The principal should ensure that the local school board has policies that govern the financial practices of the school. Several examples are listed here:
The school board upon recommendation of the finance committee should vote a dollar limit above which equipment should be capitalized and depreciated. Auditors can provide guidance in this area.
The school board should vote a single-item, maximum-dollar limit for purchases above which the administration must seek board approval. Often, financial controls also include a dollar limit above which two signatures are required on check payments.
The principal should be aware that agency/trust funds do not belong to the school. The school is holding them in trust. It is recommended that a savings account be maintained with adequate funds to cover the total of all agency/trust funds. This account should be reconciled regularly.
A facility rental policy and booking procedure should be in place for both constituent and nonconstituent groups that use the school facility. This should include use agreements and liability waivers.
The principal is to provide leadership in the budget process and must work collaboratively with other school financial personnel. The budget should reflect the mission of the school and provide adequate support for student learning. Operating and capital budgets are to be developed by administration and approved by the school board each year as well as the constituency (when stipulated by the school constitution).
A recommended budgeting process usually includes the following:
The principal should be conservative on enrollment estimates. There are a variety of methods for estimating tuition income based on enrollment for the coming year:
Teachers need to have money available to purchase supplies and equipment essential for instruction. Teachers should be given the opportunity during the budgeting process to have input on an amount needed for instructional resource materials, textbooks, and equipment.
The principal should ensure that the school board receives an accurate monthly financial statement and understands it.
Schools are audited on a regular basis. Secondary schools are audited by the General Conference Auditing Service (GCAS), while all other schools are audited by local conference auditors. Principals must:
The principal needs to consult with the LCOE to ensure that adequate insurance coverage has been obtained. The principal should be aware of the limits of the coverage, deductibles, and the protocols that should be followed when insurance claims need to be filed. Some typical insurance coverages are:
The title to the property and buildings of Adventist schools is held by the local conference legal entity. Therefore, when a school desires to construct, reconstruct, enlarge, or improve its property, the following should be used to guide the process:
Accounting for Dummies — John A. Tracy
Book on Accounting