PUBLIC VS. NON-PUBLIC FUNDSRULES AND REGULATIONS

FINANCIAL PROCEDURES FOR LOCAL SCHOOLS

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Table of Contents• Public funds……………………………………………….……...... 3• Non-Public Funds……………………………………………....... 4• Allowable Uses of Public Funds………………….………… 5• Unallowable Uses of Public Funds………………………… 6• Uses of Non-Public Funds…………………………………….. 9• Unallowable Uses of Non-Public Funds………………… 10• Miscellaneous Compliance…………………………..………. 11• Food Purchases…………………………………………….……… 12• Constitutional Amendment No. 558…………………….. 13• Public Fund Raisers………………………………………………14• Non-Public Fund Raisers………………………………………15• Parent Organizations and Booster Organizations…… 16• Specific Requirements………………………………………….. 17

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PUBLIC FUNDS

Funds received from public (tax) sources. Funds received from non-tax sources but used

for public purposes. Any funds subject to direct control of school

principal. Any public funds transferred from Central

Office to School. Legislative, City or County appropriations.

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NON-PUBLIC FUNDS

• Not received from public (tax) sources.• Not used for public purposes.• Subject to intent and authorization of the

organization’s members, officers, and sponsors- NOT used for general operations of the schools unless organization/sponsor directs.

• Principal does not direct use of these funds but does have authority to prohibit inappropriate expenditures.

• Some donations from private sources are non-public.

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ALLOWABLE USES OF PUBLIC FUNDS

• Professional Development/Training-including refreshments and meals, if extended training.

• Refreshments for Open House at school where public will attend.

• Pregame meals. (NOT postgame)• Academic incentives-recognition of academic excellence.• Athletic/band uniforms for students to participate in school

activities.• Memberships in professional organizations.• School landscaping, furnishings and decorations.• *******Subject to Control of Principal*******

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UNALLOWABLE USES OF PUBLIC FUNDS

• Gift items for staff.• Flowers for staff and/or families.• T-shirts for office staff.• Staff Holiday parties/Christmas gifts.• Christmas cards.• Donations to various organizations.• Dues to private clubs.

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UNALLOWABLE…PUBLIC…continued

• Alcoholic beverages.• Scholarships for Students.• Meals for spouses.• Food items for teachers.• Coffee and cups for employees.• Expenditures for pictures for school office.• Expenditures for flower arrangement for

school office.

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UNALLOWABLE PUBLIC - continued

• Food for social gatherings.• Faculty and staff luncheon.• Faculty appreciation gifts.• Championship rings.• Class prom entertainment.

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USES OF NON PUBLIC FUNDS

• May be used as designated by organization or person or entity making a donation.

• PTO/ Booster or club should direct expenditures.

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Unallowable Uses of Non-Public Funds

• Purchases for school employees and their families. (Ethics Law)

• Alcoholic beverages.

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MISCELLANEOUS COMPLIANCE

• You can transfer non-public to public, but NOT public to non-public.

• If non-public receipts are commingled with public receipts, they all become public.

• When in doubt, consider the funds public.• The principal cannot use or transfer Non-public

funds without approval of organization or sponsor.

• Monthly reports to organization or sponsor!

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FOOD PURCHASES

May use public funds if:o All-day professional training meeting or

extended meeting to benefit of district.o Open Houses.o Public Meetings – Board meetings. May not use for afterschool staff meetings,

meetings for staff at beginning or end of school year.

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CONSTITUTIONAL AMENDMENT No. 558

• May expend public funds for recognition of significant contributions to education.

• May expend public funds to promote educational excellence by students, faculty, staff and the public.

• Recognitions may be in form of trophies, plaques, academic banquets and other honors.

• Teacher retirements.• Plaques and other awards for significant academic

achievement or significant contribution to school.

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PUBLIC FUND RAISERS

• Typically are school-wide, can be used for all students and are controlled by the principal.

• All proceeds deposited in public fund.• Normal Test: If it is during school hours, on

school grounds, or sold to students – IT IS PUBLIC.

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NON-PUBLIC FUND RAISERS

• Proceeds from non-public fund raisers such as picture sales, coupon books, gift wrap, etc., items sold in community after school hours – non-public account.

• Non public fundraisers can be held on school premises with approval of Principal but must occur after school hours and NOT at public events.

• DURING SCHOOL HOURS – TO STUDENTS – ON SCHOOL PROPERTY – IT IS PUBLIC

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PARENT ORGANIZATIONS and BOOSTER ORGANIZATIONS

• Parent and parent/teacher organizations provide a vital role in the education of students. In Alabama public schools, the PTA and the PTO are the most common parent organizations. Many parent organizations join a national organization that serves the individual school organizations. Each of the national organizations publishes guidance for the financial operations of the individual school organizations.

• These organizations must have a separate employer identification number (EIN) and a separate mailing address in order to maintain their own records and accounts outside the control of the school.

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SPECIFIC REQUIREMENTS

• Parent organizations and booster organizations that maintain financial operations outside the control of the school could create a negative image for the school by failing to maintain proper accounting controls. Accountability for the funds these organizations control includes an agreement that:

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o The organization has obtained an employer identification number from the IRS.

o The organization provides a report of the annual audit of the organization to the school.

o The organization makes its financial records available to the school’s auditors and authorized school employees upon request.

o The organization provides proof of a fidelity bond for the treasurer.

o The organization provides required financial reports.o The organization will not provide any payment or benefit to a

school employee (or family member of a school employee) in violation of the State Ethics Law.

o A school employee may not hold a leadership role or lead the fundraising or maintain the accounting records for Booster Organizations. If an employee does so the funds become PUBLIC funds.