FRANKLIN PUBLIC SCHOOLS
Business Office
Procedures Manual
Revised by: Erica Monteiro
& MaryJane Mendes
February 20, 2014
Table of Contents
Accounting Procedures 4
Internal controls 5
Compliance with Laws 5
Record Keeping 5
Security of Financial Data 5
Security of School Documents 5
Record Retention and Disposal 6
General Accounting Procedures 8
Reporting Revenue and Expenditures 8
Classification Of Revenue and Expenditures 8
Revolving Accounts 8
Cash Receipts Procedures 9
Cash Receipts – Student Activity Funds 10
Cash Disbursements 10
General Ledger Account Inquiry 10
Budgeting 12
Budget Timelines 12
Budget Procedures 13
Procurement Guidelines 15
Purchasing 16
Creating the Requisition 17
Approving the Requisition 18
Converting the Requisition to A Purchase Order 19
Printing the Purchase Orders 20
Accounts Payable Processing 21
Invoice Payment Processing 22
Internal Reporting Procedures 24
Printing a Year-to-Date Budget Report 24
Federal and State Grants 26
Entitlement Grants 26
Competitive Grants 27
Grant Amendments 27
Requesting Grant Payments 28
Grant Reporting Procedures 28
Payroll Processing 30
New Employees 30
Reactivating Former Employees 30
Processing Payroll 30
Leave of Absence Procedures 36
Vacation, Personal, and Sick Pay 37
Terminations 38
Processing Final Payment for a Member of Administrative Staff 38
Timekeeping Procedures 38
Balloon Payments (at Year End) 39
Updating Contract Pay/ COLA Increases 44
Analyzing the Finalized Payroll 45
Encumbrance Reporting and Updates 46
Use of the MTRS BERT Access Database 47
End of Year Reporting 48
Year End Issues 49
Other Procedures 50
Mail for Payroll Department 50
Postage Meter 50
Monthly Postage Meter Report 51
Foodservice………………………………………………………………………………53
Student Activity Accounts 76
Building Usage…………………………………………………………………………...85
Transportation………………………………………………………………………...….92
Appendix A 104
Structure of GL Account Code 104
Chart of Accounts – Criteria for Financial Reporting 119
Accounting Procedures
To provide an accurate and auditable record of all financial transactions, the Franklin Public Schools’ records and accounts are maintained in conformity with Generally Accepted Accounting Principles (GAAP) as required by the Commonwealth’s statutes applicable to school districts. The accounting policies are intended to support the presentation of financial statements and information in conformity with GAAP as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Significant details on the School’s accounting policies are described in this section.
The Franklin Public Schools use funds and account groups to report its financial position and the results of operations. Fund accounting is designed to demonstrate legal compliance and to aid in financial management by segregating transactions related to certain functions or activities.
FUND A fund is a separate accounting entity with a self
ACCOUNTING: balancing set of accounts established by general or special law to record all the financial resources or revenues together with all related expenditures or liabilities that are segregated for a particular purpose.
The funds used are all classified under three major categories: governmental, proprietary and fiduciary funds and consist primarily of the General Fund to account for daily operations, and Special Revenue Funds to account for grant monies that are received for special purposes. In addition, revolving accounts are used to account for particular activities. A revolving account is a revenue retention account in which the retained revenues unspent or unencumbered at the end of a fiscal year are carried over into the next fiscal year for expenditure.
No funds or accounts may be established or maintained for purposes that are not fully and accurately described within the records of the Franklin Public Schools.
The Franklin Public Schools utilize the MUNIS financial software which is shared with the Town of Franklin. Basic knowledge of MUNIS is expected when reading this document as direct references to MUNIS are made throughout the manual.
Internal controls
Internal control policies provide the Franklin Public Schools with the foundation to safeguard its assets properly, implement the policies of the Franklin School Committee, provide compliance with state and federal laws and regulations, and produce timely and accurate financial information.
Compliance with Laws
The Franklin Public Schools will follow all of the relevant laws and regulations that govern the school districts within the Commonwealth of Massachusetts. Additionally, any Federal Government laws and regulations that relate to grant funding will be adopted as the grant funding is received.
This manual describes procedures specific to the Franklin Public Schools in accordance with all laws and regulations as described above.
Record Keeping
Receipts and disbursements must be fully and accurately described in the records. No false entries may be made in the records. No false or misleading reports shall be issued. Payments may be made only to the contracting party and only for the actual services rendered or products delivered. No false or fictitious invoices may be submitted or paid.
Security of Financial Data
The School’s accounting software should be reviewed regularly to ensure that only properly authorized individuals, utilizing a security password, can access or modify data. The district’s financial data must be backed up daily to ensure the recoverability of financial information in case of hardware failure. Such back-up shall be stored in a fire-safe area that is properly secured. Unused checks for Student Activity accounts shall be kept in a secure location.
The Superintendent of Schools or the Superintendent’s designee shall secure all other financial data.
Security of School Documents
Originals of the following district documents are maintained and their presence is verified on a periodic basis.
· Minutes of School Committee Meetings
· Leases
· Insurance Policies
· Vendor Invoices
· Grant Agreements
· Contract Agreements
· Fixed Asset Inventory List
Record Retention and Disposal
Records are maintained for the following indicated minimum periods:
Records, documents, and other supporting evidence including paid, cancelled or voided checks, accounts payable records, vendors’ invoices, payroll sheets and registers of salaries and wages, employees’ timesheets and other public documents are retained for seven years after the original entry date.
The following records supporting Federal contracts, as required by the U. S. Office of Management and Budget are retained for the indicated minimum periods:
For three years after submission of the final report of expenditures, all financial records including spreadsheets, salary information, invoices submitted and paid, and any other pertinent information, with the following exceptions:
If any litigation, claim, or audit is started before the expiration of the three year period, the records shall be retained until all litigation, claims, or audit findings involving the records have been resolved and final action taken.
Records of equipment acquired with Federal funds shall be retained for three years after final disposition.
Permanently: Audit reports, annual district reports, School Committee minutes, tax and legal correspondence, labor contracts, insurance claims and policies, and retirement / pension records.
The disposal date determined under this procedure is the end of the fiscal year, or the date of final payment of government grants.
All records not supporting government grants or otherwise covered by rules of the Internal Revenue Service are retained for three years from the end of the fiscal year in which the records were originally prepared.
All financial records are maintained, by category, in chronological order and fiscal year.
The Franklin Public Schools currently contracts with a third party for storage of records. Periodically, records are sent to or received from the storage facility as needed.
Pursuant to MA GL, C. 66, http://www.sec.state.ma.us/arc/arcpdf/MA_Municipal_Records_Retention_Manual.pdf
See also RM2 E regarding discard of electronically scanned records. Email is therefore a public record in accordance with MA GL, C.4, Sec. 7(26) and is subject to the requirements of the Public Records Law as noted above.
General Accounting Procedures
All entries into the General Ledger will be made soon after the underlying accounting event to ensure the financial recording and reporting are accurate. All entries will be supported by adequate documentation that clearly shows the justification and authorization for the transaction. A complete paper trail should be kept so that the auditors will be able to reconstruct and/or justify all entries. Non-recurring entries, such as for correcting entries, will be prepared as circumstances warrant and submitted to the Town Comptroller for entry into MUNIS. Documentation shall be attached to all such correcting entries. Under no circumstances will school employees make journal entries into MUNIS. All general journal entries will be documented and submitted to the Town Comptroller for entry into MUNIS.
Reporting Revenue and Expenditures
Reporting of revenue and expenses is an ongoing requirement from the Superintendent, the School Committee, the Department of Education and other agencies. Internal reporting to the Superintendent is on an as-requested basis. Monthly reporting is provided to the School Committee. The Department of Education requires completion of an annual End of Year report. Additional guidance regarding completion of the End of Year report can be found on page 52.
Reports are generated through the MUNIS accounting system and can also be custom created through Crystal Reports. Specific directions for production of particular reports can be found on page 26, in MUNIS training documentation and online at http://www.tyler-munis.com.
Classification of Revenue and Expenditures
The Department of Elementary and Secondary Education (DESE) requires adherence to a Statewide Chart of Accounts that details the functional classification codes. These DESE guidelines, last updated July 1, 2001 are used for recording and reporting purposes using the district’s MUNIS software. The School Department has added the additional elements of Fund, Department, Division, Program, Object and Location to the structure of the account. The full account code is simplified to two fields- ORG and OBJECT. The ORG is an 8 digit number comprised of the location code, the DESE function code, and the district’s program code. Full detail of these elements can be found in Appendix A along with the detail of the DESE financial reporting requirements.
Revolving Accounts
As stated earlier, a revolving account is a revenue retention account in which the retained revenues unspent or unencumbered at the end of a fiscal year are carried over into the next fiscal year for expenditure. Revolving accounts are used to account for revenue and expenses for Athletics, Foodservice, Circuit Breaker Reimbursement, Lifelong Learning, Transportation, School Choice, and other gift and miscellaneous accounts. Budgetary expenses shall be reclassified to revolving accounts as balances become available. Revolving account balances are reported to the School Committee on a monthly basis. Expenses classified or reclassified to revolving accounts are reported to the School Committee monthly as well. Under no circumstances shall revolving accounts maintain a deficit balance at year end.
Cash Receipts Procedures
Cash receipts procedures are in place to record receipts completely and accurately and to prevent the diversion of cash assets. Processing of cash receipts is the responsibility of the Accounting Coordinator and the School Business Administrator. If necessary, other staff members or temporary replacements, as assigned by the School Business Administrator may perform these tasks.
Cash receipts come from various sources including athletic games, transportation payments, tuition payments, school lunch receipts, building rentals, refunds from vendors, and other general fund revenue.
Cash receipts from all sources must be remitted to the Accounting Coordinator on a daily basis from departments located at Central Office. Cash receipts from all sources must be remitted to the Accounting Coordinator on a weekly basis by the schools and the athletic department, and more frequently if deposits contain cash. All receipts sent to the Business Office for deposit must be accompanied by a turnover sheet indicating the account to which the deposit should be posted. The turnover sheets should be reconciled to the accounts posted on a monthly basis to ensure that the deposit was properly received and recorded.
All checks must be endorsed “For deposit only – Town of Franklin” immediately upon receipt. All deposits must be presented to the Treasurer’s office within 24 hours of receipt in the Business Office. All receipts that are not remitted to the Treasurer immediately must be kept in a secure location with no access to other departmental employees or the public. Receipts held overnight must be kept in a locked safe or cabinet with no access to other departmental employees. All deposits must be accompanied by a turnover sheet indicating the account to which the deposit should be posted. A second copy of the turnover sheet must be sent directly to the Town Comptroller from the Business Office. A third copy should be maintained in the Business Office and attached to the signed copy from the Treasurer upon its return. The Treasurer’s office will post the deposit and send back the signed turnover sheet to the Accounting Coordinator. Turnover sheets are filed by the source of the receipt (e.g. pay-to ride, athletic receipts, building rentals, etc.) and should be reconciled monthly.
Cash Receipts – Student Activity Funds
Student Activity Account funds are received at the School Business Office from various schools in the district. Each deposit must include an adding machine tape for the checks included in the deposit as well as the cash included in the deposit.
Each check included in the deposit must have “Student Activity Account” and the name of the school written in the memo portion of the check. The purpose of this is to be able to identify the account into which the check was deposited should it be returned for insufficient funds.
Either the Accounting Coordinator or the Accounts Payable Clerk will verify the count of the deposit by creating another adding machine tape for both the checks and the cash. The combined total will be compared to that submitted by the school.
If the count comparison differs, the deposit is counted once again. If it still differs, the turnover is prepared based on the School Business Office’s count and the school, which submitted the deposit, is notified in writing.
Once the deposit count is verified, the Business Office will complete a Student Activity Account Turnover Sheet. The form is signed and two copies are made.
The original turnover sheet accompanies the deposit and is delivered to the Town Treasurer’s Office. One copy is delivered to the Town Comptroller’s Office and the other copy is kept in the Business Office. Any paperwork received with the deposit from the school is attached the Business Office’s copy and filed in the “Waiting for Treasurer’s Confirmation” file.