WHO: Charter Schools and Traditional Districts entrusted with taxpayer funds.
WHAT: Gift Cards- something we all enjoy receiving in our personal lives, but a gray area of public finance and the subject of a MN Office of the State Auditor Statement of Position.
WHY: Gift cards can be great when you receive a gift during the holidays or on your birthday – it allows you to buy whatever you want. The same freedom can cause some confusion when gift cards are used in schools.
STATEMENT OF POSITION SUMMARY:
Authorized Methods and Manner of Public Fund Disbursement/Expenditure
Statute authorizes payments via checks, warrants and orders, imprest funds and electronic or wire fund transfers. No statute in MN authorizes payment via gift card.
Authorized Purposes for Disbursement of Public Funds
To spend funds, the cost must meet public purpose, which the MN Supreme Court has defined as “an activity that serves as a benefit to the community as a body, and which, at the same time, is directly related to the functions of government.”
The Minnesota Attorney General has long held that gifts lack public purpose.
Gift Cards as Compensation for Board or Commission Service
Gifts to board or committee members risk being considered an unauthorized expenditure of public funds.
May raise concerns about an improper method or manner of making the expenditure
Gift Cards as a “Thank You” for Program Participation
Gifts of this kind also risk being deemed unauthorized payments of public funds.
Gift Cards Authorized by Federal or State Grant Programs
Payments of grant funds need to follow all the requirements of the grant program and be itemized. Gift cards do not create a record that can be used to itemize expenses.
REMEMBER: When the state auditor puts out guidance such as that attached, it is because they are seeing a trend. The fact that they are calling out court decisions and state statute indicates that it is best to be very careful around gift cards.
As always, please reach out with any questions we are always happy to work towards a solution together!
-EdFin Team
