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7000 SERIES
Finance and Fiscal Management TABLE OF CONTENTS |
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7000 SERIES - FINANCE AND FISCAL MANAGEMENT 7000 Use of Funds USE OF FUNDS The Cleveland County Board of Education, in recognition of its accountability to the people of
LEGAL REF: G.S. 115C-36
There shall be a school finance officer appointed or designated by the Superintendent and approved by the Board, in accordance with the provisions of state law. The school finance officer shall serve at the pleasure of the Superintendent. The duties of the school finance officer shall be as prescribed by law and Board policy and as assigned by the Superintendent. The school finance officer shall be responsible to the Superintendent for: A. Keeping the accounts of the school system in accordance with generally accepted principles of governmental accounting, the rules and regulations of the State Board of Education, and the rules and regulations of the Local Government Commission; B. Giving the preaudit certificate required by law; C. Signing and issuing all checks, drafts, and state warrants by the school system, investing idle cash, and receiving and depositing all monies accruing to the school system; D. Preparing and filing a statement of the financial condition of the school system as often as requested by the Superintendent or the Board, and when requested in writing, with a copy to the Superintendent, by the Board of County Commissioners; and E. Performing such other duties as may be assigned by law, by the Superintendent, or by rules and regulations of the State Board of Education and the Local Government Commission. LEGAL REF: G.S. 115C-435, -436, and -441. The Superintendent shall ensure that the finance officer and all other officers, employees and agents of the school system who are required to be bonded are bonded in accordance with state law. It is the duty of the financial officer to assist the Superintendent in implementing this policy. LEGAL REF: G.S. 115C-442 The Superintendent shall prepare an annual budget and submit it with his budget message to the Board not later than May 1. The budget shall comply in all respects with the limitations imposed by law. The Superintendent’s budget message shall contain a concise explanation of the educational goals fixed by the budget for the budget year, set forth the reasons for stated changes from the previous year in program goals, programs, and appropriation levels, and shall explain any major changes in educational or fiscal policy. On the same day that he submits the budget to the Board, the Superintendent shall file a copy of it in his office, where it shall remain available for public inspection until the budget resolution is adopted. Upon receiving the budget from the Superintendent, the Board shall consider the budget, make such changes therein as it deems advisable, and submit the entire budget as approved by the Board to the Board of County Commissioners not later than May 15, or such later date as may be fixed by the Board of County Commissioners. The Board may hold a public hearing on the proposed budget prior to final action. LEGAL REF: G.S. 115C-427, -428, -429 ADOPTION OF BUDGET RESOLUTION 7110 After the Board of County Commissioners has made its appropriations to the school system, or after the budget appeal procedure set out in state law, the Board shall adopt a budget resolution making appropriations for the budget year in such sums as the Board deems sufficient and proper. The budget resolution shall be adopted in accordance with the provisions of state law. The budget resolution shall conform to the uniform budget format established by the State Board of Education. The budget resolution shall be entered in the Board minutes, and within five (5) days after adoption, copies of the resolution shall be filed with the Superintendent, the school finance officer and the county finance officer. LEGAL REF: G.S. 115C-431 and -432 BUDGET TRANSFERS AND AMENDMENTS 7120 The Board has the right to make budget transfers or amendments to the budget resolution for the reasons prescribed by state law and in accordance with the adopted budget resolution and state law. The Superintendent is authorized to transfer moneys from one appropriation to another within the same fund, so long as the transfer does not increase or decrease the amount within an appropriation by more than twenty-five percent (25%). Any such transfers in excess of this 25% threshold shall be reported to the Board at its next regular meeting and entered into the minutes. LEGAL REF: G.S. 115C-433 In case the adoption of the budget resolution is delayed until after July 1, the Board shall make interim appropriations for the purpose of paying salaries and the usual expenses of the school system for the interval between the beginning of the fiscal year and the adoption of the budget resolution. Interim appropriations so made and expended shall be charged to the proper appropriations in the adopted budget resolution. LEGAL REF: G.S. 115C-434 The administration shall establish and maintain a financial accounting and reporting system designed to show the school system’s assets, liabilities, equities, revenues, and expenditures. The system shall be designed to show appropriations and estimated revenues as established in the budget resolution as originally adopted and subsequently amended. The administration shall use the modified accrual basis of accounting in recording transactions. LEGAL REF: G.S. 115C-440
FINANCIAL REPORTS AND STATEMENTS 7210 The administration shall prepare a comprehensive annual financial report that encompasses all the funds and account groups of the school system. The comprehensive annual financial report shall contain the general purpose financial statements as well as combining statements by fund type and individual fund statements. The school finance officer shall report to the Secretary of the Local Government Commission on January 1 and July 1 each year, or such other dates as the secretary may prescribe, the amount of money then in his or her custody and in the custody of treasurers of individual schools within the system, the amount of deposits of such money in depositories, a list of all investment securities and time deposits held by the school system and individual schools therein. The finance officer shall prepare other statements of financial condition of the school system and other such financial information as may be necessary or desirable by the Superintendent and the Board. LEGAL REF: G.S. 115C-436, -446
The Board authorizes the maintenance of appropriate individual school accounts. The Board shall appoint a treasurer for each school upon recommendation of the Superintendent. The principal shall be responsible for proper administration of financial activities of the school in accordance with law and appropriate accounting practices and procedures. Only the principal may give final approval to purchase materials, equipment, and services which the school is authorized to purchase from the individual school funds. No obligations shall be made by a principal if the total exceeds the amount of funds in the appropriate account of the individual school. Obligations incurred by the principal in excess of funds on hand will be considered to be the personal obligation of the principal and the principal may be held personally liable for payment of the obligation. Each payment made at the individual school level shall be made on a check signed by both the principal and school treasurer or assistant treasurer. Neither signature may be a stamp or facsimile. Monies raised by a student organization shall be expended for the benefit of the students in that organization. Principals shall file with the Board the name of the bank in which their school funds are deposited and the name of the local school treasurer. A monthly financial statement of all funds shall be filed with the Superintendent. No funds may be transferred from one account to another without the written approval of the finance officer. Requests for transfer of funds shall be made in writing by the principal Individual staff members shall issue a receipt for all money they collect and provide the collected funds to the school treasurer on a daily basis. All money collected by the school treasurer shall be deposited in the local school fund, properly carried through regular bookkeeping channels, and disbursed as required by law and Board policy. Disbursements shall be made by check only and must be substantiated by proper invoices. Reserves from dormant and general fundraising accounts within a school that have remained inactive for more than one year may be transferred to that school’s general fund with approval of the finance officer. Gate Receipts and Admissions Admission receipts of school events shall be adequately controlled. The principal is responsible for the administration and supervision of all phases of school events for which an admission is charged. Admission to those school events for which an admission is charged shall be by serially-numbered tickets only. However, persons presenting season, faculty or special passes will be admitted to all events. Adequate records shall be maintained to provide chronological and accounting data for subsequent review and analysis. LEGAL REF: G.S. 115C-47, -288, -440, -441, -442, -444, -445, -448 School-related organizations or organizations which engage in public fund-raising activities in the name of the school or for the purpose of supporting school programs and extracurricular activities must be properly accountable to the public which contributes to such efforts and the school. These groups shall adopt a constitution or set of rules/by-laws which are approved by the membership prior to acting for or on behalf of the school. As part of the rules/by-laws providing for duly-elected officers, one officer shall be designated as organization treasurer charged with maintaining accurate and current financial records. These records shall be shared regularly at meetings of the membership or executive committee in a written financial report. The principal shall be apprised of the financial reports and share these reports with the school system’s finance officer. An audit of the organizations’ financial records shall be conducted annually by a committee from within the membership and may include community business/finance leaders as well as personnel from the school system. All disbursements from organizational funds should be approved by the executive committee and shall require two signatures (generally the president/chief officer and treasurer) on all checks for payment, if funds are to be maintained in the organization’s bank account. All funds for school-related organizations should be deposited in one of the following ways: A. Funds of the organization may be deposited with the bonded school treasurer and held in the school’s general financial account with disbursement made upon direction of the organization’s executive committee. The principal and school treasurer will sign all checks. B. Funds of the organization may be deposited in a separate organization banking account provided: 1. the organization treasurer is bonded for a limit equivalent to the organization’s annual budget; and 2. all checks for disbursements require the signatures of both the president and treasurer. For the purpose of this policy, the term “school-related organization” includes school yearbooks, newspapers, student organizations, and other organizations that operate under the supervision of the principal or other school officials. Legal Reference: G.S. 115C-47, -448 Personnel responsible for purchasing shall establish and maintain a receiving procedure for all supplies, materials, and equipment as appropriate. Personnel responsible for receiving items delivered shall inspect them and have ready access to specifications. Receiving personnel shall be responsible for determining that the items received are in good quality condition and shall be responsible for entering in the receiving document an actual count of quantity delivered. Personnel responsible for receiving shall be responsible for taking appropriate action with respect to complaints on deficiencies concerning the received items. LEGAL REF: G.S. 115C-47 ADOPTED:
MAINTENANCE OF INVENTORY AND FIXED ASSETS 7310 Administrative personnel shall be responsible for all fixed assets assigned to their site or department, and shall take a physical count and account for each item at least once per fiscal year according to procedures established by the finance officer. • This inventory shall be entered on the inventory record accounts for appropriate accounting. • Items whose purchase/donation price is five thousand dollars ($5,000.00) or more (including shipping, taxes, etc.), when such items have a useful and non-expendable life of one year or more and are not primarily used to repair or maintain other fixed assets, shall be identified as fixed assets and shall be accounted for as required by the State, in accordance with administrative procedures approved by the superintendent. The three minimum cost thresholds are $5,000 for equipment, $20,000 for buildings, and $100,000 or higher for infrastructure. Identified fixed assets shall be accounted for as required by GASB statement No. 34 and in accordance with administrative procedures approved by the superintendent. • Items whose purchase/donation price is between $500.00 and $5,000.00 will be tracked for inventory control purchases. Each school site or department is responsible for the record keeping of items in their location in accordance with state and local accountability procedures approved by the superintendent. LEGAL REF: G.S. 115C-36, -47 Except as otherwise provided by Board policy, all system-level contracts made on behalf of the Board of Education involving expenditures exceeding one hundred thousand dollars ($100,000) must receive prior approval from the Board. Unless otherwise prohibited by statute, state regulation, or other Board policy, the Superintendent or his/her designee is authorized to enter into contracts involving amounts up to one hundred thousand dollars ($100,000). The Superintendent shall report all contracts exceeding ($100,000) one hundred thousand dollars to the Board quarterly. Contracts for unanticipated expenditures exceeding one hundred thousand dollars ($100,000) for direct or related services to exceptional children may be undertaken by the Superintendent conditioned on final approval by the Board at its next scheduled meeting. Where feasible, the Superintendent or his/her designee shall seek informal bids for contracts. The Superintendent may develop administrative procedures for implementation of this policy. All system-level contracts must be pre-audited by the finance officer before they are awarded. This policy shall not apply to items that must be purchased under the requirements of the State Division of Purchase and Contract. In addition, all contracts involving construction or repair work or purchase of apparatus, supplies, materials or equipment must be undertaken in compliance with Chapter 143 of the North Carolina General Statutes and Board policies. School Principal Contracting Authority School principals may enter into contracts for: A. School pictures; B. Yearbooks and school newspapers C. Fund-raising activities undertaken in compliance with Board policies; D. Disc jockeys/bands and facilities for dances to be paid for with school funds; E. Athletic officials and security personnel for games and other special events; F. Class rings; G. Caps and gowns; H. Senior supplies (i.e., invitations, note cards, class keys, etc.); I. Vendng/dispensing machines; J. Copiers; and K. Maintenance services. School principals may enter into other contracts for goods or services in amounts up to $10,000.00 without prior approval, provided there are sufficient funds in the local school account to cover the contract and the contract is executed during the current fiscal year. Principals shall submit quarterly reports to the school system’s finance officer of all school contracts. LEGAL REF: G.S. 115C-288, -518, -522; 143-129, -131, -132, -133 The Board shall designate as official depositories of the school system one or more banks, savings and loan associations, or trust companies in
LEGAL REF: G.S. 115C-443; -444 Except as otherwise provided by law, all monies collected or received by an officer, employee, or agent of the school system or an individual school shall be deposited in accordance with this policy. Daily deposits are recommended, however each officer, employee, and agent of the school system or individual school whose duty it is to collect or receive any taxes or other monies shall deposit all collections and receipts when the moneys on hand amounts to $250.00. Also, all monies collected and on hand shall be deposited at the end of each week and on the last working day of the month regardless of the amount on hand. All deposits shall be made with the school system’s finance officer or in an official depository. Deposits in an official depository shall be reported immediately to the individual school treasurer by means of a duplicate deposit ticket. The school system’s finance officer or designee may at any time audit the accounts of any officer, employee, or agent collecting or receiving any taxes or other monies, and may prescribe the form and detail of these accounts. The accounts of such an officer, employee, or agent shall be audited at least annually. LEGAL REF: G.S. 115C-445 Surplus or idle funds controlled by the school system shall be invested in accordance with state law. Interest earned from such investments shall be credited to the fund from which the investment is made. LEGAL REF: G.S. 115-443; -444 The school finance officer shall certify to the State Board of Education each month the expenditures to be made by the school system from the State Public School Fund during the month, on or before the fifth day of the month. Upon receiving notice from the State Treasurer of the amount placed to the credit of the school system, the finance officer may issue state warrants up to the amount so certified. When a bill, invoice, or other claim against the school system is presented, the finance officer shall either approve or disapprove the disbursement. The finance officer may approve the claim only if (1) she/he determines the amount to be payable and (2) the budget resolution includes an appropriation authorizing the expenditure and either (i) an encumbrance has been previously created for the transaction or (ii) an unencumbered balance remains in the appropriation sufficient to pay the amount to be disbursed. A bill, invoice, or other claim may not be paid unless it has been approved by the finance officer or by the Board, in accordance with state law and Board policy. LEGAL REF: G.S. 115C-438, -441 No obligation may be incurred by the school system unless the budget resolution includes an appropriation authorizing the obligation and an unencumbered balance remains in the appropriation sufficient to pay in the current fiscal year the sums obligated by the transaction for the current fiscal year. If an obligation is evidenced by a contract or agreement requiring the payment of money or by a purchase order for supplies and materials, the contract, agreement, or purchase order shall include on its face a certificate stating that the instrument has been preaudited to assure compliance with this policy. The certificate, which shall be signed by the school finance officer, shall take substantially the following form: “This instrument has been preaudited in the manner required by the School Budget and Fiscal Control Act. Signature of school finance officer
(Date) ” An obligation incurred in violation of this policy is invalid and may not be enforced. The school finance officer shall establish procedures to assure compliance with this policy. LEGAL REF: G.S. 115C-441 PAYMENTS OF BILLS, INVOICES, OR OTHER CLAIMS 7620 The school system shall not pay a bill, invoice, salary, or other claim except by a check or draft on an official depository, by a bank wire transfer from an official depository, or by a warrant on the State Treasurer. Except as provided in this policy, each check or draft on an official depository shall bear on its face a certificate signed by the school finance officer or, in cases where the Board overrides the finance officer, signed by the chairman or some other member of the Board. The certificate for a disbursement shall take substantially the following form: “This disbursement has been approved as required by the School Budget and Fiscal Control Act. (Signature of school finance officer) ” No certificate is required on payroll checks or drafts or on state warrants. LEGAL REF: G.S. 115C-441 ADOPTED:
BOARD AUTHORITY TO OVERRIDE FINANCE OFFICER 7630 The Board may approve a bill, invoice, or other claim against the school system that has been disapproved by the school finance officer. It may not approve a claim for which no appropriation appears in the budget resolution, or for which the appropriation contains no encumbrance and the unencumbered balance is less than the amount to be paid. The Board shall approve payment by formal resolution stating the Board’s reasons for allowing the bill, invoice, or other claim. The resolution shall be entered in the minutes together with the names of those voting in the affirmative. The Board chair, or some other Board member designated for this purpose, shall sign the certificate on the check or draft given in payment of the bill, invoice, or other claim. If payment results in a violation of law, each member of the Board voting to allow payment is jointly and severally liable for the full amount of the check or draft given in payment. LEGAL REF: G.S. 115C-441 The school finance officer shall make only those salary deductions authorized by the Superintendent and/or required by federal and state law. School personnel must notify the central payroll department in writing of any additions, deletions, or other changes to payroll deductions at least 30 days before the effective date of the change. Nothing in this policy precludes the school system from reducing the amount of an employee’s wages in order to adjust for overpayment and/or to assure accuracy in the cumulative wages paid to the employee, provided that the reduction does not result in the employee’s wages falling below the federal minimum wage. Any employee receiving inaccurate wages shall promptly report the inaccuracy to his/or her supervisor. LEGAL REF: G.S. 115C-36, -339, -340, -341, -341.1, -342, -343;
All permanent employees, with the exception of any grandfathered employees, hired by the Cleveland County Board of Education shall receive their paychecks via direct deposit. All existing employees should currently receive their paychecks via direct deposit and shall continue to receive their paychecks in this manner. Each permanent employee is encouraged to designate a financial institution within the federal reserve system (bank, credit union, savings and loan) of his or her choice and shall complete all forms necessary to permit the employee to receive his or her paychecks via direct deposit at that financial institution. If a financial institution is not designated, one will be designated by the school finance officer for the purpose of establishing a location whereby the employee may collect his or her pay. LEGAL REF: None All travel reimbursement shall be requested on the appropriate travel forms and shall be supported by receipts. Reimbursement must be approved in advance by the Superintendent or designee. Reimbursements shall not exceed the annual budget allocated to the respective employee or department. All reimbursements are contingent upon funds available. Reimbursable expenses for out-of-county travel include food, lodging, mileage, registration, and other business-related costs. The amounts reimbursed shall follow guidelines established by the State Board of Education for its employees, except when amounts exceeding state guidelines are authorized by the Superintendent or designee. LEGAL REF: G.S. 115C-36, -47;
RECOVERY OF SALARY OR BENEFITS ADVANCED TO EMPLOYEES 7660 The Board will recover from employees any money paid or benefits received in advance, such as salary or health insurance contributions, if an employee leaves the school system before earning such salary or contributions. Any money paid or benefits received in error will be recovered from the employee. LEGAL REF: G.S. 115C-316(a) USE OF FACSIMILE SIGNATURES 7670 The Board may provide by appropriate resolution for the use of facsimile signature machines, signature stamps, or similar devices in signing checks and drafts and in signing the preaudit certificate on contracts or purchase orders. The Board shall charge the school finance officer with the custody of the necessary machines, stamps, plates, or other devices, and the finance officer and the sureties on his official bond are liable for any illegal, improper, or unauthorized use of them. Nothing in this policy will amend the requirements prescribed to individual schools in Board policy 7720. LEGAL REF: G.S. 115C-439 ADOPTED:
The following types of claims may be settled by the Board, subject to evaluation of the liability (including cost of defense) and damages issues, notwithstanding the availability of a sovereign immunity defense as to any portion of the claim. 1. Any claim which includes a component part for which the immunity defense may not be available. 2. Any claim in which there is a reasonable possibility that defense costs will exceed the amount for which the case can be settled. 3. Any claim in which the settlement amount exceeds the applicable Fund Limit and involves payment by the excess insurer. 4. Any claim which is related to one or more other claims for which the defense of sovereign immunity may not be available. The Superintendent or his/her designee is authorized to settle claims by payment of a sum not to exceed $10,000 when the Superintendent determines that the settlement is in the best interest of the school system. The Superintendent shall settle claims by sums not to exceed $10,000 in accordance with the guidelines contained within this policy. LEGAL REF: Hallman v. Charlotte-Mecklenburg Board of Education, 124 N.C. App. 435 (1996); Dobrowolska v. The City of
ADOPTED:
The Board shall provide general liability insurance coverage for the Board, its members, collectively and individually, and for school system employees. The Board either through the Public School Insurance Fund or through private carriers shall insure all property against direct loss or damage. Custody of insurance policies and insurance programs and services for the board and school system employees shall be vested in the Superintendent or his/her designee. LEGAL REF: G.S. 115C-36, -42, -47, -435, -533 to -543 The school system shall have its accounts and the accounts of the individual schools audited as soon as possible after the close of each fiscal year by a certified public accountant or by an accountant certified by the Local Government Commission as qualified to audit local government accounts. The auditor who audits the accounts of the school system shall also audit the accounts of its individual schools. The auditor shall be selected by and shall report directly to the Board. The audit contract shall be in writing, shall include all its terms and conditions, and shall be submitted to the Secretary of the Local Government Commission for his/her approval as to form, terms, and conditions. The terms and conditions of the audit contract shall include the scope of the audit, and the requirement that, upon completion of the examination, the auditor shall prepare a typewritten or printed report embodying financial statements and his opinion and comments relating thereto. The financial statements accompanying the auditor’s report shall be prepared in conformity with generally accepted accounting principles. The auditor shall file a copy of the audit report with the Secretary of the Local Government Commission, the State Board of Education, the Board, and the Board of County Commissioners, and shall submit all bills or claims for audit fees and costs to the Secretary of the Local Government Commission for his/her approval. The Board shall receive the audit report at the regular business meeting in November of each year. The school system shall not pay or permit the payment of such bills or claims without this approval. Each officer, employee, and agent of the school system having custody of public money or responsibility for keeping records of public financial or fiscal affairs shall produce all books and records requested by the auditor and shall divulge such information relating to fiscal affairs as he may request. No member of the Board or any other public officer, employee, or agent shall conceal, falsify, or refuse to deliver or divulge any books, records, or information, with an intent thereby to mislead the auditor or impede or interfere with the audit. The State Auditor shall have authority to prescribe the manner in which funds disbursed by administrative units by warrants on the State Treasurer shall be audited. LEGAL REF: G.S. 115C-447
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