GASB 84 for school districts: a guide to student activity funds

GASB Statement No. 84, Fiduciary Activities, is the Governmental Accounting Standards Board's standard for identifying fiduciary activities, meaning resources a government holds for someone else, and for reporting them. GASB issued it in January 2017. It applies to state and local governments, and public school districts follow GASB standards.

GASB says the criteria focus on two things: whether the government controls the assets, and who the beneficiaries are. An activity that meets the criteria is reported in a fiduciary fund, with a statement of fiduciary net position and a statement of changes in fiduciary net position (GASB summary).

For K-12 business offices, the biggest change landed on student activity funds: class accounts, clubs, yearbook, student council and similar groups. Many districts used to report these as agency funds. GASB 84 replaced agency funds with custodial funds and set clearer tests for what qualifies (Pennsylvania Department of Education, Texas Education Agency).

Statement 84 describes four fiduciary funds that a government should report when they apply (GASB summary, GFOA).

Fiduciary funds record a liability to beneficiaries when an event compels the government to disburse the resources, such as a demand for the money or no further action being needed to release it (GASB summary). For custodial funds, GFOA notes that additions and deductions are reported by the nature of the resource flows (GFOA).

Most student activity funds are judged under paragraph 11c(2). It treats an activity as fiduciary when "the assets are for the benefit of individuals and the government does not have administrative involvement with the assets or direct financial involvement with the assets" (quoted by the South Carolina Department of Education). The assets also have to be controlled by the district and not come from its own-source revenues (Pennsylvania Department of Education).

Footnote 1 of the Statement gives examples of administrative involvement. A district has it if it monitors compliance with requirements it set, determines eligible expenditures, or has the ability to exercise discretion over how the assets are allocated (Pennsylvania Department of Education). A district that matches student activity resources has direct financial involvement (TEA).

How GASB's implementation guide applies this to student clubs

In June 2019 GASB issued Implementation Guide No. 2019-2, Fiduciary Activities, which works through student club scenarios. The Texas Education Agency reproduces those questions and answers in its GASB 84 FAQ. In summary:

When student activity funds are governmental, they go in the general fund, or in a special revenue fund if they meet the GASB 54 definition of restricted or committed fund balance (New York State Comptroller). Your state's chart of accounts usually decides which.

• January 2017. GASB issues Statement No. 84 (GASB).
• Original effective date. Reporting periods beginning after December 15, 2018, which TEA described as the 2019-20 fiscal year (TEA).
• June 2019. GASB issues Implementation Guide No. 2019-2, Fiduciary Activities (GASB).
• May 2020. Statement No. 95 postpones Statement 84 and Implementation Guide 2019-2 by one year to give governments relief during COVID-19 (GASB).
• Result. Statement 84 is effective for reporting periods beginning after December 15, 2019 (GASB). For districts on a July to June year, that's 2020-21. Early application was allowed, but a statement couldn't be partially implemented (Wisconsin DPI).

GASB's status page for Statement 84 also shows later changes: Statement No. 97 amended paragraph 7 (part of the fiduciary component unit criteria), Statement No. 92 amended paragraphs 22 and 25, and Implementation Guide No. 2020-1 is listed as further interpretive guidance (GASB). Ask your auditor whether any of these affect your district.

GASB sets the standard. State education agencies set fund numbers and often add their own rules, and state law can create administrative involvement on its own. That's why the same standard led to different answers.

Classification is one question. Most findings in student activity audits are about basic cash handling. A few examples from state audit reports:

• Missing paperwork. Student treasurers and advisors didn't keep pre-numbered tickets and receipts or profit and loss statements, checks weren't countersigned, and middle school bank reconciliations were done incorrectly, so clubs and the board saw inaccurate balances (NY State Comptroller, Bethpage UFSD).
• Late deposits. In the same audit, 27 of 81 receipted collections were deposited 8 to 22 days after the clerk received them, when procedures required seven days (NY State Comptroller).
• No policy, unapproved clubs. Clubs operated without approval, the board hadn't adopted a comprehensive policy, and 72 of 90 transactions tested weren't properly accounted for by the club (NY State Comptroller, Brookhaven-Comsewogue UFSD).
• No monthly reporting. The board didn't receive monthly extra-classroom activity fund reports, and collections lacked supporting records (NY State Comptroller, Salem CSD).
• Unreported shortages. An auditor's cash count found a high school's ASB fund $1,161 short, and the loss wasn't reported as state law requires (Washington State Auditor).

None of these are exotic. They come from many small cash transactions, handled by busy staff, with too little documentation between the event and the bank.

Classify and document

1. List every student activity and school-level account, by building.
2. For each one, write down who decides how money is raised and spent, and whether the district sets fees or adds money.
3. Compare that with board policy and the implementation guide scenarios above.
4. Agree the classification with your auditor and record the reasoning.
5. Set up fund and account codes from your state's chart of accounts before the next collection starts.

Tighten internal controls and cash handling

The NCES handbook for school accounting recommends that the board approve each activity fund, that receipts use pre-numbered forms, and that receipts be deposited intact and daily (NCES). It also recommends separating three duties: signing checks, keeping the fund's accounting records and reconciling bank statements. Two people should count collected cash and sign a receipt for the total. GFOA adds that one person shouldn't both receive and record revenue, and that electronic payment methods reduce overall risk where feasible (GFOA).

Reconcile and report every month

NCES recommends reconciling activity fund bank statements as soon as they arrive and preparing a monthly report for each student organization, which the sponsor checks against their own records (NCES). In Illinois, monthly reconciliation and reporting are required by rule (23 Ill. Adm. Code 100.80).

Our companion guides go deeper: student activity fund controls and event cash handling and reconciling online school payments by account code.

No software decides your fund classification. That depends on your board policy and who controls spending, and your auditor reviews it. A payment system changes something more practical: how much cash moves through school offices, and how quickly each payment lands in the right account.

Here's what Omella does for business offices:

• Families pay online by card or with free ACH bank transfer, so schools count and carry less cash.
• Payments are organized by school and activity, and land in one report by account code. Card reader and online payments show up in the same report.
• Account codes can be added after money has been collected, and past transactions and reports update.
• The business office sees collections, payouts and account codes across schools, while staff get the access their role needs.
• Every payment and response can stream into a Google spreadsheet in real time.
• For Skyward® districts, payments sync back, so Skyward® is always up to date.

Omella is free for schools and makes money from optional tips at checkout. Card processing is 3.99% + $0.30, and districts can pass card fees to payers or absorb them. See pricing for the details, or read how reconciliation works and what Omella does for the business office.