The Financial Structure of the Farragut Band Boosters, Inc.

Procedures Governing Control of Assets and School Support Organization Reporting

Approved February 25, 2009

Section 1: General Procedures

1. The President shall submit, no later than the first business day of August of each year, a form to the Director of Schools which verifies or, if appropriate, updates the information previously provided to the Director of Schools under a cooperative agreement.
2. The Treasurer shall submit no later than the first business day of June each year a detailed statement of receipts and disbursements to the school principal.
3. The Treasurer shall be responsible for submitting the annual report to the State of Tennessee, as required by law for tax exempt organizations.
4. The Treasurer shall be responsible for ensuring that an accurate tax return is submitted to the Internal Revenue Service each year by November 15th. A qualified tax preparation firm is to be retained upon the approval of the Board of Directors for purposes of preparing the tax return based upon the financial records provided by the Treasurer.
5. The Treasurer is responsible for ensuring the retention of the financial records for a period of at least four (4) years or until Internal Revenue Service retention requirements have expired, whichever is longer.
6. The Farragut High School Band Boosters, Inc. is a non-profit organization under section 501(c)(3) of the Internal Revenue Code, and therefore has its own tax exempt identification number. It shall not use the school’s tax exempt identification number for any purpose.
7. These procedures are to be published on the organization’s website. Procedures for handling cash and making disbursements are to be reviewed with applicable committee chairpersons at the beginning of the fiscal year to ensure they are familiar with such procedures. Likewise, all Board members are to be familiar with these procedures and the Treasurer is responsible for reviewing these procedures with the Board of Directors at the start of the fiscal year.
8. These procedures are to be approved by and, if necessary, amended by a majority vote of the Board of Directors.

Section 2: Bank Accounts

1. The following officers shall be an authorized signer on the Farragut Band Boosters’ bank accounts (“support accounts”): President, Vice-President and Treasurer. Other authorized signers may be approved by a majority vote of the Board of Directors if needed to conduct the organization’s business in an efficient manner. School or school district employees may not be authorized signers on the support accounts.
2. Annually, the identity of the authorized banking institution, authorized bank accounts, and authorized signers shall be reported to the membership of the organization and included in the minutes of the meeting at which such report is made.
3. The name on all bank accounts owned by the organization must be Farragut Band Boosters, Inc.
4. The opening and closing of bank accounts must be approved by a majority vote of the Board of Directors.
5. The Treasurer is responsible for reconciling the bank accounts on a monthly basis. The reconciliation is to be signed by the Treasurer. The President is to review and sign the reconciliation.
6. A check register listing all disbursement and deposit transactions is to be maintained. This can be maintained in an Excel spreadsheet or other financial tracking software.

Section 3: Disbursement of Funds

1. Disbursement of funds shall be by check only, except in the case of bank fees and interest on bank loans which may be disbursed by direct bank draft where that method is customary.
2. The Treasurer shall retain possession of the checkbook
3. Two of the three authorized signers must approve each disbursement. The signature of the President on the disbursement documentation shall fulfill the requirement of one of the two required signatures.
4. The Treasurer shall make disbursements upon the presentation of adequate documentation including the written or e-mail approval of the President
5. Documentation supporting all disbursements is to be marked with the check number and filed orderly by check number to facilitate an efficient audit. If documentation is not available, a written memo from the person requesting the payment (preferred) or the Treasurer, and approved by the President, is to be prepared describing the expenditure and explaining why documentation is not available.
6. Voided checks are to be marked as voided and kept on file.

Section 4: Collection of Funds

1. A receipt is to be issued by the Treasurer or the Accounts Receivable Assistant any time cash is received. The receipts should be pre-numbered and a control copy kept on file.
2. At fund raising events where mass amounts of cash are collected, a count of the cash is to be performed at the end of the event by two individuals and the count documented on a count sheet signed by both individuals. The Accounts Receivable Assistant is to verify the amount when it is turned in for deposit, along with a copy of the count sheet, and is to sign the account sheet evidencing receipt. Alternatively, and in order to hasten the deposit of the cash, a committee chairperson for the fund raising event may deposit the cash directly to the bank account and then provide the Accounts Receivable assistant with the bank deposit ticket and count sheet. Any discrepancy in amounts is to be fully explained and documented. Count sheets are to be retained as documentation of the deposit.
3. For fund raising events on school property (such as high school football concessions), the Accounts Receivable Assistant or the committee chairperson for the activity is to annually provide the school with all relevant collection records required by the Internal School Uniform Accounting Policy Manual (per sections 4 and 5).
4. Collections are to be deposited to the bank account in a timely manner. Deposit slips are to include an itemized listing of checks. For efficiency, an itemized list can be created in an Excel worksheet and attached to the deposit receipt.
5. Cash collected is to be physically secured at all times until its deposit. Cash is to be deposited to the bank account as soon as possible after its collection.
6. The Accounts Receivable Assistant is to provide a signed (e-mail is sufficient) summary of deposits to the Treasurer and President on a monthly basis.

Section 5: Reporting

1. The Treasurer is to submit a monthly report of expenditures to the Board of Directions that includes a listing of activity in all bank accounts since the last report, a summary of receipts and expenditures compared to budget, and the bank reconciliation for the latest period.
2. The Treasurer is also to highlight for the Board of Directors any budgetary issues that have become apparent through analysis of the records, such as variances in spending or income, so that the Board can take the necessary corrective action to ensure the financial goals of the organization are met.
3. Annually, the Board of Directors shall prepare and approve by majority vote an annual budget.

Section 6: Loans

1. Loans are to be authorized in accordance with the by-laws of the organization.
2. Loan repayments are to be authorized by a majority vote of the Board of Directors.
3. The Treasurer is responsible for preparing a monthly report on the balance and activity on any loan accounts, and presenting this to the Board of Directors.

Section 7: Audit

1. The President shall designate an officer or member to perform an audit of the financial records at least once per year. The person performing this audit shall not be an authorized signer on any bank accounts. The designated individual is to report his or her findings to the Board of Directors.
2. The audit shall consist of the following procedures:
1. Ensure that the beginning balance in the financial records matches the ending balance from the prior year.
2. Ensure all checks are numerically accounted for in the financial records.
3. Ensure the checking account balance is arithmetically accurate.
4. Review the list of disbursements for reasonableness. Select any unusual disbursements, including disbursements to officers for further review.
5. Select a random sample of at least 15 disbursements for additional review.
6. Obtain the documentation for disbursements in the sample and ensure the following:
1. The disbursement has adequate documentation
2. The documentation is approved by the President either by signature or by e-mail.
3. The check number is written on the documentation and filed in an orderly manner.
4. The amount of the disbursement matches the documentation.
5. The disbursement is accurately categorized in the financial records.
7. Obtain a listing of deposits from the Accounts Receivable assistant and select a sample of at least 15 deposits for testing. Compare the deposit records to the financial records and verify accuracy.
8. Note any exceptions and review with the Treasurer for explanation.
9. Prepare a report of findings, attach work papers evidencing the audit, and present to the Board of Directors.
10. If any inappropriate activity is detected, report this immediately to the President for further action. If fraud is suspected the President is to contact the Comptroller of the Treasury, Division of Municipal Audit at (615) 401-7871.

Section 8: Other Assets

1. All other assets are to be titled in the name of the Farragut Band Boosters, Inc.
2. Inventory used in fundraising is to be physically secured to prevent theft or loss. Inventory left unused for a period of time between fundraising events is to be minimized. If it is significant, it is to be counted to ensure theft or loss is detected during idle periods.

Bylaws of the Farragut Band Boosters Inc.