[Busmanagers] Building Trust use

[Jill Treeby]

Thanks a lot Bev,

Jill

 

  _____  

From: busmanagers-bounces at edulists.com.au
[mailto:busmanagers-bounces at edulists.com.au] On Behalf Of Tewkesbury,
Beverley D
Sent: Monday, 5 June 2006 1:28 PM
To: Business Managers' Mailing List
Subject: RE: [Busmanagers] Building Trust use

 

Hi Jill,

 

This is the information I was talking about originally - I eventually found
it.

 

 

Bev Tewkesbury

Relieving Business Manager

Lilydale Heights College

email:  <mailto:tewkesbury.beverley.d at edumail.vic.gov.au>
tewkesbury.beverley.d at edumail.vic.gov.au

Phone:  9735 7004

Fax:      9739 5463


 Guidelines for recording tax deductible Library Funds and Building Funds on
CASES


Schools can apply to the Australian Tax Office (ATO) for permission to
operate a tax deductible library or building fund account.  A key condition
for ATO approval is that the school council must open and maintain a
separate bank account.  (Refer Public Ruling 95/27.)

The majority of donations to tax deductible accounts are made at the
beginning of the school year.  Parents often pay for a variety of school
fees and charges with a single cheque.  An administrative problem arises
where a portion of the cheque amount includes a tax deductible donation for
the library or building fund.  The amount of the donation cannot be
receipted separately and banked directly into the library or building fund
account.

The ATO have agreed in writing to the following procedures:

*      When the receipt is exclusively for an amount of money donated to the
tax deductible account, the funds must be receipted, recorded and banked
directly into the designated account.

*      When a school receives a cheque for voluntary contributions, class
materials, excursions, etc., as well as a donation to a tax deductible
library or building fund, the money can be receipted and banked into the
Official account, providing that:

1.        Periodically, all money receipted into the Official account on
behalf of the tax deductible account is transferred into the library or
building fund from the Official account.

2.        The person making the donation receives official written
confirmation of the donation.  Normally this will be the receipt from the
tax deductible account.  However, where the receipt is issued from the
Official account, and only a portion of the amount relates to the tax
deductible donation, a form letter can be provided.  (See 'Administrative
Procedures' below.)

3.        All payments relevant to the library or building fund must be paid
by cheque directly from the library or building fund bank account.

The ATO requires:

*      Bank account number (of the separate library or building fund
account)

*      Where tax deductible funds are originally receipted into the Official
account, proof/justification for the transfer of funds from the Official
account into the library or building fund account.  (Use the program budget
variance report, the flexible transaction report, or the General Ledger
transaction report for the designated program account at Chart Level 4.)

*      A cheque book that is solely for the library or building fund bank
account.

*      A receipt book that is solely for the library or building fund bank
account.

Administrative Procedures

(a) Parent issues a cheque solely for a tax deductible donation to the
library or building fund:

If the cheque is made-out to the school for just the amount of the donation
to the building fund, or if the donation is in cash, then the donation must
be receipted directly into the library or building fund trust account.

(b) Parent issues one cheque for a variety of payments including a tax
deductible donation to the library or building fund:

The school receipts the total funds into the Official account in the usual
manner and issues a receipt.  To enable the parent to claim a taxation
benefit for the donation, it is recommended a 'Form Letter' could be issued
to the parent.  This letter (prepared on school letterhead) would be a
standard form.  The date, receipt number, payee's name and amount donated
could be completed and signed by the bursar or business manager when each
donation is received.

Illustrated below is a suggested format of the 'Form Letter':

 


[SCHOOL LETTERHEAD]


Date....


Contribution to School Building Fund


The following details confirm that a donation was received by the school
council for the [SCHOOL NAME] approved Building Fund.  All donations to this
fund over $2.00 are tax deductible.


Receipt Number................


Name.....................


Contribution to Building Fund.$..........


Signature....................




Note:

If the school issues a separate receipt for the library or building fund
donation, and another for the payment of excursion fees, subject
contributions, etc., it is not necessary to issue a 'Form Letter'.

Ensure a file is started to hold a copy of correspondence and ATO approval
for the tax deductible bank account.  Details of all periodic receipts and
payments transferring trust funds from the Official account to the library
or building fund should be filed.  All related reports including the program
budget variance reports and transaction reports are kept in this file for
reference.  This will make research easier if or when the tax office makes
enquiries.

CASES Procedures

Chart Level 1

If it does not already exist, create an account code for library or building
fund bank account.

Chart Level 2

Code 0049 under 'Locally Raised Funds' called Donations is to be used for
receipting funds. 

Chart Level 3

Create an account code under 'Miscellaneous Expenditure' for the movement of
funds from the Official account to the library or building fund account.
E.g. 0141 Library/Building Fund Transfers.

This level 3 account code should only be used for the transfer of funds from
the Official account to the library or building fund account.  It should not
be used when making payments for goods received directly from the library or
building fund bank account.

Chart Level 4

A Building Fund program, 458, has been established to record transactions
relating tax deductible community donations. For those schools who have a
Library Fund a code can be established for the recording of transactions.


Transferring funds from the Official account into the approved library or
building fund account.

When moving funds from the Official account into the library or building
fund account, the school should process the transaction as a payment from
the Official account and a receipt into the library or building fund
account.


THIS TRANSACTION SHOULD NOT BE PROCESSED AS AN INVESTMENT TRANSFER.

Illustrative Examples

Payment for goods received using library or building fund account money.

All payments that relate to the library or building fund must be made
directly from the library or building fund bank account using the
appropriate expenditure line item.

When paying for goods received, do not use the level 3 account code that has
been established for the transfer of funds between the Official account and
the library or building fund account.

Example transaction codes

Assume a building fund was authorised by the ATO and the school created 0003
as the bank account on chart level 1, and the level 3 code created for the
movement of funds was 0141.  The following transaction codes would be
appropriate in the examples illustrated.

1.  School receives a cheque for $120 from a parent, including $45 for the
building fund.

Official account transaction code for donation =  0002  0049  0000  458  000

2.  School has accumulated $1,200 in Program 458 Building Fund and wishes to
transfer the funds from the Official account to the building fund bank
account.

Official account payment transaction code = 0002  0001  0141  458  000

Building fund account receipt transaction code = 0003  0049  458  000

3.  School is purchasing a door from the building fund account.

Building Fund payment transaction code = 0003  0001  0101  458  000

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Important - 
This email and any attachments may be confidential. If received in error, please contact us and delete all copies. Before opening or using attachments check them for viruses and defects. Regardless of any loss, damage or consequence, whether caused by the negligence of the sender or not, resulting directly or indirectly from the use of any attached files our liability is limited to resupplying any affected attachments. Any representations or opinions expressed are those of the individual sender, and not necessarily those of the Department of Education & Training.
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