Staying compliant: How to manage ASB fund transfers

If your school is experiencing budget shortfalls, it’s crucial to know which funding sources are appropriate to use—and which are not. School districts have various types of revenue, some of which are restricted to certain purposes. These include federal grant awards, levy or bond proceeds and even Associated Student Body (ASB) money. It’s important that districts do not use these funds for general budget purposes.

ASB funds are restricted to use for any optional, noncredit extracurricular events of a school district that are cultural, social, recreational or athletic in nature. Money raised by ASB clubs or athletic programs or transferred into their account must be used only for these purposes. The ASB governing body must also approve any spending from these accounts. ASB clubs rely on these funds to run their activities, and fundraising is often their main revenue source to operate their club or athletic program.

While it may be tempting to transfer unused ASB funds to the general fund to help close budget gaps, this is not allowed and violates state rules and regulations (RCW 28A.325.030 and WAC 392-138-125).

We understand the financial challenges schools are facing right now. To help keep ASB fund use compliant, here are some key reminders:

• All ASB spending should be approved in the budget and used only for cultural, social, recreational or athletic purposes
• The ASB governing body should approve all ASB expenditures in advance
• Transfers between ASB accounts are allowed, but both clubs (those releasing funds and those receiving) and the ASB governing body must approve the transfer in advance
• ASB accounts should never operate with a negative fund balance

For comments or questions about ASB activities, reach out to Sara Heath at Sara.Heath@sao.wa.gov.

For more help

Remember, SAO's Center for Government Resources is here to support you! Our Resource Library is packed with a variety of free guides, checklists, best practices and tools to assist Washington governments improve internal controls, grants management, procurement practices, financial reporting and cybersecurity. If you have specific technical accounting questions, submit them using our HelpDesk in the client portal.