GASB 84 Compliance Made Simple: How to Eliminate Student Activity Fund Headaches Forever

July 18, 2025

Wanderson Rodrigues

GASB 84 Compliance Made Simple: How to Eliminate Student Activity Fund Headaches Forever

Worried about your next GASB 84 audit? Drowning in manual fund tracking? You're not alone. This comprehensive guide shows superintendents and CSBOs exactly how to handle student activity fund compliance automaticallyâ€”and why it's more urgent than ever.

Understanding GASB 84
State Implementation Examples
The Multiple Payment Systems Problem
Real Cases of Fund Misappropriation
Omella's Activity-based Accounting™ Solution
Implementation Roadmap
FAQ

If you're a superintendent, CSBO, or school finance leader, you've probably lost sleep over questions like:

"Are we properly tracking our football team's fundraising money?"
"What happens when auditors demand our student activity fund records?"
"How do we make sure every transaction complies with GASB 84?"
"Are we following our state's specific requirements for fund segregation?"

Here's the reality: Since GASB 84 took effect in 2020, school districts nationwide have faced stricter requirements for tracking student activity funds. The old "agency fund" workarounds are gone. Now you must decide if funds are fiduciary (held for others) or governmental (district controls use), track who owns what with separate balances for each club, deposit all activity money in district-controlled accounts, and maintain audit trails for every dollar.

The good news: Compliance doesn't have to be complicated or time-consuming. In this guide, we'll walk you through exactly what GASB 84 requires, why it matters, and most importantly—how to handle it all automatically so you can focus on what really matters: educating students.

What You'll Learn in This Guide

By the end of this post, you'll understand:

GASB 84 requirements and how they apply to your student activity funds
State-specific compliance rules (with examples from Texas and Illinois)
Real consequences of non-compliance (including actual fraud cases)
How modern technology can automate compliance and eliminate manual headaches
Actionable steps to make your district audit-proof

Promise: We'll keep this practical and actionable. No accounting jargon, no overwhelming details—just what you need to know to pass your next audit and sleep better at night.

Understanding GASB 84: The New Reality for School Districts

Since 2020, GASB Statement 84 has fundamentally changed how school districts must handle student activity funds. The old system of keeping these funds "off the books" in simple agency accounts is over.

The key question GASB 84 asks: Who controls the money and who benefits from it?

If school board, superintendent, or staff guide how money is earned or spent → These are governmental funds that must be included in the district's financial statements
If students truly direct all spending with minimal district involvement → These can remain fiduciary custodial funds with separate reporting

What this means practically:

Every transaction must be tracked with clear audit trails
Fund balances must be maintained separately for each activity or club
Monthly reconciliations are required to ensure accuracy
Annual financial reporting must include these funds appropriately
Board policies must govern how these funds are collected and spent

This isn't just an accounting change—it's a compliance requirement that affects every public school district in America.

State-by-State Implementation: Texas vs. Illinois Examples

GASB 84 is a national standard, but states implement it differently. Here's how two major states handle student activity fund compliance:

Texas: Fiduciary Fund Approach

Texas Education Agency (TEA) determined that most student activity funds remain fiduciary because students typically control spending with limited district intervention.

Key Texas Requirements:

Fund 865: Student Activity Funds (fiduciary custodial fund) - money raised by specific student groups
Fund 461: Campus Activity Funds (district special revenue fund) - school-controlled activities like vending machines
Texas Education Code §44.903: Requires board policy for spending local funds from "vending machines, rentals, gate receipts, or other local sources"
Monthly reconciliation and reporting required for all activity funds
TEA Financial Accountability System Resource Guide (FASRG) provides detailed compliance procedures

Texas Compliance Requirements:

Campus principal is ultimately accountable for activity funds
All money must be promptly deposited in official school bank accounts
Strong internal controls required to prevent commingling with personal accounts
Disbursements only via official district checks or electronic payments
Monthly reports showing receipts, disbursements, and balances for each activity

Illinois: Governmental Fund Integration

Illinois State Board of Education (ISBE) took a different approach, requiring all student activity funds to be reported within the district's governmental funds.

Key Illinois Requirements:

All student activity funds reported in the Education Fund (main operating fund)
23 Ill. Admin. Code Part 100 governs budget and financial reporting requirements
Board must appoint activity fund treasurer to manage all activity fund assets
Monthly reconciliation of bank balances to activity fund liabilities required
Annual budget and financial report must include student activity revenues and expenditures

Illinois Compliance Requirements:

All activity money must be deposited with the district's activity fund treasurer
Official receipts required for all collections
Disbursements only via treasurer's checks
Monthly reports to each student group and school board
Funds carry over year-to-year for continued activity use

The Bottom Line: Whether your state treats these as fiduciary or governmental funds, the compliance requirements are extensive and non-negotiable.

The Problem: Why Multiple Payment Systems Create Compliance Nightmares

💡 The Reality Check: Parents expect Venmo-like payment convenience. You need compliance-grade accounting.

Here's where most districts get stuck. They're juggling multiple payment systems that weren't designed to work together or meet school compliance requirements:

Square, Venmo, Square Cash for various payments
Snap Raise, Vertical Raise, SchoolFundr for peer-to-peer fundraising
PayPal for donations
GoFan, Eventbrite, MySchoolDance, Hometown Ticketing for ticketing
RevTrak for general payments (but not fundraising)
Cash and checks for everything else
And the list goes on...

Each system creates its own set of problems:

The Manual Mapping Nightmare: Every payment has to be manually assigned to the right activity across multiple platforms. Miss one, and you're out of compliance.

The Reconciliation Maze: Trying to match bank deposits with activity balances becomes a monthly detective game when money comes from 5+ different sources.

The Training Burden: Teachers and coaches need to understand GL codes, accounting rules, AND multiple payment platforms just to collect money.

The Audit Trail Gap: When transactions aren't properly categorized from the start across multiple systems, creating audit documentation requires hours of reconstruction.

The Real-Time Reporting Problem: You can't see current fund balances by activity when money is scattered across different platforms.

The Overhead Explosion: Multiple systems mean multiple training sessions, multiple fees, multiple reconciliations, and multiple potential failure points.

Sound familiar? You're not alone. Most districts struggle with these same issues—and the consequences can be severe.

When Things Go Wrong: Real Cases of Fund Misappropriation

The stakes couldn't be higher. In the past five years alone, school employees have stolen millions from districts across the country: Christina Barnard, a business services assistant at Jurupa Valley Unified School District, embezzled $1.2 million over six years; Kimberly Dudek, treasurer for Westfield Public Schools, stole $460,000 in student activity funds; David Pickett, athletic director at Chaparral High School, pocketed $106,000 in gate receipts; Sherry Knowles at Flagler County Schools manipulated federal funds to steal nearly $1 million meant for disadvantaged students; and Robert Coughlin, business manager at Medford Public Schools, created fake vendors to steal $330,000. These aren't isolated incidents—they represent a pattern of vulnerability that exists when manual fund tracking systems create opportunities for both honest mistakes and intentional fraud. Every one of these cases could have been prevented with proper digital oversight and automatic transaction tracking.

Fund tracking isn't just about compliance—it's about protecting your district from devastating financial losses and career-ending scandals. Here are the documented details of what happens when fund tracking fails:

Honest Mistakes That Led to Legal Trouble

Case 1: The Audit Finding That Cost MillionsMultiple California school districts have faced state audit findings for improper fund tracking. These "honest mistakes" in fund segregation and documentation have resulted in districts having to implement expensive corrective measures and enhanced oversight procedures.

Bad Actors Who Caused Major Damage

Case 2: The $1.2 Million Bookkeeper SchemeChristina Barnard, a business services assistant at Jurupa Valley Unified School District in California, was sentenced to eight years in prison for embezzling $1.2 million over six years. She exploited weak internal controls by creating fake invoices and manipulating financial records. "This defendant violated the public trust and stole money meant for children's education," said District Attorney Mike Hestrin.

Case 3: The Athletic Director's Gate Receipt TheftDavid Pickett, athletic director at Chaparral High School in Arizona, was sentenced to prison for stealing $106,000 in gate receipts and booster funds between 2014-2017. He exploited gaps in cash handling procedures and the lack of digital oversight. The Scottsdale Unified School District had to implement new financial controls and suffered significant reputational damage.

Case 4: The $460,000 Activity Fund EmbezzlementKimberly Dudek, treasurer for Westfield Public Schools in New Jersey, was sentenced to five years in prison for embezzling $460,000 in student activity funds. She used a scheme where she deposited district checks into personal accounts and manipulated records to hide the theft. "She betrayed the trust of the school district, the students, and the taxpayers," said Union County Prosecutor Lynne Ruhl.

Case 5: The Massive Florida FraudSherry Knowles, a finance employee at Flagler County Schools in Florida, was sentenced to five years in federal prison for stealing nearly $1 million in federal funds meant for disadvantaged students. She manipulated purchase orders and created fictitious vendors over a four-year period. The scheme was only discovered during a routine audit.

Case 6: The Credit Card FraudMichelle Braud, bookkeeper at Zachary Community School District in Louisiana, was sentenced to two years in prison for using school credit cards for personal purchases totaling $78,000. She bought everything from groceries to vacation expenses, exploiting the lack of real-time oversight of credit card transactions.

Case 7: The Vendor Payment SchemeRobert Coughlin, business manager at Medford Public Schools in Massachusetts, was sentenced to 15 months in prison for stealing $330,000 through a fake vendor scheme. He created fictitious companies and submitted false invoices over three years. "This defendant stole money that should have gone to educating our children," said U.S. Attorney Rachael Rollins.

How These Cases Could Have Been Prevented

Automatic Digital Tracking: Every case above involved manual processes that created opportunities for error or fraud. Digital systems that automatically track every transaction eliminate these vulnerabilities.

Real-Time Oversight: Many fraud cases persist for years because there's no real-time visibility into fund balances. Immediate alerts for unusual activity can stop problems before they escalate.

Complete Audit Trails: Digital systems that track every transaction from collection to deposit create unbreakable audit trails that prevent both honest mistakes and intentional fraud.

Cash Collection Controls: Even with cash collections, digital systems can record every transaction, ensuring the amount recorded matches the cash handed over to the school.

Vendor Payment Verification: Digital systems can require multi-level approval for vendor payments and flag suspicious patterns that manual systems miss.

Omella's Activity-based Accounting™ Solution

What if compliance could be automatic? What if every transaction was properly mapped and tracked without any manual work from your staff? What if you could eliminate the chaos of multiple payment systems while protecting your district from both honest mistakes and bad actors?

That's exactly what Omella's Activity-based Accounting™: Funds mapped automatically feature delivers.

Why One Platform Changes Everything

Instead of juggling Square, Venmo, Square Cash, Snap Raise, PayPal, GoFan, Eventbrite, MySchoolDance, Hometown Ticketing, RevTrak, and a dozen other systems, Omella handles everything:

Concession sales and School Store (replacing Square, Venmo, Square Cash, Cash)
Peer-to-peer team fundraising (replacing Snap Raise, Vertical Raise, SchoolFundr)
Donations (replacing PayPal, GoFundMe, DonorsChoose and others)
Prom and homecoming tickets (replacing GoFan, Eventbrite, MySchoolDance, Hometown Ticketing)
Core payments (replacing RevTrak)
Registration, Signatures and Permission slip fees (replacing DocuSign, HelloSign and others)
Parking passes (replacing cash)
And everything else

This consolidation isn't just convenient—it's transformative for compliance:

Unified Tracking: Every transaction, regardless of type, is automatically mapped to the correct activity from a single platform through Omella's Activity-based Accounting™ feature.

Consistent Training: Staff only need to learn one system instead of multiple platforms.

Simplified Reconciliation: One monthly payout instead of reconciling multiple systems.

Reduced Overhead: One platform to manage, one contract to negotiate, one system to maintain.

Cost Savings: Omella is free for schools, eliminating multiple subscription fees.

Parent-Friendly Payments: Parents get the convenience they expect with one-click Apple Pay and Google Pay, plus a free ACH option to avoid card processing fees—just like Venmo, but built for schools.

How Omella's Activity-based Accounting™ Prevents Every Type of Fund Misappropriation

Omella's Activity-based Accounting™: Funds mapped automatically feature ensures every transaction is automatically mapped to an activity or program (e.g., Football, Debate Club) to stay GASB compliant with district and audit requirements. Here's how this prevents both honest mistakes and intentional fraud:

Preventing Honest Mistakes:

Automatic fund segregation: Each activity gets its own space, eliminating commingling issues
Digital documentation: Every transaction is automatically documented with complete audit trails
Real-time reconciliation: No more manual reconciliation errors—everything balances automatically

Preventing Intentional Fraud:

Digital cash tracking: Even cash collections are recorded digitally, ensuring the amount in Omella matches the cash handed over
Real-time oversight: Finance administrators can see all activity in real-time, detecting unusual patterns immediately
Complete transparency: Every transaction is visible to appropriate staff members, eliminating opportunities for hidden manipulation

Step-by-Step: How Omella's Activity-based Accounting™ Works

Step 1: Organize by Activity (Just Like Real Life)

In Omella, each activity gets its own "space"—think of it like a folder in Google Drive:

Football team gets a space
Debate club gets a space
Band trip gets a space

When staff collect money within a space, it's automatically mapped to that activity through Omella's Activity-based Accounting™ system. No manual work, no training required, no room for error.

Step 2: Automatic Transaction Mapping

Every payment, donation, refund, or fee collected in Omella is automatically mapped to the correct activity or program through our Activity-based Accounting™ feature, ensuring you stay GASB compliant with district and audit requirements. Each transaction is automatically:

Assigned to the correct activity
Tracked in real-time
Included in compliance reports
Available for audit review

Step 3: Seamless GL Code Integration

Use GL codes? No problem. Add them to any space or page—even after money has been collected. Omella automatically updates all historical transactions and reports in real-time.

This flexibility is crucial because school environments are dynamic. Sometimes a teacher needs to start collecting money immediately, or they forget to add the GL code initially. With Omella, these situations don't create compliance problems—they're easily resolved.

Step 4: Effortless Reconciliation

Omella provides detailed reports that break down your monthly bank deposits by:

Individual activities (football, debate club, etc.)
Specific pages (permission slips, fundraisers, etc.)
Transaction types (payments, donations, refunds)

Finance administrators can verify that bank deposits match Omella's records down to the penny—automatically.

Step 5: Mobile Compliance Everywhere

Unlike traditional POS systems that can't enforce activity-specific mapping, Omella maintains compliance whether staff are collecting payments at school or in the field. Every transaction is automatically mapped because the payment process starts with selecting the appropriate activity space.

Step 6: Cash Collection Control

Even with cash collections, Omella records every transaction digitally. At the end of an event, the amount recorded in Omella should exactly match the cash the cashier hands over to the school. This eliminates the cash handling vulnerabilities that enabled many of the fraud cases mentioned above.

Learn More About GASB 84 Implementation

For a deeper dive into GASB 84 requirements and implementation strategies, watch this comprehensive webinar:

Recorded Webinar: GASB Statement No. 84, Fiduciary Activities and Student Activity Funds

This third-party educational resource provides additional context on GASB 84 requirements and implementation challenges

Your Next Steps: From Compliance Stress to Audit-Proof Confidence

Here's your roadmap to bulletproof GASB 84 compliance:

Immediate Actions (This Week):

Audit your current system: Document exactly how you're tracking student activity funds today
Review your state's specific requirements: Contact your state education agency for current guidance
Assess your pain points: Which activities create the most compliance headaches?
Calculate the real cost: Add up staff hours spent on manual fund tracking each month

Short-Term Solutions (Next 30 Days):

Implement automated tracking: Look for systems that provide automatic transaction mapping and real-time reporting
Pilot test with high-volume activities: Start with your most active programs (athletics, band, drama)
Train your team: Ensure all staff understand GASB 84 requirements and your compliance procedures
Update board policies: Ensure your policies align with current state requirements

Long-Term Strategy (Next 90 Days):

Deploy comprehensive automation: Choose a system that eliminates manual work while maintaining full compliance
Standardize district-wide: Ensure all schools and activities use the same compliant system
Prepare for audits: Generate sample reports and documentation to verify audit readiness
Focus on education: Free up your team's time to support student learning instead of tracking transactions

Key Performance Indicators for Success:

✅ Zero audit findings related to student activity funds
✅ 100% transaction visibility with real-time reporting
✅ Automated reconciliation with zero manual errors
✅ Staff time savings of 10+ hours per month
✅ Complete audit trail for every dollar collected and spent

The Bottom Line: Turn GASB 84 from Burden to Competitive Advantage

Student activity fund compliance isn't optional—but it doesn't have to be overwhelming. With the right approach, you can:

Eliminate manual tracking errors that create audit risk
Provide real-time visibility into every club and activity balance
Generate audit-ready reports automatically
Free up staff time to focus on educational outcomes
Sleep better knowing you're always compliant

The regulatory landscape will only get more complex, but your response doesn't have to be. Modern technology makes it possible to handle GASB 84 compliance automatically, without burdening your staff or compromising your educational mission.

Most importantly: Districts that master compliance early gain a significant operational advantage. While competitors struggle with manual processes and audit findings, you'll have a streamlined system that makes compliance effortless.

Ready to make your district audit-proof? Contact Omella today to see how Activity-based Accounting™: Funds mapped automatically can eliminate your compliance headaches forever.

This guide provides actionable information about GASB 84 and student activity fund compliance. Requirements may vary by state and district. Always consult with your legal and accounting advisors for specific guidance tailored to your situation.