Amends TCA Title 49, Chapter 2, Part 1.

Under present law, schools may receive funds for student activities and events ("student activity funds") held at or in connection with the school, including contracts with other schools for interschool events, and the department of education is responsible for preparing a uniform accounting policy manual for local school systems, subject to the approval of the comptroller of the treasury and the commissioner of finance and administration, with each local school system required to adopt the manual when issued as well as maintain all activity fund books and records in accordance with the requirements of the manual. This bill requires that the department of education prepare instead an internal school funds manual for local school systems, subject to the approval of the comptroller of the treasury, with each local school system required to adopt the manual when issued and maintain all internal school funds books and records in accordance with the requirements of the manual. FUNDS BENEFITTING LESS THAN THE STUDENT BODY AS A WHOLE Under present law, if funds raised by organizations composed of parents and teachers or parents and students are used in a manner that benefits less than the student body as a whole, then neither the provision governing the duties and powers of a local board of education nor the uniform accounting policy manual for local school systems is construed to prohibit such use of funds, if such use benefits the overall school program and is subject to the policies of the local board of education. This bill provides, instead, that if funds raised by organizations composed of parents and teachers or parents and students are used in a manner that benefits less than the student body as a whole, then neither the provision governing the duties and powers of a local board of education nor the internal school funds manual for local school systems is construed to prohibit such use of funds, if such use benefits the overall school program and is subject to the policies of the local board of education. Further, this bill does not prohibit the use of funds in any manner that was authorized prior to April 17, 1995, under the provision governing the duties and powers of a local board of education and the former uniform accounting policy manual for local school systems.