Have you lost track of your extra-curricular tax credit and auxiliary

operations dollars?

Prepared by: Annette Moreno, Pendergast Elementary School DistrictTracy McLaughlin, Heinfeld, Meech & Co., P.C.

Extra-curricular Tax Credit• In accordance with A.R.S. § 15-342(24) and § 43-1089.01(G)(2):

• 1. Is the activity sponsored by the district/school? • 2. Is the activity for enrolled students? • 3. Is the activity optional? • 4. Is the activity non-credit? • 5. Does the activity supplement the district/school’s educational

program? • 6. Does the district/school charge a fee for participation in the

activity? • 7. Is the activity fee paid directly to the district/school? • 8. Was the fee for this activity adopted by the Governing Board at a

public meeting after notice to all parents of enrolled students? • 9. Has the Governing Board authorized the principal to waive all or part

of the activity fee if it creates an economic hardship for a student?

Are you prepared?

• USFR Chart of Accounts– Fund 525 or 526

• General ledger or not?‒ Excel spreadsheet‒ Project or course codes?

Legislative Changes to ECTC

• First Regular Session 2011– HB 2031– 50% unencumbered contributions prior to

December 31, 2010– Short-term capital items– Only for SY 2012 and 2013

ARS §43-1089.01(F)

• 50% unencumbered contributions– Identify– Calculate– Reduce– Document, document, document

Legislative Changes to ECTC

• Unspent designated contributions– Reclassified • Following year,• Specific purpose or program discontinued,

OR• Specific purpose or program defunct for two (2)

consecutive fiscal years

ARS §43-1089.01(E)

Legislative Changes to ECTC

Just a side note…

• Unspent, undesignated contributions– Site council of each individual school shall

determine

Arizona Department of RevenueGuidelines For The Public School Extracurricular Activity (ECA) Tax Credit – www.azdor.gov

State of Arizona Office of the Auditor GeneralFAQs, newsletters, USFR Memos – www.auditorgen.state.az.us

Being informed

Annual Financial Report

• FY 2010– Fund 525 and 526 - Page 9 Section H added• Function/Object detail required

• FY 2011 and thereafter– Transaction activity detail by fund, program,

function, object and unit required• Record in Accounting Records

– Directly or by– Summary Journal Entries

• Detail included in Audit File

Summary Journal Entries

• Revenue– Credit Object 1790, Debit Cash Object 0102

• Expenditure– Debit proper Fund, program, function, object, unit– Credit Cash Object 0102• Art Club supplies at Pendergast School:

– Debit: 526.100.1000.6611.112.802.0000– Credit: 526.000.0000.0102.000.000.0000– Course code 802 is a specific activity - Art

When In Doubt

• Refer back to your resource– State of Arizona Office of the Auditor General

www.auditorgen.state.az.us

– Arizona Department of Revenuewww.azdor.gov

Thank you for your attendance!

Annette Moreno Tracy McLaughlinPendergast Elementary School District Heinfeld, Meech & Co., P.C.amoreno@pesd92.orgtracym@heinfeldmeech.com