PTA and Booster Club Training Presented by Financial Services, Athletics, and Internal Audit Services

Transcription

1 PTA and Booster Club Training 2017 Presented by Financial Services, Athletics, and Internal Audit Services

2 Presented By Mary Russell, Executive Director of Financial Services Greg Priest, Athletic Director Jan Coker, Director of Internal Audit Services

3 Tonight s Topics PTA & Booster Club Checklist PTA and Booster Club Website Tyler ISD PTA and Booster Club Guidelines UIL

4 PTA and Booster Club Checklist General Provide the Principal with a PTA & Booster Club Information Sheet at the beginning of each school year and as officers change. The information sheet should include: Name Office Held Cell Phone Number and Mailing Address of Club Officers Club Sponsor (Teacher, Coach) The club s official mailing address. Provide the Principal with the club charter, Articles of Incorporation, EIN#, bylaws, and operating procedures. Coca-Cola Contract Beverages sold on District property must be purchased through Coca-Cola. (See handout.)

5 PTA and Booster Club Checklist General Provide the Principal with the following: Yearly budget Meeting minutes Treasurers reports. Provide the principal with the annual audit report and financial statements by September 1. The audit report and financial statements are from the prior school year. This is per Board Policy GE (LOCAL).

6 PTA and Booster Club Checklist Club s Permanent Records Develop strategy for continuity of recordkeeping from year to year! IRS Determination Letter IRS Application for Exemption Annual Form 990 s Employer Identification Number (EIN), Form SS-4 Exemption letter from State Comptroller

7 PTA and Booster Club Checklist Fundraisers Provide the Principal with a list of fundraisers for the current year, the time period for the fund drive and the method by which the funds will be raised. The club cannot require members or students to fundraise or raise a certain amount. For example, a student s ability to attend a trip cannot be based on raising a certain amount of money. Fundraising is an opportunity to generate revenue for the club as a group, not individuals. Therefore, revenues should be recorded in a group account where all members or students have the same opportunity to benefit equally from the revenues. Board policy CDC (LOCAL) The Board delegates to the Superintendent the authority to accept unsolicited gifts on behalf of the District. However, any gift with a cost or market value of $5,000 or more or any gift of real property shall require Board approval.

8 PTA and Booster Club Checklist Financial Basics Clubs should have a separate bank account. Clubs should not use the District s EIN. Club checks should require the signature of two club officers. District employees should not have control over club funds and should not be check signors.

9 PTA and Booster Club Website Tyler ISD PTA and Booster Club Guidelines (Club) PTA & Booster Club Training UIL Booster Club Guidelines

10 Tyler ISD PTA and Booster Club Guidelines The TISD PTA and Booster Club Guidelines are designed to assist club officers and members by providing organizational and financial guidance. The guideline sections are listed below and discussed in various sections of the presentation. Club Guidelines Sections Formation of the Club Bylaws Meetings Club Basics Officers and Election of Officers Applying for 501 ( c ) 3 Tax Exempt Status and Benefits Annual Federal Filing Requirements Financial Management Sales Tax

11 Formation of the Club In order to start a club, the District must approve the formation of the club and the club must comply with all district requirements. Only approved organizations, operating under the TISD PTA and Booster Club Guidelines and Tyler ISD policies and procedures shall be allowed to use the facilities in support of its programs. The District s designee for overseeing the activities of the clubs is the Principal of the campus where the organization functions. The Principal shall: Approve the formation of any such organization. Receive a copy of the organizing documents and bylaws. Ensure that an organization s sole function is to support the educational activities of the designated program. Have the authority to discontinue association of any school program that has been judged to be disruptive to the educational activities or goals of the program.

12 Bylaws Each club should develop bylaws that govern the operation of the club. Sample of Bylaws Found at Bylaws should: Be on file in the campus principal s office. Be reviewed annually by the campus principal and club officers. Contain the rules of membership. State the organization s fiscal year and organizational structure and method used to elect officers. Recommend annual approval of budget.

13 Club Basics Obtain an Employer Identification Number (EIN) Every organization must have an EIN, even if it will not have employees. Obtain an EIN by applying online, by phone or by faxing or mailing a completed IRS Form SS-4. No fee required Obtaining an EIN does not necessarily entitle the organization to exemption from federal taxes; organizations must apply for tax-exempt status 501 ( c ) 3.

14 Officers and Election of Officers District employees should not serve in a financial capacity such as the treasurer, a check signer or any other function that involves the receipt and distribution of money. Best Practices At a minimum, the booster organization shall elect on an annual basis a President, Vice-President, Secretary and Treasurer. Only active members should have the ability to vote or hold an office. May be elected in a variety of methods (simple majority, secret ballot) in accordance with the organizations bylaws. Election of officers should be taken from a slate of officers presented by the nominating committee. Recommendations may also be taken from the floor at the time of the vote. Officers should not be appointed without the input and approval of the membership.

15 Applying for 501 ( c ) 3 Tax-Exempt Status IRS Publication 4220 Addresses: Why apply for 501 ( c ) 3 status? Who is eligible for 501 ( c ) 3 status? What responsibilities accompany 501 ( c ) 3 status? How do you apply for 501 ( c ) 3 status?

16 Benefits of Becoming a 501 ( c ) 3 Tax Benefits Revenues raised by organization are generally not taxable. Contributions to 501 ( c ) 3 are tax deductible by the contributor. Can qualify for sales tax exemption through State of Texas. IRS Publication 557, Tax Exempt Status for Your Organization, covers the rules and procedures for organizations that seek recognition of exemption from federal income tax.

17 Annual Federal Filing Requirements Form 990, Form 990-N, Form 990-EZ Required if exempt from federal income tax. Due by the 15 th day of the 5 th month after the close of the organization s tax year. Tax exempt status will be revoked if not filed for three consecutive years. Penalties may also be applied for failure to file or late filing.

18 Meetings Notice of meetings should be published at the campus 72 hours prior to the meeting date can be done on website if approved by the principal. All actions of the board should be recorded in the meeting minutes. Meetings should take place on District premises. Meetings should be held in the presence of the campus principal and/or a designated administrator. A copy of the minutes should be provided to the campus principal and/or designated administrator. Meetings should be conducted in accordance with Roberts Rules of Order.

19 Financial Management Bank Accounts and Cash Controls Disbursements Budget/Oversight Day-To-Day Operations 1099 Reporting

20 Bank Accounts and Cash Control Establish bank account & require two signatures EIN Required cannot be a person s SSN or District EIN. Three Step Fraud Prevention Program The Buddy System! Require 2 people to count cash. Deposit cash daily. Money received should be supported by documentation. Require 2 people to sign checks. Require 2 people to reconcile the bank statements. Bank reconciliation completed within 30 days of the date the statement is issued

21 Disbursements Controls over disbursements Assure fundraiser has been coordinated with the administrator/sponsor and approved in club minutes. Checks and EFT s supported by documentation Invoice Receipt Signed and authorized by President, Vice President or Designated Representative. Checks should require a second signature review supporting documentation. Checks should not be made out to cash make out to individual so there is accountability. Also for disbursements When ordering something and paying for it the items ordered need to be in the clubs name, not the school or Tyler ISD. The orders need to be billed directly to the club Very important internal control to keep the club and district purchases from being confused.

22 Budget/Oversight Budgetary and oversight controls Members should establish and approve a budget at the beginning of the school year Treasurer should provide a monthly written financial report to membership At a minimum Bank account balance Receipt & disbursement activity since last meeting Comparison of budget vs. actual receipts and expenditures Complete a financial recap at the end of a fundraiser Reminder TISD will be requiring annual financial and audit reports provided to the us for fiscal year by September 1, 2017.

23 Day-To-Day Operations Booster Clubs may provide financial support to their student group in two ways: Activity Account Funding: Booster Club members raise funds for a student group. Funds are deposited into the Club s bank account. The Club writes a check to the school and the school transfers money to the Activity Fund of the program. The funds then belong to the members of the student group, to be spent by the Sponsor. All accounting and safeguarding of the funds is the responsibility of the school. The flow of funds looks like this: Booster Club School Activity Fund of Organization Vendor For 501 ( c ) 3 organizations, This is the cleanest procedure to track how the Booster Club spends its revenues. Using this Method, the Club s Financial Report would show a clear path of revenues generated and expended exclusively for its purpose, to support a student group.

24 Day-To-Day Operations Continued Club Direct Funding: Booster Club members raise funds for a student group. Funds are deposited into the Club s bank account. The Club writes checks to the individual vendor for the expense related to the student group through the club s bank account. All accounting and safeguarding of the funds is the responsibility of the Booster Club. The flow of funds looks like this: Vend Booster Club Vendor

25 1099 Reporting Other IRS Issues 1099 reporting all payments for services of $600 or greater made to an individual or unincorporated business should be reported on a 1099 on or before January 31 st of following year. Should have IRS form W-9 completed by vendor at time of service to obtain information needed. Just a side note A benefit to donating to the district is the district will be responsible for tracking and reporting 1099s.

26 State Sales Tax Qualifying for Exemption of Texas Sales and Use Tax Organizations must apply for an exemption from sales and use tax to the Texas Comptroller s Office. Must be 501 ( c ) 3 to qualify. Complete Application Texas AP 204 (Sales and Use Tax). Exemption process is separate and in addition to applying for federal tax-exemption from the IRS.

27 Obtaining a Texas Sales Tax Permit Organizations must get a Sales Tax Permit and collect and remit sales tax for all taxable items it sells Texas Sales Tax Permit can be obtained by submitting the completed applications online to the Texas Comptroller s Office Booster clubs cannot use the District s Sales Tax Permit number

28 Sales Tax - Purchases Purchases by Club Sales tax permit sales tax exemption applies to purchase, lease, or rent of taxable items that are necessary to the organization s exempt functions, but NOT sales. Refer to Comptroller s website for updates to taxable status of purchases Provide exemption certificate at time of purchase. This is Form , Texas Sales and Use Tax Resale Certificate or Texas Sales and Use Tax Exemption Certification. Cannot use tax-free items for personal benefit

29 Sales Tax Collection and Remittance Collection and Remittance of Sales Tax Must obtain sales tax permit to collect and remit sales tax on taxable sales. Two tax free sales per year qualifying organizations only (501 ( c ) 3). If resale of items, provide resale tax exemption form to vendor at time of purchase. Must file at least one sales tax report per calendar year frequency is determined by the Comptroller s Office and is based on amount of sales tax collected in previous periods. Sales tax reports may be due monthly, quarterly, or annually. A late fee will be imposed by the Comptroller s office to any entity failing to submit a sales tax report even if sales tax was not collected during a reporting period.

30 Booster Club Guidelines

31 ROLE OF BOOSTER CLUBS Neighborhood patrons form booster clubs to help enrich the school s participation in extracurricular activities. The fundraising role of booster clubs is particularly crucial in today s economic climate. Positive and direct communication can prevent most problems. Keep the superintendent informed of all activities. Have a chain of command for communication with the administration. Clear all activities through your administration. The superintendent or a designee who does not coach or direct a UIL contest but has approval authority over booster clubs should be invited to all meetings. All meetings should be open to the public. Booster clubs should apprise school administrators of all club activities. Make sure your local administration has a copy of all booster club publications. Invite administrators to all booster club meetings. Have an officer meet with the school administration regularly. School administration should apprise booster clubs of all school activities. Booster clubs do not have authority to direct the duties of a school district employee. The scheduling of contests, rules for participation, methods of earning letters and all other criteria dealing with inter-school programs are under the jurisdiction of the local school administration. Minutes should be taken at each meeting and kept on file at the school. Periodic financial statements itemizing all receipts and expenditures should be made to the general club membership and kept on file at the school.

32 UIL Constitution and Contest Rules Section 441: AMATEUR ATHLETIC STATUS Section 480: LIMITATION OF AWARDS Booster Clubs should make sure not to do anything that could violate the athletic amateur rule found in Section 441 and the awards rule found in Section 480 of the UIL Constitution and Contest Rules. Check with school administrators before giving anything to a student, school sponsor or coach. The penalty to a student-athlete is forfeiture of varsity athletic eligibility in the sport for which the violation occurred for one calendar year from the date of the violation. If a team violates the amateur rule, the penalty shall be assessed against the team and not against each individual.

33 REMINDERS: Athletic booster club funds shall not be used to support athletic camps, clinics, private instruction or any activity outside of the school. The local school district determines when, how and from whom student athletes can receive meals and snacks. Schools must give prior approval for any banquet or get-together given for students. Students may not accept money or other valuable consideration from school booster club funds for any non-school purpose. Student athletes are prohibited from accepting valuable consideration for participation in school athletics (anything that is not given or offered to the entire student body on the same basis that it is given or offered to an athlete). Valuable consideration is defined as tangible or intangible property or service including anything that is usable, wearable, salable or consumable. Booster groups or individuals may donate money or merchandise to the school with prior approval of the administration. These kinds of donations are often made to cover the cost of commercial transportation and to cover costs for meals. It would be a violation for booster groups or individuals to pay for such costs directly, without prior approval from the local school administration. All fundraising activity including vendors used should be approved by administration. This will help prevent scams! Student athletes may accept small goodie bags consisting of cookies, candy and symbolic gifts from their classmates, if allowed by local school policy.

34 Questions

35 Thank You!