Transcript Booster Club 101 - Humble Independent School District

Booster Club 101
An Introduction to Booster Clubs and
Parent Groups
1
Purpose

In the Humble ISD School District (HISD), we
encourage the participation and involvement of
parents in the education of their children. One way
parents can be involved is through participation in
voluntary parent organizations such as Booster Clubs
and PTOs and PTAs.

Booster Clubs should be organized to help promote,
support, and improve the extra curricular activities of
the schools in Humble ISD.
2

Booster Clubs and Parent Groups represent the
school they support. Therefore, it is necessary
for them to follow the guidelines set forth by
the District. This is done to protect our
parents, patrons, and most importantly, our
students.
3
“Although Texas ranks as the
number-one state for having its
school districts misrepresented in
fundraising schemes, neither size
nor climate zone determines which
districts are most apt to become
targets. It's all about the money.”
(Fundraisingforsports.com, 8/2006)
4
What to Expect Before Forming
The following are some questions to consider when deciding whether or not to
form a Booster Club:

Why do I want a Booster Club?

What can a Booster Club accomplish that cannot be achieved through the
use of a Student Activity Fund?

Do I have time to commit to a Booster Club?

Are there enough parents with time to commit to a Booster Club?

Am I willing to perform the necessary research, training, and paperwork to
be in compliance with all District, UIL, state, and federal regulations?

Have I read or will I read the Booster Club handbook to discover my
responsibilities once a Booster Club is formed?

Have I spoken with other similar Booster Clubs to determine what
benefits/problems they have experienced?

Have I spoken with the Sponsor to obtain support for the formation of a
Booster Club?

Have I obtained permission from the campus principal?
5
You Do Not Have to Form a Booster

You do not have to form a booster. Parents
may still support a student group as parents
through fund-raisers and other activities that
are controlled through the Student Activity
Fund set up with the District. All money
would be considered the student group’s
money and would benefit only those students.
6
Authoritative Guidelines

Booster Clubs are governed by various entities. The School
District has Board Policies and guidelines that must be
followed by Booster Clubs (GE Local), as well as guidelines
that the School Principal or Administrator (if the Booster Club
is not located at a school) may implement. Also, the Booster
Clubs must follow the guidelines of the University
Interscholastic League (UIL), the State of Texas, and the
Federal Government, through the Internal Revenue Service
(IRS). Some state regulations relate to state sales tax while
other regulations involve becoming incorporated or involve the
holding of a raffle.

The UIL Booster Club Guidelines do not necessarily include
all rules that may apply to your organization. For specific
questions, you should contact the UIL directly.
7
Authoritative Guidelines
The required federal regulatory information discussed does not
include all laws or rules that may apply to your particular
situation. This information is provided by the District’s
Internal Audit Department; however, Internal Audit is not an
authority on specific accounting situations or tax-related issues
concerning individual Booster Clubs. Therefore, Booster
Clubs should obtain competent independent counsel, such as a
Certified Public Accountant (CPA) or an attorney, to address
accounting and tax matters related to their specific
circumstances. The cost of these services would be the
Booster Club’s responsibility. In addition, the IRS and the
Texas State Comptroller’s Office may be contacted for
questions related to your organization’s specific situation.
8
Authoritative Guidelines
Booster Club officers are solely responsible for
ensuring that their Booster Club is in compliance with
all federal regulations. The most important regulation
is the duty to comply, and the duty to report.
Therefore, the District is not responsible for a Booster
Club not being in good standing with all federal
agencies. However, the District has provided the
following information that includes steps Booster
Clubs should take to comply with federal tax
regulations.
9
Basic Requirements to Formation







Must obtain written approval from the School Principal.
Must be formed as a non profit charity with the purpose as
defined in the Internal Revenue Code section 501C3. This is
the only way to be recognized as an exempt charity.
Get your sales and use tax permit.
Obtain a post office box/permanent mailing address.
Must have proof of liability insurance in place.
Must become incorporated as a non profit.
Begin submitting timely audited financials yearly. (by
September 1st)
10
IRS and State Processes






Obtain an EIN: Complete form SS-4 or complete form SS-4 online.
www.irs.gov (no fee)
With an EIN and bylaws, you may open a bank account.
Obtain a State Sales and Use Tax Permit. Form AP-201.
http://www.window.state.tx.us/taxinfo/taxforms/ap-201.pdf (no fee)
Contact the Secretary of State in order to become incorporated. This step is
strongly recommended. Complete form 202.
http://www.sos.state.tx.us/corp/forms/202_boc.pdf ($25 fee)
If you desire, complete Form 1023 in order to be recognized as an exempt
organization. (http://www.irs.gov/pub/irs-pdf/f1023.pdf) Also complete the
user fee, Form 8718. ($750) Or you may join the Group Booster
Exemption. Contact [email protected] (no fee)
Contact the State Comptrollers Office Exempt Organizations Department in
order to be recognized as exempt with the State. (no fee)
11
IRS and State Process



Once you are properly set up, you must maintain good
standing with the State of Texas and the Federal Government.
You must file your Sales and Use Tax reports as well as your
IRS Form 990’s.
You must also have a yearly audit. The audited financials
must be turned in to the Internal Audit Department by
September 1st of each year.
You may also want to refer to the Booster Club Checklist.
This reference document should be completed and turned in to
the Internal Audit Department annually by September 1st.
http://www.humbleisd.net/22321033145931380/lib/2
2321033145931380/booster_club_checklist.PDF
12
Liability Insurance



All Boosters are required to have Liability Insurance.
The minimum lines of coverage are $2 million in
aggregate, $1 million per occurrence. There are
several vendors who provide this type of coverage.
All Boosters must supply evidence of Liability
Insurance.
If you would like to join the group liability policy for
Boosters managed by the District, please contact
[email protected]
13

Boosters should send up-to-date contact (e-mail)
information for officers to the Internal Audit
Department.
http://www.humbleisd.net/22321033145931380/lib/22321033145
931380/BoosterClubOfficerInformationSheet.pdf

This allows the District to communicate with you,
and keep you current through the Booster Club
Bulletins that are sent electronically. See the Booster
Club/Parent Organization page at
http://www.humbleisd.net/22321033145931380/site/default.asp?2
2321033145931380Nav=|&NodeID=190
14


June 16, 2006
More Booster Club Trouble - This Time at El Toro
El Toro boosters might be missing $250,000
Saddleback Valley Unified has hired a fraud examiner
to determine how much money is unaccounted for.
MISSION VIEJO The Saddleback Valley Unified
School District has hired a fraud examiner to
determine whether as much as $250,000 is missing
from an athletic boosters fund at El Toro High School
and may file a report with the Sheriff’s Department
soon, district officials say. According to parents who
have met with school officials, the money is missing
from the account, the sole funding for 23 El Toro
High boosters organizations.
15
April 3, 2008
Former high school booster club treasurer arrested
By Joann Groff [email protected]
The man who served as Thousand Oaks High School Football
Booster Club treasurer for more than two and a half years has
been arrested for allegedly embezzling the money he
volunteered to help keep an eye on. Michael McCarley, 59,
turned himself in at the East Valley Sheriff's Station on March
12. Shortly thereafter he was arrested on suspicion of grand
theft, having allegedly taken more than $30,000 from the club,
according to Sgt. Mark Gillette. McCarley is free on $10,000
bail.
"There was some concern among booster members who believed
that there were some problems with financial records and
maybe even money missing," Baarstad said. "We got all their
records so we could do an audit. There was enough initial
information that it was pretty clear right away that something
was up."
16
April 1, 2010
Former Booster Club Treasurer in California Charge in Alleges $175K Embezzlement Case
Herman Wong, 62, of Venice, California, was arrested and charged with one count of grand theft
by embezzlement recently with misappropriating as much as $175,000 from the Venice High
School Booster Club where he had served as volunteer treasurer for the past 6 years. Wong
was reportedly the only bookkeeper for the organization. Details on the case have not fully
been released.
Detectives were notified that up to $175,000 was showing missing from the booster club account
and after reviewing the financial records they determined that Wong, the volunteer treasurer
of the club, had allegedly embezzled funds for personal use, Serna said. Wong, who served as
treasurer from 2003 to 2009, had allegedly restored about $57,000 to the account prior to his
arrest, she said.
Wong was the group’s sole treasurer for six years and the booster club was initially unaware that
any funds were missing from its account during that time, Serna said.
The detective said she found the case particularly unsettling during a time when schools are
already facing significant cuts as a result of the state budget crisis. The booster club collects
money from fundraisers and other donations for various extracurricular activities and the loss
of those funds could “affect the morale” of students who are passionate about those programs,
Serna said.
Wallace said Wong did not hold a position at the high school but he became involved with the
booster club after his children attended the school.
17their
Serna said this case could serve as a lesson to booster groups to ensure that they are auditing
funds properly and have at least two signers on checks.
July 24, 2007
As dramatic as high school sports can be, sometimes the more intense
battles involve the student athletes' impassioned parents.
Such a dispute is revolving around the Bellaire High School baseball
program, one of the most successful in the Houston Independent
School District.
One father is accusing veteran coach Rocky Manuel of pressuring
parents to donate money, while another is criticizing HISD's limited
oversight of booster clubs -- which raise hundreds of thousands of
dollars a year for high school athletics in the district.
The coach says he has done nothing wrong. The head of one team
booster club says the criticism is unjustified.
HISD is asking Texas Attorney General Greg Abbott for an opinion on
whether the district is responsible for maintaining booster clubs'
financial records. The opinion, expected this week, could affect the
18
relationship between school systems and booster clubs across Texas.
Reference List






Internal Revenue Service-Non Profit Section
1-877-829-5500
Texas State Comptrollers Office-Exempt
Organizations 1-800-252-5555
University Interscholastic League 512-471-5883
Texas Secretary of State 1-512-463-5555
Humble ISD-Parent/Exempt Organizations
281-641-8158
Texas Attorney General www.oag.state.tx.us
Houston Office- 713-223-5886
19
There is Help….








Remember the Internal Audit Department holds two Booster
Club Outreach sessions for Parents who are involved with
Boosters.
Use the resources on the Booster Club Webpage.
IA will also help you prepare a tax policy statement.
There is a monthly newsletter.
Assistance is provided on Tuesday’s, Wednesday’s and
Thursday’s in between the hours of 9 and 3p.m.
Never be afraid to ask questions.
You may be contacted for routine account maintenance.
There is a Booster Club Manual online at:
http://www.humbleisd.net/22321033145931380/lib/22321033145
931380/Booster_Club_Manual.pdf
20