Independent Activity Funds Data Report for FY 2013

7/29/2019 Independent Activity Funds Data Report for FY 2013

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Office of Shared AccountabilityMONTGOMERY COUNTY PUBLIC SCHOOLSRockville, Maryland

September 9, 2013MEMORANDUMTo: Fiscal Management Committee Members

Mr. Geoffrey T. Sanderson, Associate Superintendent, Office of Shared [>"'($AccountabilityRoger W . Pisha, Internal Audit Supervisor p / J , - ; L , ' 4

Through:

From:Subject: Independent Activity Funds Data Report for FY 20 l 3

Each year, all school principals must file an annual report on the Independent Activity Funds(IAF) held at their school. These reports are utilized by the Division of Controller staff to createa schedule fo r the Comprehensive Annual Financial Report.The attached report was compiled using school data to reflect cash receipts, cash disbursements,and Centralized Investment Fund balances in total, on a per school basis, and as compared withthe county average for all Montgomery County Public Schools secondary schools. The reportconsists of an abstract section and graphs that you may find useful in understanding themagnitude of the impact that IAF has on secondary school operations.In addition to the report, the raw data from each secondary school's annual report has beenincluded together with two summarized reports on spending at the high and middle school levels.These reports should help in your continued review of the IAF.RWP:sdAttachmentsCopy to:Mr. BowersDr. Schiavino-NarvaezDr. StathamAssociate Superintendents of SchoolsMrs. ChenMrs. DeGraba


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Q MONTGOMERYCOUNTY PUBLIC\ SCHOOLS ~"72012-2013 INDEPENDENT ACTIVITY FUNDS DATAFOR THEMONTGOMERY COUNTY PUBLIC SCHOOLSMANAGEMENT REPORT

Office of Shared AccountabilityInternal Audit Unit

September 2013Mary J.BergstresserVirginia A. Denning, CPADena K. Horton, CGAPRoger W. Pisha, CIA, CGAP, CGFM


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FY 2013 INDEPENDENT ACTIVITY FUND DATA FOR THEMONTGOMERY COUNTY PUBLIC SCHOOLS

Abstract

The 2012-2013 edition of the Montgomery County Public Schools (MCPS) Schools at a Glancereports that there were 44,824 students enrolled in 25 high schools, 31,227 enrolled in 38 middleschools, and 71,591 enrolled in 132 elementary schools. These schools are supported byappropriations of county tax revenues, as well as federal and state government appropriationsand grants from private organizations. In addition, each school is supported by IndependentActivity Funds (IAFs) which also are reported in the MCPS Comprehensive Annual FinancialReport (CAFR) as agency funds. Generally Accepted Accounting Principles (GAAP) definethese funds as "held in an agency capacity for others." Use of agency funds is expressly limited,and they cannot be used to support the government's own programs.1IAFs of MCPS are established to promote the general welfare, education, and morale of studentsas well as to finance the recognized extracurricular activities of the student body. Principals arethe fiduciary agents for the IAFs charged with determining the manner in which funds are raisedand expended for activities such as field trips, admission events, and fund-raisers. They areresponsible for ensuring that IAFs are administered in accordance with MCPS policies,regulations, and procedures. Unless ownership is otherwise designated, IAFs of the schoolbelong to the student body currently enrolled in the school.Many schools have parent groups, such as Parent Teachers Associations (PTA) or booster clubs,which derive revenues associated with school activities. Financial activities of PTAs aregoverned by Cash Encounters: A Maryland PTA Guide for Money Management, while mostbooster clubs are organized more informally and are governed by their own local bylaws as wellas the MCPS High School Athletics Handbook which is revised annually. These groups shouldmaintain their own organizational bank accounts because they are not allowed to deposit fundsinto school IAF bank accounts. However, these parent groups may provide grants or donationsto schools. As with all other IAF expenditures, schools must comply with MCPS policies andregulations when procuring goods and services using funds received from these organizations.Annual financial reports for all MCPS IAFs are submitted to the Internal Audit Unit (TAU)following the conclusion of each fiscal year. Data consisting of assets, liabilities, and fundbalances are extracted from these reports and compiled for analysis. Cash receipts consist of themoney collected for IAF programs and are to be deposited to the school's checking account on adaily basis. Most receipts are derived either directly from students or indirectly from theirparticipation in activities. Receipts may consist of fees for course-related expenses, parkingpermits, field trips, dances, commissions on vending machines and school pictures, admissions todrama productions and athletic competitions, and a variety of other student fund-raisingactivities. Each school is required to inform parents and students of any course-related fees.Course-related expenses are limited to food consumed by a student as part of a course, materials

1 Governmental Accounting Standards Board Statement No. 34, paragraph 69.Officeof SharedAccountability2012-2013 IndependentActivityFundDataReport Page2


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that become a product that belongs to the student, personal items that become the student'sproperty, and fees assessed by outside organizations.Cash disbursements are monies paid out by the schools for IAF programs and activities. Fieldtrip expenses include buses, admission fees, and substitute teachers. Other purchases of goodsand services that enhance the curricular and extracurricular experiences for students may includeathletic clothing and equipment, fund-raising products, and maintenance of buildings. Theoverall policy guiding the purchase of supplemental materials for students is MCPS Policy JNA,Curricular Expenses for Students. The purpose of this policy is to ensure that all students,regardless of their economic circumstances, receive full access to all courses, the instructionalmaterials required for those courses, and the instructional program.The IAFs are deposited into, and disbursed from a checking account maintained by each school.Balances in the checking account that exceed current needs can be transferred to the CentralizedInvestment Fund (CIF), a savings program in which individual schools' monies are pooled togain a greater rate of interest. The purpose of the CIF is to enable schools to maximize interestearned on their idle funds. This fund is audited every year with the results reported to thesuperintendent of schools and the CIF Advisory Counci I. The CIF began operation on ApriI 14,1981, with only $29,000, from three schools. For the next 32 years, schools have united toincrease the return by investing their funds for short periods through the CIF. Effective April 1,2011, MCPS began a partnership with Sandy Spring Bank for investment of the funds providinga guarantee of returns tied to the return of two-year treasury notes that improves the previousreturns received from the Maryland Local Government and Montgomery County InvestmentPools. As of June 30, 2013, the fund had deposits totaling approximately $12.2 million from 197schools. Withdrawals of funds from the CTF are transmitted via direct deposit to a school'schecking account.At June 30, 2013, the CIF rate of interest was 0.24 percent. This compares with the same interestrate of 0.24 percent at June 30, 2012. Any changes in the interest rate are due to economicfactors beyond the control of the CIF advisory board.In FY 2013, MCPS schools generated $33,841,439 in total IAF revenues while expending$34,014,458. Total assets in the IAF, as of June 30, 2013, were $18,192,624, a decrease of$145,667 from the previous fiscal year. MCPS schools invested $12, 154,584, or 67 percent oftotal IAF assets i n the CIF.Although elementary and secondary school data are included in this narrative, only secondaryschool data are depicted graphically in the appendices.

High School DataHigh schools held approximately 53 percent of all TAFassets for FY 2013. Total high schoolassets decreased $264, 191 from $9,938,462 to $9,674,271, compared to the previous fiscal year.Total high school IAF receipts decreased $27,008 from $19,657,311 to $19,630,303 while totaldisbursements increased $252,073 from $19,640,526 to $19,892,599, compared to the previousfiscal year.

Officeof SharedAccountability2012-2013 IndependentActivityFundDataReport Page3


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For FY 2013, high school CIF balances decreased $387,330 from $7,565,833 to $7, 178,503,compared to the previous fiscal year.

It should be noted that Thomas Edison High School of Technology was not included in this data.The school's IAF does not reflect typical transactions processed at the high school level. InFY 2013, the school's extracurricular activity receipts decreased $2,196 from $131,396 to$129,200, while its disbursements increased $11,568 from $133,485 to $145,053, compared tothe previous fiscal year. The school's CIF balance decreased $13,391 from $99,967 to $86,576,compared to the previous fiscal year.Middle School DataMiddle schools held approximately 21 percent of all IAF assets for FY 2013. Total middleschool assets increased $8,568 from $3,774,714 to $3,783,282, compared to the previous fiscalyear. Total middle school !AF receipts increased $245,024 from $6,725,019 to $6,970,043 whiletotal disbursements increased $198, 106 from $6,789,671 to $6,987,777 compared to the previousfiscal year.For FY 2013, middle school CIF balances decreased $121,996 from $2,596,749 to $2,474,753,compared to the previous fiscal year.Elementary School DataElementary schools held approximately 24 percent of all IAF assets for FY 2013. Totalelementary school assets increased $154,072 from $4,268,544 to $4,422,616, compared to theprevious fiscal year. Total elementary school IAF receipts increased $339, 162 from $6,535,887to $6,875,049 while total disbursements increased $285,072 from $6,455,285 to $6,740,357compared to the previous fiscal year.For FY 2013, elementary school CIF balances increased $29,535 from $2,257,604 to $2,287,139,compared to the previous fiscal year.ConclusionThe dollar amount of receipts and disbursements varies from school to school as well as fromyear to year within the same school. Regardless of the amount of receipts and disbursements,proper management of the IAF is a significant responsibility. Good stewardship involvessafeguarding of the students' funds and prudent expenditures thereof. It should be noted thatdisbursements, primarily personal in nature for the benefit of school employees, are prohibiteduses of IAF funds unless the funds for these purposes are derived solely from non-studentgenerated sources. Disbursements for meeting refreshments and staff appreciation within thelimitations authorized by the chief operating officer are an exception.The IA U regularly conducts IAF audits to evaluate compliance with MCPS policies, regulations,and procedures, and to review processes for continuous improvement. Generally accepted audit

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procedures guide the work of the auditors who examine samples of IAF records and financialaccounts selected from documentation of various activities to verify their accuracy as well as toassess the effectiveness of financial control procedures. An IAF audit does not review everytransaction or school activity but seeks to provide reasonable assurance that there is compliancewith MCPS policies, regulations, and procedures, and that any significant errors or omissions inthe financial records are detected.When an IAF audit is concluded, the IAU issues a written report to the principal including anyfindings and recommendations that need to be addressed. Principals are required to prepare aresponse with proposed corrective actions to be taken. In FY 2012, the IAU began to upload tothe MCPS website TAF audit reports dated January 1, 2012, and after, together with therespective principal response. Any IAF audit report published prior to January 1, 2012, isavailable to the general public upon request as required by the Maryland Public Information Act.A school's annual financial report on lAFs is also available for review by the general public.The most recent annual financial report is maintained in the school's media center.

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HIGH SCHOOLAF DATAAS OF J UNE 30, 2013

-- - - - , - --Bethesda.ChevyChase 1,835 $ 248,407 $ 957,223 $ 936,570 $ 269,061 $ 88,131 $ - $ 357,192Blair 2 806 281,291 868,969 875,898 274,361 97,401 - 371,763Blake 1,755 336,079 806,390 866,919 275,549 64,187 - 339,736Churchill 2,092 321,163 1,325,180 1,354,949 291,394 28,696 6,338 326,428Clarksbura 1,901 153,420 677, 103 671, 117 159,407 38,418 6,729 204,553Damascus 1,308 462,447 642,753 587,403 517,797 18,560 75 536,432Einstein 1 581 100,013 560,822 581,500 79,335 63,034 966 143,335Gaithersbura 2,035 380,346 618,406 645,232 353,520 117,700 12,580 483,801WalterJ ohnson 2,244 470,890 929 543 903,759 496,673 66 631 730 564 035Kennedv 1,594 287,456 479, 142 494,581 272,017 54,532 3,613 330,162Magruder 1,700 457,001 504,215 532,883 428,333 36,289 2,582 467,204RichardMontgomery 2,124 446,216 980,668 995,652 431,233 51,039 6,369 488,642Northwest 2,062 394,367 862,927 833,222 424,072 108,072 3,582 535,726Northwood 1,488 204,578 493 164 519,979 177,763 91,465 759 269,987PaintBranch 1,922 427,899 852,026 954,510 325.415 61,010 2,374 388 799Poolesville 1235 417,049 635 077 687,692 364,435 28 773 895 394 102QuinceOrchard 1,832 303,566 1,111,201 1100,921 313,846 71 518 215 385,579Rockville 1,269 318 852 633,685 619,292 333 245 21,618 552 355,415SenecaVallev 1,306 216,053 590,488 605, 107 201,434 27,662 3,385 232,481Sherwood 2,027 733,097 947 499 933,519 747 077 26,965 2,250 776,293Sprinabrook 1,723 228,095 712,200 712,265 228,030 39,614 950 268,594Watkins Mill 1,424 215,963 493,594 499,512 210,045 81,635 9,312 300,992Wheaton 1,226 269,824 451 451 464,763 256,512 53,186 592 310,291Whitman 1909 264, 179 1,463,431 1411,945 315,665 1,532 1,591 318,788Wootton 2,297 566,953 1,033,145 1,103,410 496,688 26,990 264 523,943

SchoolNBeginning

Enrollmentas CashBalancef 9/30/2012asof 7101/2012 R Dlsb

EndingCashBalanceasof6/30/2013 Recelvabl TotalA

TOTALS( ~95! $--------S:SOS,204$ 19,630,303 I $ 19,892,599 I $ 8,242,908 I $ 1,364,659 I $ 66,705 I $ 9,674,271 I

MinMedianMaxAverage

1,226 $ 100,013 $ 451,451 $ 464,763 $ 79,335 $ 1,532 $ - $ 143,3351,832 $ 318,852 $ 712,200 $ 712,265 $ 313,846 $ 53,186 $ 966 $ 357,1922,806 $ 733,097 $ 1.463,431 $ 1,411,945 $ 747,077 $ 117,700 $ 12,580 $ 776,2931,788 $ 340,208 $ 785,212 $ 795,704 $ 329,716 $ 54,586 $ 2,668 $ 386,971

[ThomasEdisonHSofTechnology I 516 l $ 105,932 I$ 129,200 I$ 145,053 l $ 90,078 f $ 4,190 I$ 5,021 I$ 99,290 INotes:a. Edison HS enrollment counts students taking courses there. They are also counted above intheir respective home highschool.b. Another 129 students are enrolled inthe Gateway to College program not included in the above high school total enrollment.

Appendix A A-1


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HIG H S CHO OL IAF DAT AAS OF J UNE 30, 2013

Payables PayablesTotal

Liabilities and CheckingPetty

CashfCash on-Bethesda-Chevv Chase $ 3,800 $ 43,478 $ 309 914 $ 357,192 $ 105,795 $ 163,265 $ - $ 269,061Blair 2,800 18,289 350,674 371,763 68,848 205,514 - 274,361Blake 2,050 11,982 325,704 339,736 48,109 227,440 - 275,549Churchill 9,257 17,399 299,773 326,428 77,999 213 295 100 291,394Clarksbura - 7,826 196,727 204,553 54,908 104498 - 159,407Damascus 6,096 102,192 428,144 536,432 58,655 458,891 250 517,797Einstein 12,051 11,908 119 376 143,335 21,945 57,290 100 79,335Gaithersbura 37,370 9499 436,931 483,801 29,273 324,047 200 353,520Walter Johnson 1,270 18,716 544,049 564,035 23,580 473,018 75 496,673Kennedy 2,476 8 970 318,716 330,162 2,883 269,134 - 272,017Magruder 1,174 6 370 459,661 467,204 28,972 399,261 100 428 333Richard Montgomerv 5,230 13 825 469,586 488,642 25,440 405 693 100 431 233Northwest 13,551 30,551 491,623 535,726 90,928 333,044 100 424 072Northwood 150 9 899 259,938 269,987 2,070 175,492 200 177763Paint Branch 6,972 15 170 366,657 388,799 7,645 317,695 75 325,415Poolesville 1,047 24 914 368 141 394,102 11,701 352,734 . - 364,435Quince Orchard 43,279 1,374 340,926 385,579 92,205 221,566 75 313,846Rockville 8,705 15,209 331,500 355,415 31,997 301,173 75 333,245Seneca Vallev 15 136 13,544 203,802 232,481 47,096 154,338 - 201,434Sherwood 7,984 20422 747,887 776,293 13,729 733,304 45 747,077Sorlnabrook 1,928 37 367 229 298 268,594 29,744 198,261 25 228 030Watkins Mil l 15,828 9 792 275 372 300,992 13,863 196,082 100 210,045Wheaton 7,090 10 204 292 997 310 291 42,972 213,540 - 256 512Whitman 18,317 38,132 262 339 318,788 92,490 223,175 - 315 665Wootton 10,876 32 240 480,827 523,943 39,937 456,751 - 496,688

TOTALS[$---z34,430]$ 529,273 I $ 8,910,562 I $ 9,674,271 I $ 1,062,785 I $ 7,178,503 I $ 1,620 I $ 8,242,908 IMin $ - $ 1,374 $ 119,376 $ 143,335 $ 2,070 $ 57,290 $ - $ 79,335$ 6,972 $ 15,170 $ 331,500 $ 357,192 $ 31,997 $ 227,440 $ 75 $ 313,846$ 43,279 $ 102,192 $ 747,887 $ 776,293 $ 105,795 $ 733,304 $ 250 $ 747,077$ 9,377 $ 21,171 $ 356,422 $ 386,971 $ 42,511 $ 287,140 $ 65 $ 329,716

MedianMaxAverage

li'llOmaillisonHS of Techno logy I$ 926 I$ 3,717 I$ 94,648 I$ 99,290 I$ 3,452 I$ 86,576 I$ 50 I$ 90,078 l

Appendix A A- 2


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Independent Activity Funds Data Report for FY 2013