Sanctioning in Edmond Public Schools
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Edmond Public Schools
Sanctioned Organizations
What is Sanctioning?
Recognition & Attribution
Allows organization to
operate for benefit of
students
Permits fundraising on school
property
Finances are exempt from
school laws over activity fund
Board of Education has
complete discretion whether
to sanction a group
Sanctioning Does NOT Equal Control
•
Board of Education does not control funds;
organizations operate from their own bank
accounts
•
Organizations must obtain their own tax ID number
•
Organizations may
NOT
use school district’s tax ID
number or tax-free status
•
Board of Education is NOT responsible for ensuring
that organization complies with applicable state
and federal laws
Sanctioning Application Process
•
Apply annually – applications emailed end of April
•
Due in EPS business office by
mid
June each year
•
Include Financial Information from June of prior year
through May (June 1, 2023 to May 31, 2024)
see example next slide
•
Approval by School Board at August meeting
•
Board can request records at any time
•
Board can withdraw sanctioning at any time
•
Applications are subject to Open Records Act
Using Your Software’s Profit and Loss Report For Your
Cash Flow Statement
1.
Date range for report
must be June 1 of
prior year to May 31 of
current year.
2.
Write in the June 1
beginning cash
balance.
3.
Add Total Income.
4.
Subtract Total
Expenses.
5.
This gives the ending
balance which must
reconcile to the bank
statement.
Application Process – cont.
•
Recommend that outgoing and incoming officers fill out
application together. This is a great way to pass down
information.
•
Bank statements – please review and sign the statements
prior to submitting.
•
Organizations with debit cards and electronic payments
must submit an example of the controls in place in
addition to the reviewed bank statement.
501
(c)(
3
) Status
Exemption from income taxation by the IRS under
section
501(c)(3)
of the Internal Revenue Code
Certificate of Incorporation and Bylaws must be
filed with the Secretary of State
Criteria and process for applying can be found in
IRS Publication
557
PTAs that are members of the National Parent
Teacher Association are exempt under a group and
national exemption
Group exemption also available under Parent
Booster USA
501(c)(3)
Advantages
•
Income is tax exempt (except unrelated business
income, e.g. advertising)
•
Contributions received are tax deductible to the
donor – Many corporations and foundations require
501(c)(3)
status before they will make contributions
•
Individual members are protected from personal
liability
•
Eligible to hold bingo games in Oklahoma
Obtaining
501(c)(3)
status
If you have not yet received your
501(c)(3)
determination
letter from the IRS, EPS recommends contacting Parent
Booster USA
(
www.parentbooster.org
)
PBUSA is a non-profit organization that provides
services to booster clubs at reasonable prices
Tax exempt status may become a requirement of
sanctioning in the future
Parent Booster USA
•
Founded in
2004
by an attorney skilled in nonprofit and
tax law, PBUSA has more than
3,500
member
organizations in
48
states with a
95%
annual renewal rate.
PBUSA provides peace of mind for parent volunteers,
school administrators and school district leadership.
•
https://parentbooster.org/member-resources
Tax Return Requirements
•
ALL nonprofit groups are required to file tax
returns
•
The IRS requires that any organization,
regardless of income, MUST file the appropriate
tax return
•
Organizations recognized as tax-exempt file the
appropriate form of IRS
990
•
If an organization does not have tax-exempt
status it may be required to file a corporate tax
return and pay tax on net income
Tax Return Requirements – cont.
•
If a booster club does not file a tax return, it risks future
penalties and interest for failure to do so
•
If a booster club DOES NOT have federal tax-exempt
status, filing a Form
990
, the tax-exempt return, will raise
questions
•
The IRS expects all organizations to begin filing taxes
immediately upon obtaining an Employer Identification
Number (EIN)
•
Nonprofits that fail to file federal income taxes on time
for three consecutive years automatically lose their tax-
exempt status
Federal Filing Obligations
•
If
501(c)(3
), Form
990
, the annual "Return of Organization
Exempt From Income Tax,"
•
If gross receipts are normally
$50,000
or less
◦
may generally file
990
-N
(e-postcard)
•
If gross receipts <
$200,000
AND total assets <
$500,000
◦
file
990
-EZ
•
Searchable data base of exempt organizations as well as revoked
exemptions is available at
http://www.irs.gov/Charities-&-Non-
Profits/Exempt-Organizations-Select-Check
•
If an organization has unrelated business income of more than
$1,000
, it must file an unrelated business tax return, Form
990
-T in addition to the Form
990
(Taxes will be due on this
income regardless of the
501(c)(3
) status)
•
If non
501(c)(3
), Form
1120
Corporate income tax return is
required
State Filing Obligations
•
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State Filing Obligations – cont.
•
In Oklahoma, school fundraising organizations,
including PTAs, PTOs, and booster clubs, must file
exemption from charity registration if the group is
"authorized" by the school.
Apply for exemption ,
including your school's authorization letter and a
$15
filing fee with the
Oklahoma Secretary of State
.
From parentbooster.org
State
S
ales Tax
Not required to
collect and remit sales taxes
:
•
A public or private student group/organization, or
•
A PTO or PTA (even if not a 501(c)(3))
Not required to
pay sales tax on purchases
:
•
A PTA (member of national association; PTOs are not included), or
•
An organization which has acquired a sales tax permit from the Oklahoma
Tax Commission for items purchased for resale, or
•
An organization which has acquired a sales tax exemption from the
Oklahoma Tax Commission (The OTC allows ONE exempt parent-teacher
group per school)
Additional information can be found on
Oklahoma Tax Commission Agency
Rules
pgs 464-465
State Sales Tax – cont.
•
Per the Oklahoma Sales Tax Exemption Packet
(one PTO per school):
•
The entities that qualify for sales tax exemption in Oklahoma are specifically
legislated. Therefore, not all entities that are recognized by the Internal Revenue
Service as tax exempt pursuant to
26 USC§501(c)(3
) are exempt from sales tax in
Oklahoma.
•
The organization must have a Federal Identification Number before applying.
•
Oklahoma has ruled that Booster Clubs are NOT exempt.
•
Booster Clubs may apply for a Oklahoma sales tax resale permit. This
permit would enable the group to make purchases for resale exempt
from sales tax.
•
Periodic sales tax returns will be required for a permit holder.
•
Sales tax must be charged to the customers for all goods sold.
•
Collected taxes must be remitted with periodic returns.
State Sales Tax – cont.
Payments for Professional Services
•
All individuals who will have contact with our
students must have a current, clear background
check on file with the district
•
Payment for professional services is strongly
encouraged to be made through the school’s
activity fund in order to ensure compliance
•
This practice will alleviate the need for your club
to file form(s)
1099
for these services
•
Funding to the activity fund can be by donation
or reimbursement depending on school’s
preference
Payments for Professional Services –
cont.
•
If your club does pay directly for any of the
following, a form
1099
-MISC
must be issued to
the payee for any payments totaling
$600
or
more in a calendar year:
•
Services, Prizes/Awards, Rents, Royalties, Attorney
fees, Medical services
•
A
1099
-
MISC
is not required for payments to
companies/individuals who only provide goods
Merchant Accounts
•
EPS does not approve or chose the merchant processor or
cash payment apps
for booster clubs.
•
Merchant accounts
& cash payment apps
must
be linked
to business bank accounts (not personal)
•
Income and expense should be categorized appropriately
on the cash flow statement as opposed to labeling as
“credit card receipts” or similar non-specific terms.
Debit Cards
•
EPS strongly discourages the use of debit cards by any
sanctioned organization
•
If a debit card is used, observe the following safeguards:
•
Monthly statements reviewed and signed by two
officers who do NOT have access to the debit card
•
Debit card receipts are approved and signed by two
officers other than the purchaser
•
Debit card should be kept in secure location
•
Purchases should be reported in detail on reports
Raffles and Bingo
Raffles and Bingo
Raffles are allowed under Oklahoma law for
accredited public schools and affiliated student groups, PTAs, PTOs
and
501(c)(3)
organizations.
For bingo games where consideration is paid to play, organization must be a
501(c)(3
) and must obtain a license or exemption from the ABLE
Commission.
May be required to report prizes:
Raffles - winnings
>=$600
AND at least 300 times amount of wager (net of
amount of wager)
Bingo - winnings >=
$1,200
before deducting wager
May be required to withhold federal tax:
•
Raffles – winnings
>$5,000
•
Bingo – no FWT unless they don’t provide TIN, then backup w/h
28%
Can’t provide alcohol as prize.
FYI: Although sanctioned organizations can hold bingo games, schools
cannot. Raffles are allowed for both.
Compensation & Gifts
to District Employees
The IRS has deemed certain payments to District
employees by sanctioned organizations to be taxable as if
paid by the District:
Compensation for services (e.g. payments to coaches,
band directors, etc.)
Gifts to employees of the district (unless de minimis)
◦
Tangible personal property of minimal value
may be non-taxable
(dollar threshold for de minimis is not defined in law)
◦
Cash and gift cards are NEVER de minimis, and thus
ARE
taxable
regardless of amount and should be avoided.
Call the EPS Business Office for guidance before making
a taxable payment or giving a taxable gift!
Compensation for Services
•
Compensation to EPS employees may not be allowed for
reasons of conflict with contract terms or school equity issues
•
Check with the business office before making any
compensation arrangements with EPS employees
•
Any payments to employees are considered taxable wages and
must be made through EPS payroll department
•
Organization will reimburse the school for the compensation
amount PLUS employer FICA and Teachers Retirement
(totaling
25.39%
)
•
Employee will be responsible for employee FICA and income
tax withholding
Gifts to District Employees
If a sanctioned organization gives a gift to an employee, this is
deemed a taxable fringe benefit by the IRS.
•
Once
an employee receives tangible gifts with an accumulated value
of $75 in a calendar year,
this exceeds the de minimis threshold and
the entire amount is taxable income.
•
Inform the district of any gifts (even if individually de minimis)
BEFORE Winter Break.
The business office must combine gifts from
every source for W-2 reporting.
•
If gifts are given school wide, submit a spreadsheet listing the
names of recipients, item(s) given and dollar amount. Please turn in
promptly to Michele Russell in business department.
•
The District will invoice the sanctioned organization for the
employer FICA.
Gifts to District Employees – cont.
•
Inform recipient up front of the possible tax consequences of
your gift.
o
The employee will pay the employee FICA, federal, and state taxes on
gifts.
•
The following are
not
considered taxable fringe benefits:
o
Gifts to employees from individual
parents
o
Meals provided to staff during normal work hours if paid directly from
booster club funds
o
Employee reimbursements for qualified business expenses
with
appropriate receipts (without receipts it is a taxable gift)
Hosting Events on School Property
•
All building usage is subject to the provisions stated in District Policy #
5330
•
Fundraising events held outside of school hours require a nominal rental fee of
$20 an hour, proof of insurance, and a completed contract
•
Activity Booking Form must be completed and approved by site principal
•
Fundraisers must be safe (e.g. no dunk tanks) and follow EPS guidelines (if not
allowed in school, not allowed as fundraiser)
•
Any extra hours worked by EPS staff for the event (custodial, event supervisor,
auditorium tech) will be billed to the club
•
All vendors (such as food trucks, photo booths, and bouncy houses) must supply
proof of adequate liability insurance and a signed “Sex Offender” Affidavit on file
•
A list of approved food truck vendors is available from the business office
•
Contact Michele Russell for rental and food truck information at
Michele.Russell@edmondschools.net
Policy #5330 – Facilities Use
page 2 section II paragraph C
C. PTA/PTO groups and other specifically sanctioned parent
organizations fall into a special class of facility users. Such
organizations that conduct fund raising activities utilizing the
facilities identified will be subject only to the provisions noted below:
1. The organization will furnish the school district with a liability
policy covering the specific activity or event. The policy must
name the Edmond Public Schools as an additional insured.
2. The organization will be assessed a utility fee in the amount of $20 per
hour for utilization of a gymnasium, cafeteria, auditorium, or athletic
facility.
3. In addition to the rental fee, organizations shall be charged a minimum $30
per hour fee for custodial personnel, and/or auditorium technicians, and/or
a facility supervisor, as applicable.
4. The requirement to obtain liability insurance coverage (except for hired services as
noted in section I paragraph D above) as well as the utility fee shall be waived if all
proceeds from the activity are deposited into the school’s appropriate activity account.
District Beverage Agreement
•
Previously, the District had an exclusive rights agreement
with Southwest Beverages-Coca Cola which extended to
sanctioned parent organizations.
•
This year, the District is only maintaining the exclusivity
to vending machines.
•
Sanctioned organizations are still encouraged to use
Southwest Beverages when possible, but it is not
required.
•
Sanctioned organizations are no longer restricted to
selling only Coca-Cola products.
Property Donated by Sanctioned
Property Donated by Sanctioned
Organizations
Organizations
Must comply with all applicable codes
Must be free of liens
Becomes property of the district
School must maintain and inspect (but may ask for
assistance with expenses)
School is potentially liable if injury occurs
In order to ensure compatibility and ongoing support,
all technology items should be purchased by the
district.
Title IX Considerations for
Booster Clubs
•
Female athletes must be given equivalent opportunities
•
There must be no discrimination in the provision of
athletic opportunities
•
One of the many factors considered in determining
overall compliance with Title IX is the funding level of
related programs.
•
Booster club funds are considered in this analysis
Recommended Practices
•
Required annual election or affirmation of officers
•
Required periodic meetings open to the membership
•
Required full financial disclosure to the membership
•
Surety bonds for treasurer and others who handle money
•
Officer liability insurance
•
System of internal controls over cash, including
segregation of duties as much as possible
•
Emails must come from sanctioned organization, not
from EPS employee. A principal/sponsor can forward
email written by sanctioned org.
•
Sanctioned org. need a locked drop box for payments and
forms. EPS employees cannot handle the money.
RESTRICTIONS REGARDING
OFFICER POSITIONS
•
Any full-time employee that is assigned to the school
that is supported by the organization cannot hold
the office of President or Treasurer
•
Any relative of a full-time employee that is assigned
to the school that is supported by the organization
cannot hold the office of President or Treasurer
•
Relative is defined as: father, mother, brother, sister,
spouse, child, cousin, aunt or uncle, including generational
extensions (e.g. grandparent, great-uncle)
Employees of Edmond Public Schools are restricted from
holding certain offices within a sanctioned organization.
Officer positions that typically have fiscal control (e.g.
President and Treasurer) are restricted as follows:
RESTRICTIONS REGARDING
OFFICER POSITIONS cont.
•
A substitute worker that is
not
on a long-term contract
may serve as President or Treasurer
•
Should the by-laws of an organization define a different
position as having fiscal responsibility, said position
would also be restricted
Ways to Protect Against Liability
•
Insurance and bonds
•
Good procedures
•
Written documents to provide club “memory”
•
Well thought-out activities and services (no dunk
tanks)
•
Consider national affiliation (PTA vs. PTO)
•
Volunteer Protection Act provides some
protection if an incident occurs within the scope
of the volunteerism and there is no misconduct
or negligence
Best Sanctioning Financial Practices
•
Issue numbered receipts
•
Segregate duties as much as possible
•
“It takes two”
•
Check payments must have two signatures
•
Provide financial transparency to organization members
and district
•
File proper IRS forms correctly and timely
•
Understand Board of Education sanctioning policy,
guidelines and procedures.
•
Controls in place if using debit cards to prevent misuse.
Segregation of Duties
Ideally:
•
The person who orders/purchases an item should not be
the one who pays for it.
•
The person making the purchase should not be the one
who approves it.
•
The person who collects money should not be the one
who deposits it.
•
The person who reconciles the bank account should not
be the one who takes the collections.
•
The person who writes the checks should not be the one
who reconciles the bank account
Minimum Internal Controls -
Receipts
•
Money kept safe with controlled access.
•
School staff cannot collect money for PTA/PTO/Booster
club.
•
Collections listed when received.
•
Money deposited intact by a person other than the one
collecting it.
•
Listed collections verified to deposit total.
•
Bank account reconciled monthly.
•
Bank reconciliations reviewed by another.
Minimum Internal Controls -
Disbursements
•
All purchases approved in advance by someone other
than the person making the purchase.
•
Goods checked to see they are received as ordered.
•
Invoice checked to items received and order pricing;
signed by person who accepts responsibility.
•
Two signatures required on checks.
•
Check signer reviews documentation before signing
check.
•
Cancelled checks listed and accounted for.
•
Bank statements reviewed and signed by two officers
other than debit card holder.
•
Debit card receipts approved & attached with bank
statement.
Please let us know if any contact
information changes from what
was on your application.
Cheryl Fenech
405-340-2809
cheryl.fenech@edmondschools.net
•
Officer changes
•
Updated information for officers
•
Email address
•
Phone number
•
Banking information
•
Updated signature cards
•
Tax returns filed after application
submitted
Contact Information for EPS
Nicole Ball, Finance Supervisor
Phone:
(405) 340-2881
Email:
Nicole.ball@edmondschools.net
Cheryl Fenech, Sanctioning Assistant
Phone:
(405) 340-2809
Email:
Cheryl.fenech@edmondschools.net
This presentation, along with other resources,
will be posted on our website:
edmondschools.net/district/departments/business/
sanctioned-organizations/
Good business practices
protect your assets,
your officers,
your members,
and our students!
Edmond Public Schools
Sanctioned Organizations
Sanctioning in Edmond Public Schools allows organizations to operate for the benefit of students by permitting fundraising on school property and providing financial exemption from certain laws. However, it does not equate to control as organizations manage their own funds and must comply with relevant laws. The application process involves annual submissions with financial information, subject to approval by the School Board. Using software reports for financial management and ensuring outgoing and incoming officers are involved in the process are recommended steps. Additionally, 501(c)(3) status for tax exemption is highlighted.
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Presentation Transcript
Edmond Public Schools Sanctioned Organizations
What is Sanctioning? Recognition & Attribution Allows organization to operate for benefit of students Permits fundraising on school property Finances are exempt from school laws over activity fund Board of Education has complete discretion whether to sanction a group
Sanctioning Does NOT Equal Control Board of Education does not control funds; organizations operate from their own bank accounts Organizations must obtain their own tax ID number Organizations may NOTuse school district s tax ID number or tax-free status Board of Education is NOT responsible for ensuring that organization complies with applicable state and federal laws
Sanctioning Application Process Apply annually applications emailed end of April Due in EPS business office by mid June each year Include Financial Information from June of prior year through May (June 1, 2023 to May 31, 2024) see example next slide Approval by School Board at August meeting Board can request records at any time Board can withdraw sanctioning at any time Applications are subject to Open Records Act
Using Your Softwares Profit and Loss Report For Your Cash Flow Statement 1. Date range for report must be June 1 of prior year to May 31 of current year. 2. Write in the June 1 beginning cash balance. 3. Add Total Income. 4. Subtract Total Expenses. 5. This gives the ending balance which must reconcile to the bank statement.
Application Process cont. Recommend that outgoing and incoming officers fill out application together. This is a great way to pass down information. Bank statements please review and sign the statements prior to submitting. Organizations with debit cards and electronic payments must submit an example of the controls in place in addition to the reviewed bank statement.
501(c)(3) Status Exemption from income taxation by the IRS under section 501(c)(3) of the Internal Revenue Code Certificate of Incorporation and Bylaws must be filed with the Secretary of State Criteria and process for applying can be found in IRS Publication 557 PTAs that are members of the National Parent Teacher Association are exempt under a group and national exemption Group exemption also available under Parent Booster USA
501(c)(3) Advantages Income is tax exempt (except unrelated business income, e.g. advertising) Contributions received are tax deductible to the donor Many corporations and foundations require 501(c)(3) status before they will make contributions Individual members are protected from personal liability Eligible to hold bingo games in Oklahoma
Obtaining 501(c)(3) status If you have not yet received your 501(c)(3) determination letter from the IRS, EPS recommends contacting Parent Booster USA (www.parentbooster.org) PBUSA is a non-profit organization that provides services to booster clubs at reasonable prices Tax exempt status may become a requirement of sanctioning in the future
Parent Booster USA Founded in 2004 by an attorney skilled in nonprofit and tax law, PBUSA has more than 3,500 member organizations in 48 states with a 95% annual renewal rate. PBUSA provides peace of mind for parent volunteers, school administrators and school district leadership. https://parentbooster.org/member-resources
Tax Return Requirements ALL nonprofit groups are required to file tax returns The IRS requires that any organization, regardless of income, MUST file the appropriate tax return Organizations recognized as tax-exempt file the appropriate form of IRS 990 If an organization does not have tax-exempt status it may be required to file a corporate tax return and pay tax on net income
Tax Return Requirements cont. If a booster club does not file a tax return, it risks future penalties and interest for failure to do so If a booster club DOES NOT have federal tax-exempt status, filing a Form 990, the tax-exempt return, will raise questions The IRS expects all organizations to begin filing taxes immediately upon obtaining an Employer Identification Number (EIN) Nonprofits that fail to file federal income taxes on time for three consecutive years automatically lose their tax- exempt status
Federal Filing Obligations If 501(c)(3), Form 990, the annual "Return of Organization Exempt From Income Tax," If gross receipts are normally $50,000 or less may generally file 990-N (e-postcard) If gross receipts < $200,000 AND total assets < $500,000 file 990-EZ Searchable data base of exempt organizations as well as revoked exemptions is available at http://www.irs.gov/Charities-&-Non- Profits/Exempt-Organizations-Select-Check If an organization has unrelated business income of more than $1,000, it must file an unrelated business tax return, Form 990-T in addition to the Form 990 (Taxes will be due on this income regardless of the 501(c)(3) status) If non 501(c)(3), Form 1120 Corporate income tax return is required
State Filing Obligations Oklahoma automatically exempts organizations with IRS 501(c)(3) status from Oklahoma state income tax. However, organizations must file the OK tax return, Form 512E. The form is due on the same day the IRS Form 990 is due. This makes the form's due date the 15th day of the 5th month after the end of your fiscal year. In simple terms, that is May 15 for organizations on a January 1 - December 31 calendar year. From parentbooster.org
State Filing Obligations cont. In Oklahoma, school fundraising organizations, including PTAs, PTOs, and booster clubs, must file exemption from charity registration if the group is "authorized" by the school. Apply for exemption , including your school's authorization letter and a $15 filing fee with theOklahoma Secretary of State. From parentbooster.org
State Sales Tax Not required to collect and remit sales taxes: A public or private student group/organization, or A PTO or PTA (even if not a 501(c)(3)) Not required to pay sales tax on purchases: A PTA (member of national association; PTOs are not included), or An organization which has acquired a sales tax permit from the Oklahoma Tax Commission for items purchased for resale, or An organization which has acquired a sales tax exemption from the Oklahoma Tax Commission (The OTC allows ONE exempt parent-teacher group per school) Additional information can be found on Oklahoma Tax Commission Agency Rules pgs 464-465
State Sales Tax cont. Per the Oklahoma Sales Tax Exemption Packet (one PTO per school): The entities that qualify for sales tax exemption in Oklahoma are specifically legislated. Therefore, not all entities that are recognized by the Internal Revenue Service as tax exempt pursuant to 26 USC 501(c)(3) are exempt from sales tax in Oklahoma. The organization must have a Federal Identification Number before applying. Oklahoma has ruled that Booster Clubs are NOT exempt. Booster Clubs may apply for a Oklahoma sales tax resale permit. This permit would enable the group to make purchases for resale exempt from sales tax. Periodic sales tax returns will be required for a permit holder. Sales tax must be charged to the customers for all goods sold. Collected taxes must be remitted with periodic returns.
State Sales Tax cont. Collect and remit sales tax on goods sold Pay sales tax on purchases PTA NO NO PTO NO YES PTO w/Sales tax exemption * NO NO Booster Club YES YES Booster Club w/sales tax permit YES MAYBE ** *Limit one PTO per school per OTC **Only on items for resale are exempt
Payments for Professional Services All individuals who will have contact with our students must have a current, clear background check on file with the district Payment for professional services is strongly encouraged to be made through the school s activity fund in order to ensure compliance This practice will alleviate the need for your club to file form(s) 1099 for these services Funding to the activity fund can be by donation or reimbursement depending on school s preference
Payments for Professional Services cont. If your club does pay directly for any of the following, a form 1099-MISC must be issued to the payee for any payments totaling $600 or more in a calendar year: Services, Prizes/Awards, Rents, Royalties, Attorney fees, Medical services A 1099-MISC is not required for payments to companies/individuals who only provide goods
Merchant Accounts EPS does not approve or chose the merchant processor or cash payment apps for booster clubs. Merchant accounts & cash payment apps must be linked to business bank accounts (not personal) Income and expense should be categorized appropriately on the cash flow statement as opposed to labeling as credit card receipts or similar non-specific terms.
Debit Cards EPS strongly discourages the use of debit cards by any sanctioned organization If a debit card is used, observe the following safeguards: Monthly statements reviewed and signed by two officers who do NOT have access to the debit card Debit card receipts are approved and signed by two officers other than the purchaser Debit card should be kept in secure location Purchases should be reported in detail on reports
Raffles and Bingo Raffles are allowed under Oklahoma law for accredited public schools and affiliated student groups, PTAs, PTOs and 501(c)(3) organizations. For bingo games where consideration is paid to play, organization must be a 501(c)(3) and must obtain a license or exemption from the ABLE Commission. May be required to report prizes: Raffles - winnings >=$600 AND at least 300 times amount of wager (net of amount of wager) Bingo - winnings >= $1,200 before deducting wager May be required to withhold federal tax: Raffles winnings >$5,000 Bingo no FWT unless they don t provide TIN, then backup w/h 28% Can t provide alcohol as prize. FYI: Although sanctioned organizations can hold bingo games, schools cannot. Raffles are allowed for both.
Compensation & Gifts to District Employees The IRS has deemed certain payments to District employees by sanctioned organizations to be taxable as if paid by the District: Compensation for services (e.g. payments to coaches, band directors, etc.) Gifts to employees of the district (unless de minimis) Tangible personal property of minimal value may be non-taxable (dollar threshold for de minimis is not defined in law) Cash and gift cards are NEVER de minimis, and thus ARE taxable regardless of amount and should be avoided. Call the EPS Business Office for guidance before making a taxable payment or giving a taxable gift!
Compensation for Services Compensation to EPS employees may not be allowed for reasons of conflict with contract terms or school equity issues Check with the business office before making any compensation arrangements with EPS employees Any payments to employees are considered taxable wages and must be made through EPS payroll department Organization will reimburse the school for the compensation amount PLUS employer FICA and Teachers Retirement (totaling 25.39%) Employee will be responsible for employee FICA and income tax withholding
Gifts to District Employees If a sanctioned organization gives a gift to an employee, this is deemed a taxable fringe benefit by the IRS. Once an employee receives tangible gifts with an accumulated value of $75 in a calendar year, this exceeds the de minimis threshold and the entire amount is taxable income. Inform the district of any gifts (even if individually de minimis) BEFORE Winter Break. The business office must combine gifts from every source for W-2 reporting. If gifts are given school wide, submit a spreadsheet listing the names of recipients, item(s) given and dollar amount. Please turn in promptly to Michele Russell in business department. The District will invoice the sanctioned organization for the employer FICA.
Gifts to District Employees cont. Inform recipient up front of the possible tax consequences of your gift. o The employee will pay the employee FICA, federal, and state taxes on gifts. The following are not considered taxable fringe benefits: o Gifts to employees from individual parents o Meals provided to staff during normal work hours if paid directly from booster club funds o Employee reimbursements for qualified business expenses with appropriate receipts (without receipts it is a taxable gift)
Hosting Events on School Property All building usage is subject to the provisions stated in District Policy #5330 Fundraising events held outside of school hours require a nominal rental fee of $20 an hour, proof of insurance, and a completed contract Activity Booking Form must be completed and approved by site principal Fundraisers must be safe (e.g. no dunk tanks) and follow EPS guidelines (if not allowed in school, not allowed as fundraiser) Any extra hours worked by EPS staff for the event (custodial, event supervisor, auditorium tech) will be billed to the club All vendors (such as food trucks, photo booths, and bouncy houses) must supply proof of adequate liability insurance and a signed Sex Offender Affidavit on file A list of approved food truck vendors is available from the business office Contact Michele Russell for rental and food truck information at Michele.Russell@edmondschools.net
Policy #5330 Facilities Use page 2 section II paragraph C C. PTA/PTO groups and other specifically sanctioned parent organizations fall into a special class of facility users. Such organizations that conduct fund raising activities utilizing the facilities identified will be subject only to the provisions noted below: 1. The organization will furnish the school district with a liability policy covering the specific activity or event. The policy must name the Edmond Public Schools as an additional insured. 2. The organization will be assessed a utility fee in the amount of $20 per hour for utilization of a gymnasium, cafeteria, auditorium, or athletic facility. 3. In addition to the rental fee, organizations shall be charged a minimum $30 per hour fee for custodial personnel, and/or auditorium technicians, and/or a facility supervisor, as applicable. 4. The requirement to obtain liability insurance coverage (except for hired services as noted in section I paragraph D above) as well as the utility fee shall be waived if all proceeds from the activity are deposited into the school s appropriate activity account.
District Beverage Agreement Previously, the District had an exclusive rights agreement with Southwest Beverages-Coca Cola which extended to sanctioned parent organizations. This year, the District is only maintaining the exclusivity to vending machines. Sanctioned organizations are still encouraged to use Southwest Beverages when possible, but it is not required. Sanctioned organizations are no longer restricted to selling only Coca-Cola products.
Property Donated by Sanctioned Organizations Must comply with all applicable codes Must be free of liens Becomes property of the district School must maintain and inspect (but may ask for assistance with expenses) School is potentially liable if injury occurs In order to ensure compatibility and ongoing support, all technology items should be purchased by the district.
Title IX Considerations for Booster Clubs Female athletes must be given equivalent opportunities There must be no discrimination in the provision of athletic opportunities One of the many factors considered in determining overall compliance with Title IX is the funding level of related programs. Booster club funds are considered in this analysis
Recommended Practices Required annual election or affirmation of officers Required periodic meetings open to the membership Required full financial disclosure to the membership Surety bonds for treasurer and others who handle money Officer liability insurance System of internal controls over cash, including segregation of duties as much as possible Emails must come from sanctioned organization, not from EPS employee. A principal/sponsor can forward email written by sanctioned org. Sanctioned org. need a locked drop box for payments and forms. EPS employees cannot handle the money.
RESTRICTIONS REGARDING OFFICER POSITIONS Employees of Edmond Public Schools are restricted from holding certain offices within a sanctioned organization. Officer positions that typically have fiscal control (e.g. President and Treasurer) are restricted as follows: Any full-time employee that is assigned to the school that is supported by the organization cannot hold the office of President or Treasurer Any relative of a full-time employee that is assigned to the school that is supported by the organization cannot hold the office of President or Treasurer Relative is defined as: father, mother, brother, sister, spouse, child, cousin, aunt or uncle, including generational extensions (e.g. grandparent, great-uncle)
RESTRICTIONS REGARDING OFFICER POSITIONS cont. A substitute worker that is not on a long-term contract may serve as President or Treasurer Should the by-laws of an organization define a different position as having fiscal responsibility, said position would also be restricted
Ways to Protect Against Liability Insurance and bonds Good procedures Written documents to provide club memory Well thought-out activities and services (no dunk tanks) Consider national affiliation (PTA vs. PTO) Volunteer Protection Act provides some protection if an incident occurs within the scope of the volunteerism and there is no misconduct or negligence
Best Sanctioning Financial Practices Issue numbered receipts Segregate duties as much as possible It takes two Check payments must have two signatures Provide financial transparency to organization members and district File proper IRS forms correctly and timely Understand Board of Education sanctioning policy, guidelines and procedures. Controls in place if using debit cards to prevent misuse.
Segregation of Duties Ideally: The person who orders/purchases an item should not be the one who pays for it. The person making the purchase should not be the one who approves it. The person who collects money should not be the one who deposits it. The person who reconciles the bank account should not be the one who takes the collections. The person who writes the checks should not be the one who reconciles the bank account
Minimum Internal Controls - Receipts Money kept safe with controlled access. School staff cannot collect money for PTA/PTO/Booster club. Collections listed when received. Money deposited intact by a person other than the one collecting it. Listed collections verified to deposit total. Bank account reconciled monthly. Bank reconciliations reviewed by another.
Minimum Internal Controls - Disbursements All purchases approved in advance by someone other than the person making the purchase. Goods checked to see they are received as ordered. Invoice checked to items received and order pricing; signed by person who accepts responsibility. Two signatures required on checks. Check signer reviews documentation before signing check. Cancelled checks listed and accounted for. Bank statements reviewed and signed by two officers other than debit card holder. Debit card receipts approved & attached with bank statement.
Please let us know if any contact information changes from what was on your application. Cheryl Fenech 405-340-2809 cheryl.fenech@edmondschools.net Officer changes Updated information for officers Email address Phone number Banking information Updated signature cards Tax returns filed after application submitted
Contact Information for EPS Nicole Ball, Finance Supervisor Phone: (405) 340-2881 Email: Nicole.ball@edmondschools.net Cheryl Fenech, Sanctioning Assistant Phone: (405) 340-2809 Email: Cheryl.fenech@edmondschools.net This presentation, along with other resources, will be posted on our website: edmondschools.net/district/departments/business/ sanctioned-organizations/
Good business practices protect your assets, your officers, your members, and our students!
Edmond Public Schools Sanctioned Organizations
