10
NMPED Update
School Budget &
Finance Analysis Bureau
School district activity funds are special revenue funds and should be accounted for as Non-instructional Support under the 23000 series of funds. In our state, funds classified as agency funds (90000) are grouped together under non-instructional support (23000) for PED reporting, including the cash report and actuals reporting. This is delineated in the Manual of Procedures under Supplement 18. This does not mean we account for them on the district books as special revenue funds (23000), it merely means you consolidate reporting to that fund level.
Another area of confusion that has been encountered is how to account for activity funds where significant revenue is generated from enterprise activity. In instances where the enterprise activity is associated with student activities, it is recommended that the student organization account for the activity in its student activity fund. In instances where the school district activity is an enterprise activity, it is recommended (but not required) that the school district account for the enterprise activity within the district activity fund. Regardless of how you choose to account for the enterprise activity, board authorization to operate the activity is needed, and all funds should be accounted for in the district's books. In the case of revenue from affiliated organizations (booster clubs), board authorization to receive such funds is needed and it is recommended policies for accounting for cash receipts be considered.
Treatment of Activity Funds
In conversations with school districts and charter schools, one area of continued confusion is how to treat school district (charter school) or student activity funds.
As a point of clarification, student activity funds are those that generally support student clubs (think the debate club, or student council) and school district activity funds are those that are local education agency-wide activities (often these will be pooled funds for athletics, band or book fair proceeds). Student activity funds should be kept at the school site, while district activity funds are kept on the school district books.
The best test to determine whether or not to classify funds as a student or district activity is whether or not the school district administers the funds or not. If the school district (or charter school) has no administration over fund usage and merely acts as an agent that holds the funds, they are likely student activity funds. If not, they are district activity funds. For example, if a high school football team has money that is raised by an outside entity, but managed by district staff depositing receipts and accounting for balances, you have a school district activity fund. Similarly, if an after-school club is provided at the school-level, but is district administration manages personnel in its system and collects and disburses cash through the district accounting system, you have a district activity.
Generally speaking, the use of student activity funds is pretty rare – but they should be accounted for as an agency (fiduciary) fund type under under the 90000 series of funds.
David Craig
Further Reading:
NM OSA – GAO Risk Advisory Student Activity Funds September 2016.