BPS hopes policy will bring transparency to fund flow
Boston Public Schools is making schools deposit student activity money into the citywide financial system, training school principals and staff on how to correctly manage fundraising money and adopting a new policy to ensure strong control over cash collection and deposits after an IRS audit last year found mismanagement of student activity accounts.
The moves are in response to a separate independent audit by Ernst & Young that analyzed student activity funds and use, assessed key internal controls and reviewed historical transactions at 118 schools in the BPS system over the past five years.
“The audit by Ernst & Young and the previous audit by the IRS can really in this case be viewed as helping the BPS achieve greater accountability, transparency but also stewardship with funds that are meant to benefit our most important asset, which is our students,” Interim Superintendent Laura Perille said. “And we do have the responsibility to ensure that all funds in the BPS, whether they are taxpayer funds or money obtained through fundraising student activity fees, are being used in the correct manner.”
Ernst & Young’s review followed an IRS audit in late 2017 that found confusion and a lack of records in fund management among student activity accounts at 12 of 16 schools reviewed from 2014. Student activity accounts are supposed to be used for activities like clubs, proms and field trips.
The E&Y report found a lack of policy on student activity accounts and that BPS did not define what the accounts were as required under state law. There was also no process in place for depositing the student activity account dollars with the city chief financial officer.
Perille said the student activity accounts make up less than half a percent of the system’s $1.2 billion budget.
In response, this summer the city created a master account that requires all student activity deposits and expenditures be managed through the city’s financial system. Audits will also be conducted at schools on a rotating basis by BPS to ensure compliance with the new policies going forward.
The Boston School Committee is also scheduled to consider a new policy in September that would call for compliance of all regulatory requirements for student activity accounts.