The Department of Education’s, Office of Local Finance, in conjunction with the Comptroller’s
Office, Division of Municipal Audit has revised the Tennessee Internal School Uniform
Accounting Policy Manual effective July 1, 2011. A copy is available at: http://www.tennessee.gov/education/support/doc/July2011TISUAPM.pdf
. It is highly recommended that all bookkeepers and principals familiarize themselves with the changes to the manual.
A highlight of the additions and clarifications are summarized below.
New Terminology
Throughout the Manual: o The term “internal school funds” is used to encompass student activity, school nutrition and other internal school funds. o The term “food service” has been replaced with “school nutrition.” o The term “fixed assets” has been replaced with “capital assets.”
Section 1--Introduction
School Support Organizations (SSO’s)
Tennessee Code Annotated (TCA) requirements related to:

Retention of financial records (p. 1-4)

A written policy addressing procedures for accounting for assets (p. 1-4)
Section 2—Audit Requirements
Annual Audits
The annual Contract to Audit Accounts should be executed through the Tennessee
Comptroller’s online application entitled Contract and Report System (CARS). (p. 2-2)
Section 3—Duties and Responsibilities
Director of School Responsibilities
Clarification regarding fraud reporting requirements (p. 3-2)
Annual requirement to post or publish a list of recognized SSO’s. (p. 3-2)
School Principal Responsibilities
Clarification regarding fraud reporting requirements (p. 3-4)

Section 4—Administration of Internal School Funds
Definition of Internal School Funds
The revised Manual has incorporated the definition for student activity and other internal school funds as detailed in TCA . (pp. 4-1 and 4-2)
Internal Control Procedures
Control policies and procedures have been added and/or clarified for: o Electronic accounting files and equipment (p. 4-6) o The school’s tax-exempt status (pp. 4-10 and 4-35) o Employee purchases (p. 4-10) o Gift Cards (pp. 4-10 and 4-12) o Debit Cards (pp. 4-11 and 4-12 o Credit Cards (pp. 4-13 thru 4-15) o Bank Statements, deposit slips, canceled checks (p. 4-27) o Fundraising Activities
Definition for school-sponsored fundraising activities (p. 4-31)
Required policies for SSO Fundraisers (p. 4-33)
Definition for School Support Organizations (p. 4-34)
Definition for School Representative (p. 4-34)

Premiums (Bonus Incentives) (p. 4-37)

Basic Education Program (BEP) Funds (pp. 4-38 and 4-39)
Budgets
Budgets for school nutrition funds (p. 4-42)
Section 5—Operating Procedures
Collection of Money by Teachers and Others
Control policies and procedures have been added and/or clarified for:

Pre-numbered receipts (pp. 5-3 and 5-4)

Ticket sales and ticket reconciliations (pp. 5-4 and 5-5)

Recorded counts signed by two individuals (pp. 5-5 and 5-6)
Recording the Method of Payment
Throughout this Section as well as in other applicable Sections of the Manual there is a requirement to record the method of payment received by teachers and others who collect money.
The amount of cash collections and the amount of check collections should be clearly identified on recorded counts, teacher collection logs, receipts, ticket reconciliations, etc.

Collection of Money by Cashier
Receipts should be issued to the responsible individual and not to the revenue source such as vending, bookstore, gate receipts, etc. (p. 5-7)
Online Payments
Approval process for all online payments (pp. 5-11, 5-13 and 5-14)
Section 6--Banking
Signatures on Checks
Internal control related to access of signature stamp(s) (p. 6-3)
Bank Drafts
Emphasized internal control feature (p. 6-4)
Bank reconciliation procedure (p. 6-6)
Bank Reconciliations
A description of adequate documentation for deposit slips and canceled checks (p. 6-5)
For schools where there is a lack of separation of duties, the principal should document his or her review of the bank statement each month. (p. 6-6)
Online Banking
Documented approval from the board of education (p. 6-7)
Minimum policies and procedures (pp. 6-7 thru 6-9)
Section 7—Accounting and Reporting
School Nutrition Fund
Revenues should be classified by source and expenditures should be classified by object (p. 7-
2)

Illustrative Financial Statements
Changes have been made to the financial statements and accompanying notes in the following areas:

A new illustrative table of contents has been added. (p. 7-6)
 The title of the financial statements has been changed by adding “regulatory basis” and replacing “activity funds” with “internal school funds.” (pp. 7-7 and 7-8; pp. 7-16 thru
7-20)

Fund balance classifications have been updated for GASB Statement No. 54 requirements. (p. 7-7; p. 7-15; p. 7-17; and 7-18)

New and revised illustrative note disclosures have been included. (pp. 7-9 thru 7-14)
Section 8—Local Education Agency School Nutrition Funds
Procedures for School Nutrition Funds
Directives have been added and/or clarified for:

Definitions for centralized and noncentralized systems (p. 8-1)

Student prepaid accounts (p. 8-2)

Deficit fund balances (p. 8-2)

Uncollected lunch charges (p. 8-3)

Meals for cafeteria employees (p. 8-4)

Accounting and reporting for commodities (p. 8-4)

Financial statement presentation (pp. 8-5 thru 8-16)
Illustrative Financial Statements
Changes have been made to the financial statements and accompanying notes in the following areas:
 A new illustrative table of contents and Management’s Discussion and Analysis
(MD&A) has been added. (pp. 8-6 thru 8-8)
 The title of the financial statements has been changed by replacing “School Food
Authority” with “Local Education Agency – School Nutrition Funds” as well as adding
“Governmental Funds.” (pp. 8-9 and 8-10)
 A new column for “total governmental funds” has been added. (pp. 8-9 and 8-10)

Fund balance classifications have been updated for GASB Statement No. 54 requirements. (p. 8-9)

Example revenue and expenditure classifications for USDA commodities have been added to the statement of revenues, expenditures, and changes in fund balances – governmental funds. (p. 8-10)

New and revised illustrative note disclosures have been included. (pp. 8-11 thru 8-14)

Section 9—Chart of Accounts
Expenditure Classifications
Clarification has been provided for expenditure account 403. (p. 9-7)
Appendix A: Applicable Laws and Exhibits
State Laws Affecting Internal School Funds
An abbreviated list of selected TCA references has been included (p. A-1)
Updated Forms
Separate line items for cash collections and check collections have been added to the teacher collection log, ticket reconciliation form, and count of collections form. (pp. A-19 thru A-21)
New Exhibits
Journal Entries for Returned Checks (pp. A-26 thru A-28)
Journal Entries for Change Funds (p. A-29)
Journal Entries for Reimbursements (p. A-30)