Money may not buy happiness—but if you are not careful in handling activity funds for your school, it can lead to a big headache.  

Handling someone else’s money can feel like a daunting task, especially if you lack experience or training. But handling activity funds is a necessary part of certain campus jobs.  

Activity funds are collected by a school through fundraising, student activity fees, and other school-related activities. The money is held in trust by the school and used to benefit the school or promote student activities. 

There are two types of activity funds:  

1. Student activity funds (SAF) are generated by individual student groups rather than the campus. Decisions on how to spend SAFs are made by the students involved. Clubs relating to specific activities such as cheerleading, specific classes such as journalism, or student groups such as National Honor Society are common examples.  
2. Campus activity funds (CAF) are raised by the school or donated to the school and are considered by the Texas Education Agency to be district general funds. Expenditures of these funds should align with applicable state law and local policy. A campus may have several CAFs at once. A CAF may be general (e.g., a principal’s account) or benefit a specific group, like a library account or third grade account.  

Responsibility for activity funds may fall upon numerous school employees. Having multiple individuals oversee such accounts reduces the risk of mistakes and fraud. The club sponsor may be responsible for collections, deposits, and record keeping. A campus secretary or bookkeeper may be asked to monitor activities, handle receipts, and otherwise assist the sponsor. Usually, the campus principal or designee is ultimately responsible for safeguarding and accounting of all funds. Finally, an auditor is responsible for yearly audits of each activity fund.  

If you find yourself in charge of an activity fund, lay the groundwork for success by asking for training in basic accounting procedures (collecting, handling, depositing, and documenting) and limitations on fund uses. It is also a good idea to familiarize yourself with applicable district policies and handbooks.  

Once you take control of the fund, follow procedures closely and keep careful documentation. There may be numerous forms involved, but do not be intimidated. Having a record of when and where the money was collected, deposited, and spent can prevent future challenges. Don’t be afraid to ask for help. Because money is involved, it is always better to clarify than to assume.  

Prior to any fundraising, verify that all permission forms are submitted and approved. During fundraising activities, maintain an abundance of the proper forms/receipts, carefully document each transaction, and secure all cash and checks. After fundraising, make sure all funds are properly and promptly deposited pursuant to your district’s policies. It is common for fundraising activities to occur outside of normal school hours. Therefore, it is important to know what to do with the money ahead of time because there may not be anyone available to ask. Unless you receive specific permission, never leave the money in your classroom, take the money home, deposit it into an unauthorized account, or otherwise leave it unsecured. Unless it is specifically authorized in your local policy, never mix school funds with personal bank or digital wallet accounts—this practice may immediately raise concerns about possible theft or embezzlement of funds.  

If any money goes missing during or after a fundraiser, report it immediately. You will always have time to look for the money, but the longer it is missing, the more suspicious a delayed report may seem. Early reporting will show good faith and increase the search effort.  

When it comes time to use activity funds, rely on your training and district handbook, which may contain spending restrictions. Depending on the nature of the fund, acceptable uses may include equipment, supplies, trip expenses, etc. If purchasing food, make sure to refer to your district’s nutrition guidelines.  

Consequences for mishandling or misusing activity funds can be severe and impact your job or certificate and involve criminal charges. Even a mistake or disorganized record keeping can lead to negative employment action if the district’s procedures aren’t followed. And if your district feels the conduct was intentional, there may be fraud charges and potential sanctions to your teaching certificate(s).  

Strictly adhering to your district’s training and guidelines, as well as following these general tips, will go a long way in helping you avoid potential problems.  

The legal information provided here is accurate as of the date of publication. It is provided here is for informative purposes only. Individual legal situations vary greatly, and readers needing individual legal advice should consult directly with an attorney. Please note: Rights based on the Texas Education Code may not apply to all. Many Texas Education Code provisions do not apply to public charter schools, and public school districts may have opted out of individual provisions through a District of Innovation plan. Eligible ATPE members may contact the ATPE Member Legal Services Department. August 2021.