Iowa State Auditor Sand issues advisory to schools over misused student activity funds

(ABC 6 News) – Iowa State Auditor Rob Sand has issued an advisory to warn Iowa community school districts (CSDs) to pay more careful attention to collecting and handling of student activity funds.

Sand says over the last decade, the Iowa Auditor of State Office has conducted investigations on the use of student activity funds in 15 CSDs, and found nearly $270,000 collected through student-related activities such as admissions, fundraising events, or other activities were not deposited, or were improperly deposited, collected, or disbursed.

“We are issuing this advisory because we have seen a substantial amount of misuse of student activity funds, as well as a general misunderstanding of how these funds should be collected and disbursed in accordance with Iowa law,” said Sand. “This serves to remind school district boards of directors, faculty, and staff that student activity funds are public funds, are the property of the school district, and must be used to benefit the public.”

The Iowa Department of Education (DOE) updated its guidance on student activity funds in March 2022. It can be viewed HERE.

The investigations also identified bank accounts held outside of the CSD which were administered by employees for student activities and other sports. In some instances, the account was operated as a separate entity to provide camps not associated with the CSD.

Sand says the CSD should ensure it has policies and procedures in place which protect the CSD from any liability if the CSD allows these organizations to use CSD facilities. The policies should also include fee schedules for the use of CSD facilities and equipment if deemed appropriate by the Board.