F21.Procedure 1: Fiscal Management
Procedure: Fiscal Management
Related: See also File Code F1 Travel Reimbursement Policy, F23 Capitalization of Assets, and fiscal procedure attachments
Since educational programs are dependent on adequate funding and the proper management of those funds, District goals can best be attained through efficient fiscal management. As trustee of local, state and federal funds allocated for use in public education, the District shall fulfill its responsibility to see that funds are used to achieve the purposes intended.
EWSD seeks to achieve the following goals:
Manage finances in such a way as to achieve the greatest educational returns in relation to dollars expended.
Establish efficient processes and procedures in all areas of fiscal management.
Provide timely and appropriate information and training to staff having fiscal responsibilities.
Follow Generally Accepted Accounting Principles (GAAP).
Fiscal Year & Year-End Close Out
The fiscal year for the Essex Westford School District is defined as beginning on the first day of July and ending on the 30th day the following June. The Procedure establishing the process for year-end close out.
Fiscal Accounting and Reporting
The District recognizes its responsibilities to ensure accurate and prudent management of the financial affairs of EWSD. This includes accounting for the receipt and expenditure of federal, state, and local tax dollars, as well as revenues from other sources.
The District will employ a double entry accrual accounting system and will conform to Generally Accepted Accounting Principles (GAAP). Separate records will be maintained on a basis consistent with the accounting system requirements of the Handbook for Financial Accounting of Vermont School Systems.
The accounting system will satisfy the following purposes:
Administrative Control: The financial records must be adequate to guide the making or deferring of purchases, expanding or curtailing of programs, and controlling of expenses. Current data should be immediately available and in such form that periodic summaries may be readily made from the data.
Budget Preparation: The financial records must be adequate to serve as a guide to budget estimates of subsequent years and to hold expenditures to the amounts appropriated.
Accounting for Stewardship: The financial records of the District must be adequate to show that those in charge have handled funds within the framework of law and in accordance with state guidelines.
The financial records will provide the following information:
For each account in the District’s budget: the appropriation, appropriation transfers, adjusted appropriation, expenditures, encumbrances, and unencumbered balance.
For each purchase order: the name of the vendor, description of the item involved, the amounts, and the record of approval.
For each purchase: the purchase order information above, plus the record of receipt and condition of goods, the invoice, and the record of payment.
For each income account: the budget estimate, the estimates as revised periodically, the receipts to date, and the balance anticipated.
Financial reports will be provided to the EWSD Board on a quarterly basis. Financial reports will be submitted to federal and state agencies as required by applicable state/federal statute/regulation.
The District will arrange for an annual audit by a certified public accountant. The audit will encompass all financial records, statements, and accounts of the District. Such audit shall include:
- The financial statement of the School District;
- Trust accounts where the School District or any school officer is a trustee or where the District is the sole beneficiary;
- Accounts related to School District indebtedness; and
- Accounts of any special funds in the care of any School District.
The auditing firm will be selected after a review of qualifications and fees and will be engaged under contract.
The District’s Annual Report will include a notice that the audit has been performed.
The Superintendent charges the COO to:
- Ensure all accounts associated with a school are audited annually;
- Review all audit records and recommendations; and
- Report receipt of the audit report(s) and recommendations(s) to the respective EWSD Board.
Petty Cash Funds
The use of petty cash funds shall be authorized for specific purposes only. Transactions may include individual purchases of supplies and materials under the amount of Fifty Dollars ($50) such as postage, delivery charges, and freight. Individual personal reimbursements which exceed Fifty Dollars ($50) should not be made from petty cash funds. Petty cash accounts will be maintained as cash on hand.
Expenditures against these funds must be itemized and documented with receipts and will be charged to the applicable budget code. After a budget item is exhausted, no expenditures against the item may be made from petty cash.
The security of, and accounting for, petty cash accounts shall be the responsibility of the fund manager to whom the account is assigned.
The Director of Finance and Accounting shall be responsible for establishing the procedures involving the use and management of petty cash funds.
Student Activity Accounts
Gifts, contributions or funds collected in connection with summer program activities, school athletic events, band or athletic booster clubs, civic organizations, parent-teacher organizations, commercial agencies, and all other similar monies, properties, or benefits shall be included in internal funds of the school.
A monthly report of cash receipts and disbursements to the activity fund should be prepared and reviewed by the activity fund supervisor and submitted to the treasurer of the School District. Column headings should include the following:
- Beginning cash balance (which should agree with the ending cash balance on the prior month’s report);
- Cash receipts;
- Cash disbursements;
- Ending cash balance;
- Unpaid purchase orders; and
- Unencumbered cash
The Finance Department will periodically perform internal audits of the reports and supporting records. The ending balances of all student activity accounts will be included in the audited financial statements.
Travel Allowances and Expenses:
It is the policy of the District to encourage appropriate personnel to attend educational conferences, seminars, and workshops which are directly related to the responsibilities of such personnel in their work in the District. Such experiences tend to enhance, broaden, and extend the professional contacts which are required to maintain an excellent school system. All employee and support staff conference, workshop, clinic, and convention requests must be approved in advance by the appropriate supervising principal or director. All District administrative staff and principals must have such requests approved by the Superintendent.
Expenditures related to vicinity travel are expected to be reimbursed after the fact. Some portion of travel and conference expenditures may need to be reimbursed after the fact, but employees are encouraged to apply for an appropriate advance payment.
Every employee will be reimbursed for travel expenses while traveling outside of the District and engaged in official District business. All travel expenses must be reported on the established travel advance and/or reimbursement forms and approved by the employee’s supervisor.
The District Finance Department will be responsible for the development of procedures and forms to be used in connection with travel expense claims and reimbursements.
To reduce the financial burden on employees and the possibility of fraud, we strongly discourage non-travel personal expenditures which must subsequently be reimbursed. While most purchases of goods or services can be made within established purchasing procedures, there may be an occasional need for an employee to make a purchase for the benefit of the District from personal funds. In that event, an employee will be reimbursed for a personal purchase under the following criteria:
- It is clearly demonstrated that the purchase is of benefit to the District;
- The purchase was made with the prior approval of an authorized administrator;
- The item purchased was not available from resources within the District; and
- The claim for personal reimbursement is properly accounted for and documented with an invoice/receipt.
The District Finance Department will be responsible for the development of the procedures and forms to be used in processing claims for personal reimbursements.
Capitalization Policy for Fixed Assets
A fixed asset is a property that meets all of the following requirements:
- Must be tangible in nature;
- Must have a useful life of longer than the current fiscal year; and
- Must be of a single per item cost of $5,000 or greater.
Fixed assets may be acquired through donation, purchase or may be self-constructed. The asset value for donations will be the fair market value at the time of the donation. The asset value, when purchased, will be the initial cost plus the trade-in value of any old asset given up, plus all costs related to placing the asset into operation. The cost of self-constructed assets will include both the materials used and the cost of labor involved in the construction of the asset.
The following significant values will be used for different classes of assets:
Class of Fixed Asset Significant Value
Equipment and machinery $5,000 or greater
Buildings – Improvements $5,000 or greater
Improvements other than buildings $5,000 or greater
Land Any amount
The Director of Finance and/or fund manager shall be responsible for the inventory of all fixed assets of the District. There shall be a complete inventory of all land, buildings, and physical property under the control of the District. Such records shall be updated annually. Property records shall show the make, source, date of purchase, model, serial number, location, and other identifying data.
The District recognizes that in the ongoing operation of the school system, there may be school property (not including real estate) that is no longer useful to the District, and in the interest of efficiency and operation such property should be properly disposed of. Subject to statutory limitations, the administration is authorized to proceed in a proper and orderly manner in disposing of school property that is no longer useful to the District. Disposal shall include the acts or processes of selling, donating, trading, transferring control to another, discarding, and destroying. Disposal of school property is documented in procedures.
Legal References: 16 VSA § 562 and 563; 24 VSA § 1681 and 1682