Article 12. Scholarship And Loan Funds of California Education Code >> Division 3. >> Title 2. >> Part 21. >> Chapter 2. >> Article 12.

The governing board of any school district may establish and maintain a scholarship and loan fund, to be administered by a committee composed of the members of the governing board of the school district, the school district superintendent, and such other community, faculty, administrative, and student representatives as the governing board shall determine. The governing board shall, by rules and regulations, determine the terms of office and the method of selection of such community, faculty, administrative, and student representatives.

The superintendent of school district shall be the chairman of the committee and shall be the chief executive officer of the fund.

The committee shall meet at least once each fiscal year and at such other times as it may be called into session by the chairman.

The committee may accept on behalf of, and in the name of, the fund, such gifts, donations, bequests, and devises as are made for the purposes of the fund. Such gifts, donations, bequests, and devises may be made subject to such conditions or restrictions as the committee may prescribe. Any donor to the fund may impose conditions to his gift, donation, bequest, or devise. The committee shall review all such conditions and make a recommendation to the governing board as to the compatibility of such conditions with the intent and purpose of the fund. The governing board shall have the authority to prohibit the committee from accepting any proposed donation to the fund if conditions with respect to the gift, donation, bequest, or devise are incompatible with the intent and purpose of the fund, as determined by the governing board. Except as provided in this section, in no event shall the approval of any state agency be a prerequisite to acceptance by the committee of any gift, donation, bequest, or devise.

Money in the fund shall be deposited in a bank or other institution whose accounts are federally insured, and any money so deposited shall be in an account or accounts fully covered by that insurance. The committee shall establish and maintain procedures to identify clearly all money in the fund and its separate and distinct impressed trusts, if any, and from whom and to whom the money was received and disbursed.

All money in the fund shall be available for making interest-free loans for educational advancement, for scholarship, or for grants-in-aid to eligible persons. An eligible person for such loans shall be any of the following:
  (a) A bona fide organization of a school under the jurisdiction of the governing board of the school district.
  (b) An enrollee at a school under the jurisdiction of the governing board of the school district.
  (c) A graduate of a school under the jurisdiction of the governing board of the school district.

An applicant for a loan from the fund shall make application therefor in accordance with reasonable rules and regulations established by the governing board of the school district, provided that the rules and regulations shall not include any conditions limiting eligibility on account of the characteristics listed in Section 220.

All expenses in the administration of the fund including, but not limited to, operating costs, audits, promotion of the fund, and physical housing for the committee, shall be a proper charge against the funds of the school district and the annual budget of the school districts shall include funds for such expenses.

The governing board of the school district shall arrange for an annual audit of the fund in the same manner as prescribed in Section 41020.

The chief executive officer of the fund shall make periodic reports, but not less frequently than annually, to the governing board of the school district with respect to the status and activity of the fund.