Activity Funds Slides Extraclassroom Activity Funds
Safeguarding, Accounting, and Auditing
Class Summary Overview | Spring 2026
Presentation Overview
01
Regulatory Framework
Guiding principles and BOE duties
02
Accounting Procedures
Dual recordkeeping and authorization
03
Sales Tax Compliance
Taxable vs. non-taxable activities
04
Organizational Roles
Key positions and responsibilities
05
Charter School Rules
Specific requirements for charters
06
Internal Controls
Essential forms and safeguards
Chapter 1
Rules & Guiding Principles
Purpose
Funds raised by and for students.
Follows NYCRR Part 172 regulations.
Operates outside district budget funds.
Guiding Values
Protect funds from misuse/loss.
Provide educational value to students.
Ensure transparency & accountability.
Board of Education Responsibilities
Conduct & Operation
Define acceptable student activities
Establish club formation procedures
Set student officer selection guidelines
Approve transportation rules
Safeguarding & Accounting
Proper methods for receiving funds
Clear separation of duties
Designate adult treasurers
Require annual audits
Chapter 2
Principles & Procedures Overview
Dual Recordkeeping
Central Treasurer and Student Treasurer maintain independent sets of records for cross-verification.
Separation of Duties
Distinguish between spending authority and fund custody to prevent unauthorized access.
Dual Authorization
All disbursements require signatures from both the Student Activity Treasurer and Faculty Advisor.
Operational Procedures
Admissions
Use pre-numbered tickets, adult supervision, and reconciliations of unused tickets.
Membership Dues
Pre-numbered receipts required. No credit sales allowed. Duplicate receipts for every transaction.
Sales Campaigns
Inventory control forms essential. Funds recorded in minutes. Receipts for all donations.
Purchasing & Payments
Mandatory pre-approval with formal purchase orders. All checks issued by Central Treasurer.
Chapter 3
Sales Tax Compliance
The Key Rule
A school district is NOT automatically exempt from sales tax when it acts as a vendor. Tax must be collected on sales of taxable items by students.
Generally Taxable
Candy and soda
Heated food (pizza, popcorn)
Yearbooks (unless underwritten)
Admission charges
Generally Non-Taxable
Bake sales
Newspapers & magazines
Unheated pre-packaged snacks
Yearbook advertising space
Chapter 4
Roles: Administrative Oversight
Central Treasurer
• Custody of all activity funds
• Issues prenumbered checks
• Deposits funds promptly
• Cannot approve payments
Faculty Auditor
• Reviews monthly treasurer reports
• Conducts ledger comparisons
• Creates annual composite report
• Cannot approve payment/fundraising
Chief Faculty Counselor
• Coordinates financial planning
• Appoints faculty advisors
• Oversees audit corrective actions
• Investigates club disputes
Independent Auditor
• Appointed by the Board
• Conducts mandatory annual audit
• Verifies cash reconciliations
• Includes ECAF in district audit
Chapter 4
Roles: Club Operations
Faculty Advisor
• Guides student officers
• Reviews/signs deposit slips
• Verifies ledger balances
• Ensures sales tax compliance
Focus: Educational value + Oversight
Student Treasurer
• Receives all funds raised
• Issues prenumbered receipts
• Prepares payment orders
• Maintains running balance ledger
Focus: Financial responsibility
Chapter 5
Charter School Specifics
Regulatory Gap
No specific laws currently authorize extraclassroom activities in charter schools.
However, if implemented, schools MUST:
Establish clear internal policies
Keep funds raised by students separate from operating funds
Maintain student control over spending decisions
Conduct annual independent risk assessments
Chapter 6
Internal Controls & Essential Forms
The Golden Rule
No single individual should control all aspects of a transaction. Segregation of duties is the primary defense against misappropriation.
Continuous Monitoring
Emphasis should be on regular monthly reviews and ledger comparisons, not just an annual audit.
Mandatory Documentation
Form 1: Register and Expenditure Ledger
Form 5: Statement of Profit and Loss
Form 8: Inventory Control Form
Form 9: Purchase Order
Form 10: Payment Order
Form 13: Reconciliation of Cash Balances
Key Takeaways
Accountability
Clear division of duties ensures no single individual has total control over funds.
Documentation
Accurate records and standardized forms are essential for audit trails and transparency.
Education
The system provides vital hands-on financial management experience for students.
Prepared for EDA 694 | Resource Management & Financial Accountability
Activity Funds Compliance Checklist ECAF Compliance Checklist
Safeguarding & Auditing of Extraclassroom Activity Funds
Administrative Resource
Essential Internal Controls
Dual Recordkeeping: Central and Student Treasurers maintain independent, reconciled ledgers.
Separation of Duties: The individual authorizing a purchase is not the same person holding funds or issuing checks.
Dual Authorization: Payment orders require signatures from both the Faculty Advisor and Student Treasurer.
Prompt Deposits: Funds raised are deposited with the Central Treasurer immediately after the event.
Required Forms Checklist
Form 1: Register/Expenditure Ledger
Form 2: Register of Receipts
Form 5: Statement of Profit/Loss
Form 8: Inventory Control Form
Form 9: Purchase Order
Form 10: Payment Order
Form 13: Cash Reconciliation
Form 14: Central Treasurer Report
Sales Tax Critical Points
District as Vendor
Districts are not exempt when acting as a vendor. Tax must be collected on sales of candy, soda, clothing over $110, car washes, and heated food.
Resale Certificates
The district should issue Form ST-120 (Resale Certificate) to suppliers when purchasing items for resale to avoid paying tax on the acquisition side.
Reference: NYCRR Part 172 & NYSED Guidelines
Revised: April 2026
Operational Compliance Presentation Administrative Resource
ECAF Compliance
Quick Reference
Standard Operating Procedures for Extraclassroom Activity Funds
Essential Internal Controls
Dual Recordkeeping
Central and Student Treasurers maintain independent, reconciled ledgers for all activities.
Separation of Duties
Authorizing, recording, and custody functions must be performed by different individuals.
Dual Authorization
Payment orders require signatures from both the Faculty Advisor and the Student Treasurer.
Prompt Deposits
All funds must be deposited with the Central Treasurer immediately following collection.
Required Documentation
Essential forms for audit compliance
Form 1: Register/Expenditure Ledger
Form 2: Register of Receipts
Form 5: Statement of Profit/Loss
Form 8: Inventory Control Form
Form 9: Purchase Order
Form 10: Payment Order
Form 13: Cash Reconciliation
Form 14: Central Treasurer Report
Sales Tax Compliance
District as Vendor
Districts are NOT automatically exempt when acting as a vendor. Tax must be collected on:
• Candy and soda
• Heated food (pizza, popcorn)
• Car washes
• Clothing items over $110
Resale Certificates
Use Form ST-120 when purchasing items for resale. This prevents paying tax at acquisition, as tax will be collected from the final consumer.
"Ensure all tax collections are clearly identified on Central Treasurer reports."
Maintain Audit Readiness
Consistent use of standardized forms ensures a clear audit trail.
Regular review by the Faculty Auditor prevents year-end surprises.
Compliance is a year-round commitment.
NYCRR Part 172
April 2026 Revision
