Q If it is determined that the school district does have control of the assets but the fiduciary criteria is not met how do you determine whether to recognize the activity as a governmental or business type activity?

A Paragraph 30 of GASB 54 discusses special revenue funds. It states, “Special revenue funds should not be used to account for resources held in trust for individuals, private organizations, or other governments.” Since the school is holding these funds for the clubs and organizations, the funds do not meet the criteria of a special revenue fund. As GASB gives the option of recognizing the activity as either governmental or business type, we recommend providing sufficient documentation for where you feel that the activity should be recognized and discussing that with your auditor.