Financial Accounting for Local and State School Systems: 2009 Edition - Chapter 8: Activity Fund Guidelines

Financial Accounting for Local and State School Systems: 2009 Edition

NCES 2009-325
June 2009

Locate a Code
- Quick Code Finder by Number/Category
- Code Descriptions in Alphabetical Order
Preface
Acknowledgments
Chapter 1: Introduction
Chapter 2: Financial Reporting Within a System of Education Information
Chapter 3: Budgeting
Chapter 4: Governmental Accounting
Chapter 5: Financial Reporting
Chapter 6: Account Classification Descriptions
Chapter 7: Cost Accounting and Reporting for Educational Programs
Chapter 8: Activity Fund Guidelines
- Types of Activity Funds and Proper Classification
- Controls for Establishing and Maintaining Activity Funds
- Preparation and Review of Monthly Activity Fund Reports
- Summary
References
List of Exhibits
Appendix A—Summary of Account Code Changes Since 2003
Appendix B—Other Resources
Appendix C—Glossary of Acronyms
Appendix D—Illustrative Financial Statements for an Independent School District
Appendix E—Criteria for Distinguishing Equipment From Supply Items
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Chapter 8: Activity Fund Guidelines — Summary

There are two classifications of activity funds: district and student. It is recommended that district activity funds be classified as special revenue funds and student activity funds as agency (fiduciary) funds.

As governments increasingly respond to the demands for fiscal and operational accountability, best practice dictates the creation of strong controls over activity funds, including assurances that all transactions are recorded and reported in district financial records. Additionally, at a minimum, proper lines of authority combined with strong control practices—such as segregation of duties, multiple checks and balances, requirements for annual audits, and regular financial reporting—are the elements needed to protect against error and abuse.