Money Matters for ALL PTA Leaders

Transcription

1 Money Matters for ALL PTA Leaders Pam Grigorian and Nicole Ponziani PTA 2016 Convention Leadership Training

2 Money Matters to the Board Board members are expected to use good business judgement when making decisions and protecting PTA s assets which is primarily its name and reputation. A PTA is not in the business of just fundraising, but money does play an important role to everyone on the board. As a board member, we hope the following information will help you follow the PTA way and help make your PTA successful.

3 501(c)(3) The IRS classifies PTAs as a tax exempt 501(c)(3) organization. The major advantage to this is contributions may be deductible on donors federal income taxes. This deduction may or may not be for the whole amount paid to the PTA. In 1963, GA PTA and its subordinate local units became exempt from Federal income tax All PTAs function under the exempt status of and National PTA To insure this status, PTA must ensure that fundraising is not the primary focus PTA must be organized for charitable, educational or scientific purposes PTA resources and funds cannot be used for the private benefit or an officer or director Every PTA has an EIN number. You should have the original form from the IRS that states what your EIN number is. You must never let another organization use your EIN number.

4 501(c)(3) There is a letter from GA PTA that informs the local unit of their good standing, tax exemption, EIN number and group exemption number of GA PTA. A 501(c)(3) has to file one of the following 990 forms 990- N Electronic Postcard with gross receipts less than 50,000 along with a few other rules 990EZ with gross receipts between 50,000 and 200,000 and assets less than 500,000

5 501(c)(3) There is a automatic tax exemption revocation if an organization fails to file an annual return for three consecutive years. This means your tax exempt status is revoked for your PTA.

6 Budget An initial budget must be developed before the first general meeting It should included monies necessary to operate the PTA including summer months and the beginning of the year expenses The president and treasurer, along with input from many other officers should be involved It should be based on your mission determining programs and projects for the next year

7 Budget The budget should balance to zero at the bottom Carryover funds are budgeted for, but it is based on what funds are needed to continue PTA business until the next income opportunity If your LU continues to carryover large sum of money, you may think about reducing fundraisers

8 Treasurer s Monthly Report The Treasurer s Report is different than the budget The budget is an estimate whereas the Treasurer s Report presents what actually happened that month and year to date. The budget should also be shown on the report as well. The Treasurer s Report is a written report presented at every board meeting and general membership meeting. It is not voted on like the budget.

9

10 Bank Reconciliation The checking account should be reconciled at the end of every month A copy of the bank statement that includes check images along with bank reconciliation report should be printed out every month The treasurer, president and one non- check signer should review the bank reconciliation and bank statement and sign it every month

11 Check Request A check should only be issued with a check request form and original receipts attached A check is neverissued for cash A check must be issued to a person or company Never use a debit card in the name of the PTA for any transactions All check request forms should be approved by the President All checks need to be signed by two check signers, the treasurer and another signer which will most likely be the president

12

13 Funds Verification Cash should always be counted by two people before it is given to the treasurer The treasurer is the 3 rd and final counter Cash Verification forms should be used for ALL money collected whether it is cash or check or electronically If using Square or GoPayment, a report should be printed that matches the amount on the cash verification form

14

15 Sales Tax & Fundraising If buying for resale, tax exempt If buying to use, need to pay sales tax Use the 3:1 rule for fundraising For every 1 fundraising event there should be at least 3 projects aimed at helping parents and children

16 Money Matters Extras PTAs cannot obligate future boards to a contract or a particular expenditure The PTA should not allow money to flow through its checking account for the school or any other organization PTA money belongs to the association so all decisions must be approved by the general membership

17 Annual Audit Audits are to certify the accuracy of the books and records of the PTA Audits are preformed at the end of the school year and upon resignation of the treasurer during the school year Audits may also be performed at any time deemed necessary and when missing funds are suspected Audits are to be conducted by an auditor or audit committee of at least 3 people

18 What records are needed? A copy of the last audit report The checkbook containing stubs of all checks written and cancelled checks Bank statements and deposit receipts Treasurer s book or ledgers The annual financial report All treasurer s reports All check request and cash verification forms Adopted budget and any amendments that were approved by the membership during the year Current bylaws Copies of board, EC and General Meeting Minutes

19 Financial Red Flags

20 Financial Red Flags No treasurer s reports at executive board or association meetings Audits not performed as scheduled Unapproved meeting minutes or no meeting minutes at all Fundraising project that will benefit a board member financially Local unit board not following financial procedure because they never did before ; board that claims it didn t know Only one person counting money Only one person signing checks; only one person on the bank signature card Over 4 people on the signature card Signing of blank checks

21 What to do when fraud is suspected? Local units should contact their council and district if fraud is suspected or reported. Normally this occurs when local unit officers see irregularities in the financial records. Please refer to the Prevention Checklist and PTA Leadership Resource Guide for details on how to protect your local unit against embezzlement.

22 What to do when fraud is suspected? The local unit obtains the books and records in order to conduct a complete and thorough audit. All records, funds, books and other materials pertaining to the position shall be relinquished to the president within three (3) days. The local unit, council and district will agree as to who will complete the audit. The auditor must be an unbiased, independent party, who has no potential conflict of interest. A forensic audit will also be ordered, using the discovery method.

23 Fraud Allegation Form

24 Resources Leadership Resource Guide PTA website Leadership Resource Guide (LRG) Baker Street, NE Atlanta, GA (404) PTA-TODAY ( )