PACT Charter School

Original Creation Date: October 11, 1994
Last Approved By: PACT Charter School Board of Directors
Last Approved Date: June 3, 2021
Year Reviewed: 2020-2021

PURPOSE

The purpose of this policy is to set limits on how funds are authorized to be spent.

POLICY STATEMENT

This policy is in place to set limits on how much spending Administration, Budget and Finance Committee, and Board of Directors are authorized to spend.

DEFINITIONS 

Abbreviations 

The following PACT committee abbreviations apply:

1. BFC refers to Budget and Finance Committee
2. BAS refers to the Business Accounts Specialist 
3. BDT refers to the Board Treasurer 
4. CE(S) refer to Capital Expenditure(s) (over $1000) 
5. FA refers to a designated Funds Account 
6. DFT refers to the Designated Funds Treasurer
7. LIBS refers to Line Item Budget Supervisors. For this document, LIBS includes Treasurers.
8. UFARS refers to the Minnesota Uniform Financial Accounting and Reporting Standards 

Other definitions and references 

“Purchase” shall be understood to include individual items, groupings of related items, and contracts requiring BFC approval. 

The budgeting process is found in 314 - Annual Budget Process Policy

Detailed information about budget departments is contained in a separate document with filename prefix Policy-BudgetDepartments-20yymmdd-.

Conflicts of Interest 

No member of the board of directors, employee, officer, or agent of a charter school shall participate in selecting, awarding, or administering a contract if a conflict of interest exists. A conflict exists when:

(1) the board member, employee, officer, or agent;

(2) the immediate family of the board member, employee, officer, or agent;

(3) the partner of the board member, employee, officer, or agent; or

(4) an organization that employs, or is about to employ any individual in clauses (1) to (3), has a financial or other interest in the entity with which the charter school is contracting. A violation of this prohibition renders the contract void.

The conflict of interest provisions under this section does not apply to compensation paid to a teacher employed as a teacher by the charter school or a teacher who provides instructional services to the charter school through a cooperative formed under chapter 308A when the teacher also serves on the charter school board of directors.

A charter school board member, employee, or officer must follow the acceptance of gifts policy in regard to any purchasing decisions. A board member, employee, or officer must not receive compensation from a group health insurance provider.

GUIDELINES 

Authorizing expenditures – basic guidelines 

1. Each department (see 320 - Budget Departments Policy) will have a Board-approved budget at the start of each fiscal year. Each department may spend up to its budgeted allocation (see additional guidelines below). Board approval is required to spend funds more than the approved department budget. 
2. Each department shall have a LIBS or Treasurer who authorizes and/or monitors the department's expenditures. Different individuals may act as LIBS on separate line items. The BAS will maintain a list of LIBS and make a list available to the Executive Director and BFC members. Departments must report changes in LIBS promptly before new signatures will be accepted. 
3. For operational efficiency, the BAS may authorize expenditures that are within budget and requested in writing or other traceable form and that do not require additional approvals as described below. 
4. Verbal approval is permissible under extenuating circumstances. All persons involved should be noted on the signature approval line. However, written approval by the appropriate LIBS is preferred. 

Additional Required Authorizations 

1. BFC approval is required for purchases over $10,000 and/or any contractual obligations that exceed one year. 
2. School Board of Director's approval is required for purchases over $40,000 and/or any contractual obligations that exceed one year. 
3. Designated individuals shall present such requests to BFC.
4. PACT requires a competitive bidding process for any procurement estimated to exceed $25,000.
5. Where possible, requests should include the proposed UFARS code that applies to the purchase. 
6. BFC members may consider any or all of the following when approving such requests: the needs of the school, knowledge of competing or alternative products or services, adequacy of submitted documentation, financial impact, potential liability, unforeseen consequences, or any factors which, in the sole discretion of the individual members, impact the well being of PACT. 
7. Purchasers will inform BFC and Administration early in the process of developing major purchasing decisions. 
8. Purchasers are not to attempt to circumvent the intent of this policy by breaking up a procurement into smaller components to avoid the thresholds. 
9. BFC members continually monitor all expenditures, and BFC is authorized to ensure compliance with this policy's intent. 

Reallocations 

1. Departments can reallocate amounts from one line item to another within the same department. 
2. Reallocations must be reported to the contracted financial manager, the BDT, and the BAS as soon as possible so that the budget may be updated in the school’s accounting software. 

Building Rental Designated Fund Account 

1. The Superintendent has the authority and discretion to spend funds accumulated in the Building Rental Designated Fund account (after expenses have been paid for building use).
2. All funds will be spent in accordance with state guidelines and in accordance with this policy. 
3. These funds should be used to cover expenses outside of what has been included within the general budget.