Jordan School District Financial Accounting Manual Prepared by: Accounting/Budget Office ______________________________ Updated Fall 2013 Table of Contents INTRODUCTION LETTER ................................................................................................................................ ii PUBLIC FUNDS ............................................................................................................................................... 1 AUDIT OF FINANCIAL RECORDS .................................................................................................................... 1 INTERNAL CONTROL SYSTEM ........................................................................................................................ 1 ACCOUNT CODING SYSTEM .......................................................................................................................... 1 PURCHASING ................................................................................................................................................. 4 FIXED ASSETS............................................................................................................................................... 10 PURCHASING CARDS ................................................................................................................................... 11 DISTRICT REIMBURSEMENTS ...................................................................................................................... 17 CASH RECEIPTS ............................................................................................................................................ 20 BANK ACCOUNTS ........................................................................................................................................ 23 SCHOOL LEDGER ACCOUNTS ...................................................................................................................... 25 CASH DISBURSEMENTS ............................................................................................................................... 30 JOURNAL ENTRIES ....................................................................................................................................... 35 DISCRETIONARY FUNDS .............................................................................................................................. 35 PERSONAL USE OF DISTRICT ASSETS ........................................................................................................... 35 SIGNING OF OFFICIAL DISTRICT DOCUMENTS ............................................................................................ 36 EMPLOYEE TRAVEL ...................................................................................................................................... 36 GRANTS ....................................................................................................................................................... 41 DONATIONS ................................................................................................................................................ 42 UTAH SALES TAX ......................................................................................................................................... 44 PAYMENT TO EMPLOYEES VS INDEPENDENT CONTRACTORS (W-2 VS. 1099) ........................................... 46 FINANCIAL RECORD RETENTION SCHEDULE ............................................................................................... 48 SCHOOL SPECIFIC ISSUES ............................................................................................................................ 49 FACILITY RENTAL GUIDELINES AND FEE SCHEDULE .................................................................................... 59 APPENDIX .................................................................................................................................................... 73 NTRODUCTION LETTER September 2013 This manual is intended for all Jordan School District employees who have any financial responsibility within the District. Although not all sections of this manual will apply to everyone, it should prove helpful to anyone who has questions regarding accounting within the District. All District employees shall comply with the policies and procedures in the accounting manual. Training on any significant changes will be provided at the annual business meeting. It is the responsibility of principals and department directors to ensure that their employees have received proper training, are familiar with any changes, and are in compliance with District policy. This manual was reviewed and approved by the deputy superintendent for Business Services. In addition, the District’s administrative cabinet gives input into its contents. The policies in this manual provide a framework for audits as well as establish the processes for District financial activity. Balancing good accounting practices with practical procedures in an educational environment is challenging. Each policy in this manual was thought out and felt to be appropriate; however, if you have a suggestion or idea on changes that may need to be made to improve the accountability of the District’s finances or to streamline the accounting processes, please let us know. As with most manuals, updates, additions, and corrections will need to be made constantly. If you notice anything in this manual that is wrong or should be changed, please notify the accounting department. We want this manual to be useful, which means it must be as up-to-date and correct as possible. Significant changes that have been made since the previous version (Fall 2012) have been highlighted for the reader’s convenience. At the end of the manual is a set of forms and other documents that should be of help to each department and school. Please feel free to copy and use these forms as appropriate. Electronic versions of these forms are also available on the accounting department webpage: www.jordandistrict.org/departments/accounting/. Sincerely, John N. Larsen, CPA, Director of Accounting, Budgets, and Audits Heather D. Ellingson, CPA, Accountant/Internal Auditor ii PUBLIC FUNDS “Public Funds” refers to money, funds, and accounts, regardless of the source from which the funds are derived, that are owned, held, or administered by the state of any of its political subdivisions. All monies collected, retained, or donated at Jordan School District Offices or any of the schools within Jordan School District are public funds and should be treated as such. Collection and expenditure of Public Funds must comply with State rule, District policy and the Accounting Manual. AUDIT OF FINANCIAL RECORDS The District will be audited by external auditors on an annual basis. In addition to auditing the financial records of the District, the external audit firm will audit financial and membership records of the schools. Schools will be audited every year by either the District’s internal auditor or by the external audit firm. The external audit firm will select schools to visit on a rotating basis; typically, high schools will be selected every year, middle schools will be selected every other year and elementary and special schools will be selected every third year. The District’s internal auditor will visit schools not selected by the external audit firm. Schools may be selected for audits at other times by the internal auditor, external auditors or other State agencies. Annually, the external audit firm will report its findings to the audit committee. The audit committee is comprised of the Jordan School District Board of Education, the Deputy Superintendent for Business Services, the Director of Accounting, Budgets and Audits, and the Internal Auditor. The external audit firm will be selected by the audit committee using the District’s RFP process. INTERNAL CONTROL SYSTEM The policies and procedures outlined in this manual are based on a principle of internal controls. Internal controls are designed to limit the risk of misstatement due to errors, theft and misappropriation of district assets. The control environment reflects the overall attitude, awareness, and action of the Board, Administration, and others concerning the importance of control and its emphasis in the district. The accounting system establishes a method to identify, assemble, analyze, classify, record, and report the district’s transactions and to maintain accountability for the related assets and liabilities. Skyward is the district’s official accounting system. No other system should be used to track or record financial transactions or data. Using additional systems weakens the information in Skyward, wastes resources, and is ineffective. Every effort has been made to establish policies and procedures that balance the effectiveness of controls with the costs associated with implementing them. Commitment to internal controls is necessary at all levels of the district in order for the controls to be effective. ACCOUNT CODING SYSTEM Account Number Structure and Detail It is important to identify the proper account to which an item will be expensed prior to making any purchase. Doing so will ensure that proper approvals have been obtained and transactions are accounted for appropriately. This is applicable to both school paid and district paid transactions. The district uses a 17 digit account number, which is in the following format. It is extremely important