Delaware County Sheriff George Sheridan says the boy was riding the bus to Selma Elementary School when he handed out the money on Friday, the last school day before Christmas vacation began.
Children who received the ones, fives and twenties told teachers and the principal, and the sheriff's department was called.
Officers found the boy carrying the rest of the cash, which was returned to his grandparents. Police weren't certain what he intended to do with the money or how he got it from the safe.