Question: Our district is involved in an international exchange program with Osaka, Japan. One year our students visit Osaka and the next year Osaka students visit our school district. We typically have two of our teachers chaperone the trip of about 30-40 students. We receive a large donation from the California Senate International Relations Program and the parents pay the rest of the cost when our students visit Osaka. When the Osaka students visit us, the costs are minimal. What is the appropriate way for the accounting to be handled? Currently we have a separate checking account (under the district's tax ID #) and all deposits and checks are issued from this account.

Response: Whenever funds are used for specific students, the district cannot use public funds. The district may handle this a couple of ways:

1) Account for this as a pass-through account where the funds are received for a specific and identified purpose. The funds received must identify the specific purpose and be reconciled to show that all funds were expended for that purpose and no other district funds were contributed. FCMAT recommends using caution with using the district as the fiscal agent or when the district is the control agent for the funds (i.e. ASB account, pass-through accounting.)

2) Handled through a separate entity (i.e. parent club, booster club, etc.)

FCMAT recommends discussing the handling of this with your auditor. Should you decide to proceed with accounting for these funds within the district accounts or under the district's control, your auditor can assist with proper procedures, accounting, and reconciliation of these funds.

7/21/10