Question:  We have a student recognition program where students at large receive "catchem being good" cards from teachers throughout the day and have a drawing each week for prizes such as basketballs, Nerf toys, Rubix Cubes, backpacks, pens and pencils, and the like. We know that gift cards are considered like cash but are these other items also considered gifts of public funds when purchased out of ASB funds?

Response: Because student body funds are to benefit students as a group and not individuals, awards generally are discouraged but are allowable as discussed below. However, questions often arise about the giving of gifts, which has a personal as opposed to public character. Contrary to what often occurs in the field, gifts are not allowable, even if the amount is small. Gift certificates are ordinarily characterized as gifts of public funds even when purchased for an event with a public purpose, because they confer a tangible private benefit on an individual. While some administrators and teachers feel that the school site or district has a benefit from positive relationships established by sending gifts to students, the real public relations value is of primary benefit to the respective individual leaders involved, not to the school district itself as an institution. If anyone wants to give gifts, use private funds, not public ones.

On the other hand, Education Code section 44015 authorizes awards to employees for exceptional contributions and to students for excellence. If items are intended as some form of employee or student award, it also requires the governing board to adopt rules and regulations concerning such awards. Such awards shall not exceed $200 unless a larger award is expressly approved by the governing board. The category of "award" is what we believe your question relates to.

Since, the governing board of a school district may make awards to pupils for excellence, incentives for good attendance and good behavior, which you are asking about above, could be considered an allowable expenditure if they are $200 or below (unless a higher amount is specifically listed in the board policy allowing awards).  So, if a governing board adopts rules and regulations prior to any awards being made, a district or ASB can recognize superior accomplishments of any employee or student within the guidelines and provisions contained in the applicable district policies, rules and/or regulations. In the absence of applicable policies, rules and/or regulations, no district official can make the award and no one can legitimately purchase the award. So, the first step is for you to verify whether or not such a policy exists.

Awards are often signified by letters of commendation, board resolutions, trophies, certificates, plaques, medals, badges, pins and the like, within the statutory monetary limits and subject to IRS reporting requirements. The board may also approve an expenditure for flowers or candy as part of an award, which is appropriate only if the school district’s board policy on awards complies with the education code and IRS regulations. And, because ASB funds would be used for the award, the students would need to pre-approve this use of funds, along with the site principal (or designee) and the ASB advisor.

Drawings would normally be unallowable, but in this case the drawing would only be based on those students receiving an award (if awards are allowed in your district).  A raffle is unallowable by districts and ASBs as money is being paid for a chance to win, but this is not what you are describing above, so we don’t consider this an issue.

10/7/08