Student Activity Fund Changes

The Governmental Accounting Standards Board (GASB) issued Statement No. 84, Fiduciary Activities, which revises and establishes new financial reporting requirements for Fiduciary Activities. The implementation guide of this Statement indicates there may be significant financial accounting and reporting changes for the District’s student activity funds. Due to the District’s administrative involvement in student activities, this statement will require the District to report Student Activity Funds in either the General Fund or a special revenue fund.

Minnesota Department of Education (MDE) has proposed the State Legislature make changes to current statutes related to student activity funds by requiring them to be under Board control. MDE is also requiring all student activity funds be reported in the General Fund. They are recommending the activities be recorded in Fund 50, to help differentiate the accounts. Fund 50 can then be cross-walked to Fund 1.

Starting July 1, 2019, the following changes to UFARS will be made:
MDE has plans to update the Manual for Activity Fund Accounting (MAFA) but we have been notified it will not be released until after July 1. MDE will be releasing a Q&A document in the meantime.

The MDE GASB Subcommittee has made several recommendations.

The following actions are required to be taken by each District:

  1. Review each activity fund and determine which fund (ex. General Fund, Custodial Fund) is most appropriate or if the fund should be handled by an outside organization.
  2. Pass a Board resolution to place student activity funds under Board control, if they are currently not under Board control. (MSBA is working on a template for this resolution).
  3. All financial records must be recorded in an MDE approved software.
  4. Review internal controls surrounding receipts and disbursements, as well as receivables and payables. Note: Since these activities will be under the General Fund, they will be required to be reported under the modified accrual basis of accounting.
  5. All fundraising must be approved by the District, similar to donations that are made directly to the District.
  6. Restrict sources available for these activities.

Some best practices for operations of student activities include the following:

  • Creating a student activity handbook to document how activity operates in the District.
  • Maintaining minutes for all student activity accounts with School Board approval afterwards.
  • Implementing internal audit procedures including assigning an individual in the District to ensure policies and procedures are being followed.
  • Requiring an annual training for advisors to understand how activities are to operate.

Some procedures the District may want to consider implementing include the following:

  • Approving budgets for these activities.
  • Utilizing a fundraiser accountability form.
  • Using pre-numbered receipts.
  • Reconciling receipts.
  • Requiring a minimum of two individuals to count deposits.
  • Making sure blank checks are secured and safeguarded.
  • Creating a District policy for overages/shortages.
  • Mailing checks the same day they are signed.
  • Creating a purchase order system.

We understand there are a lot of changes happening with very short notice. If you have any questions, please feel free to contact one of our Governmental Audit experts.


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