Overview

School Support Organizations (SSO) are organizations that collect or receive money, materials, or property from students, parents, or members of the general public whose primary purpose is to support a school district, school, club, or any academic, arts, athletic, or social activities related to a school.

SSO Examples:

1. Booster club
2. Foundation
3. Parent-teacher association
4. Parent-teacher organization
5. Parent-teacher support organization
6. Any other nongovernmental organization

The procedures manual contains the minimum required policies and internal controls to assist SSOs in improving accountability of funds that must be followed.

Tennessee Code Annotated

SSO shall adopt and maintain a written policy specifying reasonable procedures for accounting, controlling and safeguarding any money, materials, property or securities collected or disbursed by it.

Tennessee Code Annotated § 49-2-604, Local Board of Education Policies

• Local board shall adopt policies regarding cooperative agreements, SSOs and the use of school facilities for fundraising purposes.
• Until such policy is in place, an SSO may not raise money, materials or property by using the school district’s or school’s:
  • Name
  • Mascot
  • Logos
  • Property or facilities

Policy must include the following:

1. Prior to raising money, SSO shall submit to Director of Schools: 
   1. SSO’s non-profit status
   2. SSO’s goals and objectives
   3. Telephone number, address and position of SSO’s officers
2. Prior to beginning of each school year, SSO shall verify above information with Director of Schools.
3. Prior to end of each school year, SSO shall provide a statement of total revenues and disbursements to Director of Schools.
4. Prior to scheduling a fundraising activity, SSO must obtain approval from Director of Schools.

School Involvement

School Representative:

• may not act as treasurer/bookkeeper of SSO
• may not serve as signatory on SSO checks

School representatives include:

• School board members
• Director of Schools
• Principal
• Any person primarily responsible for accounting for either the school system or individual school funds
• School employee charged with directing or assisting in directing a related school club or activity
• Any school sponsor of a related club or activity
• Coaches
• Band directors

Overarching Requirements

1. SSOs subject to audit at the discretion of the Tennessee Comptroller of the Treasury
   1. Must maintain all records in a way that will allow auditors to follow transaction details
   2. Shall provide access to all books, records and bank information
2. SSO must immediately report fraud, waste, or abuse to the Tennessee Comptroller of the Treasury
3. SSOs sales tax exemption does not exempt SSO from taxes due on items purchased for resale
4. Accounting and internal control policies must be designed and implemented to ensure compliance with laws & regulations
5. All SSO funds must be used in support of SSO’s goals & objectives
6. Accounting and internal control policies must be documented and approved by Board of Directors at a regular meeting
   1. Shall be distributed to all active members of SSO
   2. Any changes must be approved by Board of Directors
   3. Prepare checklist of monthly and annual duties for both collections and disbursements
7. Board of Directors shall designate an SSO officer as custodian of records
   1. Must maintain financial and other SSO records in an organized manner and protected from damage
   2. Records shall be turned over to subsequently elected officer
   3. Electronic records must be backed up weekly
   4. Back up files must be secured in off-site location
8. Board of Directors shall assume responsibility for SSO operation
   1. Responsibility cannot be delegated
   2. Must review all monthly receipts and disbursements
   3. Must examine bank statements to verify appropriate transactions
   4. Must examine monthly bank reconciliation for accuracy
   5. Must ensure compliance with laws & regulations
   6. Shall ensure all active members are familiar with the Model Financial Policy for School Support Organizations
9. Board of Directors are responsible for ethical operation of the SSO
   1. Responsibility cannot be delegated
   2. Must set “tone at the top” demonstrating ethical behavior, honesty and integrity
10. Board of Directors must comply with applicable policies of local Board of Education pursuant to state statutes
    1. Local Board of Education may adopt policies more restrictive than those included in the Model Financial Policy for School Support Organizations
11. SSO responsibility to annually review the Model Financial Policy for School Support Organizations

General Requirements

1. SSO must incorporate as a nonprofit or be a chartered member of a nonprofit organization
2. SSO must annually provide to the Director of Schools:
   1. Confirmation of its status as a nonprofit
   2. Description of goals and objectives
   3. Address, telephone number and position of each officer of SSO
3. Must obtain approval from Director of Schools before undertaking any fundraising activity
   1. Shall maintain documentation of approval
4. Must comply with all Board of Education policies and procedures
   1. Shall operate within applicable standards set by related state organizations (TSSAA, Tennessee PTA, etc.)
5. Must not use school’s or school system’s federal EIN or sales tax exemption for any purpose
6. Disbursements and collections can be made by any legal method over which adequate internal controls can be established
7. Board of Directors shall maintain: 
   1. Official minutes of all meetings 
      1. Board of Directors shall conduct regular business meetings
   2. Copies of SSO charter, bylaws, and accounting and internal control policies (including any amendments)
   3. Documentation of nonprofit status
   4. Records above shall be considered permanent for SSO’s existence and shall be maintained for at least 4 years after SSO dissolution
   5. All other records shall be retained for at least 4 years 
8. Minutes shall include:
   1. identity of authorized banking institution
   2. authorized bank account(s) 
   3. authorized signatories
9. Incorporated SSO name shall be on any bank account, loan, security or other investment
   1. New bank accounts must be approved by Board of Directors
   2. Number of SSO bank accounts shall be kept to a minimum
10. Incorporated SSO shall be titled owner to any property
11. Materials, supplies and fundraising resale inventory must be stored at a location and in manner to prevent spoilage or theft
    1. SSO shall account for these items on a regular basis
    2. Profit analysis shall be performed at conclusion of each fundraising event
12. Duties shall be segregated between SSO officers and members
13. SSOs shall not advertise donations to the SSO are tax deductible unless the SSO has achieved IRS tax exempt status
14. Money must be deposited within three days of collection    
    1. Best practice is to deposit daily
    2. Deposit slips must include an itemized listing of checks
15. Treasurer must provide monthly listing of collections and disbursements to Board of Directors 
    1. Listing must be signed
    2. Listing must agree with bank statements
16. Bank accounts must be reconciled monthly
    1. Copy of bank statements (including front & back of imaged deposit slips and checks) must be provided for inspection to each board member monthly
    2. Board members shall initial documents indicating review
    3. Signing blank checks shall never be allowed
17. Treasurer shall organize and maintain by fiscal year:
    1. Collection and disbursement records
    2. Bank statements
    3. Imaged checks
    4. Invoices for disbursements
    5. Copies of monthly treasurer’s report
    6. Payroll reports
    7. Other financial and informational reports
    8. State and federal agency filed reports
18. SSO shall maintain documentation of any written conditions for any donations to the Board of Education or the school. 
    1. Pursuant to state law, the school board or school must, in good faith, disburse the funds in accordance with those conditions.
19. If SSO receives “school funds”, SSO shall immediately remit those funds to school officials. 
    1. This would include money received by coaches, band directors, or other school representatives, which by definition (i.e. state law), is school money. 

Director of Schools Responsibilities

Director of Schools shall annually publish list of SSOs approved to fundraise Required by TCA 49-2-605, and approving fundraising activities conducted by SSOs Required by TCA 49-2-604.

Contact Information

Sara Pope, CPA, CGFM, CMFO
Contract Audit  Review Specialist
Division of Local Government Audit
615.401.3051
Sara.Pope@cot.tn.gov

Bethany Wilson, CPA, CMFO
Contract Audit  Review Specialist
Division of Local Government Audit
615.747.8807
Bethany.Wilson@cot.tn.gov