Microsoft Word - School Support Organizations Manual-updated contacts Jul2013.doc

MODEL FINANCIAL POLICY FOR

SCHOOL SUPPORT ORGANIZATIONS

(PROCEDURES MANUAL)

IVISION OF LOCAL GOVERNMENT AUDIT

UNE 2008

(CONTACT INFORMATION AND LINKS UPDATED AS OF JULY 2013)

Preface

Public Chapter 326, amending Tennessee Code Annotated, Title 49, Chapter 2, requires that

school support organizations “adopt and maintain a written policy which specifies reasonable

procedures for accounting, controlling and safeguarding any money, materials, property or

securities collected or disbursed by it.” The statute further authorizes the comptroller of the

treasury to prepare such a model financial policy for the school support organizations.

The “Model Financial Policy for School Support Organizations” fulfills this responsibility. It is

intended to provide minimum internal controls to assist members and officers in improving

accountability over school support organization funds. In addition, it provides recommendations

for procedures that are considered a supplement to the required minimum procedures. The

manual also includes basic contact information as well as some sample forms.

Model Financial Policy for School Support Organizations

Required controls

1. To comply with the statute, the organization must register (incorporate as a nonprofit) with

the Secretary of State’s office.

2. The organization must annually: confirm its status as a nonprofit; describe its goals and

objectives; and provide the address, telephone number and position of each officer of the

organization to the director of schools or the director’s designee. (Refer to sample reports.)

3. Organizations must not use the school’s Employer Identification Number or sales tax

exemption for any purpose.

4. The identity of the authorized banking institution, authorized bank account(s), and

authorized signatories should be included in the minutes.

5. The name on any bank account, security, or other investment should be that of the

incorporated support organization.

6. The titled owner to any property (vehicle, computer, land, etc.) should be the incorporated

support organization.

7. Materials, supplies, and fundraising product inventory should be stored at a location and in

a manner to prevent spoilage or pilfering. An effort should be made to account for supply

and inventory items.

8. All bills should be paid by check, never cash. Presigning blank checks should be

prohibited.

9. For disbursements, prenumbered bank checks should be used that require two signatures.

10. Each check written should have a receipt or invoice filed by check number. The treasurer

should write the check number and date paid on the invoice or receipt. When a receipt or

invoice is not available, a written document, signed by the treasurer, describing the

expenditure and explaining why no other documentation is provided, should be created and

filed.

11. A receipt should be issued any time, and at the time, cash is turned over to or collected by

the treasurer acting in his/her official capacity as treasurer of the school support

organization. The receipts should be prenumbered and kept in a bound book. One copy

should be maintained in the receipt book.

12. For certain events or mass collections (e.g., concession, parking, car wash, candy sale), a

record of the total collections each day must be created. Two individuals should count the

collections and prepare a count sheet, signed by both counters. When the collections are

turned over to the treasurer, he/she and the individuals should recount the collections. The

treasurer should then immediately issue a receipt to the individuals. The count sheet should

be filed by the treasurer.

13. When a school support organization operates a concession stand or parking at a related

school academic, arts, athletic, or social event on school property, the support organization

must provide the school with all relevant collection records required by the Internal School

Uniform Accounting Policy Manual. (Refer to Sections 4 and 5 of the manual available

online at https//comptroller.tn.gov/office-functions/la/resources/manuals.html.)

14. Collections should be deposited in the bank in a timely manner. Deposit slips should

include an itemized listing of checks.

15. The treasurer should provide a signed summary of collections and disbursements to

organization officers on a monthly basis. (Refer to sample reports.)

16. Bank accounts should be reconciled promptly. A copy of the bank statement and imaged

checks should be included in the minutes.

17. All collection records, bank statements, canceled checks and invoices, along with copies of

the monthly treasurer’s report, should be organized and maintained by the treasurer by

fiscal year. Records should be maintained for at least four years.

18. The organization should maintain documentation of any written conditions on any

donations to the board of education or the school. Pursuant to state law, the school board or

school must, in good faith, disburse the funds in accordance with those conditions.

19. The organization should contact the Comptroller of the Treasury, Division of Local

Government Audit, at (615) 401-7841 if fraud is suspected.

Other recommendations

1. Schools’ and support organizations’ sales and use tax exemption does not exempt them

from taxes due on items purchased for resale. To avoid liabilities for sales tax due to the

state and any related penalties, the organization should comply with state sales tax statutes

(Section 67-6-102, Tennessee Code Annotated) by remitting sales tax to the vendor or use

tax to the Tennessee Department of Revenue for applicable purchases of products intended

for resale.

2. Financial responsibilities should be separated whenever possible. One person should not

have complete control of the organization’s finances. Periodic review of bank statements

and other documentation by other officers or members helps detect errors and enhances the

integrity of financial information.

3. Systematic analysis of fundraising events should be performed whenever possible to help

identify the most successful events.

4. To assist in the transition for incoming treasurers, a treasurer’s manual (simply a checklist

of monthly and annual duties) should be prepared.

5. Designate a support organization officer as custodian of records. This officer would

maintain the financial and other entity records in an organized manner and protect them

from damage. The records would be turned over to the subsequently elected and designated

officer.

6. To provide an independent review of the organization’s records and financial activity, the

organization should form a financial review committee or designate a member as financial

reviewer. (Refer to sample reports.) That role could also function to ensure compliance

with Internal Revenue Service, nonprofit, or other state laws and regulations. The treasurer

should not serve on the financial review committee or be designated the financial reviewer.

Contact Information

Comptroller of the Treasury

Division of Local Government Audit Suite 1500

James K. Polk State Office Building Nashville, TN

37243-1402

Phone: 615-401-7841

https://www.comptroller.tn.gov/office-functions/la.html

Fraud Waste and Abuse Hotline

1-800-232-5454

Tennessee Secretary of State

Information related to obtaining nonprofit status from the State of Tennessee

Division of Business Services

312 Rosa L. Parks Avenue

Snodgrass Tower, 6th Floor

Nashville, TN 37243

Phone: (615) 741-2286

https://sos.tn.gov/business-services/non-profit-corporations

Tennessee Department of Revenue

Information related to obtaining state sales and use tax exemption

Statewide toll-free: (800) 342-1003

Nashville and out-of-state: (615) 253-0600

https://www.tn.gov/revenue

Internal Revenue Service

Application for Employer Identification Number

Information related to obtaining 501 (federal) tax exempt status

http://www.irs.gov/Charities-&-Non-Profits/Charitable-Organizations

www.irs.gov/pub/irs-pdf/p557.pdf

Support Organization Annual (or Monthly) Financial Report

School Year (or Month) Ending _________

Organization Name _____________________________________________________________

President _________________________________ Phone Number_______________________

Treasurer_________________________________ Phone Number_______________________

1. Objectives and activities completed by the organization:

________________________________________________________________________

2. Money in account at the beginning of the school year (or month): $__________________

3. Money raised during the school year (or month) (by activity or fundraiser):

A. _____________________________________ $_______________________

B. _____________________________________ $_______________________

C. _____________________________________ $_______________________

D. _____________________________________ $_______________________

E. _____________________________________ $_______________________

Total revenue for the school year (or month) $_______________________

4. Activities, equipment, materials, services, etc., purchased:

A. _____________________________________ $_______________________

B. _____________________________________ $_______________________

C. _____________________________________ $_______________________

D. _____________________________________ $_______________________

E. _____________________________________ $_______________________

Total expenditures for the school year (or month) $_______________________

5. Money in account at end of school year (or month) $_______________________

______________________________________ ______________________

Preparer’s Signature Date

Distribution to director/designee at completion of fiscal year

Page 1 of 2

Support Organization Financial Review and Inspection

Name of Support Organization__________________________________

Date __________________

The reviewer/review committee members named below have reviewed the financial reports and

related financial activity for the time period of _______________ through _______________, in

detail. I/we agree that the financial report, related financial activity and records and

documentation are (check one):

Correct and adequate

Correct and adequate, with the exceptions listed below

Incorrect and/or incomplete

1) ________________________________________________________________________

2) ________________________________________________________________________

3) ________________________________________________________________________

4) ________________________________________________________________________

5) ________________________________________________________________________

6) ________________________________________________________________________

To prevent the above exceptions from occurring in the future, the following steps should be

taken: (list actions)

1) ________________________________________________________________________

2) ________________________________________________________________________

3) ________________________________________________________________________

4) ________________________________________________________________________

5) ________________________________________________________________________

6) ________________________________________________________________________

Overview of Financial Activity (prepared by reviewer/committee)

Balance on Hand (date of last review) $_____________________

Receipts

(from last review to date of current review) $_____________________

Disbursements

(from last review to date of current review) $_____________________

Balance on Hand (date of review) $_____________________

___________________________ ____________________

Reviewer Date

Page 2 of 2

Number Printed Name Officer Title Member Signature Date

I have read and understand the exceptions, if any, noted above.

____________________________ ___________________

Treasurer Date

Support Organization Annual Information Form

School Year Ending _________

Organization Name _____________________________________________________________

Goals and Objectives of Organization (Fill out if this is your first filing or if you have a

change)

No change from previous year.

First filing or change. Please explain.

______________________________________________________________________________

Status

Nonprofit

Foundation

Chartered member of nonprofit organization or foundation

(For initial filing, or if status has changed, attach supporting documentation for status, e.g.,

annual report filed with Secretary of State.)

Officers

President _________________________________ Phone Number__________________