Alabama Department of Education issues guidelines on accountability measures for school-related organizations
The Alabama Department of Education (SDE) has issued new guidelines that outline accountability measures for parent groups, booster clubs and other school-related organizations across the state. It's the first time the department has issued comprehensive accounting guidelines for school-related groups, said Craig Pouncey, assistant state superintendent for administrative and financial services. The Hoover school system came under scrutiny this year because of a lack of financial accountability for such groups, but Pouncey said the guidelines, sent to city and county superintendents last month, initially were drafted about two years ago and are an attempt to create consistency for school systems statewide. The guidelines don’t require schools to put the finances for all school-related organizations on their books. But they seek to clarify what makes an activity a “school activity” and list specific requirements for parent and booster organizations that operate their finances outside the control of the school they support. Several agencies have provided partial and often conflicting rulings on how groups such as school, student, parent and athletic organizations should operate, state Superintendent Joe Morton wrote in a Nov. 8 letter to city and county superintendents.
The guidelines say coaches and other school employees cannot maintain a separate bank account that supports or benefits from a school extracurricular activity. Funds from sponsors, vendors or other sources that support an athletic activity must be included in the school's financial records under the principal's control. School-related organizations that want to maintain books outside of a school must meet requirements that include obtaining an employer identification number from the IRS, providing an annual audit report to the school and making financial records available to certain school employees upon request. Organizations also must show proof of a fidelity bond for their treasurer. A fidelity bond is a type of insurance that protects against fraud. In order to keep their own records and accounts outside the control of the school, organizations must have a separate employer identification number and a separate mailing address, according to the guidelines. They would become “school activities” if a school employee leads fundraising or maintains the accounting records for the organization, or if both parties agree to the fiduciary control of the principal. That means the principal must maintain accurate accounting records for the proceeds, Pouncey said. It doesn't mean principals are authorized to spend the money any way they want, he said. Groups still would have decision-making power, and auditors check for that, he said. For booster clubs, certain activities may come under the control of a school principal, including activities where the group operates a training camp that includes students of the activity it supports or an exhibition or competition that includes students of the activity it supports.
Laurie McCaulley, president of the Alabama PTA, said that for PTAs to maintain control of their own finances, they now must have parents control the finances, not school employees who are members. But McCaulley said she doesn't think local PTAs will be affected much because they already have many of the accountability measures in place. McCaulley, who said the guidelines generally are good, questioned the requirement that external groups must make their financial records available to authorized school employees and auditors upon request. The goal for full compliance is by July 1. School boards may be required to amend or adopt local policies to comply.
Birmingham News By Erin Stock
[Editor’s Note: The guidelines are below.]
Alabama state guidelines on school-related organizations