Frequently Asked Questions

Sponsorship

Is it acceptable to participate in an AT&T program that gives points for use in order to purchase software?

If the program is structured as a royalty for the right to use the PTA name to market the long distance services, it is acceptable for PTA to participate.

Can a PTA receive cash donations from a business for printing of their business information in a program book or a PTA newsletter?

Yes. The PTA may receive cash donations from a business. The content of the acknowledgment is key to whether the donation is tax free or taxable to the PTA. If the acknowledgment of thanks lists the sponsor's name, logo, address, telephone number, and products, then it is considered tax free sponsorship. If however, the acknowledgment asks members to buy the product, makes a qualitative judgement about the product, or endorses the product, the donation would then be taxable income to the PTA.

Our school is sponsored by Target. We receive donations based on purchases made on the Target credit card. The PTA administers the program with Target, but the checks are made out to the school not the PTA. This creates a conflict with the school office as to where the money belongs. Any suggestions?

If it is a PTA program then the checks should be made out to the PTA. Talk with Target management and ask them to make the checks payable to the PTA. Explain that when the check is made out to the school, it causes problems, and that it is illegal for school and PTA funds to be commingled. If they refuse to make the checks payable to PTA, withdraw from the program and let the school manage it.

Can PTA receive a donation which is restricted to a specific activity?

Donations can be made for specific, restricted purposes. However, the donation cannot result in more than an incidental benefit to the donor. For example, the donor's child cannot benefit any more than a larger number of children similarly situated. If you give money to the music program in which a large number of children participate and will benefit from the donation, that donation is then tax deductible. If you give money to the music program just to buy a violin for your own child, then the donation is not tax deductible. If the PTA accepts money for a restricted program, the PTA must spend the money only on that program. It cannot be spent on any other program without written direction from the donor.

May the PTA contract with a restaurant to provide food at a carnival for a discounted price? Can the profits go to the PTA?

Yes. PTA may contract with vendors, including restaurants, in order to hold a carnival. If the local restaurant provides food at a discounted price, the PTA will have the good fortunate of being able to make more money. Restaurants are required to follow Health Department guidelines. If a contract is involved, follow the guidelines for signing contracts.

If we are a public versus a private nonprofit charity, do we fall under the Brown Act?

The Brown Act has to do with officials elected to public offices (city councils, school boards) by the general population. PTA is a nonprofit, membership organization and does not fall under the regulations of the Brown Act. PTA is a public charity not a private foundation for Federal Income Tax purposes.

Can the vendor's logo be placed on a t-shirt worn during a walk-a-thon in acknowledgment of their sponsorship?

Yes. The vendor's logo can be placed on a t-shirt and worn during the sponsored event.

Is it acceptable to have the PTA jog-a-thon headquarters at the sponsor's headquarters?

If the jog-a-thon is being held at the sponsor's headquarters, there is nothing wrong with the PTA managing the event at the headquarter's site.

Can a PTA give out its tax ID# to people who make donations?

Yes. If the PTA is soliciting donations or sponsorship from vendors, they should be supplying their tax ID # when asked so that the vendor has documentation of the PTA tax exempt status and, therefore can legitimately deduct the donation.


Scrip

Are grocery stores excluded for e-scrip because they sell tobacco and alcohol?

No. The scrip program is not selling tobacco or alcohol. It allows customers to patronize a market while benefitting a school. The PTA is not recommending that participants purchase any particular item. The PTA must also offer scrip from all markets in the community so that there is no impression of endorsement.

How does the PTA ensure that the proceeds of the scrip program go to the PTA and not the school?

If the PTA buys the scrip directly from the market, it is purchased at discounted rate and then the customer buys the scrip from the PTA at the full rate. The profit is made by the PTA at the time of purchase and accounting is controlled by the PTA based on the procedures in Guidelines for Scrip Programs.

If the PTA is participating in an electronic scrip program, it would need to work with the market to ensure that the PTA was the designated payee on the checks. If the market writes the check to the school, then the PTA does not need to sponsor the program.


Fund Raising

How do we handle non payment for candy that has been issued?

It is not recommended to issue candy without payment in advance. Generally, orders are taken and paid first. If candy has been issued without payment, and the customer will not pay, the PTA is in essence liable for payment. Contact the parent/customer by phone or mail and ask that they pay for the product that they agreed to purchase and already received.

Should PTA give numbered receipts during a fund raising activity? Is it required or recommended?

A numbered receipt is not required for customers who purchase items. When the purchaser pays by check, then the check would be considered proof of purchase. The treasurer must issue a numbered receipt for all cash money received.

Can a PTA write a letter to parents requesting donations in lieu of a fund raiser?

Yes. The request must be completely voluntary. Be sure to explain what the money will be used for, and ensure the moneys are deposited for that specific activity/program.

What is "ithought.com"?

ithought.com is a unique Yellow Pages directory where consumers can share their opinions about any service business in the U.S. It incorporates real-life consumer feedback with a traditional online directory. Their goal is to allow customers to make more informed purchasing decisions by providing access to consumer opinions on every business in the nation.

How many fund raisers are allowed annually?

When planning the year's activities, PTAs should use the 3-to-1 rule. For every fund raising activity, there should be at least three non fund raising projects aimed at helping parents or children or advocating for school improvements. All funds raised must be in the context of the Mission and the Objects of PTA.

Must the PTA vote to participate with each family restaurant individually, or can it vote once to have family restaurant nights throughout the year?

At the beginning of the school year when you present the proposed program to the association for approval, you do not need to list each restaurant individually. If you plan on going to a variety of restaurants, present the program as "Family Nights at Local Restaurants."

Can PTA send home a flyer with students informing parents about a "Carl's Jr Night" on a specific date and time and reference that a percentage of the sales will benefit the PTA?

Yes. If the PTA association votes to have a fund raiser at a local establishment, and Carl's Jr. is chosen as one of the establishments, the information can be sent home with students.


Carry Over Funds

Can a standard reserve amount that remains in a separate savings account from year to year be established?

The emergency reserve funds are considered an integral part of each PTA's planning and budgeting process. The emergency reserve funds are intended to serve as a means to retain financial stability in the event of an unforseen development such as unplanned expenses arising from a project or an unexpected increase in inflation. The amount of the fund will vary according to each PTA's size. It is a good idea to establish carryover funds or reserve funds, which will help provide funds for unanticipated and unbudgeted expenses; funds for emergencies; and allow the PTA to be fiscally responsible.

If a PTA cannot totally fund large purchases such as a computer lab or playground equipment in one year, how are the funds handled without encumbering a future board?

The funds are designated for the specific activity. If the future board does not vote to continue raising money for the activity, the designated funds must then be gifted to the school for partial payment of the activity. However, before approving proposals for material aid to the school, a PTA should consider whether or not the proposed equipment or services is a public responsibility. If the association approves to raise the funds each year, establish an account that is specified for that particular activity.

Is it appropriate to plan on carrying over money from one year to the next to fund a school general improvement such as a sound system for the multipurpose room? If so, how many years can you carry over the funds (adding to this every year)?

Money can be carried over as designated funds for specific purchases. There is no time limit on how many years funds can be carried-forward, as long as the association approves raising the funds for the purchase each year.

How much money can or should be carried over?

As a guide, reserve funds should not exceed one-half of a PTA's budget for an average year. If it does, the indication is that the PTA is not giving as much service to children and youth as it should. In planning the budget, it is not uncommon for PTAs to have small contingency savings accounts for the following reasons: efficient management of funds, reserve to carry on programs during the summer and fall until dues are collected, and moneys to finance unexpected but approved projects or programs.


Budget

May a PTA release the entire budget at the beginning of the school year?

The PTA may not release the entire budget at the beginning of the year. The executive board may authorize the payment of bills within the limits of the adopted budget, but such action must be ratified at the next association meeting and recorded in the minutes. To facilitate the process of releasing funds, plan ahead to see what activities are going to be held and make motions to release funds up to the budgeted amount BEFORE activities occur. Checks may be written immediately upon presentation of a bill or receipt.

Are membership dues included in the gross income?

As directed, the California State PTA and National PTA portions of the dues shall be forwarded through channels to the California State PTA without requiring specific authorization by the association. These portions of dues should not be recorded as part of the unit PTA's gross income.

If you do not record the state and National PTA portion of membership dues as income, how would this money be entered?

This money is shown as "Income not belonging to the unit" and "Disbursements not belonging to the unit."

Is a budget required?

Yes. The budget is an outline of estimated annual income and expenses. It is part of the treasurer's duties to chair the budget committee and prepare a proposed budget. After the budget has been drafted, it should be presented by the treasurer to the PTA board/executive committee for consideration and then to the PTA association for approval. The treasurer presents the proposed budget to the association in writing and explains that budget amounts are estimated. The president asks if there are any questions concerning any item in the budget. If there are none, or after questions have been answered, a member moves to adopt the budget as presented or amended.

Who attends a budget meeting?

The president appoints a budget committee from members of the executive board, which is chaired by the treasurer. It has the responsibility for developing a budget for the PTA. The program committee gives the budget committee the proposed programs for the coming year including cost estimates to carry them out so that the budget can be accurately estimated. The committee usually consists of 3-5 members.

Can any member of the association ask for a budget to be changed or can it only be changed at a budget meeting? What type of motion would the member make?

Since the budget is only an estimate of the planned expenditures for the year, it may be necessary to amend it. The treasurer should review the budget monthly, compare it to expenditures, and bring a motion mid-year to amend if necessary. The budget may also need to be amended if new programs or projects are approved. Any voting member of the association may make a motion to amend the budget. To amend a previously adopted budget, it is necessary to have a two-thirds vote; with 30 days previous notice, a majority vote.

Is the PTA going to develop financial software? Can a PTA use Quicken, or a similar software product?

Based on the high level of interest from our members, we have developed PTAEZTM. This online accounting system helps your PTA manage your financial records, run customized reports, get prepared for filing tax forms — and offers other great features such as an online store and the ability to collect memberships online. For more information or a free trial, please go to http://www.ptaez.com.

Is it recommended to make copies of checks prior to depositing them?

It is always a good idea to make copies of any document that might affect the PTA's financial status. You may also document by computer or by hand, the check number, payee, date, bank identity number, amount and what PTA activity the check was written for, if a copy machine is not available.

Is it necessary to put royalty income in a separate category in the budget?

Royalty income should be shown in the fund raising category associated with the specific company from whom they are received. Every fund raising activity must be approved by the association annually.

Why is the budget & finance officer never addressed in conferences?

Unit bylaws provide for an elected treasurer who serves as the budget chair and is the custodian of PTA funds. Other financial officers include an auditor and may also include a financial secretary. PTA does not identify any of these officers as a "budget & finance" officer.

When the budget is approved, are the fund raisers included in the budget also approved or must they be voted on separately?

The proposed budget should be presented in writing after the proposed program has been adopted. You may present the budget as a whole, discussing the activities that you think will bring in income, and then discussing activities that will have expenditures. This would include all fund raisers. Give the membership the opportunity to ask questions regarding the budget, then vote on the budget as a whole. If a member has a question about a particular activity, you may pull that item from the budget until more information is obtained, and bring back an amended budget at the next association meeting.


Banking

Can one bank deposit be made for three separate functions such as $100 for membership, $600 for a candy fund raiser, and $50 for the spirit shop?

Yes, as long as each individual activity is accounted for separately in the treasurer's records, in the checkbook register and on the treasurer's report.

If all banks in the community are charging a service fee, even though they know the PTA is a nonprofit organization, how should this be handled?

A bank service charge that cannot be avoided is considered as an operating expense, and should be indicated as such on the budget. Ask the bank manager to waive the service fee. Sometimes if a savings account is tied in with the checking account, the bank will waive a monthly service fee.

Can a PTA bank at the local credit union? Is there a conflict since the credit union is not for profit and "owned" by the credit union members?

A PTA may bank at a credit union if they are not charged a membership fee. PTA may not be a member of another organization.

Recently the bank decided to stop sending back the canceled checks with the bank statement. Is this acceptable to use copies of the checks instead of the original?

Yes. If the bank sends only copies of the checks, or allows the PTA to make copies, this is acceptable.

Can checks be generated by computer?

Checks may be printed on the computer as long as they are signed by two people authorized to do so. Electronic banking is strictly prohibited since there are no signatures required.

If a PTA uses a computerized check register, is a hand written one still required?

No. The computerized register is sufficient. However, a hard copy of the treasurer's report must be printed monthly and attached to the minutes as part of the permanent record. These records must be audited and the computer disks must be kept as part of the treasurer's records.

Can the ledger be maintained in the computer?

Yes. You may have to look at the treasurer's ledger book to see how to set up the computerized ledger. It is important that hard copies be printed out for audit, and the computer disks must be kept as part of the treasurer's records.

Is there any special information for computerized accounting?

If financial records are kept on the computer, files must be stored to a backup disk at least monthly. Each report generated must show the title and time period covered. PTA financial records must be kept on a disk separate from all other accounts. If an error is discovered prior to printing a report, it may be corrected at that time. If an error is discovered after the report/file has been printed, correct it by a journal entry adding an explanation. A hard copy of the computer register must be printed on a monthly basis and maintained in a bound book. Review the California State PTA Guidelines for Computer-Generated Financial Records.

Must all checks be saved permanently?

Canceled checks for important payments such as taxes and special contracts must be kept permanently. They should be filed with papers pertaining to the transaction. Other canceled checks must be retained for seven years. See the Records Retention Schedule in Financial Procedures Made Easier.

Can a separate safe be bought by the PTA and kept at school for locking scrip and/or money?

If unsold scrip or money cannot be deposited in the bank immediately, establish advance arrangements with the principal to use the school safe. It is recommended the PTA purchase a small safe or lock box to place inside the school safe. Prior to placing unsold scrip or money in the school safe, it must be counted by two PTA executive board members. Document the amount and have the documentation signed by the PTA executive board members. The principal may require that a school representative verify the documentation.

If there is no school safe, it is acceptable to purchase a PTA safe if there is a way to anchor the safe to the floor. Seek approval from the principal and/or school district.


Taxes

Are Membership Dues Tax Deductible?

Dues collected by PTA units are generally tax deductible. The services that a PTA provides to members are intangible and do not provide any direct benefit to specific members or groups of members. Such intangible services include leadership and legislation. These services are generally a benefit to the entire community, regardless of whether all members of the community become members of the PTA.

Membership dues are essentially an internal method of recording levels of support. The "de minimus" benefits are received by the donors who are members and by non-member parents as well.

Dues would NOT be deductible if a significant product is received or when a member receives services not available to the community at large.

Certain advocacy or legislative promotion activities may be considered lobbying expenses, and would therefore not be deductible. However, no PTA unit should have significant lobbying or political action expenses.

Please keep in mind: PTA does not dispense tax advice. It is the taxpayer's responsibility to report his income and deductions appropriately. Members or PTAs should consult directly with a tax professional if they believe their circumstances are unusual.

Are council or district assessments included in the gross receipts when filing the IRS Form 990?

As directed, the California State PTA and National PTA portions of dues, or other assessments such as insurance premiums, shall be forwarded through channels to the California State PTA without requiring specific authorization by the association. These portions shall never be recorded as part of the unit PTA's gross income.

What are the state filing requirements?

Starting with the 2010 tax year, the California State Franchise Tax Board (FTB) is requiring all tax-exempt organizations to file the electronic Form 199N or Form 199. In the past, PTA units and councils were not required to file a Form 199 if they were unincorporated. Based on this new reporting requirement, all units, councils and districts must now file the Form 199. Returns are due the 15th day of the fifth month after the fiscal year-end. For example, if your unit's fiscal year-end is June 30, 2011, the form is due on November 15, 2011.

Units, councils, and districts having unrelated business income of $1,000 or more are required to file Form 109. Any unrelated business income should be identified when filing IRS Form 990/990EZ.

All units, councils and districts must be registered with the Attorney General's Office, Registry of Charitable Trusts, and must file the RRF-1 form annually.

On an interest bearing account, is the interest taxable and how is it reported?

Interest is considered as part of the gross receipts of the unit. If the gross receipts require that the unit file, then it is recorded on Form 990/990EZ.

Must a Form 1099 be completed if a corporation is paid $600 or more for services?

Federal and state laws require that when payment of $600 or more per calendar year is made to an individual (non-employee) or unincorporated business for services rendered or in payment for a grant, award, or scholarship, the employer must file Form 1099-MISC with the IRS. The form is not required to be issued to corporations. Form 1099-MISC must be sent to the recipients on or before January 31 of each year and filed with the IRS on or before February 28 of each year.

Do gross receipts include "money-in/money-out" such as for t-shirt sales which are not classified as a fund raiser?

Yes. All income to the unit, except for assessments money that the unit does not have control over or does not have any say in how it is used is considered as part of the gross receipts of the unit. It does not have to be classified as a fund raiser to be considered gross receipts.

If a unit has gross receipts of more than $100,000, but does not have assets over $250,000, which tax form should be filed?

If your gross receipts exceed $100,000, file Form 990 and Schedule A.

Is a Form 1099 required for people who present assemblies?

A Form 1099-MISC is required for anyone who is paid $600 in a year.

What happens if the tax forms are not filed timely?

The PTA will receive a notice from the IRS and may be assessed penalties and interest for the late forms. Respond immediately to any notice requesting that the fine be waived. Contact your PTA district or the California State PTA for assistance in writing a letter of explanation.

Do all PTA units end their fiscal year 6/30? Is it required that the fiscal year be the same as the California State PTA?

No. Fiscal year is given in bylaws.

When filing Form 990 for a fiscal year 7/1 through 6/30, what year form is used?

The correct form to use is one for which the fiscal year begins. If the fiscal year begins July 1, 2000, and ends June 30, 2001, then the PTA would use the Form 990 for the year 2000.

What is unrelated business income?

The income generated by PTA must be related to the organization's tax-exempt purpose if that income is to be free from federal income tax. To determine if an organization has unrelated business income, three factors must be present: The income must be: (1) from a business, (2) regularly carried on, and (3) unrelated to the PTA's exempt purpose.

A PTA with unrelated business income of $1000 or more is required to file Form 109 with the Franchise Tax Board. Any unrelated business income should also be identified when filing IRS Form 990 or 990EZ.

Is income from e-scrip considered unrelated business income?

While the income is from a business and regularly carried on, as an approved PTA fund raiser, the proceeds are related to the PTA's exempt purpose. If the level of effort on the part of the PTA in raising funds is insignificant, then there should be no unrelated business income.

How is the average gross income determined, if due to lack of proper procedures and lack of paperwork, a unit cannot determine their gross receipts for several years?

Bank records show all deposits and expenditures. If you do not have all of the bank statements for the years needed, then determine which bank statements you are missing and request copies from the bank. You will probably have to pay for this service. Total all income from bank statements for each fiscal year to determine the average gross income.

Remember, do not count membership moneys and Founders Day moneys forwarded through channels. If you don't have these records, ask for assistance from your council or district.


E-Commerce

Is it acceptable for an annual membership fee to be paid by the PTA member? Would this be considered as encumbering a future board?

Your PTA may not participate in the E-commerce program if a membership fee is charged.

Can PTA participate in the e-scrip program?

Yes. Follow the California State PTA Guidelines for Scrip Programs.

How is electronic scrip different from paper scrip in relation to IRS guidelines?

The programs are basically the same, the means by which they are conducted is different. While the income from electronic scrip is from a business and regularly carried on, as an approved PTA fund raiser, the proceeds are related to the PTA's exempt purpose.

If the level of effort on the part of the PTA in raising funds is insignificant and the PTA involvement in holding the fund raiser is conducted by volunteers, then there should be no unrelated business income. It is recommended that when participating in the scrip program, the PTA have its taxes completed by a professional tax accountant. This question should be posed to the tax accountant completing the IRS Form 990 for the unit.

If the e-scrip program only offers certain supermarkets, can the PTA provide paper scrip for the other local markets?

Yes. Not all parents have access to the Internet and e-scrip. Be sure to invite all local markets to participate in the program. Avoid the impression of endorsement of any particular market.

Can units sell scrip non-electronically? Is there any tax liability?

Yes. PTAs can sell scrip non-electronically. As with any Unrelated Business Income, your PTA may be subject to UBIT if it earns over $1000 selling scrip. It is recommended that when participating in the scrip program, the PTA have its taxes completed by a professional tax accountant. This question should be posed to the tax accountant completing the IRS Form 990 for the unit.

If a PTA participates with an Internet shopping mall for fund raising, can examples of the vendors the site links to be included on a flyer to parents? Is this considered endorsement?

Do not give examples of vendors on a flyer which encourages parents to visit the shopping Web site. This may be considered an endorsement of products or services. Invite parents to visit the site and tell them about the wonderful shopping opportunities available without giving them specific names of vendors.


Check Writing

What should a PTA do about a NSF (non-sufficient funds) check?

Call the writer of the check, explain that the check was returned by the PTA bank and provide the reason given by the bank. Remember to state that the writer is now liable for whatever fee the bank has charged for the transaction. See additional instructions in Financial Procedures Made Easier under "Returned or Uncashed Checks."

How are the PTA books adjusted to reflect an NSF check that cannot be collected?

When a check has been returned by the bank, note it in the ledger and checkbook register along with the charges levied by the bank. Treat the charge as a disbursement. See additional instructions in Financial Procedures Made Easier under "Returned or Uncashed Checks."

Is it acceptable for PTA to refuse checks from people who have past NSF checks that they have not resolved?

Yes. You do not have to accept another check from that person. Demand payment in cash. You may also file with the Small Claims Court for the amount of the NSF check plus three times the amount in damages. See additional instructions in Financial Procedures Made Easier under "Returned or Uncashed checks."

How far should the treasurer go to recover a $5.00 bank fee on a check that needed to be redeposited?

Call the writer of the check, explain that the check needed to be redeposited in the PTA bank account and that the bank charged the PTA $5.00, and that the writer is now liable for the bank fee.

Explain "deposit promptly."

"Promptly." "Immediately." "As soon as possible." The treasurer should not keep cash in her car or home The deposit should be made the day of the event or collection of money, if at all possible. For safety reasons, the treasurer should not go to the bank alone. Two people should bank large deposits after the money has been counted and verified by two people.

If a large amount of money is to be collected at a time when the banks are not open, arrangements should be made ahead of time to make a night deposit. Depending upon the community, a police or sheriff escort may be provided on request.

If unsold scrip or money cannot be deposited in the bank immediately, establish advance arrangements with the principal to use the school safe. It is recommended the PTA purchase a small safe or lock box to place inside the school safe. Prior to placing unsold scrip or money in the school safe, it must be counted by two PTA executive board members. Document the amount and have the documentation signed by the PTA executive board members. The principal may require that a school representative verify the documentation.

Must a receipt be issued for activities such as cookbook, pizza, or cookie dough sales?

A check may be used as a proof of purchase. If cash is the method of payment, then a numbered receipt should always be issued. If requested, provide a receipt regardless of whether the person paid by check or cash.

How exactly are chairmen paid for expenses between meetings?

The treasurer may pay expenses for any approved expense. At an association meeting move to release funds up to the budgeted amount for up-coming activities. Upon receipt of expenses, chairmen may be paid immediately. Reimbursements may also be ratified at the next association meeting.

Can the treasurer write an authorized check to herself?

Yes, she can write the check to herself, but it would be prudent that she not sign her own check. All PTAs are required to have at least three elected check signers, so this should not cause a problem.

Can a check be written in advance, for example to a market, if the amount is unknown?

Yes, for authorized expenditures only. Fill in everything but the amount. NEVER SIGN A BLANK CHECK. DO NOT USE CASH. Make sure the treasurer is given the amount of the check written and the receipt for her records. It would be best if the buyer write a personal check, then upon receipt the treasurer could reimburse the buyer immediately.


Audit

Who moves to accept the audit?

The auditor or any PTA member moves to adopt the audit.

Can PTA hire an outside auditor to provide audit services who is related to school staff?

Yes. The PTA executive board must make full disclosure to the membership of the outside auditor being hired and the amount paid must be fair market value for the services provided.

How can bank statements be reconciled when the treasurer has not reconciled them, and it is difficult to determine if there are outstanding checks.

Bank statements should be reconciled monthly. If that is not being done, then someone other than the treasurer should reconcile the statements. The executive board should insist that proper financial procedures be followed.

If the auditor determines that there are problems, then request the council or district come and do training. The bank can provide a list of checks it has received prior to the bank statement being mailed. Ensure that all bank statements be mailed to the school address. If the treasurer refuses to use correct procedures, the PTA executive board may ask her to resign using Due Process. Follow the procedures outlined in the Unit Bylaws for Local PTAs/PTSAs.

Are the recommendations in the audit report included in the minutes?

Yes. Recommendations are a part of the audit report and attached to the minutes. Upon adoption at an association meeting, the auditor reads only the statement, "I have examined the books and find them . . . "correct," "substantially correct," " incomplete," or " incorrect." Do not make any implicit or explicit statements regarding any person if problems are detected by the auditor. If mismanagement of funds is suspected, contact the council or district immediately for assistance.

Can the audit committee be composed of any of the executive board members?

Yes. The audit committee may be composed of any executive board member except any check signer, secretary or financial secretary. The PTA may also hire or request assistance from non-PTA members; or request assistance from the council or district.

If there are problems with the audit, is the report still adopted by the association?

Yes. The audit report tells the status of the books. If the financial records are incorrect, then take steps to correct any problems. If the audit is done incorrectly, then do another audit. Request assistance from the council or district.


Commingling of Funds

If the school has an activity not sponsored by the PTA, can the PTA collect the funds and write checks for the activity on behalf of the school?

NO. This is called commingling of funds and is illegal. The PTA can help facilitate the activity but all funds must be deposited into the school account. All income must be reported on an annual financial report and if required, must also be reported on tax filings. Top of Page


Treasurer

What steps can be taken if the past treasurer will not give up the past records?

The president should send a certified letter, return receipt requested, that all treasurer materials be returned to the PTA. Request that the person return the materials to the school office by a specific date, or arrange to have two executive board officers to pick up the records at a specific time and date. Ask the person to leave the materials by the front door if she doesn't want any contact with the PTA officers. Talk to the principal to see if he can facilitate the process. Call the bank and freeze the account, and if records are not returned, close that account and open a new one.

If mismanagement of funds is suspected, conduct an audit using past executive board and/or committee records. Request past statements from bank. Contact council or district for assistance. If audit shows moneys are missing, contact law enforcement.

What is the best way to organize receipts?

Organize receipts in a way that makes sense to you. One way is to keep receipts in an envelope with the month written on the outside of the envelope. Attach receipts to warrants; write check number and date on the receipt when the check is written, and file them in the order of the check number.

Do all the expenditures need to be read off at every board meeting or can they just be listed in the monthly treasurer's report?

The treasurer should provide a written treasurer's report at every executive board meeting with the expenditures listed. Board members should be given an opportunity to ask questions concerning any expenditure. It is the responsibility of the entire executive board to ensure that proper financial procedures are being followed.


Gifts to School

If the PTA wants to buy $4000 worth of sand for the playground equipment, can the money be "granted" to the school?

Yes. The membership must approve the grant. Grants should be given to the school district for all purchases.

Can the PTA offer teachers a stipend to purchase classroom supplies such as art paper or books, if receipts are provided?

Yes. However, develop a list of approved purchases that will benefit all children in the classroom. Do not give money up-front, but always require receipts in order to reimburse the teacher. You may also set up an approved mini grant program that allows teachers to apply directly to the PTA for supplies needed. A committee should be appointed by the president to administer the program and a teacher should also be on the committee.

Set aside an amount of money for the grant program; inform the teachers of the program; set a date for applications to be submitted; the committee selects recipients and with executive board approval "grants" the requests. The committee may decide to grant the full request, part of the request, or none of the request. Be firm that teachers must submit a bill, receipt or a purchase order for all purchases/reimbursements.

If teachers are paid for academic enrichment programs by PTA, do Workers' Compensation requirements need to be met?

Yes. Anytime any person is paid money by the PTA, a Workers' Compensation Form must be filled out. It would be best to give that money to the school district to administer the program. If a teacher is paid more than $600 in a calendar year, a Form 1099-MISC must be filed with the IRS.

These frequently asked questions are arranged in the following sections:


Basic Policies
PTA as an Employer
Fundraising
Tax Filing Support Center
Handling Requests for Relief Assistance
Insurance
Forms
Frequently Asked Questions
Toolkit

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