TITLE 8. EDUCATION

STATE BOARD OF EDUCATION

Fast-Track Regulation

Title of Regulation: 8VAC20-240. Regulations Governing School Activity Funds (amending 8VAC20-240-10, 8VAC20-240-20, 8VAC20-240-40; repealing 8VAC20-240-30, 8VAC20-240-50).

Statutory Authority: § 22.1-16 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: September 10, 2025.

Effective Date: September 25, 2025.

Agency Contact: Jim Chapman, Director of Board Relations, Department of Education, James Monroe Building, 101 North 14th Street, 25th Floor, Richmond, VA 23219, telephone (804) 750-8750, or email jim.chapman@doe.virginia.gov.

Basis: Section 22.1-16 of the Code of Virginia authorizes the State Board of Education to adopt bylaws for its own government and to promulgate regulations necessary to carry out its powers and duties.

Purpose: This action is necessary to protect the health, safety, and welfare of the public because it increases the clarity of the regulation by removing outdated and unnecessary information regarding school activity funds.

Rationale for Using Fast-Track Rulemaking Process: This action is expected to be noncontroversial and therefore appropriate for the fast-track rulemaking process because it brings the regulation into conformance with current statutory language, amends incorrect references, and corrects outdated information.

Substance: This action (i) makes stylistic changes to 8VAC20-240-10, 8VAC20-240-20, and 8VAC20-240-40 to conform to style and formatting of the Virginia Administrative Code and (ii) repeals 8VAC20-240-30 and 8VAC20-240-50, which are obsolete.

Issues: The primary advantage to the public and the Commonwealth is that the regulation will be consistent with the current statutory language and provide accurate information and references. There are no disadvantages.

Department of Planning and Budget Economic Impact Analysis:

The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia and Executive Order 19. The analysis presented represents DPB's best estimate of the potential economic impacts as of the date of this analysis.¹

Summary of the Proposed Amendments to Regulation. As a result of a 2024 periodic review, the State Board of Education (board) proposes to amend 8VAC20-240 Regulations Governing School Activity Funds to conform with the Virginia Administrative Code style and formatting² and remove obsolete language.

Background. The proposed amendments would remove 8VAC20-240-30 and 8VAC20-240-50, both of which are related to forms that the board has determined to be unnecessary. According to DOE, the board no longer issues forms for the use of school activity funds. The board also proposes other amendments that have no impact on requirements but align text with the language with the Style Manual.

Estimated Benefits and Costs. None of the proposed amendments change requirements in practice. Nevertheless, removing obsolete text would be beneficial for readers of the regulation in understanding the requirements in practice and conforming text to the style and formatting conventions of the Virginia Administrative Code may also help improve clarity readers of regulations accustomed to that style.

Businesses and Other Entities Affected. The proposed amendments pertain to the 131 school divisions in the Commonwealth. The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.³ An adverse impact is indicated if there is any increase in net cost or reduction in net benefit for any entity, even if the benefits exceed the costs for all entities combined.⁴ As the proposed amendments neither increase cost nor reduce benefit, no adverse impact is indicated.

Small Businesses⁵ Affected.⁶ The proposed repeal of the regulation does not adversely affect small businesses.

Localities⁷ Affected.⁸ The proposed repeal of the regulation neither disproportionally affects particular localities nor affects costs for local governments.

Projected Impact on Employment. The proposed repeal of the regulation does not affect employment.

Effects on the Use and Value of Private Property. The proposed repeal of the regulation neither affects the use and value of private property nor costs related to the development of real estate.

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¹ Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

² See https://register.dls.virginia.gov/documents/agency_resources/stylemanual.pdf.

³ Pursuant to § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

⁴ Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation. As a result, DPB has adopted a definition of adverse impact that assesses changes in net costs and benefits for each affected Virginia entity that directly results from discretionary changes to the regulation.

⁵ Pursuant to § 2.2-4007.04, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

⁶ If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to § 2.2-4007.1 of the Code of Virginia, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

⁷ "Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

⁸ Section 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

Agency Response to Economic Impact Analysis: The State Board of Education thanks the Department of Planning and Budget for its thorough economic impact analysis.

Summary:

Pursuant to a periodic review, the amendments (i) repeal obsolete and unnecessary sections and (ii) conform the regulation to style and formatting conventions of the Virginia Administrative Code.

8VAC20-240-10. Classification; responsibility for administration of regulations, exclusion of specific funds.

All funds derived from extracurricular school activities, such as including entertainment, athletic contest, cafeteria, and club dues, etc., and from any and all activities of the school involving personnel staff, students, or property are by this chapter classified as school activity funds (internal accounts). The local school boards shall be responsible for the administration of this chapter in the schools under their the board's control and may determine which funds in any a school may be excluded from those subject to this chapter. (Funds defined by law as public funds are not subject to this chapter and are to be handled as provided by law.)

8VAC20-240-20. Records, school finance officer, bonds.

Each The school shall keep an accurate record of all receipts and disbursements so that a clear and concise statement of the condition of each the fund may be determined at all times always be determined. It shall be the duty of each The principal to see must ensure that such records are maintained in accordance with this chapter and rules promulgated by the local school board. The principal or person designated by him the principal's designee shall perform the duties of school finance officer or central treasurer. The school finance officer shall be bonded, and the local school board shall prescribe rules governing such the bonds for employees who are responsible for these funds.

8VAC20-240-30. Forms. (Repealed.)

The use of forms prescribed by the Board of Education is not mandatory but the basic information required by the uniform system must be incorporated in any system substituted for that designed by the Board of Education.

8VAC20-240-40. Audits; monthly and annual reports.

School activity funds (internal accounts) shall be audited at least once a year by a duly qualified accountant or accounting firm approved by the local school board and a copy of the audit report shall be filed in the office of the division superintendent. Monthly reports of such the funds shall be prepared and filed in the principal's office, and annual reports shall be filed in the office of the principal or division superintendent. The cost of such an audit is a proper charge against the school operating fund or school activity funds.

8VAC20-240-50. Interpretation of regulations and forms. (Repealed.)

Nothing in this chapter or suggested forms shall be construed as superseding or modifying the federal-state plan for operation of cafeterias under the National School Lunch Act, 42 USC § 1751 et seq.