Klein Collins High School Tiger Booster Club Information

Klein Collins High SchoolTiger Booster ClubInformation2006-2007Klein Collins High School20811 EllaSpring, Texas 77388Associate Principal for ActivitiesPhone 832-484-5204FAX 832-484-7811

To: Klein Collins Booster Clubs and sponsorsFrom: Randy Kirk, PrincipalTom Wendt, Associate PrincipalRE:Coordination of Parent OrganizationsKlein Collins High School is excited about continued academic and extracurricularsuccess and is looking forward to another year of activity and recognition. Your supportof Klein Collins High School programs is greatly appreciated and respected. We want totake this opportunity to welcome and assist you in carrying out your role as booster clubofficers and liaisons persons.Activities of all parent groups, including parent-teacher organizations, volunteer parents,high school booster groups, etc., fall under the general supervision and coordination ofthe school principal. The office of the associate principal for activities at Klein CollinsHigh School serves as his designee.The following will serve to clarify the responsibility of the school administration:1. Each school principal is requested to meet at least once prior to the beginning ofeach school year, and at appropriate intervals during the school year, with thepresident, and other key representatives of each parent organization, to review allapplicable guidelines.2. The school principal is directly responsible for all publications reproduced orprepared by parent organizations. This includes items such as newsletters, gameor event programs, etc. Prior to distribution, the principal must review thecontents in order to assure that he is fully informed of the group’s activities. Inaddition, it may be necessary to exercise prerogatives of the principal, to edit anydocuments for clarity, accuracy, and for any other reasons that are in the bestinterest of the individual school or the school district.3. Each school principal is requested to use the utmost discretion in reviewing thepurposes of fundraising activities conducted by affiliated parent groups, inaccordance with the Board of Trustee’ policies and administrative directives, onthis subject, since the annual school budget provides sufficient funds to offer anenriched educational program. The school principal is specifically charged withpassing on reminders to all organizations, of the district’s stance regarding our notpermitting the establishing of a quota for each member of a given organization.Under no circumstances should pressure be brought to bear on pupils throughcompetition or by special recognition for sales with individual prizes such asstereos, bicycles, savings bonds, etc.

4. Parent groups or citizens wishing to contribute material and/or services, e.g.,equipment, instructional materials, student instruction assistance, special projects,etc., must make their request to the school principal. The school principal willconsult with both the director of school administration and the assistantsuperintendent for instruction to determine if requests are compatible withdistrict-wide objectives. Please be reminded that the following statement must beincluded in all correspondence from booster clubs to parents in which a financialdonation is requested:We would like to have our entire parents join the booster clubs that havebeen organized to offer support and encouragement for various activities.However, we understand and respect whatever choice is made regardingmembership. Parental involvement in booster clubs, including contributions ordonations, is not a prerequisite to student participation in any club or activity forwhich the booster club has been organized.As you are aware, our school district profits greatly from the contributions of time,talent, energy and funds from individuals and groups. The administrators of KleinCollins High school appreciate you and have prepared this booklet to assist you inyour leadership responsibilities as they relate to the extracurricular programs of KleinCollins High School.Thank-youRandy KirkPrincipalTom Wendt,Associate Principal

K.I.S.D. BOOSTER CLUB GUIDELINESThe school principal is directly responsible for the operation and coordination of allparent booster clubs at all respective high schools. The coach/sponsor, in most instances,will be the initial contact with the parents on booster club business.A copy of the club constitution and written policies must be on file in the principal’soffice and contain either documents or statements that address each of the following:a. Club’s purpose and objectivesb. A listing of the three money-raising activities that are allowable each school yearper Board of Trustee’s policyc. Procedures for handling, counting, depositing, and disposition of fundsd. Location of bank account for booster club and names of those authorized to signcheckse. Method of electing officersf. UIL regulations affecting booster club and fans at athletic contestsg. If scholarships are awarded, a copy of the criteria for the scholarship, selectionprocess, and dollar amount of the award, must be in writing and submitted to theprincipal.Decisions regarding the disbursement of parent organization funds, should be that of theorganization officers or executive committee members, who are to consult with the headcoach and principal. The sale of items or services on school premises is subject to theapproval of the administrator in charge of the facility, and must be consistent with allapplicable Board of Trustee’s policies and administrative directives.MAIL SERVICE-INTER-DISTRICTMaterials from non-school-district sources may not be distributed through the interschoolmail system unless they are first received in the US mail or from other commercialcarriers and appropriately bundled and labeled as to recipients.Literature intended for distribution to students and staff members by community civic,recreational, and other similar organizations must be delivered to the individual buildingsin bundles of approximately students’ class size. Dissemination is under the supervisionand control of the school principal. The inter-district mail service is not available to thesegroups.School sponsored and affiliated organizations may use the central mailroom and theinterschool mail system to distribute materials to staff members and students providedthat the materials are properly bundled and labeled as to recipients.

MONEY-RAISING ACTIVITIESThe school principal is directly responsible for the operation and coordination of allparent booster clubs at Klein Collins. He uses the utmost discretion in limitingfundraising activities conducted by classes, organizations, and affiliated groups and maynot authorize if he desires. The coach/sponsor, in most instances, will be the initialcontact with the parent on booster club business.The school principal is directly responsible for all types of pay entertainment or moneyraisingactivities carried on at Klein Collins or sponsored in any manner by his school.Parent/teacher committees or faculty/student committees should work in full cooperationwith the principal and under his supervision in planning special programs and activitiesor in conducting any activity which involves the raising of money.All groups and organizations must follow the following requirements:1. All fundraising requests must be submitted on the form provided to the principalfor his approval no later than October 15 th of the current school year. Requestsfrom musical, athletic, agriculture, drill squads, and other similar groups must bepresented to the principal by the director or sponsor.2. There is a limit of three fundraising activities per school year for each officialclub, organization, or affiliated parent group and the school principal must grantapproval. The school administration will discuss the reasonableness of a thirdrequest.3. Spirit items may be sold within the sports season for specific spirit item sales.Discretion will be utilized by the principal to determine if an activity produces aprofit, or is only utilized to promote spirit and recognition for the studentsinvolved. Items sold must be spirit items with school insignia, etc.4. Co-mingling of organization and school activity funds is not permitted. Eachparent organization must have its own separate bank account at a facility inproximity to the school. All parent organization accounts are subject to audit bythe Klein ISD.5. The principal will discourage fundraising activities to benefit the schools that areconducted by community groups.6. If a booster club awards any scholarship(s), the principal must have in writing thecriteria for the scholarship, dollar amount, and the selection process.

7. Pay entertainment programs cannot be held during school hours.8. School employees may not accept direct payment from parent organization fundsfor any services rendered to that organization.9. The sale of any items or services on school premises is subject to the approval ofthe administrator in charge of the facility and must be consistent with allapplicable Board of Trustees’ policies and administrative directives.MONEY RAISING ACTIVITIES-BOOSTER CLUB COMMITMENTNo coercion should be exercised in fundraising activities and no student or teacher isrequired to raise any particular minimum of money or to sell any minimum number oftickets, etc. Under no circumstances should pressure be brought to bear on pupilsthrough competition or recognition for sales.The following statement must be included in all correspondence from booster clubs toparents in which financial donation or commitment is requested:We would like to have our entire parents join the booster clubs that havebeen organized to offer support and encouragement for various activities.However, we understand and respect whatever choice is made regardingmembership. Parental involvement in booster clubs, including contributions ordonations, is not a prerequisite to student participation in any club or activity forwhich the booster club has been organized.SELLING ITEMS AT ATHLETIC EVENTSIt is the aim of the athletic office to see that all of the support groups are dealt with ina consistent manner; therefore:1. Only spirit items may be sold.2. Only school and activity related groups would be allowed to sell these items at allcontests, e.g., at varsity football games, this would include football, band, drillteam, and cheerleader booster clubs.3. Items will only be sold in a designated area. Check with the athletic office forassignment.4. The said group must furnish any tables or chairs needed during the selling of theseitems and these items must be removed from the facility immediately after thecontest.

5. Members selling these items must have a ticket to enter the facility.6. The athletic office assumes that all other fundraising policies applying to saidgroup have been followed and proper permission granted.7. Facilities usually open their gates 30 minutes prior to the start of the contest.CONCESSION OPERATIONSThe coordination and operation of all concessions at school district events held on thepremises or the campuses of the KISD are the responsibility of the director of athletics.FEES/CONTRIBUTIONS-EXTRECURRICULAR ACTIVITIESIndividual schools and school-sponsored student membership organizations may notestablish a fee, contribution, or its equivalent for either the students or theirparents/guardians as a stated or implied condition of membership or participation.SALES OF ITEMS OR SERVICESThe sale of any items or services on school premises is subject to the approval of theadministrator in charge of the facility and must be consistent with all applicable Board ofTrustees’ policies and administrative directives.REQUEST FOR DONATIONSTeachers and other employees should not request financial support or donations of anytype from civic groups, PTA organizations, or individuals in the community for anysupplies, materials, or other items used in the instructional process. All requests of thisnature must be handled through the principals and directors. This does not preclude,however, these organizations from making donations after discussing the needs with theappropriate administrators.GARAGE-TYPE SALESPlease be reminded that garage-type sales by community and school clubs andorganizations are permissible on school facilities after executing the appropriatedocuments. However, individuals or several families may not join together to have aprofit-motive sale and use our parking lots, etc. Once documents are filed, the Klein ISDbusiness office based guidelines will calculate fees.UNIVERSITY INTERSCHOLASTIC LEAGUEPlease refer to: http://www.uil.utexas.edu/ 2006 – 2007 Booster Club Guidelines formore information.

APPLICATION FOR MONEY-RAISING ACTIVITYFundraising # for current year _________Type of activity:________________________________________________________________________________________________________________________________________________If activity involves a fund-raiser vendor, complete the following:Salesman Name: ______________________ Company Name: __________________Address: ____________________________________________________________________ Phone: _________________Estimated proceeds: $ ____________Utilization of proceeds (approximate)A. ________________________________ $_____________B. ________________________________ $_____________C. ________________________________ $_____________Dates (approximate)Beginning: _______________Ending: __________________Submitted by: ____________________________________Group/Club NameFaculty Sponsor: _____________________________Date Submitted: _________Parent Group Chairperson (if applicable) ___________________________This request must be presented to the activity Principal before October 15th of thecurrent year for consideration.No coercion should be exercised in fundraising activities and no student or teacheris required to raise any particular minimum of money or to sell any minimumnumber of tickets, etc. Under no circumstances should pressure be brought to bearon pupils through competition or special recognition for sales.(Office use)Approved: ________Disapproved: ________Date: ________

FUNDRAISING ANALYSIS REPORTFundraising # for current year _________Please complete upon conclusion of each approved fundraising activity. If thefundraising activity was not completed, please return the report with “not completed”indicated on the report.Group/Club Name: _______________________ Faculty Sponsor: _______________Parent Group Chairperson (if applicable) ______________________________Fund Raiser Activity:________________________________________________________________________________________________________________________________________________If activity involves a fund-raiser vendor, complete the following:Salesman Name: ______________________ Company Name: __________________Address: ____________________________________________________________________ Phone: _________________Start Date: _______________ End Date: _______________Quoted profit (%) from vendor_____%.Total Money Collected (receipted & deposited) $___________Items Received to Sell/Items Ordered $___________Less: Items Returned to Vendor:$___________Items Actually Sold$___________Less: Total of Invoices from VendorNet Profit$___________$___________Were cash receipts/cash receipt documents completed for all money collected? _____Does the quoted profit % equal the actual net profit %? _____ if no, explain: _________________________________________________________________________________Does the total money collected equal the items actually sold? _____ if no, explain ____________________________________________________________________________

FINAL PARENT BOOSTER CLUB FINANCIAL REPORTKLEIN INDEPENDENT SCHOOL DISTRICTKlein Collins High SchoolDue to Mr. Wendt’s office by June 15, who will submit to the KISD Business Office.Booster Club ________________________________Beginning Balance $_______________RevenuesExpendituresEnding Balance$_______________$_______________$_______________**Parent Booster clubs are limited to three fundraisers per school year. An applicationfor Money-Raising Activities must be submitted to Mr. Wendt’s office for approval byOctober 15 of the current school year. Please work with your faculty sponsor tocoordinate this effort.List of fundraisers:2006-2007 school year1. _________________________________2. _________________________________3. _________________________________No coercion should be exercised in fundraising activities and no student or teacher isrequired to raise any particular minimum of money or to sell any minimum number oftickets, etc. Under no circumstances should pressure be brought to bear on pupilsthrough competition or recognition for sales.

END OF THE SEASON/YEAR EVENTSThe head coaches/sponsors may request a consolidated event for any combination ofsports.UIL guidelines must be followed pertaining to all gifts, remembrances, and mementosprovided from any source for students and district employees.The sponsors/parent boosters should review all presentations by students to coaches, andthe coach regarding exchanges among students, to be sure that are in good taste. Someexamples are:• No alcohol or sexual innuendos or symbols on a tee shirt• No drug related innuendoes• No sexual innuendoes when passing out personal gifts• No slamsThe message the faculty and students send to the public must be clear and appropriatefor Klein Collins High School. Sponsors of the banquets need to know what studentswill be saying and presenting.Prayers at banquets need to be previewed by the administration if presented bystudents. All prayers must be non-sectarian and non-proselytizing. By public law,Klein ISD will not permit school sponsored prayer at athletic events.INVITATIONSOn the Klein Collins campus, the administrators are each designated to attend certainbanquets as administrative delegates. The honor of being at these events is shared so thatstudents and parents recognize our appreciation of their talent and effort. It offers eachan opportunity for a relaxed, positive, and social involvement with students and parents.Please call Jean Franklin, 832-484-5203 to get the name of the administrator(s) who willbe attending your function.As you know, many clubs and organizations extend written invitations to members of theBoard of Trustees and to various central office administrators to attend end-of-yearfunctions. Notification is always appreciated but it is understood that they will not beincluded on all invitations lists and are not requesting that this occur.If order to guarantee that our trustees are notified, can make long-range plans, and canRSVP, especially to those at which a meal is served, we would appreciate the followingprocedure:

1. The club/organization sponsor should inform the school principal if trusteesand/or central office administrators will receive a written invitation once thearrangements have been made for the event. The school principal, in turn,periodically will send a consolidated memorandum to the assistant superintendentfor school administration listing dates, time, and locations. In this manner we caninform the trustees of the activities, perhaps in advance of receiving theinvitations.2. All written invitations for trustees and central office administration should bedelivered to the principal who will send them to the trustees.BINGOThe Bingo Enabling Act strictly regulates Bingo in Texas. A license is required toconduct Bingo and only certain organizations are authorized to obtain a license.According to Section 2001.101 of the Bingo Enabling Act, an authorizedorganization eligible for a license to conduct Bingo is:1. A religious society that has existed in this state for at least 8years;2. a nonprofit organization whose predominant activities are for theSupport of medical research programs;3. a fraternal organization;4. a veterans organization; or5. a volunteer fire department.Therefore, a school or school related organization such as a PTO or booster club(includes After Prom) are not authorized organizations that are allowed toconduct Bingo in Texas.RAFFLESThe school district (i.e. - activity funds) is not a qualified organization to have araffle but a parent organization is allowed to have a raffle. If a raffle isconducted, it will count as one of the three money-raising activities allowed for anorganization and will be restricted as follows:1. Students must not assist in the sale of raffle tickets2. The item(s) awarded for the winning raffle ticket(s) may be presented onthe school campus.

3. The organization is restricted to selling raffle tickets at one schoolactivity/event. In addition, the sale may be conducted only at an event inwhich the student group it represents is performing or participating.4. The item(s) to be raffled must be approved by the assistantSupintendent of schools.

Questions and AnswersBooster Clubs and Other Parent Organizations1. What is the Klein ISD basis for developing policies and directives regarding boosterclubs?• State and federal laws.• IRS regulations.• UIL Booster Club Guidelines.• TEA Financial Accountability System Resource Guide.• Klein ISD priorities.2. How does the Klein ISD provide guidance to booster clubs while maintaining theappropriate separation?• Assigns a school administrator to work as a liaison with the booster clubs.• Requires principals to be familiar with district policies, procedures anddirectives regarding booster clubs and provide this information to teachers,coaches and sponsors dealing directly with booster clubs.• Meets at least once prior to the beginning of each school year and atappropriate intervals during the school year with the president and keyrepresentatives of each booster club to review all applicable guidelines.3. Is there a difference between a parent teacher organization (PTO) and a booster club?Yes. A PTO is formed to promote the general welfare of the entire studentbody at a particular school while a booster club is formed to promote thewelfare of an individual student group such as band or football.4. Is the “Tiger’s After Prom” organization considered a booster club?Yes.5. Does the Klein ISD require booster clubs to obtain tax-exempt status?Yes. Klein ISD requires booster clubs to obtain tax-exempt status to be incompliance with IRS guidelines and to avoid paying taxes on their netincome. Per the IRS, outside groups such as booster clubs that are not directlyfunded and managed by the district cannot use the district’s tax-exemptcertificate. Outside groups are not tax-exempt entities, but are considered nonprofit.

6. Does obtaining tax-exempt status require the assistance of an attorney?No. Each individual booster club would not need an attorney. The Klein ISDhas obtained a group tax exemption on behalf of interested booster clubs. Tobe a part of the group tax exemption, contact the District controller Mrs.Karen G. Smith at 832.249.4655.7. Have any of the Klein ISD booster clubs obtained individual 501(c)(3) tax-exemptstatus (not part of the group tax exemption)?Yes, a few booster clubs have obtained individual tax-exempt status.8. Why would a parent organization choose to be a part of the group tax exemptionversus obtaining individual tax-exempt status?The Klein ISD has already gone through the lengthy process of obtaining501(c)(3) tax-exempt status. A parent organization wishing to obtainindividual tax-exempt status would be responsible for completing the processto become tax-exempt.9. What is involved in obtaining 501(c)(3) tax-exempt status?• Employer Identification Number from the IRS.• Incorporate as a Texas non-profit corporation by filing articles ofincorporation and enact by-laws.• File for exempt status by completing and submitting appropriate IRSforms.10. Upon acquiring tax-exempt status, does a booster club have a different relationship tothe Klein ISD?No. A booster club’s relationship to the school district is defined in UILguidelines and not as a result of obtaining tax-exempt status.11. Are there any IRS reporting requirements after obtaining tax-exempt status?Yes. A booster club must file a form 990EZ or a form 990 if it collects grossreceipts of $25,000 or more in a tax year.12. If a booster club does not obtain tax-exempt status, is their net income taxable?Yes.

13. When a booster club files for tax-exempt status, are they subject to federal incometaxes on any net income received prior to obtaining tax-exempt status?Probably not … Even if the IRS questioned a booster club’s failure to file, thebooster club may request retroactive classification as an exempt organizationto the date of formation. Therefore, it is unlikely that a booster club would befound retroactively liable for federal income tax for past year.14. What information are booster clubs currently required to submit to the schoolprincipal each year?• A copy of the booster club’s by-laws and written policies (only if there arechanges to that originally given to the principal.)• A list of the fund-raising activities planned by each booster club byOctober 16 of the current school year.• Requests to donate material and/or services.• Copy of report from annual audit.• A year-end financial report by June 15.15. What information are PTO’s currently required to submit to the school principal eachyear?• A copy of the PTO’s by-laws (only if there are changes to that originallygiven to the principal.)• A list of the fund-raising activities planned by each PTO by October 13 ofthe current school year.• Requests to donate materials and/or services.• Copy of report from annual audit.16. What additional information are parent organizations required to submit to theDistrict when they obtain tax-exempt status?• Proof of tax-exempt status when obtained. (copy of IRS Letter ofDetermination.)• Copy of Articles of Incorporation.• Copy of informational tax returns (form 990EZ or 990) if organizationmeets gross receipts criteria.17. Do booster clubs and all other parent organizations have to charge sales taxes?Yes. Sales taxes must be collected and reported for all taxable transactions. Alist of items or activities that are generally taxable may be obtained from theschool principal. However, each booster club can have two (2) one-day taxfreefundraisers per calendar year according to the State Comptroller’s office.

Financial Management HandbookGeneral Information1.0 General Guidelines1.1 In the Klein Independent School District (KISD), we encourage theparticipation and involvement of parents in the education of their children.One way parents can be involved is through participation in voluntaryparent organizations such as Parent Teacher Organizations (PTO’s) andbooster clubs.1.1.1 A PTO is formed to promote the general welfare of the entirestudent body at a particular school.1.1.2 A booster club is formed to enrich the school’s participation inextracurricular activities and normally involves an individualstudent group (band, football, after prom, etc.).1.2 The principal must approve the formation of all parent organizations.1.3 Parent organizations operate autonomously of the school district asseparate parent organizations even though they generally exist solely tosupport school activities.1.4 This Financial Management Handbook for parent organizations is aconsolidation of updated guidelines and previously issued documentsdesigned to provide parent organizations, principals and sponsors withfinancial procedures that are mandated by state law, the Internal RevenueService (IRS), Board policy, administrative directives and/or goodbusiness practices.1.5 The responsibility for accounting, safeguarding, and disbursement offunds rests with the parent organization officers. The principal may act inan advisory capacity only.1.6 Sections of this handbook will provide general, not specific and/or allinclusivetax information as it relates to parent organizations. It is eachparent organization’s sole responsibility to seek competent professionaltax assistance for its own tax reporting requirements.1.7 Parent organizations should strive to remain in good standing with allfederal and state agencies. This includes paying all taxes and other debtsincurred by the organization.

1.8 A parent organization may not represent the District nor bind the Districtor any of its employees to a third party with which the organization mayconduct business.1.9 All meetings of parent organizations must be public meetings.1.10 Minutes of all parent organization meetings should be kept in writing inthe permanent records of the organization.1.11 Each parent organization shall operate under bylaws and shall submit acopy to the school principal and the KISD business office.1.12 All parent organizations must obtain a unique tax identificationnumber/Employer Identification Number (EIN). Parent organizationsare not permitted to use the District’s EIN or its Texas Sales TaxPermit Number.1.13 Principals should inform sponsors so that they are aware of the guidelinesthat may pertain to their particular area.2.0 Helpful Websites, Addresses and Phone Numbers2.1 KISD Controller – general questions as it relates to the financial matters of parentorganizations and assistance with becoming part of the group exemption.Klein Independent School DistrictAttn: Business Office, Controller7200 Spring-Cypress RoadKlein, TX 77379-3299kgsmith@kleinisd.net(832)249-4655 (phone)(832)249-4034 (fax)

Financial Management HandbookTax-Exempt Non-Profit Organization3.0 District Requirements3.1 All parent organizations must obtain a unique Employer IdentificationNumber (EIN). Parent organizations are not permitted to use the district’sEIN or its Texas Sales Tax Permit Number.3.2 All parent organizations shall obtain federal tax-exempt status as a public501(c)(3) charitable organization by applying for and obtaining a Letter ofDetermination from the Internal Revenue Service (IRS) that states theorganization is tax-exempt.3.3 A parent organization may request through the business office at thecentral office to be a part of the group exemption obtained for parentorganizations of the District versus filing for individual tax-exempt status.3.4 If a parent organization is new, the organization shall apply for andreceive its tax-exempt status from the IRS within one year from the datethe organization is formed.1.5 If an organization loses its public 501(c)(3) tax-exempt status or if it expires, theorganization shall take the necessary steps to regain the tax-exempt status within oneyear from the date of notification from the IRS of the loss of exemption or within oneyear from the expiration date.4.0 Individual Tax-Exempt Status for Parent Organizations4.1 If a parent organization has not obtained tax-exempt status as a nonprofitorganization, it may follow the steps below to obtain individual exemptstatus.2.1.1 Obtain information on tax-exempt status (see check list for Form1023)2.1.2 Prepare articles of incorporation (see Exhibits 2-1 & 2-2)• Call Secretary of State (512)463-5582 for OK on corporatename• Approval by majority vote at membership meeting• Mail articles of incorporation and filing fee ($25) to:Corporations SectionStatutory Filings DivisionOffice of the Secretary of State

P.O. Box 13697Austin, TX 78711-36972.1.3 File for EIN for new organization• Fill out Form SS-4 completely• Fax Form SS-4 to (631)447-8960 or• Call IRS office (800)829-4933:o Give information on Form SS-4 as requested byoperatoro Operator will give you the EIN to be recorded on theform2.1.4 Prepare bylaws (see Exhibits 2-3 through 2-5)• Approval by majority vote at membership meeting (held afterincorporation is complete)2.1.5 Prepare application for recognition of exemption (Form 1023)• See check list for Form 1023• Complete Schedule D• Fill out Form 8718, User Fee for Exempt OrganizationDeterminationLetter Request• Check (a) if your average gross proceeds for the last 4 years isless than $10,000 (filing fee is $150)• Check (b) if your average gross proceeds for the last 4 years ismore than $10,000 (filing fee is $500)• Mail Form 8718, check for filing fee, Form 1023, copy ofCertificate of Incorporation from Secretary of State, Articles ofIncorporation and copy of signed bylaws to:Internal Revenue ServiceP.O. Box 192Covington, KY 41012-01922.2 After your organization receives a Determination Letter from the IRSindicating your organization qualifies as a public 501(c)(3) charitableorganization, request exempt status from State sales and use taxes (topurchase items to be used in an exempt manner) and franchise taxes asfollows:• Go to Texas State Comptroller’s website athttp://www.window.state.tx.us/taxinfo/taxforms/ap-205.pdfand complete form per instructions.• Print above form and enclose copy of Articles of Incorporation andIRS Determination Letter and mail to:Tax Policy DivisionExempt Organizations SectionTexas State Comptroller’s OfficeP.O. Box 13528

Austin, TX 78711-35282.3 After your organization receives a letter from the State Comptrollerapproving an exemption from State sales and use taxes, apply for a StateSales & Use Tax Permit if your organization will be selling taxable itemson days other than your two (2) one-day tax-free days.• Complete Application for Sales and Use Tax Permit (if needed forresale purposes) by going to Texas State Comptroller’s website athttp://www.window.state.tx.us/taxinfo/taxforms/ap-201.pdfand complete form per instructions.•Mail to:Comptroller of Public Accounts111 E. 17 th StreetAustin, TX 78774-0100• If your organization currently has a permit number (prior tobecoming a public 501(c)(3) charitable organization), indicate thenumber on the form so that the old account can be closed when thenew permit is issued.5.0 Group Exemption for Parent Organizations3.1 A parent organization may request to be a part of the group exemptionobtained for parent organizations of the District versus filing for individualexempt status as outlined above.3.2 Send a letter to the business office at the central office requesting to bepart of thegroup exemption. Include a list of all parent organization officers, theiraddresses, a contact person and contact’s phone number.3.3 If your organization decides to take the route of group exemption versusapplying for individual exempt status, the business office at the centraloffice will handle the following for your organization:• Prepare and notarize the articles of incorporation, and forward toyour organization with a pre-addressed envelope to the Secretary ofState and detailed instructions (organization will need to attach $25check for filing fee)• Complete Form SS-4 to file for your organization’s EIN• Provide your organization with sample bylaws via e-mail that can becustomized to your organization• Request exemption for your organization from State sales, use andfranchise taxes

• Provide your organization with a completed application for a Sales andUse Tax Permit that can be sent to the Comptroller if yourorganization determines a Permit is needed.3.4 Your organization will not be required to complete a Form 1023(application for recognition of exemption) with the IRS or pay a user feeto obtain exempt status as this part of the process was handled by theKISD in applying for the group exemption.6.0 To Open a Bank Account6.1 Once an EIN has been received, use it to open a bank account. Eachparent organization must have a separate bank account at a facility inproximity to the school.6.2 A member’s social security number should not be used as theorganization’s EIN for banking and/or other business purposes.7.0 Federal Tax Information5.1 Upon approval by the IRS of exempt status, the organization will receive adetermination letter from the IRS stating the organization is considered tobe an exempt organization. At that time, within certain guidelines thatapply to what is received by a contributor in return for a contribution,contributions made to the organization will be deductible on contributors'federal income tax returns.5.2 Once the IRS recognizes an organization as “exempt,” the organizationmust file Form 990 or 990EZ if gross receipts normally exceed $100,000or $25,000, respectively.5.2.1 Form 990/990EZ is simply an informational return that the IRSrequires to determine that the tax-exempt organization is operatingin the tax-exempt manner as indicated when they filed for exemptstatus with the IRS.5.2.2 Gross receipts are defined as all monies collected (i.e. – dues,donations, fund-raisers, etc.), not just profit.5.3 The Form 990EZ does not have to be completed if gross receipts arenormally less than $25,000 unless the IRS sends you a 990 package. Inthat case, the IRS asks that you complete the top portion of the 990EZ andcheck the box that gross receipts are normally less than $25,000 (the entireform does not have to be completed).

5.3.1 An organization’s gross receipts are considered normally to be$25,000 or less if gross receipts for the immediately preceding 3tax years (including the year for which the return would be filed)averaged $25,000 or less.5.4 The Form 990 or 990EZ is due on the 15 th day of the fifth month after theend of the fiscal year of the parent organization. For parent organizationsthat are part of the group exemption, the due date is November 15 th eachyear (June 30 year-end).5.5 If you do not receive the IRS Form 990 package, you still need tocomplete a Form 990 or 990EZ if you fall into the gross receipts criteria.The form and instructions can be obtained by going towww.irs.gov/formspubs/.5.6The IRS will impose a financial penalty if you fail to complete a Form 990 or

Financial Management HandbookOfficer Responsibilities and Duties8.0 Responsibility Guidelines8.1 The responsibility for the proper collection, disbursement, andsafeguarding of all money and all other parent organization assets and theproper reporting of each parent organization's activities to the InternalRevenue Service, State Comptroller, and to the Klein ISD rests solely witheach parent organization's officers, jointly and severally, not the schooldistrict or any of its employees.1.1.1 When an officer's term expires or becomes vacant due toresignation or other reason, it is the vacating officer's responsibilityto ensure that the above officer responsibility statement is fulfilled.1.2 The commingling of parent organization money with school money is notpermitted.1.3 School employees may not accept loans of funds from parentorganizations.1.4 A parent organization should be absolutely sure it has or will have themoney necessary to meet its financial commitments. A parentorganization does not have the authority to commit or to represent in anyway that the KISD is responsible for any of its obligations in the way ofpaying bills and/or fulfilling any other agreement.1.5 Parent organizations should seek competent tax and legal advice on theirown and at their expense on an as needed basis to assist and to advisethem on legal and tax matters.1.6 According to the IRS, revenues generated from fund-raising by taxexemptorganizations should benefit the organization as a whole, notindividuals. In addition, benefits given by a parent organization cannot bedistributed based on participation in a fund-raiser or based on revenuesindividually generated in a fund-raiser. Therefore, an individual cannot bedenied the opportunity to receive a benefit because of lack of participationin a fund-raiser or because a specified amount of revenue was not raised.1.7 Each parent organization must complete the “Parent, Employee and OtherKlein ISD Related Organizations Information Sheet” when requested bythe business office at the central office.

1.8 Payment from parent organization funds may not be made to employeesfor any services rendered to that organization unless the transaction isprocessed through the KISD business office.1.9 Parent organization funds and/or assets that aredonated to a school must be coordinated with the school’s principal.1.9.1 Property purchased with parent organization funds becomes theproperty of the school district.1.10 “Petty cash” or miscellaneous funds for a teacher, coach or sponsor to useat his/her discretion may not be established.1.11 The direction of the teacher, coach or sponsor, scheduling of contests,rules of participation, method of earning letters, and all other criteria dealing withinterschool programs are the responsibility of school administration.1.12 A parent organization or any other outside organization cannot give ateacher, coach or sponsor a gift in excess of the limits imposed by theKISD Board of Trustees’ Policy, which is the same as the school districtcan spend for a letter jacket awarded to a student.1.13 There is a limit of three (3) fund-raisers for each organization per schoolyear and the school principal must grant advance approval.1.14 Comply with all UIL guidelines, if applicable, and all District procedures.1.15 Incoming officers should never accept financial records without havingthem audited.9.0 Officer Duties9.1 Listed below are general duties of the president of a parent organization.9.1.1 Make a year-end financial report to the school principal not laterthan June 15 th .9.1.2 Responsible for all financial affairs of the organization andassociated reporting thereof including any duties that may bedelegated.9.1.3 Submit all fund-raiser requests on the form provided byadministration to the principal for his/her approval in the spring

semester of the preceding school year and no later than October15 th , of the current school year.9.1.4 Preside at all meetings of the Directors.9.1.5 Coordinate the work of the Directors and/or committees in orderthat the organization’s objectives may be promoted.9.1.6 Coordinate the work so that the necessary reports are timely madeto the appropriate State and Federal agencies.9.1.7 Co-sign checks along with Treasurer.9.1.8 Ensure annual audit is performed.2.1.9 Perform such other duties as deemed necessary by the Directors.9.2 Listed below are general duties of the vice president of a parentorganization.9.2.1 Assume the duties of the President in the event of the President’sinability to serve or resignation.9.2.2 Chair organization committees.9.2.3 Maintain a roll of all members of the organization.9.2.4 Perform such other duties as deemed necessary by the Directors.9.3 Listed below are general duties of the secretary of a parent organization.9.3.1 Record the minutes of all meetings of the Directors, and furnish acopy of such minutes to the President within one (1) weekfollowing the meeting.9.3.2 Coordinate all correspondence relating to the organization.9.3.3 Catalogue and supervise the property of the organization.9.3.4 Publish all notices of meetings or other matters.9.3.5 Perform such other duties as deemed necessary by the Directors.9.4 Listed below are general duties of the treasurer of a parent organization.9.4.1 Maintain financial records (keep an accurate record of receipts andexpenditures).

9.4.2 Prepare the budget and provide financial reports as requested.9.4.3 Receive all funds for the organization and promptly deposit saidmonies in a bank designated by the Directors.9.4.4 Pay out funds with proper vouchers in accordance with theapproved budget and co-sign checks with President.9.4.5 Prepare all required tax returns (Form 990/990EZ and sales tax) onbehalf of the organization.9.4.6 Establish good accounting procedures.9.4.7 Establish permanent file for financial related records.9.4.8 Turn over all financial records to the new treasurer.9.4.9 Perform such other duties as deemed necessary by the Directors.

Financial Management HandbookAnnual Audit of Financial Records10.0 General Requirements10.1 Each parent organization should select a qualified individual or group toconduct an annual audit, which must be permanently maintained in theorganization's records with a copy provided to the school principal.10.1.1 It is recommended that an audit be conducted when there is achange during the year of the treasurer or any officer that signs aparent organization check.10.2 An audit is an examination of the financial records of the parentorganization.10.2.1 An audit helps ensure that income and expenditures are accountedfor and that they are in accordance with the budget and theorganization’s goals for the year.10.2.2 The audit is to protect the parent organization officers and theorganization.10.3 All financial records should be reviewed in the audit.10.4 A CPA or accountant may perform the audit at the organization’s expense.10.5 A parent organization may instead establish a review committee toperform the audit.10.5.1 A review committee includes officers and club members; however,the committee should have at least one non-officer member reviewthe information.10.5.2 The treasurer is prohibited from being on the review committee.This does not prohibit the treasurer from meeting with the reviewcommittee to explain their records or answer questions.10.5.3 A sponsor, sponsor’s spouse or officer’s spouse cannot bedesignated as the non-officer member of the review committee.10.6 The audit should be documented in a written report that communicates anassessment of the records that were audited as well as the results of the

audit to the parent organization and signed by the individual(s) performingthe audit. Some report examples include:10.6.1 Review was performed with no exceptions noted; therefore, theFinancial Report appears proper and correct.10.6.2 Review was performed with immaterial exception(s) being noted.The Financial Report was either corrected or exceptions did nothave a material effect. Except for these minor exceptions, theFinancial Report appears proper and correct. Any exceptions, pooror lacking documentation, poor or lacking internal controls, etc.should be provided as part of the report. Some examples ofexceptions are listed below:‣ Check #1234 did not have 2 authorized signatures.‣ Six checks did not have the related invoices asdocumentation for the expenditures.‣ The checking account was not reconciled during the year.‣ No documentation exists showing sales for the ChristmasCards sold in order to determine whether the amountrecorded in the Financial Report is correct.10.6.3 Review was performed with material exception(s) being noted.Because of the material exception(s), the Financial Report is notproper and correct. Any exceptions, poor or lackingdocumentation, poor or lacking internal controls, etc. should beprovided as part of the report.10.6.4 In some instances, due to the material exception(s), the committeemay not be able to determine whether the Financial Report isproper and correct. When this situation occurs, the committeeshould state that the status of the Financial Report could not bedetermined because of material exceptions.10.6.5 Some examples of items needed for the audit are:‣ A copy of last audit report‣ Current checkbook and cancelled checks‣ Bank statements and validated deposit slips‣ Any bank corrections (debits/credits)‣ Monthly bank reconciliations‣ Copy of budget‣ Copy of Financial Report and 990/990EZ (if applicable)from last year‣ Ledger or similar record of transactions

‣ Disbursement support (check request and originalinvoice/sales slip/register receipt)‣ Record of approved fund-raisers‣ Cash receipt book and cash receipt sheets‣ Copies of minutes‣ Current bylaws11.0 Sample Review Committee Guidelines2.1 The following suggested guidelines are designed to assist the parentorganization Audit Review Committee in conducting a thorough review ofthe organization's Financial Report and the financial activity for theapplicable fiscal year. The checklist in Exhibit 7-1 may be utilized tofacilitate the review.2.2 Have the treasurer prepare the Financial Report (written report of revenuesand expenditures) for your organization. The report should includeinformation for the full applicable year.2.3 The review must cover the period beginning with the reconciled cashbalance from the previous written Financial Report and ending with thereconciled cash balance from the last day of the time period reported bythe parent organization. If the organization is using a retained earningsaccount, then the beginning retained earnings should equal the prior year’sending retained earnings balance plus/(minus) net income/(loss).2.4 Review the reconciled bank statements and canceled checks to determinethat:2.4.1 Disbursements have been properly documented with an invoice orreceipt.2.4.2 Disbursements have been properly approved.2.4.3 Checks have been properly signed by two officers.2.4.4 Checks have been deposited or cashed by the payee indicated andthat no information on the face of the check has been altered.2.4.5 Checks have been accounted for in the proper sequence (nomissing checks).2.5 Check addition and subtraction on cash receipts and deposits.2.6 Compare cash receipts and deposits to the bank statement.2.7 Verify that receipts and disbursements were recorded to the correctaccount on the organization’s books.2.8 Review the treasurer's monthly reports and check them for accuracy.Review the beginning and ending balances on reports to verify that correctending balances were carried forward as beginning balances onsubsequent reports.

2.9 Determine that only appropriate parent organization officers areauthorized signers on the bank account. Former officers should notremain on the account as authorized signers. In addition, Districtemployees cannot be an authorized signer on the organization's bankaccount.2.10 Determine that the coaches and directors of UIL academics, athletics, andfine arts were not given more than the amount that the school district canspend for a letter jacket awarded to a student in product(s) or gift(s) inrecognition for coaching, directing, or sponsoring UIL activities during acalendar year.2.11 Obtain proof that all applicable sales tax reports were submitted to theTexas State Comptroller’s Office and that the related taxes were paid.2.12 Determine which two fund-raisers were chosen to be the “one-day taxfree”sales, if applicable. Only parent organizations that have receivedan exemption from the Texas State Comptroller’s Office are allowedtwo (2)“one-day tax-free” sales per calendar year.2.13 Review the tax-exempt status of the parent organization to determine thatthe organization has received and maintained its federal tax-exempt statusas a public 501(c)(3) charitable organization or other tax-exempt statusdeemed by the IRS.2.14 Determine that Form 990 or 990-EZ has been filed properly with the IRSif gross receipts normally exceed $100,000 or $25,000, respectively.2.15 Determine that the parent organization has not used individual accounts,which credit funds raised to individual students or parents.2.16 Verify that 1099s were issued, if applicable. In general, a parentorganization may have to issue a 1099-MISC (Miscellaneous Income) foreach person to whom they have paid at least $600 in rents, services, prizes& awards, attorney fees, etc. in a calendar year.2.16.1 The funds can be donated to the school and they will handle the1099 reporting.2.17 If exceptions are noted during the audit, consult with the organization'streasurer and president (if necessary) to resolve the exception(s). Thetreasurer is responsible for making any corrections to the records,checkbook, and Financial Report.2.18 If material exceptions have been noted, prepare recommendations toprevent the future occurrence of these exceptions.2.19 The organization's treasurer and president are responsible for acting uponthe recommendations made by the Audit Review Committee.2.20 After the review is complete, prepare the applicable report.2.21 Retain the original written Financial Report and the original Audit

Review Committee Report in the organization’s permanent files.2.22 Submit one copy of your organization’s Financial Report along with theAudit Review Committee’s Report to the school principal.

Financial Management HandbookSales Tax Rules and Reporting12.0 Purchases1.1 If a parent organization has obtained an exemption from the State for Texas salesand use taxes, it simply means that the organization can purchase items for theorganization’s exclusive use or for resale (once the items are sold, they are taxable)without paying sales taxes.1.2 The remainder of Section 4 is based on the assumption that the parentorganization has obtained tax-exempt status from the IRS as a public501(c)(3) charitable organization and an exemption from the State forTexas sales and use taxes.1.3 All purchases made for the exclusive use of a parent organization shouldbe made tax-exempt.1.3.1 A Texas Sales and Use Tax Exemption Certificate form should beissued to the vendor.1.3.2 Sales and use tax exemption numbers do not exist. Exemptionforms require no number to be valid. The Certificate authorizesthe vendor to make the sale tax-exempt.1.3.3 The vendor should keep the certificate on file to show StateComptroller auditors if they are audited.1.4 All items purchased to resell during a fund-raising event such as T-shirts,spirit items, etc. should be made as non-taxable purchases from thevendor.1.4.1 A Texas Sales Tax Resale Certificate showing the organization’sSales Tax Permit Number (11 digits) should be given to the vendorunless the vendor already has one on file.1.4.2 It is not recommended to pay the vendor for sales taxes in anattempt to avoid colleting and remitting sales taxes to the State.13.0 Reporting and Remitting Sales Taxes to the State13.1 Sales taxes are due to the State and must be collected when taxable items(i.e. – Sally Foster wrapping paper) are sold to others.

13.2 Sales taxes are due regardless of whether a parent organization hasobtained tax-exempt status from the IRS and regardless of whether salestaxes were charged as part of the sales price when the items were sold.13.3 There is a requirement to file at least one sales tax report per calendar year(January – December) with the State Comptroller's office. The StateComptroller will inform the parent organization after filing their first salestax report if sales taxes must be remitted more frequently (based ontaxable sales in one year).13.3.1 The State Comptroller's office will generally mail the requiredreporting forms and information to the organization after it hasobtained a Sales Tax Permit.2.3.2 If an organization has a Sales Tax Permit, the State requires that asales tax report be filed annually even if the organization did notsell anything taxable (zero sales/no tax due tax report).2.3.3 The sales tax report can be completed online, if preferred, by goingto the State Comptroller’s website athttp://www.window.state.tx.us/webfile/salestax.html. Select either“File Tax Due” or “File No Tax Due” (zero tax report).13.4 Annual sales tax reports are due January 20 th each year. Quarterly andmonthly sales tax reports are due on the 20 th of the month immediatelyfollowing the end of the quarter or month, respectively.13.5 All KISD locations are currently located in a 7¼% sales tax rate area.13.6 When completing the sales tax report, verify that the amount listed as totaltaxable sales reflects the sales price before tax. It should not be the totalamount collected including tax or your organization will be paying salestaxes twice.13.6.1 For example if the total amount collected including tax for a T-shirt is $15.00, the sales price would be $13.99 ($15.00/1.0725).9.0 One-day Tax-free Sale13.7 Parent organizations are allowed two one-day tax-free days per calendaryear by the State if they have obtained exempt status from the IRS andexemption from sales and use taxes from the State.13.8 A one-day tax-free day is a day a parent organization can sell taxableitems and not have to remit the normal sales taxes due to the State.

3.3 In order to be fair to those taking over the next year, it is recommended thatparent organizations use one of these tax-free days during the fall semester and one inthe spring semester (unless the nature of a particular organization is to have all fundraisersin the same semester). This will allow the next parent organization to stillhave one tax-free day left for that calendar year. It is important to communicate thisinformation to the next officers.3.4 The criteria for a one-day tax-free sale have to do with when possession goesfrom the parent organization (which is tax exempt) to the buyer (which is not taxexempt). Orders and/or collections could be taken over an extended period beforedelivery is made. The delivery just has to be advertised as one day (the tax-free day).3.5 If your organization has a sales tax permit, it will need to report the one-day taxfreeday on the sales tax report in “total sales”, not “taxable sales”.14.0 List of Common Taxable Items14.1 The following list of items or activities have been identified as beingtaxable when sold or sponsored by a parent organization. This list is notall-inclusive.• Athletic equipment and uniforms• Balloons• Band equipment and supplies - reeds, recorders• Books, cookbooks, workbooks, etc.• Candles• Catered dinners• Clothing - T-shirts, all other clothing items• Concessions, if not part of a fund-raiser• Copies - collections from coin or manual copiers• Cups - glass, plastic, paper, etc.• Directories - student• Drafting supplies• Flower sales• Gift-wrap paper• Handicrafts• Horticulture items• Magazine subscriptions• Musical supplies• Pennants• Pictures/photographs• Plant sales• Pompoms• Publications - yearbooks, memory books• Programs - athletic, music, etc.• Recorders - musical

• Retirement plaque• Rings - school• School Store - all items sold by school stores• Silent Auctions (if not part of one-day tax-free day and is for itemssuch as free golf round, membership to a health club, other recreationaltypeitems, etc.)• Stationery• Tickets sold to play a game at a booth for a prize• Uniforms - PE, cheerleader (when student property)• Vending - pencils and other non-edible supplies5.0 List of Common Non-taxable Items5.1 The following list of items or activities have been identified as being non-taxablewhen sold or sponsored by a parent organization. This list is not all-inclusive.• Advertisements sold for school newspapers, athletic & booster clubprograms, etc.• Bake sales• Car wash• Concessions, if part of a fund-raiser• Dinners – when prepared by parents or catered as part of a fund-raiserof a parent organization• Discount cards• Dues• Gold-C and Entertainment coupon books• Golf tournament entry fees• Fees – clinics and workshops• Jog-a-thon• Raffle tickets• Silent auctions (all if part of one-day tax-free day; if not part of onedaytax-free day and is for items such as gift certificates for dinner,manicure, facials, haircuts, stay at a hotel, etc.)• Tickets for admission to athletic events, drama productions, dances,school carnivals and other similar entertainment events