Question
: Should ASB’s maintain a reserve of 10%?Response: In order to answer your question, we have taken the following section directly from the Associated Student Body Accounting Manual and Desk Reference, which FCMAT has produced. That manual can be found on line at: http://www.fcmat.org/stories/storyReader$911. This section can be found on pages 42 and 43.
Carryover of Unexpended Balances
Carryover is the amount of money the club has at the end of the year after all of the revenues are deposited and all of the bills have been paid. It is also called the ending balance.
The principal, advisor and students should ensure that the funds that were raised by students during a given school year are spent on behalf of those students. In one elementary school, the students raised over $4,000 each year; however, only about $1,000 was spent each year. Within a few years, the ASB organization had an ending balance of $12,000. This practice is clearly contrary to the intent of the law.
Reasonable carryover balances often are used as seed money for a project in a new year, and a club may work toward a large project that takes more than one year to fund. Large or excessive carryover balances are discouraged. Thus, a good practice would include a regular review of carryover balances to be certain that the funds are spent for the benefit of the students who raised the funds.
Good Business Practice for Budget Carryover
The governing board should include a limit on carryover in its ASB policy.
Some districts include this issue in their own district-generated ASB manual or ASB board policy. If a district has already provided guidance about this issue, it is clear what needs to be done. However, if a district’s board and/or administration has not included language regarding carryover balances, it is suggested that this issue be brought to their attention. A good rule of thumb guideline could be something like the following: "No student club or organization may carry over more than 20 percent of the total amount raised in a given school year without a spending plan that has been approved by the business office." Under this rule, for example, if the total club revenues were $4,000 in a given year the club could carry over up to $800 without approval.There may be circumstances where it would be appropriate for a club to carry over more than 20 percent. For example, if the student council wants to participate in a band competition and parade festival overseas, it could take them two years to raise the funds. If the student council has voted for this project, it may be appropriate for the business office to approve the carryover of funds.
The Budget Carryover Request Form is the form that the student club (organized ASB) or principal (unorganized ASB) should submit to the district business office in April or May of each school year to request approval to carry over more than the allowed district amount (e.g., 20 percent).
5/12/08
