
unorganized ASB). In the case of an unorganized ASB, although adults will make all decisions regarding use
of the ASB funds, the allowable uses are more restrictive than for non-ASB funds.
Donations of Cash to a District for a Specic School or Program
If the donation is made to the school district for a particular school, or to a specic program, the principal/
school administrator or designee must remit the donation to the district’s business oce in accord with the
district’s procedures for doing so. If the donation is a check or cash, the district’s business oce will deposit
the funds into the county treasury and record the revenue as a donation for that specic school or program.
e school or program budget will then be adjusted to allow the principal/school administrator or designee
to use the funds. A separate budget is usually set up to identify donor funds and to show how they have been
spent and their available balance. Funds that remain unexpended at year end are carried over to the new
budget year. e principal/school administrator or designee will determine how to use the donated funds,
within district guidelines, and will ensure that the donor’s requests are considered.
e district’s board policy regarding gifts and donations needs to be understood so that sta members can
follow the correct procedure for notifying the governing board and other district employees and departments
when they are received and ensure that the district oce records them correctly. In some districts, all
146 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
donations are brought to the governing board for acceptance; in others, only donations greater than a certain
dollar amount are brought to the board. In either case, the correct policy and procedure should be followed.
Cash Donations to an ASB Organization
If a cash or check donation is intended for the ASB organization, the principal/school administrator or
designee must deposit the check into the ASB account. Ideally, the donor should note on the check or in a
separate letter that the donation is for the ASB organization and, if applicable, which club. In the absence
of a clear indication, the district’s business oce sta will usually assume that the donation is intended for
the school and the money will be deposited in the district’s account for the benet of the particular school,
not the ASB. If the donation is for the ASB, it must be used in accord with ASB guidelines and the donor’s
requests. e donation should also be accepted/approved by the student body and a thank you letter should
be written to the donor, unless district board policy states otherwise (for example, the district’s board policy
may include information on the correct procedure to follow when receiving donations to the ASB). It is
important to review board policy to ensure compliance.
Donations of Gift Cards to a District for a Specic School, Program, or ASB
When a district or ASB receives a gift card as a donation, it is important to make sure it is recorded accurately
in the correct entity’s nancial records. A donation of a gift card is technically a gift, which the California
School Accounting Manual (CSAM) denes as “anything of value received from any source for which no
repayment or service to the contributor is expected.” FCMAT considers a gift card to be a cash gift. e
CSAM states that gifts are considered local revenue, so a gift card should be recorded in the general ledger
with an entry of a debit to cash and a credit to local revenue either in the ASB’s records or the district’s,
depending on the donor’s wishes regarding who is to be the beneciary.
Before entering this donation into the general ledger, FCMAT recommends researching how the gift card
came to be donated, which club or clubs were involved and how, so that the gift can be divided among clubs
if necessary.
After the donation has been recorded in either the ASB’s or district’s general ledger, all expenditures paid
from the donation need to follow the applicable district and/or ASB expenditures rules. For organized
ASBs, this includes students determining how the money is to be spent, adults co-approving, noting student
approval in meeting minutes, and obtaining three signatures prior to purchase.
FCMAT recommends working with the district’s business oce to establish procedures for using a gift card;
these should include a check-out system, a requirement to return the card after each use with the original
receipt, and other measures so that the card’s use can be tracked to ensure that expenditures are appropriate
and its full balance is used. As the gift card is used, an entry can be made in the general ledger with a debit to
the appropriate expenditure and a credit to cash.
Ambiguous Situations
After the books have been closed at the end of the year, auditors often nd funds that were deposited into
the ASB bank account but that appear to have been intended for the district for use at a particular school, or
vice versa. ese situations are dicult to unravel and have the potential to cause misunderstandings. e
donation forms at the end of this chapter can help ensure that donations are recorded correctly when received
and the donor’s intent is stated clearly to prevent ambiguity.
Donations of Material or Equipment to an ASB Organization
If the donation consists of material or equipment, the principal/school administrator, ASB advisor and
bookkeeper must understand and follow the district’s requirements regarding this issue. All districts should
require that all ASB donations be formally accepted by the student body and recorded in the meeting
minutes. Many districts also require that material or equipment donated to the ASB be approved by the
Chapter 12
–
Gifts and Donations 147
school board or an authorized designee, or that all gifts or donations of equipment or other property be
transferred to the district rather than remaining property of the ASB. e district would probably then
accept responsibility for maintenance (though not necessarily for replacement) in accordance with district
guidelines. e instructions need to be clear so there is no misunderstanding about which entity (ASB or the
district) is responsible for maintenance and replacement.
Before accepting any donation of this type, it must be determined that the school program has a legitimate
use for the item and that district policy allows acceptance. For example, many people have donated
non-working computers and printers to schools and/or ASB organizations. e district should have a policy
or procedure to ensure that items are inspected and found to be usable before they are accepted. Installation
and maintenance costs must also be considered before an item is accepted.
Donations of Scholarships to an ASB Organization
If they are large enough, donations intended as scholarships may require a separate bank account from the
ASB account to simplify tracking the interest the funds earn. In these cases the school will need to work with
the district’s business oce to open a separate bank account for that purpose.
Whenever possible, student organizations should attempt to persuade potential scholarship donors to donate
without special award criteria or restrictions. is will allow the student organization to include the donation
in its existing general scholarship fund without a separate bank account or selection and award process. e
Memorial Fund/Scholarship Fund form at the end of this chapter can help ensure that the donor’s intentions
are clear. Additional information on scholarships is included in Chapter 8.
Donations to ASBs from Booster Clubs, Foundations, Auxiliary Organizations and
Other Parent-Teacher Organizations
Booster clubs, foundations, auxiliary organizations and other parent-teacher organizations are independent of
both the district and the student organizations/ASB. Booster clubs, foundations, auxiliary organizations and
other parent-teacher organizations may decide to donate money to an ASB, but once they do so, all ASB rules
and requirements apply and the donor organization no longer has any control or authority over the donated
funds. In addition, the donation to the ASB cannot occur until after the funds have been deposited and
accounted for within the booster club, foundation, auxiliary organization, or other parent-teacher organi-
zation. Nonstudent organizations should be organized as distinct 501(c)(3) not-for-prot organizations and
have their own tax identication number; it is important that their operations remain separate and distinct
from the district and from student organizations; they may not use the district’s tax identication number for
any of their operations.
Good Business Practices for ASB Donation Management
e donation forms on the following pages can be used to ensure that donations are recorded correctly. ese
forms allow a donor’s intent to be stated clearly to prevent ambiguity.
Updating gift and donation procedures should be a standing agenda item for the annual district-sponsored
ASB meeting with the business oce. A review of the past year’s activities can serve as a starting point, with
the intent to improve practices for the coming year.
When the ASB organization spends a donation, it is subject to the same policies and procedures as all other
ASB expenses.
Tax-Exempt Status
When outside business or individuals are considering making a donation, ASBs are frequently asked for their
tax identication number. e ASB and the district are not considered a private nonprot 501(c)(3) organi-
zation; rather, they have nonprot, tax-exempt status by virtue of being a governmental entity. e district’s
148 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
tax identication number should always be treated condentially; it should not be given out when asked
because it is not required for the donors to claim a tax deduction. All requests for the district’s tax identi-
cation number should be forwarded to the district’s business oce unless schools have been provided with a
letter to send out when asked for the number. Many districts have developed a letter for requestors that will
meet their need to document a tax-deductible donation. A sample letter is included at the end of this chapter.
A tax-exempt organization may need an armation letter from the Internal Revenue Service (IRS) to
conrm its tax-exempt status or to show a change in its name or address.Tax-exempt organizations that need
such a letter can contact IRS Customer Account Services by phone at 877-829-5500, or by mail or fax.
A letter or fax requesting an armation letter must include the following information:
• Full nameof the organization
• e organization’s employer identication number (or district’s tax identication number)
• Authorized signature (of an ocer or trustee)
e individual signing the letter from the tax-exempt entity to the IRS must state the capacity in which he or
she is signing (for example, “John Smith, President of the Board of Trustees”).
e IRS armation letter will describe government entities’ exemption from Federal income tax and cite
applicable internal revenue code sections pertaining to deductible contributions and income exclusion. Most
organizations and individuals will accept the government armation letter as proof of an organization’s
tax-exempt status.
Chapter 12
–
Gifts and Donations 149
Donation to ASB
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Donation to ASB
Fiscal Year: _______________
Name of Donor: _____________________________________________________________
Street Address: ____________________________________________________________________
City, State & ZIP: ___________________________________________________________________
Telephone: _______________________________
Description of the donation: (If cash or check, show the exact amount; if other than cash or check, include a
detailed description of each item, including serial number, color, etc.)
Donor’s estimate of value: _________________________________
Purpose of the donation (ASB organization, school site, or district program):
If the donation is for a club or organization that is part of a school’s ASB, indicate the name of the club or
organization and deposit the cash or check into the ASB bank account. Retain this form as a record of the
donation.
If the donation is for the district, either for the use of the school or for another district program, forward the
cash, check, or other item to the district business ofce with this form. Explain below whether the donation is for
the school site or a specic district program.
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
Report prepared by: _________________________________________________________________
Signature, Title and Date
Veried by ASB bookkeeper: _________________________________________________________________
Signature, Title and Date
Donor: ____________________________________________________________________
Signature, Title and Date
Submitted and Approved by:
Student Club Representative: ________________________________________________________________
Signature, Title and Date
150 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: _______________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
Chapter 12
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Gifts and Donations 151
Memorial Fund/Scholarship Fund Information Sheet
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Memorial Fund/Scholarship Fund Information Sheet
Fiscal Year: _______________
Memorial/Scholarship Name: ________________________________________________________________
Year Memorial/Scholarship Established: _______________
Initial Amount: ____________________________
Name of Donor: _______________________________________________________
Contact Name: ___________________________________ Relationship: _____________________
Address: _________________________________________________________________________
City: _______________________________State: _________ Zip: _____________
Telephone: _______________________________
Fax: ____________________________________
Email: ___________________________________
This Gift is in Memory Of: _____________________________________________________
Intended Purpose: _________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
Selection Criteria: (attach application and essay instructions if applicable)
________________________________________________________________________________________
________________________________________________________________________________________
Annual Award: ______________________________________________________________
Special Instructions: _______________________________________________________________________
________________________________________________________________________________________
152 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Report prepared by: _________________________________________________________________
Signature, Title and Date
Veried by ASB bookkeeper: __________________________________________________________
Signature, Title and Date
Principal/School Administrator or Designee: _____________________________________________________
Signature, Title and Date
Presented to ASB on: _____________________________
Date
IRS regulations prohibit donors from selecting scholarship recipients. In some instances, donors
may serve on scholarship selection committees as long as there are at least two other district
representatives.
Donors may not request that their donations be returned to them once deposited by the district.
Donor: ____________________________________________________________________
Signature, Title and Date
Chapter 12
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Gifts and Donations 153
Letter Regarding Tax-Exempt Status
(Use district or school letterhead)
Date
To whom it may concern:
Thank you for interest in supporting our schools. We often receive inquiries about our nonprot status. Please
accept this letter as certication that the Sample USD qualies as a not-for-prot organization. We are a state
educational institution, which is considered a political subdivision of the State of California. Because of this,
we are considered a nonprot state entity rather than a private 501(c)(3) nonprot organization. Donations and
private grants made to our schools are tax-deductible under these statutes.
If you have further questions, please feel free to contact me at (000) 000-0000.
Sincerely,
Name
Chief Business Ofcial
154 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 13
–
Cash Receipt Management and Procedures (Updated 9-2016) 155
Chapter 13
Chapter 13 – Cash Receipt Management and Procedures
Sound cash management procedures are essential for successful ASB operations. e most common
ASB-related nding in a district’s annual audit involves inadequate internal control procedures when
handling cash from the time it is collected until it is deposited into the ASB bank account. Most fraud in
ASB activities is directly related to inadequate or ineective cash or check handling procedures.
Chapter 5 discusses the importance of sound internal control procedures. Sound internal controls for
handling cash discourage theft of ASB funds and protect those who handle the cash. Whenever students
hold a fundraising event or collect cash, the students, with their advisor, should establish and implement
internal controls. e ASB bookkeeper should also establish and implement sound internal controls for the
distribution of cash boxes, and for cash controls (e.g., tickets, receipt books) both before a fundraiser begins
and when it is over and the cash and checks are received to be deposited at the bank. e internal controls
discussed and recommended in Chapter 5 are critical to protect the ASB’s assets (e.g., cash) and to protect
students, employees and others who handle cash from accusations or errors.
Good Business Practices for Cash Procedures
e cash control procedures described in this chapter are easy to implement and follow, and in most instances
the cost is minimal. Each principal/school administrator should ensure that the ASB advisor and students
understand that their fundraiser will not be approved unless cash control procedures have been established
for the event. e ASB advisor is responsible for ensuring that the procedures are followed from the time
the fundraising event begins until it is complete. If an advisor is not willing to accept this responsibility, the
principal/school administrator should not approve the fundraiser and may need to reassess that advisor’s role.
Audit Findings and Preventive Action
In response to audit ndings related to cash control procedures, principals/school administrators often
indicate that they did not have time to implement the right procedures or that implementing the controls
would cost too much. is is not true. As noted earlier, implementing good internal controls for cash
handling frequently involves little or no cost and little additional time if understandable procedures are
available and the individuals involved are trained in their use.
Internal controls not only protect against fraud but also help prevent honest errors and act as a defense for
the innocent when fraud or errors do occur. Each year there are numerous reports of fraud in the handling
of ASB funds. Some reports are not true and may result from a disagreement between students and/or sta.
Cash receipt control procedures provide evidence that cash was handled properly. Without this evidence,
those involved in ASB will not have the information to prove that fraud did not occur. Well planned internal
controls that are consistently followed by students and sta will leave a clear record of who did what,
when, and why. When the principal/school administrator insists that students and advisors follow good
internal control procedures, he or she is protecting the students, the sta and himself or herself against false
accusations if something does go wrong. For this reason, if anyone involved in the fundraiser does not want
to follow sound internal control procedures, that club should not be allowed to hold any fundraising events.
School administrators need to ensure that proper cash control procedures are established and followed at two
stages of cash collection: when the fundraising event is held and the cash and checks are collected; and when
the cash and checks are given to the ASB bookkeeper for deposit into the ASB bank account. is chapter
explains the cash control procedures at both stages.
Cash Control Procedures for Fundraising Events
It is important to be able to tie all proceeds to the specic fundraiser from which they were generated and to
ensure that all proceeds from an event are properly turned in and accounted for. To accomplish this, student
156 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
organizations/clubs, ASB advisors and school administrators must ensure that proper internal controls exist,
including the following:
• Cash control procedures.
• Proper inventory of concession, student store and vending machine items.
• Proper cash handling and physical chain of custody for all cash receipts.
• No commingling of receipts from separate events.
• Immediate delivery of all event proceeds to the ASB bookkeeper or secretary.
• Use of three-part receipts when turning in all event proceeds.
is section describes simple cash control procedures that can be used for any fundraising event. Each control
procedure has strengths and weaknesses, thus dierent control procedures are suited to dierent types of
fundraisers. Nonetheless, it is imperative that some method be implemented that allows for reconciliation
between money actually collected and the fundraiser sales records.
ese cash control procedures are:
• Prenumbered tickets for all sales events.
• A cash register for store-type sales.
• Prenumbered receipt books for all receipt transactions.
• A tally sheet for designated activities.
• Inventory control for vending machines, students stores and concessions.
• Cash boxes to make change and keep the received money safe.
e following table shows six dierent cash control procedures and examples of dierent events where each
procedure may be most eective. However, dierent control procedures can work for almost any event as long
as the procedure is well thought out and followed closely.
Control Procedure Types of Events
Prenumbered Tickets
Dances
Entertainment events
Car washes
Athletic events
Festivals
Cash Register Student store
Concession stands
Prenumbered Receipt Books Publication sales
Sale of advertising space
Tally Sheets
Dances
Car washes
Bake sales
Inventory Control Vending machines
Candy sales
Cash Box Any event
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Cash Receipt Management and Procedures (Updated 9-2016) 157
After a fundraising event is scheduled, the advisor is responsible for ensuring that control procedures are
in place. e advisor should help students select and develop a good business practice for cash receipts and
control procedures, and help implement the correct internal controls once the event begins. No student
should handle cash without direct adult supervision.
e principal/school administrator responsible for reviewing and approving the fundraising activity request
should ensure that the club advisor has developed proper controls as part of their fundraiser planning and
will be able to implement those controls.
Following are detailed steps for how the dierent procedures should be used.
Prenumbered Tickets
1. e ASB bookkeeper (or other person/position responsible for bookkeeping) at the school is responsible
for purchasing prenumbered tickets and storing them in a safe place. Only the bookkeeper and the
principal/school administrator (or designee) should have access to the inventory of ticket rolls.
2. e ASB bookkeeper must maintain a record of the number of rolls of tickets in inventory and the
beginning and ending ticket numbers on each ticket roll. e Ticket Inventory form (presented later
in this chapter) was designed for the bookkeeper to use for this purpose. When a roll of tickets is given
to an advisor for a fundraising event, the beginning number is recorded on the form when the roll is
issued, and the ending number is recorded when the roll is returned to the bookkeeper.
3. At the fundraising event, this cash control procedure involves two people. One person collects
the money and issues the prenumbered ticket as proof of purchase. A second person collects the
prenumbered ticket when the person enters the event.
4. At the end of the fundraising event, the total number of tickets issued is counted and recorded on the
Report of Ticket Sales form. A second person should count the tickets that were collected to verify the
accuracy of the count.
5. At the end of the fundraising event, at least two people should independently count the cash and
checks collected. ey should use the ASB Cash Count form to help with this.
6. e students then enter the amount of the total cash counted on the Report of Ticket Sales form.
7. If the number of tickets sold does not equal the amount of cash collected, the students and the advisor
should determine the reason for the cash overage or shortage immediately after the event.
8. At the end of the event, the advisor should see that the following items are stored in a safe place: cash
and checks, Report of Ticket Sales form, ASB Cash Count form, and the unsold tickets. Each school
must establish after-hours cash security procedures so that cash and checks can be stored in a locked
bag in the school safe until the amounts can be counted and veried with the school bookkeeper.
9. e next school day, the advisor should provide the ASB bookkeeper with the Report of Ticket Sales
form, the ASB Cash Count form, and the remaining tickets. e cash and checks should already be
in the school safe. When the cash and checks are retrieved from the safe, the bookkeeper should issue
a receipt for the cash and checks, but only after the two individuals (the advisor and the bookkeeper)
have counted the dollar amount together and recorded that amount on the receipt. If the advisor is not
able to count the funds with the bookkeeper, another individual must do so; the bookkeeper should
never count funds alone.
10. For events that have tickets of dierent prices, the students should use dierent colored tickets for each
price. e students must account for each roll of tickets separately, but they may use the same cash
count and ticket sales forms.
158 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
11. Event tickets should be kept at least until after the annual audit of the ASB is complete, but not for
more than two years. Some auditors will audit tickets and cash receipts before the end of the scal year,
but other auditors will not audit these until October of the following scal year.
Cash Registers
1. Each time a sale is made, a student/cashier working at the cash register rings up the sale.
2. At the end of the day, the cash register tape total should equal the total of the cash collected.
3. At the end of the day, the total cash in the cash register should be counted and recorded on the ASB
Cash Count form.
4. e advisor should immediately investigate any signicant dierences between the cash register tape
and the amount reported on the ASB Cash Count form.
5. At the end of the day, the advisor should ensure that the cash, the ASB Cash Count form and the cash
register tape are stored in a safe place. Each school should establish after-hours cash security procedures
so that cash and checks can be stored in a locked bag in the school safe until the amounts can be
counted and veried with the school bookkeeper.
6. e next school day, the advisor should provide the ASB bookkeeper with the ASB Cash Count form
and the cash register tape. e cash and checks should already be in the school safe. When the cash
and checks are retrieved from the safe, the bookkeeper should issue a receipt for the cash and checks,
but only after the two individuals (the advisor and the bookkeeper) have counted the dollar amount
together and recorded that amount on the receipt. If the advisor is not able to count the funds with the
bookkeeper, another individual must do so; the bookkeeper should never count funds alone.
Prenumbered Receipt Books
1. e ASB bookkeeper is responsible for purchasing prenumbered receipt books and maintaining an
inventory of all receipt books. e receipt books purchased should contain triplicate copies of each
receipt.
2. e ASB bookkeeper should maintain a log of all receipt books and record the issuance of each book.
e bookkeeper should record the beginning number of the receipt in the book when it is issued to
the ASB advisor and the ending number when the ASB advisor returns it. e Receipt Book Log form
facilitates the recordkeeping.
3. Receipts used for a fundraising event should be in triplicate, with copies issued as follows:
• One copy is given to the person making the purchase.
• One copy is turned in with the cash.
• One copy remains in the book as the historical record.
4. Receipts must always be issued in sequence.
5. e students need to note the following items on each receipt:
• e date.
• e description and number of items sold.
• e total cash collected.
• e name of the person who received the goods.
• e name of the person who prepared the receipt.
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6. If a mistake is made on a receipt, the student should mark the receipt void and issue another. For
voided receipts, two copies remain in the receipt book, and one copy is turned in with the cash to
provide for the continuity of receipts.
7. At the end of the fundraising event, the amount of cash reported on the receipts is totaled and the
receipts are sorted in numerical order. e students must account for all of the receipts that were used
from the receipt book. At the end of the fundraising event, at least two people should count the cash
and checks collected. e ASB Cash Count form should be used for this purpose.
8. If the amount of cash recorded as collected on the cash receipts does not agree with the cash reported
on the ASB Cash Count form, the students and the advisor should determine the reason for the cash
overage or shortage immediately after the event.
9. At the end of the day, the advisor should ensure that the cash and checks, the ASB Cash Count form,
and all receipts (even if voided) are stored in a safe place. Each school should establish after-hours
cash security procedures so cash and checks can be stored in a locked bag in the school safe until the
amount can be counted and veried with the school bookkeeper.
10. e next school day, when the cash and checks are retrieved from the safe, the bookkeeper should
issue a receipt for the cash and checks, but only after the advisor and the bookkeeper have counted the
dollar amount together and recorded that amount on the receipt. e ASB Cash Count form and all
the receipt books must also be returned to the bookkeeper. If the advisor is not able to count the funds
with the bookkeeper, another individual must do so; the bookkeeper should never count funds alone.
Tally Sheets
1. When tally sheets are used as the cash receipt control procedure, two people should be involved: one
person makes a mark on the tally sheet when an item is sold and issues the goods; the other person
takes the cash.
2. e students may use a tally sheet to mark the number of items sold.
3. At the end of the event, the number of items sold is multiplied by the item’s price.
4. At the end of the event, at least two people should independently count the cash and checks collected.
e students should use the ASB Cash Count form to facilitate the counting of the cash.
5. e amount computed on the tally sheet is compared to the amount of the cash reported on the ASB
Cash Count form. If the amount on the tally sheet does not agree with the amount of cash collected,
the ASB advisor and the students should determine the reason for the dierence immediately after the
fundraising event.
6. At the end of the day, the advisor should ensure that the cash, the ASB Cash Count form and the tally
sheet are stored in a safe place. Each school should establish after-hours cash security procedures so that
cash and checks can be stored in a locked bag in the school safe until the amounts can be counted and
veried with the school bookkeeper.
7. e next school day, the advisor should provide the ASB bookkeeper with the ASB Cash Count
form and the tally sheet. e cash and checks should already be in the school safe. When the cash
and checks are retrieved from the safe, the bookkeeper should issue a receipt for the cash and checks,
but only after the two individuals (the advisor and the bookkeeper) have counted the dollar amount
together and recorded that amount on the receipt. If the advisor is not able to count the funds with the
bookkeeper, another individual should do so; the bookkeeper should never count funds alone.
160 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Cash Box
Cash boxes should be checked out from the ASB bookkeeper when needed, and are usually loaded with some
amount of starter or advance cash so that change can be made at events. Cash boxes should always be kept in
the safe between uses. Cash box procedures are important to ensuring the success of the procedures discussed
above (prenumbered tickets, cash registers, prenumbered receipt books, and tally sheets). e security of both
the cash box and the volunteer entrusted with the cash box is essential.
When an event concludes and the funds are counted, volunteers should have access to security personnel to
help them place funds in school safes. After the funds are counted, all of the cash collected is in one place
and is an easy target for theft. If security personnel are not available, another responsible adult should be
available to help escort the cash boxes to school safes. Arrangements should always be made so that volunteers
are never expected to escort money alone. If an escort cannot be obtained, or if the funds cannot be kept in
the safe overnight, the fundraiser should not take place.
Chapter 8 discussed how to use the Revenue Projection form and the Fundraising Event Prot form to
estimate the amount of prot students expect to earn from a fundraising event. ese forms have a place to
report the results of the fundraising event as well as the estimated sales and expenses. e ASB advisor should
help the students complete this form at the end of the fundraising event. is is a sound internal control to
determine that the funds were handled properly and will help students determine what types of fundraising
events are most protable and worth repeating.
Credit and Debit Cards
It is increasingly common for parents to use a credit or debit card rather than writing a check, and ASBs are
often asked if they can accept payment by credit or debit card for a variety of things. e answer depends on
whether the district’s board policy and procedure allow the use of such cards for payment (revenue). If the
district allows payment by credit and debit card, then it follows that, unless policy states otherwise, the ASB
can as well. e ASB should follow all district policies when taking such payments.
Civil Code Section 1748.1 makes it illegal for the retailer (which in this case is the school or ASB) to pass on
card swipe fees to consumers, even though it is legal for the bank to charge such fees to the retailer. However,
a retailer is permitted to increase sales prices to cover the cost of these fees, and/or to oer a lower price to all
purchasers if they pay with cash or a check.
Cash Control Procedures for the ASB Bookkeeper
e ASB bookkeeper is responsible for providing any materials ASB advisors and clubs need for fundraising
events, such as ticket rolls, receipt books and all necessary forms, and for keeping sucient stock on hand.
e ASB bookkeeper is responsible for the cash and checks from the time they are received from the ASB
advisor until they are deposited in the bank.
e principal/school administrator or designee must work with each student organization and school sta to
develop methods for securing cash collected after hours and on non-school days.
e following table identies the dierent internal control measures clubs use for fundraisers and the
documentation that should accompany the cash/checks when they are turned in to the bookkeeper and a
receipt is given.
Cash Control Procedure Documentation
Prenumbered Tickets
All cash and checks collected
All remaining tickets
Report of ticket sales
ASB Cash Count form
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Cash Control Procedure Documentation
Cash Register
All cash and checks collected
The cash register tape
ASB Cash Count form
Prenumbered Receipt Books
All cash and checks collected
All receipt books issued
One copy of the receipt issued
ASB Cash Count form
Tally Sheets
All cash and checks collected
Tally sheets used
ASB Cash Count form
Internal Controls for Cash After Receipt
e following are good business practices and internal
controls for the ASB bookkeeper to follow when handling
the cash and checks after they are received:
1. e ASB bookkeeper should not accept any cash or
checks unless they are accompanied by the appropriate
documents.
2. e ASB bookkeeper should always count the cash in
the presence of the advisor (or designee if the advisor is
not available) when it is turned in. is is also known
as a dual cash count. Although a dual cash count is
always recommended, those in the eld often state
that there is not enough time to do it. Time should be
set aside to count the receipts together because if a
dual cash count is not performed and the advisor and
bookkeeper end up with dierent totals, one of them
may be suspected of wrongdoing. Many schools have
set up times when cash can be brought to the
bookkeeper to be counted in the presence of the
person who brings the receipts. If this is not possible, a
locked bank bag should be used so that there is some
certainty that the money counted and put in the bag
after the event cannot be tampered with until the
bookkeeper is able to count it. When the locked bag is
later opened and the funds are counted, a witness
should be present so that a dual cash count is still
performed.
3. To create a record of receipt of the cash, the ASB
bookkeeper should prepare a written receipt indicating
the amount of cash shown on the ASB Cash Count
form and give a copy of the receipt to the ASB advisor
when the funds are received. e ASB bookkeeper
should use a triplicate receipt book for this process.
Fraud Alert
If the proper documentation is not received
and/or if that documentation does not contain
the initials or signatures of either of the
individuals who counted the funds, there is a
risk that someone may allege that more funds
were raised than the bookkeeper indicates. All
funds should be counted by those performing
the fundraising, even if the funds are only rough
counted. The volunteers counting the funds
may even indicate on the cash count sheet that
funds were rough counted. If a complete and
comprehensive count is not possible late at
night after a long event, counting and initialing
the rough count is preferable to no count at all.
Fraud Alert
The deposit form must be at least in duplicate.
To protect those performing the fund-raising
and the ASB bookkeeper, the fund-raising club
should retain a copy of the deposit form for
comparison to the amount posted to their
club account. When the ASB bookkeeper has
sole custody of the funds raised and the only
supporting documentation, transaction amounts
can be altered and receipts voided or destroyed,
and the opportunity for theft without detection
is signicant. Always have multiple-copy deposit
and fund-raising forms, and always ensure that
one copy is retained before the others are
submitted to the ASB bookkeeper.
162 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
4. e ASB bookkeeper is responsible for endorsing the back of the checks received. Typically, a rubber
stamp is used that states, “For deposit to the bank account of the Sample School.”
5. e ASB bookkeeper is responsible for storing the cash and
checks and the supporting documentation in a safe place
until it is counted in the presence of a witness and deposited
in the bank. Because of the amount of cash often stored on
site, each school should have a safe for cash storage. If the
safe is used almost exclusively for ASB funds, the purchase
of a safe is an appropriate use of student body funds – if
approved by the students.
6. As soon as possible, the ASB bookkeeper should recount the
cash in the presence of a witness and compare this count to
the information turned in by the ASB advisor. is includes
the following:
• ASB Cash Count form
• Cash register tape
• Report of ticket sales
• Receipt book log
• Tally sheet
e bookkeeper should immediately notify the advisor any
discrepancies noted during the cash count. Both the ASB
bookkeeper and a witness should sign the Cash Count form
and initial the dierence.
As soon as the advisor and bookkeeper determine the reason
for the discrepancy, they should report any signicant
discrepancies to the principal/school administrator. e loss
of tickets is the same as the loss of cash. If the remaining
tickets do not reconcile with the cash collected to date,
something has gone amiss and a plan should be developed
to ensure that it does not continue.
7. After the ASB bookkeeper has veried the amount of cash,
the bookkeeper should sign and date the ASB Cash Count
form and provide a copy to the ASB advisor. When the
information on the Report of Ticket Sales form has been
veried, the ASB bookkeeper should sign and date the form
and provide a copy to the ASB advisor. is information is
the evidence that the amount of cash received by the ASB
bookkeeper agrees with the amount the ASB advisor turned
in.
8. Deposits should be made to the ASB bank account at least
weekly, though within two to three school days is preferable.
Avoid leaving money at a school over the weekend or holidays
because many thefts occur during those times. If money must
be left at school during those times, ensure that there is a
procedure for securing the funds in the school safe.
Fraud Alert
Trusting advisors too often leave funds
unattended on the ASB bookkeeper’s
desk. When the ASB bookkeeper
returns, the funds have been taken.
When the ASB bookkeeper is not
available, assign another individual to
receive the deposit and sign for the
funds received. As a second level of theft
deterrence, install surveillance cameras.
Many times an ASB bookkeeper has been
falsely accused of theft when students,
teachers, parents or others have been
the criminals. Do not leave money
unattended.
Fraud Alert
Ensure that the total of the checks and
cash received agrees with the total
collected. Would-be thieves swap
receipts for checks with those for cash,
enabling them to replace cash with checks
received and pocket the cash. Many cash
count forms are designed to verify that
the total of the numbered receipts is the
same as the combined total of cash and
checks; however, this will not stop fraud.
All numbered receipts should be
accounted for using beginning and ending
numbers from the prior deposit and for
completeness with the current deposit.
There should be no missing receipt
numbers, and cash and check receipts
should be matched within the cash and
check category totals. Finally, the name
on the check should be matched with the
name on the receipt. To commit fraud,
most perpetrators of fraud need to have
several event deposits available and the
time and opportunity to mix and match
checks and cash as needed. Good ASB
bookkeepers will notice that they have
not received funds for activities they
know have occurred and will notify the
site administrator and activities director
of any patterns observed.
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9. When the funds have been deposited, the ASB bookkeeper should retain a copy of the deposit slip
with all of the documentation from the fundraising event. is is important so that the auditors can
determine when the fundraising proceeds were deposited and compare the amount deposited to the
amount the ASB advisor turned in.
10. e ASB advisor is responsible for maintaining the stock of ticket rolls and receipt books and updating
the Ticket Inventory and Receipt Book Log forms whenever tickets or receipt books are used. e ASB
bookkeeper must also maintain a master log of receipt books and ticket rolls.
Petty Cash and Change Accounts
Petty Cash
ere are reasons for establishing a petty cash fund for ASB operations, such as to make immediate cash
payments of a small amount. ese expenditures require the same documentation and the same prior
approval as other disbursements. Petty cash accounts should be established only in ASBs with the strongest
of internal controls and where authorized by district board policy. An ASB cannot open a petty cash fund
without district oce approval.
Change Account
A change account is normally checked out from the bookkeeper for individual fundraisers or activities
and should be used solely for making change. Expenditures should not be made from this account under
any circumstances; that is what the petty cash account is for (if one is authorized). When the fundraiser is
complete, the change account should be deposited back into the bank account.
General cash control procedures for petty cash and change accounts include the following:
1. Security: Must be secured in an approved, locked
safe at the end of each school day and on weekends.
Must be in a locked, supervised drawer or le cabinet
with controlled access when in use during school
hours or during a fundraiser. A lockable cash box
should be used to ensure physical security of the cash.
2. Accountability: Cash balances must always equal
their authorized value, plus any receipted deposits or
minus any receipted disbursements.
3. Control: A responsible faculty member from the
school must sign out the change box (cash) from
the bookkeeper; this should be permitted only for
approved fundraisers.
4. Authorizations to increase cash balances:
Occasionally it may be necessary to temporarily
increase the school’s on-hand change box balances
above the approved limit. e request to do so
should go to the district’s business oce and should
include justication for the temporary increase and
a projected date that the balance will be returned to
its original value.
Fraud Alert
Fraud perpetrators will set up suspense and
clearing accounts to move funds in and out
of club accounts. When a perpetrator nds a
club that is not monitoring and reconciling its
nancial activities, funds can be cleared to the
club’s detriment. If a club notices that their
account is incorrect, the perpetrator makes
a correction and proceeds to abuse another
club’s account. Requiring the ASB bookkeeper
to obtain signatures indicating that a transfer is
approved and documentation retained will make
any unauthorized transactions stand out. Printing
the detailed transaction report of all clearing and
suspense accounts monthly (or at least semian-
nually) will also identify activity even when the
ending balances are zero.
Fraud Alert
Be on the lookout for inter-club transfers. The
authorization procedures recommended for
clearing and suspense accounts also apply to
inter-club transfers. No inter-club transfer should
be allowed unless there is prior authorization for
it in the ASB minutes.
164 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Clearing Account
ASB accounts are not clearing accounts, and the ASB bank account should not be used for any transactions
other than ASB transactions. Districts establish clearing accounts to set certain nancial transactions apart
from regular accounts so that dierent types of transactions are not commingled. ey are temporary
holding accounts, so a balance will not exist at the end of any scal year because all cash will have been
transferred to the appropriate account. ese transfers should be made monthly.
For example, if cash is collected at a school for a library ne, it should not be deposited into the ASB account
and then transferred to the district’s general fund. Rather, it should be deposited to a clearing account (if
established), then transferred to the general fund at a later time.
When clearing accounts are used and transfers made, the journal or transaction entry used to make the
transfer should be properly documented, with the signatures of the supervisor and the employee making the
transfer axed to the printed entry. At the end of each month, any balance remaining in the clearing account
should be identied by printing the account balance and noting on the document the reason the balance
remains and a list of the supporting documentation needed to conclude the use of the clearing account.
Taxes
Although school entities are exempt from federal and state income taxes, as discussed elsewhere in this
manual, they must collect and pay California sales tax on taxable items they sell unless those sales are
irregular or intermittent.
If tax is paid when the goods to be sold at the fundraiser are purchased, only the dierence between the
purchase price and the selling price is subject to sales tax, so this is the amount that will need to be included
on the sales tax return. ose involved with ASB should check with their district’s business oce to see if this
sales tax information can be combined on the sales return that is completed by the business oce, because
many business oces want to include all of the schools’ tax information on one return. Chapter 18 contains
more detailed information regarding taxes.
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Tally Sheet
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Tally Sheet
Fiscal Year: _______________
Fundraiser: __________________________________________________________
Date of Fundraiser: ________________________
(A)
Item Sold
(B)
Tally Marks
(C)
Total Tally Marks
(D)
Sales Price
(E)
Extended Total
$ $
$ $
$ $
$ $
$ $
(F) Grand Total $
(G) Cash Receipts $
(H) Difference $
(A) Description of each item being sold
(B) Tally marks made, one mark for each item sold
(C) Number of tally marks for that item
(D) Individual item sales price
(E) Total of (C) multiplied by (D)
(F) Grand total—sum of all extended values in (E)
(G) Cash receipts—cash count of total cash from sales, less any startup cash
(H) Difference—if (F) does not equal (G), this is the difference between the two
Do not force the balance on this sheet. If there is an out of balance, it should be researched and resolved.
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
166 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Fundraising Event Prot
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Fundraising Event Prot
Fiscal Year: _______________
This form is to be completed in a two-step process: estimates prior to the event; actuals and differences after
the event
1. Prepare the estimated sales, cost of sales and net prot. Sign and submit a copy to school secretary or
nance clerk.
2. After the event, complete the actual sales and differences. Sign, have reviewer sign, and submit one copy
to the business ofce (lead accountant) and keep one copy for your student body records.
Student Club: _______________________ Name of Event: _____________________
ASB Advisor: _______________________ Date of Event: ______________________
Part I: Revenue
Estimated Sales Actual Sales Difference
Revenues Number Unit Price
Total
(# x price) Number Unit Price
Total
(# x price) Units Dollars
No. of Tickets Sold
No. of Items Sold
Other Revenues:
Advertising
______________
______________
______________
Total all revenue
Loss Items (explain)
Given Away (explain)
Lost (explain)
Stolen (explain)
Damaged/Returned
Remaining/Unsold
Chapter 13
–
Cash Receipt Management and Procedures (Updated 9-2016) 167
Total all losses
Total Revenue
(Revenues–Losses)
Part II: Expenses
Estimated Cost of Sales Actual Cost of Sales Difference
Expenses Number Unit Price
Total
(# x price) Number Unit Price
Total
(# x price) Units Dollars
Cost of Items
Cost of Items
Other Expenses:
Supplies
Advertising
Custodial OT
Fees
Equipment
______________
______________
______________
Total all Expenses
Part III: Actual Net Prot for this Activity _________________________________
Net Prot is the difference between Total Revenues and Total Expenses.
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
168 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Report of Ticket Sales
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Report of Ticket Sales
Fiscal Year: _______________
Fundraiser: ________________________________________________________________
Date of fundraiser: ________________________
Person(s) selling tickets: ______________________________________________________
Signature of person(s) selling tickets ____________________________________________
Note: This form was designed for one ticket color. If more are used with different prices, use additional Report
of Ticket Sales sheets and summarize all sheets at the bottom.
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
Chapter 13
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Cash Receipt Management and Procedures (Updated 9-2016) 169
Dance Ticket Tally
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Dance Ticket Tally
Fiscal Year: _______________
Dance Ticket Sales
As payment is received by another party and each student enters through the door, please mark each payment
as a tick mark, and count by ves.
Date: ______________________ Location: ____________________________________________
Preparer: _____________________________________________________
$3 Tickets $5 Tickets
170 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
$3 Tickets $5 Tickets
Totals:
Total Collections Should be:
x $3 = + x $5 = =
Less: Amount collected at the door:
Difference (short/over):
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
Chapter 13
–
Cash Receipt Management and Procedures (Updated 9-2016) 171
Ticket Inventory
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Ticket Inventory
Fiscal Year: _______________
Fundraiser: ________________________________________________________________
Date of fundraiser: _________________________
Color of ticket roll: ____________ Numbering: _______ to: ______
Date Event
Beginning
Number
Ending
Number
Number of
Tickets Sold
A separate ticket inventory control log must be used for each ticket roll. Use multiple sheets until the entire
ticket roll is consumed.
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
172 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Receipt Book Log
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Receipt Book Log
Fiscal Year: _______________
Name of person completing form: ________________________________________
Date completing this form: _________________________
Receipt Book
Number
Receipt
Number
Sequence
Issued To Date Issued Date Returned Receipts
Used
For each approved ASB activity that will issue receipts as their internal control measure, the receipt book should be
controlled by the ASB bookkeeper or other designee and signed out prior to the event using this control log. When the
event is over, the unused portions of all receipt books issued are to be returned and this control log completed.
Chapter 13
–
Cash Receipt Management and Procedures (Updated 9-2016) 173
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
174 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
ASB Cash Count
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
ASB Cash Count
Fiscal Year: _______________
Name of person completing form: _______________________________________________
Date completing this form: ___________________
(A)
Denominations
(B)
Number of Bills or
Coins
(C)
Total Amount
Collected (A times B)
Totals
from
Receipts
Adding
Machine
Tape
Pennies .01
Nickels .05
Dimes .10
Quarters .25
Half dollars .50
Dollar coins 1.00
Dollar bills 1.00
Five dollar bills 5.00
Ten dollar bills 10.00
Twenty dollar bills 20.00
Total amount of all cash $
(D)
$
Total
Cash
Receipts
Total amount of all checks $
(E)
$
Total
Check
Receipts
Total amount of all cash
and checks $
(Pre-record amount and initial
the amount of change funds
received)
Less startup change fund
amount $
Initial
upon
receiving
change
funds
Total net amount of all cash
and checks
Note
ASB
Bookkeeper
Conrm that total “cash & coin” receipts equal total amount of all cash. (D)
Initial
Conrm that all check receipts agree to attached receipts. (E)
Initial
Conrm that all check payees individually agree to attached receipts.
Initial
Conrm that all receipt numbers are sequential, with none missing.
Initial
Follow up on ANY differences.
Chapter 13
–
Cash Receipt Management and Procedures (Updated 9-2016) 175
Cash Count form prepared by: ________________________________________________________
Signature, Title and Date
Signature of fundraising staff counting the cash: ___________________________________________
Signature and Date
Signature of fundraising staff counting the cash: ___________________________________________
Signature and Date
Veried by ASB Bookkeeper: __________________________________________________________
Signature, Title and Date
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
Supporting documentation:
(Must be included when this form is turned in)
Cash register:
Report of Ticket Sales form
Unused tickets returned
Prenumbered receipt books:
Cash register tape
Copy of each receipt issued
Tally Sheet:
Copy of each receipt issued
All receipt books returned
All receipt books accounted for
Completed tally sheet/sheets
176 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Bank Deposit
DEPOSIT TICKET
BANK NAME
ADDRESS
DATE: __________
DOLLARS CENTS
CURRENCY 2784 00
COIN 348 92
1. 18 50
2. 34 00
3. 57 02
4. 91 45
5. 35 84
6. 85 44
7. 18 33
8
9.
10.
340 58
3473 50
SUBTOTAL
(CHECKS)
TOTAL
DEPOSIT
SCHOOL NAME
SCHOOL ADDRESS
BANK ACCOUNT NUMBER
TAPE TOTALING ALL RECEIPTS
1,547.33 +
1,052.10 +
874.07 +
3,473.50 +
TAPE TOTALING DEPOSIT
2,784.00 +
348.92 +
340.58 +
3,473.50 +
TAPE TOTALING CHECKS
18.50 +
34.00 +
57.02 +
35.84 +
91.45 +
85.44 +
18.33 +
340.58 +
Chapter 13
–
Cash Receipt Management and Procedures (Updated 9-2016) 177
Summary Recap – ASB Deposit
Name of School: ___________________________________________________
Name of Club: _____________________________________________________
Summary Recap - ASB Deposit
Fiscal Year: _______________
Date Funds
Received
Received from
Advisor/Teacher
Receipt
Number
Deposit for
(Identify Club
or Activity)
Amount Received
Total
Deposit
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Veried by ASB Bookkeeper: _________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
178 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 14
–
Allowable and Questionable Expenses 179
Chapter 14
Chapter 14 – Allowable and Questionable Expenses
Anything purchased by a district must be in compliance with the law and local board policy, and cannot be
considered a gift of public funds. Because ASBs are part of the district, ASB organizations must follow the
same laws and local policies, as well as ensure that the funds are spent appropriately. e principal/school
administrator and ASB advisors are responsible for ensuring that ASB funds are used to purchase goods and
services that promote the students’ general welfare, morale and educational experiences. In general, ASB
expenses that meet these criteria are allowable if they are directly linked to the students’ benet. With few
exceptions (such as awards and scholarships, which are discussed later in this chapter), ASB expenditures
will benet a group of students rather than individuals. e expenditures must also be for goods and services
other than those the school entity should provide from its own funding sources. us if the expenditure is
the district’s responsibility, or the district has paid for the expenditure in the past, or the ASB is being asked
to pay for the item or service because of district budget cuts, it is probably not an allowable ASB expenditure.
e district is responsible for the curriculum of the class or program; ASBs are supposed to pay for extras,
meaning items in addition to the regular curriculum.
In high schools, middle schools and community colleges, the students should be the primary authority that
decides how the ASB funds are spent. is helps ensure that the interests of the students are protected. In
elementary schools, the students are often not involved in the decision-making and operations. Regardless of
the school type, the principal/school administrator or designee is responsible for protecting the interests of the
students and ensuring that the funds are spent for their benet. Although the primary decision maker may
vary depending on the type of ASB, the types of expenditures that should be made with ASB funds remain
the same for all ASBs.
Questions often come up about whether an item is an appropriate use of ASB funds. In these instances, the
principal/school administrator or the ASB advisor should contact the appropriate sta in the district business
oce for guidance.
Examples of Allowable Purchases
Following are some examples of the many types of items generally considered allowable expenses from
ASB funds. ese examples include frequently questioned items; they do not include obviously appropriate
ones, such as supplies for a student store, school photos, or a disc jockey or decorations for a school dance.
ese and similar expenditures that enhance students’ educational experience and are directly linked to the
students’ benet are other than what the school entity must provide from its general funding sources.
e following are examples of appropriate expenditures using ASB funds:
• Magazines and newspaper subscriptions for student use
• Playground equipment
• Library books
• Supplemental equipment for student use that is not normally provided by the school entity, such as
telescopes and aquariums
• Field trips/excursions and outdoor education/science camps
• Extracurricular athletic costs, including costs for ticket sales, game ociating and security
• Costs for student social events
• Scholarships (under specic circumstances)
• Awards, if there is a district policy allowing them
180 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• Substitute teacher, if the teacher’s absence is due to an authorized ASB activity
• Indirect charges
Examples of Prohibited Purchases
Expenditure of student funds for the following items is not usually allowable because they do not directly
promote the general welfare, morale or educational experience of the students, or are considered a district
responsibility, or do not benet a group of students (with some exceptions), or are a gift of public funds:
• Salaries or supplies that are the responsibility of the district. Some examples are teachers’ salaries
and negotiated stipends, curriculum supplies, and oce supplies and equipment. However,
substitute teachers’ pay may be allowed if they are substituting because of an ASB-related activity.
• Repair and maintenance of district-owned facilities and equipment. An exception might exist for
equipment that the ASB donated to the district and for which the donation agreement includes a
provision that the ASB will maintain the donation in the future, including paying for any repair,
maintenance or replacement.
• Permanent buildings
• Articles for the personal use of district employees
• Expenses for sta meetings
• Expenses for faculty meetings
• Expenses for booster clubs, foundations, auxiliary organizations and other parent-teacher
organizations
• Large awards, unless board policy states otherwise
• Gifts of any kind
• Employee appreciation gifts or meals
• Employee clothing/attire
• Donations to other organizations, except in special circumstances
• Donations to families or students in need
• Cash awards to anyone, because internal controls cannot be established and documented, unless a
district’s board policy allows such awards (FCMAT does not recommend this).
Because student body funds are to benet students as a group and not individuals, awards and scholarships
generally are discouraged but are allowable as discussed later in this chapter.
Questions often arise about the giving of gifts, which has a personal as opposed to public character. Contrary
to what often occurs in the eld, gifts are not allowable, even if the amount is small. Gift certicates are
ordinarily characterized as gifts of public funds even when purchased for an event with a public purpose,
because they confer a tangible private benet on an individual. To avoid making a gift of public funds with
gift certicates, ask merchants or individuals to donate gift certicates. Although some school administrators
may feel that the school or district benets from positive relationships established by sending gifts to students,
parents, board members or others, the real public relations value is of primary benet to the respective
individual leaders involved, not to the school entity itself as an institution. If students want to give gifts, use
private funds, not public funds.
Discussions regarding gifts often conclude that trivial or insignicant gifts are acceptable. However, given
modern governmental accounting practices and regulations, conict of interest law and criminal law,
FCMAT’s recommendation is that such expenditures of public funds or use of public funds in any amount
Chapter 14
–
Allowable and Questionable Expenses 181
can never be considered trivial or insignicant. e law clearly regards the misappropriation of public funds
as a criminal act, with no minimum monetary limit specied, so it is best to avoid gifts of any amount.
Donations
Donations to nonprot organizations and students or families in need usually are not allowable because
they are considered a gift of public funds, no matter how worthy the cause. ASB funds are legally considered
public funds because they are raised through the district’s tax identication number and under its nontaxable
status. In general, fundraising that occurs on campus should be for the benet of the ASB and not for other
organizations. However, a student group may organize a fundraiser to support an outside organization such
as a charity as long as the fundraising event is clearly identied as raising funds to donate to that charity.
All donations should be in the form of checks made payable to the charity and should be picked up by or
delivered directly to the charity so that funds are not deposited into the ASB account. If it is not possible to
have the checks made directly to the outside organization, open a trust account within the ASB specically
for these donations (with district governing board approval), then write a check to the organization and close
the account when the fundraiser is over. It is crucial to ensure that the district’s governing board (not its
designee) approves this fundraiser and that all paperwork associated with the fundraiser clearly documents
that the only funds donated to the outside organization were those raised for that specic purpose. No funds
from other clubs, inactive accounts, or fundraisers not approved by the governing board should be donated to
outside organizations.
Another viable option is to work with a parent group that has its own tax identication number and sucient
internal controls and ask them to operate the fundraiser because groups such as this are not subject to the
rules regarding gifts of public funds.
Many schools, especially elementary schools, like to hold what is often called a penny drive, during which
students put collected pennies or other coins in jars and the money is then given to a designated charity.
ese are allowable but should be limited in their frequency, and the coin jars must be kept secure. Rather
than depositing coins directly into the ASB account, ask the bank to count and issue the money directly
to the charity, or use a coin counting machine. If the funds will be deposited into the ASB account, ensure
that the governing board has approved the fundraiser. is is because if the governing board has determined
that a specic expenditure will benet the education of students by approving it, they have justied the
expenditure as serving a public purpose and thus the expenditure is not considered a gift of public funds in
the eyes of most courts.
e normal rules regarding prior approval apply to donation disbursements: as with all ASB expenditures, the
approval should be documented using the expenditure approval form signed by the student representative,
advisor and principal/school administrator, and noted in the club meeting minutes.
Under no circumstance should student groups donate funds to an individual needy student or family, or
use school equipment for a charity fundraising drive. ose donations are not tax-deductible unless a legal
foundation has been established for that student or family.
e issue of a gift of public funds arises when a check is written from ASB and given or donated to another
organization. is is why a food or can drive is allowable: rather than money from the ASB being used for the
charity, students bring food from home to donate to the charity.
Scholarships
As discussed in Chapter 8, the student council may accept scholarships and trusts from outside donors
(individuals or organizations) with the approval of the governing board or authorized designee. e
acceptance should be made in writing and should clearly describe all the conditions the donor is requesting.
ese funds should be accounted for separately in a trust account within ASB and used specically for
scholarships. If the donor does not establish criteria for award of the scholarship, the principal/school
administrator should work with a committee that includes at least one student representative to determine
182 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
the criteria for the scholarship. A donor may not donate toward a specic student’s scholarship. If a donor
wishes to fund a specic student’s higher education, the donor should transact directly with the student; such
donations are not tax-deductible.
Scholarships paid from student body fundraisers rather than from outside donations are normally not
allowable because they do not benet a group of students. School district governing boards may sometimes
approve fundraisers specically to raise scholarship funds, or may approve a club whose sole purpose is
to raise scholarship funds. If governing board approval has been received, a separate trust account should
be opened within the ASB specically for these donations, with board approval, and then closed after
the scholarship(s) are paid. It is critical to ensure that the board approves this fundraising and to clearly
document that the only funds raised for scholarships are those that were fundraised and paid out for that
specic purpose. No funds from other clubs or accounts should be used for scholarships.
If scholarships are to be allowed, the district should set guidelines regarding how many will be allowed
annually. ere should be established selection criteria for all scholarships. Cash awards are not allowed;
rather, scholarship checks should be made payable to an institution of higher learning or a college bookstore,
to be used toward tuition or books and supplies.
e normal rules regarding prior approval also apply to scholarship disbursements: as is the case with all ASB
expenditures, the approval should be documented on the expenditure approval form by the signatures of the
student representative, advisor and principal/school administrator, and noted in the club meeting minutes.
Awards
Education Code section 44015 authorizes school districts to make awards to employees for exceptional
contributions and to students for excellence. If items are intended as some form of employee or student award,
it also requires the governing board to adopt rules and regulations concerning such awards. Such awards shall
not exceed $200 unless a larger award is expressly approved by the governing board. Awards to community
members, parents or volunteers are not considered authorized because they are not included as allowable in
the Education Code.
To award to employees for exceptional contribution, the governing board of a school district must nd that
the employee did one or more of the following:
• Proposed procedures or ideas that thereafter are adopted and eectuated, and that resulted in
eliminating or reducing district expenditures or improving operations.
• Performed special acts or special services in the public interest.
• By their superior accomplishments, made exceptional contributions to the eciency, economy, or
other improvement in the operations of the school district.
Because this manual’s subject is ASB, FCMAT recommends that ASB funds be used for awards to pupils for
excellence, if approved and in accordance with board policy. Awards to employees for exceptional contribu-
tions are best made from district funds because the intent is that ASB funds are to be used for students.
us, if a governing board adopts rules and regulations before any awards are made, a district or ASB
can recognize superior accomplishments of any employee or student within the guidelines and provisions
contained in the applicable district policies, rules and/or regulations. In the absence of applicable policies,
rules and/or regulations, no district ocial can make the award and no one can legitimately purchase the
award.
Life transition events such as birthdays, weddings, funerals, holidays and other similar circumstances can
happen to anyone and so cannot be considered superior accomplishments, or merit an award.
Chapter 14
–
Allowable and Questionable Expenses 183
Awards are often signied by letters of commendation, board resolutions, trophies, certicates, plaques,
medals, badges, pins and the like. ey may also be in the form of a gift certicate or a scholarship, within
the statutory monetary limits, if the governing board has approved such items as allowable awards and if
IRS reporting requirements are followed. e board may also approve an expenditure for owers or candy as
part of an award, which is appropriate only if the school district’s board policy on awards complies with the
Education Code and IRS regulations. FCMAT recommends that the district’s board policy allowing awards
specify what is considered an allowable award.
Mugs, cards and similar items given to promote goodwill or positive relations between either the district and
its employees or between sta and students are not considered awards. e expenditure of public funds to
promote positive employer-employee and/or sta-student relations does not serve a direct and/or substantial
public purpose, so would likely violate the gift of public funds provisions contained in the California
Constitution.
IRS Publication 15b provides guidance to employers regarding how to report awards (tangible personal
property) given to an employee as an award for either length of service or safety achievements. Publication
525 provides guidance to employees regarding how to report awards received.
Generally, cash or cash-equivalent awards to employees must be reported as taxable income. If the award is
provided in the form of goods or services, the fair market value of the award is reportable. Tangible personal
property awards (other than cash, gift certicates, other cash equivalents or certain intangible property) for
certain service or safety achievements are excludable up to certain amounts. Refer to the IRS publications for
more information on the topic of employee awards and reporting of the awards for tax purposes.
Employee Appreciation Meals
A 1978 legal opinion issued by the California attorney general concluded that a governing board is not
authorized by Education Code section 44032 to provide for the reimbursement to its employees for the cost
of meals purchased for community leaders, including public ocials, regardless of whether such acts are
deemed to be in the best interest of the school district. e attorney general concluded that the foregoing
expenditures were not “actual and necessary” expenses within the meaning of Education Code section 44032
and thus could not be reimbursed. Absent special circumstance, it is unlikely that a court would conclude
that an expenditure for employee appreciation meals, which do not qualify as awards, would serve a direct
and/or substantial public purpose. e same rule applies for employee appreciation gifts because they also do
not serve a direct and/or substantial purpose, and do not qualify as awards.
Employee Clothing/Attire
ere is no specic statute or case authorizing the expenditure of public funds for items such as employee
jackets, sweatshirts or T-shirts, because these items benet an individual and could be considered a gift
of public funds. e only possible exceptions might arise when the clothing or equipment is necessary or
required for the employee (e.g. athletic coach, club advisor) to perform his or her duties in that capacity,
or where the clothing or equipment is properly given as an award under Education Code section 44015.
However, FCMAT does not believe that it is appropriate to charge employee expenditures or awards to ASB
funds and recommends that they be charged to district funds because the intent is that ASB funds be used
for students.
Indirect Charges
e question sometimes arises concerning whether a district may charge ASB funds an indirect cost rate as
it does with certain local, state and federal programs. Indirect costs include services that support but are not
directly attributable to ASB, such as insurance, utilities, management and supplies. Although it is allowable
to charge the ASB an indirect charge, this should be discussed with the schools so that they can plan for that
expenditure and understand what that charge pays for. Ensure that the board policy regarding ASB includes
this information. As with all ASB expenditures, any such charge would need to be approved in advance.
184 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Good Business Practices
Because the distinction between allowable and prohibited expenses can be confusing, what guidelines or
practices should an ASB consider? As with many business situations, the use of common sense is important.
e ASB can also ask the rhetorical question, “If this situation were to be published on the front page of the
local newspaper, would the same action still be recommended?”
Questions to ask when deciding whether or not an expense would be allowable include the following:
• Will the expenditure be used to promote the general welfare, morale and educational experience of
the students?
• Have the students agreed to the expenditure before it occurs?
• Is this expenditure a responsibility of the district?
• Has the ASB or the district paid for this in the past?
• Is the ASB being asked to pay for this because the district is making a budget cut?
• Is this something the district should provide, or is it an extra that the students want?
• Who will use the item?
• Will a group of students benet?
Here is more specic advice on recommended good business practices.
e district should:
• Establish board policy or administrative regulations with guidelines regarding allowable and
prohibited expenditures.
• Establish board policy or administrative regulations regarding procedures to follow if questionable
expenditures arise.
• Conduct regular reviews and updates of governing board policies and administrative regulations on
this and all ASB matters.
• Include a statement in the ASB constitution setting parameters for determining the appropriateness
of expenditures.
• Assign an employee position in the district’s business oce to provide assistance when questions
arise.
• Provide annual training on expenditure guidelines, sponsored by the business oce, for all sta
members and students with ASB management responsibilities.
Chapter 15
–
Contracts 185
Chapter 15
Chapter 15 – Contracts
An ASB will normally need to execute contracts for goods or services. A contract is a legally binding
document that must be carefully reviewed prior to execution. Like any other contracts, all contracts related to
ASB must be in accord with the district’s rules regarding who is authorized to execute and/or sign contracts.
Some districts’ governing board policies clearly describe how all contracts, including ASB contracts, are to
be managed from beginning to end. Other districts’ policies are completely silent regarding ASB contracting
practices. If the board policies and administrative regulations are silent regarding ASB contracting practices,
existing policies for other district contracts should be followed (e.g., if the superintendent and chief business
ocial are the two administrators listed in policy who can sign all district contracts, then those are the only
individuals who can sign ASB contracts, unless the policy specically states something dierent for ASB).
is chapter suggests best practices to facilitate ASB contracts and to protect the ASB, the students and their
assets.
Contract Situations
An example of an ASB organization contract is an agreement for vending machine management as a
fundraising vehicle for the student council. Additional contracts the ASB may enter into include yearbooks,
disc jockeys, and picture sales, as well as other activities.
Some contract situations may be single events while others are subject to ongoing contractual agreements,
such as yearbook and picture sales or events that repeat throughout the school year.
It is important to remember that any document that requires one party to do any specic action and receive
consideration of any kind in return is considered a contract, regardless of what the document may be called.
Contracts oblige the student organization to pay for goods or services, or they might guarantee payment to
the student organization for allowing access or advertisement. ese documents may be called many things,
including agreements, letters, memoranda of understanding, and grants, but all are contracts and thus board
policy must be followed when they are agreed to.
Potential Problem Situations
As previously mentioned, a contract is a legally binding document. Some ASB organizations have found
that the contracts they executed did not adequately protect their interests and the organization lost money.
Organizations also often nd that the employee signing the contract did not have the authority to do so.
In other cases, questions were raised about the propriety of the contract. For example, was it entered into
impartially or was the vendor a relative of the assistant principal or another sta member? Questions to
consider include the following:
• Are the contract terms and conditions stated clearly?
• Does the contract conform to board policies and regulations?
• Did the business oce review the contract?
• Did legal counsel review the contract?
• Does the contract contain appropriate indemnication language to protect the ASB?
• Are there adequate insurance terms and hold harmless clauses in the contract? Who do these
clauses protect?
• Does the contract have renewal provisions? Are they carefully scrutinized before the contract is
signed?
186 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• Did the person signing the contract on behalf of the ASB have signatory authority? Up to what
dollar amount do they have authority to sign?
• Are there adequate funds to pay all costs for the contract? Have these funds been budgeted and
approved by the students?
• Is the contract subject to the bid limit?
Role of the Business Ofce
Because student organizations are considered part of the school entity, the district’s business oce has the
same responsibility and authority over ASB contracts as it does over the contracts of any other district entity.
is often includes the following:
• Risk management review for potential liability and any indemnity from contracts.
• Purchasing review to ensure that terms are clearly stated and understood.
• Business services review to ensure that nancial considerations are clear and have been fully
factored into the decision.
• Business services contacting the district’s legal counsel for advice, if necessary.
For these reasons and because of the complexities of contract law, the ASB organization should have
contracts, particularly long-term and ongoing contracts, reviewed by the district’s business oce before the
contract is signed by the appropriate employee.
A supportive and informed business oce can provide counsel and assistance in many ASB contracting
matters. Several steps in contracting require expertise in specialized business areas. Many purchasing
departments assist the ASB with dening specications, requests for proposals, requests for bids, and
evaluation of responses from vendors and bidders. e district’s legal counsel may need to review the terms
and conditions of the contract because of its size and complexity, or because such a review is mandated by
governing board policy. e district’s risk manager is often involved in various aspects of ASB contracting
as levels of insurance, coinsurance, hold harmless or other indemnication terms are considered. Standard
contracts should be developed for common ASB activities, such as disc jockeys for dances.
Signatory authority for district contracts, including the ASB contracts, is the prerogative of the governing
board. is authority may be limited to certain individuals based on the monetary amount. For instance, in
one district, all contracts for more than $5,000 must be signed by the chief business ocial (CBO), while
ASB contracts for less than $5,000 may be signed by the principal/school administrator. Individuals who
sign contracts without proper authority assume personal responsibility. Students are never allowed to sign
contracts on behalf of the ASB.
Uncompensated Service Agreements
Sometimes an organization and/or a company wants to enter into an agreement with a student organization/
ASB to provide specic services free of charge. Although these organizations are not requesting compen-
sation, it is a good business practice to use some type of agreement/contract so that terms can be specied and
issues of insurance and ngerprint clearance addressed. ese agreements will usually be used for ongoing
programs involving regular interaction with district students, but may also be used for one-time events.
e primary concern is exposure to liability. School administrators should seek guidance from the district’s
CBO whenever an uncompensated service for any event is discussed and prior to any agreement. A district
administrator, such as the CBO, should be responsible for approving any uncompensated service agreements.
Chapter 15
–
Contracts 187
Booster Clubs, Foundations, Auxiliary Organizations and other Parent-Teacher
Organizations
Booster clubs, foundations, auxiliary organizations and other parent-teacher organizations are independent of
both the district and the student organizations/ASB. Booster clubs, foundations, auxiliary organizations and
other parent-teacher organizations must enter into their own contracts or agreements with external organiza-
tions and must not be appended to or be part of district or student organization contracts. Because many of
these nonstudent organizations are organized as distinct 501(c)(3) not-for-prot organizations and have their
own tax identication number, it is important that their operations remain separate and distinct from the
district and from student organizations and that they not use the district’s tax identication number for any
of their operations.
Good Business Practices
To assist the ASB leaders and advisors in contract matters, the district should have procedures and policies in
place regarding the following:
• Clear identication in board policy for ASB contracting authority.
• Dened responsibility and support role for key district sta members, such as the following:
• ASB advisor
• Principal/school administrator
• Business oce sta
• Chief business ocial
• Risk manager
• Legal counsel
• Purchasing ocer, with responsibility for:
• Identication of service or product with clear specications
• Solicitation and evaluations of proposals and bids
• Selection of the best proposal
• Contract Negotiation:
• Terms and conditions
• Price
• Deliverables
• Indemnication
• Escape or termination provisions
• Renewability
• Mandatory review by the business oce of all contracts for more than a certain dollar amount.
• Standard contracts for annual activities and services, such as disc jockeys, pictures and yearbooks.
• Limitation of contract term to one year.
• Ensure that the activity has been approved and budgeted by ASB.
• Ensure that all contracts are reviewed for compliance with the bid limit. Pursuant to the Public
Contract Code, some bid limits change annually, so it is critical that someone in the business or
188 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
purchasing department review the contract to ensure compliance. As of January 1, 2014, the bid
limit was raised to $84,100 for the following:
• e purchase of equipment, materials, and supplies;
• Services, except construction services; and
• Repairs, including maintenance, as dened in Public Contract Code section 20115.
e $15,000 threshold for construction contracts under Public Contract Code section 20111(b)
remains unchanged.
ese limits mean any purchase that exceeds $84,100, or any required construction labor costs that
will exceed $15,000, must go out to formal bid.
• Only the governing board should enter into construction contracts; the ASB should not.
Chapter 16
–
Equipment Purchases and Management 189
Chapter 16
Chapter 16 – Equipment Purchases and Management
Occasionally, students purchase equipment with ASB funds. Equipment is generally dened as moveable
personal property of a permanent nature (other than land and buildings) with a useful life of more than
one year and a cost of more than $500. Examples include machines, furniture, vehicles, and furnishings
that are not integral parts of a building or a building service system. Some equipment also requires periodic
maintenance and repairs. When purchasing equipment, the ASB needs to consider insurance and its exposure
to various risks such as vandalism and theft, and should understand inventory listing requirements.
Equipment Ownership Options
Equipment purchased by an ASB organization is the property of the ASB. e student club may then donate
the equipment to the district. is has many advantages for the student organization because the district
usually assumes the responsibility of maintaining and repairing the equipment. If the student organization
does not donate the equipment to the district, current and future students will have to assume responsibility
for all associated costs, including those for maintenance, repair and insurance.
If the ASB chooses to donate the equipment to the district, the students should stipulate that the ASB
club making the donation retains the right to exclusive use of the equipment. e governing board should
formally accept the equipment donation just as it would all other donations. Acceptance of the gift does not
necessarily mean that the district will replace the item in the future if it no longer works or is obsolete; in
most cases the district will expect the ASB to maintain, repair or replace the equipment. In addition, because
the district is not required to accept any donation, the ASB should communicate with the district before
purchasing the equipment to ensure that the district agrees with the donation.
Many districts prohibit student organizations from owning equipment or long-term assets of any kind.
A sample letter for transferring equipment to the district is included at the end of this chapter.
Risk Management and Insurance Options
A district’s insurance policy covers district-owned equipment for various
risks. If the ASB prefers to retain ownership of the equipment, it should
check with the district’s risk manager before the purchase to determine
what type of insurance is needed. e ASB advisor should counsel student
leaders about business issues such as deductibles, replacement value, and
depreciated value of equipment.
Inventory Practices
If the district accepts a donation of equipment purchased by the ASB, the
sta should place a tag on the equipment identifying it as district property
and should include the item or items in the district’s equipment inventory
list. e district should have specic policies and procedures related to
inventory practices and should follow them. Per California Education
Code section 35168, the following information must be recorded for
equipment valued at more than $500:
1. Name and description of the property
2. Serial number or other identication number
3. Original cost of the property (a reasonable estimate may be used if
original cost is unknown)
Fraud Alert
Digital cameras, scanners and
other small devices that do not
cost more than $500 but may
have a useful life of more than
one year and are susceptible
to theft are often too small for
an inventory tag or bar code.
Consider doing the following to
deter theft.
• Engraving the ASB name on
each item.
• Identify the make, model
and serial number of each
item in the inventory.
Require that each item be
checked in and out for use, using
a signature log.
190 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
4. Acquisition date
5. Location of use
6. Time and mode of disposal (when applicable)
If the ASB retains ownership of the equipment, it should ensure that the equipment is marked and identied
as ASB equipment. In some districts, the equipment marking is done with electronic bar coding. In addition,
the ASB organization should maintain a list of all the equipment it owns, separate from the district’s list. To
ensure compliance with the Education Code, this list should include the information listed above and should
be retained as a permanent record.
Once a year, the ASB bookkeeper should verify that all items on the ASB-owned equipment inventory list are
still at the school. is is referred to as taking a physical inventory of the equipment. When equipment the
ASB owns is sold or deemed obsolete, the ASB bookkeeper should credit the proceeds of the sale to the club
that originally purchased the item and remove the item from the equipment inventory records. Appropriate
accounts for all xed assets will need to be set up in the student organization’s accounting system.
Chapter 16
–
Equipment Purchases and Management 191
Equipment Donation
To: Sample District, Chief Business Ofcial or Designee
From: Sample School Club
Subject: Transfer of equipment ownership to Sample District
The below items were purchased/received by the student organization for _______________________ School.
The governing board formally accepted the donation of the equipment on ________________ . It should be
understood that acceptance of this gift does not necessarily mean that the district will replace the item in the
future if it is no longer working or is obsolete.
It is requested that while ownership is transferred to __________________________ District, operational
control and use be retained by the student organization, as administered by the principal/school administrator.
It is recognized that transfer of ownership only transfers responsibility for maintenance and replacement,
consistent with the priorities and practice of the district and in accordance with existing nancial management
guidelines and procedures.
The effective date of this transfer is: ________________________________
Specic equipment transferred: _________________________________________________
Name and description of the property: ___________________________________________________
Serial number or other identication number: _______________________________
Original cost of the property
(a reasonable estimate may be used if original cost is unknown): ______________________
Acquisition date: __________________________
Location of use: ________________________________________________
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: _______________________
Date
192 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 17
–
Employees and Consultants 193
Chapter 17
Chapter 17 – Employees and Consultants
In certain circumstances, the ASB may need to hire someone to perform some service on behalf of the
students. For example, the ASB may need extra custodial help after a school carnival or a disc jockey for a
school dance. All of these individuals will need to be paid, so the question is, “What is the legal and proper
method to compensate them?”
When people are paid to assist the ASB, they are compensated either as an employee or as a consultant/
independent contractor (in education, independent contractors are frequently called consultants, so this
manual uses the two terms interchangeably). e Internal Revenue Service (IRS) has regulations regarding
when someone may be paid as an employee and when they may be paid as a consultant. e district’s
business oce and personnel department also should be available to help the students, the ASB advisor and
the principal/school administrator determine on a case-by-case basis whether the individual hired is to be
considered an employee or a consultant. is determination has important tax consequences. For employees,
the district has to withhold and pay federal income tax, social security taxes, Medicare taxes and federal
unemployment tax, as well as report wages and issue statements to employees. For independent contractors,
usually no withholding is required. is chapter includes the criteria for determining who is an employee and
who is a consultant, the best method of payment, and federal reporting requirements.
ASB Employees
Because ASB organizations are legally part of the school entity, anyone hired to be an ASB employee is an
employee of the district, with requirements for employability and immigration status, ngerprinting and
oath of allegiance certications. Because the employee is an employee of the district, the district’s personnel
department would be involved in the process from the beginning and would provide the best counsel and
guidance in this area. is department should help the ASB with any personnel it is authorized to hire.
Although the funding for the position might come from the ASB, all district policies, rules and regulations
apply.
Good Business Practices for ASB Employee Payroll Management
All ASB employees, including substitute employees, are paid using the district’s normal payroll process. e
individual lls out the standard time card used by other district employees who work in a similar capacity.
is time card is processed with the regular district payroll. If it is a preapproved ASB expenditure, the
business department then invoices the ASB for the cost of the salary and associated statutory benets. e
payroll department ensures that it obtains all of the documents needed to pay the individual correctly and
legally.
Someone who works for the district and performs extra duties for the ASB must be paid as an employee
through the payroll system regardless of the task they perform and even if the work performed is normally
considered consultant work. For example, if the school secretary types the school play in the evenings for
$15 an hour or acts as a disc jockey at a dance, he or she must be paid through the district’s payroll because
she is already an employee of the school entity. In addition to determining if this additional work is subject
to overtime pay, the personnel oce would determine if any collective bargaining parameters should be
considered. Because the secretary is a district employee, the ASB may not write a check from ASB funds to
pay for this additional work as they would in the case of a consultant.
To ensure that proper legal requirements are met without having to determine whether each individual
should be classied as an employee or a consultant, the district could require that all individuals who work
with ASB be paid as district employees. As mentioned above, the personnel department would be best suited
to help with the employment process.
194 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
e personnel department can also consider whether district regulations, personnel commission rules or
collective bargaining provisions govern the choice of district employees to perform extra functions for the
ASB.
Guidelines for Determining Employee vs. Consultant Status
In general, if there is no written policy in the district stating that all people working with ASB are paid as
district employees, the IRS will look at the level of control the employer has in each case to help determine
whether an individual should be classied as an employee of the district or a consultant.
When determining whether an individual is an employee or a consultant/independent contractor, all
information regarding the degree of control and independence must be considered. e general rule is that
an individual is a consultant/independent contractor if the employer (the person for whom the services are
performed) has the right to control or direct only the result of the work and not the means and methods
of accomplishing the result. After considering all of the facts of the case, the greater the level of employer
control, the more likely it is that the worker should be classied as an employee.
e following are guidelines for making the distinction between employee and consultant/independent
contractor. If the answer to any of these questions is yes, then the ASB organization should classify the
worker as an employee, and they should be paid using the district’s payroll process.
1. Does the ASB organization provide the worker with instructions for when, where and how to do the
work? e following are all examples of types of instructions of how to do work and imply either
independent determination by consultant or dependent status of employee:
a. When and where to do the work.
b. What tools or equipment to use.
c. What workers to hire to help with the work.
d. Where to purchase supplies and services.
e. What work must be performed by specied individuals.
f. What order or sequence to follow.
2. Does the ASB organization provide the training for the worker? Consultants ordinarily use their own
methods.
3. Does the worker realize a prot or loss? A consultant can make a prot or loss; an employee would not.
4. Is the worker’s service a vital part of the ASB operations? If a worker provides services that are a key
aspect of the regular business activity, it is more likely that the employer has the right to direct and
control their activities, indicating an employer-employee relationship.
5. Does the worker perform services for the ASB regularly and continually? If a worker is engaged
with the expectation that the relationship will continue indenitely, rather than for a specic project
or period, this is generally considered evidence that the intent is to create an employer-employee
relationship.
6. Is the worker guaranteed a regular wage amount per hour, week or other period of time? Employees are
generally guaranteed a regular wage per a given period of time; consultants are usually paid a at fee
for a job.
7. Does the worker make their services available to the market? Consultants usually are free to seek out
business opportunities; they often advertise, maintain a visible business location, and are available to
work in the market.
Chapter 17
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Employees and Consultants 195
8. Is the worker reimbursed for business and travel expenses? Contractors are more likely to have
unreimbursed expenses than are employees.
9. Does the ASB provide the equipment and tools for the worker? Contractors often have a signicant
investment in the tools they use to perform services for someone else.
ere is much gray area when determining whether or not someone should be classied as an employee or
a consultant. e costs to the district/ASB of incorrectly classifying a worker as a consultant rather than an
employee are signicant, including back employment taxes, retirement contributions, interest and penalties.
us, when in doubt, the default position should be to classify the worker as an employee.
e IRS website (www.irs.gov) has several reference materials to help determine whether a worker should
be classied as an employee or a consultant. Publication 15-A, titled “Employer’s Supplemental Tax Guide,”
covers this area in detail.
The ABC Test
On April 30, 2018 the California Supreme Court ruled in Dynamex Operations West, Inc. v. e Superior
Court of Los Angeles County, establishing stricter rules for employers to ensure that employees are not
misclassied as independent contractors, and thus deprived of benets to which employees are entitled.
In particular, the Supreme Court established a standard that presumes all workers are employees unless the
employer can show the following using the ABC test:
A. at the worker is free from the control and direction of the hiring entity in connection with the
performance of the work, both under the contract for the performance of the work and in fact.
B. at the worker performs work that is outside the usual course of the hiring entity’s business regardless
of where the work occurs.
C. at the worker is customarily engaged in an independently established trade, occupation, or business
of the same nature as the work performed for the hiring entity.
All three of these requirements need to be met for the presumption that a worker is an employee to be
rebutted, and for a court to recognize that a worker has been properly classied as an independent contractor.
Although the ABC test applies only to Industrial Welfare Commission wage orders as of this writing, and
although the court decision cited above did not include a ruling about whether the test would also apply
to other wage and hour laws, the ruling does make it signicantly more challenging for entities to classify
workers as independent contractors rather than employees. LEAs should review their relationships with
independent contractors to determine if any of their workers should be reclassied.
Consultants
If someone is not already an employee of the school entity, and if the ASB has determined that the person
is legally considered a consultant/independent contractor under the IRS regulations (see above), there is a
dierent method of payment.
Federal Tax Reporting Requirements for Consultants
If the ASB organization determines that it will pay the worker as a consultant/independent contractor, the
ASB bookkeeper should ensure that the worker completes a W-9 taxpayer identication form before they
begin work, because it is much more dicult to obtain the needed information after payment has been
made. It is best practice never to pay any consultant for any work performed unless the ASB bookkeeper has
obtained a W-9 from the consultant, because the IRS penalty for not obtaining the required information is
large. Receiving the information prior to payment helps avoid such penalties.
196 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Good Business Practices for ASB Consultant Federal Tax Reporting
e IRS has many requirements for reporting payments to independent contractors, but as a general rule
ASB organizations are obligated by law to report student body fund payments by issuing Form 1099-MISC
to any independent contractor who is paid a total of $600 or more in a tax year for services, including parts
and materials. Because the district also issues 1099s at the end of the calendar year, it is most ecient for the
district’s business oce to issue all 1099s for the ASBs as well, since they are able to retrieve the information
from all schools. e 1099s must include all payments throughout the entire district, not just at one school.
e best way to eciently coordinate this is through the district’s business oce. e ASB provides the
district’s business oce with information on the independent contractors, and the business oce then issues
the 1099s for all of the ASB’s independent contractors districtwide.
Summary of Payment Techniques – Employee and Consultant
e following is a summary of how ASB workers are paid after the ASB has determined whether the workers
are employees or independent contractors. Costs for ASB workers should be approved in advance like all
other ASB expenditures.
Employee Payment Procedures
1. e ASB preapproves the work to be performed; this includes signatures from authorized individuals.
2. e employee who will perform the ASB work completes all of the paperwork required by the district’s
personnel and payroll departments.
3. e personnel department helps the ASB organization determine the appropriate hourly rate.
4. e employee lls out a time card for work performed for the ASB.
5. e principal/school administrator or the ASB advisor signs the time card, conrming that the hours
reported on the card are correct.
6. e ASB bookkeeper turns the time card in to the payroll department, where it is processed with the
next payroll.
7. e employee is paid.
8. e business oce bills the ASB for salary and employee benet costs.
Independent Contractor Payment Procedures
1. e ASB preapproves the work to be performed; this includes signatures from authorized individuals.
2. e ASB bookkeeper obtains the W-9 Taxpayer Identication form from the independent contractor
before their work begins.
3. e contractor submits an invoice to the ASB bookkeeper for payment.
4. e principal/school administrator or ASB advisor signs the invoice, indicating that the work was
completed satisfactorily.
5. e ASB bookkeeper pays the invoice.
6. By mid-January, the ASB bookkeeper provides the district’s business department with information
about the amount paid to the independent contractor.
7. e district’s business department issues a 1099 tax form to the contractor by January 31.
Chapter 18
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Cash Disbursement Management and Procedures 197
Chapter 18
Chapter 18 – Cash Disbursement Management and Procedures
One of the primary purposes of the ASB is to allow students to raise and spend money for their benet.
Expenditures of ASB funds are called disbursements. Chapter 14, Allowable and Questionable Expenses,
provided guidance regarding the types of items usually considered appropriate expenses from ASB funds.
is chapter discusses how to ensure that adequate internal controls exist over the disbursement of ASB
funds.
Student money must be spent in accordance with a system that includes sound internal controls, good
accounting practices and conformity with board regulations.
Elementary school ASBs are usually structured as unorganized ASBs, and secondary school and community
college ASBs as organized ASBs. If the elementary school ASB is structured as an organized ASB and the
students have authority over how funds are used, then the checks and balances for organized ASBs are
applicable.
Sales and Use Tax
State Revenue and Taxation Code (RTC) section 6006 identies what constitutes a sale and what is subject
to state sales tax. Section 6006 (f) of the RTC denes a sale as, “A transfer for a consideration of the title or
possession of tangible personal property which has been produced, fabricated, or printed to the special order
of the customer, or of any publication.”
Assembly Bill 155 (AB 155), eective September 15, 2012, expands the types of out-of-state retailers that are
required to register with the California State Board of Equalization (BOE) to collect and remit use tax on
sales of tangible personal property to customers in California. As a result, more online retailers must register
with BOE to collect tax.
If out-of-state retailers do not collect tax, or do not charge it because they assume that educational agencies
do not have to pay it, school agencies are still required to report and pay the equivalent of sales tax, known
as use tax. Because the BOE does not have a mechanism to track sales by out-of-state vendors’ customers for
reporting purposes, school agencies should not submit the sales tax to an out-of-state vendor when it is not
charged, but should instead include the purchase of the item in the periodic sales tax report led with BOE
and pay the obligation directly. is ensures that the correct amount of sales tax is submitted to the BOE,
with no fear of penalties for underpayment of sales tax.
Note that because the reporting schedule is based on the total sales in dollars (e.g., monthly, quarterly or
annually), not all districts are on the same reporting schedule. us those involved should work with their
district’s business oce to learn the requirements for their district.
e BOE’s Publication 18 provides guidance regarding the taxability of sales by nonprot organizations such
as ASBs. is publication and additional information about sales tax are available on the BOE’s website at
http://www.boe.ca.gov/pdf/pub18.pdf.
At the end of this chapter is an overview to help readers understand sales and use tax applicability and
exemptions.
Internal Controls
In general, the internal controls over cash disbursements should ensure that:
• All disbursements are for items that were included in the budget.
198 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• All disbursements are for items for which spending from ASB funds was preapproved and for which
there is documentation (i.e. purchase order) showing the approval.
• e ASB bookkeeper only pays for goods that were authorized and received.
• e ASB bookkeeper maintains adequate records of all expenses, including original detailed
receipts.
Within the above general requirements, specic internal controls for cash disbursements dier slightly
between unorganized and organized ASBs. For this reason, the internal controls in this chapter are separated
into the following three categories:
• Internal controls that apply to all ASB operations.
• Internal controls for unorganized ASBs.
• Internal controls for organized ASBs.
Internal Controls that Apply to All ASBs
e following items are internal controls for all ASB cash disbursements:
1. e Education Code states that all ASB expenditures must be preapproved. For unorganized ASBs,
this preapproval is given by the employee or ocial the governing has appointed as trustee over the
funds. For organized ASBs, the preapproval must be by three individuals: the student council/club
representative, the ASB advisor, and the board designee. e ASB/club is not obligated to pay for the
expenditure if preapproval was not obtained.
2. Students and sta members should never pay for an expense out of cash collected from a fundraising
event; all of the cash must remain intact for deposit, and a check can be issued for the expenditure.
is ensures that the students and ASB bookkeeper can perform a complete reconciliation of the
fundraising event and that a complete audit trail exists.
For example, if the students are holding a bake sale and they need to purchase extra napkins during the
bake sale, they should not take some money out of the cash collected that day to pay for the napkins.
Instead, an employee should be preapproved to purchase emergency supplies, such as napkins, during
the event. e employee can use their own money for the purchase, then submit the original purchase
receipt with a request for reimbursement.
3. e ASB bookkeeper may pay for a purchase with ASB funds only after the items have been received
and only if the purchase has been approved in advance by authorized individual(s).
4. e ASB bookkeeper must maintain the checkbook and all check stock in a secure place, preferably a
safe, or, if that is not possible, in a locked reproof le cabinet.
5. e ASB bookkeeper should never allow checks to be signed in advance. Instead, backup signers
should be approved in case the regular signers are not available. For example, if the principal/school
administrator will be out of the district for a week or two, someone may ask for checks to be signed
in advance. is request should not be granted. Instead, backup signers should be approved for the
checking account. e backup for the principal/school administrator could be a district oce ocial.
6. e ASB bookkeeper should never make a check out to cash or issue a check that lacks a payee name or
amount. When ASB petty cash has been authorized by the district and used to reimburse an individual
for preapproved expenditures, the petty cash fund will need to be replenished by issuing a check to a
designated person, who will cash the check and reimburse the petty cash fund.
7. e ASB bookkeeper must use checks in sequence.
Chapter 18
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Cash Disbursement Management and Procedures 199
8. Personal or third-party checks should not be cashed from the ASB account.
9. Two signatures should be required on all checks, and all signers should be adults (i.e. not students).
10. If a check is written that is not correct or is not issued, the bookkeeper should mark the check void.
e bookkeeper should retain these checks in the checkbook to account for all checks in numerical
order.
11. e ASB bookkeeper should maintain adequate
records and an audit trail, including original
detail receipts of all expenses, per the district’s
retention guidelines.
Internal Controls for Unorganized ASBs
Few elementary schools/unorganized ASBs have a
formal student body organization, though one can be
established if desired. Usually, the governing board
designates the principal/school administrator as the
primary authority to operate the student activities and
authorize all expenses from ASB funds. However, the
principal/school administrator should designate an
alternate/second person to approve the disbursement of
ASB funds. In addition, a third authorized check signer
is recommended in case the rst two are unavailable.
Another reason for multiple authorized signatories
is to prevent a situation in which an individual
(e.g., the principal/school administrator) approves a
reimbursement to themselves and is the signatory on the
check.
e following are good internal controls for schools with
unorganized ASBs:
1. e principal/school administrator should
establish a process to allow other school sta
members to get approval for the use of ASB
funds. For example, the principal/school
administrator may decide that each teacher in
the school will be allowed to spend $50 each
year out of ASB funds for appropriate student
body expenses. Before these funds are spent or
any purchase is made, teachers must submit to
the principal/school administrator (assuming the
principal/administrator is the board designee) a
request to use the funds via a purchase order or an
expenditure approval form. is ensures that the
funds are available and approved for use before
teachers spend personal money in anticipation of
a reimbursement from ASB funds.
2. e ASB bookkeeper, who is usually the school
secretary, should prepare an ASB check for payment from ASB funds only for items that have been
Fraud Alert
When funds collected during the event are
allowed to be used to allegedly purchase materials
during the event, fraud perpetrators will simply
reduce the amount of funds collected by keeping
the cash. Too often, no additional materials are
purchased and unsuspecting volunteers or students
are so busy running the event that nobody misses
the funds that are taken.
Fraud Alert
ASB purchases are allowed only for expenditures
that are authorized and approved in advance.
Using the trusting nature of many involved in ASB
business, fraud perpetrators will submit personal
receipts for reimbursement from student funds.
Trusting bookkeepers, advisors and others often
overlook an individual they have known for a
long time and often issue reimbursement on the
person’s promise to provide supporting authori-
zation the following day. The ASB is NOT obligated
and must not pay for expenditures that are not
authorized in advance with a properly signed
purchase order.
Fraud Alert
When check stock is not safeguarded, even
unsophisticated thieves know that they can simply
copy a blank check and create their own duplicate
check stock. For help copying check stock,
organized fraud groups approach janitors, cleaning
crews and other workers who have access and
late night shifts. The original check stock remains
and the fraud continues as the check information
is transferred to check-printing software. Within a
short time, thousands of dollars of checks are being
presented at the ASB’s bank. This fraud may go
undetected until the next month’s bank statement
is received.
200 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
approved in advance by the principal/school administrator or designee and for which proof of purchase
(original invoice and supporting documents such as a purchase order or a receiving report) is in hand.
3. e ASB bookkeeper should prepare a check for payment only when an original invoice and supporting
backup such as a purchase order or a receiving report is presented.
4. e ASB bookkeeper must ensure that two people sign each check.
5. e ASB bookkeeper should mark the invoice paid and record the date the check was issued and the
check number.
6. e bookkeeper should maintain a le of all paid invoices. It is probably easiest to maintain these
invoices in order of the check numbers or in vendor alphabetical order.
Internal Controls for Organized ASBs
e operations of the ASBs at secondary schools and community colleges are usually more complex and
therefore require more elaborate internal controls. At high schools and community colleges, the ASB
bookkeeper will be responsible for keeping records for several dierent clubs. For instance, the ASB
bookkeeper at a large high school could maintain the records for more than 50 clubs, writing checks for
each club and ensuring that the amount is recorded as a deduction from the appropriate club account. It is
important to remember that the ASB is not obligated to pay for an expenditure ordered by a teacher, other
sta member, student or other person who has not received approval using a purchase order prior to purchase.
e following are good internal controls for schools with organized ASBs:
1. e principal/school administrator needs to ensure that all club members, teachers and advisors
understand that they cannot obligate ASB funds until a purchase order is prepared and approved by
the student club representative, advisor, and principal/school administrator or other board designee
prior to the purchase. For example, if a teacher places an order or goes shopping for materials without a
purchase order that has the appropriate signatures, the teacher is responsible for paying for the goods.
2. Each school should have a purchase order form for use when ordering goods for the various clubs
and for employees who use their own funds to purchase items and then request reimbursement.
e purchase order form demonstrates that the proposed purchase has been approved by all of the
appropriate sta members and students. A sample purchase order form is provided at the end of
this chapter. Some districts use an expenditure approval form rather than a purchase order. is is
acceptable if it has the correct preapproval signatures in compliance with the Education Code. A
sample Expenditure Approval form is included at the end of this chapter.
3. When the purchase orders are printed, they should be numbered or assigned a sequential number that
is recorded in a purchase order log to track each document and transaction. Multiple copies of each
purchase order should be printed and distributed as follows:
• e rst copy is retained by the club requesting the goods.
• e second copy is for the club or advisor to acknowledge the receipt of the goods. Whoever
will physically receive the goods should keep this copy and upon receipt conrm its accuracy,
note the date/time the goods were received, sign the copy, and forward it to the ASB
bookkeeper.
• e third copy is sent to the vendor (if applicable).
• e fourth copy is retained by the ASB bookkeeper and attached to the receiving report when
the ordered items are received.
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Cash Disbursement Management and Procedures 201
4. At a minimum, the purchase order should include the following:
• e name of the student club or organization requesting the materials. is is the group that
the ASB bookkeeper will charge for the goods.
• e name and address of the vendor, or of the employee making the purchase with their own
money.
• e quantity of goods, including a description and the cost. e requestor should also
estimate the sales tax and shipping charges.
• ree required signatures. ese three signatures meet the requirements for approval in
Education Code section 48933(b) for K-12 and section 76063 for community colleges.
ese signatures must include a student representative, a board designee (principal/school
administrator) and a certicated advisor. Because the purchase order has the three required
approvals, the check only needs to have two signatures.
5. Before any club makes a commitment to purchase goods, it must prepare a purchase order and obtain
all of the required approvals. is is the proof that appropriate prior approval was obtained.
6. If the vendor will not take a purchase order but requires payment by check, the purchase order form
should be used as part of the process to request a check and
to obtain and document prior approval. A check request is
not the same as a purchase order; most check requests are
completed after the purchase, not before. e ASB bookkeeper
could maintain a pending purchases le as a reminder to
obtain an original receipt after payment is made.
7. e students submit the completed purchase order to the ASB
bookkeeper after all of the approvals are obtained.
8. e students record the issuance and approval of the purchase
order in the club’s minutes. is approval can be given
after the purchase or before depending on the district’s
requirements. e Education Code does not require the club’s
approval prior to purchase but does require the approval of the
three individuals mentioned in the fourth bullet under item 4
above.
9. e students retain two copies of the purchase order. One
copy is saved as a permanent record of the order and the other
copy is used as a receiving copy.
10. e ASB bookkeeper veries that the club has sucient funds
to pay for the goods before the order is sent to the vendor or
to the employee who will purchase the goods with their own
money and subsequently requesting reimbursement. If the club
does not have sucient funds, the bookkeeper should return
the purchase order to the club with a request for a budget
revision or a plan for how the item will be paid for.
11. Depending on the policy at the school, the ASB bookkeeper or
the club advisor may open and formally receive the goods.
Fraud Alert
The following are fraud tips related
to suppliers, vendors, contractors and
others:
• Be wary of purchasing items from
vendors who are farther away
than other similar vendors. Often
vendors provide kickbacks and
special deals for those who bring
business to them and the ASB
ends up paying a higher price.
• Reconcile paperwork for
graduation cap and gown and
other contractors that provide a
volume discount or other discount
at the end of the year. Sometimes
the credit that they indicate
they will provide on the closing
year’s document will not match
the credit they show on the new
year’s opening document.
• Beware of vendors that resubmit
previously used and paid invoices.
• Beware of bookkeeping that
overloads or inates expense
accounts and/or advances.
Typically the excess cash is
diverted for personal use.
202 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
12. e designated receiver (this could be either the ASB bookkeeper or the club advisor) will open the
shipment and compare the shipped items to the packing slip.
13. After all of the items have been compared to the packing slip, the receiver will sign the receiving copy
of the purchase order.
14. If the advisor is receiving the goods, the advisor should provide the ASB bookkeeper with the signed
receiving report (copy of the purchase order) and the packing slip.
15. When the ASB bookkeeper is ready to pay bills, usually once a week, the bookkeeper matches the
original purchase order to the invoice and the receiving copy of the purchase order. When all three
documents are matched, the ASB bookkeeper will prepare a check to pay the invoice.
16. Two signatures are required on all checks written from ASB funds. One signature is usually the
principal/school administrator or designee and the other is a sta member from the school (e.g., the
student council advisor) or from the district oce. Students should never sign checks.
17. When the checks are presented for signatures, the ASB bookkeeper should also provide all of the
documents for review. is allows the signers to review the invoices and purchase orders before signing
the check.
18. After the check has both signatures, the ASB bookkeeper mails the check.
19. e check is then recorded in the accounting records for the club.
20. e invoice is marked paid and the check number is written on the invoice.
21. e ASB bookkeeper stores the paid invoices with the receiving report.
22. e invoice may be slightly higher or lower than the original purchase order. e district should have
a policy regarding the amount by which a purchase order may be exceeded and still be paid without
further approval. For example, if the invoice exceeds the original purchase order by more than 10%,
the ASB bookkeeper should obtain approval from the three individuals who approved the original
purchase order.
23. e ASB bookkeeper should maintain a list or log of all purchase orders issued and the dates when the
goods or services were received and the invoices were paid. is allows the bookkeeper to determine
easily at any time whether there are goods that have been ordered and not received, or goods that have
been delivered but not processed for payment. Some nancial information systems create such a log
automatically.
Credit and Debit Cards
e question of whether student groups and ASB should use credit or debit cards depends on a few things,
including whether district board policy or procedure allows them, whether the district business oce
authorizes their use, and whether a strong process is in place to ensure that the cards are not used unless
preapproval is obtained. FCMAT often sees debit or credit cards used to bypass the required preapproval.
However, because a credit or debit card is simply another method of payment, the rules about what must
occur prior to purchases, including preapproval, still apply.
Preapproval is the most important thing that must occur before a purchase. For unorganized ASBs, the
principal/school administrator or a designee, must give prior approval for a purchase. In organized ASBs,
prior approval must be obtained from three individuals: a club representative, the student body advisor, and
the principal/school administrator (or designee). is is normally done using a purchase order that all three
approving ocials sign, then the purchase can be made. e purchase order should include an estimate of
Chapter 18
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Cash Disbursement Management and Procedures 203
the cost and an indication of where the items will be purchased; a quote from the vendor often provides this
information. After the required preapproval is obtained via the three signatures, a purchase can be made.
ASBs do not usually have many rules regarding method of payment, but most school districts have policies
specifying when credit cards can be used, and many do not allow debit cards to be used at all. us, in
addition to the preapproval rule, one must be aware of what the school district requires for internal control
purposes. If in doubt, check with the district’s business oce. e business oce may want to also include its
auditors in the discussion because they will ultimately be reviewing the expenditures for the district’s annual
audit and expressing their opinion on any methods of payment.
Advance Payment
Regarding cash disbursements, it is a best practice for the ASB bookkeeper to pay only for goods that have
been authorized and received. is is generally recommended and is FCMAT’s recommendation, and it
provides for internal controls. However, it may not always be possible. Education Code sections 48933(b) (for
K-12) and 76063 (for community colleges) require prior authorization but do not prohibit advance payment.
However, rather than assuming that advance payment is permitted, one should review existing board policy
and the ASB constitution for guidance on this matter. Any expenditure of ASB funds is always subject to
any procedures established by the student body organization and to approval in advance by three persons: an
employee or ocial of the school district designated by the governing board, the certicated employee who
is the advisor of the particular student body organization, and a representative of the specic student body
organization.
us, if board policy or the ASB constitution or bylaws allow payment in advance, one can follow their
direction, and if the district has a policy regarding prepayment, one must follow it. However, if no such
policy, rules, or regulations exist, FCMAT recommends working with the district’s business oce to write
such a rule or regulation, and placing it in the ASB’s constitution or bylaws or district board policy.
If there is no written guidance regarding prepayment (e.g. in board policy or the ASB constitution) and a
situation needs resolution, FCMAT recommends inquiring whether the vendor will accept a purchase order
in lieu of a deposit. It may help to remind the vendor that a purchase order is a contract between the vendor
and the ASB for payment. If that is not acceptable to them, contact the business oce and inquire how they
would like you to proceed. e business oce may or may not allow the purchase to go forward with their
occasional approval; if the purchase does go forward, FCMAT recommends having a legal contract drawn up
that provides terms for a refund of the deposit in case of cancellation, and providing a completed W-9 to the
district or ASB before the deposit is made.
W-9s and 1099s
Please review Chapter 17, Employees and Consultants. is chapter is applicable to consultants and many
others who perform services for the ASB. Be prepared to ensure that consultants who qualify have returned a
signed and fully completed W-9 to the ASB before any work is performed or any payment made.
Associated Student Body Sales and Use Tax Applicability
Overview of Sales and Use Tax
Sales and use taxes can present special challenges for student body organizations, especially those that
purchase many items from out of state or that run a student store. e likelihood of being audited has
increased, and student body organizations need to be prepared for challenges. Eective preparation includes
identifying and resolving issues, and establishing adequate policies and procedures. Although this manual
introduces and gives brief guidelines regarding sales and use tax, it is not intended to provide tax, legal, or
accounting advice. ose responsible for ASBs should review the issues thoroughly with their accounting
professional and/or legal counsel.
204 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Sales Ta x
Sales tax is the tax applied when an item is sold. Sales tax is a transaction tax, calculated as a percentage of
the sales price. Although sales tax may legally be imposed on the seller or the purchaser, the seller is liable for
the tax and responsible for remitting it to the state.
Sales tax is computed only on the end product being sold. erefore, sales tax is not required on items
purchased with the intent of contributing to a later nal product; these are considered items for eventual
resale. If vendors attempt to charge sales tax on items intended for resale, student organizations must obtain a
seller’s permit and show the vendors a resale certicate as proof of this permit to avoid paying the sales tax.
Items not intended to contribute to some future end product are considered consumed by their nal
purchaser, and sales tax is computed based on their full sales price.
Use Tax
Use tax is the tax applied to items purchased from outside the state (in which case no sales tax can be applied
because of interstate commerce laws) for use in California. e liability for the tax and remittance to the state
is the responsibility of the buyer.
• e use tax rate is always exactly the same as the sales tax rate. Sales and use tax can never both
apply; it is always one or the other.
• Items purchased for eventual resale can also be exempted from use tax using the seller’s permit and
resale certicate mentioned above.
California sales or use tax applies when:
• Goods or services are taxable according toCalifornia State Board of Equalization (BOE)
regulations.
• Delivery or acceptance took place in California, or goods were brought into California shortly after
acceptance in another state.
California sales or use tax does not apply when:
• Funds being used are nontaxable within the guidelines of a contract or award.
• Goods or services aretax-exempt.
• Delivery or acceptance took place outside California.
• Items purchased are for resale.
• Title of equipment passes directly to the federal government.
Primary Exceptions for Student Organizations:
• Yearbooks and other student-produced publications that are sold. e state allows items
purchased to produce these publications to be considered consumed, and thus releases the student
organization from tax collection when the nal item is sold.
• Student-manufactured items that are not sold regularly; purchases intended to be used to produce
or contribute to these products are considered consumed, and the nal sale is released from tax
collection.
More information
More information on sales and use tax rules and regulations is available from theCalifornia State Board of
Equalization.
Chapter 18
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Cash Disbursement Management and Procedures 205
Specic Examples
• Items sold (requirement to collect sales tax at time of sale). Per California State Code for
Revenue and Taxation, section 6361 and the State of California Board of Equalization Sales and
Use Tax Regulations 1597 and 1603, the following applies:
Any organization (as identied below) shall be considered a consumer (must pay sales/use tax) and not a
retailer (does not need to collect sales tax) within the provisions of the part, of food products, nonalcoholic
beverages, or tangible personal property, when: sales are made on an irregular or intermittent basis and
that the organization’s prots from those sales are used exclusively for furtherance of the purposes of the
organization.
Specic Guidance from References
• Who: Any youth group sponsored by or aliated with a qualied educational institution.
• What: Sales of food products, nonalcoholic beverages, and other tangible personal property sold
by nonprot organizations on an irregular or intermittent basis.
• When: On an irregular or intermittent basis, provided the prots from such sales are used solely
and exclusively in the furtherance of the purpose of the organization.
• Irregular or Intermittent. Associated directly with particular events, such as fairs, galas, parades,
games, and similar activities. is includes refreshment stands or booths used at scheduled events
of organized leagues, but it does not include storefront or mobile retail outlets, which would
ordinarily require local business licenses.
• Sales of Food Products, Nonalcoholic Beverages. Sales of meals or food products for human
consumption to students of a school by public or private schools, school entities, and student
organizations, are exempt from tax.
• Other Tangible Personal Property. A qualied youth organization is the consumer and not the
retailer of . . . . . tangible personal property that is created by members of the organization and that
is sold on an irregular or intermittent basis.
• Additional. Any public/private school, school district, county oce of education, or student
organization is a consumer of and shall not be considered a retailer within the provisions of this
part with respect to yearbooks and catalogs prepared for or by it and distributed to students.
By inference, this would not include items sold at the student store or elsewhere that are not
intended for human consumption (unless the tangible personal property was actually made by
members of the organization), because the sales do not qualify as irregular or intermittent.
Items Purchased (applicability to pay sales or use tax at time of purchase)
• Items purchased for consumption (supplies, equipment, etc.). For these items, schools or
student organizations do not carry any applicable exemption status; therefore, all state sales or state
use tax is applicable and must be paid.
• Items purchased for resale. For items identied above that do not require the organization to
collect sales tax when it sells them, the organization is considered a consumer and must pay the
sales/use tax when it purchases the items. For items to which sales tax applies at the point of sale
(tangible personal property, not made by members, not sold at intermittent or irregular events), the
organization is considered a retailer and so would not pay sales/use tax when it purchases the items,
but should present a valid resale certicate.
206 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Procedures
Based on the above determinations, the following procedures are recommended:
• Sales/use tax at point of purchase. Based on the above categories of purchases, for all items where
sales tax (or use tax in cases of out-of-state vendors) is applicable, the tax must be paid. If the tax
is included on an invoice, it should be paid to the vendor and the district would allow the vendor
to remit the tax to the state. If tax is not included on an invoice, it should be recorded and added
to the regular remittance to the state for sales and use tax. Student organization bookkeepers must
develop internal procedures for remitting quarterly sales and use tax to the BOE.
• Sales tax at point of sale. When sales tax is collected at the point of sale (for example, for nonfood
items sold in the student store), it should be recorded and added to the regular remittance to the
state for sales and use tax as outlined in the bookkeeper’s quarterly remittance procedures.
• Remittance. Remittance should be set at regular periods (quarterly is recommended). Checks will
be made directly to the California State Board of Equalization and the appropriate remittance
forms will be used.
• Tracking. If the ASB accounting software does not accept the accrual of taxes payable entry, all
schools with ASBs will need to manually track taxes owed but not remitted and manually add these
to scheduled remittances.
Chapter 18
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Cash Disbursement Management and Procedures 207
Purchase Order
Sample Purchase Order
School Name
School Address
City, State, ZIP
P.O. Number: _______________________________ Date: _________________________________
To:
Vendor Name
Vendor Address
Item
Number
Description Quantity Unit Price Total Amount
Requested By:
(Name of Person) (Name of Club) Subtotal
+ estimated sales tax:
+ estimated shipping charges:
Total of this purchase order:
Notice to the Vendor
Please mail the invoice to the address at the top of the purchase order, care of the ASB Bookkeeper.
Please indicate the purchase order number on the invoice. If all below signatures have not been obtained, this purchase
order is not valid.
...........................................................................................................................................................................................................................................
Accounts to be Charged (this section must be completed prior to submittal to the ASB bookkeeper)
Club or Class: ______________________________________________________________
Club Account(s) to be Charged: ______________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
208 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Certication
Submitted and Approved by:
Student Club Representative: ___________________________________________
Signature, Title and Date
We certify that this request has been approved by ASB or Student Council:
Club Advisor: ________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Veried by ASB Bookkeeper: __________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: _______________________
Date
Chapter 18
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Cash Disbursement Management and Procedures 209
Purchase Order Log
Best Practices School
ASB Purchase Order Log
P.O. # Date Issued Vendor Name Description Club Amount Date
Reviewed
Date Paid Comments
210 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Expenditure Approval
(For items to be purchased without a purchase order but that require preapproval, such as allowing a staff member to
be reimbursed for ASB purchases after they submit receipts).
Sample Expenditure Approval
School Name
School Address
City, State, ZIP
Date Requested: __________________________
Approval Number: ________________________________
Club to be Charged: ____________________________________________
Date of Event: ____________________________
To:
Name of Staff Member to be Reimbursed
Staff Member Address
Item
Number
Description Quantity Unit Price Total Amount
Requested By: _______________________________________________________
(Name of Person) (Name of Club) Subtotal
+ estimated sales tax:
+ estimated shipping charges:
Total of this purchase:
Important Reminder:
This Expenditure Approval form is not valid unless all signatures below have been obtained.
Accounts to be Charged (this section must be completed prior to submittal to the ASB Bookkeeper)
Club or Class: ______________________________________________________________
Club Account(s) to be Charged: ______________________________________________________________
________________________________________________________________________________________
Chapter 18
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Cash Disbursement Management and Procedures 211
Certication
Submitted and Approved by:
Student Club Representative: ________________________________________________________________
Signature, Title and Date
We certify that this request has been approved by ASB or Student Council:
Club Advisor: ______________________________________________________________________
Signature, Title and Date
Principal/School Administrator: _______________________________________________________________
Signature, Title and Date
Veried by ASB Bookkeeper: ________________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
212 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 19
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Cash Controls and Fraud 213
Chapter 19
Chapter 19 – Cash Controls and Fraud
Every year FCMAT is brought in to review school district ASBs for suspected fraud. e reasons and
methods for fraud vary, but there is no doubt that fraud is occurring in ASB organizations.
School district ASB programs have the potential for fraud because they generate cash, the people helping with
them are trusting, and internal controls are often bypassed because everyone is in a hurry.
Regardless of an ASB’s size, everyone must always be aware of the three components required for fraud to
occur: motive, opportunity, and access. ese three components are known as the fraud triangle, and all
three must be present for fraud to occur. No program or person is immune to fraud. A person who is honest
today can experience change or new circumstances that may make fraud an option for them tomorrow.
e purpose of internal controls is to protect individuals from situations in which all elements of the fraud
triangle are present. Strong cash controls can limit the opportunity and access needed to commit fraud and
prevent individuals from doing something they may otherwise never have considered.
If fraud does occur, strong cash controls can also help identify the suspect and help exclude from suspicion
innocent individuals who may be wrongfully accused by the actual thief. Controls can also provide a
document trail to quantify the loss and to limit ongoing losses.
While reading the following sections of this chapter, consider who has the motive, opportunity and access
required to commit fraud.
e following sections discuss cash controls and their importance.
Fundraising and Deposits
ere are ve main control points at which fraud may occur during ASB fundraising or events.
1. During a fundraising event. If nobody is monitoring how funds are collected, safeguarded and
accounted for, cash taken cannot be traced and people are often left wondering why the event raised
less money than it should have.
Without proper cash safeguards, allegations of fraud can and often are made against an unsuspecting
advisor or innocent volunteer.
Recommended Preventive Measure: Always monitor and safeguard cash collections during events.
2. After the fundraising event but before the money is taken to the ASB bookkeeper. A lack of cash
controls that results in an advisor or volunteer counting the cash alone is problematic and should not
be allowed. Cash should always be counted in the presence of two people so that there are witnesses.
For example, consider the possibility of a fundraising event at which people believe approximately
$2,000 was raised but at which the advisor counts the cash alone, without witnesses, and nds that
only $1,100 was raised. ese funds are deposited. However, later someone asks how much money was
raised and is surprised that it was only $1,100, then becomes suspicious. Questions and allegations
follow, and the advisor’s reputation is at stake with only his or her own word to defend it.
Cash controls are more for everyone’s protection than to catch a thief. Every year, many ASB advisors,
volunteers, bookkeepers and others are accused of stealing cash. If an ASB does not enforce strong cash
controls, these individuals’ defense is limited to their word.
Recommended Preventive Measure: Money should never be counted alone. Always count money in
the presence of a witness.
214 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
3. After the cash is counted but before it is taken to the ASB bookkeeper. After a fundraiser, the cash
is often placed in a desk or locked le cabinet overnight; or put in the trunk of an individual’s car;
or delivered to the ASB oce with the only signed and witnessed cash count form by one student or
adult, who gures out that there is an opportunity to remove cash on the way to the ASB oce. Proper
procedures, including retention of duplicate cash count forms, are necessary to provide controls.
a. Cash kept in desk drawers or le cabinets is not secure and can be easily lost or stolen, sometimes
after the person who placed it there forgets about it. ese types of practices unnecessarily make
everyone a potential suspect, thus placing honest individuals, including school employees and
students, at risk of suspicion, rumors and accusations, simply because the money was not properly
deposited with the ASB bookkeeper.
b. Without proper cash controls, the real thief can also easily blame someone else for the theft.
c. Honest ASB club advisors, bookkeepers and volunteers have and continue to put cash in their car
with good intentions. Some of these honest individuals have put cash in their car, forgotten about
it, then had it stolen at a car wash. Imagine this happening with $10,000 from the sale of football
game tickets. Some thieves have also put the cash in their car and left it there for weeks to see if
anyone noticed the cash missing and to give themselves an increasing sense of ownership of the
cash.
d. After the money is counted in the presence of a witness and the cash count form completed and
signed, individuals sometimes do not have or do not make multiple copies of the cash count
form for their own records, but nonetheless give the deposit and cash count form to another lone
individual for delivery to the ASB bookkeeper. Subsequently, the bookkeeper receives a deposit
that is less than the individual who counted it remembers. e ASB bookkeeper, appropriately,
refuses the deposit in order to avoid being blamed, and the person carrying the deposit claims to
have only received the amount deposited and claims never to have seen a cash count form.
Without a copy of the cash count form signed by at least one witness, there is no recourse in this
situation.
Recommended Preventive Measures: Always use a cash count form and ensure that it is signed
by the individual responsible for the cash and by a witness. Make multiple copies of this completed
form, and always keep at least one copy in a safe place, separate from the copy sent with the deposit.
Whenever possible, have two people transport a deposit to the school safe. If one person must transport
the deposit, it should be one of the individuals who counted the money. Each school must establish
after-hours cash security procedures so cash and checks can be stored safely in a locked bag in the
school safe until the amounts can be counted or veried with the school bookkeeper.
4. After the deposit reaches the ASB bookkeeper. Trusting a helpful ASB bookkeeper, some individuals
send the bookkeeper their only copy of the cash count form and do not count the cash again with the
ASB bookkeeper. In other cases the ASB bookkeeper is absent so individuals simply leave the deposit
on the bookkeeper’s desk.
is eliminates fundamental controls and allows a dishonest ASB bookkeeper unchecked control of the
deposit. e ASB bookkeeper can swap cash and checks within multiple deposits and take cash, or take
as much of the cash deposit they want and change the amounts in the cash count form, or take all of
the money and say they never received it.
is type of fraud has occurred in schools. Without documentation to show the chain of custody there
is little or no recourse.
Chapter 19
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Cash Controls and Fraud 215
A common scheme for dishonest ASB bookkeepers is to take a deposit that is part cash and part checks
(e.g. $400 in cash and $550 in checks) and wait for another cash deposit equal to or greater than the
amount of the rst deposit that was checks ($550), then swap the check deposit with the same amount
of the later cash deposit. Dishonest bookkeepers will continue swapping checks for cash until they nd
a trusting club advisor who does not keep their cash count forms or check their club account reports,
then start shorting that club’s deposits.
Neglecting to count the money with the ASB bookkeeper can also leave an honest ASB bookkeeper
open to accusations of theft or fraud. An ASB bookkeeper may be trusting enough to accept a
deposit even if the advisor or other individuals is too busy to count the money with them. If there is a
dierence in the deposit because of an error caused by fatigue or haste on the part of the depositor, it
may look as though the ASB bookkeeper committed fraud even though they did not. For example, if
the depositor, even though fatigued at the time, is sure they deposited a certain amount (e.g. $2,520)
but that some of it is missing (e.g. the ASB bookkeeper counted $2,250), there is no way to prove or
disprove this. e ASB bookkeeper is left with no alibi, no witnesses and no help.
Recommended Preventive Measures: Always keep a copy of the completed and signed cash count form.
Always count the cash again in the presence of the ASB bookkeeper and document this second count.
When the cash and checks are retrieved from the safe, the bookkeeper should issue a receipt for the cash
and checks, but only after the two individuals (the advisor and the bookkeeper) have counted the dollar
amount together and recorded that amount on the receipt. If the advisor is not able to count the funds
with the bookkeeper, an alternate individual must do so; the bookkeeper should never count funds alone.
5. When receiving startup cash for change. Some events require a cash box containing startup cash to
make change.
For example, if the ASB bookkeeper has the person sign a form that acknowledges receipt of the
startup cash for change and that states the amount (e.g. $400) but does not require them to count the
money at that time in their presence, the person could end up with less money than stated on the form
(e.g. $300), and as a result be held accountable (i.e. be blamed) for the dierence.
If the bookkeeper places startup money in the cash box but fails to document it with a cash count form
signed by both parties and cash is subsequently stolen or miscounted for any reason, or the individual
receiving the startup funds incorrectly identies a smaller amount than was actually provided, the club
will receive less revenue than expected.
Some ASB bookkeepers keep a startup cash log and require everyone who receives startup cash to sign
it signifying that they have counted the startup cash together with the ASB bookkeeper and that they
agree regarding the amount. Failure to keep such a log creates the potential for simple errors that can
result in allegations of wrongdoing.
Recommended Preventive Measures: Always have both the ASB bookkeeper and the person
receiving the startup cash count the money, and document this count with signatures signifying
agreement regarding the amount.
Checks, Reimbursements and Advances
People often think fraud cannot occur with checks, reimbursements and advances because they require
multiple signatures, receipts or other verication. However, this is not the case.
Checks
Checks are written to pay for services and purchases. Fraudulent vendors and services with credible looking
invoices and business names can present invoices for payment. Checks can be altered by removing the
legitimate payee’s name and inserting another. ese are common types of frauds.
216 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Fraudulent Vendors
When cash controls and authorization procedures are weak or nonexistent, an unauthorized vendor can be
added to the payee lists, ctitious invoices for products or services can be created and money siphoned from
clubs or the ASB general account.
e purchase order, authorization and disbursement processes discussed in this guide are designed to provide
step-by-step procedures for properly documenting the cash disbursement process. e disbursement process
helps prevent fraud and nancial errors.
Check Altering
In more sophisticated check altering schemes, someone will obtain the proper authorizations and purchase
orders for a check, then the club advisor, ASB bookkeeper or any other person in control of the check will
remove the payee’s name and insert their own.
Increasingly, banks are including electronic copies of checks with the account statement rather than the
original checks. Extra care must be used to conrm that the payee on the check is the same as that listed on
the check register. Conrming who endorsed a check helps establish the chain of custody.
When original checks are returned with bank statements, there is the potential opportunity for a perpetrator
who has sole custody of the returned checks to alter the checks again to restore the original payee’s name and
thus avoid detection of the prior check altering fraud.
If it is not cost eective to create a separation of duties for the bank statement reconciliation process, the
school administrator, ASB advisor or district oce should examine the returned checks to look for fading and
other signs that the payee has been altered. e digital copies of checks printed in the bank statement should
also be periodically compared to the cleared check register, and the endorsements on the reverse side of the
checks veried.
Reimbursements
With reimbursements, two types of fraud can occur: e person receiving the reimbursement can falsify the
reimbursement; and the amount of reimbursement can be altered and cash stolen.
e most typical type of reimbursement theft involves attempts to have the ASB pay for something that is
unauthorized.
Every receipt and every line item of the reimbursement must be conrmed. Copies of receipts are not
sucient; original receipts should be presented for reimbursement whenever possible. If there is no policy
requiring original receipts for reimbursements, one should be developed.
Because altering reimbursements is not common and requires some time and planning, this type of fraud is
usually perpetrated by the ASB bookkeeper or someone with access to ASB petty cash, the ASB accounting
software, and the completed reimbursement form. e perpetrator typically does the following:
• Pulls the completed reimbursement form from the payee le, adds expenses that do not have
documentation, and increases the cash advance.
• Pockets the amount of the cash increase and alters the accounting records to agree with the new
larger cash advance total.
Advances
As is the case with all cash transactions, cash advances attract more fraudulent activity than non-cash
advances such as those via check. Cash advances should occur in ASB only if advances are authorized by
district policy. District policy and ASB policy should be the same.
Chapter 19
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Cash Controls and Fraud 217
eft
e opportunity for theft exists when advances are not documented with signatures, initials next to a line
item on the reimbursement form, and an advance log that requires signatures.
To safeguard against cash advance fraud and protect innocent parties, write the cash advance amount on
at least two separate documents and have the recipient sign both documents and initial the cash advance
amount. is makes it more dicult for a potential perpetrator to alter the cash advance amount and protects
the ASB bookkeeper from allegations that he or she issued a dierent cash advance amount.
Fictitious Advances
Another common cash advance fraud is the ctitious cash advance. Although completely false, the ctitious
cash advance may have documentation and is usually booked to an unsuspecting club advisor who does not
check their club’s monthly nancial report. For example, a dishonest ASB bookkeeper could take $60 from
cash and record it as an advance or a petty cash expense for a certain club. If the club advisor does not check
the club’s nancial report monthly, they are unlikely to remember or recognize that the $60 advance was not
used for club purposes. is is particularly true for relatively small amounts such as in the example, especially
when the transaction is one of many.
ASB Financial Reports
ASB nancial reports and club reports may not be perceived as cash control measures, but they are. e
nancial report prepared for a club lists in detail all of the club’s transactions and is thus an historical account
of the club’s nancial activities.
Club advisors should receive a detailed monthly transaction report for the club that shows at least the
deposits, checks, journal entries, transfers, and memos or notes of the club’s nancial transactions. Club
advisors should keep duplicate cash count forms, club minutes, copies of purchase orders and other
paperwork. is enables them to do the following:
• Compare the deposit amounts on the cash count forms with the nancial report for the club to
verify that the club’s deposits are accounted for correctly. If there is a discrepancy, the advisor who
has kept duplicate paperwork is able to identify discrepancies, question them, and be part of the
solution.
A dierence or discrepancy does not necessarily indicate fraud. A deposit may have simply been
miscoded to another club’s account, which can be corrected.
Failure to review nancial reports monthly makes it dicult to detect errors or fraud. It is far more
dicult to review in detail hundreds of transactions or more at the end of a year than review a
much smaller number each month.
Club advisors who do not keep copies of deposit records, cash count forms and other paperwork
will have few options and no documentation against which to compare the club’s nancial report
and detect errors. Failure to keep such supporting nancial documents also gives a dishonest ASB
bookkeeper the opportunity to commit fraud.
• Review the transfers and/or journal entries in the club’s nancial report. All transfers and journal
entries should have been approved before being entered in the club account. Note and question any
transfers or journal entries that are not readily recognizable.
One of the most common but less sophisticated frauds is to write o deposit amounts as transfers
or journal entry errors during the bank reconciliation process.
Another common fraud is to shift forged or altered checks or shorted deposits between club
accounts. Club advisors who do not reconcile their clubs’ nancial reports and do not question the
ASB bookkeeper about discrepancies create the opportunity for this type of fraud.
218 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
If only some advisors review and question transactions, a dishonest ASB bookkeeper or other
individual who has access to the ASB software can often continue to commit fraud without
detection simply by moving the questioned transactions to the account of another club with an
advisor who does not ask questions. If all club advisors retain backup documentation and scrutinize
their clubs’ nancial reports, the opportunity for fraud decreases and the chance of detecting it
increases.
Reviewing and questioning nancial reports and activities also protects every honest ASB
bookkeeper. In some cases, a person other than the ASB bookkeeper may have gained access to
the ASB accounting software, cash deposits and checks. For example, the ASB bookkeeper may be
on vacation or may have inadvertently allowed someone to see the accounting software password
or safe combination. In these types of situations, timely reporting of nancial discrepancies to
the ASB bookkeeper enables them to determine when the discrepancy occurred. Because ASB
bookkeepers typically record thousands of transactions per year, the sooner an irregularity is
discovered the better the chances of someone remembering what occurred and being able to resolve
the error.
• Review and compare the checks, reimbursements and advances in the nancial report for the club
with records of nancial and other activity, and note and question any disbursement transactions
that are not readily recognizable.
Not all discrepancies are the result of fraud; some may simply be the result of incorrect coding that
attributes an expense to the wrong club, leaving one club with fewer funds than it should have.
Reviewing records in a timely manner is vital. Waiting several months or more can allow an error
or a fraudulent transactions to remain undetected among many other similar transactions.
Club Advisors’ Copies of Financial Documents
Club advisors should keep all copies of every club-related record in their possession.
Diligent retention of cash count forms, copies of receipts, revenue potentials, budgets, purchase orders,
minutes and other documents provides vital evidence in the event of fraud, improper spending, allegations of
improper club administration, and even catastrophe.
Because perpetrators of fraud will often destroy any records they have access to, the records a club advisor
retains may be the only source from which it is possible to reconstruct events and determine the amount and
probable location of any missing funds. us they serve as protection for the honest advisor and the ASB
bookkeeper, and help ensure the public trust when allegations arise.
For example, a parent who wrongfully accuses a club advisor may not know the details of how an ASB club
is run, but the advisor’s detailed copies of records that reconcile with those of the ASB bookkeeper may
demonstrate accuracy and reliability and thus restore condence. Inadequate records, on the other hand, will
invite skepticism and unneeded attention in such situations.
Club advisors should retain records for as long as they serve in that capacity, then give records to the district
oce for safekeeping, or do with them as directed by their district’s policies. Most fraud investigations review
the last one to four years of records, but some have investigated as many as 10 years of records.
e cash controls discussed in this chapter and throughout this manual are designed to help protect all
innocent parties from allegations of fraud, and to help identify who has committed fraud. ose who commit
fraud depend on poor internal controls and the ability to gain the condence of those they work with to
accomplish the theft.
Chapter 19
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Cash Controls and Fraud 219
For everyone’s protection, do the following:
• Never leave money unattended.
• Always count all money with a witness.
• When possible, have two people transport deposits.
• Always sign and initial and have a witness sign and initial documentation in as many places as
possible indicating the status and amount of money that the two signers counted.
• Always retain duplicate cash count forms for the club’s records.
• Always protect the ASB bookkeeper by counting cash with them and obtaining signatures attesting
that the cash counts agree.
• Safeguard user identities, passwords, combinations and other access controls.
• Double-check bank reconciliations, cancelled/cleared checks, and check endorsements.
• Obtain proper authorizations for all transactions including journal entries, transfers,
reimbursements and advances.
• Always compare the advisor’s copies of club transactions with the nancial report for the club.
• Ensure that all club advisors retain club-related records for as long as they serve as club advisor.
• Ensure that the ASB bookkeeper is never afraid to say no. e ASB bookkeeper should never be
afraid to refuse an incorrect deposit or improper authorization for disbursement.
220 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 20
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Charter Schools and ASBs 221
Chapter 20
Chapter 20 – Charter Schools and ASBs
e Charter Schools Act of 1992 states that it provides “opportunities for teachers, parents, pupils, and
community members to establish and maintain schools that operate independently from the existing school
district structure . . .” e legislative intent is that charter schools provide innovative alternative learning
opportunities for all pupils. Charter schools are by design dierent from traditional schools that serve
students in transitional kindergarten (TK) through grade 12, with expanded oerings that engage students
in performance-based learning and that create new professional opportunities for teachers and options for
parents and students.
e state statutes governing K-12 organizations and ASB funds (Education Code sections 48930 through
48938) appear to clearly address “laws governing school districts”; therefore, charter schools are likely exempt
under the provisions of Education Code sections 47600 through 47664, which contain general provisions for
charter schools.
Although no section of the Education Code states denitively how ASB rules relate to charter schools,
Education Code section 47605(b)(5) states that charter schools are required to have in their charters a section
addressing the “governance structure of the school.” In addition, because charter authorizers must provide
adequate oversight of both academics and nances, ASB falls within this oversight responsibility, which is
essential to ensuring the scal health of a charter school. Ineective oversight by an authorizer can make
the authorizer liable for a charter school’s debts unless the authorizer “has complied with all the oversight
responsibilities required by law, including but not limited to those required by Section 47604.32 and subdivi-
sions (m) of Section 47605” (E.C. 47604).
In addition, charter schools that have student body funds in their possession have a trusteeship responsibility
to safeguard those funds for the benet of the students. Complying with ASB statutes and regulations would
meet that responsibility. us, it appears to be entirely the prerogative of chartering authorities (a district,
county oce or the California Department of Education) to ask that charter petitioners address the issue
of a student organization and the handling of ASB funds within the governance section or elsewhere in the
charter, or in a memorandum of understanding separate from the charter (which has equal legal standing).
One simple way for chartering authorities and charter schools to address the issue, and help ensure that
ASB funds and expenditures are properly handled, is to indicate that the charter school will comply with
Education Code sections 48930 through 48938 and any other statutes guiding ASB operations. Doing this
ensures that all of the various rules, recommendations and regulations discussed in this chapter apply to the
charter school.
Charter schools may have booster clubs, foundations and other auxiliary organizations that assist the charter
school and its ASB. When outside organizations such as booster clubs, foundations, auxiliary organizations
and other parent-teacher organizations are involved with a charter school, the policies and procedures
described in Chapter 21 should apply.
Charter schools and private schools used to be exempt from competitive food sale regulations under
California law, even if they participated in school meal programs. However, because of new federal laws
created by the Healthy, Hunger-Free Kids Act, all schools participating in school meal programs, including
charter schools, must follow these new regulations.
Although a charter school is not required to have a state- and/or federally-funded nutrition program, if a
charter school elects to request state and/or federal funding for its nutrition program, all of the statutes and
regulations pertaining to food laws apply to the charter school. If the charter school does not comply, that
funding can be discontinued.
222 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 21
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Booster Clubs, Foundations, Auxiliary Organizations and Other Parent-Teacher Associations 223
Chapter 21
Chapter 21 – Booster Clubs, Foundations, Auxiliary Organizations
and Other Parent-Teacher Associations
Booster clubs, foundations, auxiliary organizations and other parent-teacher organizations are composed of
parents, community members, and sta members who join together to support specic school activities for
the benet of students. Such groups are commonly referred to as school-connected organizations. ey serve
an important function by connecting parents and other community members with the students’ curricular
and extracurricular activities, and most districts welcome and encourage parental interest and participation.
is manual will use the term “booster auxiliary organizations” to refer to any of these types of organizations.
Booster auxiliary organizations are popular in high schools, community colleges and universities, and are
usually run in high schools by the parents of students in the organization being supported, and in colleges by
supporters and fans of athletic programs. Fundraisers are often held to raise money for supplies or equipment
the students may need or for student trips. Although not all booster auxiliary organizations are nonprots
under section 501(c)(3) of the Internal Revenue Code, the benets of this status include exemption from
federal income tax and eligibility to receive tax-deductible charitable contributions. Nonprot 501(c)(3)
organizations, including booster auxiliary organizations formed as such, may not discriminate in making
grants to youth or college students on the basis of their family’s membership in or funding to the organi-
zation, or the family’s fundraising for or time devoted to the organization’s activities.
e most common types of 501(c)(3) organizations are charitable, educational, and religious. Educational
organizations include the following:
• Schools, such as a primary or secondary school, a college, or a professional or trade school.
• Organizations that conduct public discussion groups, forums, panels, lectures, or similar programs.
• Organizations that present a course of instruction by correspondence or through the use of
television or radio.
• Museums, zoos, planetariums, symphony orchestras, or similar organizations.
• Nonprot daycare centers.
• Youth sports organizations.
Booster auxiliary organizations are organized with many purposes in mind. One of the largest, formal,
and most well-known booster auxiliary organizations is the National Parent Teacher Association (PTA).
e California State PTA publishes governance, fundraising and nancial guidance for members on its
website, www.capta.org. Other booster auxiliary organizations are organized to help with special interests
or for school activities such as football, or to help buy school supplies, or to support other athletic teams or
programs, the arts, eld trips, debate teams, or musical groups. Booster auxiliary organizations are separate
organizations from a school district or community college, and their primary role should be to enrich
students’ participation in curricular and extracurricular activities.
In general, booster auxiliary organizations provide nancial support and/or direct assistance in some form to
help achieve goals shared with school programs. Booster auxiliary organizations have many purposes and are
not limited to the following examples:
• Assisting others:
• Helping a principal/school administrator, faculty advisor, sports coach, and other district sta
with student activities.
• Helping students through scholarships.
224 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• Purchasing supplies for the school.
• Helping with funds for eld trip travel.
• Specic activities connected to students, parents and adults:
• Sports programs
• Field trips
• Performing arts
• Debate teams
• Language programs
e relationship between student organizations and booster auxiliary organizations is often confusing.
Student organizations are legally considered a part of the school entity. For this reason, they are included in
the district’s annual audit and have the benet of the district’s tax-exempt status under the internal revenue
code. All activities and fundraising events in which students primarily participate should be conducted
through the ASB. is includes all student performances for which gate receipts are received and all student-
conducted fundraisers.
Booster auxiliary organizations should supplement school programs and should conduct activities and
fundraising events in which parents and other adult community members are the primary participants.
Funds raised by these organizations are to be used to support programs; however, no student will be required
to raise funds to participate in school programs and events. Booster auxiliary organizations may raise funds
and donate those funds to the district or purchase items with their funds for donation or assistance to the
district, but they are separate from the district with which they are associated, are not legally considered
a part of the district, and are not included in the district’s annual audit. Although booster auxiliary
organizations are not governed by the Education Code, they do not have free access to schools and students.
e school district governing board and administration have, and must maintain, exclusive control and
management of the public school system they serve. Education Code sections 51520 and 51521 require that
any school-connected organization (booster auxiliary organization) and/or activity be authorized by law and
permitted by board policy.
Some organizations, such as the PTA, are established as nonprot corporations with a separate tax-exempt
status. However, many booster auxiliary organizations have not applied for or received nonprot status and
do not have their own tax identication number, so it should not be assumed that they are all ocial groups
in the eyes of the Internal Revenue Service (IRS) or State of California. Estimates have shown that less than
20% of booster auxiliary organizations have registered and become tax-exempt organizations.
Booster auxiliary organization funds and district funds, including ASB funds, must never be commingled.
Booster auxiliary organizations and the school entity should remain separate, including in the following ways:
1. e booster auxiliary organization’s name, address or any other correspondence should never imply any
form of responsibility on the part of the ASB or district.
2. e district’s tax-exempt status and identication number are not for use by any non-school
organizations or groups.
3. Booster auxiliary organizations are responsible for their own tax status, accounting, internal controls,
nancial and governmental reporting, retention of records, and all other operations, separate from the
district and ASB.
Because student organizations operate under the school entity’s tax-exempt status, the funds deposited in
bank accounts are not subject to state or federal taxes. For this reason, the funds raised by booster auxiliary
organizations should not be deposited into or commingled with the student organizations’ or the school
Chapter 21
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Booster Clubs, Foundations, Auxiliary Organizations and Other Parent-Teacher Associations 225
entity’s funds or bank accounts; rather, they should be deposited into the booster auxiliary organization’s
bank account. Booster auxiliary organizations may donate funds to the student organization(s); however, after
they do so, only the student organizations can control how the funds will be used, and all district policies
and procedures will apply. A student organization’s account cannot be used as a pass-through account for any
booster auxiliary organizations.
ere is no requirement that a booster auxiliary organizations have a corresponding ASB club. A booster
auxiliary organization could make a donation to the general ASB or to any ASB club. e important thing is
that the donation made by the booster auxiliary organization can be accepted and spent for the purpose for
which the booster auxiliary organization raised the funds, within the district’s guidelines.
Because booster auxiliary organizations are responsible for their own tax status and accounting, they may
not use the district’s tax-exempt status or open bank accounts using the district’s tax identication number.
To avoid the appearance of district sponsorship, it is best if school sta members do not act as ocers of
nonstudent- or nondistrict-sponsored clubs.
Organizations formed by teachers and/or other employees of a school entity also are not a part of the ASB or
the district and may not use the district’s tax identication number or deposit funds into the school’s ASB
account or district bank accounts. All booster auxiliary organizations organized to support or assist any
district school or program should be authorized by the school district’s governing board, and their activities
should be approved by the principal/school administrator or his or her designee.
Auxiliary Organization versus Student Organization at Community Colleges
If a student group at a community college is formed dierently than described in the Education Code
sections regarding student organizations and is instead an auxiliary organization, dierent rules and
guidelines apply to it than to a student organization, beginning with Education Code section 72673.
ese auxiliary organizations could be compared to parent or booster groups at K-12 schools, except that
community college auxiliary groups are usually made up of adult students.
Although they are dierent from student organizations, community college auxiliary organizations must
follow the rules and regulations established by the community college’s governing board, as there is an ocial
relationship with the college. Governing board approval is needed to use the college’s name in the auxiliary
organization’s title.
Community college district governing boards may establish an auxiliary organization to provide support
services and special programs for the general benet of its college or colleges. is can be compared to a
foundation being formed at a K-12 district to support district programs. An auxiliary organization is separate
from the college, unlike a student organization, yet a connection exists because the directors, governors and/
or trustees of the organization are appointed or nominated by the college governing board, a district ocial,
or a student body or faculty member.
An auxiliary organization can include the following types of groups:
• Any entity that operates a commercial service for the benet of a community college or district on a
campus or other property of the district.
• Any entity whose purpose is to promote or assist a community college or district, or to receive gifts,
property and funds to be used for the benet of the community college or district or any person or
organization having an ocial relationship therewith.
• Any entity that is designated as an auxiliary organization by the district’s governing board.
226 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Regulations Governing Booster Auxiliary Organizations
Because booster auxiliary organizations are separate from the district, they are not under the control of,
nor are they the responsibility of, the principal/school administrator, superintendent or governing board.
eir funds are not controlled by the district or students, nor should they be involved in administering or
supervising the activities of student organizations.
However, governing boards are able to approve guidelines for these groups to follow, and these organiza-
tions’ fundraising activities should be approved by the governing board. California Education Code section
51520 prohibits outside organization from soliciting pupils on school property during school hours, as well
as one hour before and one hour after school, with exemptions for certain nonprot, nonpartisan charitable
organizations. Education Code section 51521 requires that all organizations that conduct fundraising to
benet clubs, schools, students or the district at the K-12 level have prior approval from the school district’s
governing board or the board-assigned designee.
To meet these statutory requirements, a school district or community college should adopt board policy and
regulations requiring all booster auxiliary organizations to do the following:
• Complete and le an application to form a booster auxiliary organization, with at least the
following information included:
• e name of the organization.
• e date of application.
• Bylaws, rules, and procedures under which the organization will operate.
• e names, addresses and phone numbers of all ocers.
• A brief description of the organization’s purpose.
• A list of specic annual objectives.
• Agreement that the group’s nancial records shall be available for review by the district at any
time.
• e name of the bank at which the group’s account will be located and the names of those
authorized to withdraw funds.
• e signature of a principal/school administrator who supports the request for authorization.
• Desired use for any money remaining at the end of the year if the organization is not
continued or authorized to continue in the future.
• An agreement to provide evidence of liability insurance as required by law.
• Submit for approval annually a copy of the application and an updated plan of activities.
• Authorizations shall be granted for one year. Requests for subsequent authorizations (i.e. renewals)
should be presented to the superintendent/chancellor or designee annually.
• Ensure that renewal applications include the following:
• An annual nancial statement for the year just ended; the statement is to include all
expenditures and all income for all events and fundraisers.
• A budget for the upcoming year.
• A budget plan for the related activities.
• A copy of the organization’s up-to-date adopted constitution and bylaws must be submitted with
the initial application and all subsequent authorization requests.
Chapter 21
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Booster Clubs, Foundations, Auxiliary Organizations and Other Parent-Teacher Associations 227
A constitution should include at least the following ve elements:
• Name and purpose of the organization
• Membership
• Executive board or ocers, with positions and duties of each position dened, as well as
position and term limits
• Method of amendments to the constitution, such as by whom, what percent of members, and/
or by ballot
• Method of adoptions or ratication of constitution and any subsequent amendments
• e bylaws should include at least the following six elements:
• Duties and powers of the executive board and ocers
• e composition and membership of committees
• Successions
• Elections and qualication for oce
• Finances, including a statement of internal controls, authorization of nancial activities, and
who can preapprove transactions
• Meeting schedule for regular and special sessions, including time, manner, frequency,
denition of a quorum, and who shall conduct meetings. e procedures and meetings shall
be governed by Roberts’ Rules of Order or a similar code. Minutes of the meetings shall be
kept and read for approval at succeeding meetings. Actions taken by the executive committee
shall be reported to the membership at large.
Other recommended rules and regulations are as follows:
• e district has the express right to review and/or audit booster auxiliary organizations’ nancial
statements to ensure their nancial integrity.
• Authorization of a booster auxiliary organization is valid for up to one year; however, if the
superintendent/chancellor considers it necessary, he or she may revoke a booster auxiliary
organization’s authorization to conduct activities in the district.
• Booster auxiliary organizations are not legal components of the school entity. Each booster
auxiliary organization should have its own tax identication number (TIN); booster auxiliary
organizations are not allowed to use the school entity’s tax identication number in any way.
• Booster auxiliary organizations are responsible for their own tax status, accounting and nancial
records, and must make their own arrangements for an audit if one is needed. e booster auxiliary
organization is not audited as part of the district’s annual nancial audit.
• District or school site ocials may require booster auxiliary organizations to be ocially
recognized as tax-exempt organizations under internal revenue code section 501(c)(3) and may
require them to provide a copy of their determination letter or certicate of nonprot status
(exempt status is discussed further below).
• Booster auxiliary organization funds should never be commingled with ASB funds or any other
district funds.
• e booster auxiliary organization will need to create its own logo and name; the school and
district names and logos are separate and should not be used without authorization from the
superintendent or designee. Booster auxiliary organizations have their own identity.
• e booster auxiliary organization is not authorized to act as an agent of the school or district.
228 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• e booster auxiliary organization must carry its own liability insurance in an amount equal to or
exceeding a minimum determined by the district. e district should be named as an additional
insured. When the booster auxiliary organization uses school facilities, the district may, at its
discretion, require a higher level of coverage based on the type of use requested, such as athletic
activities and large events.
• California Education Code section 51520 applies in the case of booster auxiliary organizations at
K-12 districts that wish to have students help with activities.
• Booster auxiliary organizations’ ability to use school facilities at K-12 districts is regulated by
California Education Code sections 38130-38139, known as the Civic Center Act. A district use
of facility form should be submitted one month before the intended activity, with a certicate
of insurance that includes liability and property damage coverage and names the district as
additionally insured.
• Booster auxiliary organizations must prepare and adopt a constitution and bylaws.
• Booster auxiliary organization ocers should be elected according to the structure and process
dened in the bylaws.
• It is suggested that K-12 school district personnel not hold any ocial position in a booster
auxiliary organization. For community colleges, Education Code section 72673 states that the
directors, governors and/or trustees of the organization are appointed or nominated by the college
governing board, a district ocial or a student body or faculty member.
• Fundraising at any school is directly under the control of school authorities, such as the principal/
school administrator, and must be approved by at least the school administrator prior to any
activity. Approval may be granted based on completion of some type of application or form,
sometimes referred to as a Request for Approval of Fundraising Activity by a Non-District
Organization form. All approved fundraisers must be authorized and conducted according to local
board policy, laws, and school rules.
• Booster auxiliary organizations must comply with state law and with district policies and
regulations regarding the sale of food on school premises, and are encouraged to review and
become knowledgeable about laws, including county food handling requirements, state and federal
nutritional standards, and the district’s wellness policy.
• Requests or proposals for districtwide projects or fundraising, such as collection drives, must be
submitted in writing and authorized in advance by the district’s governing board at a regular board
meeting.
• Membership fees may be used to raise funds for specic projects for the schools, but parents or
students may not be required to pay fees to participate in school activities.
• Any rules and regulations developed for the organization must conform to the law, the board of
education’s policies and regulations, and the school’s rules and procedures.
• All booster auxiliary organization members must be made aware that no individual should
personally benet from the activities the organization conducts. is concept should be made a
part of the bylaws.
• Any prots from fundraising activities that are not spent for a booster auxiliary organization’s
nonprot exempt purpose cannot be returned directly to its members or their families.
• In case the booster auxiliary organization dissolves or terminates, the booster auxiliary
organization’s constitution should provide for the distribution of any excess funds to another
nonprot organization, the ASB or the district.
Chapter 21
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Booster Clubs, Foundations, Auxiliary Organizations and Other Parent-Teacher Associations 229
All other booster auxiliary organization activities are outside the control of the district and its governing
board.
Should a booster auxiliary organization decide to operate a bingo or rae activity, California Penal Code
sections 326.5 and 320.5 regulate these events. ese regulations are enforced by the licensing agency of each
county. Information on how to conduct a legal rae can be obtained from the California attorney general’s
website at www.ag.ca.gov.
Booster Auxiliary Organizations as Nonprot Organizations with Their Own Tax
Identication Number
Booster auxiliary organizations are not legal components of the school district. Each booster auxiliary organi-
zation must have its own tax identication number (TIN) and bank account, and is directly responsible for
compliance with IRS and state reporting and disclosure requirements. Any organization that provides receipts
to donors stating that their gift is a charitable tax-deductible donation must be approved by IRS as a 501(c)(3)
tax-exempt organization. It is the organization’s responsibility to know and comply with all state and federal
laws.
ere are several ways to approach being tax-exempt, having a TIN, or choosing whether or not to accept
donations. e recommended approach is for all booster auxiliary organizations to apply for nonprot
tax-exempt status through the Internal Revenue Service (IRS) and State of California. Preparing constitu-
tions, bylaws, articles of incorporation, budgets and projections are already part of the process of obtaining
school entity approval. Taking the next step and completing the federal and state forms is not much more
dicult.
IRS Form SS-4, Application for Employer Identication Number, may be submitted over the telephone after
it is lled out. Instructions are available at www.irs.gov/pub/irs-pdf/iss4.pdf, and a form is available at www.
irs.gov/pub/irs-pdf/fss4.pdf.
Regardless of whether it intends to le for nonprot status, a booster auxiliary organization that will receive
$5,000 or more in annual revenues or gross receipts is required to le IRS Form 1023, Application for
Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. is form, its instructions,
and Form 872, are available online at https://www.irs.gov/pub/irs-utl/f872ovdp.pdf.
Likewise, if the booster auxiliary organization wishes to specify contributions as tax-deductible, the most
direct path to doing so is through Form 1023, which upon approval will result in the IRS issuing a deter-
mination letter that recognizes the booster auxiliary organization’s 501(c)(3) nonprot, tax-exempt status.
Booster auxiliary organizations cannot legally furnish donors with receipts for a charitable tax-deductible
donation unless they have obtained this type of ocial determination letter from the IRS. Package 1023,
Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, includes
Form 1023, instructions for Form 1023, Consent to Extend the Time to Assess Tax, at https://www.irs.gov/
pub/irs-pdf/f1023.pdf, and Form 872, at https://www.irs.gov/pub/irs-pdf/f1023.pdf.
Booster auxiliary organizations must le Federal Form 990, Return of Organization Exempt from Income Tax,
and State Form 199, Exempt Organization Annual Information Return, unless they do not meet the ling
requirements. According to the 2014 IRS Form 990 instructions, Form 990 must be led by an organization
even if that organization has not completed Form 1023 if it has either (1) gross receipts greater than or equal
to $200,000 or (2) total assets greater than or equal to $500,000 at the end of the tax year.
Information on nonprot status can be found in Non-Prot Status Publication 557, Tax-Exempt Status for
Your Organization at www.irs.gov/pub/irs-pdf/p557.pdf.
California nonprot, tax-exempt status is similar and requires that an organization complete Form 3500,
Exemption Application. California Forms and Instructions Form 3500 Booklet, Exemption Application
230 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Booklet includes instructions and a copy of form 3500 and is available online at https://www.ftb.ca.gov/
forms/misc/3500bk.pdf.
According to the 2014 California Franchise Tax Board Form 199 instructions, Form 199 must be led by
an organization if the organization has been granted tax-exempt status by the Franchise Tax Board, the
organization is a nonexempt charitable trust as described in Internal Revenue Code section 4947(a) (1),
and its gross receipts and pledges as a general guideline are greater than $50,000. California Form RRF-1,
Annual Registration Renewal Fee Report to Attorney General of California, must be led by every charitable
nonprot corporation, unincorporated association or trustee holding assets for charitable purposes, regardless
of whether the corporation les Form 990, unless the organization is exempt from ling. Organizations
exempt from ling Form RRF-1 include governmental agencies and any charitable corporation organized and
operated primarily as a religious organization, educational institution, or hospital.
Forms are available on the IRS, California Franchise Tax Board and California Attorney General’s Oce
websites at www.irs.gov, www.ftb.ca.gov, and www.oag.ca.gov
Financial Guidelines
Booster auxiliary organizations are responsible for ensuring that proper internal controls exist for all of their
nancial activities. In accordance with its bylaws, each booster auxiliary organization should elect a treasurer
who is assigned responsibility for recording, documenting and organizing all nancial activities.
As do ASBs that exercise the best practices contained in this guide, booster auxiliary organizations should
adhere to sound business practices and maintain an adequate system of controls. ese include, but are not
limited to, the following:
Financial statements and treasury (See Chapter 7)
• e treasurer or designated ocer should prepare monthly nancial statements that are presented
to the organization along with a copy of the most current bank statement and reconciliation.
Financial statements may include cash receipts, cash disbursements, checking account beginning
and ending balances, balance sheets, income statements and other relevant items.
• A budget should be developed at the beginning of the year to project expected revenues and
expenses, and should be revised as needed.
• An auditor who is independent of the treasurer should be appointed and should report directly to
the booster auxiliary organization board. e auditor should review all of the nancial records,
journals, check registers, receipts, invoices, bank statements, and other nancial information at
least annually.
Cash receipts and bank reconciliation (See Chapters 7 and 13)
• Prenumbered receipt books and supporting documentation.
• Preparation of duplicate deposit, cash count and fundraising forms.
• Bank deposits should be made intact and in a timely manner.
• Someone other than the individual(s) responsible for depositing funds and writing checks should
perform bank reconciliations monthly.
Cash disbursements (See Chapter 18)
• Checks should require a minimum of two signatures.
• Preparation of duplicate forms such as purchase orders.
Chapter 21
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Booster Clubs, Foundations, Auxiliary Organizations and Other Parent-Teacher Associations 231
• All expenditures should be approved by the booster auxiliary organization board and the approval
noted in the board meeting minutes.
Fundraising activities should be conducted for a specic goal and not simply to raise money for the organi-
zation. All fundraising activities conducted on school premises must adhere to the guidelines established by
the board of education, each school’s individual guidelines, and those noted in Chapter 8.
Only organizations that have scheduled fundraising activities and have obtained prior written approval from
the principal/school administrator will be authorized to conduct such activities on district or school premises.
Because booster auxiliary organizations experience frequent turnover of ocers and members, it is important
to clearly document the activities of the organization and to establish a procedure for retaining those
documents. Documents that should be retained by the organization include the following:
1. Cash receipts.
2. Cash disbursements and general ledger.
3. Bank records.
4. Income tax returns.
5. Minutes of meetings as dened by the organization’s bylaws.
e organization should obtain a safe deposit box or similar storage facility to secure important documents.
Solicitations on School Premises
California Education Code 51520, Prohibited Solicitations on School Premises, states the following for K-12
school entities:
During school hours, and within one hour before the time of opening and
within one hour after the time of closing of school, pupils of the public school
shall not be solicited on school premises by teachers or others to subscribe
or contribute to the funds of, to become members of, or to work for, any
organization not directly under the control of the school authorities, unless the
organization is a nonpartisan, charitable organization organized for charitable
purposes by an Act of Congress or under the laws of the state, the purpose
of the solicitation is nonpartisan and charitable, and the solicitation has been
approved by the county board of education or by the Governing Board of the
school district in which the school is located. Nothing in this section shall be
construed as prohibiting the solicitation of pupils of the public school on school
premises by pupils of that school for any otherwise lawful purpose.
California Education Code section 51521, also for K-12 school entities, discusses solicitations on behalf of
a school. Ultimately, the school district’s superintendent and governing board have complete authority over
whether any such activity occurs on school district property. us, obtaining written permission for any such
activities is of primary importance. e following are general criteria for obtaining permission:
• e purposes of the fundraising activity, which must be nonpartisan, nonpolitical, nonsectarian,
and nondenominational.
• e manner in which the fundraising activity will be conducted (for example, demands made
on sta time and district materials must be minimal, and the activity must not encroach on
instructional time).
• Identication of the sponsors, ocers and individuals participating in the fundraising activity.
232 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• Disclosure of the identity and location of any parent organization with which the soliciting
organization is aliated or of which it is a subsidiary.
School District Employees
If a booster auxiliary organization wishes to pay for additional and/or extracurricular services, the person to
provide the services must be hired through the school district’s personnel department. e booster auxiliary
organization will deposit funds into a district account for the proposed expenses. e funds must be sucient
to pay for the services, plus the benets due to the employee. School employees are not employees of the
booster auxiliary organization, and the booster auxiliary organization should be aware of the following:
• While serving as district employees, they have no authority to work for the booster auxiliary
organization during their district work schedule. A district employee acting in his or her ocial
capacity and during work hours may interact with booster auxiliary organization ocials when this
is a required part of his or her duties as a district employee.
• If a district employee would like to be employed by the booster auxiliary organization, the
employee must obtain prior approval from the district’s personnel department.
• Some districts that permit a district employee to also be employed by a booster auxiliary
organization may require that the employee be paid through the district, with the district being
reimbursed in turn by the booster auxiliary organization. e district may also require that any
employee chosen to work for a booster auxiliary organization be hired and cleared for work through
the district’s personnel oce.
• A district employee who acts in their personal capacity and on their own personal time is free to
establish a booster auxiliary organization or to participate in it. e employee must ensure that
participation in the booster auxiliary organization does not present a conict of interest with their
duties as a school employee. e employee should also make it clear that their participation is in
their personal capacity and not in their capacity as a district employee.
Donations for Supplies, Equipment and Transportation
Booster auxiliary organizations by nature are designed to help the school and/or ASB, and such help may
come in the form of donations of supplies, equipment and transportation.
Supplies
When a booster auxiliary organization wishes to give the ASB or one of its clubs money for supplies, the
district should purchase the supplies in accordance with district purchasing guidelines and statutory laws,
and the booster auxiliary organization should reimburse the district. e purchase should be carried out
through the district’s purchasing system by a district-designated individual who is authorized to spend the
funds, with the principal’s or other school administrator’s approval. e purchase should be charged to a
school account code, and the purchase requisition should contain the following information in bold:
• Paid by
• Booster auxiliary organization name
• Person responsible for booster club
• Billing address
e purchase should be charged to the school account code on the requisition at the time of payment, and
the district oce should bill the booster auxiliary organization for the cost of the supplies purchased.
Chapter 21
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Booster Clubs, Foundations, Auxiliary Organizations and Other Parent-Teacher Associations 233
Donations for Equipment Purchases
When a booster auxiliary organization wishes to donate equipment to a school, the preferred method for
the transaction is the same as noted above for donation of supplies. Also as above, with the approval of the
principal/school administrator, the district-designated individual authorized to spend the funds purchases
the equipment through the district’s purchasing system. e purchase should be charged to a school account
code, and the purchase requisition should contain the following information in bold:
• Paid by
• Booster auxiliary organization name
• Person responsible for booster auxiliary organization
• Billing address
e purchase should be charged to the school account code on the requisition at the time of payment, and
the district oce should bill the booster auxiliary organization for the cost of the equipment purchased.
If the booster auxiliary organization wishes to purchase equipment outright and donate it to a school, the
process is dierent. e booster auxiliary organization should notify the school administrator and the
purchasing department before the equipment is ordered. en, at a regular board meeting, the district’s
governing board must accept the equipment as a donation to the district.
Donations for Transportation/Field Trips
A booster auxiliary organization may donate funds to the ASB or the district for transporting students to
events. A eld trip request form must be completed in conjunction with the ASB and schools and then be
sent to the district’s transportation department. e request form should contain the following information
in bold:
• Paid by
• Booster auxiliary organization name
• Person responsible for booster auxiliary organization
• Billing address
e transportation cost should be charged to the school account code on the requisition at the time
of payment, and the district oce should bill the booster auxiliary organization for the cost of the
transportation.
Paying Stipends, Salaries and Consultants
Paying Stipends and Salaries
A booster auxiliary organization may not pay any employee of the school district an additional stipend or
salary without prior approval from the district’s business and/or personnel oce. If the booster auxiliary
organization wishes to supplement the school with additional personnel please refer to the section titled
“School District Employees” earlier in this chapter.
Paying Consultants
Consultants are sometimes hired in the ordinary course of business to help with various projects as needed.
Consultants are not employees; they should have their own insurance and should meet all of the qualica-
tions to be considered a consultant. Booster auxiliary organizations should be aware of the regulations that
must be followed when communicating with the ASB on this topic. Chapter 17 discusses this topic at length.
234 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 21
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Booster Clubs, Foundations, Auxiliary Organizations and Other Parent-Teacher Associations 235
Sample School District Letter to Applicants
(District Letterhead)
MEMO
To: All Booster Auxiliary Organizations Supporting Sample School District Schools
From: Sam Smith, Superintendent of Schools
John Money, Fiscal Services
Subject: Booster Auxiliary Organization Requirements
Thank you for applying to operate a booster auxiliary organization supporting Sample School District schools
and for making a difference in the lives and education of our students.
We are providing you this memo to help you with your application. All booster auxiliary organizations are
considered separate organizations from the Sample School District. Before operating on any school site, the
district requires the following items from each booster auxiliary organization:
Required Document Comment
Booster auxiliary organization name
Dene which school and sport or activity the group is
supporting.
Booster club ofcers and contact information
List ofcers’ titles, phone numbers, and
email addresses.
Employer/Tax Identication Number (TIN) of the
booster auxiliary organization
Note: The district’s TIN is not available for use;
the booster auxiliary organization must have its own
TIN.
This is required to open a bank account and for many other
functions. If you used an individual’s social security number,
please indicate this. See Form SS-4 at www.irs.gov.
Proof of tax-exempt status under Internal Revenue
Code Section 501(c)(3) (if applicable)
To apply for exempt status, you may review Form 1023
and the instructions for ling at www.irs.gov
You will need this if your booster will normally have gross
receipts of $5,000 or more in a year OR if you wish to
receive a determination letter that recognizes 501(c)(3)
status and species that contributions to the organization
are tax-deductible.
Meeting dates – calendar For board meetings, committee meetings, etc.
A copy of the booster club current charter and bylaws Provide the most recent information.
Note: These required documents are subject to change at any time without notice.
For help, you may refer to the guidelines for booster auxiliary organizations as outlined in the Associated
Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference published by FCMAT and
available at www.fcmat.org. The FCMAT desk reference includes guidelines regarding the organization of
booster auxiliary organizations, nancial guidelines, solicitation regulations, school interaction, and many other
procedures and functions.
If you have any questions regarding this memorandum, please contact your principal/school administrator.
Sincerely
Sam Smith
Superintendent of Schools
236 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Sample Booster Auxiliary Organization Application
(School District Name)
Booster Auxiliary Organization Application
Application Date: ________________________________
Booster Auxiliary Organization Name: __________________________________________________
Name of School: ____________________________________________________________
Check one: o Initial Application o Renewal:
The parents of Sample School District hereby requests approval for the formation of the
_____________________________________________________ Booster Auxiliary Organization.
Name of Organization
Objectives / Purposes of the Booster Auxiliary Organization are: ____________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
Booster Auxiliary Organization Ofcial Mailing Address:
Ofcial Name: _____________________________________________________________________
PO Box/Street: ____________________________________________________________________
City/State/Zip Code: ________________________________________________________________
Telephone Number: _____________________________________
Booster Auxiliary Organization Ofcers:
Position Held Name Email Address
Is the organization a 501(c)(3) tax-exempt? o Yes o No
Organization Tax ID # ________________ Banking Institution: ______________________________________
Chapter 21
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Booster Clubs, Foundations, Auxiliary Organizations and Other Parent-Teacher Associations 237
Does the booster auxiliary organization conduct annual nancial audits/reviews? o Yes o No
Attach a copy of your proposed budget for the upcoming school year.
Upcoming School Year Planned Meetings (or attach schedule):
Date Time Location
Upcoming School Year Planned Fundraisers (or attach schedule):
Activity Date Location
We, the members of this booster auxiliary organization, have read and understand the rules for forming and
conducting this organization, including the district’s board policy and administrative regulations, and agree
to abide by them. We will submit a contact list and two copies of the proposed constitution and bylaws to the
principal/school administrator or designee, who will review the application for approval, as well as any other
information required by the district.
____________________________________________________________________
Signature of Organization President Date
District/School Site Approvals:
Principal/School Administrator: _______________________________________________________________
Signature Date
District Board Recognition and Approval:
District Administrator: ______________________________________________________________________
Signature Date
Title: _______________________________________________________________
238 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 22
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Where to Go for Help 239
Chapter 22
Chapter 22 – Where to Go for Help
As indicated throughout this manual, many people are involved in administering and supervising the
activities of student organizations, and many people and organizations are available to solve problems,
provide guidance and answer questions that arise. e following ow chart oers a recommended sequence
for getting answers to ASB questions:
Students, Student Council Members and Staff
ASB Accounting Manual, Fraud Prevention Guide and Desk Reference
ASB Advisor
ASB Bookkeeper
Principal/School Administrator, or Designee
District Business Ofce Staff
District Chief Business Ofcial (CBO)
California Association of
Directors of Activities
District
Auditors
FCMAT
District Legal
Counsel
County Ofce
of Education
At times, a student organization may need to contact other people or groups outside the district. Following is
a list of additional resources to help ensure the success of a school’s student organization.
Organizations and Online Resources
Association of California School Administrators (ACSA)
1029 J Street, Suite 500, Sacramento, CA 95814 • 916-444-3216 or 800-608-2272 • www.acsa.org
California Association of Directors of Activities (CADA)
3121 Park Avenue, Suite C, Soquel, CA 95073 • 831-464-4891 • www.cada1.org
California Association of Student Councils (CASC)
1212 Preservation Park Way, Oakland, CA 94612 • 510-834-2272 • www.casc.net
California Association of School Business Ocials (CASBO)
1001 K Street, 5th Floor, Sacramento, CA 95814 • 916-447-3783 • www.casbo.org
California School Boards Association (CSBA)
3251 Beacon Blvd., West Sacramento, CA 95691 • 800-266-3382 • www.csba.org
240 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
EdSource
436 14th Street, Suite 1005, Oakland, CA 94612 • 510-433-0421 • www.edsource.org
Ed-Data Education Data Partnership
www.ed-data.k12.ca.us
State Agencies
California Department of Education (CDE)
1430 N Street, Sacramento, CA 95814 • 916-319-0800 • www.cde.ca.gov
Fiscal Crisis & Management Assistance Team (FCMAT)
1300 17th Street, Bakerseld, CA 93301-4533 • 661-636-4611 • www.fcmat.org
Board of Equalization (BOE)
P.O. Box 942879, Sacramento, CA 94279-0080 • 800-400-7115 • www.boe.ca.gov
Legislative Analyst’s Oce (LAO)
925 L Street, Suite 1000, Sacramento, CA 95814 • 916-445-4656 • www.lao.ca.gov
Oce of Administrative Law (OAL)
300 Capitol Mall, Suite 1250, Sacramento, CA 95814-4339 • 916-323-6225 • www.oal.ca.gov
Student Senate for California Community Colleges
1102 Q Street, 6th Floor, Suite 4400 Sacramento, CA 95811 • 916-445-2949 • www.StudentSenateCCC.
org
National Associations
Association of School Business Ocials International (ASBO)
11401 North Shore Drive, Reston, VA 20190-4232 • 866-682-2729 • www.asbointl.org
National Association of Secondary School Principals (NASSP)
1904 Association Drive, Reston, VA 20191-1537 • 703-860-0200 or 800-253-7746 • www.nassp.org
National Association of Student Councils (NASC)
1904 Association Drive, Reston, VA 20191-1537 • 703-860-0200 or 800-253-7746 • www.nasc.us
Chapter 23
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Glossary 241
Chapter 23
Chapter 23 – Glossary
e following list of commonly used terms and acronyms has been compiled to help students, student
councils, teachers, activity sponsors, student activity directors, ASB bookkeepers and all others who work
with ASBs.
Terminology
Account Code
A number that classies sources of revenues or purposes of expenditures in either an educational agency’s
budget or the reports submitted to the California Department of Education. e account code classies
expenditures according to the types of items purchased or services obtained, and revenues by the general
source and type of revenue.
Account Numbers
Numbers assigned codes to describe the standard titles of accounts for classication and easy reference.
Accounting
e process of recording, classifying, and summarizing nancial transactions in monetary units to show the
results of those transactions.
Accounting Cycle
e series of procedures required to process nancial transactions throughout a scal period. Procedures used
during this cycle include recording transactions in books of original entry; posting to ledger accounts; taking
a trial balance of the general ledger and ensuring that the subsidiary records agree with their controlling
ledger account; making adjustments; preparing nancial statements; and closing the books.
Accounting Period
A period of time for which records are maintained and at the end of which nancial statements are prepared
covering the period.
Accounts Payable
Amounts due and owed to persons, businesses, governmental units, or others for goods received or earned
and services rendered before the end of the scal period. is includes amounts billed but not received or
paid.
Accounts Receivable
Amounts due and owed from individuals, businesses, governmental units, or others for goods received or
earned and services rendered before the end of the scal period. Includes amounts billed but not received.
Accrual Basis Accounting
An accounting system in which transactions are recorded when they have been reduced to a legal or
contractual right or obligation to receive or pay cash or other resources.
Actuals
e amount an entity actually spent in a given period as opposed to original budget estimates.
Assets
Anything owned that has value, either tangible or intangible. Assets may be further segregated into current
assets and xed assets.
242 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Associated Student Body
Any organization of students having as its purpose the conduct of activities on behalf of the students as
approved by the governing body of the organization and by the school authorities, and not in conict with
the authority and responsibility of the public school ocials.
Audit
An examination of documents, records, and accounts to: (1) determine the propriety of transactions; (2)
ascertain whether all transactions are recorded properly; and (3) determine whether statements drawn from
accounts provide an accurate picture of nancial operations and nancial status for a given period of time.
Audit Finding
A weakness in internal controls or an instance of noncompliance with laws and regulations. Audit ndings
are presented in the audit report.
Balance Sheet
A statement that shows assets, liabilities, reserves and fund balance (or decit) of an entity at a specic date,
properly classied to show the nancial position of the entity as of that date.
Bank Charges
Fees or charges made by banks to cover the expenses of handling depositors’ accounts.
Book of Original Entry
A book that contains a chronological record of transactions, names the accounts to be debited and credited
to record each transaction, and states the debit and credit amounts. e recording function is completed by
posting the debits and credits shown in the journal to the various accounts in the ledgers.
Budget
A plan of nancial operation, consisting of an estimate of proposed revenues and expenditures for specied
purposes for a given time, usually one scal year.
Budgetary Control
Managing nancial transactions according to an approved plan of estimated revenues and expenditures.
Budgeting
Allocating the resources of an organization among potential activities to achieve the organization’s objectives;
planning for the use of resources.
Budget Revisions
Net increases and decreases to the budget. ese may include items such as increases from new grant funds
and decreases to reduce appropriations to prevent spending in excess of available revenues.
California Code of Regulations (CCR)
Regulations that have been formally adopted by approximately 200 regulatory agencies in the state, including
the State Board of Education.
California Department of Education (CDE)
e CDE has several roles within the school nance system, including administering the numerous
categorical programs created by state and federal lawmakers, and maintaining data on the funding districts
and county oces receive and how those funds are spent. California’s elected superintendent of public
instruction oversees the CDE, and the State Board of Education acts as its policymaking body.
California Education Code
A collection of all the laws directly related to California K-12 public schools. Education Code sections are
created or changed by the governor and Legislature when they make laws. Local school boards and county
oces of education are responsible for complying with these provisions. e Education Code is permissive,
Chapter 23
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Glossary 243
which means that school districts are free to take any action not specically prohibited. Additional
regulations that aect education are contained in the California Administrative Code, Titles 5 and 8, the
Government Code, and general statutes.
Canceled Checks
Checks that have been issued by the depositor and paid by the bank.
California Public Employees’ Retirement System (CalPERS)
A retirement fund required by state law. Classied employees and their employer (such as school districts and
county oces of education) contribute. It is also referred to as Public Employees’ Retirement Fund (PERS).
California State Teachers’ Retirement System (CalSTRS)
A retirement fund required by state law. Certicated employees and education agencies (such as school
districts and county oces of education) contribute to CalSTRS. It is also referred to as State Teachers’
Retirement System (STRS).
Capital Outlay
Money spent for major physical changes to a school such as new land or buildings; building construction,
additions, remodeling, renovations, or reconstruction, or certain new equipment. ese investments in the
physical structure of a school are expected to last for a number of years.
Cash
Currency, checks, money orders, bankers’ drafts and bank deposits.
Cash Basis
Method of accounting in which revenues and expenditures are recorded only when cash is actually received
or disbursed. is accounting method is not acceptable for use in local educational agencies.
Cash Disbursement Journal
A special accounting journal used for recording all cash disbursements.
Cash in Bank
Balances in bank accounts.
Cash Receipts Journal
A special accounting journal used for recording all cash receipts.
Centralized Accounting
A method of accounting in which a student body organization’s nancial transactions are handled at a central
location rather than at the school.
Certicated/Credentialed Employees
School employees who are required by the state to hold some type of teaching credential, including most
full-time, part-time, substitute and temporary teachers; librarians; counselors; and most administrators.
e requirements for a fully credentialed teacher include having a bachelor’s degree, completing additional
required coursework, and passing the California Basic Educational Skills Test (CBEST). However, teachers
who have not yet acquired a credential but have an emergency permit are allowed to teach in the classroom
and are counted in this category.
Chart of Accounts
A systematically arranged list of accounts applicable to a specic local educational agency. All account names
and numbers, if any, are listed in numerical order.
244 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Charter School
A public school that may provide instruction in any combination of grades (kindergarten through grade
12). Parents, teachers or community members may initiate a charter petition, which is typically presented to
and approved by a local school district governing board. e law also grants chartering authority to county
boards of education and the State Board of Education under certain circumstances, such as the appeal of
a petition’s denial by a school district’s governing board or the direct approval of countywide or statewide
charter schools. Charter schools are funded on a per-pupil basis, freed from most state regulations that apply
to school districts and county oces of education, usually able to hire their own teachers and other sta, and
subject to closure if they fail to meet their promises for student outcomes. Charter schools were originally
authorized in California in 1992 (Senate Bill 1448).
Check
A bill of exchange drawn on a bank and payable on demand; a written order on a bank to pay on demand a
specic sum of money to a named person or business out of money on deposit.
Classied Employees
School employees in positions that do not require teaching credentials. is group includes bus drivers,
cafeteria sta, clerical sta, custodians, instructional aides, and some management personnel.
Collective Bargaining
A process for establishing a contract between a school district and its employee organizations. Senate Bill
160 (1975) dened the manner and scope of negotiations, and mandated a state regulatory board (see Public
Employment Relations Board).
Combination Journal
A journal that shows both cash receipts and cash disbursement transactions.
Consumer Price Index (CPI)
A measure of the average change over a short time in the prices paid for a set of consumer goods and services.
e United States Bureau of Labor Statistics compiles this measure. Salary adjustments and other costs can
be linked to the CPI, which is sometimes used to measure ination.
Contingent Liabilities
Items that may become liabilities as a result of conditions undetermined at a given time (e.g., guarantees,
pending lawsuits, judgments and appeals, and unsettled disputed claims).
Cost of Living Adjustment (COLA)
An increase in funding from the state or federal government to compensate for ination. In California, the
law states that educational programs should receive a certain COLA based on the annual percentage change
in the Implicit Price Deator for state and local government purchases of goods and services (Education
Code Section 42238.1).
County Oce of Education (COE)
e agency that provides educational programs for certain students; business, administrative, and curriculum
services to school districts; and nancial oversight of districts. ese services are aected by the size and type
of districts in the county, the geographic location and size of the county, and the students who have special
needs that are not met by the districts. Each of California’s 58 counties has an oce of education.
Credit
A term used in double-entry bookkeeping for the right side of double-entry posting. e credit will reduce
assets and expenditures and will increase liabilities, revenue and fund balance. e typical balance for
liabilities, revenue and fund balance accounts is a credit amount.
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Glossary 245
Current Assets
Assets that are readily available, liquid and/or can be made readily available to meet the cost of operations or
to pay current liabilities such as petty cash, cash in bank, cash in savings, or accounts receivable.
Current Liabilities
Liabilities due and payable for goods and services such as accounts payable, wages payable or state income tax
payable.
Debit
A term used in double-entry bookkeeping for the left side of double-entry posting. e debit will increase
assets and expenditures and reduce liabilities, revenue and fund balance. e typical balance for assets and
expenditure accounts is a debit amount.
Decentralized Accounting
A method of accounting in which nancial transactions of a student body organization are handled at the
school rather than at a central location.
Decit
e amount by which a sum of money is less than the required amount (e.g., apportionment decits or
budget decits).
Decit Fund Balance
e amount by which a fund’s liabilities exceed its assets.
Decit Spending
When actual expenditures exceed actual revenues (also referred to as an operating decit).
Deposit in Transit
Any deposit recorded on the books but not shown on the bank statement.
Disbursement
Payment by currency or check.
District Governing Board
e ocial name for the local school board.
Double-entry
A system of bookkeeping that requires an amount credited for every corresponding amount debited. A
double-entry ledger maintains equality of debits and credits.
Education Code
e body of law that regulates education in California. Additional education regulations are contained in the
California Administrative Code, Titles 5 and 8, the Government Code, and general statutes.
Education Foundation
A tax-exempt organization established to raise funds and receive gifts and grants in support of a school
district or individual school (also referred to as a school foundation).
Encumbrance
An obligation in the form of a purchase order, contract, salary or other commitment that can be charged to
an appropriation and for which a part of the appropriation is reserved.
Equity or Fund Balances
e equity is the dierence between the total assets and the total liabilities. is shows the net worth of an
ASB.
246 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Estimated Revenue
Expected receipts of monies during a given period of time.
Expenditure or Expenses
Costs incurred to purchase goods or services. is is the money spent by the ASB.
Financial Statement
A formal statement that accurately indicates the results of business and the nancial position of the
enterprise.
Fiscal Crisis and Management Assistance Team (FCMAT)
A state-funded agency that provides scal advice, management assistance, training, and other school business
services, with a particular emphasis on districts facing scal insolvency. FCMAT operates from the oce
of the Kern County Superintendent of Schools and is under contract with the California Department of
Education and the governor’s oce. Assembly Bill 1200 (AB1200) created FCMAT in 1991. e team can
help county oces of education understand their scal monitoring duties required by AB1200, sometimes
suggesting specic methods of oversight. FCMAT also provides management studies for school districts,
county oces of education, charter schools and community colleges that request them.
Fiscal Year
One year, the beginning and ending dates of which are xed by statute. For local educational agencies, each
scal year begins July 1 and ends June 30.
Fixed Assets
Assets of a permanent nature, having continuing value. A piece of equipment, such as a sound system, is an
example of a xed asset.
Fund
A scal and accounting entity that consists of a number of accounts that record cash and other nancial
resources, all related liabilities and residual equities or balances, and changes therein. A fund serves to
separate the accounts in it from others to carry out specic activities or meet certain objectives in accord with
special regulations, restrictions, or limitations.
Fund balance
e dierence between assets and liabilities. e fund equity of governmental and trust funds.
General Fund
e primary, legally dened fund used to nance the ordinary operations of a local educational agency and
to distinguish general revenues and expenditures from those placed in other funds for specic uses. e
general fund is available for any legally authorized purpose.
General Journal
A journal used primarily for opening, adjusting, accruing and closing entries. Transactions of a less routine
and frequent nature are recorded in the general journal.
General Ledger
A book or le in which accounts are kept to the degree of detail necessary to summarize the nancial transac-
tions of an organization. It includes all assets, liabilities and elements of equity of an enterprise, including
revenues and expenses.
General Long-Term Debt
Long-term debt that is legally payable from general revenue and backed by the full faith and credit of a local
educational agency.
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Generally Accepted Accounting Principles (GAAP)
Uniform minimum standards and guidelines for nancial accounting and reporting. ese govern the form
and content of an entity’s nancial statements, and include the conventions, rules and procedures needed to
dene accepted accounting practices. Generally accepted accounting principles provide a standard by which
to measure nancial presentations.
e primary authority on the application of these principles to state and local governments is the
Governmental Accounting Standards Board (GASB). GASB is the organization established to issue standards
of nancial accounting and reporting for the activities and transactions of state and local governmental
entities. It is the successor organization to the National Council on Governmental Accounting (NCGA).
Indirect Costs
Agencywide general administrative costs, including scal, personnel, and data processing services. Indirect
costs benet multiple programs and objectives; they cannot be readily identied with a particular nal cost
objective.
Indirect Cost Rate
e rate used to charge a portion of the general expenses of operating a district to a specic program such as
food services/cafeteria program or adult education.
Interest
A fee charged to a borrower for the use of money, or a yield earned on money on deposit.
Inventory
A detailed list showing quantities and containing descriptions of an organization’s property at a given time. It
may also include units of measure, unit prices, and values.
Investments
Disbursements of cash for the purpose of generating income.
Joint School Districts
School districts with boundaries that cross county lines.
Journal
Any accounting record in which the nancial transactions of an organization are formally recorded for the
rst time (e.g., a check register or a receipt book).
K-14
Kindergarten through community college.
Ledger
A group of accounts in which nancial transactions of an organization are recorded. e nal book or record
in which all debits and credits from the journal are posted to the correct accounts.
Legislative Analyst’s Oce (LAO)
A nonpartisan oce in the state government that gives scal and policy advice to the California Legislature.
e LAO provides analyses of proposed and adopted state budgets and oers the public information about
state initiatives and ballot propositions.
Liabilities
Unpaid legal obligations. ese include invoices to vendors for items received but not paid for as well as
balances due for sales tax payable to the state.
248 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Local Education Agency (LEA)
A public board of education or other public authority that maintains administrative control of public
elementary or secondary schools in a city, county, township, school district, or other political subdivision of
a state. School districts and county oces of education are both local educational agencies (LEAs). A charter
school can be deemed an LEA for special education purposes (E.C. 47641).
Modied Accrual Basis
e method of accounting in which revenues are recorded when they become both measurable and available
to nance expenditures of the current period. Most expenditures are recorded when the related liability is
incurred, such as when issuing a purchase order.
National School Lunch Program
A federal program to provide food — typically lunch and/or breakfast — for students from low-income
families. e number of students participating in this free and reduced-price meal program is increasingly
being used to measure the poverty level of a school or district population. e number of children in this
program can aect schools’ or districts’ eligibility for grants or other funding aimed at helping lower-income
families.
Net Income
e dierence between revenue and expenses.
Object Codes
In school district budgets, object codes are used to classify revenues and expenditures. For revenues, the
object code identies the source and type of funds. For expenditures, it identies the type of item or service
being purchased.
Organized ASB
ASB organizations are either organized or unorganized. Student organizations in middle schools and high
schools are called organized student body associations because the students organize their activities around
student clubs and a student council.
Outstanding Checks
Checks that have been issued by a depositor but have not been presented for payment at the bank and do not
appear on the bank statement.
Parent Teacher Association (PTA)
A volunteer group of parents and teachers that works to promote the education and wellbeing of all children
and youth at home, in school and in the community. Many schools have a parent club instead of a formal
PTA.
Petty Cash
A sum of money set aside to make change or for immediate payments of small amounts.
Position Control
A function that coordinates and authorizes positions in accordance with established district policies and
procedures. is function is useful for budget development and for preparing salary projections.
Preliminary Credential
A credential that can be earned by both administrators and teachers after they complete a number of require-
ments. e Preliminary Credential is valid for ve years, during which time the teacher or administrator is
expected to pursue a Professional Clear Credential. Among other requirements for a Preliminary Credential,
teachers must earn at least a bachelor’s degree, pass the California Basic Educational Skills Test (CBEST),
and complete an approved teacher-preparation program. Among other requirements for a Preliminary
Credential, administrators must pass the CBEST, complete at least three successful years in teaching or pupil
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services, and complete an approved program of administrator preparation or internship. However, in 2002
the state oered administrators a fast-track alternative: the School Leaders Licensure Assessment (SLLA). In
addition, administrative services interns can obtain a Preliminary Credential by participating in an approved
one-year in-service training program.
Public Employees’ Retirement System
A public retirement fund for classied employees that is required by state law. Classied employees, their
employer (such as a school district or a county oce of education) and the state contribute to this retirement
fund, unless exempted by state law. It is also referred to as the California Public Employees’ Retirement
System (CalPERS).
Public Employment Relations Board (PERB)
A ve-person board appointed by the governor that regulates collective bargaining between public employees
(including school district and county oce of education employees) and public employers (see Government
Code Sections 3541, et seq.).
Purchase Order
A document issued to a vendor or business that authorizes the delivery of specied merchandise or the
performance of certain services and charges for the goods or services.
Reserves
Funds set aside in a school entity budget to provide for future expenditures, to oset future losses, for
working capital, or for other purposes.
Revenue
Receipt of money from the sale of goods or services or as prot from fundraising activities or investments.
is is the money earned by the ASB.
School Board
A locally elected group, usually consisting of three to seven members, that sets scal, personnel, instructional,
and student-related policies. A school district governing board also provides direction for the district, hires
and res the district superintendent, and approves the budget and contracts with employee unions. By law,
every school district in California is governed by a locally-elected school board.
School District
A local education agency directed by an elected local board of education that exists primarily to operate
public schools. In California, there are three types of school districts: elementary, high school, and unied.
An elementary district is usually kindergarten through eighth grade (K-8); a high school district is usually
grades 9 through 12; and a unied district is kindergarten through grade 12 (K-12).
School Foundation
A tax-exempt organization established to raise funds and receive gifts and grants in support of a school
district or individual school (also referred to as an education foundation).
School Site Council
Parents, students (high schools only), teachers, and other sta selected by their peers to prepare a school
improvement plan and to help see that the planned activities are carried out and evaluated. Such a council is
required when a school receives Title I funding.
Single Subject Credential
A credential required to teach middle or high school in California.
Small Districts
A small elementary district is dened as having an average daily attendance (ADA) of fewer than 901
students. In California, more than 40% of districts have fewer than 1,000 students.
250 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Standardized Account Code Structure (SACS)
A comprehensive system of accounting for and reporting school district revenues and expenditures. As
of 2003–04, all school districts use SACS, which provides a variety of ways to track and report nancial
information, including by specic programs and functions.
State Education Agency (SEA)
e agency primarily responsible for supervising a state’s public elementary and secondary schools. In
California, it is the California Department of Education.
State Superintendent of Public Instruction (SPI)
Elected on a statewide, non-partisan ballot, the superintendent of public instruction (also called the state
superintendent) is in charge of running the California Department of Education. County oces of education
are required to inform the state superintendent of their approval or disapproval of all school district budgets.
State Teachers’ Retirement System (STRS)
A retirement fund required by state law and funded by contributions from certicated employees, their
employing school agencies (such as school districts and county oces of education), and direct payments by
the state. Also known as CalSTRS.
Student Senate
An organization that provides policy input to the consultation council on behalf of community college
students.
Subsidiary Ledger
Provides supporting detail to the general ledger accounts.
Trial Balance
A list of the balances of the accounts is a ledger kept by double entry, with the debit and credit balances
shown in separate columns. If the totals of the debit and the credit columns are equal, the ledgers are said to
be in balance.
Trust Accounts
Sums of money held by an organization for another group or organization. e ASB acts as trustee for
scholarship accounts, class accounts and club accounts.
Unorganized ASB
ASB organizations are either organized or unorganized. Student organizations in elementary schools are
unorganized student body associations because the students do not form clubs or a student council. Although
elementary school students do raise funds, they have only limited involvement in decisions about the
fundraising events and how the funds are to be spent. If a student council exists, its activities are limited.
e governing board delegates authority to oversee the raising and spending of funds to the principal/school
administrator or designee.
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Glossary 251
Acronyms
Student body administration, like every other business, has its set of frequently used abbreviations. is list of
acronyms is intended to identify some of the abbreviations used regularly in school entities.
A AASA American Association of School Administrators
AB Assembly Bill
ACSA Association of California School Administrators
ADA Americans with Disabilities Act
ADA Average Daily Attendance
AFDC Aid to Families with Dependent Children
AP Advanced Placement
API Academic Performance Index
AS Associated Students
ASACC American Student Association of Community Colleges
ASB Associated Student Body
ASBGP Associated Student Body Government Presidents
AYP Adequate Yearly Progress
C CAA California Athletic Association
CAHSEE California High School Exit Examination
CALPADS California Longitudinal Pupil Achievement Data System
CalPERS California Public Employees’ Retirement System
CALSACC California Student Association of Community Colleges
CASBO California Association of School Business Ofcials
CalSTRS California State Teachers’ Retirement System
CBEDS California Basic Educational Data System
CBEST California Basic Educational Skills Test
CBO Chief Business Ofcial
CCR California Code of Regulations
CCSS Common Core State Standards
CDE California Department of Education
CFO Chief Financial Ofcer
CFR Code of Federal Regulations
CLAD Cross-cultural, Language and Academic Development
COE County Ofce of Education
COLA Cost of Living Adjustment
CPA Certied Public Accountant
252 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
CPI Consumer Price Index
CPO Chief Personnel Ofcer
CR Credit
CSAM California School Accounting Manual
CSBA California School Boards Association
CSF California Scholarship Federation
CSIS California School Information Services
CSR Class Size Reduction
CST California Standards Test
CTC Commission on Teacher Credentialing
CTE Career Technical Education
CY Current Year
D DGS Department of General Services
DOF Department of Finance
DR Debit
DSA Division of the State Architect
E EAAP Education Audit Appeals Panel
EC Education Code
EL English Learners
ESL English as a Second Language
ESY Extended School Year
F FAPE Free Appropriate Public Education
FCMAT Fiscal Crisis and Management Assistance Team
F/RPM Free and Reduced-Price Meals
FTE Full-time Equivalent
G GAAP Generally Accepted Accounting Principles
GASB Governmental Accounting Standards Board
GATE Gifted and Talented Education
GO General Obligation (Bond)
H HQT Highly Qualied Teacher
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Glossary 253
I IDEA Individuals with Disabilities Education Act
IEP Individualized Education Program
J JPA Joint Powers Agreement
K K-8 Kindergarten through grade 8
K-12 Kindergarten through grade 12
K-14 Kindergarten through grade 14
K-16 Kindergarten through college undergraduate university
L LAIF Local Agency Investment Fund
LAO Legislative Analyst’s Ofce
LCAP Local Control Accountability Plan
LCFF Local Control Funding Formula
LEA Local Educational Agency
M M&O Maintenance and Operations
MOU Memorandum of Understanding
MTYRE Multi-Track Year-Round Education
MYP Multiyear Projection
N NCLB No Child Left Behind
NPS/A Nonpublic School/Agency
NSL National School Lunch
NSS Necessary Small School
O OMB Ofce of Management and Budget
OPEB Other Post-Employment Benets
OPSC Ofce of Public School Construction
P P-1 Period 1 (First Principal Apportionment Period)
P-2 Period 2 (Second Principal Apportionment Period)
PERB Public Employment Relations Board
PERS Public Employees’ Retirement System
PI Program Improvement
PL Public Law (Federal Law)
254 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
PTA Parent-Teacher Association
PY Prior Year
R RDA Redevelopment Agency
RFA Request for Application
RFP Request for Proposal
ROC Regional Occupational Center
ROP Regional Occupational Program
ROTC Reserve Ofcer Training Corps
RRMA Routine Restricted Maintenance Account
S SAB State Allocation Board
SACS Standardized Account Code Structure
SAIT School Assistance and Intervention Team
SARB School Attendance Review Board
SARC School Accountability Report Card
SB Senate Bill
SBE State Board of Education
SCO State Controller’s Ofce
SEA State Education Agency
SELPA Special Education Local Plan Area
SPI Superintendent of Public Instruction
STAR Standardized Testing and Reporting Program
STRS State Teachers’ Retirement System
T TK Transitional Kindergarten
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Appendices 255
Chapter 24
Chapter 24 – Appendices
Sample Associated Student Body (ASB) Constitutions and Bylaws
Best Practices School Sample ASB Constitution
(Name of School)
(Name of Student Council or Club)
ASB Constitution
Article I – Name of the Organization
The name of the organization shall be the Associated Student Body (ASB) of the Best Practices
School.
Article 2 - Objectives and Purpose.
This organization shall have as its objective and purpose the conduct of activities on behalf of the
students of the Best Practices School as approved by the principal/school administrator and the
governing board of the Best Practices School. These shall include:
• Provide a democratic forum in which students can address school issues that affect their
lives.
• Maintain continual communication from students to faculty members and administrators as
well as among the students within the school.
• Offer a year-long program of social functions and community involvement projects for
students.
• Provide leadership training for student in the duties and responsibilities of good citizenship,
using the school environment as the primary training ground.
Article 3 – Organization and Membership
All registered students enrolled in the Best Practices School shall be members of the Associated
Student Body. Members shall be entitled to one vote in all student body elections.
Any registered student is eligible for election to the student council according to election procedures.
The election of representatives shall take place the ____ week of the _____ term or semester of
school. Any member shall be removed if they miss three (3) meetings without presenting reasonable
justication.
Article 4 – Executive Board
The executive board shall consist of the following ASB ofcers:
• President
• Vice-President
• Treasurer
• Secretary
• Historian
• Activities Chair (or Commissioner of Activities)
256 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• Publicity Chair (or Commissioner of Publicity)
• Athletics Chair (or Commissioner of Athletics)
• Academics Chair (or Commissioner of Academics)
The executive board shall have all executive powers. The executive board members shall serve as
acting and voting members of the Best Practices School Student Council. The appointed ofcers and
the adviser are non-voting members.
Duties of the executive board members are outlined in the bylaws to the constitution.
The positions on the executive board shall be lled by a general election of the ASB, held annually.
No member of the executive board may hold more than one ASB ofce or class ofce.
Executive board members shall hold ofce for one school year.
Article 5 – Student Council
The legislative powers of the ASB shall be vested in the student council as delegated by the school
administration.
All actions of the student council are subject to review and possible veto by the ASB advisor and
principal/school administrator.
The student council shall consist of 20 voting members: the ASB executive board and the president,
vice president, secretary, and treasurer of each of the three classes (sophomore, junior, and senior).
(Note: The student council voting member number may vary, per desire of ASB.)
The elected, voting members of the student council shall be chosen by election as described in the
bylaws.
The term of ofce for members of the student council shall be one school year.
The principal/school administrator shall appoint a certicated staff member of the district to serve as
advisor to manage the club/student council and oversee its projects.
Article 6 – Amendments
Amendments to this constitution may originate:
• In student council
• By petition by 10 percent of the student body
• By ballot
• To represent the student council at all school and school district meetings where this
representation is appropriate.
Amendments must be submitted in writing during a regular business meeting and must be posted for
reading for 30 days.
Any amendments that do not pass with a two-thirds vote may not be reconsidered during the same
school year.
Article 7 – Ratication
The student council shall ratify this constitution and any subsequent amendments through a two-
thirds vote of the council.
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Appendices 257
Best Practices School, Sample Associated Student Body Bylaws of the Constitution
(Name of School)
Associated Student Body Bylaws of the Constitution
Article I – Student Council
It shall be the duty and power of the student council to:
• Be the supreme legislative body of the Associated Student Body.
• Propose and pass legislation that is considered important to the student body.
• Establish the annual student body dues, also known as the price of an ASB Card that will
allow students to attend ASB activities at a reduced cost.
• Establish a disciplinary board as the need arises.
• Spend ASB monies.
• Propose and pass amendments to the constitution and bylaws.
Each member of the student council shall be able to cast one vote in each voting situation.
Article II – Executive Board
The ASB president shall have the following duties:
• Preside over all meetings.
• Call special meetings.
• Plan and prepare an agenda for all meetings.
• Appoint all committee members and chairpersons.
• Serve as ex-ofcio member of all committees.
• Represent the student council at all school and school district meetings, community group
meetings, and civic organization meetings where this representation is appropriate.
• Preside at all student body assemblies or authorize someone to do so in their place.
• Vote in student council only in cases where their vote would affect the result.
• Coordinate the interview, selection, and performance of committee chairpersons and task
forces.
• Act as a facilitator of group discussion by summarizing, clarifying, etc.
• Work closely with the student council advisor on all planning.
• Participate in student council-sponsored activities.
The ASB vice president shall have the following duties:
• Work closely with the president
• Serve as the ASB president if the president becomes unable to fulll their duties either
temporarily or permanently.
• Serve as chairperson of the elections committee and supervise all student body elections.
• Coordinate the work of committees.
• Work with the president and treasurer to prepare the budget and calendar.
• Help the president prepare the meeting agenda.
258 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• Lead the ag salute at all meetings, student body activities and assemblies, or authorize
another member to do so in their place.
The ASB treasurer shall have the following duties:
• Maintain complete and accurate record of all ASB receipts and disbursements.
• Prepare monthly reports for the student council on the ASB bank balances and receipts and
disbursements to date.
• Serve as chairperson of the nance committee, with the assistance of the student body
bookkeeper and a district business staff member.
• Act as co-chair of the fundraising standing committee.
• Work with the ASB to prepare revenue potential forms to ensure successful fundraisers and
adequate internal controls.
• Keep accurate prot and loss statements of all ASB functions, clearly detailing all money
collected and spent, and help classes and clubs keep accurate records.
• Work closely with the president and vice president to prepare an annual budget.
• Authorize purchase orders/expenditure approvals prior to spending
The ASB secretary shall have the following duties:
• Prepare and distribute the agenda for meetings.
• Notify members of upcoming meetings.
• Take attendance at meetings and keep permanent attendance records.
• Maintain accurate minutes of all meetings, including date and place, presiding ofcer, and
business conducted.
• Prepare the minutes in the prescribed format by the next meeting for distribution to all
members.
• Maintain all les of the organization, including original agendas and minutes, clippings and
relevant documents, and establish a policy about lending les.
• Maintain contact names, addresses, phone numbers and email addresses of people with
whom the organization regularly works.
• Keep copies of activity calendars and special event documentation.
• Produce a membership directory of the group.
• Report, answer and le all necessary correspondence.
The historian shall have the following duties:
• Record annual activities using video, photos, written reports, clippings, and/or other means.
• Prepare an historical document such as a scrapbook, website, slide show or video, DVD or
CD.
The activities chair (or commissioner of activities) shall have the following duties:
• Coordinate and maintain the master calendar of all student body activities.
• Serve as chairperson of the activities committee.
• Serve as co-chair of the fundraising standing committee.
The publicity chair (or commissioner of publicity) shall have the following duties:
• Publicize all school activities through the school newspaper, the school marquee, and school
bulletin boards.
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Appendices 259
• Issue news releases to the press, radio and television stations.
The athletics chair (or commissioner of athletics) shall have the following duties:
• To initiate and organize the intramural sports.
The academics chair (or commissioner of athletics) shall have the following duty:
• To serve as the representative to the district governing board.
Article III – Standing Committees
The ASB president and the ASB advisor shall appoint committee members and chairpersons to the
following committees each year:
• The nance committee
• The elections committee
• The activities committee
The Finance Committee:
• The ASB treasurer shall chair the nance committee.
• The treasurers from each class, the ASB advisor, the ASB bookkeeper, and one faculty
member shall serve on this committee.
• The purpose of the committee is to prepare and submit the nal budget and approve all
requests to spend ASB funds.
The Elections Committee:
• The ASB vice president shall chair the elections committee.
• The ASB advisor and the vice presidents from each class shall serve on this committee.
• The purpose of the committee is to plan, organize, and supervise all student body elections.
The Activities Committee:
• The activities chair shall also serve as the chair of this committee.
• The purpose of the committee is to plan, organize, and supervise all student council activities
and to facilitate requests from student clubs for use of school facilities.
Article IV – Succession
If the ASB president cannot fulll his/her duties because of illness, physical disability or absence,
the ASB vice president shall assume and carry out the duties of the president until the President
becomes able to resume the duties of his/her ofce.
If the president is permanently unable to fulll his/her duties, the ASB vice president becomes the
ASB president.
After the vice president, succession to the presidency shall be appointed by the vote of the entire
membership of the executive board.
Only ASB ofcers elected by the general student body shall succeed to the ASB presidency.
Upon the permanent disabilities of any ASB ofcer other than the president, the corresponding senior
class ofcer shall assume the duties of that ofce.
Upon the permanent disability of any ASB commissioner, the ASB president shall appoint the
opposition runner to that position, if available, until the end of the current semester, when an election
may be held.
260 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Article V – Elections and Qualications for Ofce
The student council shall hold the annual election of student council ofcers on the campus of the
Best Practices High School. The voting shall take place during homeroom, by secret ballot.
The student council shall hold the elections for class ofcers at the same time as the elections for the
ASB ofcers.
The candidates for ASB ofcer and class ofcer must have a minimum overall grade point average of
2.5 and have satisfactory citizenship and attendance. Candidates must also have the endorsement of
their counselor and one other faculty member.
Candidates for ASB president and vice president must have served at least one year on the student
council.
Each applicant for candidacy must submit an application to the screening committee. The application
must include information on the student’s academic record, school activities, and reasons for desiring
to serve as a school ofcer.
The ASB advisor, four student council members, and two faculty members chosen by the ASB
president shall serve on the selection committee. The purpose of the selection committee is to ensure
that all candidates for ofce meet the qualications.
The Campaign:
• Students may use an unlimited number of bumper stickers and buttons during the campaign.
• Candidates may place eight posters on the campus. The posters may not exceed two feet by
two feet.
• The elections committee must approve the content of all posters, bumper stickers, buttons,
and other campaign materials in advance.
Counting the Ballots:
• The ASB president and members of the elections committee shall count the ballots on the
same day as the election is held. No candidate for ofce may participate in counting the
ballots.
• The ballots shall be counted twice and the results compared. A third count is required if the
results of the rst and second count are not within one percent of each other.
Article VI – Student Clubs
Each student club must prepare and approve a constitution before it can begin fundraising activities
or make expenditures of club funds.
Article VII – Amendments
The student council, whenever it is necessary, shall propose amendments to the constitution. To
make such amendments valid, two-thirds of the total student body must approve the proposed
amendment in a general election.
Article VIII – Adoption
These bylaws may be adopted by a two-thirds vote of the student council, whereupon they shall go
into effect immediately.
Article IX – Finances
The student council must approve all requests for expenditures of all student funds prior to any
commitments.
Student clubs must have a positive balance in their club account before the student council may
approve an expenditure.
All ASB checks require two signatures. The ASB advisor or the principal/school administrator may
sign ASB checks. In addition, at least one district ofce administrator will be an approved signer.
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Article X – Meeting Schedule
The student council shall meet at least once every two weeks during the school year as called by
the ASB president or the ASB advisor, unless the club decides by a two-thirds vote to forego this
schedule for a particular time period.
Special meetings can be called by the president, the executive committee, the adviser, the principal,
or by written request of at least ten (10) members. The purpose of the meeting shall be stated when
called. Adequate notice is required for a special meeting to occur.
A quorum consists of two-thirds of the student council members, e.g., 14 members in the standard
case of 20 on the council.
The ASB president shall conduct the student council meetings under Robert’s Rules of Order.
All legally elected representatives and ofcers may vote.
Any member of the student body may attend and participate in discussions, but must have written
permission from their teacher if they are missing a class.
262 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Best Practices School, Sample ASB Club Constitution and Bylaws Combined as One Document,
Simpler Constitution/Bylaws
(Name of School)
(Name of Student Council or Club)
ASB Constitution and Bylaws
Article I – Name of the Organization
The name of the organization shall be the Associated Student Body (ASB) of the Best Practices
School.
Article 2 - Objectives and Purpose:
This organization shall have as its objective and purpose the conduct of activities on behalf of the
students of the Best Practices School as approved by the principal/school administrator and the
governing board of the Best Practices School. These shall include:
• Provide a democratic forum in which students can address school issues that affect their
lives.
• Maintain continual communication from students to faculty members and administrators as
well as among the students within the school
• Offer a year-long program of social functions and community involvement projects for
students
• Provide leadership training for students in the duties and responsibilities of good citizenship,
using the school environment as the primary training ground.
Article 3 – Organization and Membership
All registered students enrolled in the Best Practices School shall be members of the Associated
Student Body. Members shall be entitled to one vote in all student body elections.
Any registered student is eligible for election to the student council according to election procedures.
The election of representatives shall take place the ____ week of the _____ term or semester of
school. Any member shall be removed if they miss three (3) meetings without presenting reasonable
justication.
Article 4 – Meeting Schedule
The student council shall meet at least once every two weeks during the school year as called by
the ASB president or the ASB advisor, unless the club decides by a two-thirds vote to forego this
schedule for a particular time period.
Special meetings can be called by the president, the executive committee, the adviser, the principal,
or by written request of at least ten (10) members. The purpose of the meeting shall be stated when
called. Adequate notice is required for a special meeting to occur.
A quorum consists of two-thirds of the student council members, e.g., 14 members in the standard
case of 20 on the council.
The ASB president shall conduct the student council meetings under Robert’s Rules of Order.
All legally elected representatives and ofcers may vote.
Any member of the student body may attend and participate in discussions, but must have written
permission from their teacher if they are missing a class.
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Article 5 – Club Ofcers
The club ofcers shall consist of the following:
• President
• Vice-President
• Treasurer
• Secretary
• Publicity Chair
Article 6 – Duties
The club president will have the following duties:
• Preside over all meetings.
• Call special meetings.
• Plan and prepare an agenda for all meetings.
• Act as a facilitator of group discussion by summarizing, clarifying, etc.
• Work closely with the student club advisor on all planning.
• Participate in student club activities.
The club vice president will have the following duties:
• Work closely with the president.
• Serve as the ASB president if the president becomes unable to fulll their duties.
• Work with the president and treasurer to prepare the budget and calendar.
• Help the president prepare the meeting agenda.
• Lead the ag salute at all meetings or authorize another member to do so in their place.
The club treasurer will have the following duties:
• Maintain a complete and accurate record of all ASB receipts and disbursements.
• Prepare monthly reports for the student council on the ASB bank balances, receipts and
disbursements to date.
• Work with the ASB to prepare revenue potential forms to ensure successful fundraisers and
adequate internal controls.
• Keep accurate prot and loss statements of all ASB functions, clearly detailing all money
collected and spent, and help classes and clubs keep accurate records.
• Work closely with the president and vice president to prepare an annual budget.
• Authorize purchase orders/expenditure approvals prior to spending.
The club secretary will have the following duties:
• Prepare and distribute meeting agendas.
• Notify members of upcoming meetings.
• Take attendance at meetings and keep permanent attendance records.
• Maintain accurate minutes of all meetings, including date and place, presiding ofcer and
business conducted.
• Prepares the minutes in the prescribed format by the next meeting for distribution to all
members.
264 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
• Maintain all les of the organization, including original agendas and minutes, clippings and
relevant documents, and establish a policy about lending les.
• Maintain contact names, addresses, phone numbers and email addresses of people with
whom the organization regularly works.
• Keep copies of activity calendars and special events documents.
• Produce a membership director of the group.
• Report, answer and le all necessary correspondence.
The publicity chair will have the following duties:
• Publicize all school activities through the school newspaper, the school marquee, and school
bulletin boards.
• Issue news releases to the press, radio and television stations.
Article 7 – Elections
The club will hold the election of ofcers once a year. The voting will take place by secret ballot.
Article 8 – Amendment
A two-thirds majority vote of the members in attendance is required to amend this club constitution.
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Sample ASB Constitution for Associated Students at a Junior/Community College
The Constitution of The
Associated Students of
__________________ Junior/Community College
Preamble
We, the students of ________________ Junior/Community College, do hereby assume the powers of self-
governance delegated to us by the district governing board and do ordain and establish this constitution.
The objective is to unite, in one local organization, representatives of students who are registered and
attend ________ Junior/Community College, in order to coordinate the varying interests and concerns of
the student body and to provide a forum for addressing issues of common concern. We, the students of
_________________ Junior/Community College, in order to promote the general welfare of the students,
to guarantee the equality of opportunity among students, to offer experience in moral, aesthetic, social and
economic values under an atmosphere of intellectual freedom, to encourage student participation, planning and
direction of student activities as permitted under the rules, regulations and policies of the State of California
and the Board of Trustees of the ___________ Junior/Community College District, do ordain and establish this
Constitution of the Associated Students of _________________ Junior/Community College.
These representatives shall represent the students in shared governance on campus. This body shall consist
of active members representing the different student constituencies within the district; these active members’
functions and duties shall be dened in this constitution. Other rules, regulations and constitutions shall not be
in conict with this constitution.
ARTICLE I
Name, Purpose, Membership
SECTION 1 The name of this organization shall be the Associated Students of _____________________
Junior/Community College.
SECTION 2 The purpose of this student body organization shall be to coordinate the varying interests and
concerns of the student body in representing the students in shared governance issues on
campus. As a participant in the governance processes, the student body shall:
1. Provide a collegewide body that represents the needs, concerns and viewpoints of all
students.
2. Provide a central communication link between students and the rest of the college
community.
3. Select student representatives from the student body, upon recommendation of the
student trustee, to serve on governance and college committees.
4. Provide an opportunity for students to enhance governance at the college.
5. Provide students an opportunity to enhance their leadership skills.
6. Increase student participation in student governance.
SECTION 3 The primary legislative body of the Associated Students of ___________________________
Junior/Community College shall be the Student Executive Board, and no actions of student
groups or organizations shall be in conict with the rules, regulations, or policies of the
Student Executive Board or the ____________ Junior/Community College District.
266 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
SECTION 4 All currently enrolled students of the _______________________ Junior/Community College
District shall be members of the Association.
SECTION 5 All non-student employees, retired non-student employees, members of the board of trustees,
former members of the board of trustees, and former ofcers of the association shall be
recognized as honorary members of the association.
SECTION 6 The purpose of this organization shall be the representation of its membership at the college,
in the community, to the State of California and other governments. It shall establish the rules,
regulations, and policies by which its members and the organizations they establish may
coordinate their activities and participate in the shared governance process. It shall promote
student life, activities, and advocacy at the college, in the community, and throughout the state
of California.
SECTION 7 The Associated Students of ____________________________________ Junior/Community
College shall be funded by the student representation fee, which shall be used by the
association as governed by the State Education Code and in the Financial Code.
SECTION 8 The Associated Students of ____________________________________ Junior/Community
College may be funded by additional fees established in a manner approved by the Board
of Trustees of the _____________________ Junior/Community College District. These
fees shall be in compliance with the State Student Fee Handbook and shall be used by the
association as governed by the State Education Code and in the Financial Code.
SECTION 9 All student groups and organizations shall be governed by the Standard Code of
Parliamentary Procedure by Alice Sturgis.
SECTION 10 For the purpose of establishing a quorum in any group empowered by this constitution, one-
half (1/2) of the total voting membership rounded up to the next whole number, plus an advisor
appointed by the director of student affairs and new student programs, shall be required. If
less than two-thirds (2/3) of the total voting membership is present, it shall take a two-thirds
(2/3) vote of the group to pass any motion.
ARTICLE II
Rights and Benets
SECTION 1 All members of the Association shall have the right to vote in any election of the Associated
Students of __________________________________________ Junior/Community College,
the right to hold any elected ofce, and the right to propose legislation to the student executive
board.
SECTION 2 All members of the association who shall choose not to pay the student representation fee
shall remain members of the association and retain all the rights of membership and the
benets provided.
SECTION 3 All members of the association who shall choose not to pay additional fees established by the
association shall remain members of the association and retain all the rights of membership;
however, they shall no longer be eligible for the benets provided to members.
SECTION 4 All honorary members of the association shall be eligible for the benets provided to members
of the Association.
SECTION 5 All benets established for members of the association shall be outlined in the Association
Benets Code.
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Article III
Meetings
Meetings, necessary to conduct the business of the students, shall be held weekly. The student council board
may call additional meetings in accordance with provisions set forth in the bylaws.
All meetings shall be conducted in accordance with California open meeting laws (Ralph M. Brown Act).
Section 1 Regular Meetings
1. Agendas for student body board meetings shall be posted 72 hours prior to the
scheduled meeting.
2. All items to be put on the agenda must be submitted to the student body president by a
time designated by the president.
3. All minutes should be typed and distributed to the board members before the meeting at
which they will be approved.
4. All minutes and accompanying purchase orders and requisitions must be sent to Fiscal
Services.
5. No board members shall miss more than three (3) regularly scheduled board meetings
in a given semester. Absences exceeding three (3) can result in board disciplinary action
and/or removal of that board member. It is the responsibility of the secretary to notify the
board when this occurs.
6. In case of absence, a board member may submit a written proxy vote via a board ofcer.
7. No more than three board members may vote by proxy at any given meeting.
Section 2 Special Meetings
8. The board shall conduct a special meeting in accordance with the Ralph M. Brown Act.
Section 3 Emergency Meetings
1. The board shall conduct an emergency meeting in accordance with the Ralph M. Brown
Act.
Section 4 Right to Meet
1. The president, or a majority of the board if deemed necessary in accordance with the
Ralph M. Brown Act, may call board meetings at any time.
Section 5 Quorum
1. A quorum for all board and committee meetings shall be established when a simple
majority of the respective active voting members are present. A quorum must be in effect
before any action can be voted upon.
The following business may take place without a quorum:
• Call to order
• Roll Call
• Open Forum
• Ofcer Reports
• Committee Reports
• Discussion of New and Old Business
• Announcements
• Adjournment
268 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Article IV
Board Members
Section 1 Board Membership Requirements.
1. A board member must be currently enrolled in a minimum of six (6) academic units at __
__________________________________Junior/Community College and must maintain
enrollment in said minimum number of academic units for the duration of his/her term, or
be subject to dismissal from the student council.
2. Board members or petitioners must have a minimum GPA of 2.0 or higher (per semester
and cumulative). Board members on academic or progress probation, either in the
previous semester or during their term, are ineligible to serve.
3. Failure to comply with the above mentioned requirements will result in the board
member being removed from ofce. Board members must be notied privately and
will be given one week before automatic removal. Appeals must be discussed with the
advisor by the end of the one-week grace period. If at any time during the semester
a student drops below the six-unit minimum, they may appeal their eligibility with the
advisor.
Section 2 Board Members Shall:
1. Be a voting member and attend all meetings, mandatory retreats and workshops of the
board. (Failure to attend a mandatory retreat or workshop shall be the equivalent of two
(2) unexcused absences for that semester.)
2. Hold three (3) ofce hours per week with the exception of nals week, spring break, and
summer session. If a holiday falls on one of the regularly scheduled ofce days, these
hours should be made up during that same week. Participation on committees or at
committee meetings does not count toward ofce hours. Participation in student body-
sponsored activities can be counted towards a maximum of two (2) weekly ofce hours,
at the discretion of the student body president and advisor.
3. Submit ofce hours to the vice president and advisor to be posted on student body ofce
door and bulletin boards no later than the second week of the semester.
4. Become familiar with and comply with parliamentary procedure.
5. Become familiar with associated students scal matters and provide input on requests,
proposals, and petitions presented to the student body board.
6. Provide oral and/or written reports to the board and constituency regarding committee
activities, collegewide committee activities, board members’ current activities, and
varying interests and concerns of the student body.
7. Participate in special projects or perform duties as outlined in the constitution, bylaws,
Election Code, or as specied by the student body president or vice president.
8. Board members will not make contractual agreements on behalf of the student body
board without prior consent of the board and student body advisor.
9. Participate in a self-evaluation at the end of each semester in ofce by completing a
self-evaluation form; meeting with advisor and student body president to go over the
evaluation; and determining an appropriate plan of action for future goals.
10. Maintain all requirements of a board member, unless overridden by the constitution or
bylaws.
11. Not concurrently hold more than one student body ofcer position.
12. Hold their elected ofce for one year.
13. Maintain all requirements of an ofcer as outlined in the constitution.
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14. Upon completion, the board member will turn over to the successor and the advisor any
scal records or other materials pertaining to the ofce.
15. Sign purchase requests as necessary.
16. Submit an oral and/or written ofcer report to the secretary at all regular student body
meetings.
Section 3 The Board Shall:
17. Appoint representatives and alternates to internal/external committees as needed.
ARTICLE V
Associated Students Student Board Ofcers
SECTION 1 The Student Board ofcers shall be comprised of the following: President, Executive Vice
President, Vice President of Programs, Vice President of Organizations, Vice President of
Committees, Vice President of Membership and Marketing, Vice President of Advocacy, and
Vice President of __________ Campus. Each is entitled to one vote.
SECTION 2 All meetings of the Student Board shall fall under the provisions of the Ralph M. Brown Act.
SECTION 3 Meetings of the Student Board shall take place biweekly and the location of each meeting
shall alternate between the college’s different campuses.
SECTION 4 All members of the Student Board shall participate in leadership training in the application of
the Ralph M. Brown Act, the Standard Code of Parliamentary Procedure by Alice Sturgis, and
the Associated Students Constitution and Codes as specied in the Election Code.
SECTION 5 All members of the Student Executive Board shall take an oath of ofce as specied in the
Election Code.
SECTION 6 The order of succession of the Executive Board shall be: Associated Student President,
Executive Vice President, Vice President of Programs, Vice President of Organizations, Vice
President of Committees, Vice President of Membership and Marketing, Vice President of
Advocacy, Vice President of ___________ Campus.
ARTICLE VI
Elected Ofcers
SECTION 1 Associated Students President:
1. Preside as chair of the Student Executive Board and vote only to make or break a tie.
2. Preside as chief administrative ofcer of the Association, directing and coordinating all
policies of the Associated Students.
3. Set the agenda for the Student Executive Board ensuring that the advisor signs and
dates the agenda.
4. Report to the board of trustees on behalf of the Associated Students.
5. Attend meetings of, or send a designee to, the programs committee.
6. Authorize and sign all expenditures of the Student Executive Board.
7. Appoint members to vacant positions or remove members, with the approval of the
student executive board.
270 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
8. Perform other duties that pertain to the ofce, to include the making of policies not in
conict with the constitution or codes. Such duties and policies shall be reviewed by the
Student Executive Board.
SECTION 2 Executive Vice President:
1. Assume the duties of the president during their absence and succeed to the ofce upon
the vacancy of the presidency.
2. Preside as vice chair of the Student Executive Board.
3. Serve as assistant administrative ofcer of the association as directed by the president.
4. Ensure that the president has posted the agenda and that the advisor has signed and
dated it.
5. Attend meetings of the board of trustees on behalf of the Student Executive Board.
6. Track and report all expenditures of the Associated Students.
7. Carry out the provisions of the Financial Code.
8. Preside as chair of the Budget Committee.
9. Ensure that the ofcers of the Student Executive Board maintain clear channels of
communication and work effectively toward their shared goals.
SECTION 3 Vice President of Programs
1. Preside as chair of the Programs Committee.
2. Serve as assistant administrative ofcer of the association as directed by the president.
3. Set the agenda for the Programs Committee, ensuring that the advisor signs and dates
the agenda.
4. Carry out the provisions of the Programs Committee Code.
5. Authorize and sign all program expenditures.
6. Conrm the appointment of student ambassadors selected by the Programs Committee
to conduct events and activities on campus.
SECTION 4 Vice President of Organizations:
1. Be responsible for the coordination and operation of clubs and organizations.
2. Carry out the provisions of the Inter-Club Council Code.
3. Work collaboratively with the chair of each Inter-Club Council.
4. Act as a liaison between clubs and the Student Executive Board.
5. Organize all records of club status to ensure continuity.
SECTION 5 Vice President of Committees:
1. Appoint students to the collegewide committee system, with the ratication of the
Student Executive Board.
2. Maintain records of student involvement in the collegewide committee system.
3. Carry out the provisions of the Shared Governance Code.
4. Report to the academic and classied senate as a representative of the Student
Executive Board
5. Recruit and interview students wishing to sit on active collegewide committees.
SECTION 6 Vice President of Membership and Marketing:
1. Carry out the provisions of the Association Benets Code.
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Appendices 271
2. Coordinate communication regarding media and outreach to members of the
association.
3. Promote the association benets program so that new students are aware of the
program before class registration begins.
4. Administer the association benets program.
5. Be responsible for recruiting new members in a timely fashion, ensuring that there is a
stable membership base to fund each semester.
6. Meet with the student affairs accountant to review the nancial standing of the benets
program.
SECTION 7 Vice President of Advocacy:
1. Serve as the representative of the _________________________ Junior/Community
College at the regional meetings of the Statewide Student Executive Board.
2. Be informed of statewide legislation and issues affecting students and student
government.
3. Be responsible for the coordination of statewide efforts involving the association.
SECTION 8 Vice President of __________________ Campus:
1. Be responsible for representing student issues and concerns of _________________
Campus to all branches of the Student Executive Board
2. Serve on the Student Executive Board Budget Committee.
3. Serve on the Programs Committee.
4. Work collaboratively with the chair of the ___________________ Inter-Club Council.
ARTICLE VII
Programs Committee
SECTION 1 The Student Executive Board shall establish a programs committee which shall serve as an
advisory body responsible for proposing and outlining implementation of events and activities
for student learning, enrichment, and enjoyment.
SECTION 2 The Programs Committee shall be composed of the vice president of programs, vice president
of ___________ Campus, two student members at-large, one representative of the Academic
Executive Board, one representative of the Classied Senate, and one representative of the
management team appointed by their constituent groups. Each is entitled to one vote. The
associated student president, or designee, shall serve on the committee as an ex-ofcio
member.
SECTION 3 The Programs Committee shall abide by the Programs Committee Code.
ARTICLE VIII
Inter-Club Council
SECTION 1 The Student Executive Board shall establish one Inter-Club Council for the ______________
Campus and one for the _______________ Campus. These groups shall be responsible for
the recognition, activation, and coordination of all clubs and organizations present at each
respective campus.
272 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
SECTION 2 Each Inter-Club Council shall be composed of a representative for each club or organization
recognized by that council. Each is entitled to one vote.
SECTION 3 Each meeting of an Inter-Club Council shall fall under the provisions of the Ralph M. Brown
Act.
SECTION 4 Each Inter-Club Council shall abide by the Inter-Club Council Code.
SECTION 5 Each Inter-Club Council shall elect a chair from among the representatives sitting on that
body.
ARTICLE IX
Budget
SECTION 1 The Student Executive Board shall establish a Budget Committee. That committee shall serve
as an advisory body responsible for generating a budget proposal. This proposal shall be
based on the previous year’s expenditures and income in addition to recommendations made
by the college community.
SECTION 2 The Budget Committee shall be comprised of the Executive Vice President, the Vice President
of the _____________ Campus, and the Vice President of the ___________ Campus. Each is
entitled to one vote.
SECTION 3 The Budget Committee shall abide by the Budget Committee Code.
ARTICLE X
Elections
SECTION 1 The Student Executive Board shall appoint a student election coordinator who shall be
responsible for the implementation of the Election Code.
SECTION 2 The Student Election Coordinator shall ensure that all polling places are open and fully staffed
during the elections and that the ballots are counted promptly after the polling places close.
SECTION 3 The Student Election Coordinator shall have an advisor appointed by the Director of Student
Affairs and New Student Programs. This advisor shall not be responsible for executing any of
the duties of the Student Election Coordinator.
ARTICLE XI
Initiative, Referendum and Recall Measures
SECTION 1 An initiative measure may be proposed by a petition signed by a number of members equal
to one-third (1/3) of the votes cast in the last Associated Students election. The Student
Executive Board shall schedule an election to be held during the semester of receipt of a valid
petition. Approval of an initiative measure shall require a two-thirds (2/3) majority of the votes
cast. Any initiative approved shall go into effect on the rst day of the academic year following
the elections.
SECTION 2 Any measure may be submitted to referendum by a two-thirds (2/3) vote of the Student
Executive Board. The Student Executive Board shall schedule an election to be held
during the semester in which the measure is to be submitted to referendum. Approval
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of a referendum measure shall require a two-thirds (2/3) majority of the votes cast. Any
referendum approved shall go into effect immediately following the election.
SECTION 3 A recall may be proposed by a petition signed by a number of students equal to one-half (1/2)
of the votes cast on the last Associated Students election. The Student Executive Board shall
schedule an election to be held not more than fteen (15) instructional days after receipt of
a valid petition. Approval of the recall measure shall require a two-thirds (2/3) majority of the
votes cast.
Instructional days are Monday through Friday during the semester, as designated by the
college according to state reporting guidelines.
ARTICLE XII
Amendatory Systems and Provisions
SECTION 1 Amendments shall be designated as those items which directly or indirectly affect either the
intent or scope of those articles within the main body of the Constitution.
No amendment to the constitution may conict with federal laws, the Education Code
or laws of the State of California, or the regulations of the _____________ Junior/
Community College District.
Initiative proposals to amend this Constitution must meet the requirements as
prescribed in Article IX, Section 1.
Ratication of an amendment shall require two-thirds of all votes cast at a special or
general election.
Amendments from general elections shall go into effect on the rst day of the
academic year following the elections.
Copies of proposed amendment(s) must be made available to all registered students
at least twenty (20) instructional days prior to being voted upon.
SECTION 2 A code shall be designated as an area of activity deemed necessary to perpetuate and comply
with the purposes of this constitution. It shall contain only ratied statutes.
All codes shall be separate from, but subordinate to, this constitution.
The establishment or amendment of a code shall require at least a one-week
postponement and then a simple majority vote of the Student Executive Board for
action.
ARTICLE XIII
Enabling Clause
SECTION 1 This constitution shall become effective when approved by a simple majority of the Associated
Student Constitution Committee, a simple majority of the Associated Student Executive Board,
and two-thirds (2/3) of the votes cast by the Associated Students in the general election, and
shall be deemed operational not later than the rst day of the summer session, 20___.
274 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
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Sample ASB Club Constitution at a Community College (Basic)
Club Constitution
Junior/Community College
ARTICLE I
The club shall be called _____________________________________________
ARTICLE II
The purpose of the _______________________________ Club shall be to
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
ARTICLE III
Any _______________________ College student shall be eligible for membership.
There shall be no restrictions. Membership shall begin when a person signs the club roll.
ARTICLE IV
The club shall elect a president by a simple majority vote of members present.
The club shall appoint a representative to the Inter-Club Council, in addition to an alternate for that
position.
The club may elect any other ofcers it deems necessary by a simple majority vote.
There may also be various members appointed to be in charge of various tasks as the need arises.
All ofcers shall serve for _____________________. Ofcers may be removed when a 2/3 vote of the
members present at any meeting decides to remove them, whereupon only a simple majority will be
needed to elect the new ofcers.
ARTICLE V
The club shall meet __________________ _______. Other meetings shall be held if sufcient need
exists in the opinion of the members.
Parliamentary authority shall be Sturgis’ Standard Code of Parliamentary Procedure.
ARTICLE VI
This constitution shall be amendable with the consent of 2/3 of the members present at a regular
meeting. Any amendment the majority decides on shall be considered an amendment, and the
constitution shall reect that change.
276 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
ARTICLE VII
This constitution becomes effective upon the acceptance of a majority of the members present at the
rst meeting.
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Appendices 277
Sample Budgets
Sample Budget for Large High School
Name of School
Proposed ASB Budget
Fiscal Year 20xx–20xx
Account Account Description Budget
Net Beginning Fund Balance $168,488.18
Revenue Estimated Income
4000 Boys’ Basketball Income $8,800.00
4001 Football Income 9,066.00
4003 Girls’ Basketball Income 4,275.00
4004 Championship Playoff Income
4020 Yearbook Income Advertising 17,500.00
4021 Yearbook Income Sales 48,000.00
4031 Talent Show Income 1,380.00
4033 ASB Discount Cards 9,756.00
4034 Misc. ASB Fundraising 3,000.00
4045 Copy Machine Income 100.00
4046 Inactive Clubs
4052 Spring Musical Income
4053 ASB Dance Income 6,500.00
4054 Homecoming Dance Income 13,667.00
4900 Student Store Sales 1, 247.0 0
4950 Snack Bar Sales 64,000.00
Total Sales and Income 187,291.00
Total Income and Beginning Fund Balance 355,779.18
Estimated Expenses
5000 Baseball Expense 6,500.00
5001 Boys’ Basketball Expense 8,800.00
5002 Girls’ Basketball Expense 6,500.00
5003 Football Expense 9,800.00
5004 Golf Expense 500.00
5005 Boys’ Tennis Expense 100.00
5006 Girls’ Tennis Expense 100.00
5007 Track E xpense 1,500.00
5008 Wrestling Expense 1,500.00
278 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Account Account Description Budget
5009 Boys’ Soccer Expense 2,000.00
5010 Girls’ Soccer Expense 2,000.00
5011 Softball Expense 1,500.00
5012 Swimming Expense 500.00
5013 Cross Country Expense 1,000.00
5014 Boys’ Volleyball Expense 700.00
5015 Girls’ Volleyball Expense 1,500.00
5016 Water Polo Expense 600.00
5017 Championship Playoff Expense 0.00
5018 Athletic Equipment Supply Expense 5,000.00
5019 Athletic Trophy Expense 2,000.00
5021 Athletic Awards Program 500.00
5022 Athletic Letter Expense 2,500.00
5023 CIF League Dues Expense 1,500.00
5030 Band and Music 4,500.00
5031 Cheerleader Expense 685.00
5032 Choir Expense 7,000.00
5050 ASB Dance Expense 5,000.00
5054 Spring Musical Expense 0.00
5055 Homecoming Dance Expense 9,896.00
5056 Talent Show Expense 1,500.00
5061 Yearbook Expense 63,000.00
5063 Bad Debts 0.00
5100 Academic Team Expense 3,144.00
5101 Audio Visual Expense 1,000.00
5102 Other Award Expense 500.00
5103 Armored Car Service Expense 1,850.00
5104 Cash Over and Short Expense 0.00
5105 Commencement Expense 500.00
5106 Bookkeeper’s Ofce Expense 1,250.00
5107 Photocopy Machine Expense 500.00
5108 Community Service Expense 700.00
5109 Conference Expense 5,000.00
5111 Equipment and Supply Expense 8,000.00
5112 Miscellaneous Expense 100.00
5113 Form and Printing Expense 1,000.00
5114 Graphic Art Expense 200.00
5115 Homecoming Expense 600.00
5117 Improvement of Gym Bleacher Expense 20,000.00
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Appendices 279
Account Account Description Budget
5120 Crew Expense 4,000.00
5121 Postage Expense 250.00
5122 Debate Team Expense 5,000.00
5123 Productive Advertising 300.00
5124 Publicity and Spirit Expense 2,500.00
5126 Student Activities Expense 2,750.00
5128 Student Government Expense 5,200.00
5129 Speaker Expense 2,500.00
5130 Student Leader Award Expense 200.00
5132 Substitute Expense 400.00
5133 Transportation Expense 2,135.00
5910 Student Store Purchases 4,000.00
5912 Student Store Change 0.00
5913 Student Store Taxes 100.00
5964 Snack Bar Expense 4,500.00
Total Estimated Expenses 226,360.00
Estimated Ending Fund Balance 129,419.18
Total Estimated Expenses and Fund Balance $355,779.18
Estimated Operating Loss for Year (39,069.00)
Summary Net Gain or (Loss) ($39,069.00)
Submitted and Approved by:
Student Club Representative: ________________________________________________________________
Signature, Title and Date
We certify that this request has been approved by ASB or Student Council:
Club Advisor: ______________________________________________________________________
Signature, Title and Date
Principal/School Administrator: _______________________________________________________________
Signature, Title and Date
Veried by ASB Bookkeeper: ________________________________________________________________
Signature, Title and Date
Recorded in ASB Student Council Minutes on: ________________________
Date
Presented to ASB on: _____________________________
Date
280 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
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Appendices 281
Sample Fundraising Summary — Budget-to-Actual Performance
Name of School
Fundraising Summary: Budget to Actual Performance
Fiscal Year 20xx–20xx
Account Account Description Budget
Actual
Better Worse
Net Beginning Fund
Balance $168,488.18 $168,488.18
Revenue Estimated Income
4000 Boys’ Basketball Income $8,800.00 $8,830.00 $30.00
4001 Football Income 9,066.00 9,066.00 0.00
4003 Girls’ Basketball Income 4,275.00 4,275.00 0.00
4004 Championship Playoff Income (141.00) $141.00
4020 Yearbook Income Advertising 17,500.00 17,887.75 387.75
4021 Yearbook Income Sales 48,000.00 54,055.00 6,055.00
4031 Talent Show Income 1,380.00 1,380.00 0.00
4033 ASB Discount Cards 9,756.00 10,886.00 1,130.00
4034 Misc. ASB Fundraising 3,000.00 3,013.50 13.50
4045 Copy Machine Income 100.00 83.17 16.83
4046 Inactive Clubs 7,212.63 7,212.63
4052 Spring Musical Income 1,030.00 1,030.00
4053 ASB Dance Income 6,500.00 10,728.95 4,228.95
4054 Homecoming Dance Income 13,667.00 13,667.0 0 0.00
4055 Talent Show Income 680.14 680.14
4900 Student Store Sales 1,247.0 0 1,423.80 176.8 0
4950 Snack Bar Sales 64,000.00 58,725.10 5274.90
Total Sales and Income 187,291.00 $202,803.04 $20,944.77 $5,432.73
Total Income and
Beginning Fund Balance $355,779.18 $371291.22
Expense Estimated Expenses
5000 Baseball Expense 6,500.00 6,649.76 149.76
5001 Boys’ Basketball Expense 8,800.00 7,305.29 1,494.71
5002 Girls’ Basketball Expense 6,500.00 5,739.77 760.23
5003 Football Expense 9,800.00 12,592.50 2,792.50
5004 Golf Expense 500.00 524.75 24.75
5005 Boys’ Tennis Expense 100.00 120.00 20.00
5006 Girls’ Tennis Expense 100.00 42.48 57.52
5007 Track Expense 1,500.00 1,573.26 73.26
5008 Wrestling Expense 1,500.00 1,739.00 239.00
5009 Boys’ Soccer Expense 2,000.00 179.8 0 1,820.20
5010 Girls’ Soccer Expense 2,000.00 2,589.20 589.20
5011 Softball Expense 1,500.00 1,856.00 356.00
282 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Account Account Description Budget
Actual
Better Worse
5012 Swimming Expense 500.00 90.00 410.00
5013 Cross Country Expense 1,000.00 653.00 347.00
5014 Boys’ Volleyball Expense 700.00 685.00 15.00
5015 Girls’ Volleyball Expense 1,500.00 1,402.00 98.00
5016 Water Polo Expense 600.00 574.40 25.60
5017 Championship Playoff Expense 0.00 276.81 276.81
5018 Athletic Equipment Supply
Expense 5,000.00 5,384.64 384.64
5019 Athletic Trophy Expense 2,000.00 1,472.72 527.28
5021 Athletic Awards Program 500.00 251.33 248.67
5022 Athletic Letter Expense 2,500.00 1,358.56 1,141.44
5023 CIF League Dues Expense 1,500.00 1,579.85 79.85
5030 Band and Music 4,500.00 4,461.25 38.75
5031 Cheerleader Expense 685.00 791.57 106.57
5032 Choir Expense 7,000.00 7,162.81 162.81
5050 ASB Dance Expense 5,000.00 6,907.92 1,907.92
5054 Spring Musical Expense 0.00 1,137. 58 1,137.58
5055 Homecoming Dance Expense 9,896.00 10,202.48 306.48
5056 Talent Show Expense 1500.00 514.17
985.83
5061 Yearbook Expense 63,000.00 82,859.48 19,859.48
5063 Bad Debts 0.00 13.00 13.00
5100 Academic Team Expense 3,144.00 3,413.15 269.15
5101 Audio Visual Expense 1,000.00 214.93 785.07
5102 Other Award Expense 500.00 356.17 143.83
5103 Armored Car Service Expense 1,850.00 1,462.20 387.80
5104 Cash Over and Short Expense 0.00 249.50 249.50
5105 Commencement Expense 500.00 215.27 284.73
5106 Bookkeeper’s Ofce Expense 1,250.00 1,386.34 136.34
5107 Photocopy Machine Expense 500.00 500.00
5108 Community Service Expense 700.00 679.36 20.64
5109 Conference Expense 5,000.00 1,706.50 3,293.50
5111 Equipment and Supply Expense 8,000.00
5,704.46 2,295.54
5112 Miscellaneous Expense 100.00 100.00
5113 Form and Printing Expense 1,000.00 203.41 796.59
5114 Graphic Art Expense 200.00 200.00
5115 Homecoming Expense 600.00 192.87 407.13
5117 Improvement Gym Bleacher
Expense 20,000.00 22,789.26 2,789.26
5120 Crew Expense 4,000.00 4,364.44 364.44
5121 Postage Expense 250.00 66.00 184.00
5122 Debate Team Expense 5,000.00 4,900.00 100.00
5123
Productive Advertising
Expense 300.00 300.00
5124 Publicity and Spirit Expense 2,500.00 847.53 1,652.47
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Appendices 283
Account Account Description Budget
Actual
Better Worse
5126 Student Activities Expense 2,750.00 3,064.18 314.18
5128 Student Government Expense 5,200.00 4,363.31 736.69
5129 Speaker Expense 2,500.00 1,840.45 659.55
5130 Student Leader Award Expense 200.00 911. 5 0 711. 5 0
5132 Substitute Expense 400.00 400.00
5133 Transportation Expense 2,135.00 2,594.75 459.75
5910 Student Store Purchases 4,500.00 2,198.05
1,801.95
5912 Student Store Change 0.00 53.71 53.71
5913 Student Store Taxes 100.00 99.09 0.91
5964 Snack Bar Expense 4,500.00 4,514.00 14.00
Total Estimated Expenses 226,360.00 237,080.81 23,020.63 33,841.44
Estimated Ending Fund
Balance 129,419.18 134210.41
Total Estimated Expenses
and Fund Balance $355,779.18
$371,291.22
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
We certify that this request has been approved by ASB or Student Council:
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Veried by ASB Bookkeeper: _________________________________________________________
Signature, Title and Date
284 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
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Appendices 285
Sample ASB Balance Sheet – Large High School
Associated Student Body
Balance Sheet
As of June 30, 20xx
Description Balance Total
CA Bank and Trust, Acct XXX $9,092.65
CA Bank and Trust, Acct XXX 108,423.06
CA Bank and Trust, Acct XXX 186,511.59
Wells Fargo, Acct XXX 54,522.57
Wells Fargo, Acct XXX 25,666.32
Total Cash Accounts $384,216.19
Change Fund 78.50
Inventory Student Store 282.14
Total Other Assets 360.64
Total A sset s $384,576.83
Total Class Accounts 17,930.01
Total Student Club Accounts 49,560.52
Total Student Body Accounts $67,490.53
Total General Liabilities 7,786.31
Total Scholarship Accounts 25,466.32
Total Other Trust Accounts 29,256.42
Total Deferred Income Accounts 90,289.00
Total Clearing Accounts 23,549.91
Total Trust and General Liability Accounts $176,347.96
Student Body Reserve, July 1 168,488.18
Net Loss for Year ($27,749.84)
Fund Balance as of June 30 140,738.34
Total Liabilities and Fund Balance $384,576.83
286 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
We certify that this request has been approved by ASB or Student Council:
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Veried by ASB Bookkeeper: _________________________________________________________
Signature, Title and Date
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Appendices 287
Sample Summary Financial Report
Trial Balance Income Statement Balance Sheet
Account Group Account Name Debit Credit Debit Credit Debit Credit
Assets Cash – Checking $9,092.65 $9,092.65
Cash – Savings 375,123.54 375,123.54
Change Fund 78.50 78.50
Inventory Student Store 228.14 228.14
Liabilities and Trust Student Body Accounts $67,490.53 $67,490.53
Scholarship Accounts 25,466.32 25,466.32
Other Trust Accounts 29,256.42 29,256.42
Deferred Income
Accounts 90,289.00 90,289.00
Other Liability Accounts 31,336.22 31,336.22
Fund Balance Fund Balance 168,488.18 168,488.18
Income ASB Cards 10,886.00 $10,886.00
Yearbook Sales 54,001.00 54,001.00
Yearbook Advertising 17,8 87.75 17,887.75
Interest Income 16,760.13 16,760.13
Other Income 109,742.09 109,742.09
Expenses Yearbook 82,859.48 $82,859.48
Gym Bleacher Project 22,789.26 22,789.26
Other Expenses 131,432.07 131,432.07
Total $621,603.64 $621,603.64 $237,0 80.81 $209,276.97 $384,522.83 $412,326.67
Prot or (Loss) for Year 27,803.84
Total $237,080.81 $237,080.81
Change to Fund Balance 27,803.84
Total $412,326.67 $412,326.67
Submitted and Approved by:
Student Club Representative: _________________________________________________________
Signature, Title and Date
We certify that this request has been approved by ASB or Student Council:
Club Advisor: _______________________________________________________________
Signature, Title and Date
Principal/School Administrator: ________________________________________________________
Signature, Title and Date
Veried by ASB Bookkeeper: _________________________________________________________
Signature, Title and Date
288 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
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Appendices 289
Legal References
California Education Codes Specic to K-12 Education
Section Title and Content
§ 17545 Sale of Personal Property
(a) e governing board of any school district may sell for cash any personal property
belonging to the district if the property is not required for school purposes, or if it should
be disposed of for the purpose of replacement, or if it is unsatisfactory or not suitable for
school use. ere shall be no sale until notice has been given by posting in at least three
public places in the district for not less than two weeks, or by publication for at least once
a week for a period of not less than two weeks in a newspaper published in the district
and having a general circulation there. If there is no such newspaper, then in a newspaper
having a general circulation in the district; or if there is no newspaper, then in a newspaper
having a general circulation in a county in which the district or any part thereof is situated.
e board shall sell the property to the highest responsible bidder, or shall reject all bids.
(b) e governing board may choose to conduct any sale of personal property authorized
under this section by means of a public auction conducted by employees of the district or
other public agencies, or by contract with a private auction rm. e board may delegate
to the district employee responsible for conducting the auction the authority to transfer the
personal property to the highest responsible bidder upon completion of the auction and
after payment has been received by the district.
§ 17546 Sale of Personal Property
(a) If the governing board, by a unanimous vote of those members present, nds that the
property, whether one or more items, does not exceed in value the sum of two thousand
ve hundred dollars ($2,500), it may be sold at private sale without advertising, by any
employee of the district empowered for that purpose by the board.
(b) Any item or items of property having previously been oered for sale pursuant to Section
17545, but for which no qualied bid was received, may be sold at private sale without
advertising by any employee of the district empowered for that purpose by the board.
(c) If the board, by a unanimous vote of those members present, nds that the property is of
insucient value to defray the costs of arranging a sale, the property may be donated to a
charitable organization deemed appropriate by the board, or it may be disposed of in the
local public dump on order of any employee of the district empowered for that purpose by
the board.
§ 17547 Sale of Personal Property
e money received from the sale shall be placed to the credit of the fund from which the
original expenditure for the purchase of the property was made or in the general or reserve fund
of the district.
290 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
§ 35182.5 Sales of Non-nutritious Foods and Beverages
(a) e Legislature nds and declares all of the following:
(1) State and federal laws require all schools participating in meal programs to provide
nutritious food and beverages to pupils.
(2) State and federal laws restrict the sale of food and beverages in competition with meal
programs to enhance the nutritional goals for pupils, and to protect the scal and
nutritional integrity of the school food service programs.
(3) Parents, pupils, and community members should have the opportunity to ensure,
through the review of food and beverage contracts, that food and beverages sold on
school campuses provide nutritious sustenance to pupils, promote good health, help
pupils learn, provide energy, and model t living for life.
(b) For purposes of this section, the following terms have the following meanings:
(1) “Nonnutritious beverages” means any beverage that is not any of the following:
(A) Drinking water.
(B) Milk, including, but not limited to, chocolate milk, soy milk, rice milk, and other
similar dairy or nondairy milk.
(C) An electrolyte replacement beverage that contains 42 grams or less of added
sweetener per 20 ounce serving.
(D) A 100 percent fruit juice, or fruit-based drink that is composed of 50 percent or
more fruit juice and that has no added sweeteners.
(2) “Added sweetener” means an additive that enhances the sweetness of the beverage,
including, but not limited to, added sugar, but does not include the natural sugar or
sugars that are contained within any fruit juice that is a component of the beverage.
(3) “Nonnutritious food” means food that is not sold as part of the school breakfast or
lunch program as a full meal, and that meets any of the following standards:
(A) More than 35 percent of its total calories are from fat.
(B) More than 10 percent of its total calories are from saturated fat.
(C) More than 35 percent of its total weight is composed of sugar. is subparagraph
does not apply to the sale of fruits or vegetables.
(c) e governing board of a school district shall not do any of the following:
(1) Enter into or renew a contract, or permit a school within the district to enter into or
renew a contract, that grants exclusive or nonexclusive advertising or grants the right to
the exclusive or nonexclusive sale of carbonated beverages or nonnutritious beverages or
nonnutritious food within the district to a person, business, or corporation, unless the
governing board of the school district does all of the following:
(A) Adopts a policy after a public hearing of the governing board of the school
district to ensure that the school district has internal controls in place to protect
the integrity of the public funds and to ensure that funds raised benet public
education, and that the contracts are entered into on a competitive basis pursuant to
procedures contained in Section 20111 of the Public Contract Code or through the
issuance of a Request for Proposal.
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Appendices 291
(B) Provides to parents, guardians, pupils, and members of the public the opportunity
to comment on the contract by holding a public hearing on the contract during a
regularly scheduled board meeting. e governing board of the school district shall
clearly, and in a manner recognizable to the general public, identify in the agenda
the contract to be discussed at the meeting.
(2) Enter into a contract that prohibits a school district employee from disparaging the
goods or services of the party contracting with the governing board of the school
district.
(3) Enter into a contract or permit a school within the district to enter into a contract for
electronic products or services that requires the dissemination of advertising to pupils,
unless the governing board of the school district does all of the following:
(A) Enters into the contract at a noticed public hearing of the governing board of the
school district.
(B) Makes a nding that the electronic product or service in question is or would be an
integral component of the education of pupils.
(C) Makes a nding that the school district cannot aord to provide the electronic
product or service unless it contracts to permit dissemination of advertising to
pupils.
(D) Provides written notice to the parents or guardians of pupils that the advertising
will be used in the classroom or other learning centers. is notice shall be part of
the school district’s normal ongoing communication to parents or guardians.
(E) Oers the parents the opportunity to request in writing that the pupil not be
exposed to the program that contains the advertising. A request shall be honored
for the school year in which it is submitted, or longer if specied, but may be
withdrawn by the parents or guardians at any time.
(d) A governing board of the school district may meet the public hearing requirement set
forth in subparagraph (B) of paragraph (1) of subdivision (c) for those contracts that grant
the right to the exclusive or nonexclusive sale of carbonated beverages or nonnutritious
beverages or nonnutritious food within the district, by an annual public hearing to review
and discuss existing and potential contracts for the sale of food and beverages on campuses,
including food and beverages sold as full meals, through competitive sales, as fundraisers,
and through vending machines.
(1) e public hearing shall include, but not be limited to, a discussion of all of the
following:
(A) e nutritional value of food and beverages sold within the district.
(B) e availability of fresh fruit, vegetables, and grains in school meals and snacks,
including, but not limited to, locally grown and organic produce.
(C) e amount of fat, sugar, and additives in the food and beverages discussed.
(D) Barriers to pupil participation in school breakfast and lunch programs.
(2) A school district that holds an annual public hearing consistent with this subdivision
is not released from the public hearing requirements set forth in subparagraph (B) of
paragraph (1) of subdivision (c) for those contracts not discussed at the annual public
hearing.
292 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
(e) e governing board of the school district shall make accessible to the public a contract
entered into pursuant to paragraph (1) of subdivision (c) and may not include in that
contract a condentiality clause that would prevent a school or school district from making
any part of the contract public.
(f) e governing board of a school district may sell advertising, products, or services on a
nonexclusive basis.
(g) e governing board of a school district may post public signs indicating the school
district’s appreciation for the support of a person or business for the school district’s
education program.
(h) Contracts entered into before January 1, 2004, may remain in eect, but shall not be
renewed if they are in conict with this section.
(Amended by Stats. 2014, Ch. 71, Sec. 33. Eective January 1, 2015.)
§ 35564 Disposition of Records, Funds, Property, and Obligations When Reorganized
If the reorganization of a school district under this chapter results in the relocation of district
boundaries so that a portion of the pupils will not be residents of the district thereafter
maintaining a school previously attended by the pupils, and if there is in the school an
organized student body, the property, funds, and obligations of the student body shall be
divided as determined by the county committee, except that the share shall not exceed an
amount equal to the ratio which the number of pupils leaving the school bears to the total
number of pupils enrolled. e ownership of the property, funds, and obligations, which is the
proportionate share of each segment of the student body, shall be transferred to the student
body of the school or schools in which the pupils are enrolled after the reorganization. Funds
from devises, bequests, or gifts made to the organized student body of a school shall remain the
property of the organized student body of that school and shall not be divided.
§ 4 4015 Awards to Employees and Pupils
(a) e governing board of a school district may make awards to employees who do any of the
following:
(1) Propose procedures or ideas that thereafter are adopted and eectuated, and that result
in eliminating or reducing district expenditures or improving operations.
(2) Perform special acts or special services in the public interest.
(3) By their superior accomplishments, make exceptional contributions to the eciency,
economy, or other improvement in operations of the school district.
(b) e governing board of a school district may make awards to pupils for excellence.
Before any awards are made pursuant to this section, the governing board shall adopt rules and
regulations. e board may appoint one or more merit award committees made up of district
ocers, district employees, or private citizens to consider employee proposals, special acts,
special services, or superior accomplishments and to act armatively or negatively thereon or to
provide appropriate recommendations thereon to the board.
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Appendices 293
Any award granted under the provisions of this section that may be made by an awards
committee under appropriate district rules, shall not exceed two hundred dollars ($200), unless
a larger award is expressly approved by the governing board.
When an awards program is established in a school district pursuant to this section, the
governing board shall budget funds for this purpose but may authorize awards from funds
under its control whether or not budgeted funds have been provided or the funds budgeted are
exhausted.
§ 44032 Payments to Employees
e governing board of any school district shall provide for the payment of the actual and
necessary expenses, including traveling expenses, of any employee of the district incurred in the
course of performing services for the district, whether within or outside the district, under the
direction of the governing board.
§ 47605 Charter School Petitions and Responsibilities
(b) No later than 30 days after receiving a petition, in accordance with subdivision (a), the
governing board of the school district shall hold a public hearing on the provisions of
the charter, at which time the governing board of the school district shall consider the
level of support for the petition by teachers employed by the district, other employees
of the district, and parents. Following review of the petition and the public hearing, the
governing board of the school district shall either grant or deny the charter within 60
days of receipt of the petition, provided, however, that the date may be extended by an
additional 30 days if both parties agree to the extension. In reviewing petitions for the
establishment of charter schools pursuant to this section, the chartering authority shall
be guided by the intent of the Legislature that charter schools are and should become an
integral part of the California educational system and that establishment of charter schools
should be encouraged. e governing board of the school district shall grant a charter
for the operation of a school under this part if it is satised that granting the charter is
consistent with sound educational practice. e governing board of the school district shall
not deny a petition for the establishment of a charter school unless it makes written factual
ndings, specic to the particular petition, setting forth specic facts to support one or
more of the following ndings:
(1) e charter school presents an unsound educational program for the pupils to be
enrolled in the charter school.
(2) e petitioners are demonstrably unlikely to successfully implement the program set
forth in the petition.
(3) e petition does not contain the number of signatures required by subdivision (a).
(4) e petition does not contain an armation of each of the conditions described in
subdivision (d).
(5) e petition does not contain reasonably comprehensive descriptions of all of the
following:
(A)
(i) A description of the educational program of the school, designed, among
other things, to identify those whom the school is attempting to educate, what
294 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
it means to be an “educated person” in the 21st century, and how learning
best occurs. e goals identied in that program shall include the objective of
enabling pupils to become self-motivated, competent, and lifelong learners.
(ii) A description, for the charter school, of annual goals, for all pupils and for
each subgroup of pupils identied pursuant to Section 52052, to be achieved
in the state priorities, as described in subdivision (d) of Section 52060, that
apply for the grade levels served, or the nature of the program operated, by the
charter school, and specic annual actions to achieve those goals. A charter
petition may identify additional school priorities, the goals for the school
priorities, and the specic annual actions to achieve those goals.
(iii) If the proposed school will serve high school pupils, a description of the
manner in which the charter school will inform parents about the transfer-
ability of courses to other public high schools and the eligibility of courses to
meet college entrance requirements. Courses oered by the charter school that
are accredited by the Western Association of Schools and Colleges may be
considered transferable and courses approved by the University of California
or the California State University as creditable under the “A” to “G”
admissions criteria may be considered to meet college entrance requirements.
(B) e measurable pupil outcomes identied for use by the charter school. “Pupil
outcomes,” for purposes of this part, means the extent to which all pupils of the
school demonstrate that they have attained the skills, knowledge, and attitudes
specied as goals in the school’s educational program. Pupil outcomes shall include
outcomes that address increases in pupil academic achievement both schoolwide
and for all groups of pupils served by the charter school, as that term is dened in
subparagraph (B) of paragraph (3) of subdivision (a) of Section 47607. e pupil
outcomes shall align with the state priorities, as described in subdivision (d) of
Section 52060, that apply for the grade levels served, or the nature of the program
operated, by the charter school.
(C) e method by which pupil progress in meeting those pupil outcomes is to be
measured. To the extent practicable, the method for measuring pupil outcomes for
state priorities shall be consistent with the way information is reported on a school
accountability report card.
(D) e governance structure of the school, including, but not limited to, the process to
be followed by the school to ensure parental involvement.
(E) e qualications to be met by individuals to be employed by the school.
(F) e procedures that the school will follow to ensure the health and safety of pupils
and sta. ese procedures shall include the requirement that each employee of the
school furnish the school with a criminal record summary as described in Section
4 4 237.
(G) e means by which the school will achieve a racial and ethnic balance among
its pupils that is reective of the general population residing within the territorial
jurisdiction of the school district to which the charter petition is submitted.
(H) Admission requirements, if applicable.
(I) e manner in which annual, independent nancial audits shall be conducted,
which shall employ generally accepted accounting principles, and the manner in
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which audit exceptions and deciencies shall be resolved to the satisfaction of the
chartering authority.
(J) e procedures by which pupils can be suspended or expelled.
(K) e manner by which sta members of the charter schools will be covered by the
State Teachers’ Retirement System, the Public Employees’ Retirement System, or
federal social security.
(L) e public school attendance alternatives for pupils residing within the school
district who choose not to attend charter schools.
(M) A description of the rights of any employee of the school district upon leaving the
employment of the school district to work in a charter school, and of any rights of
return to the school district after employment at a charter school.
(N) e procedures to be followed by the charter school and the entity granting the
charter to resolve disputes relating to provisions of the charter.
(O) A declaration whether or not the charter school shall be deemed the exclusive public
school employer of the employees of the charter school for purposes of Chapter 10.7
(commencing with Section 3540) of Division 4 of Title 1 of the Government Code.
(P) A description of the procedures to be used if the charter school closes. e
procedures shall ensure a nal audit of the school to determine the disposition of all
assets and liabilities of the charter school, including plans for disposing of any net
assets and for the maintenance and transfer of pupil records.
§ 47610 Charter School Applicable Education Code Sections
A charter school shall comply with this part and all of the provisions set forth in its charter, but
is otherwise exempt from the laws governing school districts, except all of the following:
(a) As specied in Section 47611.
(b) As specied in Section 41365.
(c) All laws establishing minimum age for public school attendance.
(d) e California Building Standards Code (Part 2 (commencing with Section 101) of Title
24 of the California Code of Regulations), as adopted and enforced by the local building
enforcement agency with jurisdiction over the area in which the charter school is located.
(e) Charter school facilities shall comply with subdivision (d) by January 1, 2007.
§ 48930 Purpose and Privileges of Student Body Organization
Any group of students may organize a student body association within the public schools with
the approval and subject to the control and regulation of the governing board of the school
district. Any such organization shall have as its purpose the conduct of activities on behalf
of the students approved by the school authorities and not in conict with the authority and
responsibility of the public school ocials. Any student body organization may be granted the
use of school premises and properties without charge subject to such regulations as may be
established by the governing board of the school district.
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§ 48931 Authorization for Sale of Food by Student Organization
e governing board of any school district or any county oce of education may authorize
any pupil or adult entity or organization to sell food on school premises, subject to policy
and regulations of the State Board of Education. e State Board of Education shall develop
policy and regulations for the sale of food by any pupil or adult entity or organization, or any
combination thereof, which shall ensure optimum participation in the school district’s or the
county oce of education’s nonprot food service programs and shall be in consideration
of all programs approved by the governing board of any school district or any county oce
of education. e policy and regulations shall be eective the rst of the month following
adoption by the State Board of Education.
Nothing in this section shall be construed as exempting from the California Uniform Retail
Food Facilities Law (Chapter 4 (commencing with Section 113700) of Part 7 of Division 104
of the Health and Safety Code), food sales that are authorized pursuant to this section and that
would otherwise be subject to the California Uniform Retail Food Facilities Law.
§ 48932 Authorization for Fundraising Activities by Student Organizations
e governing board of any school district may authorize any organization composed entirely
of pupils attending the schools of the district to maintain such activities, including fund-raising
activities, as may be approved by the governing board.
e governing board of any school district may, by resolution, authorize any student body
organization to conduct fund-raising activities on school property during school hours provided
that the governing board has determined that such activities will not interfere with the normal
conduct of the schools.
§ 48933 Deposit or Investment of Student Funds
(a) e funds of any student body organization established in the public schools of any school
district shall, subject to approval of the governing board of the school district, be deposited
or invested in one or more of the following ways:
(1) Deposits in a bank or banks, or other institution, whose accounts are federally insured.
(2) Investment certicates or withdrawable shares in state-chartered savings and loan
associations and savings accounts of federal savings and loan associations, provided
those associations are doing business in this state and have their accounts insured by the
Federal Savings and Loan Insurance Corporation.
(3) Purchase of repurchase agreements issued by savings and loan associations or banks.
(4) Purchase of bonds, notes, bills, certicates, debentures, or any other obligations issued
by the United States of America.
(5) Shares or certicates for funds received or any form of evidence of interest or indebt-
edness issued by any credit union in this state, organized under the provisions of
Division 5 (commencing with Section 14000) of the Financial Code or the statutes
of the United States relating to credit unions insured by the administrator of the
National Credit Union Administration or a comparable agency as provided by a state
government.
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(b) e funds shall be expended subject to such procedure as may be established by the student
body organization subject to the approval of each of the following three persons, which
shall be obtained each time before any of the funds may be expended: an employee or
ocial of the school district designated by the governing board, the certicated employee
who is the designated adviser of the particular student body organization, and a represen-
tative of the particular student body organization.
§ 48934 Kindergarten and Grades 1 to 6 Student Body Funds
e funds of a student body organization established in the public schools for kindergarten
and grades 1 to 6, inclusive, of any school district maintaining kindergarten and grades 1 to
6, inclusive, may be used to nance activities for noninstructional periods or to augment or to
enrich the programs provided by the district.
§ 48936 Additional Uses of Student Funds
In addition to deposit or investment pursuant to Section 48933, the funds of a student body
organization may be loaned or invested in any of the following ways:
(a) Loans, with or without interest, to any student body organization established in another
school of the district for a period not to exceed three years.
(b) Invest money in permanent improvements to any school district property including, but
not limited to, buildings, automobile parking facilities, gymnasiums, swimming pools,
stadia and playing elds, where such facilities, or portions thereof, are used for conducting
student extracurricular activities or student spectator sports, or when such improvements
are for the benet of the student body. Such investment shall be made on condition that
the principal amount of the investment plus a reasonable amount of interest thereon shall
be returned to the student body organization as provided herein. Any school district
approving such an investment shall establish a special fund in which moneys derived from
the rental of school district property to student body organizations shall be deposited.
Moneys shall be returned to the student body organization as contemplated by this section
exclusively from such special fund and only to the extent that there are moneys in such
special fund. Whenever there are no outstanding obligations against the special fund, all
moneys therein may be transferred to the general fund of the school district by action of
the local governing board.
Two or more student body organizations of the same school district may join together in
making such investments in the same manner as is authorized herein for a single student body.
Nothing herein shall be construed so as to limit the discretion of the local governing board in
charging rental for use of school district property by student body organizations as provided in
Section 48930.
§ 48937 Supervision and Audit of Student Funds
e governing board of any school district shall provide for the supervision of all funds raised
by any student body or student organization using the name of the school.
e cost of supervision may constitute a proper charge against the funds of the district.
e governing board of a school district may also provide for a continuing audit of student
body funds with school district personnel.
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§ 48938 Trustee for Funds of Unorganized Student Body
In schools or classes for adults, regional occupational centers or programs, or in elementary,
continuation, or special education schools in which the student body is not organized, the
governing board may appoint an employee or ocial to act as trustee for student body funds
and to receive these funds in accordance with procedures established by the board. ese funds
shall be deposited in a bank, a savings and loan association, a credit union, or any combination
of these nancial institutions, approved by the board and shall be expended subject to the
approval of the appointed employee or ocial and also subject to the procedure that may be
established by the board.
§ 49430 e Pupil Nutrition, Health and Achievement Act of 2001
As used in this article, the following terms have the following meanings:
(a) “Elementary school” means a school operated and maintained by a school district or
county oce of education that maintains any grade from kindergarten to grade 6,
inclusive, but no grade higher than grade 6.
(b) “Middle school” means a school operated and maintained by a school district or county
oce of education that maintains grade 7 or 8, 7 to 9, inclusive, or 7 to 10, inclusive.
(c) “High school” means a school operated and maintained by a school district or county oce
of education maintaining any of grades 9 to 12, inclusive.
(d) “Full meal” means a combination of food items that meet USDA-approved School
Breakfast Program or National School Lunch Program meal pattern requirements.
(e) “Added sweetener” means an additive other than 100 percent fruit juice that enhances the
sweetness of a beverage.
(f) “Sold” means the exchange of food or beverages for money, coupons, vouchers, or order
forms, when any part of the exchange occurs on a school campus.
(g) “Entrée” means a food that is generally regarded as being the primary food in a meal, and
shall include, but not be limited to, sandwiches, burritos, pasta, and pizza.
(h) “Snack” means a food that is generally regarded as supplementing a meal, including, but
not limited to, chips, crackers, onion rings, nachos, french fries, donuts, cookies, pastries,
cinnamon rolls, and candy.
(i) “Deep fried” means a food item is cooked by total submersion in oil or fat.
(j) “Par fried” means a food item is fried to reach an internal temperature of 160 degrees
Fahrenheit then is cooled to room temperature so that it may be refrigerated or frozen for
future frying.
(k) “Flash fried” means a food item is quickly fried on both sides in oil with a temperature of
400 degrees Fahrenheit or higher.
§ 49430.3 Notwithstanding any provisions of law, including, but not limited to, Chapter 3 (commencing
with Section 38080) of Part 23 or Section 48931, this article shall control over contrary provi-
sions relating to the sale of food items to public school pupils.
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§ 49430.5
(a) e reimbursement a school receives for free and reduced-price meals sold or served to
pupils in elementary, middle, or high schools included within a school district, charter
school, or county oce of education shall be twenty-two and forty-eight hundredths
cents ($0.2248) per meal, and, for meals served in child care centers and homes, the
reimbursement shall be sixteen and seventy-four hundredths cents ($0.1674) per meal.
(b) To qualify for the reimbursement for free and reduced-price meals provided to pupils in
elementary, middle, or high schools, a school shall follow the Enhanced Food Based Meal
Pattern, Nutrient Standard Meal Planning, or Traditional Meal Pattern developed by the
United States Department of Agriculture or the SHAPE Menu Patterns developed by the
state.
(c) e reimbursement rates set forth in this section shall be adjusted annually for increases in
cost of living in the same manner set forth in Section 42238.1.
§ 49430.7
(a) For purposes of this section, the following terms have the following meanings:
(1) “School” means a school operated and maintained by a school district or county oce
of education, or a charter school.
(2) “School district” means a school district, charter school, or county oce of education.
(3) (3) “Child development program” means a program operated pursuant to Chapter 2
(commencing with Section 8200) of Part 6 of Division 1 of Title 1.
(b) As a condition of receipt of funds pursuant to Section 49430.5, commencing with the
2007–08 scal year, for meals and food items sold as part of the free and reduced-price
meal programs, a school or school district shall comply with all of the following require-
ments and prohibitions:
(1) (1) Follow the United States Department of Agriculture (USDA) nutritional guidelines
or the menu planning options of Shaping Health as Partners in Education developed by
the state (SHAPE California network).
(2) Not sell or serve a food item that has in any way been deep fried, par fried, or ash fried
by a school or school district.
(3) Not sell or serve a food item containing articial trans fat. A food item contains
articial trans fat if it contains vegetable shortening, margarine, or any kind of hydroge-
nated or partially hydrogenated vegetable oil, unless the manufacturer’s documentation
or the label required on the food, pursuant to applicable federal and state law, lists the
trans fat content as less than 0.5 gram per serving.
(4) Not sell or serve a food item that, as part of the manufacturing process, has been deep
fried, par fried, or ash fried in an oil or fat that is prohibited by this paragraph. Oils
and fats prohibited by this paragraph include, but are not limited to, palm, coconut,
palm kernel, lard, typically solid at room temperature and are known to negatively
impact cardiovascular health. Oils permitted by this paragraph include, but are not
limited to, canola, saower, sunower, corn, olive, soybean, peanut, or a blend of these
oils, typically liquid at room temperature and are known for their positive cardiovas-
cular benet.
300 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
(c) Commencing with the 2007–08 scal year, for meals and food items sold as part of the
free and reduced-price meal programs, a child development program is encouraged to
comply with all of the following guidelines:
(1) Meet developmentally and programmatically appropriate meal pattern and meal
planning requirements developed by the USDA or menu planning options of Shaping
Health as Partners in Education developed by the state (SHAPE California network).
(2) Not sell or serve a food item that has in any way been deep fried, par fried, or ash fried
by a school, school district, or child development program.
(3) Not sell or serve a food item containing articial trans fat. A food item contains
articial trans fat if it contains vegetable shortening, margarine, or any kind of hydroge-
nated or partially hydrogenated vegetable oil, unless the manufacturer’s documentation
or the label required on the food, pursuant to applicable federal and state law, lists the
trans fat content as less than 0.5 gram per serving.
(4) Not sell or serve a food item that, as part of the manufacturing process, has been deep
fried, par fried, or ash fried in an oil or fat prohibited by this paragraph. Oils and
fats prohibited by this paragraph include, but are not limited to, palm, coconut, palm
kernel, lard, typically solid at room temperature and are known to negatively impact
cardiovascular health. Oils permitted by this provision include, but are not limited
to, canola, saower, sunower, corn, olive, soybean, peanut, or a blend of these oils,
typically liquid at room temperature and are known for their positive cardiovascular
benet.
(d) e prohibitions and requirements of this section regarding food items sold or served by
a school or school district apply to raw bulk USDA commodity foods ordered by schools
or school districts and sent to commercial processors for conversion into ready to use end
products, but do not apply to other USDA commodity foods until the scheduled 2009
reauthorization of the USDA National School Lunch Program is complete or ingredient
and nutrition information is available for all USDA commodity foods, whichever is earlier.
(e) As a condition of receipt of funds pursuant to Section 49430.5, by no later than June 30,
2008, and annually thereafter, schools and school districts shall provide the department
with an annual certication of compliance with the provisions of this section.
(f) is section shall become operative only upon an appropriation for its purposes in the
annual Budget Act or another statute.
§ 49431 Sale of Foods and Beverages in Elementary Schools
(a) (1) From one-half hour before the start of the schoolday to one-half hour after the
schoolday, at each elementary school, the only food that may be sold to a pupil are full
meals, individually sold dairy or whole grain foods, and individually sold portions of
nuts, nut butters, seeds, eggs, cheese packaged for individual sale, fruit, vegetables that
have not been deep fried, and legumes.
(2) An individually sold dairy or whole grain food item, and individually sold portions of
nuts, nut butters, seeds, eggs, cheese packaged for individual sale, fruit, vegetables that
have not been deep fried, and legumes may be sold to pupils at an elementary school,
except food sold as part of a USDA meal program, if they meet all of the following
standards:
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(A) Not more than 35 percent of its total calories shall be from fat. is subparagraph
shall not apply to individually sold portions of nuts, nut butters, seeds, eggs, cheese
packaged for individual sale, fruit, vegetables that have not been deep fried, or
legumes.
(B) Not more than 10 percent of its total calories shall be from saturated fat. is
subparagraph shall not apply to eggs or cheese packaged for individual sale.
(C) Not more than 35 percent of its total weight shall be composed of sugar, including
naturally occurring and added sugar. is subparagraph shall not apply to fruit or
vegetables that have not been deep fried.
(D) Not more than 175 calories per individual food item.
(b) An elementary school may permit the sale of food items that do not comply with
subdivision (a) as part of a school fundraising event in either of the following
circumstances:
(1) e sale of those items takes place o of and away from school premises.
(2) e sale of those items takes place on school premises at least one-half hour after the
end of the schoolday.
(c) It is the intent of the Legislature that the governing board of a school district annually
review its compliance with the nutrition standards described in this section and Section
49431.5.
§ 49431.2 Sale of Foods in Middle, Junior and High Schools
(a) From one-half hour before the start of the schoolday to one-half hour after the schoolday,
snacks sold to a pupil in middle school or high school, except food served as part of a
USDA meal program, shall meet all of the following standards:
(1) Not more than 35 percent of its total calories shall be from fat. is paragraph does not
apply to the sale of nuts, nut butters, seeds, eggs, cheese packaged for individual sale,
fruits, vegetables that have not been deep fried, or legumes.
(2) Not more than 10 percent of its total calories shall be from saturated fat. is paragraph
does not apply to eggs or cheese packaged for individual sale.
(3) Not more than 35 percent of its total weight shall be composed of sugar, including
naturally occurring and added sugars. is paragraph does not apply to the sale of fruits
or vegetables that have not been deep fried.
(4) No more than 250 calories per individual food item.
(b) From one-half hour before the start of the schoolday to one-half hour after the schoolday,
entrée items sold to a pupil in middle school or high school, except food served as part of a
USDA meal program, shall contain no more than 400 calories per entrée, and shall contain
no more than 4 grams of fat per 100 calories contained in each entrée.
(c) A middle school or high school may permit the sale of food items that do not comply with
subdivision (a) or (b) in any of the following circumstances:
(1) e sale of those items takes place o of and away from school premises.
(2) e sale of those items takes place on school premises at least one-half hour after the
end of the schoolday.
302 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
(d) It is the intent of the Legislature that the governing board of a school district annually
review its compliance with the nutrition standards described in this section.
§ 49431.5 Sale of Beverages at Schools
(a) (1) Regardless of the time of day, only the following beverages may be sold to a pupil at an
elementary school:
(A) Fruit-based drinks that are composed of no less than 50 percent fruit juice and have
no added sweetener.
(B) Vegetable-based drinks that are composed of no less than 50 percent vegetable juice
and have no added sweetener.
(C) Drinking water with no added sweetener.
(D) One-percent-fat milk, nonfat milk, soy milk, rice milk, and other similar nondairy
milk.
(2) An elementary school may permit the sale of beverages that do not comply with
paragraph (1) as part of a school fundraising event in either of the following
circumstances:
(A) e sale of those items takes place o and away from the premises of the school.
(B) e sale of those items takes place on school premises at least one-half hour after the
end of the schoolday.
(3) From one-half hour before the start of the schoolday to one-half hour after the end of
the schoolday, only the following beverages may be sold to a pupil at a middle school or
high school:
(A) Fruit-based drinks that are composed of no less than 50 percent fruit juice and have
no added sweetener.
(B) Vegetable-based drinks that are composed of no less than 50 percent vegetable juice
and have no added sweetener.
(C) Drinking water with no added sweetener.
(D) One-percent-fat milk, nonfat milk, soy milk, rice milk, and other similar nondairy
milk.
(E) An electrolyte replacement beverage that contains no more than 42 grams of added
sweetener per 20-ounce serving.
(4) A middle school or high school may permit the sale of beverages that do not comply
with paragraph (3) as part of a school event if the sale of those items meets either of the
following criteria:
(A) e sale of those items takes place o and away from the premises of the school.
(B) e sale of those items takes place on school premises at least one-half hour after the
end of the schoolday.
(b) It is the intent of the Legislature that the governing board of a school district annually
review its compliance with this section.
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Appendices 303
(c) Notwithstanding Article 3 (commencing with Section 33050) of Chapter 1 of Part 20 of
Division 2, compliance with this section may not be waived.
§ 49431.7 Prohibition of Sale of Foods with Articial Trans Fat
(a) From one-half hour before the start of the schoolday to one-half hour after the end of the
schoolday, a school or school district shall not sell to pupils enrolled in kindergarten, or any
of grades 1 to 12, inclusive, food containing articial trans fat, as dened in subdivision
(b).
(b) For purposes of this section, a food contains articial trans fat if a food contains vegetable
shortening, margarine, or any kind of partially hydrogenated vegetable oil, unless the
manufacturer’s documentation or the label required on the food, pursuant to applicable
federal and state law, lists the trans fat content as less than 0.5 grams of trans fat per
serving.
(c) is section shall not apply to food provided as part of a USDA meal program.
§ 49432 Posting District Information on Nutrition and Physical Activity Policies
Every public school may post a summary of nutrition and physical activity laws and regula-
tions, and shall post the school district’s nutrition and physical activity policies, in public view
within all school cafeterias or other central eating areas. e department shall develop the
summary of state law and regulations.
§ 49434 Compliance Shall be Monitored
Compliance with this article shall be monitored by the department in conformity with the
United States Department of Agriculture’s administrative review process, as published in the
Federal Register, Volume 77, Number 17, on January 26, 2012.
§ 51520 Prohibited Solicitations on School Premises
(a) During school hours, and within one hour before the time of opening and within one
hour after the time of closing of school, pupils of the public school shall not be solicited on
school premises by teachers or others to subscribe or contribute to the funds of, to become
members of, or to work for, any organization not directly under the control of the school
authorities, unless the organization is a nonpartisan, charitable organization organized for
charitable purposes by an act of Congress or under the laws of the state, the purpose of the
solicitation is nonpartisan and charitable, and the solicitation has been approved by the
county board of education or by the governing board of the school district in which the
school is located.
(b) A licensed dentist who provides voluntary dental health screening programs for pupils on
school premises, shall not solicit a pupil, or the pupil’s parent or guardian, or encourage, or
advise treatment or consultation for the pupil by the licensed dentist, or any entity in which
the licensed dentist has a nancial interest, for any condition discovered in the course of
the dental health screening. It is the intent of the Legislature that no licensed dentist use
voluntary dental health screening programs for the generation of referrals or for nancial
benet. e Legislature does not intend to deny or limit freedom of choice in the selection
of an appropriate dental provider for treatment or consultation.
304 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
(c) A licensed optometrist who provides voluntary vision testing programs for pupils on school
premises, shall not solicit a pupil, or the pupil’s parent or guardian, or encourage, or advise
treatment or consultation for the pupil by the licensed optometrist, or any entity in which
the licensed optometrist has a nancial interest, for any condition discovered in the course
of the vision testing. It is the intent of the Legislature that no licensed optometrist use
voluntary vision testing programs for the generation of referrals or for nancial benet. e
Legislature does not intend to deny freedom of choice in the selection of an appropriate
vision care provider for treatment or consultation.
(d) Nothing in this section shall be construed as prohibiting the solicitation of pupils of the
public school on school premises by pupils of that school for any otherwise lawful purpose.
§ 51521 Fundraising Projects
No person shall solicit any other person to contribute to any fund or to purchase any item of
personal property, upon the representation that the money received is to be used wholly or in
part for the benet of any public school or the student body of any public school, unless such
person obtains the prior written approval of either the governing board of the school district
in which such solicitation is to be made or the governing board of the school district having
jurisdiction over the school or student body represented to be beneted by such solicitation, or
the designee of either of such boards.
e prohibitions of this section shall not apply with respect to any solicitation or contribution
the total proceeds of which are delivered to a public school, nor to a solicitation of a transfer to
be eected by a testamentary act.
§ 52240 Advanced Placement Program
(a) e Legislature hereby nds and declares all of the following:
(1) Advanced placement courses, for which school credit is awarded, provide rigorous
academic coursework opportunities for high school pupils and help to improve the
overall curriculum at schools where those courses are provided.
(2) e successful completion of advanced placement courses and the subsequent advanced
placement examinations, which are conducted by the College Entrance Examination
Board and for which college credit is awarded, provide a cost-eective means for high
school pupils to obtain college-level coursework experience.
(3) To the extent that economically disadvantaged pupils are provided nancial assistance
to take advanced placement examinations, they will be provided with successful college-
level experience and be encouraged to pursue postsecondary education opportunities.
(b) It is the intent of the Legislature, therefore, that certain state funding that currently is
provided to school districts be made available to provide nancial assistance to economi-
cally disadvantaged pupils for the payment of advanced placement examination fees. It is
further the intent of the Legislature that a competitive grant program also be established
for the purpose of awarding grants to economically disadvantaged pupils to cover the costs
of advanced placement examination fees, thereby creating a second source of nancial
assistance for economically disadvantaged pupils taking advanced placement examinations.
(c) e Superintendent shall annually update the information on advanced placement available
on the department’s Internet Web site to include current information on the various means
available to school districts to oer or access advanced placement courses, including online
Chapter 24
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courses. e Superintendent shall annually communicate with high schools that oer
advanced placement courses in fewer than ve subjects, and inform them of the various
options for making advanced placement courses and other rigorous courses available to
pupils who may benet from them.
306 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
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Appendices 307
California Education Codes Specic to Community Colleges
Section Title and Content
§ 72673 Auxiliary Organization versus Student Organization, Community Colleges
Student body organizations not formed or operating pursuant to Article 4 (commencing with
Section 76060) of Chapter 1 of Part 47; student or faculty societies, social clubs, fraternities,
and sororities; and alumni associations shall be exempt from the provisions of this article,
unless any such organization, society, club, fraternity, sorority, or association has been estab-
lished as an auxiliary organization pursuant to the provisions of this article.
is section shall not be construed to alter or limit the powers of the district governing
board to establish rules and regulations governing organizations which maintain an ocial
relationship with a college or district or which uses the name or facilities of the college or
district.
§ 76060 Purpose and Privileges of Student Body Organization, Community Colleges
e governing board of a community college district may authorize the students of a college to
organize a student body association. e association shall encourage students to participate in
the governance of the college and may conduct any activities, including fundraising activities,
as may be approved by the appropriate college ocials. e association may be granted the use
of community college premises and properties without charge, subject to any regulations that
may be established by the governing board of the community college district.
e governing board of the community college district may authorize the students of a college
to organize more than one student body association when the governing board nds that day
students and evening students each need an association or geographic circumstances make the
organization of only one student body association impractical or inconvenient.
A community college district may assume responsibility for activities formerly conducted by a
student body association if the student body association is dissolved. A student body association
employee who was employed to perform the activity assumed by the district pursuant to this
section shall become a member of the classied service of the district in accordance with
Section 88020.
§ 76060.5 Student Representation Fees, Community Colleges
(a) If a student body association has been established at a community college as authorized by
Section 76060, the governing body of the association may order that an election be held
for the purpose of establishing a student representation fee of two dollars ($2) per semester.
e election shall be held in compliance with regulations of the Board of Governors of
the California Community Colleges and shall be open to all regularly enrolled students
of the community college. e armative vote of a majority of the students voting in the
election shall be sucient to establish the fee. However, the election shall not be sucient
to establish the fee unless the number of students who vote in the election equals or exceeds
the average of the number of students who voted in the previous three student body
association elections.
308 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
(b) e student representation fee authorized by this section shall be collected by the ocials
of the community college, together with all other fees, at the time of registration or
before registration and shall be deposited in a separate duciary fund established per the
California Community Colleges Budget and Accounting Manual for student represen-
tation fees. e money collected pursuant to this section shall be expended to provide
support for governmental aairs representatives of local or statewide student body organi-
zations who may be stating their positions and viewpoints before city, county, and district
governments, and before oces and agencies of state government.
(c) (1) One dollar ($1) of every two-dollar ($2) fee collected shall be expended to establish
and support the operations of a statewide community college student organization,
recognized by the Board of Governors of the California Community Colleges, with
eective student representation and participation in state-level community college
shared governance and with governmental aairs representatives to advocate before the
Legislature and other state and local governmental entities. is subdivision shall only
apply to student representation fees adopted on or after January 1, 2014.
(2) e underlying goals of a statewide community college student organization shall
include, but are not limited to, all of the following:
(A) Establishing a sustainable foundation for statewide community college student
representation and advocacy.
(B) Promoting institutional and organizational memory.
(C) Ensuring and maintaining responsible community college student organizational
oversight and decisionmaking.
(D) Strengthening regional approaches for community college student representation
and coordination.
(E) Promoting and enhancing student opportunities for engagement in community
college student issues and aairs.
(F) Providing for open and public transparency and accountability.
(d) Fees collected pursuant to subdivision (c) shall be annually distributed to the Board of
Governors before February 1. e Board of Governors shall have custody of the moneys
and shall, each year by April 15, distribute the moneys to the recognized statewide
community college student organization if the recognized statewide community college
student organization satises all of the following:
(1) Is established as a legal entity registered with the Secretary of State.
(2) Demonstrates compliance with all applicable state and federal laws and reporting
requirements.
(3) Exercises prudent scal management by establishing generally accepted accounting
controls and procedures.
(4)
(A) Commencing after the rst year it receives funding pursuant to this subdivision,
completes an annual independent nancial audit, the results of which shall be
annually provided to the Board of Governors for review.
(B)
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(i) Except as provided in clause (ii) and after the rst year funding is received, it
shall be a condition for funding pursuant to this subdivision that the results
of the annual audit identify no signicant audit ndings.
(ii) In no event shall funds be withheld from the statewide community college
student organization unless the statewide community college student organi-
zation fails to address and correct any identied exceptions, concerns, errors,
or deciencies contained in the annual audit after being given a reasonable
opportunity to do so.
(5) Meets the obligations and addresses the goals described in subdivision (c).
(e) Meetings of the recognized statewide community college student organization shall
be open to the public and shall comply with the requirements of the California Public
Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the
Government Code) and the Ralph M. Brown Act (Chapter 9 (commencing with Section
54950) of Part 1 of Division 2 of Title 5 of the Government Code).
(f) Notwithstanding subdivision (c), a student body association that adopted a student repre-
sentation fee before January 1, 2014, shall retain the authority to continue to receive the
one-dollar ($1) fee as authorized pursuant to this section as it read before January 1, 2014.
e student body association may conduct an election pursuant to subdivision (a) to adopt
a revised student representation fee. If an election conducted pursuant to subdivision (a)
establishes the revised student representation fee, then one dollar ($1) of every two-dollar
($2) fee collected shall be expended as described in subdivision (c).
(g) (1) e chief scal ocer of the community college shall have custody of the money
collected pursuant to this section, except as provided in subdivision (d), and the money
shall be disbursed for the purposes described in subdivision (b) upon the order of the
governing body of the student body association.
(2) e community college district shall annually prepare a summary of all revenue
collected from the student representation fee and the expenditures of the proceeds of
the student representation fee. e summary shall include the amount distributed to the
Board of Governors of the California Community Colleges each year. e summary
shall be presented at the community college district board meeting each year and
posted to the community college district Internet Web site.
(3) e community college district may retain a portion of the fees collected and deposited
pursuant to this section that is equal to the actual cost of administering these fees up to,
but not more than, 7 percent.
(h) e student representation fee authorized by this section may be terminated by a majority
vote of the students voting in an election held for that purpose. e election shall be called
and held in compliance with regulations of the Board of Governors of the California
Community Colleges and shall be open to all regularly enrolled students of the community
college.
(i) A student may, for religious, political, nancial, or moral reasons, refuse to pay the student
representation fee established under this section. e refusal shall be submitted in writing
to the community college ocials at the time the student pays other fees collected by
the community college ocials. e refusal shall be submitted on the same form that is
used for collection of fees as provided by the community college, which, as determined
by the community college, shall be as nearly as practical in the same form as a model
310 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
form prescribed by regulations of the Board of Governors of the California Community
Colleges.
(j) Any costs incurred by the Oce of the Chancellor of the California Community Colleges
to implement subdivisions (c) and (d) shall be reimbursed by the statewide community
college student organization.
(k) If no statewide community college student organization that qualies for funding in
accordance with this section is recognized by the Board of Governors, the funds collected
pursuant to this section shall be held by the Oce of the Chancellor of the California
Community Colleges until a qualifying statewide community college student organization
is recognized, or shall be returned to the source of funds.
§ 76061 Student Government Ocer Requirements, Community Colleges
A student who is elected to serve as an ocer in the student government of a community
college shall meet both of the following requirements:
(a) e student shall be enrolled in the community college at the time of election, and
throughout his or her term, with a minimum of ve semester units, or its equivalent.
(b) e student shall meet and maintain the minimum standards of scholarship prescribed for
community college students by the community college district.
§ 76062 Approval of Activities, Community Colleges
e governing board of a community college district may authorize any organization composed
entirely of students attending the colleges of the district to maintain any activities, including
fundraising activities, as may be approved by the governing board.
§ 76063 Deposit or Investment of Student Funds, Community Colleges
e funds of any student body organization established in the public schools of any community
college district shall, subject to approval of the governing board of the district, be deposited or
invested in one or more of the following ways:
(a) Deposits in trust accounts of the centralized State Treasury system pursuant to Sections
16305 to 16305.7, inclusive, of the Government Code or in a bank or banks whose
accounts are insured by the Federal Deposit Insurance Corporation.
(b) Investment certicates or withdrawable shares in state-chartered savings and loan associa-
tions and savings accounts of federal savings and loan associations, if the associations are
doing business in this state and have their accounts insured by the Federal Savings and
Loan Insurance Corporation and if any money so invested or deposited is invested or
deposited in certicates, shares, or accounts fully covered by the insurance.
(c) Purchase of any of the securities authorized for investment by Section 16430 of the
Government Code or investment by the Treasurer in those securities.
(d) Participation in funds that are exempt from federal income tax pursuant to Section 501(c)
(3) of the Internal Revenue Code and that are open exclusively to nonprot colleges,
universities, and independent schools.
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(e) Investment certicates or withdrawable shares in federal or state credit unions, if the credit
unions are doing business in this state and have their accounts insured by the National
Credit Union Administration and if any money so invested or deposited is invested or
deposited in certicates, shares, or accounts fully covered by the insurance.
e funds shall be expended subject to procedures that may be established by the student
body organization subject to the approval of each of the following three persons, which shall
be obtained each time before any of the funds may be expended: an employee or ocial of the
community college district designated by the governing board, the certicated employee who is
the designated adviser of the particular student body organization, and a representative of the
particular student body organization.
§ 76064 Additional Uses of Student Funds, Community Colleges
In addition to deposit or investment pursuant to Section 76063, the funds of a student body
organization may be loaned or invested in any of the following ways:
(a) Loans, with or without interest, to any student body organization established in another
community college of the district for a period not to exceed three years.
(b) Invest money in permanent improvements to any community college district property
including, but not limited to, buildings, automobile parking facilities, gymnasiums,
swimming pools, stadia and playing elds, where those facilities, or portions thereof, are
used for conducting student extracurricular activities or student spectator sports, or when
those improvements are for the benet of the student body. e investment shall be made
on condition that the principal amount of the investment plus a reasonable amount of
interest thereon shall be returned to the student body organization as provided herein. Any
community college district approving the investment shall establish a fund in accordance
with the California Community Colleges Budget and Accounting Manual in which
moneys derived from the rental of community college district property to student body
organizations shall be deposited. Moneys collected by the governing board for automobile
parking facilities as authorized by Section 76360 shall be deposited in the fund designated
by the California Community Colleges Budget and Accounting Manual if the parking
facilities were provided for by investment of student body funds under this section.
Moneys shall be returned to the student body organization as contemplated by this section
exclusively from the special fund and only to the extent that there are moneys in the special
fund. Whenever there are no outstanding obligations against the special fund, all moneys
therein may be transferred to the general fund of the school district by action of the local
governing board.
Two or more student body organizations of the same community college district may join
together in making the investments in the same manner as is authorized herein for a single
student body. Nothing herein shall be construed so as to limit the discretion of the local
governing board in charging rental for use of community college district property by student
body organizations as provided in Section 76060.
§ 76065 Supervision and Audit of Funds, Community Colleges
e governing board of any community college district shall provide for the supervision of all
funds raised by any student body or student organization using the name of the college.
e cost of supervision may constitute a proper charge against the funds of the district.
312 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
e governing board of a community college district may also provide for a continuing audit of
student body funds with community college district personnel.
§ 76067 Student Political Organizations, Community Colleges
Any student political organization that is aliated with the ocial youth division of
any political party that is on the ballot of the State of California may hold meetings on a
community college campus, and may distribute bulletins and circulars concerning its meetings,
provided that there is no endorsement of that organization by the school authorities and no
interference with the regular educational program of the district.
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Appendices 313
Public Contract Code
Section Title and Content
§ 20110 e provisions of this part shall apply to contracts awarded by school districts subject to Part 21
(commencing with Section 35000) of Division 3 of Title 2 of the Education Code.
§ 20111
(a) e governing board of any school district, in accordance with any requirement established
by that governing board pursuant to subdivision (a) of Section 2000, shall let any contracts
involving an expenditure of more than fty thousand dollars ($50,000) for any of the
following:
(1) e purchase of equipment, materials, or supplies to be furnished, sold, or leased to the
district.
(2) Services, except construction services.
(3) Repairs, including maintenance as dened in Section 20115, that are not a public
project as dened in subdivision (c) of Section 22002.
e contract shall be let to the lowest responsible bidder who shall give security as the
board requires, or else reject all bids.
(b) e governing board shall let any contract for a public project, as dened in subdivision (c)
of Section 22002, involving an expenditure of fteen thousand dollars ($15,000) or more,
to the lowest responsible bidder who shall give security as the board requires, or else reject
all bids. All bids for construction work shall be presented under sealed cover and shall be
accompanied by one of the following forms of bidder’s security:
(1) Cash.
(2) A cashier’s check made payable to the school district.
(3) A certied check made payable to the school district.
(4) A bidder’s bond executed by an admitted surety insurer, made payable to the school
district.
Upon an award to the lowest bidder, the security of an unsuccessful bidder shall be
returned in a reasonable period of time, but in no event shall that security be held by the
school district beyond 60 days from the time the award is made.
(c) is section applies to all equipment, materials, or supplies, whether patented or otherwise,
and to contracts awarded pursuant to subdivision (a) of Section 2000. is section shall not
apply to professional services or advice, insurance services, or any other purchase or service
otherwise exempt from this section, or to any work done by day labor or by force account
pursuant to Section 20114.
(d) Commencing January 1, 1997, the Superintendent of Public Instruction shall annually
adjust the dollar amounts specied in subdivision (a) to reect the percentage change in
the annual average value of the Implicit Price Deator for State and Local Government
Purchases of Goods and Services for the United States, as published by the United States
Department of Commerce for the 12-month period ending in the prior scal year. e
annual adjustments shall be rounded to the nearest one hundred dollars ($100).
314 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
§ 20111.5
(a) e governing board of the district may require that each prospective bidder for a contract,
as described under Section 20111, complete and submit to the district a standardized
questionnaire and nancial statement in a form specied by the district, including
a complete statement of the prospective bidder’s nancial ability and experience in
performing public works. e questionnaire and nancial statement shall be veried under
oath by the bidder in the manner in which civil pleadings in civil actions are veried. e
questionnaires and nancial statements shall not be public records and shall not be open to
public inspection.
(b) Any school district requiring prospective bidders to complete and submit questionnaires
and nancial statements, as described in subdivision (a), shall adopt and apply a uniform
system of rating bidders on the basis of the completed questionnaires and nancial
statements, in order to determine the size of the contracts upon which each bidder shall be
deemed qualied to bid.
(c) Each prospective bidder on any contract described under Section 20111 shall be furnished
by the school district letting the contract with a standardized proposal form that, when
completed and executed, shall be submitted as his or her bid. Bids not presented on the
forms so furnished shall be disregarded.
(d) A proposal form required pursuant to subdivision (c) shall not be accepted from any person
or other entity who is required to submit a completed questionnaire and nancial statement
for prequalication pursuant to subdivision (a), but has not done so at least ve days
prior to the date xed for the public opening of sealed bids or has not been prequalied,
pursuant to subdivision (b), for at least one day prior to that date.
(e) Notwithstanding subdivision (d), any school district may establish a process for prequali-
fying prospective bidders pursuant to this section on a quarterly basis and may authorize
that prequalication to be considered valid for up to one calendar year following the date
of initial prequalication.
§ 20112 For the purpose of securing bids the governing board of a school district shall publish at least
once a week for two weeks in some newspaper of general circulation published in the district,
or if there is no such paper, then in some newspaper of general circulation, circulated in the
county, and may post on the district’s Web site or through an electronic portal, a notice calling
for bids, stating the work to be done or materials or supplies to be furnished and the time when
and the place and the Web site where bids will be opened. Whether or not bids are opened
exactly at the time xed in the public notice for opening bids, a bid shall not be received after
that time. e governing board of the district may accept a bid that was submitted either
electronically or on paper.
§ 20113
(a) In an emergency when any repairs, alterations, work, or improvement is necessary to any
facility of public schools to permit the continuance of existing school classes, or to avoid
danger to life or property, the board may, by unanimous vote, with the approval of the
county superintendent of schools, do either of the following:
(1) Make a contract in writing or otherwise on behalf of the district for the performance of
labor and furnishing of materials or supplies for the purpose without advertising for or
inviting bids.
Chapter 24
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Appendices 315
(2) Notwithstanding Section 20114, authorize the use of day labor or force account for the
purpose.
(b) Nothing in this section shall eliminate the need for any bonds or security otherwise
required by law.
§ 20114
(a) In each school district, the governing board may make repairs, alterations, additions, or
painting, repainting, or decorating upon school buildings, repair or build apparatus or
equipment, make improvements on the school grounds, erect new buildings, and perform
maintenance as dened in Section 20115 by day labor, or by force account, whenever the
total number of hours on the job does not exceed 350 hours. Moreover, in any school
district having an average daily attendance of 35,000 or greater, the governing board may,
in addition, make repairs to school buildings, grounds, apparatus, or equipment, including
painting or repainting, and perform maintenance, as dened in Section 20115, by day labor
or by force account whenever the total number of hours on the job does not exceed 750
hours, or when the cost of material does not exceed twenty-one thousand dollars ($21,000).
(b) For purposes of this section, day labor shall include the use of maintenance personnel
employed on a permanent or temporary basis.
§ 20115 For purposes of Section 20114, “maintenance” means routine, recurring, and usual work for
the preservation, protection, and keeping of any publicly owned or publicly operated facility
for its intended purposes in a safe and continually usable condition for which it was designed,
improved, constructed, altered, or repaired. “Facility” means any plant, building, structure,
ground facility, utility system, or real property.
is denition of “maintenance” expressly includes, but is not limited to: carpentry, electrical,
plumbing, glazing, and other craftwork designed consistent with the denition set forth above
to preserve the facility in a safe, ecient, and continually usable condition for which it was
intended, including repairs, cleaning, and other operations on machinery and other equipment
permanently attached to the building or realty as xtures.
is denition does not include, among other types of work, janitorial or custodial services and
protection of the sort provided by guards or other security forces.
It is the intent of the Legislature that this denition does not include painting, repainting, or
decorating other than touchup, but instead it is the intent of the Legislature that such activities
be controlled directly by the provisions of Section 20114.
§ 20116 It shall be unlawful to split or separate into smaller work orders or projects any work,
project, service, or purchase for the purpose of evading the provisions of this article requiring
contracting after competitive bidding.
e district shall maintain job orders or similar records indicating the total cost expended on
each project in accordance with the procedures established in the most recent edition of the
California School Accounting Manual for a period of not less than three years after completion
of the project.
Informal bidding may be used on work, projects, services, or purchases that cost up to the
limits set forth in this article. For the purpose of securing informal bids, the board shall publish
316 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
annually in a newspaper of general circulation published in the district, or if there is no such
newspaper, then in some newspaper in general circulation in the county, a notice inviting
contractors to register to be notied of future informal bidding projects. All contractors
included on the informal bidding list shall be given notice of all informal bid projects in any
manner as the district deems appropriate.
§ 20117 Notwithstanding any other provision of law, in the event there are two or more identical lowest
or highest bids, as the case may be, submitted to a school district for the purchase, sale, or
lease of real property, supplies, materials, equipment, services, bonds, or the awarding of any
contract, pursuant to a provision requiring competitive bidding, the governing board of any
school district may determine by lot which bid shall be accepted.
§ 20118 Notwithstanding Sections 20111 and 20112, the governing board of any school district,
without advertising for bids, if the board has determined it to be in the best interests of the
district, may authorize by contract, lease, requisition, or purchase order, any public corporation
or agency, including any county, city, town, or district, to lease data-processing equipment,
purchase materials, supplies, equipment, automotive vehicles, tractors, and other personal
property for the district in the manner in which the public corporation or agency is authorized
by law to make the leases or purchases from a vendor. Upon receipt of the personal property,
if the property complies with the specications set forth in the contract, lease, requisition, or
purchase order, the school district may draw a warrant in favor of the public corporation or
agency for the amount of the approved invoice, including the reasonable costs to the public
corporation or agency for furnishing the services incidental to the lease or purchase of the
personal property, or the school district may make payment directly to the vendor. Alterna-
tively, if there is an existing contract between a public corporation or agency and a vendor
for the lease or purchase of the personal property, a school district may authorize the lease
or purchase of personal property directly from the vendor by contract, lease, requisition, or
purchase order and make payment to the vendor under the same terms that are available to the
public corporation or agency under the contract.
§ 20118.1 e governing board of any school district may contract with an acceptable party who is one of
the three lowest responsible bidders for the procurement or maintenance, or both, of electronic
data-processing systems and supporting software in any manner the board deems appropriate.
§ 20118.2
(a) Due to the highly specialized and unique nature of technology, telecommunications,
related equipment, software, and services, because products and materials of that nature
are undergoing rapid technological changes, and in order to allow for the introduction of
new technological changes into the operations of the school district, it is in the public’s best
interest to allow a school district to consider, in addition to price, factors such as vendor
nancing, performance reliability, standardization, life-cycle costs, delivery timetables,
support logistics, the broadest possible range of competing products and materials available,
tness of purchase, manufacturer’s warranties, and similar factors in the award of contracts
for technology, telecommunications, related equipment, software, and services.
(b) is section applies only to a school district’s procurement of computers, software, telecom-
munications equipment, microwave equipment, and other related electronic equipment and
apparatus. is section does not apply to contracts for construction or for the procurement
of any product that is available in substantial quantities to the general public.
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(c) Notwithstanding Section 20118.1, a school district may, after a nding is made by the
governing board that a particular procurement qualies under subdivision (b), authorize
the procurement of the product through competitive negotiation as described in
subdivision (d).
(d) For purposes of this section, competitive negotiation includes, but is not limited to, all of
the following requirements:
(1) A request for proposals shall be prepared and submitted to an adequate number of
qualied sources, as determined by the school district, to permit reasonable competition
consistent with the nature and requirement of the procurement.
(2) Notice of the request for proposals shall be published at least twice in a newspaper of
general circulation, at least 10 days before the date for receipt of the proposals.
(3) e school district shall make every eort to generate the maximum feasible number
of proposals from qualied sources and shall make a nding to that eect before
proceeding to negotiate if only a single response to the request for proposals is received.
(4) e request for proposals shall identify all signicant evaluation factors, including price,
and their relative importance.
(5) e school district shall provide reasonable procedures for the technical evaluation of
the proposals received, the identication of qualied sources, and the selection for the
award of the contract.
(6) Award shall be made to the qualied bidder whose proposal meets the evaluation
standards and will be most advantageous to the school district with price and all other
factors considered.
(7) If award is not made to the bidder whose proposal contains the lowest price, the school
district shall make a nding setting forth the basis for the award.
(e) e school district, at its discretion, may reject all proposals and request new proposals.
(f) Provisions in any contract concerning utilization of small business enterprises, that are
in accordance with the request for proposals, shall not be subject to negotiation with the
successful proposer.
§ 20118.3 e governing board of any school district may purchase supplementary textbooks, library
books, educational lms, audiovisual materials, test materials, workbooks, instructional
computer software packages, or periodicals in any amount needed for the operation of the
schools of the district without taking estimates or advertising for bids.
is section shall become operative January 1, 1989, and is declaratory of existing law and
practice.
§ 20118.4
(a) If any change or alteration of a contract governed by Article 3 (commencing with Section
17595) of Chapter 5 of Part 10.5 of the Education Code is ordered by the governing board
of the district, the change or alteration shall be specied in writing and the cost agreed
upon between the governing board and the contractor. e board may authorize the
contractor to proceed with performance of the change or alteration, without the formality
of securing bids, if the cost so agreed upon does not exceed the greater of the following:
318 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
(1) e amount specied in Section 20111 or 20114, whichever is applicable to the original
contract.
(2) Ten percent of the original contract price.
(b) e governing board of any school district, or of two or more school districts governed
by governing boards of identical personnel, having an average daily attendance of
400,000 or more as shown by the annual report of the county superintendent of schools
for the preceding year, may also authorize any change or alteration of a contract for
reconstruction or rehabilitation work, other than for the construction of new buildings or
other new structures, if the cost of the change or alteration is in excess of the limitations
in paragraphs (1) and (2) of subdivision (a) but does not exceed 25 percent of the original
contract price, without the formality of securing bids, and the change or alteration is a
necessary and integral part of the work under the contract and the taking of bids would
delay the completion of the contract. Changes exceeding 15 percent of the original contract
price shall be approved by an armative vote of not less than 75 percent of the members of
the governing board.
§ 22002
(a) “Public agency,” for purposes of this chapter, means a city, county, city and county,
including chartered cities and chartered counties, any special district, and any other agency
of the state for the local performance of governmental or proprietary functions within
limited boundaries. “Public agency” also includes a nonprot transit corporation wholly
owned by a public agency and formed to carry out the purposes of the public agency.
(b) “Representatives of the construction industry” for purposes of this chapter, means a general
contractor, subcontractor, or labor representative with experience in the eld of public
works construction.
(c) “Public project” means any of the following:
(1) Construction, reconstruction, erection, alteration, renovation, improvement,
demolition, and repair work involving any publicly owned, leased, or operated facility.
(2) Painting or repainting of any publicly owned, leased, or operated facility.
(3) In the case of a publicly owned utility system, “public project” shall include only the
construction, erection, improvement, or repair of dams, reservoirs, powerplants, and
electrical transmission lines of 230,000 volts and higher.
(d) “Public project” does not include maintenance work. For purposes of this section,
“maintenance work” includes all of the following:
(1) Routine, recurring, and usual work for the preservation or protection of any publicly
owned or publicly operated facility for its intended purposes.
(2) Minor repainting.
(3) Resurfacing of streets and highways at less than one inch.
(4) Landscape maintenance, including mowing, watering, trimming, pruning, planting,
replacement of plants, and servicing of irrigation and sprinkler systems.
(5) Work performed to keep, operate, and maintain publicly owned water, power, or waste
disposal systems, including, but not limited to, dams, reservoirs, powerplants, and
electrical transmission lines of 230,000 volts and higher.
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(e) For purposes of this chapter, “facility” means any plant, building, structure, ground
facility, utility system, subject to the limitation found in paragraph (3) of subdivision (c),
real property, streets and highways, or other public work improvement.
320 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
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Appendices 321
California Administrative Code, Title 5, Education
Section Title and Content
§ 15500 Food Sales in Elementary Schools
(a) Except as provided in subsection (b) and Section 15501, no school providing kindergarten
or any of grades one through eight shall permit the sale of food by pupil organizations
if such school is participating in the National School Lunch, School Breakfast, or Food
Distribution program.
(b) e governing board of a school district or a county superintendent of schools may
permit a student organization to sell not more than one food item per sale when all of the
following conditions are met:
(1) e specic nutritious food item is approved by the governing board.
(2) e food sales do not begin until after the close of the regularly scheduled midday food
service period.
(3) e sales during the regular school day are not of food items prepared on the premises.
(4) ere are no more than four such sales per year per school.
(5) (5) e food item sold is a dessert type food, such as pastry, ice cream or fruit.
(6) e food item sold is not one sold in the food service program at that school during that
school day.
§ 15501 Food Sales in High Schools and Junior High Schools
e governing board of any district or a county superintendent of schools maintaining a high
school or a junior high school may permit an organization consisting solely of pupils of such
school to sell food items during or after the regular school day if the following conditions are
met:
(a) e specic nutritious food items are approved by the governing board.
(b) A student organization or organizations may be approved to sell food at any time during
the school day, including the regularly scheduled food service period(s), as provided in (1)
and/or (2):
(1) Only one such organization each school day selling no more than three types of food or
beverage items such as confections, popcorn, nuts, fruit, or soft drinks; and/or
(2) Any one or more student organizations may conduct no more than four food sales of
any food items during a school year in each school, but such sales shall be held on the
same four days for any or all organizations.
(c) e sales during the regular school day are not of food prepared on the premises.
(d) e food items sold during the regular school day are not those sold by the district in the
food service program at that school during that school day.
322 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
§ 15575 Denitions for Foods.
As used in this article, the term:
(a) “Dairy” means a food made from milk with the exception of cheese packaged for
individual sale.
(b) “Entree item” means a food generally regarded as the primary food in a meal and contains:
(1) Two or more of the following groups: meat/meat alternate, grain/bread, vegetable/fruit
that are eaten together (e.g., turkey sandwich, pizza, hamburger on a bun, bean burrito,
chef’s salad, fruit and cheese platter, baked potato with chili, chicken vegetable stir-fry,
veggie sandwich), or
(2) A meat/meat alternate alone (e.g., sausage patty, egg, chicken nuggets), excluding nuts,
nut butters, seeds, cheese, and yogurt.
(c) “Exempt foods” means nuts, nut butters, seeds, eggs, cheese packaged for individual sale,
fruits, vegetables that have not been deep fried, and legumes that do not contain added
sugars or fat, and
(1) Fruit that is dried and contains added sugar is exempt only if the added sugar is
part of the dehydration process or added as dextrose to prevent caking and maintain
owability.
(2) Fruit that is canned or frozen is exempt only if it contains no added sugar other than
100 percent fruit juice.
(d) “Full meal” means any combination of food items that meet the United States Department
of Agriculture (USDA) approved School Breakfast Program or National School Lunch
Program meal pattern requirements found in 7 CFR 210.10 or 220.8.
(e) “Meat/meat alternates,” “grain/breads,” and “vegetables/fruits” mean those described in the
USDA’s Food Buying Guide for Child Nutrition Programs (2001 edition) Sections 1, 2,
and 3, which is incorporated by reference.
(f) “Non-exempt foods” means foods other than nuts, nut butters, seeds, eggs, cheese
packaged for individual sale, fruits, vegetables that have not been deep fried, and legumes
that do not contain added sugars or fat.
(g) “Whole grain” means, but is not limited to, whole wheat our, graham our, cracked
wheat, crushed wheat, wheat berries, entire wheat our, whole durum our, whole oats, oat
groats, oatmeal, rolled oats, whole corn, whole grain cornmeal, popcorn, brown rice, brown
rice our, wild rice, whole rye, whole rye our, dehulled barley, dehulled barley our, whole
grain barley, whole grain barley our, buckwheat groats, whole buckwheat our, bulgur
(cracked wheat), whole millet, whole millet our, whole quinoa, whole quinoa our, whole
spelt, whole spelt our, whole sorghum (milo), whole sorghum our, whole triticale, whole
triticale our.
(h) “Whole grain food item” means:
(1) For purchased grain or bread products:
(A) A product that contains the following statement: “Diets rich in whole grain foods
and other plant foods and low in total fat, saturated fat, and cholesterol, may help
reduce the risk of heart disease and certain cancers”, or
Chapter 24
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Appendices 323
(B) e rst listed grain ingredient is a whole grain, or
(C) If the rst listed ingredient is not specically identied as a whole grain, documen-
tation has been obtained within the previous 12 months from the manufacturer
that lists whole grains, which, when combined, shall represent at least 51 percent of
the weight of the total grains in the product.
(2) For grain or bread products prepared by schools:
(A) e weight of the whole grains shall represent at least 51 percent of the total grain
weight of the product.
§ 15576 Denitions for Beverages.
As used in this article the term:
(a) “Beverage” means any potable liquid.
(b) “Electrolyte replacement beverage” means a potable liquid that meets all of the following
requirements:
(1) Water as the rst ingredient.
(2) Contains no more than 2.1 grams of added sweetener per uid ounce.
(3) Contains at least 10 milligrams but no more than 150 milligrams of sodium per 8
ounces.
(4) Contains at least 10 milligrams but no more than 90 milligrams of potassium per 8
ounces.
(5) Contains no added caeine.
(c) “Milk” means cow’s or goat’s milk that:
(1) Contains Vitamin A, Vitamin D, and at least 25 percent of the FDA-established Daily
Value (DV) for calcium per 8 ounces.
(2) Contains no added sweeteners exceeding 28 grams of total sugars per 8 ounces.
(3) Is two-percent fat milk, one-percent fat milk, or nonfat milk.
(d) “Non-dairy milk” alternative (e.g., rice milk, soy milk) means a beverage that:
(1) Contains Vitamin A, Vitamin D and at least 25 percent of the DV for calcium per 8
ounces,
(2) Contains no added sweeteners exceeding 28 grams of total sugars per 8 ounces, and
(3) Contains no more than 5 grams of fat per 8 ounces.
§ 15577 Food and Beverages Restrictions.
As used in this article the term:
(a) “Caloric restriction” means:
(1) In elementary schools, no more than 175 calories per item.
324 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
(2) In middle, junior, or high schools, no more than 250 calories per item for a snack item
and no more than 400 calories per item for an entree item.
(b) “Fat restriction” means no more than 35 percent of calories from fat.
(c) “Saturated fat restriction” means no more than 10 percent calories from saturated fat.
(d) “Sugar restriction” means no more than 35 percent sugar by weight.
(e) “Sugar” means all free mono- and disaccharides, such as glucose, fructose, lactose, and
sucrose.
§ 15578 Sale of Food Items.
(a) Any food items appearing together on a menu and sold together as if they were a single
food item, and typically combined for simultaneous consumption (e.g., pita with hummus,
salad with dressing, chicken patty on a bun), shall be considered as one item for compliance
(1) with the fat restriction, saturated fat restriction, sugar restriction and caloric restriction
for a snack item or (2) with the fat restriction and caloric restriction for an entree item.
(b) All non-exempt food items for sale must meet the fat restriction, saturated fat restriction,
sugar restriction and caloric restriction for a snack item or the fat restriction and caloric
restriction for an entree item.
(c) A food item for sale containing non-exempted foods or ingredients combined with fruits,
vegetables, nuts, nut butters, seeds, eggs, or legumes shall comply with the restrictions for
non-exempted foods as described in section 15578(b).
(d) A food item for sale containing solely a mix of exempted foods is exempt from the fat
restriction, saturated fat restriction, sugar restriction and caloric restriction.
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Appendices 325
Code of Federal Regulations, Title 7
Section Title and Content
§ 210.11 Competitive Food Services
(a) Denitions.For the purpose of this section:
(1) Combination foodsmeans products that contain two or more components representing
two or more of the recommended food groups: fruit, vegetable, dairy, protein or grains.
(2) Competitive foodmeans all food and beverages other than meals reimbursed under
programs authorized by the Richard B. Russell National School Lunch Act and the
Child Nutrition Act of 1966 available for sale to students on the School campusduring
theSchool day.
(3) Entrée itemmeans an item that is either:
(i) A combination food of meat or meat alternate and whole grain rich food; or
(ii) A combination food of vegetable or fruit and meat or meat alternate; or
(iii) A meat or meat alternate alone with the exception of yogurt, low-fat or
reduced fat cheese, nuts, seeds and nut or seed butters, and meat snacks (such
as dried beef jerky).
(4) School campusmeans, for the purpose of competitive food standards implementation,
all areas of the property under the jurisdiction of the school that are accessible to
students during the school day.
(5) School daymeans, for the purpose of competitive food standards implementation, the
period from the midnight before, to 30 minutes after the end of the ocial school day.
(b) General requirements for competitive food.
(1) State and local educational agency policies.State agencies and/or local educational
agencies must establish such policies and procedures as are necessary to ensure
compliance with this section. State agencies and/or local educational agencies may
impose additional restrictions on competitive foods, provided that they are not incon-
sistent with the requirements of this part.
(2) Recordkeeping.e local educational agency is responsible for the maintenance of
records that document compliance with the nutrition standards for all competitive food
available for sale to students in areas under its jurisdiction that are outside of the control
of the school food authority responsible for the service of reimbursable school meals.
In addition, the local educational agency is responsible for ensuring that organizations
designated as responsible for food service at the various venues in the schools maintain
records in order to ensure and document compliance with the nutrition requirements
for the foods and beverages sold to students at these venues during the school day
as required by this section. e school food authority is responsible for maintaining
records documenting compliance with these for foods sold under the auspices of the
nonprot school food service. At a minimum, records must include receipts, nutrition
labels and/or product specications for the competitive food available for sale to
students.
(3) Applicability.e nutrition standards for the sale of competitive food outlined in this
section apply to competitive food for all programs authorized by the Richard B. Russell
326 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
National School Lunch Act and the Child Nutrition Act of 1966 operating on the
school campus during the school day.
(4) Fundraiser restrictions.Competitive food and beverage items sold during the school day
must meet the nutrition standards for competitive food as required in this section. A
special exemption is allowed for the sale of food and/or beverages that do not meet the
competitive food standards as required in this section for the purpose of conducting an
infrequent school-sponsored fundraiser. Such specially exempted fundraisers must not
take place more than the frequency specied by the State agency during such periods
that schools are in session. No specially exempted fundraiser foods or beverages may be
sold in competition with school meals in the food service area during the meal service.
(c) General nutrition standards for competitive food.
(1) General requirement.At a minimum, all competitive food sold to students on the
school campus during the school day must meet the nutrition standards specied in this
section. ese standards apply to items as packaged and served to students.
(2) General nutrition standards.To be allowable, a competitive food item must:
(i) Meet all of the competitive food nutrient standards as outlined in this section;
and
(ii) Be a grain product that contains 50 percent or more whole grains by weight or
have as the rst ingredient a whole grain; or
(iii) Have as the rst ingredient one of the non-grain major food groups: fruits,
vegetables, dairy or protein foods (meat, beans, poultry, seafood, eggs, nuts,
seeds, etc.); or
(iv) Be a combination food that contains1⁄4cup of fruit and/or vegetable; or
(v) For the period through June 30, 2016, contain 10 percent of the Daily Value
of a nutrient of public health concern based on the most recent Dietary
Guidelines for Americans (i.e., calcium, potassium, vitamin D or dietary
ber). Eective July 1, 2016, the criterion in this paragraph is obsolete and
may not be used to qualify as a competitive food; and
(vi) If water is the rst ingredient, the second ingredient must be one of the food
items in paragraphs (c)(2)(ii), (iii) or (iv) of this section.
(3) Exemptions.
(i) Entrée items oered as part of the lunch or breakfast program.Any entrée
item oered as part of the lunch program or the breakfast program under 7
CFR Part 220 is exempt from all competitive food standards if it is oered
as a competitive food on the day of, or the school day after, it is oered in
the lunch or breakfast program. Exempt entrée items oered as a competitive
food must be oered in the same or smaller portion sizes as in the lunch
or breakfast program. Side dishes oered as part of the lunch or breakfast
program and served à la carte must meet the nutrition standards in this
section.
(ii) Sugar-free chewing gum.Sugar-free chewing gum is exempt from all of the
competitive food standards in this section and may be sold to students on the
school campus during the school day, at the discretion of the local educational
agency.
Chapter 24
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Appendices 327
(d) Fruits and vegetables.
(1) Fresh, frozen and canned fruits and vegetables with no added ingredients except water
or, in the case of fruit, packed in 100 percent fruit juice or light syrup or extra light
syrup, are exempt from the nutrient standards included in this section.
(2) Canned vegetables that contain a small amount of sugar for processing purposes, to
maintain the quality and structure of the vegetable, are also exempt from the nutrient
standards included in this section.
(e) Grain products.Grain products acceptable as a competitive food must include 50 percent
or more whole grains by weight or have whole grain as the rst ingredient. Grain products
must meet all of the other nutrient standards included in this section.
(f) Total fat and saturated fat.
(1) General requirements.
(i) e total fat content of a competitive food must be not more than 35 percent
of total calories from fat per item as packaged or served, except as specied in
paragraphs (f)(2) and (3) of this section.
(ii) e saturated fat content of a competitive food must be less than 10 percent of
total calories per item as packaged or served, except as specied in paragraph
(f)(3) of this section.
(2) Exemptions to the total fat requirement.Seafoodwith no added fatis exempt from
the total fat requirement, but subject to the saturated fat, trans fat, sugar, calorie and
sodium standards.
(3) Exemptions to the total fat and saturated fat requirements.
(i) Reduced fat cheese and part skim mozzarella cheese are exempt from the total
fat and saturated fat standards, but subject to the trans fat, sugar, calorie and
sodium standards. is exemption does not apply to combination foods.
(ii) Nuts and Seeds and Nut/Seed Butters are exempt from the total fat and
saturated fat standards, but subject to the trans fat, sugar, calorie and sodium
standards. is exemption does not apply to combination products that
contain nuts, nut butters or seeds or seed butters with other ingredients such
as peanut butter and crackers, trail mix, chocolate covered peanuts, etc.
(iii) Products that consist of only dried fruit with nuts and/or seeds with no added
nutritive sweeteners or fat are exempt from the total fat, saturated fat and
sugar standards, but subject to the trans fat, calorie and sodium standards.
(g) Trans fat.e trans fat content of a competitive food must be zero grams trans fat per
portion as packaged or served (not more than 0.5 grams per portion).
(h) Total sugars.
(1) General requirement.e total sugar content of a competitive food must be not
more than 35 percent ofweightper item as packaged or served, except as specied in
paragraph (h)(2) of this section.
(2) Exemptions to the total sugar requirement.
328 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
(i) Dried whole fruits or vegetables; dried whole fruit or vegetable pieces;
and dehydrated fruits or vegetables with no added nutritive sweeteners are
exempt from the sugar standard, but subject to the total fat, saturated fat,,
trans fat, calorie and sodium standards. ere is also an exemption from the
sugar standard for dried fruits with nutritive sweeteners that are required for
processing and/or palatability purposes;
(ii) Products that consist of only dried fruit with nuts and/or seeds with no added
nutritive sweeteners or fat are exempt from the total fat, saturated fat, and
sugar standards, but subject to the calorie, trans fat, and sodium standards;
and
(i) Calorie and sodium content for snack items and side dishes sold à la carte.Snack items and
side dishes sold à la carte must have not more than 200 calories and 230 mg of sodium
per item as packaged or served, including the calories and sodium contained in any added
accompaniments such as butter, cream cheese, salad dressing, etc., and must meet all of the
other nutrient standards in this section. Eective July 1, 2016, these snack items and side
dishes must have not more than 200 calories and 200 mg of sodium per item as packaged
or served.
(j) Calorie and sodium content for entrée items sold à la carte.Entrée items sold à la carte
other than those exempt from the competitive food nutrition standards in paragraph (c)(3)
(i) of this section must have not more than 350 calories and 480 mg of sodium per item as
packaged or served, including the calories and sodium contained in any added accompani-
ments such as butter, cream cheese, salad dressing, etc., and must meet all of the other
nutrient standards in this section.
(k) Caeine.Foods and beverages available to elementary and middle school-aged students
must be caeine-free, with the exception of trace amounts of naturally occurring caeine
substances. Foods and beverages available to high school-aged students may contain
caeine.
(l) Accompaniments.e use of accompaniments is limited when competitive food is sold to
students in school. e accompaniments to a competitive food item must be included in
the nutrient prole as a part of the food item served in determining if an item meets all of
the nutrition standards for competitive food as required in this section. e contribution of
the accompaniments may be based on the average amount of the accompaniment used per
item at the site.
(m) Beverages.
(1) Elementary schools.Allowable beverages for elementary school-aged students are
limited to:
(i) Plain water or plain carbonated water (no size limit);
(ii) Low fat milk, unavored (no more than 8 uid ounces);
(iii) Non fat milk, avored or unavored (no more than 8 uid ounces);
(iv) Nutritionally equivalent milk alternatives as permitted in §210.10 and §220.8
of this chapter (no more than 8 uid ounces); and
(v) 100 percent fruit/vegetable juice, and 100 percent fruit and/or vegetable
juice diluted with water (with or without carbonation and with no added
sweeteners) (no more than 8 uid ounces).
Chapter 24
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Appendices 329
(2) Middle schools.Allowable beverages for middle school-aged students are limited to:
(i) Plain water or plain carbonated water (no size limit);
(ii) Low fat milk, unavored (no more than 12 uid ounces);
(iii) Non fat milk, avored or unavored (no more than 12 uid ounces);
(iv) Nutritionally equivalent milk alternatives as permitted in §210.10 and §220.8
of this chapter (no more than 12 uid ounces); and
(v) 100 percent fruit/vegetable juice, and 100 percent fruit and/or vegetable
juice diluted with water (with or without carbonation and with no added
sweeteners) (no more than 12 uid ounces).
(3) High schools.Allowable beverages for high school-aged students are limited to:
(i) Plain water or plain carbonated water (no size limit);
(ii) Low fat milk, unavored (no more than 12 uid ounces);
(iii) Non fat milk, avored or unavored (no more than 12 uid ounces);
(iv) Nutritionally equivalent milk alternatives as permitted in §210.10 and §220.8
of this chapter (no more than 12 uid ounces);
(v) 100 percent fruit/vegetable juice, and 100 percent fruit and/or vegetable
juice diluted with water (with or without carbonation and with no added
sweeteners) (no more than 12 uid ounces);
(vi) Calorie-free, avored water, with or without carbonation (no more than 20
uid ounces);
(vii) Other beverages that are labeled to contain less than 5 calories per 8 uid
ounces, or less than or equal to 10 calories per 20 uid ounces (no more than
20 uid ounces); and
(viii) Other beverages that are labeled to contain no more than 40 calories per 8
uid ounces or 60 calories per 12 uid ounces (no more than 12 uid ounces).
(n) Implementation date.is section is to be implemented beginning on July 1, 2014.
§ 215.1 General Purpose and Scope
is part announces the policies and prescribes the general regulations with respect to the
Special Milk Program for Children, under the Child Nutrition Act of 1966, as amended, and
sets forth the general requirements for participation in the program. e Act reads in pertinent
part as follows:
Section 3
(a) (1) ere is hereby authorized to be appropriated for the scal year ending June 30,
1970, and for each succeeding scal year such sums as may be necessary to enable the
Secretary of Agriculture, under such rules and regulations as he may deem in the public
interest, to encourage consumption of uid milk by children in the United States in
(A) nonprot schools of high school grade and under, except as provided in paragraph
(2), which do not participate in a meal service program authorized under this Act or
the National School Lunch Act, and (B) nonprot nursery schools, child care centers,
330 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
settlement houses, summer camps, and similar nonprot institutions devoted to the
care and training of children, which do not participate in a meal service program
authorized under this Act or the National School Lunch Act.
(2) e limitation imposed under paragraph (1)(A) for participation of nonprot schools
in the special milk program shall not apply to split-session kindergarten programs
conducted in schools in which children do not have access to the meal service program
operating in schools the children attend as authorized under this Act or the National
School Lunch Act (42 U.S.C. 1751et seq.).
(3) For the purposes of this section “United States” means the fty States, Guam, the
Commonwealth of Puerto Rico, the Virgin Islands, American Samoa, the Trust
Territory of the Pacic Islands, and the District of Columbia.
(4) e Secretary shall administer the special milk program provided for by this section
to the maximum extent practicable in the same manner as he administered the special
milk program provided for by Pub. L. 89-642, as amended, during the scal year
ending June 30, 1969.
(5) Any school or nonprot child care institution which does not participate in a meal
service program authorized under this Act or the National School Lunch Act shall
receive the special milk program upon their request.
(6) Children who qualify for free lunches under guidelines established by the Secretary
shall, at the option of the school involved (or of the local educational agency involved in
the case of a public school) be eligible for free milk upon their request.
(7) For the scal year ending June 30, 1975, and for subsequent school years, the minimum
rate of reimbursement for a half-pint of milk served in schools and other eligible
institutions shall not be less than 5 cents per half-pint served to eligible children, and
such minimum rate of reimbursement shall be adjusted on an annual basis each school
year to reect changes in the Producer Price Index for Fresh Processed Milk published
by the Bureau of Labor Statistics of the Department of Labor.
(8) Such adjustment shall be computed to the nearest one-fourth cent.
(9) Notwithstanding any other provision of this section, in no event shall the minimum
rate of reimbursement exceed the cost to the school or institution of milk served to
children.
§ 220.12 Competitive Food Services
School food authorities must comply with the competitive food service and standards require-
ments specied in §210.11 of this chapter.
Chapter 24
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Appendices 331
California Penal Code
Section Title and Content
§ 319 Denition of a Lottery
A lottery is any scheme for the disposal or distribution of property by chance, among persons
who have paid or promised to pay any valuable consideration for the chance of obtaining
such property or a portion of it, or for any share or any interest in such property, upon any
agreement, understanding, or expectation that it is to be distributed or disposed of by lot or
chance, whether called a lottery, rae, or gift enterprise, or by whatever name the same may be
known.
§ 319.3
(a) In addition to Section 319, a lottery also shall include a grab bag game which is a scheme
whereby, for the disposal or distribution of sports trading cards by chance, a person pays
valuable consideration to purchase a sports trading card grab bag with the understanding
that the purchaser has a chance to win a designated prize or prizes listed by the seller as
being contained in one or more, but not all, of the grab bags.
(b) For purposes of this section, the following denitions shall apply:
(1) “Sports trading card grab bag” means a sealed package which contains one or more
sports trading cards that have been removed from the manufacturer’s original
packaging. A “sports trading card grab bag” does not include a sweepstakes, or
procedure for the distribution of any sports trading card of value by lot or by chance,
which is not unlawful under other provisions of law.
(2) “Sports trading card” means any card produced for use in commerce that contains
a company name or logo, or both, and an image, representation, or facsimile of one
or more players or other team member or members in any pose, and that is produced
pursuant to an appropriate licensing agreement.
§ 319.5 Neither this chapter nor Chapter 10 (commencing with Section 330) applies to the possession
or operation of a reverse vending machine. As used in this section a reverse vending machine is
a machine in which empty beverage containers are deposited for recycling and which provides
a payment of money, merchandise, vouchers, or other incentives at a frequency less than upon
each deposit. e pay out of a reverse vending machine is made on a deposit selected at random
within the designated number of required deposits.
e deposit of an empty beverage container in a reverse vending machine does not constitute
consideration within the denition of lottery in Section 319.
§ 320 Operation of a Rae or Lottery
Every person who contrives, prepares, sets up, proposes, or draws any lottery, is guilty of a
misdemeanor.
332 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
§ 320.5
(a) Nothing in this chapter applies to any rae conducted by an eligible organization as
dened in subdivision (c) for the purpose of directly supporting benecial or charitable
purposes or nancially supporting another private, nonprot, eligible organization that
performs benecial or charitable purposes if the rae is conducted in accordance with this
section.
(b) For purposes of this section, “rae” means a scheme for the distribution of prizes by
chance among persons who have paid money for paper tickets that provide the opportunity
to win these prizes, where all of the following are true:
(1) Each ticket is sold with a detachable coupon or stub, and both the ticket and its
associated coupon or stub are marked with a unique and matching identier.
(2) Winners of the prizes are determined by draw from among the coupons or stubs
described in paragraph (1) that have been detached from all tickets sold for entry in the
draw.
(3) e draw is conducted in California under the supervision of a natural person who is 18
years of age or older.
(4)
(A) At least 90 percent of the gross receipts generated from the sale of rae tickets for
any given draw are used by the eligible organization conducting the rae to benet
or provide support for benecial or charitable purposes, or it may use those revenues
to benet another private, nonprot organization, provided that an organization
receiving these funds is itself an eligible organization as dened in subdivision (c).
As used in this section, “benecial purposes” excludes purposes that are intended
to benet ocers, directors, or members, as dened by Section 5056 of the
Corporations Code, of the eligible organization. In no event shall funds raised by
raes conducted pursuant to this section be used to fund any benecial, charitable,
or other purpose outside of California. is section does not preclude an eligible
organization from using funds from sources other than the sale of rae tickets to
pay for the administration or other costs of conducting a rae.
(B) An employee of an eligible organization who is a direct seller of rae tickets shall
not be treated as an employee for purposes of workers’ compensation under Section
3351 of the Labor Code if the following conditions are satised:
(i) Substantially all of the remuneration (whether or not paid in cash) for the
performance of the service of selling rae tickets is directly related to sales
rather than to the number of hours worked.
(ii) e services performed by the person are performed pursuant to a written
contract between the seller and the eligible organization and the contract
provides that the person will not be treated as an employee with respect to the
selling of rae tickets for workers’ compensation purposes.
(C) For purposes of this section, employees selling rae tickets shall be deemed to be
direct sellers as described in Section 650 of the Unemployment Insurance Code as
long as they meet the requirements of that section.
(c) For purposes of this section, “eligible organization” means a private, nonprot organization
that has been qualied to conduct business in California for at least one year prior to
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conducting a rae and is exempt from taxation pursuant to Sections 23701a, 23701b,
23701d, 23701e, 23701f, 23701g, 23701k, 23701l, 23701t, or 23701w of the Revenue and
Taxation Code.
(d) Any person who receives compensation in connection with the operation of the rae
shall be an employee of the eligible organization that is conducting the rae, and in no
event may compensation be paid from revenues required to be dedicated to benecial or
charitable purposes.
(e) No rae otherwise permitted under this section may be conducted by means of, or
otherwise utilize, any gaming machine, apparatus, or device, whether or not that machine,
apparatus, or device meets the denition of slot machine contained in Section 330a, 330b,
or 330.1.
(f)
(1) No rae otherwise permitted under this section may be conducted, nor may tickets
for a rae be sold, within an operating satellite wagering facility or racetrack inclosure
licensed pursuant to the Horse Racing Law (Chapter 4 (commencing with Section
19400) of Division 8 of the Business and Professions Code) or within a gambling
establishment licensed pursuant to the Gambling Control Act (Chapter 5 (commencing
with Section 19800) of Division 8 of the Business and Professions Code).
(2) A rae may not be operated or conducted in any manner over the Internet, nor may
rae tickets be sold, traded, or redeemed over the Internet. For purposes of this
paragraph, an eligible organization shall not be deemed to operate or conduct a rae
over the Internet, or sell rae tickets over the Internet, if the eligible organization
advertises its rae on the Internet or permits others to do so. Information that may be
conveyed on an Internet Web site pursuant to this paragraph includes, but is not limited
to, all of the following:
(A) Lists, descriptions, photographs, or videos of the rae prizes.
(B) Lists of the prize winners.
(C) e rules of the rae.
(D) Frequently asked questions and their answers.
(E) Rae entry forms, which may be downloaded from the Internet Web site for
manual completion by rae ticket purchasers, but shall not be submitted to the
eligible organization through the Internet.
(F) Rae contact information, including the eligible organization’s name, address,
telephone number, facsimile number, or e-mail address.
(g) No individual, corporation, partnership, or other legal entity shall hold a nancial interest
in the conduct of a rae, except the eligible organization that is itself authorized to
conduct that rae, and any private, nonprot, eligible organizations receiving nancial
support from that charitable organization pursuant to subdivisions (a) and (b).
(h)
(1) An eligible organization may not conduct a rae authorized under this section, unless
it registers annually with the Department of Justice. e department shall furnish a
registration form via the Internet or upon request to eligible nonprot organizations.
e department shall, by regulation, collect only the information necessary to carry out
334 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
the provisions of this section on this form. is information shall include, but is not
limited to, the following:
(A) e name and address of the eligible organization.
(B) e federal tax identication number, the corporate number issued by the Secretary
of State, the organization number issued by the Franchise Tax Board, or the
California charitable trust identication number of the eligible organization.
(C) e name and title of a responsible duciary of the organization.
(2) e department may require an eligible organization to pay an annual registration
fee of ten dollars ($10) to cover the actual costs of the department to administer and
enforce this section. e department may, by regulation, adjust the annual registration
fee as needed to ensure that revenues willfully oset, but do not exceed, the actual costs
incurred by the department pursuant to this section. e fee shall be deposited by the
department into the General Fund.
(3) e department shall receive General Fund moneys for the costs incurred pursuant to
this section subject to an appropriation by the Legislature.
(4) e department shall adopt regulations necessary to eectuate this section, including
emergency regulations, pursuant to the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code).
(5) e department shall maintain an automated database of all registrants. Each local law
enforcement agency shall notify the department of any arrests or investigation that may
result in an administrative or criminal action against a registrant. e department may
audit the records and other documents of a registrant to ensure compliance with this
section.
(6) Once registered, an eligible organization must le annually thereafter with the
department a report that includes the following:
(A) e aggregate gross receipts from the operation of raes.
(B) e aggregate direct costs incurred by the eligible organization from the operation
of raes.
(C) e charitable or benecial purposes for which proceeds of the raes were used, or
identify the eligible recipient organization to which proceeds were directed, and the
amount of those proceeds.
(7) e department shall annually furnish to registrants a form to collect this information.
(8) e registration and reporting provisions of this section do not apply to any religious
corporation sole or other religious corporation or organization that holds property for
religious purposes, to a cemetery corporation regulated under Chapter 19 of Division
3 of the Business and Professions Code, or to any committee as dened in Section
82013 that is required to and does le any statement pursuant to the provisions of
Article 2 (commencing with Section 84200) of Chapter 4 of Title 9, or to a charitable
corporation organized and operated primarily as a religious organization, educational
institution, hospital, or a health care service plan licensed pursuant to Section 1349 of
the Health and Safety Code.
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(i) e department may take legal action against a registrant if it determines that the
registrant has violated this section or any regulation adopted pursuant to this section,
or that the registrant has engaged in any conduct that is not in the best interests of the
public’s health, safety, or general welfare. Any action taken pursuant to this subdivision
does not prohibit the commencement of an administrative or criminal action by the
Attorney General, a district attorney, city attorney, or county counsel.
(j) Each action and hearing conducted to deny, revoke, or suspend a registry, or other adminis-
trative action taken against a registrant shall be conducted pursuant to the Administrative
Procedure Act (Chapters 4.5 (commencing with Section 11400) and 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code). e
department may seek recovery of the costs incurred in investigating or prosecuting an
action against a registrant or applicant in accordance with those procedures specied in
Section 125.3 of the Business and Professions Code. A proceeding conducted under this
subdivision is subject to judicial review pursuant to Section 1094.5 of the Code of Civil
Procedure.
(k) e Department of Justice shall conduct a study and report to the Legislature by December
31, 2003, on the impact of this section on rae practices in California. Specically, the
study shall include, but not be limited to, information on whether the number of raes
has increased, the amount of money raised through raes and whether this amount has
increased, whether there are consumer complaints, and whether there is increased fraud in
the operation of raes.
(l) is section shall become operative on July 1, 2001.
(m) A rae shall be exempt from this section if it satises all of the following requirements:
(1) It involves a general and indiscriminate distribution of the tickets.
(2) e tickets are oered on the same terms and conditions as the tickets for which a
donation is given.
(3) e scheme does not require any of the participants to pay for a chance to win.
§ 321–326 Penalties for Operation of a Rae or Lottery
§ 321 Every person who sells, gives, or in any manner whatever, furnishes or transfers to or for any
other person any ticket, chance, share, or interest, or any paper, certicate, or instrument
purporting or understood to be or to represent any ticket, chance, share, or interest in, or
depending upon the event of any lottery, is guilty of a misdemeanor.
§ 322 Every person who aids or assists, either by printing, writing, advertising, publishing, or
otherwise in setting up, managing, or drawing any lottery, or in selling or disposing of any
ticket, chance, or share therein, is guilty of a misdemeanor.
§ 323 Every person who opens, sets up, or keeps, by himself or by any other person, any oce or
other place for the sale of, or for registering the number of any ticket in any lottery, or who, by
printing, writing, or otherwise, advertises or publishes the setting up, opening, or using of any
such oce, is guilty of a misdemeanor.
336 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
§ 324 Every person who insures or receives any consideration for insuring for or against the drawing
of any ticket in any lottery whatever, whether drawn or to be drawn within this State or not, or
who receives any valuable consideration upon any agreement to repay any sum, or deliver the
same, or any other property, if any lottery ticket or number of any ticket in any lottery shall
prove fortunate or unfortunate, or shall be drawn or not be drawn, at any particular time or
in any particular order, or who promises or agrees to pay any sum of money, or to deliver any
goods, things in action, or property, or to forbear to do anything for the benet of any person,
with or without consideration, upon any event or contingency dependent on the drawing of any
ticket in any lottery, or who publishes any notice or proposal of any of the purposes aforesaid, is
guilty of a misdemeanor.
§ 325 All moneys and property oered for sale or distribution in violation of any of the provisions
of this chapter are forfeited to the state, and may be recovered by information led, or by
an action brought by the Attorney General, or by any district attorney, in the name of the
state. Upon the ling of the information or complaint, the clerk of the court must issue an
attachment against the property mentioned in the complaint or information, which attachment
has the same force and eect against such property, and is issued in the same manner as attach-
ments issued from the superior courts in civil cases.
§ 326 Every person who lets, or permits to be used, any building or vessel, or any portion thereof,
knowing that it is to be used for setting up, managing, or drawing any lottery, or for the
purpose of selling or disposing of lottery tickets, is guilty of a misdemeanor.
§ 326.5 Exception for Bingo Games for Charity
(a) Neither the prohibition on gambling in this chapter nor in Chapter 10 (commencing
with Section 330) applies to any bingo game that is conducted in a city, county, or city
and county pursuant to an ordinance enacted under Section 19 of Article IV of the State
Constitution, if the ordinance allows games to be conducted only in accordance with this
section and only by organizations exempted from the payment of the bank and corporation
tax by Sections 23701a, 23701b, 23701d, 23701e, 23701f, 23701g, 23701k, 23701w, and
23701l of the Revenue and Taxation Code and by mobilehome park associations, senior
citizens organizations, and charitable organizations aliated with a school district; and if
the receipts of those games are used only for charitable purposes.
(b) It is a misdemeanor for any person to receive or pay a prot, wage, or salary from any bingo
game authorized by Section 19 of Article IV of the State Constitution. Security personnel
employed by the organization conducting the bingo game may be paid from the revenues
of bingo games, as provided in subdivisions (j) and (k).
(c) A violation of subdivision (b) shall be punishable by a ne not to exceed ten thousand
dollars ($10,000), which ne is deposited in the general fund of the city, county, or city and
county that enacted the ordinance authorizing the bingo game. A violation of any provision
of this section, other than subdivision (b), is a misdemeanor.
(d) e city, county, or city and county that enacted the ordinance authorizing the bingo game
may bring an action to enjoin a violation of this section.
(e) Minors shall not be allowed to participate in any bingo game.
(f) An organization authorized to conduct bingo games pursuant to subdivision (a) shall
conduct a bingo game only on property owned or leased by it, or property whose use is
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donated to the organization, and which property is used by that organization for an oce
or for performance of the purposes for which the organization is organized. Nothing in
this subdivision shall be construed to require that the property owned or leased by, or
whose use is donated to, the organization be used or leased exclusively by, or donated
exclusively to, that organization.
(g) All bingo games shall be open to the public, not just to the members of the authorized
organization.
(h) A bingo game shall be operated and staed only by members of the authorized organi-
zation that organized it. ose members shall not receive a prot, wage, or salary from any
bingo game. Only the organization authorized to conduct a bingo game shall operate such
a game, or participate in the promotion, supervision, or any other phase of a bingo game.
is subdivision does not preclude the employment of security personnel who are not
members of the authorized organization at a bingo game by the organization conducting
the game.
(i) Any individual, corporation, partnership, or other legal entity, except the organization
authorized to conduct a bingo game, shall not hold a nancial interest in the conduct of a
bingo game.
(j) With respect to organizations exempt from payment of the bank and corporation tax by
Section 23701d of the Revenue and Taxation Code, all prots derived from a bingo game
shall be kept in a special fund or account and shall not be commingled with any other fund
or account. ose prots shall be used only for charitable purposes.
(k) With respect to other organizations authorized to conduct bingo games pursuant to this
section, all proceeds derived from a bingo game shall be kept in a special fund or account
and shall not be commingled with any other fund or account. Proceeds are the receipts of
bingo games conducted by organizations not within subdivision (j). ose proceeds shall be
used only for charitable purposes, except as follows:
(1) e proceeds may be used for prizes.
(2)
(A) Except as provided in subparagraph (B), a portion of the proceeds, not to exceed
20 percent of the proceeds before the deduction for prizes, or two thousand dollars
($2,000) per month, whichever is less, may be used for the rental of property and
for overhead, including the purchase of bingo equipment, administrative expenses,
security equipment, and security personnel.
(B) For the purposes of bingo games conducted by the Lake Elsinore Elks Lodge,
a portion of the proceeds, not to exceed 20 percent of the proceeds before the
deduction for prizes, or three thousand dollars ($3,000) per month, whichever
is less, may be used for the rental of property and for overhead, including the
purchase of bingo equipment, administrative expenses, security equipment, and
security personnel. Any amount of the proceeds that is additional to that permitted
under subparagraph (A), up to one thousand dollars ($1,000), shall be used for
the purpose of nancing the rebuilding of the facility and the replacement of
equipment that was destroyed by re in 2007. e exception to subparagraph (A)
that is provided by this subparagraph shall remain in eect only until the cost of
rebuilding the facility is repaid, or January 1, 2019, whichever occurs rst.
(3) e proceeds may be used to pay license fees.
338 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
(4) A city, county, or city and county that enacts an ordinance permitting bingo games
may specify in the ordinance that if the monthly gross receipts from bingo games of an
organization within this subdivision exceed ve thousand dollars ($5,000), a minimum
percentage of the proceeds shall be used only for charitable purposes not relating to
the conducting of bingo games and that the balance shall be used for prizes, rental of
property, overhead, administrative expenses, and payment of license fees. e amount
of proceeds used for rental of property, overhead, and administrative expenses is subject
to the limitations specied in paragraph (2).
(l)
(1) A city, county, or city and county may impose a license fee on each organization that it
authorizes to conduct bingo games. e fee, whether for the initial license or renewal,
shall not exceed fty dollars ($50) annually, except as provided in paragraph (2). If an
application for a license is denied, one-half of any license fee paid shall be refunded to
the organization.
(2) In lieu of the license fee permitted under paragraph (1), a city, county, or city and
county may impose a license fee of fty dollars ($50) paid upon application. If an
application for a license is denied, one-half of the application fee shall be refunded to
the organization. An additional fee for law enforcement and public safety costs incurred
by the city, county, or city and county that are directly related to bingo activities may be
imposed and shall be collected monthly by the city, county, or city and county issuing
the license; however, the fee shall not exceed the actual costs incurred in providing the
service.
(m) A person shall not be allowed to participate in a bingo game, unless the person is physically
present at the time and place where the bingo game is being conducted.
(n) e total value of prizes available to be awarded during the conduct of any bingo games
shall not exceed ve hundred dollars ($500) in cash or kind, or both, for each separate
game which is held.
(o) As used in this section, “bingo” means a game of chance in which prizes are awarded on
the basis of designated numbers or symbols that are marked or covered by the player on a
tangible card in the player’s possession and that conform to numbers or symbols, selected
at random and announced by a live caller. Notwithstanding Section 330c, as used in this
section, the game of bingo includes tangible cards having numbers or symbols that are
concealed and preprinted in a manner providing for distribution of prizes. Electronics
or video displays shall not be used in connection with the game of bingo, except in
connection with the caller’s drawing of numbers or symbols and the public display of
that drawing, and except as provided in subdivision (p). e winning cards shall not be
known prior to the game by any person participating in the playing or operation of the
bingo game. All preprinted cards shall bear the legend, “for sale or use only in a bingo
game authorized under California law and pursuant to local ordinance.” Only a covered
or marked tangible card possessed by a player and presented to an attendant may be
used to claim a prize. It is the intention of the Legislature that bingo as dened in this
subdivision applies exclusively to this section and shall not be applied in the construction
or enforcement of any other provision of law.
(p)
(1) Players who are physically present at a bingo game may use hand-held, portable
card-minding devices, as described in this subdivision, to assist in monitoring the
Chapter 24
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Appendices 339
numbers or symbols announced by a live caller as those numbers or symbols are called
in a live game. Card-minding devices may not be used in connection with any game
where a bingo card may be sold or distributed after the start of the ball draw for that
game. A card-minding device shall do all of the following:
(A) Be capable of storing in the memory of the device bingo faces of tangible cards
purchased by a player.
(B) Provide a means for bingo players to input manually each individual number or
symbol announced by a live caller.
(C) Compare the numbers or symbols entered by the player to the bingo faces
previously stored in the memory of the device.
(D) Identify winning bingo patterns that exist on the stored bingo faces.
(2) A card-minding device shall perform no functions involving the play of the game other
than those described in paragraph (1). Card-minding devices shall not do any of the
following:
(A) Be capable of accepting or dispensing any coins, currency, or other representative of
value or on which value has been encoded.
(B) Be capable of monitoring any bingo card face other than the faces of the tangible
bingo card or cards purchased by the player for that game.
(C) Display or represent the game result through any means, including, but not limited
to, video or mechanical reels or other slot machine or casino game themes, other
than highlighting the winning numbers or symbols marked or covered on the
tangible bingo cards or giving an audio alert that the player’s card has a prize-
winning pattern.
(D) Determine the outcome of any game or be physically or electronically connected
to any component that determines the outcome of a game or to any other bingo
equipment, including, but not limited to, the ball call station, or to any other
card-minding device. No other player-operated or player-activated electronic or
electromechanical device or equipment is permitted to be used in connection with a
bingo game.
(3)
(A) A card-minding device shall be approved in advance by the department as
meeting the requirements of this section and any additional requirements stated
in regulations adopted by the department. Any proposed material change to the
device, including any change to the software used by the device, shall be submitted
to the department and approved by the department prior to implementation.
(B) In accordance with Chapter 5 (commencing with Section 19800) of Division 8
of the Business and Professions Code, the commission shall establish reasonable
criteria for, and require the licensure of, any person that directly or indirectly
manufactures, distributes, supplies, vends, leases, or otherwise provides
card-minding devices or other supplies, equipment, or services related to
card-minding devices designed for use in the playing of bingo games by any
nonprot organization.
(C) A person or entity that supplies or services any card-minding device shall meet all
licensing requirements established by the commission in regulations.
340 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
(4) e costs of any testing, certication, license, or determination required by this
subdivision shall be borne by the person or entity seeking it.
(5) On and after January 1, 2010, the Department of Justice may inspect all card-minding
devices at any time without notice, and may immediately prohibit the use of any
device that does not comply with the requirements established by the department in
regulations. e Department of Justice may at any time, without notice, impound any
device the use of which has been prohibited by the commission.
(6) e Department of Justice shall issue regulations to implement the requirements of this
subdivision, and the California Gambling Control Commission may issue regulations
regarding the means by which the operator of a bingo game, as required by applicable
law, may oer assistance to a player with disabilities in order to enable that player
to participate in a bingo game, provided that the means of providing that assistance
shall not be through any electronic, electromechanical, or other device or equipment
that accepts the insertion of any coin, currency, token, credit card, or other means of
transmitting value, and does not constitute or is not a part of a system that constitutes a
video lottery terminal, slot machine, or device prohibited by Chapter 10 (commencing
with Section 330).
(7) e following denitions apply for purposes of this subdivision:
(A) “Commission” means the California Gambling Control Commission.
(B) “Department” means the Department of Justice.
(C) “Person” includes a natural person, corporation, limited liability company,
partnership, trust, joint venture, association, or any other business organization.
Chapter 24
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Appendices 341
Revenue and Taxation Code
Section Title and Content
§ 6361 Irregular or Intermittent Sales
(a) Any organization listed or described in subdivision (b) is a consumer and shall not be
considered a retailer within the provisions of this part, of food products, nonalcoholic
beverages, or other tangible personal property made or produced by members of the
organization provided, however, that the organization’s sales are made on an irregular or
intermittent basis, and that the organization’s prots from those sales are used exclusively
in furtherance of the purposes of the organization.
(b) For purposes of this section, “organization” includes any of the following:
(1) Any nonprot organization which meets all of the following conditions:
(A) e organization qualies for tax-exempt status under Section 501(c) of the Internal
Revenue Code.
(B) e organization’s primary purpose is to provide a supervised program of
competitive sports for youth, or to promote good citizenship in youth.
(C) e organization does not discriminate on the basis of race, sex, nationality, or
religion.
(2)
(A) Any youth group sponsored by or aliated with a qualied educational institution,
including, but not limited to, any student activity club, athletic group, or musical
group.
(B) For purposes of this section, “qualied educational institution” means any of the
following:
(i) Any public elementary, secondary, or vocational-technical school providing
education for kindergarten, grades 1 to 12, inclusive, and college under-
graduate programs, or any part thereof, operated by state or local government.
(ii) Any nonprot private educational institution providing education for
kindergarten, grades 1 to 12, inclusive, and college undergraduate programs,
or any part thereof, that meets the requirements of the State Department of
Education for a school. “Private educational institution” means any entity
providing education which satises the requirements of state and local laws
pertaining to private educational institutions in eect on January 1, 1990, and
which does not discriminate on the basis of race, sex, nationality, or religion.
(3) Little League, Bobby Sox, Boy Scouts, Cub Scouts, Girl Scouts, Campre, Inc., Young
Men’s Christian Association, Young Women’s Christian Association, Future Farmers of
America, Future Homemakers of America, 4-H Clubs, Distributive Education Clubs of
America, Future Business Leaders of America, Vocational Industrial Clubs of America,
Collegiate Young Farmers, Boys’ Clubs, Girls’ Clubs, Special Olympics, Inc., American
Youth Soccer Organization, California Youth Soccer Association, North, California
Youth Soccer Association, South, and Pop Warner football.
(c) For purposes of this section, “irregular or intermittent” means associated directly with a
particular event, such as fairs, galas, parades, scout-a-ramas, games, and similar activities.
342 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
at term includes refreshment stands or booths that are utilized at scheduled events of
organized leagues, but does not include storefront or mobile retail outlets which ordinarily
require local business licenses.
§ 237 Tax Exemptions
(a)
(1) Subject to the requirements set forth in paragraph (2), there is exempt from taxation
under this part that portion of the assessed value of property, owned and operated
by a federally recognized Indian tribe or its tribally designated housing entity, that
corresponds to that portion of the property that is continuously available to, or
occupied by, lower income households, as dened in Section 50079.5 of the Health and
Safety Code or applicable federal, state, or local nancing agreements, at rents that do
not exceed those prescribed by Section 50053 of the Health and Safety Code, or rents
that do not exceed those prescribed by the terms of the applicable federal, state, or local
nancing agreements or nancial assistance agreements.
(2) e exemption set forth in subdivision (a) applies only if the property and entity meet
the following requirements:
(A) At least 30 percent of the property’s housing units are either continuously available
to, or occupied by, lower income households, as dened in Section 50079.5 of the
Health and Safety Code or applicable federal, state, or local nancing agreements,
at rents that do not exceed those prescribed by Section 50053 of the Health and
Safety Code, or rents that do not exceed those prescribed by the terms of the
applicable federal, state, or local nancing agreements or nancial assistance
agreements.
(B) e housing entity is nonprot.
(C) No part of the net earnings of the housing entity inure to the benet of any private
shareholder or individual.
(b) In lieu of the tax imposed by this part, a tribe or tribally designated housing entity may
agree to make payments to a county, city, city and county, or political subdivision of the
state for services, improvements, or facilities provided by that entity for the benet of a
low-income housing project owned and operated by the tribe or tribally designated housing
entity. Any payments in lieu of tax may not exceed the estimated cost to the city, county,
city and county, or political subdivision of the state of the services, improvements, or
facilities to be provided.
(c) A tribe or tribally designated housing entity applying for an exemption under this section
shall provide the following documents to the assessor:
(1) Documents establishing that the designating tribe is federally recognized.
(2) Documents establishing that the housing entity has been designated by the tribe.
(3) Documents establishing that there is a deed restriction, agreement, or other legally
binding document requiring that the property be used in compliance with subpara-
graph (A) of paragraph (2) of subdivision (a).
(d) is exemption shall be known as the “tribal housing exemption.”
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Appendices 343
Board of Equalization, Sales and Use Tax Regulations
Section Title and Content
§ 1597 Property Transferred or Sold by a Certain Nonprot Organizations
(a) IN GENERAL.Sections 6018.9, 6359.3, 6360, 6361, 6361.1 and 6370 of the Revenue
and Taxation Code provide that certain organizations are consumers and not retailers of
specied kinds of tangible personal property under certain conditions. e subsections
which follow describe the organizations and the kind of tangible personal property
involved.
(b) FLAGS SOLD BY NONPROFIT VETERANS’ ORGANIZATIONS.Any nonprot
veterans’ organization is a consumer of and shall not be considered a retailer of ags of the
United States which it sells where the prots are used solely and exclusively in furtherance
of the purpose of the organization.
(c) PRISONERS OF WAR BRACELETS TRANSFERRED BY CHARITABLE
ORGANIZATIONS.Any charitable organization qualifying for the welfare exemption
from property taxation under Section 214 of the Revenue and Taxation Code is the
consumer of bracelets designed to commemorate American prisoners of war, which it
distributes, whether or not a contribution is made to such organization, where the prots
are used solely and exclusively in furtherance of the purposes of such organization.
(d) HANDCRAFTED OR ARTISTIC TANGIBLE PERSONAL PROPERTY SOLD BY
CERTAIN QUALIFIED ORGANIZATIONS.Any organization which is exempt from
taxation under Section 501(c)(3) of the Internal Revenue Code (26 U.S.C.A.); which, as
its primary purpose, provides services to individuals with developmental disabilities or,
eective August 3, 1995, to children with severe emotional disturbances, and which does
not discriminate on the basis of race, sex, nationality, or religion is the consumer and not
the retailer of any tangible personal property sold by them if all of the following conditions
are met:
(1) e tangible personal property is of a handcrafted or artistic nature and is designed,
created, or made by individuals with developmental disabilities or, eective August 3,
1995, by children with severe emotional disturbances, who are members of, or receive
services from, the qualied organization.
(2) e price of each item of tangible personal property sold does not exceed twenty dollars
($20) or ten dollars ($10) if sold prior to August 3, 1995.
(3) e qualied organization’s sales are made on an irregular or intermittent basis.
(4) e qualied organization’s prots from the sales are used exclusively in furtherance of
the purposes of the organization.
(e) FOOD PRODUCTS, NONALCOHOLIC BEVERAGES AND OTHER TANGIBLE
PERSONAL PROPERTY SOLD BY NONPROFIT YOUTH ORGANIZATIONS.
(1) A qualied youth organization is the consumer and not the retailer of food products,
nonalcoholic beverages, and tangible personal property created by members of the
organization, which are sold on an irregular or intermittent basis provided the prots
from such sales are used solely and exclusively in the furtherance of the purpose of the
organization.
(A) “Qualied youth organization” means and includes:
344 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
1. any nonprot organization which qualies for tax-exempt status under
Section 501(c) of the Internal Revenue Code (26 U.S.C.A.); which provides
a supervised program of competitive sports for youth or promotes good
citizenship in youth as its primary purpose; and which does not discriminate
on the basis of race, sex, nationality, or religion, or
2. any youth group or club sponsored by or aliated with a qualied educational
institution, including but not limited to any student activity group, e.g.,
debating team, swimming team, band, or choir.
(B) “Qualied educational institution” means and includes:
1. any public elementary, secondary, or vocation-technical school which provides
education for either kindergarten; grades 1 through 12, inclusive; or college or
university undergraduate programs, or any part thereof, or
2. any nonprot private school which provides education programs for either
kindergarten; grades 1 through 12, inclusive; or college or university
undergraduate programs, or any part thereof. Nonprot private school
educational programs must meet the requirements of the State Department of
Education and must satisfy the requirements of state and local laws governing
private educational institutions in eect on January 1, 1990. e term does
not include a nonprot private school which otherwise qualies but which
discriminates on the basis of race, sex, nationality, or religion. For example, a
youth group sponsored by a private school which has enrollment open only to
females is not a “qualied youth organization”.
(C) “Irregular or intermittent” is dened to mean sales made at particular events, such
as fairs, galas, parades, scout-a-ramas, games, and similar activities, which are not
conducted on a regularly scheduled basis. Sales made at refreshment stands or
booths at scheduled events of organized youth sports leagues are considered made
on an “irregular or intermittent” basis; however, sales made in storefront or mobile
retail outlets which ordinarily require local business licenses do not qualify.
(2) e following organizations are “qualied youth organizations” and are consumers, not
retailers, of tangible personal property under the circumstances described in paragraph
(e)(1):
Little League, Bobby Sox, Boy Scouts, Cub Scouts, Girl Scouts, Campre, Inc.,
formerly Campre Girls, Young Men’s Christian Association, Young Women’s
Christian Association, Future Farmers of America, Future Homemakers of America,
4-H Clubs, Distributive Education Clubs of America, Future Business Leaders of
America, Vocational Industrial Clubs of America, Collegiate Young Farmers, Boys’
Clubs, Girls’ Clubs, Special Olympics, Inc., American Youth Soccer Organization,
California Youth Soccer Association, North, California Youth Soccer Association,
South, and Pop Warner Football.
(f) TANGIBLE PERSONAL PROPERTY SOLD BY CERTAIN NON PROFIT
ORGANIZATIONS.e following organizations are consumers and not retailers of any
tangible personal property sold by them if the prots from such sales are used exclusively in
the furtherance of the purposes of the organization:
(1) Nonprot parent-teacher associations chartered by the California Congress of Parents,
Teachers, and Students, Incorporated, and equivalent organizations performing the
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Appendices 345
same type of service for public or private schools and authorized to operate within the
school by the governing authority of the school.
(2) Nonprot associations commonly called Friends of the Library, and equivalent organi-
zations performing auxiliary services to any library district, municipal library, or county
library in the state, which are authorized to operate within the library by the governing
authority of the library.
(3) Nonprot parent cooperative nursery schools.
(g) RESALE CERTIFICATES: OBLIGATIONS OF PERSONS WHO SELL TO
CONSUMERS.An organization classed as a consumer under this regulation may not give
a resale certicate with respect to the property it transfers.
All persons, other than organizations classed as consumers, who make sales of tangible
personal property not otherwise exempt, should report tax on their sales unless the
purchasers furnish resale certicates which can be accepted in good faith.
It will be presumed that all sales of tangible personal property not otherwise exempt, by
organizations not classed as consumers, for delivery in this state to purchasers who do not
furnish resale certicates which the seller accepts in good faith are subject to sales tax or
that the seller is obligated to collect use tax from the purchasers.
(h) TAXABLE SALES OF TANGIBLE PERSONAL PROPERTY BY OR THROUGH
NONPROFIT ORGANIZATIONS.A nonprot organization is treated as a consumer of
tangible personal property it may sell under circumstances described in subdivisions (d), (e)
and (f) of this regulation. In other cases, a nonprot organization is regarded as a retailer of
property it sells to consumers, or it is regarded as an agent of the companies which furnish
the property to it for delivery to consumers.
When a nonprot organization solicits orders, collects payments, and distributes
tangible personal property for a supplier, it is considered to be the agent of that supplier.
Accordingly, the supplier, not the organization, is the retailer of the merchandise sold.
is is true unless documentation establishes that the nonprot organization is buying
and selling for its own account. e nonprot organization is presumed to be buying and
selling on its own account if all of the following factors are present: 1) the organization
solicits the orders from the public in its own name; 2) the organization collects the sale
price from the customer in its own name; 3) the organization is responsible for and pays
the supplier for the merchandise; and 4) the contract between the organization and the
supplier clearly identies the fact the organization will purchase and resell the products to
its customers. If it is selling for its own account, the nonprot organization will be required
to obtain a permit and will be considered the retailer, unless the supplier has been classied
by the Board as a retailer under Revenue and Taxation Code Section 6015, or the nonprot
organization is classied under subdivisions (d), (e) and (f) of this regulation.
If the supplier is a 6015 retailer, the supplier must pay the tax and the organization does not
need a seller’s permit. e measure of tax is the amount charged to the consumer. When
this price is unknown by the supplier, tax will apply to the suggested retail selling price. If
the nonprot organization is classied as a consumer under subdivisions (d), (e) and (f) of
this regulation, the supplier will calculate tax measured by the selling price to the nonprot
organization.
(i) TRANSFER OF TANGIBLE PERSONAL PROPERTY TO MEMBERS.From April 1,
2010, until January 1, 2015, an organization described under Section 501(c) of the Internal
346 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Revenue Code (26 U.S.C.A.) is the consumer of tangible personal property transferred to
its members, if the following requirements are met:
(1) e tangible personal property bears a logo or other identifying mark of the
organization and is a promotional item or other item commonly associated with use
by a member to demonstrate the member’s association with, or membership in, the
organization.
(2) e cost to the member of the organization for the acquisition of the tangible personal
property is not more than the cost to the nonprot organization to obtain and transfer
to the member the tangible personal property, including any applicable sales or use tax
paid by the nonprot organization.
(3) Reasonable steps are taken by the organization to ensure that no member is allowed to
acquire more than 30 identical items of tangible personal property or to resell the items
to another person.
(4) e tangible personal property is not distributed for purposes of organized political
campaigning or issue advocacy.
§ 1603 Taxable Sales of Food Products
(a) RESTAURANTS, HOTELS, BOARDING HOUSES, SODA FOUNTAINS, AND
SIMILAR ESTABLISHMENTS.
(1) DEFINITIONS.
(A) Boarding House.e term “Boarding House” as used in this regulation means any
establishment regularly serving meals on the average to ve or more paying guests.
e term includes a “guest home,” “residential care home,” “halfway house,” and
any other establishment providing room and board or board only, which is not
an institution as dened in Regulation 1503 and section 6363.6 of the Revenue
and Taxation Code. e fact that guests may be recipients of welfare funds does
not aect the application of tax. A person or establishment furnishing meals on
the average to fewer than ve paying guests during the calendar quarter is not
considered to be engaged in the business of selling meals at retail.
(B) American Plan Hotel.e term “American Plan Hotel” as used in this regulation
means a hotel which charges guests a xed sum by the day, week, or other period for
room and meals combined.
(C) Complimentary Food and Beverages.As used in this subdivision (a), the term
“complimentary food and beverages” means food and beverages (including alcoholic
and non-alcoholic beverages) which are provided to transient guests on a compli-
mentary basis and:
1. ere is no segregation between the charges for rooms and the charges for the
food and beverages on the guests’ bills, and
2. e guests are not given an option to refuse the food and beverages in return
for a discounted room rental.
(D) Average Retail Value of Complimentary Food and Beverages.e term “average
retail value of complimentary food and beverages” (ARV) as used in this regulation
means the total amount of the costs of the complimentary food and beverages for
the preceding calendar year marked-up one hundred percent (100%) and divided
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by the number of rooms rented for that year. Costs of complimentary food and
beverages include charges for delivery to the lodging establishment but exclude
discounts taken and sales tax reimbursement paid to vendors. e 100% markup
factor includes the cost of food preparation labor by hotel employees, the fair rental
value of hotel facilities used to prepare or serve the food and beverages, and prot.
(E) Average Daily Rate.e term “average daily rate” (ADR) as used in this regulation
means the gross room revenue for the preceding calendar yeardivided by the
number of rooms rented for that year. “Gross room revenue” means and includes
the full charge to the hotel customers but excludes separately stated occupancy
taxes, revenue from contract and group rentals which do not qualify for compli-
mentary food and beverages, and revenue from special packages (e.g., New Year’s
Eve packages which include food and beverages as well as guest room accommoda-
tions), unless it can be documented that the retail value of the food and beverages
provided as a part of the special package is 10% or less of the total package charge
as provided in subdivision (a)(2)(B). “Number of rooms rented for that year” means
the total number of times all rooms have been rented on a nightly basis provided
the revenue for those rooms is included in the “gross room revenue.”For example,
if a room is rented out for three consecutive nights by one guest, that room will be
counted as rented three times when computing the ADR.
(2) APPLICATION OF TAX.
(A) In General.Tax applies to sales of meals or hot prepared food products (see (e)
below) furnished by restaurants, concessionaires, hotels, boarding houses, soda
fountains, and similar establishments whether served on or o the premises. In the
case of American Plan Hotels, special packages oered by hotels, e.g., a New Year’s
Eve package as described in subdivision (a)(1)(E), and boarding houses, a reasonable
segregation must be made between the charges for rooms and the charges for the
meals, hot prepared food products, and beverages. Charges by hotels or boarding
houses for delivering meals or hot prepared food products to, or serving them in,
the rooms of guests are includable in the measure of tax on the sales of the meals
or hot prepared food products whether or not the charges are separately stated.
(Caterers, see (i) below.) Sales of meals or hot prepared food products by restaurants,
concessionaires, hotels, boarding houses, soda fountains, and similar establishments
to persons such as event planners, party coordinators, or fundraisers, which buy and
sell on their own account, are sales for resale for which a resale certicate may be
accepted.(See subdivision (i)(3)(C)2.)
Soué cups, straws, paper napkins, toothpicks and like items that are not of a
reusable character which are furnished with meals or hot prepared food products
are sold with the meals or hot prepared food products. Sales of such items for such
purpose to persons engaged in the business of selling meals or hot prepared food
products are, accordingly, sales for resale.
(B) Complimentary Food and Beverages.Lodging establishments which furnish,
prepare, or serve complimentary food and beverages to guests in connection with
the rental of rooms are consumers and not retailers of such food and beverages
when the retail value of the complimentary food and beverages is “incidental” to
the room rental service regardless of where within the hotel premises the compli-
mentary food and beverages are served. For complimentary food and beverages to
qualify as “incidental” for the current calendar year, the average retail value of the
348 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
complimentary food and beverages (ARV) furnished for the preceding calendar
year must be equal to or less than 10% of the average daily rate (ADR) for that year.
If a hotel provides guests with coupons or similar documents which may be
exchanged for complimentary food and beverages in an area of the hotel where food
and beverages are sold on a regular basis to the general public (e.g., a restaurant),
the hotel will be considered the consumer and not the retailer of such food and
beverages if the coupons or similar documents are non-transferable and the guest is
specically identied by name. If the coupons or similar documents are transferable
or the guest is not specically identied, food and beverages provided will be
considered sold to the guest at the fair retail value of similar food and beverages sold
to the general public. In the case of coupons redeemed by guests at restaurants not
operated by the lodging establishment, the hotel will be considered the consumer of
food and beverages provided to the hotel’s guests and tax will apply to the charge by
the restaurant to the hotel.
Lodging establishments are retailers of food and beverages which do not qualify as
“incidental” and tax applies as provided in subdivision (a)(2)(A) above. Amounts
paid by guests for food and beverages in excess of a complimentary allowance are
gross receipts subject to the tax. Lodging establishments are retailers of otherwise
complimentary food and beverages sold to non-guests.
In the case of hotels with concierge oor, club level or similar programs, the formula
set forth above shall be applied separately with respect to the complimentary food
and beverages furnished to guests who participate in the concierge, club or similar
program. at is, the concierge, club or similar program will be deemed to be
an independent hotel separate and apart from the hotel in which it is operated.
e ADR and the retail value of complimentary food and beverages per occupied
room will be computed separately with respect to the guest room accommodations
entitled to the privileges and amenities involved in the concierge, club or similar
program.
e following example illustrates the steps in determining whether the food and
beverages are complimentary:
FORMULA:ARV ÷ ADR ≤10%
Average Daily Rate (ADR):
Room Revenue $9,108,000
Rooms Rented 74,607
ADR ($9,108,000 ÷ 74,607) $122.08
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Average Retail Value of Complimentary Food and Beverages (ARV):
Complimentary Food Cost $169,057
Complimentary Beverage Cost 52,513
Total $221,570
Add 100% Markup 221,570
Average Retail Value $443,140
ARV per occupied room ($443,140 ÷ 74,607) $5.94
Application of Formula:
$5.94 ÷ $122.08 =
4.87%
In the above example, the average retail value of the complimentary food and
beverages per occupied room for the preceding calendar year is equal to or less than
10% of the average daily rate. erefore, under the provisions of this subdivision
(a)(2)(B), the complimentary food and beverages provided to guests for the current
calendar year qualify as “incidental.”e lodging establishment is the consumer
and not the retailer of such food and beverages. is computation must be made
annually.
When a lodging establishment consists of more than one location, the operations of
each location will be considered separately in determining if that location’s compli-
mentary food and beverages qualify as incidental.
(C) “Free” Meals.When a restaurant agrees to furnish a “free” meal to a customer
who purchases another meal and presents a coupon or card, which the customer
previously had purchased directly from the restaurant or through a sales
promotional agency having a contract with the restaurant to redeem the coupons or
cards, the restaurant is regarded as selling two meals for the price of one, plus any
additional compensation from the agency or from its own sales of coupons. Any
such additional compensation is a part of its taxable gross receipts for the period in
which the meals are served.
Tax applies only to the price of the paid meal plus any such additional
compensation.
(b) “DRIVE-INS.”Tax applies to sales of food products ordinarily sold for immediate
consumption on or near a location at which parking facilities are provided primarily for the
use of patrons in consuming the products purchased at the “drive-in” establishment, even
though such products are sold on a “take out” or “to go” order and are actually packaged or
wrapped and taken from the premises of the retailer. Food products when sold in bulk, i.e.,
in quantities or in a form not suitable for consumption on the retailer’s premises, are not
regarded as ordinarily sold for immediate consumption on or near the location at which
parking facilities are provided by the retailer. Accordingly, with the exception of sales of
hot prepared food products (see (e) below) and sales of cold food under the 80-80 rule (see
(c) below), sales of ice cream, doughnuts, and other individual food items in quantities
obviously not intended for consumption on the retailer’s premises, without eating utensils,
trays or dishes and not consumed on the retailer’s premises, are exempt from tax. Any
350 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
retailer claiming a deduction on account of food sales of this type must support the
deduction by complete and detailed records.*
* e records acceptable in support of such a deduction are:
(a) A sales ticket prepared for each transaction claimed as being tax exempt showing:
(1) Date of the sale,
(2) e kind of merchandise sold,
(3) e quantity of each kind of merchandise sold,
(4) e price of each kind of merchandise sold,
(5) e total price of merchandise sold,
(6) A statement to the eect that the merchandise purchased is not to be consumed on or
near the location at which parking facilities are provided by the retailer, and
(b) A daily sales record kept in sucient detail to permit verication by audit that all gross receipts
from sales have been accounted for and that all sales claimed as being tax exempt are included
therein.
(c) COLD FOOD SOLD ON A “TAKE-OUT” ORDER.
(1) GENERAL.
(A) Seller Meeting Criteria of 80-80 Rule.When a seller meets both criteria of the
80-80 rule as explained in subdivision (c)(3) below, tax applies to sales of cold
food products (including sales for a separate price of hot bakery goods and hot
beverages such as coee) in a form suitable for consumption on the seller’s premises
even though such food products are sold on a “take-out” or “to go” order. Sales of
cold food products which are suitable for consumption on the seller’s premises are
subject to the tax no matter how great the quantity purchased, e.g., 40 one-half
pint containers of milk. Except as provided elsewhere in this regulation, tax does
not apply to sales of food products which are furnished in a form not suitable for
consumption on the seller’s premises.
Operative April 1, 1996, although a seller may meet both criteria of the 80-80 rule,
he or she may elect to separately account for the sale of “take-out” or “to go” orders
of cold food products which are in a form suitable for consumption on the seller’s
premises. e gross receipts from the sale of those food products shall be exempt
from the tax provided the seller keeps a separate accounting of these transactions
in his or her records. Tax will remain applicable to the sale of food products as
provided in subdivisions (a), (b), (e), or (f) of this regulation. Failure to maintain
the required separate accounting and documentation claimed as exempt under this
subdivision will revoke the seller’s election under this subdivision.
(B) Seller Not Meeting Criteria of 80-80 Rule.When a seller does not meet both
criteria of the 80-80 rule as explained in subdivision (c)(3) below, tax does not apply
to sales of cold food products (including sales for a separate price of hot bakery
goods and hot beverages such as coee) when sold on a “take-out” or “to go” order.
(2) DEFINITIONS.
(A) For purposes of this subdivision (c), the term “suitable for consumption on the
seller’s premises” means food products furnished:
1. In a form which requires no further processing by the purchaser, including
but not limited to cooking, heating, thawing, or slicing, and
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Appendices 351
2. In a size which ordinarily may be immediately consumed by one person such
as a large milk shake, a pint of ice cream, a pint of milk, or a slice of pie. Cold
food products (excluding milk shakes and similar milk products) furnished in
containers larger in size than a pint are considered to be in a form not suitable
for immediate consumption.
Pieces of candy sold in bulk quantities of one pound or greater are deemed to be
sold in a form not suitable for consumption on the seller’s premises.
e term does not include cold food products which obviously would not be
consumed on the premises of the seller, e.g., a cold party tray or a whole cold
chicken.
(B) For purposes of this subdivision (c), the term “seller’s premises” means the
individual location at which a sale takes place rather than the aggregate of all
locations of the seller. For example, if a seller operates several drive-in and fast
food restaurants, the operations of each location stand alone and are considered
separately in determining if the sales of food products at each location meet the
criteria of the 80-80 rule.
When two or more food-selling activities are conducted by the same person at
the same location, the operations of all food related activities will be considered
in determining if the sales of food products meet the criteria of the 80-80 rule.
For example, if a seller operates a grocery store and a restaurant with no physical
separation other than separate cash registers, the grocery store operations will be
included in determining if the sales of food products meet the criteria of the 80-80
rule. When there is a physical separation where customers of one operation may not
pass freely into the other operation, e.g., separate rooms with separate entrances but
a common kitchen, each operation will be considered separately for purposes of this
subdivision (c).
(3) 80-80 RULE. Tax applies under this subdivision (c) only if the seller meetsbothof the
following criteria:
(A) More than 80 percent of the seller’s gross receipts are from the sale of food products,
and
(B) More than 80 percent of the seller’s retail sales of food products are taxable as
provided in subdivisions (a), (b), (e), and (f) of this regulation.
Sales of alcoholic beverages, carbonated beverages, or cold food to go not suitable
for immediate consumption should not be included in this computation. Any seller
meeting both of these criteria and claiming a deduction for the sale of cold food
products in a form not suitable for consumption on the seller’s premises must support
the deduction by complete and detailed records of such sales made.
(d) PLACES WHERE ADMISSION IS CHARGED.
(1) GENERAL. Tax applies to sales of food products when sold within, and for
consumption within, a place the entrance to which is subject to an admission charge,
during the period when the sales are made, except for national and state parks and
monuments, and marinas, campgrounds, and recreational vehicle parks.
352 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
(2) DEFINITIONS.
(A) “Place” means an area the exterior boundaries of which are dened by walls,
fences or otherwise in such a manner that the area readily can be recognized and
distinguished from adjoining or surrounding property. Examples include buildings,
fenced enclosures and areas delimited by posted signs.
(B) “Within a place” means inside the door, gate, turnstile, or other point at which the
customer must pay an admission charge or present evidence, such as a ticket, that
an admission charge has been paid. Adjacent to, or in close proximity to, a place is
not within a place.
(C) “Admission charge” means any consideration required to be paid in money or
otherwise for admittance to a place.
“Admission charge” does not include:
1. Membership dues in a club or other organization entitling the member
to, among other things, entrance to a place maintained by the club or
organization, such as a fenced area containing a club house, tennis courts,
and a swimming pool. Where a guest is admitted to such a place only when
accompanied by or vouched for by a member of the club or organization, any
charge made to the guest for use of facilities in the place is not an admission
charge.
2. A charge for a student body card entitling the student to, among other things,
entrance to a place, such as entrance to a school auditorium at which a dance
is held.
3. A charge for the use of facilities within a place to which no entrance charge is
made to spectators. For example, green fees paid for the privilege of playing a
golf course, a charge made to swimmers for the use of a pool within a place,
or a charge made for the use of lanes in a public bowling place.
(D) “National and state parks and monuments” means those which are part of the
National Park System or the State Park System. e phrase does not include parks
and monuments not within either of those systems, such as city, county, regional,
district or private parks.
(3) PRESUMPTION THAT FOOD IS SOLD FOR CONSUMPTION WITHIN A
PLACE. When food products are sold within a place the entrance to which is subject
to an admission charge, it will be presumed, in the absence of evidence to the contrary,
that the food products are sold for consumption within the place. Obtaining and
retaining evidence in support of the claimed tax exemption is the responsibility of the
retailer. Such evidence may consist, for example, of proof that the sales were of canned
jams, cake mixes, spices, cooking chocolate, or other items in a form in which it is
unlikely that such items would be consumed within the place where sold.
(4) FOOD SOLD TO STUDENTS. e exemption otherwise granted by Section
6363 does not apply to sales of food products to students when sold within, and
for consumption within, a place the entrance to which is subject to an admission
charge, and such sales are subject to tax except as provided in (q) of this regulation.
For example, when food products are sold by a student organization to students or to
both students and nonstudents within a place the entrance to which is subject to an
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Appendices 353
admission charge, such as a place where school athletic events are held, the sales to both
students and nonstudents are taxable.
(e) HOT PREPARED FOOD PRODUCTS.
(1) GENERAL. Tax applies to all sales of hot prepared food products unless otherwise
exempt. “Hot prepared food products” means those products, items, or components
which have been prepared for sale in a heated condition and which are sold at any
temperature which is higher than the air temperature of the room or place where they
are sold. e mere heating of a food product constitutes preparation of a hot prepared
food product, e.g., grilling a sandwich, dipping a sandwich bun in hot gravy,using
infra-red lights, steam tables, etc. If the sale is intended to be of a hot food product,
such sale is of a hot food product regardless of cooling which incidentally occurs. For
example, the sale of a toasted sandwich intended to be in a heated condition when
sold, such as a fried ham sandwich on toast, is a sale of a hot prepared food product
even though it may have cooled due to delay. On the other hand, the sale of a toasted
sandwich which is not intended to be in a heated condition when sold, such as a cold
tuna sandwich on toast, is not a sale of a hot prepared food product.
When a single price has been established for a combination of hot and cold food items,
such as a meal or dinner which includes cold components or side items, tax applies to
the entire established price regardless of itemization on the sales check. e inclusion
of any hot food product in an otherwise cold combination of food products sold for
a single established price, results in the tax applying to the entire established price,
e.g., hot coee served with a meal consisting of cold food products, when the coee
is included in the established price of the meal. If a single price for the combination
of hot and cold food items is listed on a menu, wall sign or is otherwise advertised, a
single price has been established. Except as otherwise provided in (b), (c), (d) or (f) of
this regulation, or in Regulation 1574, tax does not apply to the sale for a separate price
of bakery goods, beverages classed as food products, or cold or frozen food products.
Hot bakery goods and hot beverages such as coee are hot prepared food products but
their sale for a separate price is exempt unless taxable as provided in (b), (c), (d) or (f)
of this regulation, or in Regulation 1574. Tax does apply if a hot beverage and a bakery
product or cold food product are sold as a combination for a single price. Hot soup,
bouillon, or consommé is a hot prepared food product which is not a beverage.
(2) AIR CARRIERS ENGAGED IN INTERSTATE OR FOREIGN COMMERCE.
Tax does not apply to the sale, storage, use, or other consumption of hot prepared
food products sold by caterers or other vendors to air carriers engaged in interstate or
foreign commerce for consumption by passengers on such air carriers, nor to the sale,
storage, use, or other consumption of hot prepared food products sold or served to
passengers by air carriers engaged in interstate or foreign commerce for consumption
by passengers on such air carriers. “Air carriers” are persons or rms in the business of
transporting persons or property for hire or compensation, and include both common
and contract carriers. “Passengers” do not include crew members. Any caterer or other
vendor claiming the exemption must support it with an exemption certicate from the
air carrier substantially in the form prescribed in Appendix A of this regulation.
(f) FOOD FOR CONSUMPTION AT FACILITIES PROVIDED BY THE
RETAILER.Tax applies to sales of sandwiches, ice cream, and other foods sold in a
form for consumption at tables, chairs, or counters or from trays, glasses, dishes, or other
tableware provided by the retailer or by a person with whom the retailer contracts to
furnish, prepare, or serve food products to others.
354 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
A passenger’s seat aboard a train, or a spectator’s seat at a game, show, or similar event
is not a “chair” within the meaning of this regulation. Accordingly, except as otherwise
provided in (c), (d), and (e) above, tax does not apply to the sale of cold sandwiches, ice
cream, or other food products sold by vendors passing among the passengers or spectators
where the food products are not “for consumption at tables, chairs, or counters or from
trays, glasses, dishes, or other tableware provided by the retailer.”
(g) TIPS, GRATUITIES, AND SERVICE CHARGES.(Prior to January 1, 2015)
e provisions of subdivision (g) apply to transactions occurring prior to January 1,
2015.is subdivision applies to restaurants, hotels, caterers, boarding houses, soda
fountains, drive-ins and similar establishments.
An optional payment designated as a tip, gratuity, or service charge is not subject to tax.
A mandatory payment designated as a tip, gratuity, or service charge is included in taxable
gross receipts, even if the amount is subsequently paid by the retailer to employees.
(1) OPT IONA L PAY MENT.
(A) A payment of a tip, gratuity, or service charge is optional if the customer adds
the amount to the bill presented by the retailer, or otherwise leaves a separate
amount in payment over and above the actual amount due the retailer for the sale
of meals, food, and drinks that include services. e following examples illustrate
transactions where a payment of a tip, gratuity or service charge is optional and not
included in taxable gross receipts. is is true regardless of printed statements on
menus, brochures, advertisements or other materials notifying customers that tips,
gratuities, or service charges will or may be added by the retailer to the prices of
meals, food, or drinks:
Example 1. e restaurant check is presented to the customer with the “tip” area
blank so the customer may voluntarily write in an amount, or
Example 2. e restaurant check is presented to the customer with options
computed by the retailer and presented to the customer as tip suggestions. e “tip”
area is blank so the customer may voluntarily write in an amount:
Guest Check
Food Item A $9.95
Beverage Item B 3.75
Subtotal $13.70
8% sales tax 1.10
Subtotal $14.80
Tip*
Total
*Suggested tips:
15%=$2.06; 18%=$2.47; 20%=$2.74; other
If an employer misappropriates these payments for these charges, as discussed in
subdivision (g)(1)(B) below, such payments are included in the retailer’s taxable gross
receipts.
(B) No employer shall collect, take, or receive any gratuity or a part thereof, paid,
given to, or left for an employee by a patron, or deduct any amount from wages
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due an employee on account of such gratuity, or require an employee to creditthe
amount, or any part thereof, of such gratuity against and as a part of the wages due
the employee from the employer. (Labor Code section 351.) If this prohibition is
violated, any amount of such gratuities received by the employer will be considered
a part of the gross receipts of the employer and subject to the tax.
(2) M ANDATORY PAY MENT.
(A) An amount negotiated between the retailer and the customer in advance of a meal,
food, or drinks, or an event that includes a meal, food, or drinks is mandatory.
(B) When the menu, brochures, advertisements or other printed materials contain
statements that notify customers that tips, gratuities, or service charges will or
may be added, an amount automatically added by the retailer to the bill or invoice
presented to and paid by the customer is a mandatory charge and subject to tax.
ese amounts are considered negotiated in advance as specied in subdivision (g)
(2)(A). Examples of printed statements include:
“An 18% gratuity [or service charge] will be added to parties of 8 or more.”
“Suggested gratuity 15%,” itemized on the invoice or bill by the restaurant,
hotel, caterer, boarding house, soda fountain, drive-in or similar
establishment.
“A 15%voluntary gratuity will be added for parties of 8 or more.”
An amount will be considered “automatically added” when the retailer adds the tip
to the bill without rst conferring with the customer after service of the meal and
receiving approval to add the tip or without providing the customer with the option
to write in the tip. Nonetheless, any amount added by the retailer is presumed to be
mandatory. is presumption may be overcome as discussed in subdivision (g)(2)
(C) below.
(C) It is presumed that an amount added as a tip by the retailer to the bill or invoice
presented to the customer is mandatory. A statement on the bill or invoice that the
amount added by the retailer is a “suggested tip,” “optional gratuity,” or that “the
amount may be increased, decreased, or removed” by the customer does not change
the mandatory nature of the charge.
is presumption may be controverted by documentary evidence showing that the
customer specically requested and authorized the gratuity be added to the amount
billed.
Examples of documentary evidence that may be used to overcome the presumption
include:
1. A guest check that is presented to the customer showing sales tax
reimbursement and the amount upon which it was computed, without tip
or with the “tip” area blank and a separate document, such as a credit card
receipt, to which the retailer adds or prints the requested tip.
2. Guest receipts and payments showing that the percentage of tips paid by
large groups varies from the percentage stated on the menu, brochure,
advertisement or other printed materials.
3. A retailer’s written policy stating that its employees shall receive conrmation
from a customer before adding a tip together with additional veriable
356 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
evidence that the policy has been enforced. e policy is not in itself sucient
documentation to establish that the customer requested and authorized that
a gratuity be added to the amount billed without such additional veriable
evidence.
e retailer must retain the guest checks and any additional separate documents to show
that the payment is optional. e retailer is also required to maintain other records in
accordance with the requirements of Regulation 1698,Records.
(h) Tips, Gratuities, and Service Charges. (On and after January 1, 2015)
e provisions of subdivision (h) apply to transactions occurring on and after January
1, 2015. is subdivision applies to restaurants, hotels, caterers, boarding houses, soda
fountains, drive-ins and similar establishments.
An optional payment designated as a tip, gratuity, or service charge is not subject to tax.
A mandatory payment designated as a tip, gratuity, or service charge is included in taxable
gross receipts, even if it is subsequently paid by the retailer to employees. For purposes of
this subdivision, “amount” means a payment designated as a tip, gratuity, service charge,
or any other separately stated payment for services associated with the purchase of meals,
food, or drinks.
(1) Optional Payment.
When a retailer keeps records consistent with reporting amounts as tip wages
for Internal Revenue Service (IRS) purposes, such amounts are presumed to be
optional and not subject to tax. When a retailer does not maintain such records, this
presumption does not apply and the amounts may be mandatory and included in
taxable gross receipts as discussed in subdivisions (h)(2) and (h)(3).
e following examples illustrate transactions where an amount is optional and not
included in taxable gross receipts:
Example 1. e restaurant check is presented to the customer with the “tip” area blank
so the customer may voluntarily write in the amount, or
Example 2. e restaurant check is presented to the customer with options computed
by the retailer and presented to the customer as tip suggestions. e “tip” area is blank
so the customer may voluntarily write in the amount:
Guest Check
Food Item A $9.95
Beverage Item B 3.75
Subtotal $13.70
8% sales tax 1.10
Subtotal $14.80
Tip*
Total
*Suggested tips:
15%=$2.06; 18%=$2.47; 20%=$2.74; other
Under these circumstances, the customer is free to enter the amount on the tip line
or leave it blank; thus, the customer may enter an amount free from compulsion. e
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customer and restaurant did not negotiate the amount nor did the restaurant dictate the
amount.
If an employer misappropriates these amounts, as discussed in subdivision (h)(4) below,
such payments are included in the retailer’s taxable gross receipts.
(2) Mandatory Payment.
When a retailer’s records reect that amounts are required to be reported to the IRS as
non-tip wages, the amount is deemed to be mandatory.
(3) When a retailer does not maintain records for purposes of reporting the amounts to the
IRS:
(A) An amount negotiated between the retailer and the customer in advance of a meal,
food, or drinks, or an event that includes a meal, food, or drinks is mandatory.
(B) When the menu, brochures, advertisements or other printed materials contain
statements that notify customers that tips, gratuities, or service charges will or
may be added, an amount automatically added by the retailer to the bill or invoice
presented to and paid by the customer is a mandatory charge and subject to tax.
ese amounts are considered negotiated in advance as specied in subdivision (h)
(3)(A). Examples of printed statements include:
“An 18% gratuity [or service charge] will be added to parties of 8 or more.”
“Suggested gratuity 15%,” itemized on the invoice or bill by the restaurant,
hotel, caterer, boarding house, soda fountain, drive-in or similar establishment.
“A 15% voluntary gratuity will be added for parties of 8 or more.”
An amount will be considered “automatically added” when the retailer adds the
amount to the bill without rst conferring with the customer after service of the
meal. Nonetheless, any amount added by the retailer is presumed to be automati-
cally added and mandatory. is presumption may be overcome as discussed in
subdivision (h)(3)(C) below.
(C) It is presumed that an amount added as a tip by the retailer to the bill or invoice
presented to the customer is automatically added and mandatory. A statement
on the bill or invoice that the amount added by the retailer is a “suggested tip,”
“optional gratuity,” or that the amount “may be increased, decreased, or removed”
by the customer does not change the mandatory nature of the charge.
is presumption may be controverted by documentary evidence showing that the
customer specically requested and authorized the amount be added to the bill.
Examples of documentary evidence that may be used to overcome the presumption
include:
1. A guest check that is presented to the customer showing sales tax
reimbursement and the gure upon which it was computed, without “tip”
or with the “tip” area blank and a separate document, such as a credit card
receipt, to which the retailer adds or prints the requested amount.
2. Guest receipts and payments showing that the percentage of amounts paid
by large parties varies from the percentage stated on the menu, brochure,
advertisement or other printed materials.
358 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
3. A retailer’s written policy stating that its employees shall receive conrmation
from a customer before adding an amount together with additional veriable
evidence that the policy has been enforced. e policy is not in itself sucient
documentation to establish that the customer requested and authorized that
the amount be added to the bill without such additional veriable evidence.
e retailer must retain the guest checks and any additional separate
documents to show that the payment is optional. e retailer is also required
to maintain other records in accordance with the requirements of Regulation
1698, Records.
(4) No employer shall collect, take, or receive any gratuity or a part thereof, paid, given to,
or left for an employee by a patron, or deduct any amount from wages due an employee
on account of such gratuity, or require an employee to credit the amount, or any part
thereof, of such gratuity against and as a part of the wages due the employee from the
employer. (Labor Code section 351.) If this prohibition is violated, any amount received
by the employer will be considered a part of the gross receipts of the employer and
subject to the tax.
(i) CATERERS.
(1) DEFINITION. e term “caterer” as used in this regulation means a person engaged
in the business of serving meals, food, or drinks on the premises of the customer, or on
premises supplied by the customer, including premises leased by the customer from a
person other than the caterer, but does not include employees hired by the customer by
the hour or day.
(2) SALES TO CATERERS. A caterer generally is considered to be the consumer of
tangible personal property normally used in the furnishing and serving of meals, food
or drinks, except for separately stated charges by the caterer for the lease of tangible
personal property or tangible personal property regarded as being sold with meals, food
or drinks such as disposable plates, napkins, utensils, glasses, cups, stemware, place
mats, trays, covers and toothpicks.
(3) SALES BY CATERERS.
(A) Caterer as Retailer.Tax applies to the entire charge made by caterers for serving
meals, food, and drinks, inclusive of charges for food, the use of dishes, silverware,
glasses, chairs, tables, etc., used in connection with serving meals, and for the labor
of serving the meals, whether performed by the caterer, the caterer’s employees or
subcontractors. Tax applies to charges made by caterers for preparing and serving
meals and drinks even though the food is not provided by the caterers. Tax applies
to charges made by caterers for hot prepared food products as in (e) above whether
or not served by the caterers. A caterer who separately states or itemizes charges for
the lease of tangible personal property regardless of the use of the property will be
deemed to be the lessor of such property. Tax applies in accordance with Regulation
1660,Leases of Tangible Personal Property—In General. Tax does not apply to
charges made by caterers for the rental of dishes, silverware, glasses, etc., purchased
by the caterer with tax paid on the purchase price if no food is provided or served by
the caterers in connection with such rental.
(B) Caterers as Lessors of Property Unrelated to the Serving or Furnishing of Meals,
Food, or Drinks by a Caterer.
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Appendices 359
1. When a caterer who is furnishing or serving meals, food, or drinks also rents
or leases from a third party tangible personal property which the caterer
does not use himself or herself and the property is not customarily provided
or used within the catering industry in connection with the furnishing and
serving of food or drinks, such as decorative props related solely to optional
entertainment, special lighting for guest speakers, sound or video systems,
dance oors, stages, etc., he or she is a lessor of such property. In such
instance, tax applies to the lease in accordance with Regulation 1660.
2. When a person who in other instances is a caterer does not furnish or serve
any meals, food, or drinks to a customer, but rents or leases from a third party
tangible personal property such as dishes, linen, silverware and glasses, etc.,
for purposes of providing it to his or her customer, he or she is not acting as a
caterer within the meaning of this regulation, but solely as a lessor of tangible
personal property. In such instances,tax applies to the lease in accordance
with Regulation 1660.
(C) Caterers Planning, Designing and Coordinating Events.
1. Tax applies to charges by a caterer for event planning, design, coordination,
and/or supervision if they are made in connection with the furnishing of
meals, food, or drinks for the event. Tax does not apply to separately stated
charges for services unrelated to the furnishing and serving of meals, food,
or drinks, such as optional entertainment or any sta who do not directly
participate in the preparation, furnishing, or serving of meals, food, or drinks,
e.g., coat-check clerks, parking attendants, security guards, etc.
2. When a caterer sells meals, food, or drinks, and the serving of them, to other
persons such as event planners, party coordinators, or fundraisers, who buy
and sell the same on their own account or for their own sake, it is a sale for
resale for which the caterer may accept a resale certicate. However, a caterer
may only claim the sale as a resale if the caterer obtains a resale certicate in
compliance with Regulation 1668. A person is buying or selling for his or
her own account, or own sake, when such person has his or her own contract
with a customer to sell the meals, food, or drinks to the customer, and is not
merely acting on behalf of the caterer.
3. When a caterer sells meals, food or drinks and the serving of them to other
persons who charge a fee for their service unrelated to the taxable sale, the
separately stated fee is not subject to tax.
(D) Sales of Meals by Caterers to Social Clubs, Fraternal Organizations.Sales of meals
to social clubs and fraternal organizations, as those terms are dened in subdivision
(j) below, by caterers are sales for resale if such social clubs and fraternal organiza-
tions are the retailers of the meals subject to tax under subdivision (j) and give valid
resale certicates therefor.
(E) Tips, Gratuities, or Service Charges.Tips, gratuities, and service charges are
discussed in subdivisions(g)and (h).
(4) PREMISES. GENERAL. Separately stated charges for the lease of premises on which
meals, food, or drinks are served, are nontaxable leases of real property. Where a charge
for leased premises is a guarantee against a minimum purchase of meals, food or drinks,
the charge for the guarantee is gross receipts subject to tax. Where a person contracts
360 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
to provide both premises and meals, food or drinks, the charge for the meals, food or
drinks must be reasonable in order for the charge for the premises to benontaxable.
(5) PRIVATE CHEFS. A private chef is generally not an employee of the customer, but an
independent contractor who pays his or her own social security, and federal and state
income taxes. Such a private chef, who prepares and serves meals, food and drinks in
the home of his or her customer is a caterer under this regulation.
(j) SOCIAL CLUBS AND FRATERNAL ORGANIZATIONS.“Social Clubs and Fraternal
Organizations” as used herein include any corporation, partnership, association or group or
combination acting as a unit, such as service clubs, lodges, and community, country, and
athletic clubs.
e tax applies to receipts from the furnishing of meals, food, and drink by social clubs
and fraternal organizations unless furnished: (1) exclusively to members; and also, (2)
less frequently than once a week. Bothofthese requirements must be met. If the club
or organization furnishes meals, food or drink to nonmembers, all receipts from the
furnishing of meals, food or drink are subject to tax whether furnished to members or
nonmembers, including receipts on occasions when furnished exclusively to members.
Meals, food or drink paid for by members are considered furnished to them even though
consumed by guests who are not members.
(k) STUDENT MEALS.
(1) DEFINITIONS.
(A) “Food Products.”As used herein, the term “food products” as dened in Regulation
1602 (18 CCR 1602) includes food furnished, prepared, or served for consumption
at tables, chairs, or counters, or from trays, glasses, dishes, or other tableware
provided by the retailer or by a person with whom the retailer contracts to furnish,
prepare or serve food to others.
(B) “Meals.”As used herein, the term “meals” includes both food and nonfood
products, which are sold to students for an established single price at a time set
aside for meals. If a single price for the combination of a nonfood product and a
food product is listed on a menu or on a sign, a single price has been established.
e term “meals” does not include nonfood products which are sold to students for
a separate price and tax applies to the sales of such products. Examples of nonfood
products are: carbonated beverages and beer. For the purpose of this regulation,
products sold at a time designated as a “nutrition break”, “recess”, or similar break,
will not be considered “meals.”
(2) APPLICATION OF TAX.
(A) Sales By Schools, School Districts and Student Organizations.Sales of meals or
food products for human consumption to students of a school by public or private
schools, school districts, and student organizations, are exempt from tax, except as
otherwise provided in (d)(4) above.
(B) Sales by Parent-Teacher Associations.Tax does not apply to the sale of, nor the
storage, use or other consumption in this state of, meals and food products for
human consumption furnished or served to the students of a school by parent-
teacher associations. Parent-teacher associations qualifying under Regulation
1597 as consumers are not retailers of tangible personal property, which they sell.
Chapter 24
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Appendices 361
Accordingly, tax does apply to the sale to such associations of nonfood items such as
carbonated beverages, containers, straws and napkins.
(C) Sales by Blind Vendors.Tax does not apply to the sale of meals or food products
for human consumption to students of a school by any blind person (as dened
in Section 19153 of the Welfare and Institutions Code) operating a restaurant or
vending stand in an educational institution under Article 5 of Chapter 6 of Part 2
of Division 10 of the Welfare and Institutions Code, except as otherwise provided
in (d)(4) above.
(D) Sales by Caterers.e application of tax to sales by caterers in general is explained
in subdivision (i) above. However, tax does not apply to the sale by caterers of meals
or food products for human consumption to students of a school, if all the following
criteria are met:
1. e premises used by the caterer to serve the lunches to the students are used
by the school for other purposes, such as sporting events and other school
activities, during the remainder of the day;
2. e xtures and equipment used by the caterer are owned and maintained by
the school; and
3. e students purchasing the meals cannot distinguish the caterer from the
employees of the school.
(l) EMPLOYEES’ MEALS.
(1) IN GENERAL. Any employer or employee organization that is in the business of
selling meals, e.g., a restaurant, hotel, club, or association, must include its receipts from
the sales of meals to employees, along with its receipts from sales to other purchasers
of meals, in the amount upon which it computes its sales tax liability. An employer or
an employee organization selling meals only to employees becomes a retailer of meals
and liable for sales tax upon its receipts from sales of meals if it sells meals to an average
number of ve or more employees during the calendar quarter.
(2) SPECIFIC CHARGE. e tax applies only if a specic charge is made to employees
for the meals. Tax does not apply to cash paid an employee in lieu of meals. A specic
charge is made for meals if:
(A) Employee pays cash for meals consumed.
(B) Value of meals is deducted from employee’s wages.
(C) Employee receives meals in lieu of cash to bring compensation up to legal minimum
wage.
(D) Employee has the option to receive cash for meals not consumed.
(3) NO SPECIFIC CHARGE. If an employer makes no specic charge for meals
consumed by employees, the employer is the consumer of the food products and
thenonfoodproducts, which are furnished to the employees as a part of the meals.
In the absence of any of the conditions under (l)(2) a specic charge is not made if:
(A) A value is assigned to meals as a means of reporting the fair market value of
employees’ meals pursuant to state and federal laws or regulations or union
contracts.
362 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
(B) Employees who do not consume available meals have no recourse on their employer
for additional cash wages.
(C) Meals are generally available to employees, but the duties of certain employees
exclude them from receiving the meals and are paid cash in lieuthereof.
(4) MEALS CREDITED TOWARD MINIMUM WAGE. If an employee receives
meals in lieu of cash to bring his or her compensation up to the legal minimum wage,
the amount by which the minimum wage exceeds the amount otherwise paid to the
employee is includable in the employer’s taxable gross receipts up to the value of the
meals credited toward the minimum wage.
For example, if the minimum rate for an eight-hour day is $46.00, and the employee
received $43.90 in cash, and a lunch is received which is credited toward the minimum
wage in the maximum allowable amount of $2.10, the employer has received gross
receipts in the amount of $2.10 for the lunch.
(5) TAX REIMBURSEMENT. If a separately stated amount for tax reimbursement is not
added to the price of meals sold to employees for which a specic charge is made, the
specic charge will be regarded as being a tax-included charge for the meals.
(m) RELIGIOUS ORGANIZATIONS.Tax does not apply to the sale of, and the storage, use
or other consumption in this state of, meals and food products for human consumption
furnished or served by any religious organization at a social or other gathering conducted
by it or under its auspices, if the purpose in furnishing or serving the meals and food
products is to obtain revenue for the functions and activities of the organization and the
revenue obtained from furnishing or serving the meals and food products is actually used
in carrying on such functions and activities. For the purposes of this regulation, “religious
organization” means any organization the property of which is exempt from taxation
pursuant to Subdivision (f) of section 3 of Article XIII of the State Constitution.
(n) INSTITUTIONS.Tax does not apply to the sale of, nor the storage, use, or other
consumption in this state of, meals and food products for human consumption furnished
or served to and consumed by patients or residents of an “institution” as dened in
Regulation 1503. Tax, however, does apply to the sale of meals and food products by an
institution to persons other than patients or residents of that institution.
(o) MEAL PROGRAMS FOR LOW-INCOME ELDERLY PERSONS.Tax does not apply
to the sale of, and the storage, use or other consumption in this state of, meals and food
products for human consumption furnished or served to low-income elderly persons at or
below cost by a nonprot organization or governmental agency under a program funded by
this state or the United States for such purposes.
(p) FOOD PRODUCTS, NONALCOHOLIC BEVERAGES AND OTHER
TANGIBLE PERSONAL PROPERTY TRANSFERRED BY NONPROFIT YOUTH
ORGANIZATIONS.See Regulation 1597 fortheapplication of tax on food products,
nonalcoholic beverages and other tangible personal property transferred by nonprot youth
organizations.
(q) NONPROFIT PARENT-TEACHER ASSOCIATIONS.Nonprot parent-teacher associa-
tions and equivalent organizations qualifying under Regulation 1597 are consumers and
not retailers of tangible personal property, which they sell.
(r) MEALS AND FOOD PRODUCTS SERVED TO CONDOMINIUM
RESIDENTS.Tax does not apply to the sale of and the storage, use, or other consumption
Chapter 24
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Appendices 363
in this state of meals and food products for human consumption furnished to and
consumed by persons 62 years of age or older residing in a condominium and who own
equal shares in a common kitchen facility; provided, that the meals and food products are
served to such persons on a regular basis.
is exemption is applicable only to sales of meals and food products for human
consumption prepared and served at the common kitchen facility of the condominium.
Tax applies to sales to persons less than 62 years of age.
(s) VETERAN’S ORGANIZATION.Beginning April 1, 2004, tax does not apply to the sale
of, and the storage, use or other consumption in this state of, meals and food products for
human consumption furnished or served by any nonprot veteran’s organization at a social
or other gathering conducted by it or under its auspices, if the purpose in furnishing or
serving the meals and food products is to obtain revenue for the functions and activities of
the organization and the revenue obtained from furnishing or serving the meals and food
products is actually used in carrying on those functions and activities.
(t) FOOD STAMP COUPONS.Tax does not apply to tangible personal property, which is
eligible to be purchased with federal food stamp coupons acquired pursuant to the Food
Stamp Act of 1977 and so purchased. When payment is made in the form of both food
stamps and cash, the amount of the food stamp coupons must be applied rst to tangible
personal property normally subject to the tax, e.g., nonalcoholic carbonated beverages.
Retailers are prohibited from adding any amount designated as sales tax, use tax, or sales
tax reimbursement to sales of tangible personal property purchased with food stamp
coupons. (See paragraph (c) of Regulation 1602.5 for special reporting provisions by
grocers.)
(u) HONOR SYSTEM SNACK SALES.An “honor system snack sale” means a system where
customers take snacks from a box or tray and pay by depositing money in a container
provided by the seller. Snacks sold through such a system may be subject to tax depending
upon where the sale takes place. Sales of such snacks are taxable when sold at or near a
lunchroom, break room, or other facility that provides tables and chairs, and it is contem-
plated that the food sold will normally be consumed at such facilities. Honor system snack
sales do not include hotel room mini-bars or snack baskets.
(v) MOBILE FOOD VENDORS.Mobile food vendors include retailers who sell food and
beverages for immediate consumption from motorized vehicles or un-motorized carts.
Examples of mobile food vendors include food trucks, coee carts, and hot dog carts. For
sales made on or after July 1, 2014, unless a separate amount for tax reimbursement is
added to the price, mobile food vendors’ sales of taxable items are presumed to be made on
a tax-included basis.
is presumption does not apply when a mobile food vendor is making sales as a “caterer”
as dened in (i)(1).
364 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 24
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Appendices 365
California Constitution, Article XVI, Public Finance
Section Title and Content
§ 6 Use of Public Funds
e Legislature shall have no power to give or to lend, or to authorize the giving or lending,
of the credit of the State, or of any county, city and county, city, township or other political
corporation or subdivision of the State now existing, or that may be hereafter established, in aid
of or to any person, association, or corporation, whether municipal or otherwise, or to pledge
the credit thereof, in any manner whatever, for the payment of the liabilities of any individual,
association, municipal or other corporation whatever; nor shall it have power to make any gift
or authorize the making of any gift, of any public money or thing of value to any individual,
municipal or other corporation whatever; provided, that nothing in this section shall prevent
the Legislature granting aid pursuant to Section 3 of Article XVI; and it shall not have power
to authorize the State, or any political subdivision thereof, to subscribe for stock, or to become
a stockholder in any corporation whatever; provided, further, that irrigation districts for the
purpose of acquiring the control of any entire international water system necessary for its use
and purposes, a part of which is situated in the United States, and a part thereof in a foreign
country, may in the manner authorized by law, acquire the stock of any foreign corporation
which is the owner of, or which holds the title to the part of such system situated in a foreign
country; provided, further, that irrigation districts for the purpose of acquiring water and
water rights and other property necessary for their uses and purposes, may acquire and hold
the stock of corporations, domestic or foreign, owning waters, water rights, canals, waterworks,
franchises or concessions subject to the same obligations and liabilities as are imposed by law
upon all other stockholders in such corporation; and
Provided, further, that this section shall not prohibit any county, city and county, city,
township, or other political corporation or subdivision of the State from joining with other such
agencies in providing for the payment of workers’ compensation, unemployment compensation,
tort liability, or public liability losses incurred by such agencies, by entry into an insurance
pooling arrangement under a joint exercise of powers agreement, or by membership in such
publicly-owned nonprot corporation or other public agency as may be authorized by the
Legislature; and
Provided, further, that nothing contained in this Constitution shall prohibit the use of state
money or credit, in aiding veterans who served in the military or naval service of the United
States during the time of war, in the acquisition of, or payments for, (1) farms or homes, or in
projects of land settlement or in the development of such farms or homes or land settlement
projects for the benet of such veterans, or (2) any business, land or any interest therein,
buildings, supplies, equipment, machinery, or tools, to be used by the veteran in pursuing a
gainful occupation; and
Provided, further, that nothing contained in this Constitution shall prohibit the State, or any
county, city and county, city, township, or other political corporation or subdivision of the
State from providing aid or assistance to persons, if found to be in the public interest, for the
purpose of clearing debris, natural materials, and wreckage from privately owned lands and
waters deposited thereon or therein during a period of a major disaster or emergency, in either
case declared by the President. In such case, the public entity shall be indemnied by the
recipient from the award of any claim against the public entity arising from the rendering of
such aid or assistance. Such aid or assistance must be eligible for federal reimbursement for the
cost thereof.
366 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
And provided, still further, that notwithstanding the restrictions contained in this Consti-
tution, the treasurer of any city, county, or city and county shall have power and the duty to
make such temporary transfers from the funds in custody as may be necessary to provide funds
for meeting the obligations incurred for maintenance purposes by any city, county, city and
county, district, or other political subdivision whose funds are in custody and are paid out
solely through the treasurer’s oce. Such temporary transfer of funds to any political subdi-
vision shall be made only upon resolution adopted by the governing body of the city, county,
or city and county directing the treasurer of such city, county, or city and county to make such
temporary transfer. Such temporary transfer of funds to any political subdivision shall not
exceed 85 percent of the anticipated revenues accruing to such political subdivision, shall not
be made prior to the rst day of the scal year nor after the last Monday in April of the current
scal year, and shall be replaced from the revenues accruing to such political subdivision before
any other obligation of such political subdivision is met from such revenue.
Chapter 24
–
Appendices 367
Sample Internal Control Reference Checklist
A “No” response to any of the following questions may indicate an internal control weakness. e district
should perform a self-evaluation, investigate all potential weaknesses, and ensure that controls are put into
place so the weakness will no longer result in internal control issues.
is checklist is divided by area; another checklist in Chapter 5 of this manual is divided by job position for
those with responsibility for ASB organizations.
General Procedures YES NO N/A Comments
1. Does the district have a comprehensive
board policy and administrative regulations
that provide rules and regulations for ASB
governance and operations? o o o ____________________
2. Does the district have a comprehensive ASB
manual with detailed procedures? o o o ____________________
3. Has the FCMAT ASB Accounting Manual,
Fraud Prevention Guide and Desk Reference
been adopted as part of the district’s ASB
policies and procedures? o o o ____________________
4. If the district has a comprehensive manual,
is it reviewed and updated as needed, at
least annually? Does the update address the
areas of concern or confusion identied in
the previous year’s audit? o o o ____________________
5. Does the business oce provide annual
ASB training for all school and district
employees who work with ASB activities
and retain a signed and dated training
attendance log as proof that employees
received training? o o o ____________________
6. Do members of the business oce sta
periodically (at least annually) visit each
school to provide support and to review the
ASB procedures used at the school? o o o ____________________
7. Do school employees and students know
whom to call in the district business oce if
they have questions or concerns about ASB
and are unable to get answers at the school? o o o ____________________
8. Has the business oce taken immediate
action to correct annual audit ndings
related to ASB activities? Are the schools
involved in developing action plans to
ensure that the ndings do not reoccur? o o o ____________________
9. Are the forms, processes and systems for
ASB operations standardized districtwide? o o o ____________________
368 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
YES NO N/A Comments
10. Is the ASB recordkeeping computerized? If
so, is the accounting software adequate to
meet the needs of the district and clubs? o o o ____________________
11. Are the nancial reports and other items
produced by the system user-friendly and
informational? o o o ____________________
12. Is the computer on which the ASB
accounting software resides user ID- and
password-protected? o o o ____________________
13. Is the ASB accounting software access
user ID- and password-protected? o o o ____________________
14. Are ASB computer and accounting software
passwords safeguarded, not given out, and
changed periodically? o o o ____________________
15. Are only ASB funds maintained in ASB
bank accounts? (ASB bank accounts should
not include PTA or booster club money, or
faculty charitable funds). o o o ____________________
16. Is a formal application required from any
students who want to establish a new club
at the school? [Secondary] o o o ____________________
17. Is each club advisor a certicated sta
member of the school district? o o o ____________________
18. Are all ASB bank accounts reconciled
within two weeks of receipt of the statement? o o o ____________________
19. If bank account reconciliations are not
performed within two weeks of receipt of
the bank statement, is a reconciliation
completion promise date obtained and
followed up on to ensure the
bank reconciliation is completed? o o o ____________________
20. Are all outstanding deposits and checks
identied, and are they clearing the bank
within a reasonable time? (Deposits should
be outstanding for no more than two or three days.) o o o ____________________
21. If any journal entries or transfer entries are
made, are those entries authorized? o o o ____________________
22. Is there a clear distinction between the
student body’s income and expenditures
and those of the district? o o o ____________________
Chapter 24
–
Appendices 369
YES NO N/A Comments
23. Do procedures ensure that trust funds
will not be used to nance general student
body activities? o o o ____________________
24. Is prompt action taken to recover decits
in trust accounts? o o o ____________________
25. Has the governing board established a
policy for disposing of inactive student
body organizations’ trust balances? o o o ____________________
26. Is equipment adequately controlled and recorded? o o o ____________________
27. Is the board’s designee an authorized
signatory on all student body accounts? o o o ____________________
28. Is a general ledger maintained? o o o ____________________
29. Are all clubs required to prepare and
maintain minutes of all meetings, with
all necessary items noted? (Secondary) o o o ____________________
30. Are the minutes of each individual club
reviewed by the general student council? o o o ____________________
31. Do the minutes contain approval for
fundraising activities? o o o ____________________
32. Are disbursements of student body funds
specically approved, item-by-item, and in
the minutes? o o o ____________________
33. Are the activities of the student body
reected in the minutes? o o o ____________________
34. Does every recognized club and the student
council have a constitution on le that
establishes the policies and rules for the
student governance of the council or club? o o o ____________________
35. Does the general student council have
bylaws in place? o o o ____________________
36. Are accounting controls for the clubs the
same as those for the general ASB? o o o ____________________
37. Are student store inventories reviewed
periodically? o o o ____________________
38. Are nancial reports prepared regularly (at
least monthly)? Are they reviewed and
included in the ASB minutes? o o o ____________________
370 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
YES NO N/A Comments
39. Do employees and students know to report
any questionable or suspicious activities to
the district’s business oce for investigation? o o o ____________________
40. Does the district have access to an
independent third-party fraud reporting
whistleblower website and telephone
hotline? Are employees aware of the
fraud reporting options? o o o ____________________
41. Is there a safe at each school adequate to
hold all cash receipts until deposit as well as
cash boxes, check stock and other necessary
items? Is access to the safe limited, with a
log identifying who has the access? o o o ____________________
Cash Receipts / Fundraisers YES NO N/A Comments
1. Are all proposed fundraising events
approved by the governing board or its
designee at the beginning of each school
year? Is this list updated throughout the year? o o o ____________________
2. Are fundraising activities in accordance
with those prescribed by the district and
approved by the governing board/designee
to help ensure success? o o o ____________________
3. Are fundraising activities approved by the
principal/school administrator and by the
general student council? o o o ____________________
4. Are revenue potentials prepared for each
approved fundraiser and completed once
the fundraiser is over? o o o ____________________
5. Do supervisory personnel exercise adequate
control over student fundraisers to ensure
that the participants are following all
district policies and exercising strong
internal controls? o o o ____________________
6. Is sta aware of the appropriate internal
controls for cash receipts for each type of
fundraising event (i.e. prenumbered
receipts, tickets, and tally sheets)? o o o ____________________
7. Is an adequate stock of supplies for cash
receipt control procedures—such as
prenumbered tickets and prenumbered
receipt books—kept in a safe, locked place? o o o ____________________
Chapter 24
–
Appendices 371
YES NO N/A Comments
8. Is control maintained over tickets,
numbered forms and receipt books
when not in use? o o o ____________________
9. Are details about the number of items
receipted and the unit price recorded on
the receipt or other documentation used
for cash receipts? o o o ____________________
10. Are all cash receipts from student
fundraising activities turned in to the ASB
bookkeeper immediately, or as soon as
possible after the fundraising event? Is the
correct documentation turned in with the
collected cash, such as reports on tickets
issued and other items? o o o ____________________
11. Do two people count the funds raised at
the end of a fundraising event, with both
individuals signing and dating the
fundraising cash collection form? o o o ____________________
12. When individuals turn in cash to the ASB
bookkeeper, does the bookkeeper count the
cash in the presence of at least one other
person? Is an acknowledgment of receipt
of the money and accuracy of amount
signed and dated? o o o ____________________
13. Are duplicates of cash count forms kept,
as well as all other forms that are part
of the nancial process? o o o ____________________
14. If a startup cash change box is issued, does
the person(s) receiving the change count the
startup cash in front of the ASB bookkeeper
and do they sign indicating that the startup
change is accurate? o o o ____________________
15. Are undeposited cash receipts kept in a safe?
16. Does the ASB bookkeeper record cash
receipts promptly when received? o o o ____________________
17. Are bank deposits made within a few days
of receipt, but at least weekly? o o o ____________________
18. Is a summary or detail of amounts making
up the deposits retained for a sucient audit trail? o o o ____________________
19. Are shortages/overages handled as
prescribed by established district policy? o o o ____________________
372 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
YES NO N/A Comments
20. Is control of associated student body card
sales maintained, including the number of
cards issued and the beginning and ending
numbers of the cards sold? o o o ____________________
21. Are commissions from vending machine
sales received promptly when due? o o o ____________________
22. Are the prot and loss statements for the
student store reviewed periodically? Are
prices adjusted when necessary based
on analysis of sales? o o o ____________________
23. Are personal checks prohibited from
being cashed from ASB funds? o o o ____________________
24. If food is sold in the student store, has it
been approved by the director of food
services? [Secondary only. Primary
grades cannot sell food daily.] o o o ____________________
25. Are only ASB receipts deposited
into the ASB account? o o o ____________________
Cash Disbursements / Expenditures YES NO N/A Comments
1. Does the business oce report the sales and
use tax for the student store and other
purchases on its sales tax report? o o o ____________________
2. Does the business oce issue 1099s for all
independent contractors paid with ASB funds? o o o ____________________
3. Are cash balances reconciled with bank
balances monthly, and are detailed items
listed on bank statements recorded in
the ASB’s books? o o o ____________________
4. Are prenumbered checks used for cash
disbursements? o o o ____________________
5. Are voided checks retained? o o o ____________________
6. Are controls established to ensure that
expenditures do not exceed budgeted funds? o o o ____________________
7. Are all expenses approved in advance? o o o ____________________
8. Are purchase orders used to show the proper
preapproval of all expenditures (prior to purchase)? o o o ____________________
Chapter 24
–
Appendices 373
YES NO N/A Comments
9. Do purchase orders have the required one
approval signature (unorganized) or three
approval signatures? [Secondary] o o o ____________________
10. Are approved purchase orders, whether
voided or not, retained in a le? o o o ____________________
11. Are contractual obligations properly
authorized by board-designated signers?
Are they kept within established limits? o o o ____________________
12. Are students approving expenditures rather
than adults (teachers, advisors or coaches)
making the decisions? [Secondary] o o o ____________________
13. Do checks require double signatures? Are
there backup signers on the account? o o o ____________________
14. Are all disbursements supported by an
original invoice and adequate receiving
documents? o o o ____________________
15. Are all checks written to a specic payee
(vendor or employee), with no checks
written to cash? o o o ____________________
16. Is a record maintained of all equipment
purchased with ASB funds? o o o ____________________
17. Are only allowable expenses paid from
ASB funds? o o o ____________________
18. Are ASB funds spent to enhance the general
welfare, morale and educational experience
of the entire student body rather than just
one or two students, individuals or a
specic group? o o o ____________________
19. Are disbursements from petty cash properly
supported by vouchers or receipts? o o o ____________________
20. Are the checkbook and the check stock
stored in a locked le cabinet or safe? o o o ____________________
21. Is there a process in place to determine
whether a worker is an employee or an
independent contractor? o o o ____________________
22. Are all employees who perform work for the
ASB paid through the district’s payroll and
then invoiced to ASB? o o o ____________________
374 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
YES NO N/A Comments
23. Is an IRS Form W-9, Request for Taxpayer
Identication Number and Certication,
obtained from all independent contractors
before any disbursements are issued to them? o o o ____________________
24. Are only board-approved sta signing
contracts up to the allowed amount? o o o ____________________
Financial Reporting YES NO N/A Comments
1. Are all bank accounts reconciled monthly?
Are they shared and reviewed by the ASB
advisor, principal/school administrator
and district’s business oce? o o o ____________________
2. Are bank reconciliations initialed/signed
and dated as evidence of being reviewed
after they are prepared? o o o ____________________
3. Are prot and loss statements for the
student store prepared and reviewed
periodically by the general student
council, principal/school administrator
and district oce? o o o ____________________
4. Are monthly reports on the nancial
transactions of various trust and club
accounts prepared and submitted to the
advisors, principal/school administrator,
general student council and district oce? o o o ____________________
5. Are periodic nancial statements prepared
and submitted to the district’s business
oce? Are these reports included in the
student council minutes? o o o ____________________
6. Does the business oce receive and review
periodic nancial statements from the ASB
organizations and sign and date that they
have reviewed the documents? o o o ____________________
7. Does the student council and each club
prepare, adopt and monitor an annual budget? o o o ____________________
8. Does the general student council approve
each club’s budget? o o o ____________________
9. Is every club and the student council
required to prepare a budget for the scal year? o o o ____________________
10. Is there a policy in place that dictates how
much carryover is allowed for individual clubs? o o o ____________________
Chapter 24
–
Appendices 375
YES NO N/A Comments
11. Is spending monitored during the year to
ensure that the club will not end the year
with a large carryover balance or a negative
balance? o o o ____________________
12. Is a balance sheet and statement of revenues
and expenditures prepared at least at the
end of the year? o o o ____________________
13. Are all of the student organization’s funds
and annual nancial reports audited
annually by the district’s independent auditor? o o o ____________________
376 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 24
–
Appendices 377
California School Boards Association Samples
Board Policy
Community Relations
BP 1230
School-Connected Organizations
***Note: e term “school-connected organization” may include booster clubs, parent-teacher associations aligned
with the California State PTA, or other parent-teacher organizations. ese organizations generally raise money
for classroom activities or activities at specic schools. For policy language about a district’s relationship with a
foundation, see BP 1260 - Educational Foundation. ***
***Note: e following optional policy should be revised to reect district practice. ***
e Governing Board recognizes that parents/guardians and community members may wish to organize
parent organizations and/or booster clubs for the purpose of supporting district and extracurricular programs,
such as athletic teams, debate teams, or musical groups. e Board appreciates the contributions made by
such organizations and encourages their interest and participation in supporting district activities and helping
to achieve the district’s vision for student learning.
(cf. 0200 - Goals for the School District)
(cf. 6020 - Parent Involvement)
***Note: Generally, booster and parent clubs are separate legal entities from the district and thus are not under the
control or the responsibility of district personnel. However, Education Code 51521 requires that any fundraising
activity by a school-connected organization, designed to raise money to benet a school or its students, receive
approval from the Governing Board. us, it is recommended that districts create an internal control procedure to
help ensure district compliance with law. ***
***Note: Certain tax-exempt organizations may be required to register with the state Attorney General’s Registry
of Charitable Trusts. As part of this registration, the organization may also be required to le copies of the
organization’s articles of incorporation and other documents governing its operations. ***
e Board recognizes that school-connected organizations are separate legal entities, independent of the
district. However, in order to help the Board fulll its legal and duciary responsibility to manage district
operations, any school-connected organization that desires to raise money to benet any district student
shall submit a request for authorization to the Board, in accordance with Board policy and administrative
regulation. In addition, the Superintendent or designee shall establish appropriate internal controls for the
relationship between school-connected organizations and the district.
(cf. 1321 - Solicitation of Funds from and by Students)
(cf. 1330 - Use of School Facilities)
(cf. 3452 - Student Activity Funds)
***Note: Generally, the funds raised by school-connected organizations benet a single school. In some districts,
there may be legal or equity concerns that result from the benet provided to a particular school while other schools
in the district do not receive the benet from the additional resources. For example, pursuant to federal and state
law (Title IX, 20 USC 1681-1688; Education Code 200-262.4; 5 CCR 4900-4965), the Board is responsible for
ensuring that the district’s athletic program provides equivalent opportunities for both males and females. Booster
club activities must be included in the district’s analysis of the equivalent opportunities provided by each school.
See BP/AR 6145.2 - Athletic Competition. Because school-connected organizations are separate legal entities, if a
concern arises regarding the equitable distribution of funds, the Superintendent or designee should consult with the
378 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
leadership of such organizations and district legal counsel. For language regarding acceptance of gifts and grants, see
BP 3290 - Gifts, Grants, and Bequests. ***
***Note: Pursuant to Education Code 51520, food sales by outside organizations may not compete with the district’s
school nutrition program and must comply with the nutritional standards specied in Education Code 49431 and
49431.2. See BP/AR 3554 - Other Food Sales. ***
e Board encourages school-connected organizations to consider the impact of fundraising activities on
the overall school and district program. School-connected organizations may consult with the principal to
determine school needs and priorities. Activities by school-connected organizations shall not conict with
law, Board policies, administrative regulations, or any rules of the sponsoring school.
(cf. 3290 - Gifts, Grants and Bequests)
(cf. 3554 - Other Food Sales)
(cf. 5030 - Student Wellness)
(cf. 6145 - Extracurricular and Cocurricular Activities)
(cf. 6145.2 - Athletic Competition)
Legal Reference:
EDUCATION CODE
200-262.4 Prohibition of discrimination on the basis of sex
35160 Authority of governing boards
38130-38138 Civic Center Act, use of school property for public purposes
48931 Authorization for sale of food by student organization
48932 Authorization for fundraising activities by student organization
49431 Sale of food to elementary students during the school day
49431.2 Sale of food to middle, junior, or high school students
49431.5 Sale of beverages at elementary, middle, or junior high schools
51520 Prohibited solicitation on school premises
51521 Fundraising project
BUSINESS AND PROFESSIONS CODE
17510-17510.95 Solicitations for charitable purposes
25608 Alcohol on school property; use in connection with instruction
GOVERNMENT CODE
12580-12599.7 Fundraisers for Charitable Purposes Act
PENAL CODE
319-329 Lottery, rae
CODE OF REGULATIONS, TITLE 5
4900-4965 Nondiscrimination in elementary and secondary education programs
15500 Food sales in elementary schools
15501 Food sales in high schools and junior high schools
CODE OF REGULATIONS, TITLE 11
300-312.1 Fundraising for charitable purposes
UNITED STATES CODE, TITLE 20
1681-1688 Discrimination based on sex or blindness, Title IX
COURT DECISIONS
Serrano v. Priest, (1976) 18 Cal. 3d 728
Management Resources:
CALIFORNIA DEPARTMENT OF EDUCATION LEGAL ADVISORIES
1101.89 School District Liability and “Hold Harmless” Agreements, LO: 4-89
WEBSITES
Chapter 24
–
Appendices 379
CSBA: http://www.csba.org
California Oce of the Attorney General, charitable trust registry: http://caag.state.ca.us/charities
California State PTA: http://www.capta.org
(9/90 12/90) 7/07
BP 1321
Solicitation of Funds From and By Students
***Note: e following optional policy applies to solicitations of students on behalf of the school or charitable
organizations. For policy regarding solicitation of funds from and by sta members in personal prot-making
ventures, see BP 4135/4235/4335 - Soliciting and Selling. For policy regarding distribution of promotional
materials to students and parents/guardians, see BP 1325 - Advertising and Promotion. ***
e Governing Board recognizes that student participation in fundraising activities for the schools and
nonprot, nonpartisan charitable organizations can help develop a sense of social responsibility in students,
enhance the relationship between the school and community, and contribute to the improvement of the
school program.
(cf. 1325 - Advertising and Promotion)
(cf. 4135/4235/4335 - Soliciting and Selling)
(cf. 5022 - Student and Family Privacy Rights)
(cf. 6142.4 - Service Learning/Community Service Classes)
Whether solicitations are made on behalf of the school or on behalf of a charitable organization, students
shall not be barred from an event or activity because they did not participate in fundraising. Potential donors,
including parents/guardians and members of the community, should not be unduly pressured to contribute
to the school system or charitable organizations. Sta are expected to emphasize the fact that donations are
always voluntary.
e Superintendent or designee shall ensure that parents/guardians are informed of the purpose of
fundraisers.
***Note: Pursuant to Education Code 51521, prior written approval is required for sales or solicitations whenever
any portion of the funds raised is to be applied to the costs of the fundraiser or to the costs of merchandise sold, such
as the sale of candy or wrapping paper. Such approval is not required if the total proceeds of a solicitation are to be
delivered to the school without deductions for expenses. ***
With the prior written approval of the Superintendent or designee, ocial school-related organizations may
organize fundraising events involving students.
(cf. 0420 - School Plans/Site Councils)
(cf. 1230 - School-Connected Organizations)
(cf. 1260 - Educational Foundation)
(cf. 3290 - Gifts, Grants and Bequests)
(cf. 3554 - Other Food Sales)
***Note: e following paragraph is optional. ***
After the fundraiser has been held, parents/guardians shall be informed how much money was raised and
how it was spent.
380 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Solicitations on Behalf of Charities
***Note: Nonprot organizations and charities conducting fundraising activities are subject to various state
laws regarding those activities. For example, Business and Professions Code 17510.2 and 17510.3 specify that
solicitations made by nonprot community or educational organizations must comply with the state disclosure
laws. Business and Professions Code 17510.3 requires volunteers over 18 years old to present potential donors or
buyers with information, including the purpose of the solicitation and the address from which further information
about revenues and administrative expenses may be obtained. In addition, Penal Code 320.5 provides that, prior
to conducting a rae, a nonprot organization, unless specically exempted, must rst register with the Attorney
General’s Registry of Charitable Organizations and le nancial disclosure reports on each rae event.***
When approved in advance by the Superintendent or designee, nonprot, nonpartisan organizations that are
properly chartered or licensed by state or federal law may solicit students on school grounds during school
hours and within one hour before school has opened and one hour after school has closed. (Education Code
51520)
Legal Reference:
EDUCATION CODE
51520 Prohibited solicitations on school premises
51521 Unlawful solicitations of contribution or purchase of personal property for benet of public school or
student body; exception
BUSINESS AND PROFESSIONS CODE
17510-17510.95 Charitable solicitations
PENAL CODE
319-329 Raes
REVENUE AND TAX CODE
6361 Sales tax exemption for certain sales
CODE OF REGULATIONS, TITLE 8
11706 Dangerous activities and occupations
Management Resources:
CSBA PUBLICATIONS
Healthy Food Policy Resource Guide, 2003
ATTORNEY GENERAL PUBLICATIONS
Guide to Charitable Solicitation, 1999
Attorney General’s Guide for Charities, 1988
WEBSITES
Oce of the Attorney General: http://caag.state.ca.us
(9/87 9/90) 7/03
Chapter 24
–
Appendices 381
Community Relations
BP 1325
***Note: e following optional policy addresses the distribution of commercial and noncommercial materials as well
as advertising in school-sponsored publications and on school facilities by outside/nonschool groups. Student speech,
including the distribution of printed materials by students, is addressed in BP/AR 5145.2 - Freedom of Speech/
Expression. ***
e Governing Board establishes this policy to ensure eective and consistent implementation of its
directions related to advertisements and promotions by nonschool groups in school-sponsored publications,
websites, and social media and on school facilities. Student speech shall be regulated in accordance with BP/
AR 5145.2 - Freedom of Speech/Expression.
(cf. 1113 - District and School Web Sites)
(cf. 1114 - District-Sponsored Social Media)
(cf. 1330 - Use of School Facilities)
(cf. 5145.2 - Freedom of Speech/Expression)
(cf. 6145.5 - Student Organizations and Equal Access)
***Note: School facilities and school-sponsored publications are public property and are subject to freedom of
expression rights granted by the First Amendment to the United States Constitution and Article 1, Section 2 of the
California State Constitution. However, because school facilities and school-sponsored publications are generally for
school purposes, they are regarded as “nonpublic fora” and the Governing Board has extensive authority to regulate
them. In exercising this authority, the Board may decide not to accept any form of advertising or distribution of
materials (nonpublic forum), as stated in Option 1 below, or to accept some advertising and/or distribution of
materials, but only from certain groups or on certain topics (limited public forum), as provided in Option 2. In
addition, the Board may maintain a “nonpublic forum” for advertising in school publications or on school facilities
while designating a “limited public forum” for distribution of materials at district schools, or a “nonpublic forum” at
its elementary schools and a “limited public forum” at its high schools.***
***Note: Whichever option the district chooses, school ocials should ensure that they enforce the policy in a
consistent manner, as courts look beyond the district’s intent as stated in its policy and look to the actual practice of
school ocials in determining whether a district facility or publication is a “nonpublic” or “limited public” forum
(Board of Education of the Westside Community Schools v. Mergens). Because this area of law is complex, it is
strongly recommended that legal counsel be consulted prior to the adoption of policy in this area. ***
OPTION 1: Nonpublic Forum
e Board believes that in order to maintain focus on academic achievement in district schools, students’
exposure to the persuasive inuence of marketing should be minimized. e Superintendent or designee shall
not allow any advertisement from any nonschool group to be included in any district- or school-sponsored
publication, web site, or social media, or to be posted on any school property such as scoreboards and
billboards. In addition, no nonschool group’s announcement, yer, or other promotional material shall be
disseminated by the district or distributed at any school facility or grounds.
***Note: Districts that have created a “nonpublic forum” must delete the remainder of this policy in order to ensure
that their “nonpublic forum” status is maintained. ***
OPTION 2: Limited Public Forum
***Note: When the Board chooses Option 2, it may adopt any rules that are reasonable to achieve its intended
purpose for the forum, as long as the rules do not discriminate against members of the public based on their
382 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
viewpoints. In Hills v. Scottsdale Unied School District 48, the Ninth Circuit Court of Appeals held that the
district discriminated against the plainti on the basis of his religious viewpoint and violated his First Amendment
right when the district refused to distribute the plainti’s brochure for summer camps because it included some
religious classes, though it permitted the distribution of similar literature by secular groups. ***
e Board desires to promote positive relationships between district schools and the community in order to
enhance community support and involvement in the schools. e Superintendent or designee may approve:
***Note: e Board may select any or all of optional items #1-5 below to reect the types of materials and/or
advertising that it will allow.***
1. Distribution of noncommercial materials that publicize services, special events, public meetings, or
other gatherings of interest to students or parents/guardians
(cf. 1400 - Relations Between Other Governmental Agencies and the Schools)
(cf. 6162.8 - Research)
2. Distribution of promotional materials of a commercial nature to students or parents/guardians
(cf. 1700 - Relations Between Private Industry and the Schools)
3. Paid advertisements on school property, including, but not limited to, advertisements on billboards and
scoreboards
4. Paid advertisements in school-sponsored publications, yearbooks, announcements, and other school
communications, including websites and social media
5. Products and materials donated by commercial enterprises for educational use, including those that
bear the name and/or logo of the donor, as long as they do not unduly promote the donor or any
commercial activity or product
(cf. 3290 - Gifts, Grants and Bequests)
(cf. 6161.11 - Supplementary Instructional Materials)
***Note: Generally, courts have upheld procedures that place reasonable “time, place, and manner” restrictions on
materials to be distributed, as long as the same restrictions were placed on all materials (Hemry v. School Board
of Colorado Springs). e district might want to consider developing procedures that limit the “time, place, and
manner” of distributions, such as limiting distribution to before or after school hours or creating a central location
for the distribution of all materials. Legal counsel should be consulted as needed. ***
Prior to the distribution, posting, or publishing of any nonschool group’s promotional materials or adver-
tisement, the Superintendent, principal, or designee shall review the materials or advertisement based on
the criteria listed below. He/she may not disapprove materials or advertisement in an arbitrary or capricious
manner or in a way that discriminates against a particular viewpoint on a subject that is otherwise allowed by
Board policy.
All materials to be distributed shall bear the name and contact information of the sponsoring entity.
***Note: e district might also consider requiring sponsoring entities to include a disclaimer on all materials to be
distributed. For example, a disclaimer might state, “this event is not school-sponsored or approved” or, “opinions are
not necessarily those of the school district or school personnel.” e district should consult legal counsel as needed. ***
As necessary, the Superintendent, principal, or designee shall require a disclaimer on any nonschool group’s
promotional materials to be distributed, posted, or published, stating that the distribution, posting, or
publishing of the materials does not imply district endorsement of the group’s activities, products, or services.
Chapter 24
–
Appendices 383
District- and school-sponsored publications shall include a disclaimer stating that the district or school does
not endorse any advertised products or services.
Criteria for Approval
***Note: e following optional section is for use by districts that select Option 2 (limited public forum) above and
may be revised to reect criteria established by the Board.***
e Superintendent, principal, or designee shall not accept for distribution any materials or advertisements
that:
1. Are lewd, obscene, libelous, or slanderous
2. Incite students to commit unlawful acts, violate school rules, or disrupt the orderly operation of the
schools
***Note: Optional item #3 below prohibits the distribution of political materials or political advertising except
under certain circumstances. Pursuant to Education Code 7058, the Board may conduct a political forum if it is
made available to all sides on an equitable basis. ***
3. Promote any particular political interest, candidate, party, or ballot measure, unless the candidates
or advocates from all sides are provided the opportunity to present their views to the students during
school hours or during events scheduled pursuant to the Civic Center Act
(cf. 1160 - Political Processes)
(cf. 4119.25/4219.25/4319.25 - Political Activities of Employees)
***Note: In DiLoreto v. Downey Unied School District, the Ninth Circuit Court of Appeals held that a district’s
refusal to post a paid religious advertisement featuring the Ten Commandments on an athletic eld fence reserved
for commercial advertising was a reasonable way for the district to avoid being placed on one side of a controversial
issue. e court concluded that, as a nonpublic forum, the district had the right to regulate content since it did not
open the forum (the fence) to all expressive activities but, in fact, had reserved it for commercial speech. Districts
wishing to establish policy dealing with the distribution of religious materials should consult legal counsel. ***
4. Proselytize or position the district on any side of a controversial issue
(cf. 6144 - Controversial Issues)
5. Discriminate against, attack, or denigrate any group on account of any unlawful consideration
(cf. 0410 - Nondiscrimination in District Programs and Activities)
6. Promote the use or sale of materials or services that are illegal or inconsistent with school objectives,
including, but not limited to, materials or advertisements for tobacco, intoxicants, non-nutritious foods
and beverages, and movies or products unsuitable for children
(cf. 5030 - Student Wellness)
(cf. 5131.6 - Alcohol and Other Drugs)
(cf. 5131.62 - Tobacco)
7. Solicit funds or services for an organization, with the exception of solicitations authorized in Board
policy
(cf. 1321 - Solicitation of Funds from and by Students)
8. Distribute unsolicited merchandise for which an ensuing payment is requested
384 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
e Superintendent or designee also may consider the educational value of the materials or advertisements,
the age or maturity of the students in the intended audience, and whether the materials or advertisements
support the basic educational mission of the district, directly benet the students, or are of intrinsic value to
the students or their parents/guardians.
(cf. 0000 - Vision)
Schools may establish additional criteria pertaining to the content of advertisements in school publications
and yearbooks, as deemed appropriate by the Superintendent or designee in accordance with law and Board
policy.
Legal Reference:
CALIFORNIA CONSTITUTION
Article 1, Section 2, Free speech rights
EDUCATION CODE
7050-7058 Political activities of school ocers and employees
35160 Authority of governing boards
35160.1 Broad authority of school districts
35172 Promotional activities
38130-38138 Civic Center Act
BUSINESS AND PROFESSIONS CODE
25664 Advertisements encouraging minors to drink
U.S. CONSTITUTION
Amendment 1, Freedom of speech and expression
COURT CASES
Hills v. Scottsdale Unied School District 48, (2003) 329 F.3d 1044
DiLoreto v. Downey Unied School District, (1999) 196 F.3d 958
Yeo v. Town of Lexington, (1997) U.S. First Circuit Court of Appeals, No. 96-1623
Hemry v. School Board of Colorado Springs, (D.Col. 1991) 760 F. Supp. 856
Bright v. Los Angeles Unied School District, (1976) 134 Cal. Rptr. 639, 556 P.2d 1090, 18 Cal. 3d 350
Lehman v. Shaker Heights, (1974) 418 U.S. 298
Management Resources:
CSBA PUBLICATIONS
School-Based Marketing of Foods and Beverages: Policy Implications for School Boards, Policy Brief, March
2006
WEBSITES
CSBA: http://www.csba.org
(6/96 11/01) 4/13
Chapter 24
–
Appendices 385
Business and Noninstructional Operations
BP 3600
Consultants
e Governing Board authorizes the use of consultants to provide expert professional advice or specialized
technical or training services which are not needed on a continuing basis and which cannot be provided by
district sta because of limitations of time, experience or knowledge. Individuals, rms or organizations
employed as consultants may assist management with decisions and/or project development related to
nancial, economic, accounting, engineering, legal, administrative, instructional or other matters.
**Note: Internal Revenue Service (IRS) Publication 15-A identies 20 common-law factors which the IRS uses to
determine whether an individual is an employee or an independent contractor. ***
As part of the contract process, the Superintendent or designee shall determine, in accordance with Internal
Revenue Service guidelines, that the consultant is properly classied as an independent contractor. District
employees who perform extra-duty consultant services shall not be retained as independent contractors. ey
shall be considered employees for all purposes, even if the additional services are not related to their regular
duties.
All consultant contracts shall be brought to the Board for approval.
(cf. 3312 - Contracts)
e district shall not contract for consulting services that can be performed without charge by a public
agency or ocial unless these services are unavailable from the public source for reasons beyond the district’s
control.
All qualied rms or resource persons shall be accorded equal opportunity for consultant contracts regardless
of race, creed, color, gender, national or ethnic origin, age or disability.
(cf. 3311 - Bids)
(cf. 3551 - Food Service Operations/Cafeteria Fund)
(cf. 4030 - Nondiscrimination in Employment)
Independent contractors applying for a consultant contract shall submit a written conict of interest
statement disclosing nancial interests as determined necessary by the Superintendent or designee, depending
on the range of duties to be performed by the consultant. e Superintendent or designee shall consider this
statement when deciding whether to recommend the consultant’s employment.
(cf. 9270 - Conict of Interest)
When employees of a public university, county oce of education or other public agency serve as consultant
or resource persons for the district, they shall certify as part of the consultant agreement that they will not
receive salary or remuneration other than vacation pay from any other public agency for the specic days
when they work for this district.
Legal Reference:
EDUCATION CODE
10400-10407 Cooperative improvement programs
35010 Control of districts; prescription and enforcement of rules
35172 Promotional activities
35204 Contract with attorney
17596 Limit on continuing contracts
386 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
44925 Part-time readers employed as independent contractors
45103 Classied service in districts not incorporating the merit system
45103.5 Contracts for food service consulting services
45134-45135 Employment of retired classied employee
45256 Merit system districts; classied service; positions established for professional experts on a temporary
basis
GOVERNMENT CODE
53060 Contract for special services and advice
Management Resources:
INTERNAL REVENUE SERVICE PUBLICATIONS
15-A Employer’s Supplemental Tax Guide
(1/85 9/88) 10/96
BP 3452
Student Activity Funds
***Note: Pursuant to Education Code 48930, the Governing Board may approve the formation of associated
student body organizations (ASBs), composed entirely of students. Generally, there are two types of ASBs. ASBs in
high schools and middle schools are called organized ASBs because the students, organizing their activities around
student clubs and/or a student council, have primary responsibility for the ASB, with the assistance of an adviser. In
elementary schools, the ASB is called unorganized because there is no student council and the principal or designee
usually oversees the fundraising and spending decisions, with more limited involvement from the students. ***
***Note: Unlike parent-teacher associations or other school-connected organizations, ASBs are legally considered part
of the district. See BP /AR 1230 - School-Connected Organizations. ***
***Note: e following optional policy may be modied to reect district practice. ***
e Governing Board recognizes that student organizations can provide students with an opportunity to
conduct worthwhile cocurricular activities beyond those provided by the district and can also help students
learn about eective nancial practices. To that end, student organizations may raise and spend funds to
support activities that promote the general welfare, morale, and educational experiences of the student body.
(cf. 3260 - Fees and Charges)
(cf. 5000 - Concepts and Roles)
(cf. 6145 - Extracurricular and Cocurricular Activities)
(cf. 6145.5 - Student Organizations and Equal Access)
Fundraising Events
***Note: Education Code 48932 requires the board to approve or disapprove a student organization’s fundraising
events and to determine whether such activities will interfere with the normal conduct of the schools. e
following paragraph provides for the board to delegate the review and approval of ASB fundraising events to the
superintendent or designee and should be modied to reect district practice. ***
***Note: Education Code 49431 and 49431.5 limit the number of fundraising events and types of food
that may be sold on school grounds, see BP/AR 3550 - Other Food Sales. For a list of activities that may be
prohibited on school grounds because of safety concerns, see AR 5142 - Safety. ***
Chapter 24
–
Appendices 387
At the beginning of each school year, each principal or designee shall submit to the Superintendent or
designee a list of the fundraising events that each student organization proposes to hold that year. e
Superintendent or designee shall review the proposed events and determine whether the events contribute to
the educational experience and whether they conict with or detract from the school’s educational program.
When reviewing proposed events, the Superintendent or designee shall consider the eects of the activities on
student health and safety, evaluate the risk of liability to the district, and ensure that the proposed activities
are in compliance with law, Board policy, and administrative regulation.
(cf. 1321 - Solicitation of Funds from and by Students)
(cf. 3530 - Risk Management/Insurance)
(cf. 3554 - Other Food Sales)
(cf. 5030 - Student Wellness)
(cf. 5142 - Safety)
(cf. 5143 - Insurance)
Management of Funds
***Note: Education Code 48937 requires the district to provide for the supervision of all funds raised by any student
body organization or student organization using the name of the school. e acceptable investment and use of such
funds are detailed in Education Code 48933, 48934, and 48936. e Fiscal Crisis & Management Assistance
Team (FCMAT) has developed the Associated Student Body Accounting Manual, Fraud Prevention Guide and
Desk Reference, available on its website, to outline the district’s scal and managerial responsibilities relative to
these funds. ***
Student body funds shall be managed in accordance with law and sound business procedures designed to
encourage the largest possible educational return to students without sacricing the security of funds.
e Superintendent or designee shall develop internal control procedures to safeguard the organization’s
assets, promote the success of fundraising ventures, provide reliable nancial information, and reduce the
risk of fraud and abuse. ese procedures shall detail the oversight of activities and funds including, but
not limited to, the appropriate role and provision of training for sta and students, parameters for events on
campus, appropriate and prohibited uses of funds, and accounting and record-keeping processes, including
procedures for handling questionable expenditures.
(cf. 3400 - Management of District Assets/Accounts)
e principal or designee shall be responsible for the proper conduct of all student organization nancial
activities. e budget adopted by the student body organization should serve as the nancial plan for the
school year and shall be submitted to the Superintendent or designee at the beginning of each school year.
e Superintendent or designee shall periodically review the organization’s use of funds to ensure compliance
with the district’s internal control procedures.
Funds derived from the student body shall be disbursed according to procedures established by the student
organization. All disbursements must be approved by a Board-designated ocial, the certicated employee
who is the student organization advisor, and a student organization representative. (Education Code 48933)
***Note: Because the ASB is an entity of the district, ASB funds are reviewed as part of the annual audit of the
district conducted pursuant to Education Code 41020, as specied below.***
e Board shall provide an annual audit of student accounts by a certied public accountant or licensed
public accountant. e cost of the audit shall be paid from district funds. (Education Code 41020)
(cf. 3460 - Financial Reports and Accountability)
388 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Legal Reference:
EDUCATION CODE
35182.5 Non-nutritious foods and beverages, vending machines
35564 Funds, obligation of the student body
41020 Requirement for annual audit
48930-48938 Student body organization
49431 Sale of food and beverages, elementary school
49431.5 Sale of food and beverages, middle and high schools
51520 School premise, prohibited solicitations
51521 Fundraising projects
CODE OF REGULATIONS, TITLE 5
15500 Food sales, elementary schools
15501 Food sales, middle and junior high schools
COURT DECISIONS
Prince v. Jacoby, (2002) 303 F.3d 1074
Management Resources:
FISCAL CRISIS MANAGEMENT & ASSISTANCE TEAM PUBLICATIONS
Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference, 2015
WEBSITES
California Department of Education: http://www.cde.ca.gov
Fiscal Crisis Management & Assistance Team: http://www.fcmat.org
(9/88) 7/07
BP 3400
Management of District Assets/Accounts
e Governing Board recognizes its duciary responsibility to eectively manage and safeguard the district’s
assets and resources in order to help achieve the district’s goals for student learning. e Superintendent or
designee shall establish and maintain an accurate, ecient nancial management system that enhances the
district’s ability to meet its scal obligations, produces reliable nancial reports, and complies with laws,
regulations, policies, and procedures. He/she shall ensure that the district’s accounting system provides
ongoing internal controls and meets generally accepted accounting standards.
(cf. 3000 - Concepts and Roles)
(cf. 3100 - Budget)
(cf. 3300 - Expenditures and Purchases)
(cf. 3312 - Contracts)
(cf. 3314 - Payment for Goods and Services)
(cf. 3460 - Financial Reports and Accountability)
Capital Assets
***Note: Statement #34 from the Governmental Accounting Standards Board (GASB), the national group
responsible for establishing accounting and nancial reporting standards for state and local governments, requires
that districts determine an appropriate capitalization threshold and identify and valuate capital assets. e
California Department of Education (CDE) recommends, for most districts, a capitalization threshold that includes
a unit acquisition cost criterion of at least $5,000, although a lower threshold may be necessary for small districts
and a higher threshold for larger districts. e following optional paragraph establishes a $5,000 capitalization
Chapter 24
–
Appendices 389
threshold consistent with the CDE’s recommendation. e district should revise the following paragraph if it has
established a dierent threshold. ***
e Superintendent or designee shall develop a system to accurately identify and value district assets in order
to help ensure nancial accountability and to minimize the risk of loss or misuse. District assets with a
useful life of more than one year and an initial acquisition cost of $5,000 or more shall be considered capital
assets. e Superintendent or designee shall determine the estimated useful life of each capital asset and shall
calculate and report the estimated loss of value or depreciation during each accounting period for all capital
assets.
(cf. 3440 - Inventories)
Internal Controls/Fraud Prevention
***Note: Internal controls are dened as safeguards that are in place to provide assurance regarding the eectiveness
and eciency of operations, reliability of nancial reporting, and compliance with applicable laws and regulations.
Internal controls are checks and balances to help prevent fraud, waste, and abuse. ***
***Note: e following section contains recommendations by auditors of internal control policies and procedures and
should be modied to reect district practice. ***
e Board expects Board members, employees, consultants, vendors, contractors, and other parties
maintaining a business relationship with the district to act with integrity and due diligence in dealings
involving the district’s assets and scal resources.
e Superintendent or designee shall develop internal controls that aid in the prevention and detection of
fraud, nancial impropriety, or irregularity within the district. ese internal controls may include, but are
not limited to, segregating employee duties relating to authorization, custody of assets, and recording or
reporting of transactions; providing detailed, written job descriptions explaining the segregation of functions;
adopting an integrated nancial system; conducting background checks on business oce employees; and
requiring continuing in-service training for business oce sta on the importance of fraud prevention.
All employees shall be alert for any indication of fraud, nancial impropriety, or irregularity within their
area of responsibility. Any employee who suspects fraud, impropriety, or irregularity shall immediately report
those suspicions to his/her immediate supervisor and/or the Superintendent or designee. In addition, the
Superintendent or designee shall establish a method for employees and outside persons to anonymously report
any suspected instances of fraud, impropriety, or irregularity.
(cf. 4119.1/4219.1/4319.1 - Civil and Legal Rights)
e Superintendent or designee shall have primary responsibility for any necessary investigations of suspected
fraud, impropriety, or irregularity, in coordination with legal counsel, the district’s auditors, law enforcement
agencies, or other governmental entities, as appropriate.
e Superintendent or designee shall provide regular reports to the Board on the status of the district’s
internal control procedures and recommend any necessary revisions to related Board policies or adminis-
trative regulations.
Legal Reference:
EDUCATION CODE
14500-14508 Financial and compliance audits
35035 Powers and duties of superintendent
35250 Duty to keep certain records and reports
390 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
41010-41023 Accounting regulations, budget controls and audits
42600-42604 Control of expenditures
42647 Drawing of warrants by district on county treasurer; form; reports, statements and other data
GOVERNMENT CODE
53995-53997 Obligation of contract
Management Resources:
CSBA PUBLICATIONS
Maximizing School Board Governance: Budget Planning and Adoption, 2006
Maximizing School Board Governance: Fiscal Accountability, 2006
School Finance CD-ROM, 2005
GOVERNMENTAL ACCOUNTING STANDARDS BOARD
Statement 34, Basic Financial Statements - and Management’s Discussion and Analysis - For State and Local
Governments, June 1999
WEBSITES
CSBA: http://www.csba.org
California Association of School Business Ocials: http://www.casbo.org
California Department of Education, School Finance: http://www.cde.ca.gov/fg
California State Controller’s Oce: http://www.sco.ca.gov
Fiscal Crisis & Management Assistance Team: http://www.fcmat.org
Governmental Accounting Standards Board: http://www.gasb.org
School Services of California: http://www.sscal.com
(7/01 7/03) 7/07
BP 3400
Other Food Sales
***Note: e following policy addresses food and beverage sales outside of the district’s food service/cafeteria program,
including the use of vending machines, student stores, and food sales on school premises by student and/or adult
organizations. For policy addressing sales by the food service/cafeteria program, see BP/AR 3550 - Food Service/
Child Nutrition Program. ***
***Note: All outside food sales are subject to state law regarding nutritional standards, time and location of the
sale, and other conditions; see the accompanying administrative regulation. In addition, pursuant to 7 CFR 210.11
and 220.12, districts participating in the National School Lunch Program (42 USC 1751-1769) and/or School
Breakfast Program (42 USC 1771-1791) are mandated to establish rules or regulations to control the sale of
food in competition with the breakfast or lunch program. e federal Child Nutrition and Women, Infants and
Children (WIC) Reauthorization Act of 2004 (42 USC 1758b) also mandates that each district participating in
the National School Lunch and/or Breakfast Program adopt a districtwide student wellness policy. See BP 5030 -
Student Wellness for language fullling the student wellness mandate. ***
e Governing Board believes that sales of foods and beverages at school during the school day should be
aligned with the district’s goals to promote student wellness. Any food sales conducted outside the district’s
food service program shall meet nutritional standards specied in law, Board policy, and administrative
regulation and shall not reduce student participation in the district’s food service program.
(cf. 3550 - Food Service/Child Nutrition Program)
(cf. 3551 - Food Service Operations/Cafeteria Fund)
(cf. 3553 - Free and Reduced Price Meals)
(cf. 5030 - Student Wellness)
(cf. 5141.27 - Food Allergies/Special Dietary Needs)
Chapter 24
–
Appendices 391
e Board authorizes the Superintendent or designee to approve the sale of foods and beverages outside the
district’s food service program, including sales by student or school-connected organizations, sales through
vending machines, and/or sales at secondary school student stores for fundraising purposes.
(cf. 1230 - School-Connected Organizations)
(cf. 1321 - Solicitations of Funds from and by Students)
When vending machines are sponsored by the district or a student or adult organization, the Superintendent
or designee shall determine how and where vending machines may be placed at school sites, district oces, or
other school facilities.
(cf. 3312 - Contracts)
Legal Reference:
EDUCATION CODE
35182.5 Contracts, non-nutritious beverages
48931 Authorization and sale of food
49430-49434 Pupil Nutrition, Health, and Achievement Act of 2001
51520 School premises; prohibited solicitations
CODE OF REGULATIONS, TITLE 5
15500 Food sales in elementary schools
15501 Sales in high schools and junior high schools
15575-15578 Requirements for foods and beverages outside the federal meals program
HEALTH AND SAFETY CODE
113700-114437 California Retail Food Code
UNITED STATES CODE, TITLE 42
1751-1769j National School Lunch Act, including:
1758b Local wellness policy
1771-1791 Child nutrition, School Breakfast Program
CODE OF FEDERAL REGULATIONS, TITLE 7
210.1-210.31 National School Lunch Program
220.1-220.21 National School Breakfast Program
Management Resources:
CSBA PUBLICATIONS
Nutrition Standards for Schools: Implications for Student Wellness, Policy Brief, rev. October 2007
Monitoring for Success: Student Wellness Policy Implementation Monitoring Report and Guide, 2007
Student Wellness: A Healthy Food and Physical Activity Policy Resource Guide, rev. April 2006
CALIFORNIA DEPARTMENT OF EDUCATION MANAGEMENT BULLETINS
06-110 Restrictions on Food and Beverage Sales Outside of the School Meal Program, August 2006
FISCAL CRISIS AND MANAGEMENT ASSISTANCE TEAM PUBLICATIONS
Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference, 2015
NATIONAL ASSOCIATION OF STATE BOARDS OF EDUCATION PUBLICATIONS
Fit, Healthy and Ready to Learn, 2000
WEB SITES
CSBA: http://www.csba.org
California Department of Education, Nutrition Services Division: http://www.cde.ca.gov/ls/nu
California Department of Public Health: http://www.cdph.ca.gov
California Healthy Kids Resource Center: http://www.californiahealthykids.org
California Project LEAN (Leaders Encouraging Activity and Nutrition): http://www.californiaprojectlean.org
Centers for Disease Control and Prevention: http://www.cdc.gov
Fiscal Crisis and Management Assistance Team: http://www.fcmat.org
National Association of State Boards of Education (NASBE): http://www.nasbe.org
Chapter 24
–
Appendices 393
Personnel
BP 4156.2
Awards And Recognition
***Note: e following policy addresses commendation of district employees and may be revised to reect district
practice. For policy addressing recognition of community members/organizations or students, see BP 1150 -
Commendations and Awards and BP/AR 5126 - Awards for Achievement. ***
e Governing Board values its instructional and noninstructional sta and desires to recognize their
outstanding service in order to increase employee morale and encourage creative and innovative performance.
(cf. 1150 - Commendations and Awards)
(cf. 5126 - Awards for Achievement)
***Note: Education Code 45460, as well as legislative resolutions, encourage recognition of employees on designated
days of signicance including the Day of the Teacher, Classied School Employee Week, and Week of the School
Administrator; see BP/AR 6115 - Ceremonies and Observances.***
e Board encourages recognition of all sta during days of signicance designated by the Board, state law,
or state resolution.
(cf. 6115 - Ceremonies and Observances)
***Note: If the governing board adopts a program to provide awards to individual employees for the reasons provided
below, Education Code 44015 mandates that the board rst adopt rules and regulations to implement the program.
e remainder of this policy may be revised to reect district practice. ***
e Board authorizes awards to individual employees who: (Education Code 44015)
1. Propose procedures or ideas that result in eliminating or reducing district expenditures or improving
district operations
2. Perform special acts or services in the public interest
3. By their superior accomplishments, make exceptional contributions to the eciency, economy, or other
improvement in district operations
As the district budget permits, the Superintendent or designee may recognize such employees by issuing
service pins, certicates, plaques, and/or other mementos. In addition, he/she may recommend employees to
the Board for recognition at a public Board meeting.
(cf. 3100 - Budget)
(cf. 3300 - Expenditures and Purchases)
e Superintendent or designee shall establish procedures for the selection of individual employees to receive
awards.
e Superintendent or designee may appoint one or more merit award committees consisting of Board
members, district employees, and/or private citizens to review employee contributions and recommend
awards.
Monetary awards to employees shall not exceed $200 unless expressly approved by the Board. (Education
Code 44015)
(cf. 1220 - Citizen Advisory Committees)
394 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
(cf. 9140 - Board Representatives)
Legal Reference:
EDUCATION CODE
35160 Authority of governing boards
35160.1 Broad authority of school districts
35161 Powers and duties generally
44015 Awards to employees
45460 Classied School Employee Week
Management Resources:
CSBA PUBLICATIONS
Maximizing School Board Governance: e Board’s Relationship to District Sta, 2008
WEBSITES
CSBA: http://www.csba.org
Fiscal Crisis and Management Assistance Team: http://www.fcmat.org
(1/85 12/91) 7/10
Chapter 24
–
Appendices 395
Students
BP 5126
Awards For Achievement
e Governing Board encourages excellence as a goal for all students and wishes to publicly recognize
students for exemplary achievement in academic, athletic, extracurricular, or community service activities.
(cf. 5121 - Grades/Evaluation of Student Achievement)
(cf. 5127 - Graduation Ceremonies and Activities)
(cf. 6142.4 - Service Learning/Community Service Classes)
District/School Awards
***Note: Education Code 44015 authorizes the Governing Board to give district-level awards to students for
excellence and mandates that the district adopt rules and regulations implementing any such awards program. See
the accompanying administrative regulation for language implementing this mandate. ***
Student awards may include verbal recognition, a letter, a certicate, a Board resolution, public ceremony,
trophy, gift, plaque, or cash gift.
e Superintendent or designee shall develop criteria for the selection of student award recipients.
Golden State Seal Merit Diploma
***Note: e following optional section is for use by districts that maintain high schools. Education Code 51450-
51455 establish the Golden State Seal Merit Diploma, which may be awarded by the Superintendent of Public
Instruction (SPI) and the State Board of Education to students identied by the district as demonstrating mastery of
the high school core curriculum. See the accompanying administrative regulation for eligibility criteria. ***
At graduation from high school, special recognition shall be awarded to those students whose academic
achievements in core curriculum areas have been outstanding.
e Superintendent or designee shall identify high school students who have demonstrated mastery of the
high school curriculum qualifying them for the Golden State Seal Merit Diploma. (Education Code 51454)
(cf. 6162.51 - State Academic Achievement Tests)
Biliteracy Award
***Note: e following optional paragraph is for use by districts maintaining one or more high schools. Education
Code 51460-51464, as added by AB 815 (Ch. 618, Statutes of 2011), establish the State Seal of Biliteracy, a
voluntary program that recognizes high school graduates who have attained a high level of prociency in one or more
languages in addition to English. e SPI will provide an insignia that can be axed to the diploma or transcript of
eligible students. See the accompanying administrative regulation for eligibility criteria for the award. Districts that
choose to adopt their own criteria and present a district-level biliteracy award may revise the following paragraph
accordingly. ***
e district shall present the State Seal of Biliteracy to each graduating high school student who has attained
a high level of prociency in speaking, reading, and writing in one or more languages in addition to English.
(Education Code 51460-51464)
(cf. 6142.2 - World/Foreign Language Instruction)
(cf. 6174 - Education for English Language Learners)
396 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
***Note: e following optional paragraph is for use by districts that choose to present biliteracy awards at other
grade levels and should be revised to reect district practice. Californians Together, a statewide coalition working to
enhance the success of English learners, recommends issuing local “pathway awards” recognizing benchmarks toward
biliteracy at preschool, grade 3, end of elementary school, and end of middle school. ***
In order to arm the value of bilingualism and encourage students’ enrollment in world language programs,
the Superintendent or designee may present awards at appropriate grade levels to recognize the pursuit and/or
attainment of grade-level prociency in one or more languages in addition to English.
Scholarship and Loan Fund
***Note: e following section is optional. Education Code 35310-35319 authorize the Board to establish and
maintain a scholarship and loan fund. If the district chooses to establish such a fund, it should revise the following
paragraph to reect only those purposes for which it wishes to make money available. ***
e Board shall establish and maintain a scholarship and loan fund which may be used to provide interest-
free loans for educational advancement, scholarship, or grants-in-aid to bona de organizations, students, or
graduates of district schools. (Education Code 35310, 35315)
(cf. 1260 - Educational Foundation)
(cf. 3290 - Gifts, Grants and Bequests)
Legal Reference:
EDUCATION CODE
220 Nondiscrimination
35160 Authority of governing boards
35310-35319 Scholarship and loan funds
44015 Awards to employees and students
51243-51245 Credit for private school foreign language instruction
51450-51455 Golden State Seal Merit Diploma
51460-51464 State Seal of Biliteracy
52164.1 Assessment of English language skills of English learners
CODE OF REGULATIONS, TITLE 5
876 Golden State Seal Merit Diploma
1632 Credit for private school foreign language instruction
11510-11516 California English Language Development Test
Management Resources:
WEBSITES
CSBA: http://www csba.org
California Department of Education: http://www.cde.ca.gov
Californians Together: http://www.californianstogether.org
(7/04 3/09) 3/12
Chapter 24
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Appendices 397
Sample Administrative Regulations
Community Relations
AR 1230
School-Connected Organizations
***Note: e following optional administrative regulation should be modied to reect district practice. Items #
1-10 below are based on internal control procedures developed by the Fiscal Crisis and Management Assistance
Team (FCMAT) for booster clubs, foundations, and other parent-teacher associations. However, districts may
consider establishing dierent procedures for dierent types of entities, depending on the entity’s scal controls and
organizational structure. For example, local units of the PTA that are chartered by the state PTA are subject to the
internal nancial policies and bylaws of the statewide PTA; therefore a dierent level of district oversight may be
sucient. ***
Persons proposing to establish a school-connected organization shall submit a request to the Governing Board
for authorization to operate at the school. e request for authorization shall contain:
1. e name and purpose of the organization
2. e date of application
3. Bylaws, rules, and procedures under which the organization will operate, including procedures for
maintaining the organization’s nances, membership qualications, if any, and an agreement that the
group will not engage in unlawful discrimination
4. e names, addresses, and phone numbers of all ocers
5. A list of specic objectives
6. An agreement to grant the district the right to audit the group’s nancial records at any time, either by
district personnel or a certied public accountant
7. e name of the bank where the organization’s account will be located and the names of those
authorized to withdraw funds
8. e signature of the principal of the supporting school
9. Planned use for any money remaining at the end of the year if the organization is not continued or
authorized to continue in the future
***Note: Education Code 38134 requires school-connected organizations to insure against any liability resulting
from the organization’s negligence during an organization-sponsored event on school facilities. See BP/AR 1330 -
Use of School Facilities. ***
10. An agreement to provide evidence of liability insurance as required by law
(cf. 1330 - Use of School Facilities)
***Note: e following optional paragraph requires an organization to request renewal of the authorization from the
superintendent or designee annually. Districts that allow for an automatic renewal or that require approval from the
board should modify the following paragraph accordingly. ***
Requests for subsequent authorization shall be presented to the Superintendent or designee annually, along
with a nancial statement showing all income and expenditures from fundraisers. If the Superintendent or
398 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
designee proposes to deny the request for reauthorization, he/she shall present his/her recommendation to the
Board for approval.
***Note: e following paragraph should be modied to reect district practice. ***
Upon consent of the Superintendent or designee, school-connected organizations may use the school’s name,
school team’s name, or any logo attributable to the school or district.
School-connected organizations are prohibited from hiring or directly paying district employees.
Organizations may make donations to the district to cover the costs of additional employees, but only if such
positions are approved in advance by the Board. At their discretion, employees may volunteer to perform
activities for school-connected organizations during non-working hours.
(cf. 4127/4227/4327 - Temporary Athletic Team Coaches)
(9/90 12/90) 7/07
AR 1321
Solicitation of Funds From and By Students
**Note: e following regulation is optional and should be revised to reect district practice. ***
e Superintendent or designee shall approve all fundraising activities at least 15 days before the activity.
If the event involves a contract with a commercial vendor, the Superintendent or designee shall review the
contract.
In order to minimize interruptions to the educational program, sta shall limit fundraising activities to
appropriate time periods designated by the principal.
(cf. 6116 - Classroom Interruptions)
No student shall be required to raise a specied amount of money in order to participate in an activity
sponsored by a school-related organization.
(cf. 1230 - School-Connected Organizations)
Students engaged in fundraising activities on behalf of the school or for school-related projects are expected
to be courteous and respectful towards all individuals and businesses.
Door-to-Door Sales
***Note: e following section is optional and should be deleted by districts that do not allow students to engage in
door-to-door sales. Items 1-4 below detail the requirements for students participating in such sales as specied in 8
CCR 11706. ***
Students under 16 years old may engage in door-to-door sales of newspaper or magazine subscriptions, candy,
cookies, owers or other merchandise only under the following conditions:
1. e students shall work in pairs, as a team, on the same or opposite side of the street. (8 CCR 11706)
2. e students shall be supervised by an adult, with one adult for every crew of 10 or fewer students. (8
CCR 11706)
Chapter 24
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Appendices 399
3. e students must be within the sight or sound of their adult supervisor at least once every 15 minutes.
(8 CCR 11706)
4. e students shall be returned to their respective homes or meeting places after each day’s work. (8
CCR 11706)
***Note: Optional items #5-7 below should be revised to reect district practice. ***
5. e students shall not engage in door-to-door sales after dark.
6. e students shall not work outside of their immediate neighborhood.
7. Students in grades _______ shall not be involved in any door-to-door sales or solicitations.
(9/87 9/90) 7/03
400 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Business and Noninstructional Operations
AR 3400
Management of District Assets/Accounts
Accounts
e district’s accounting system shall fully comply with the denitions, instructions and procedures set forth
in the California Department of Education School Accounting Manual. (Education Code 41010)
e Superintendent or designee shall ensure that funds are encumbered in the district accounting records
immediately after an expenditure is committed for subsequent payment.
(cf. 3110 - Transfer of Funds)
Fraud Prevention and Investigation
***Note: e following optional section may be revised to reect district practice and denitions. ***
Fraud, nancial improprieties or irregularities include but are not limited to:
1. Forgery or unauthorized alteration of any document or account belonging to the district
2. Forgery or unauthorized alteration of a check, bank draft or any other nancial document
3. Misappropriation of funds, securities, supplies or other assets
4. Impropriety in the handling of money or reporting of nancial transactions
5. Proteering as a result of insider knowledge of district information or activities
6. Disclosing condential and/or proprietary information to outside parties
(cf. 4119.23/4219.23/4319.23 - Unauthorized Release of Condential/Privileged Information)
7. Disclosing investment activities engaged in or contemplated by the district
(cf. 3430 - Investing)
8. Accepting or seeking anything of material value from contractors, vendors or persons providing
services or materials to the district
9. Destroying, removing or inappropriately using records, furniture, xtures or equipment
10. Failing to provide nancial records to authorized state or local entities
11. Any other dishonest or fraudulent act
e Superintendent or designee shall investigate reports of fraudulent activity in a manner that protects the
condentiality of the parties and the facts. All employees involved in the investigation shall be advised to
keep information about the investigation condential.
If an investigation substantiates the occurrence of a fraudulent activity, the Superintendent or designee shall
issue a report to appropriate personnel and to the Governing Board. e nal disposition of the matter
and any decision to le a criminal complaint or refer the matter to the appropriate law enforcement and/or
regulatory agency for independent investigation shall be made in consultation with legal counsel. e result
Chapter 24
–
Appendices 401
of the investigation shall not be disclosed to or discussed with anyone other than those individuals with a
legitimate need to know.
(cf. 4112.6/4212.6/4312.6 - Personnel Files)
(cf. 4119.1/4219.1/4319.1 - Civil and Legal Rights)
(10/93 6/95) 7/03
AR 3554
Other Food Sales
Requirements for Schools Not Participating in Federal Meal Program
***Note: e following section is for use by districts that have one or more schools that do not participate in the
National School Lunch and/or Breakfast Program (42 USC 1751-1769j, 1773). Requirements for other schools are
described below in the section titled Requirements for Schools Participating in Federal Meal Program.***
***Note: Food sales outside the district’s food service program that occur on school premises during the school day are
subject to the nutrition standards specied in Education Code 49431-49431.7, as amended by AB 626 (Ch. 706,
Statutes of 2013). ese include nutrition standards for foods in elementary schools (Education Code 49431) and
middle and high schools (Education Code 49431.2) and for beverages in all schools (Education Code 49431.5),
as well as a prohibition against the sale of foods containing articial trans fat at any grade level (Education Code
49431.7). See AR 3550 - Food Service/Child Nutrition Program for further information regarding nutrition
standards. ***
Food and beverage sales outside the district’s food service program shall comply with applicable nutritional
standards specied in Education Code 49431-49431.7 and 5 CCR 15500-15501 and 15575-15578.
(cf. 3550 - Food Service/Child Nutrition Program)
(cf. 5030 - Student Wellness)
(cf. 5141.27 - Food Allergies/Special Dietary Needs)
***Note: Pursuant to Education Code 49431-49431.5, foods and beverages that do not comply with state nutrition
standards may be sold outside of the district’s food services program under certain conditions. As amended by AB 626
(Ch. 706, Statutes of 2013), Education Code 49431-49431.5 provide that the same requirements apply to sales
of both foods and beverages and to all grade levels. AB 626 also amended Education Code 49431 and 49431.5 to
eliminate the requirement that sales of noncompliant foods and beverages in elementary schools only be allowed if the
items are sold by students of the school.***
e sale of foods or beverages that do not comply with the standards in Education Code 49431-49431.5 may
be permitted in either of the following circumstances: (Education Code 49431-49431.5)
1. e sale takes place o and away from school premises.
2. e sale takes place on school premises at least one-half hour after the end of the school day.
(cf. 1230 - School-Connected Organizations)
(cf. 1321 - Solicitations of Funds from and by Students)
(cf. 6145 - Extracurricular and Cocurricular Activities)
402 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Requirements for Schools Participating in Federal Meal Program
***Note: e following section is for use by districts that have one or more schools participating in the National
School Lunch and/or Breakfast Program (42 USC 1751-1769j, 1773). 7 CFR 210.11 and 220.12 mandate that
such districts adopt rules and regulations to ensure compliance with federal requirements for competitive foods. ***
***Note: Pursuant to 42 USC 1779, the U.S. Secretary of Agriculture has established nutrition standards which are
consistent with the most recent Dietary Guidelines for Americans and apply to all foods sold outside the school meal
programs on school campuses at any time during the school day. ese standards are contained in 7 CFR 210.11
and 220.12, as amended by 78 Fed. Reg. 125, and were required to be implemented by July 1, 2014. ***
***Note: Note that, in some instances, state nutrition standards (Education Code 49431-49431.7) may be stricter
than federal standards. In such cases, the stricter standard prevails. In addition, although 7 CFR 210.11 and
220.12 allow states to adopt criteria for special exemptions from nutrition standard compliance for infrequent
school-sponsored fundraisers, the California Department of Education (CDE) provides no exemption. us, all
infrequent school-sponsored fundraisers are subject to the same rules as other outside food sales. ***
For any district school participating in the National School Lunch and/or Breakfast Program, food and
beverage sales conducted outside the district’s food service program on school campuses during the school
day shall comply with applicable nutritional standards specied in 7 CFR 210.11 and 220.12 or with state
nutrition standards in Education Code 49431-49431.7 and 5 CCR 15500-15501 and 15575-15578, whichever
rule is stricter.
***Note: As amended by 78 Fed. Reg. 125, 7 CFR 210.11 adds the following denition of “school day” for purposes
of the regulations governing competitive food and beverage sales. ***
ese standards shall apply to all competitive foods and beverages sold from midnight before the school day
to one-half hour after the end of the school day. (7 CFR 210.11)
***Note: e remainder of this section reects 5 CCR 15500-15501 pertaining to sales by student organizations in
schools that participate in a federal meal program, but delegates to the Superintendent or designee the responsibility
for approval of the specic food item to be sold; see the accompanying Board policy.***
***Note: To the extent that any Title 5 requirement conicts with the nutrition standards specied in Education
Code 49431-49431.7 or federal law, the stricter standard prevails. us, although 5 CCR 15500 provides that a
student organization may only sell a dessert-type item, such as a pastry, ice cream, or fruit, stricter state and federal
nutrition standards supersede and so this provision is not shown in the list below. ***
***Note: Items #1-6 below are for use by districts that maintain any of grades K-8. ***
In a school with any of grades K-8 that is participating in the National School Lunch and/or Breakfast
Program, the Superintendent or designee shall not permit the sale of foods by a student organization except
when all of the following conditions are met: (5 CCR 15500)
1. e student organization sells only one food item per sale.
2. e specic nutritious food item is approved by the Superintendent or designee in accordance with
Board policy.
3. e sale does not begin until after the close of the regularly scheduled midday food service period.
4. e sale during the regular school day is not of food items prepared on the premises.
5. ere are no more than four such sales per year per school.
6. e food sold is not one sold in the district’s food service program at that school during that school day.
Chapter 24
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Appendices 403
***Note: Items #1-4 below are for use by districts that maintain middle schools or high schools.***
In any middle or high school, a student organization may be approved to sell food items during or after the
school day if all of the following conditions are met: (5 CCR 15501)
1. Only one student organization conducts a food sale on a given school day and the organization sells
no more than three types of food or beverage items, except that up to four days during the school year
may be designated on which any number of organizations may conduct the sale of any food items.
2. e specic nutritious food items are approved by the Superintendent or designee in accordance with
Board policy.
3. Food items sold during the regular school day are not prepared on the premises.
4. e food items sold are not those sold in the district’s food service program at that school during that
school day.
***Note: 7 CFR 210.11, as amended by 78 Fed. Reg. 125, requires the district to maintain specied records. ***
e Superintendent or designee shall maintain records, and shall require organizations selling foods and
beverages to maintain records, to document compliance with federal nutrition standards for all competitive
foods and beverages sold through and outside the district’s food services program. At a minimum, these
records shall include receipts, nutrition labels, and/or product specications. (7 CFR 210.11)
(11/05 11/07) 12/13
404 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Students
AR 5126
Awards For Achievement
District/School Awards
***Note: Education Code 44015 authorizes the governing board to give district-level awards to students for
excellence. Before any awards are given under the authority of this law, the board is mandated to adopt rules and
regulations implementing the awards program. e following section should be revised to reect any such rules and
regulations adopted by the district. ***
e Superintendent or designee may appoint an awards committee at each school which may consist of
school administrators, teachers, parents/guardians, community members, and student representatives. e
committee shall submit recommendations for student awards to the Superintendent or designee for approval.
(cf. 1220 - Citizen Advisory Committees)
Individual awards in excess of $200 must be expressly approved by the Governing Board. (Education Code
44015)
Golden State Seal Merit Diploma
***Note: e following optional section is for use by districts that maintain high schools. Education Code 51450-
51455 establish the Golden State Seal Merit Diploma, which may be awarded by the Superintendent of Public
Instruction (SPI) and the State Board of Education (SBE) to students identied by the district as demonstrating
mastery of the high school curriculum according to the following criteria. ***
***Note: Education Code 51452 requires the SBE to determine the means, performance standards, and achievement
levels that demonstrate mastery of the curriculum. Eligibility criteria are published on the California Department of
Education (CDE) website. ***
To be eligible to receive the Golden State Seal Merit Diploma upon high school graduation, a student shall
complete all requirements for a high school diploma and demonstrate, in accordance with the means adopted
by the State Board of Education, mastery of the curriculum in at least six subject areas, four of which shall
be mathematics, English language arts, science, and United States history, with the remaining two subject
matter areas selected by the student. (Education Code 51451, 51452; 5 CCR 876)
(cf. 6143 - Courses of Study)
(cf. 6146.1 - High School Graduation Requirements)
(cf. 6146.11 - Alternative Credits Toward Graduation)
(cf. 6162.52 - High School Exit Examination)
***Note: Items #1-5 below reect the means adopted by the SBE for students to demonstrate mastery of the
curriculum for purposes of awarding the Golden State Seal Merit Diploma. ***
To demonstrate mastery of these subject areas, the student shall earn a scaled score of 370 or above on six
separate high school California Standards Tests (CST), including:
1. One mathematics exam, including Algebra II, Geometry, Summative High School Mathematics, or
Integrated Mathematics 2 or 3
2. One English language arts exam at grade 9, 10, or 11
Chapter 24
–
Appendices 405
3. One science exam, including Biology, Chemistry, Physics, Earth Science, or Integrated/Coordinated
Science 1, 2, 3, or 4
4. e grade 11 History-Social Science exam (United States history)
5. Two CSTs of the student’s choice, which may include World History or any additional exams listed in
items #1-4 above which have not already been used to establish eligibility
(cf. 6162.51 - State Academic Achievement Tests)
e Superintendent or designee shall maintain appropriate records to identify students who are eligible for
the merit diploma and shall ax an insignia to the diploma and transcript of each student awarded the merit
diploma. (Education Code 51454)
(cf. 5125 - Student Records)
***Note: e CDE requires each district to annually submit one districtwide insignia request on a form provided
by the CDE. e CDE’s website encourages districts to submit the request far enough in advance of the graduation
ceremony date to allow sucient time for processing by the CDE and for district sta to place the insignias on the
diplomas. e CDE begins mailing requested insignias the rst week of April. ***
e Superintendent or designee shall submit an insignia request form to the California Department of
Education in sucient time to allow processing of the request prior to the high school graduation ceremony.
Biliteracy Award
***Note: e following optional section is for use by districts that maintain high schools and choose to recognize
graduating students’ bilingual/multilingual prociency with the State Seal of Biliteracy pursuant to Education Code
51460-51464, as added by AB 815 (Ch. 618, Statutes of 2011); see the accompanying board policy. Districts that
choose to present district-level biliteracy awards to students at other grade levels may revise the following section to
add eligibility criteria for those awards. ***
To be eligible to receive the State Seal of Biliteracy upon graduation, a student shall meet all the following
criteria: (Education Code 51461)
1. Complete all English language arts requirements for high school graduation with an overall grade point
average (GPA) of 2.0 or above in those classes
2. Pass the CST in English language arts administered in grade 11 at the procient level or above
3. Demonstrate prociency in one or more foreign languages, which may include American sign
language, by fullling one of the following criteria:
***Note: Education Code 51461, as added by AB 815 (Ch. 618, Statutes of 2011), authorizes the SPI to provide
a list of equivalent summative tests that districts may use in place of an Advanced Placement examination for the
purpose described below when an Advanced Placement examination is not available in a particular language. ***
a. Pass a foreign language Advanced Placement examination with a score of 3 or higher or an
International Baccalaureate examination with a score of 4 or higher
(cf. 6141.5 - Advanced Placement)
***Note: Pursuant to Education Code 51243-51245 and 5 CCR 1632, districts are required to grant credit toward
high school graduation for foreign language studies completed in a private school; see BP/AR 6146.11 - Alternative
Credits Toward Graduation. ***
406 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
b. Successfully complete a four-year high school course of study in a foreign language, attaining an
overall GPA of 3.0 or above in that course of study.
(cf. 6142.2 - World/Foreign Language Instruction)
***Note: Pursuant to Education Code 51461, when an Advanced Placement or o-the-shelf language test does
not exist in a particular language, the district may develop a foreign language test for the purpose of determining
eligibility for the State Seal of Biliteracy, provided the district certies to the SPI that the exam meets the rigor of a
four-year high school course of study in that language. When an Advanced Placement or o-the-shelf test is available,
the district may only oer a district-developed foreign language test if it rst receives approval from the SPI. ***
c. Pass a district language examination that meets the rigor of a four-year high school course of study
in that language, provided the test has been certied to or approved by the Superintendent of
Public Instruction.
d. Pass the SAT II foreign language examination with a score of 600 or higher.
In addition to meeting the criteria in items #1-3 above, a student in any of grades 9-12 whose primary
language is other than English shall attain the early advanced prociency level or higher on the California
English Language Development Test (CELDT). As necessary for this purpose, the district may administer
the CELDT an additional time outside of the regularly scheduled administration specied in AR 6174 -
Education for English Language Learners. (Education Code 51461)
(cf. 6174 - Education for English Language Learners)
***Note: e CDE requires each district to submit one districtwide insignia request on a form provided by the CDE.
e CDE begins mailing requested insignias the rst week of April. ***
e Superintendent or designee shall maintain appropriate records to identify high school students who
qualify for the award and shall ax the insignia to the diploma or transcript of each student who earns the
award. (Education Code 51463)
Scholarship and Loan Fund
***Note: e following section is for use by any district whose board has established a scholarship and loan fund
pursuant to Education Code 35310-35319; see the accompanying board policy. Pursuant to Education Code
35310, districts maintaining this fund are mandated to develop rules and regulations specifying the terms of oce
and method of selection of the committee appointed to administer the fund. e following section should be revised
to reect district practice. Districts that have not established such a program should delete this section. ***
e district’s scholarship and loan fund shall be administered by a district committee composed of Board
members, the Superintendent, and such other community, teacher, administrative, and/or student representa-
tives as determined by the Board. (Education Code 35310)
Members of this committee shall be appointed by the Board and shall serve two-year terms.
e Superintendent shall serve as chairperson of the committee and chief executive ocer of the fund. e
committee shall meet at least once each scal year and at other such times as it may be called into session by
the Superintendent. (Education Code 35311, 35312)
Scholarship and loan funds shall be deposited, administered, and audited in accordance with Education
Code 35314 and 35318.
(cf. 3400 - Management of District Assets/Accounts)
(cf. 3460 - Financial Reports and Accountability)
Chapter 24
–
Appendices 407
e committee may accept gifts, donations, and bequests made for the purposes of the fund. e committee
also may prescribe conditions or restrictions on these gifts and bequests. e committee shall review any
conditions imposed by the donor and make a recommendation to the Board as to the compatibility of such
conditions with the intent and purpose of the fund. e Board may prohibit the committee from accepting
any donation under conditions it nds incompatible with the fund’s intents and purposes. (Education Code
35313)
(cf. 1260 - Educational Foundation)
(cf. 3290 - Gifts, Grants and Bequests)
***Note: Education Code 35316 mandates that districts maintaining this fund adopt regulations governing
applications, provided such regulations do not limit student eligibility based on any conditions listed in Education
Code 220; see BP 0410 - Nondiscrimination in District Activities and Programs. e following paragraph may be
expanded to describe the district’s application procedures. ***
e Superintendent or designee shall establish criteria, procedures, and deadlines for student applications for
scholarships and/or loans from the fund. As applicable, he/she may require the student to submit letters of
recommendation or other supplementary materials providing evidence of the student’s accomplishments and/
or need.
(cf. 0410 - Nondiscrimination in District Activities and Programs)
e Superintendent or designee shall report to the Board at least annually regarding the status and activity of
the fund. (Education Code 35319)
Notications
***Note: e following optional section may be revised to reect programs oered by the district. ***
e Superintendent or designee shall annually distribute information about eligibility requirements for the
Golden State Seal Merit Diploma, State Seal of Biliteracy, and/or any district awards programs to students at
the applicable grade levels.
(7/04 3/09) 3/12
Student Activity Funds
e collection, disbursement and recording of transactions pertaining to student activity funds shall be
performed in accordance with the Fiscal Crisis & Management Assistance Team’s (FCMAT’s) Associated
Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference.
In addition, no contracts shall be entered into by any clubs or students of the associated student body
organization without prior review and approval of the administrators listed as approved contract signers in
the district’s board policy, including the superintendent and the associate superintendent, business services/
chief business ocial.
All applicable laws, regulations, and codes pertaining to the purchase of goods and services, bids, and
quotations for general funds of the district apply to the commitment and disbursement of associated student
body funds.
(07/82, 10/96, 1212, 3/15)
408 Associated Student Body Accounting Manual, Fraud Prevention Guide and Desk Reference
Chapter 25
–
Frequently Asked Questions 409
Chapter 25
Chapter 25 – FCMAT Online Frequently Asked Questions Archive
and Help Desk
FCMAT has answered many ASB-related questions through the years at its online help desk (http://fcmat.
org/helpdesklandingpage/), and answers to many of the most frequently asked question are in a searchable
archive that we encourage users to consult before submitting a question to the help desk. e frequently
asked questions page can be accessed from the main help desk page, or directly at https://servicedesk.csis.k12.
ca.us/footprints/fcmat_kb.html.
FCMAT’s frequently asked questions (FAQs) are intended to be a guide. Each person using these FAQs
should check with the local district business sta and auditors to be certain that the answers provided
complement the local district policy and practice.
FCMAT’s help desk is designed to provide guidance related to school business and operations in California.
Responses are intended to share the expertise of our oce and are not intended as legal advice. If a matter
involves interpretation of laws, regulations or court precedent, or otherwise calls for legal advice, consult legal
counsel before acting on the resulting guidance.
