Training for PTA Treasurers Training for PTA Treasurers North Carolina PTA 3501 Glenwood Avenue Raleigh, NC 27612 (800)-255-0417 revised January 2011.

Training for PTA Training for PTA TreasurersTreasurers

North Carolina PTA3501 Glenwood AvenueRaleigh, NC 27612(800)-255-0417

revised January 2011

PTA VisionPTA Vision• Making every child's potential a Making every child's potential a realityreality

PTA MissionPTA Mission

PTA isPTA is

• A powerful voice for all childrenA powerful voice for all children

• A relevant resource for families and A relevant resource for families and communities, andcommunities, and

• A strong advocate for the education A strong advocate for the education and well-being of every child.and well-being of every child.

PTA TreasurerPTA Treasurer’’s s ““MissionMission””• Its all about the childrenIts all about the children

– The money The money ‘‘belongsbelongs’’ to the children to the children

• Ensure money is spent to support the Ensure money is spent to support the PTA missionPTA mission

– IRS regulation to remain a non-profit IRS regulation to remain a non-profit corp.corp.

Keep these two rules in mind Keep these two rules in mind throughout the year and you will throughout the year and you will be successful.be successful.

Before taking officeBefore taking office

Be sure that the books have been audited before accepting them. Submit your PTA’s Financial Review online by August 31st of each year to remain a PTA in “Good Standing”.

Become familiar with duties outlined in the bylaws.

Secure the signatures of new officers authorized to sign checks and file with your bank.

Secure Bonding and Liability Insurance.

Study National PTA’s Money Matters Handbook and the Finance section of the NCPTA website.

The Uniform Local unit Bylaws define The Uniform Local unit Bylaws define the duties of the Treasurer as the duties of the Treasurer as follows:follows:Section 6.10 Treasurer.Section 6.10 Treasurer. The Treasurer shall: The Treasurer shall:

• Collect, deposit and maintain all funds of this local Collect, deposit and maintain all funds of this local PTA in approved depositories (including, but not PTA in approved depositories (including, but not limited to, all monies collected as local dues, limited to, all monies collected as local dues, raised in PTA activities, received as contributions, raised in PTA activities, received as contributions, or otherwise acquired); or otherwise acquired);

• Disburse funds in accordance with the annual budget Disburse funds in accordance with the annual budget adopted by this local PTA, and maintain records adopted by this local PTA, and maintain records identifying the purpose and payee of all identifying the purpose and payee of all disbursements; disbursements;

• Maintain a current record of income, expenditures, Maintain a current record of income, expenditures, assets and liabilities of this local PTA, and make assets and liabilities of this local PTA, and make all financial records available for inspection and all financial records available for inspection and review by the audit committee; review by the audit committee;

• Present a financial report of income and expenses at Present a financial report of income and expenses at each meeting of the general membership and the board each meeting of the general membership and the board of directors, which report shall compare current of directors, which report shall compare current income and expenditures to the approved budget; income and expenditures to the approved budget;

• Remit dues to NCPTA in accordance with Article 5 of Remit dues to NCPTA in accordance with Article 5 of these bylaws and the current NCPTA good standing these bylaws and the current NCPTA good standing requirements; requirements;

• Prepare a year-end financial report by June 30 Prepare a year-end financial report by June 30 showing the total income and expenditures for the showing the total income and expenditures for the fiscal year, comparing those figures with the budget fiscal year, comparing those figures with the budget approved at the beginning of the fiscal year, and approved at the beginning of the fiscal year, and the assets and liabilities of the local PTA, and the assets and liabilities of the local PTA, and submit that report to the incoming president, submit that report to the incoming president, treasurer and audit committee; treasurer and audit committee;

• File all required tax forms and reports in a timely File all required tax forms and reports in a timely manner, including but not limited to tax returns for manner, including but not limited to tax returns for the previous fiscal year, and submit copies of all the previous fiscal year, and submit copies of all such filings to the secretary of this local PTA; such filings to the secretary of this local PTA;

• At the end of his/her term, transfer all financial At the end of his/her term, transfer all financial records to the audit committee by July 1; andrecords to the audit committee by July 1; and

• Provide assistance to the audit committee upon Provide assistance to the audit committee upon request. request.

The Audit CommitteeThe Audit Committee

Define in the bylaws as follows: Define in the bylaws as follows: Section 8.2 Audit Committee. Section 8.2 Audit Committee.

• The audit committee shall be composed The audit committee shall be composed of no fewer than three members. of no fewer than three members. Individuals with check signing Individuals with check signing authority and their family members may authority and their family members may not serve on the audit committee, nor not serve on the audit committee, nor may the outgoing or incoming treasurer. may the outgoing or incoming treasurer.

• The audit committee shall be The audit committee shall be responsible for the audits and responsible for the audits and financial reviews described in Article financial reviews described in Article 11 of these bylaws. 11 of these bylaws.

ARTICLE 11 FINANCE AND ARTICLE 11 FINANCE AND BUDGETBUDGET

• Section 11.1 Monthly financial review. Section 11.1 Monthly financial review. The audit committee will conduct a The audit committee will conduct a monthly review of this local PTAmonthly review of this local PTA’’s bank s bank statements and supporting documents and statements and supporting documents and shall sign an acknowledgment on the bank shall sign an acknowledgment on the bank statements that the expenditures were statements that the expenditures were consistent with the approved budget. consistent with the approved budget.

• Section 11.2 Financial review when Section 11.2 Financial review when financial officer leaves office.financial officer leaves office. If any If any officer with financial responsibility, officer with financial responsibility, including but not limited to check including but not limited to check signing authorization, leaves office signing authorization, leaves office before the end of a fiscal year, the before the end of a fiscal year, the audit committee will conduct a review of audit committee will conduct a review of the local PTAthe local PTA’’s financial records. s financial records.

•   

• Section 11.3 Annual financial review.Section 11.3 Annual financial review. By August 31 By August 31 each year, the audit committee, or a certified public each year, the audit committee, or a certified public accountant appointed by the board shall:accountant appointed by the board shall:Examine the treasurerExamine the treasurer’’s year-end financial report and s year-end financial report and this local PTAthis local PTA’’s financial records (including but not s financial records (including but not limited to all depository accounts, the general ledger limited to all depository accounts, the general ledger of receipts and expenditures, supporting documentation of receipts and expenditures, supporting documentation and checks, and records of membership dues paid); and and checks, and records of membership dues paid); and State in writing whether or not the treasurerState in writing whether or not the treasurer’’s year-s year-end report is correct and shall submit that statement, end report is correct and shall submit that statement, with a copy of the report, to the board of directors.with a copy of the report, to the board of directors.The board shall review and approve the report of the The board shall review and approve the report of the audit committee or certified public accountant, and audit committee or certified public accountant, and thereafter the audit committee shall use the data in thereafter the audit committee shall use the data in the report to prepare and file the required Local PTA the report to prepare and file the required Local PTA Year-End Report online in the NCPTA database no later Year-End Report online in the NCPTA database no later than August 31. The audit committee will summarize its than August 31. The audit committee will summarize its report to the general membership at its next meeting. report to the general membership at its next meeting. The audit committee, at any time, may recommend to the The audit committee, at any time, may recommend to the board that an independent review of the financial board that an independent review of the financial records by a certified public accountant should be records by a certified public accountant should be conducted. conducted.

• Section 11.4 Annual budget.Section 11.4 Annual budget. The officers shall prepare a The officers shall prepare a proposed annual budget which, following approval by the board, proposed annual budget which, following approval by the board, shall be considered and adopted at the first general shall be considered and adopted at the first general membership meeting of the fiscal year. Amendments to the membership meeting of the fiscal year. Amendments to the budget may be considered and adopted at regular or special budget may be considered and adopted at regular or special general membership meetings. general membership meetings.   

• Section 11.5 Checks.Section 11.5 Checks. All bills of this local PTA shall be All bills of this local PTA shall be paid by check. Checks must be signed by two of no more than paid by check. Checks must be signed by two of no more than four officers authorized by the board of directors to sign four officers authorized by the board of directors to sign checks, except that none of these officers so authorized shall checks, except that none of these officers so authorized shall be related, and at least one of these authorized officers be related, and at least one of these authorized officers shall be the Treasurer. The signing of blank checks is shall be the Treasurer. The signing of blank checks is prohibited.  prohibited.  

• Section 11.6 Expenditures and fund availability. Section 11.6 Expenditures and fund availability. All All expenditures of this local PTA must be consistent with the expenditures of this local PTA must be consistent with the approved budget and based on actual fund availability. All approved budget and based on actual fund availability. All reimbursements for expenditures will be contingent upon actual reimbursements for expenditures will be contingent upon actual fund availability. fund availability.

• Section 11.7 Depositories.Section 11.7 Depositories. All depositories of local PTA All depositories of local PTA funds, including checking, savings and investment accounts, funds, including checking, savings and investment accounts, must be approved by the board of directors.must be approved by the board of directors.

• Section 11.8 Contracts and other financial agreements.Section 11.8 Contracts and other financial agreements. All All contracts and other financial agreements require the prior contracts and other financial agreements require the prior approval of the board and must be signed by the President.approval of the board and must be signed by the President.

InsuranceInsurance

Fidelity bonding insurance

Protects the PTA’s money from theft. The Treasurer and other officers are covered if:

1) An annual audit has been conducted and

2) Checks are signed by two persons

General liability insuranceCovers all routine activities of your PTA e.g. general meetings, spring festivals, skating parties, etc.

Covers bodily injury, property damage, hazards, libel/slander.

Many School Systems require proof of insurance to use facilities.

IncorporationIncorporationProtects individual officers of the PTA financially from any personal liability in the event the PTA is sued or cannot pay its bills.

Incorporation forms for nonprofit associations are available from the NCPTA state office or:

NC Secretary of StateNC Secretary of StatePO Box 29622PO Box 29622Raleigh  NC  27626-0622Raleigh  NC  27626-0622

919-807-2225http://www.sosnc.com/

Search for Your PTASearch for Your PTA

• http://www.secretary.state.nc.us/http://www.secretary.state.nc.us/corporations/CSearch.aspxcorporations/CSearch.aspx

TreasurerTreasurer’’s Recordss RecordsLedger

A copy of the Budget

Bank statements and cancelled checks

Receipts & Vouchers

Checkbook

Meeting Minutes

Although the treasurer keeps the books, the financial records belong to the organization.

Must turn everything over to the audit committee when your term is complete because they belong to the PTA.

Other important papers:A copy of bylaws

Copies of Form 990 (IRS)Employer Identification Number

State Tax information10 years of Audits

7 years of unit financial activity

3 years of budgets

Ledger – ManualLedger – Manual

Cash In

Deposits

Cash Out

Petty Cash

Checks

Funds entered by category

Ledger – ElectronicLedger – ElectronicCan use Microsoft Money,

Quicken, Spreadsheets, etc.

Always keep a backup

Always keep a printed copy

Automatically prepare budget reports

Electronic BankingElectronic Banking

• Caution when using electronic Caution when using electronic banking to pay billsbanking to pay bills

• Establish a policy and Establish a policy and consequencesconsequences

• Do not use Credit Cards, Debit Do not use Credit Cards, Debit Cards or Other Banking CardsCards or Other Banking Cards

1.1. Too difficult to track two Too difficult to track two signaturessignatures

2.2. Too easy to empty an entire Too easy to empty an entire accountaccount

BudgetBudget

• Bylaws - Section 11.4 Annual Bylaws - Section 11.4 Annual budget.budget. The officers shall The officers shall prepare a proposed annual budget prepare a proposed annual budget which, following approval by the which, following approval by the board, shall be considered and board, shall be considered and adopted at the first general adopted at the first general membership meeting of the fiscal membership meeting of the fiscal year. Amendments to the budget year. Amendments to the budget may be considered and adopted at may be considered and adopted at regular or special general regular or special general membership meetings. membership meetings.

Budget PlanningBudget Planning

PTA President, the Board of Directors and Principal should work together over the summer and agree on a plan for the coming year.

• PTAs set their own agenda

• PTAs goals should be complimentary with the school’s.

Remember, it’s all about the children

BudgetBudgetNormally presented by Treasurer to the Board of Directors Based on the PTA mission & vision Based on goals of the unit Based on historic financial information (i.e. prior years budgets)

Only official after it is approved by the general PTA membership Usually done during the first PTA meeting (quorum having been established).

Consider publishing in your newsletter Consider posting on the school website Review & hand out at every General Membership Meeting

Can’t write checks against the budget until it’s official

Budget (contBudget (cont’’d)d)A tool to monitor the

financial activities of the PTA throughout the year based on the unit’s goals.

General membership must approve a budget or budget amendments.

The fiscal year begins on July 1 and ends June 30.

Please remember, a 501( c ) 3 organization cannot obligate any future boards to a contract.

PTA’s must spend money on their Mission.

Remember, it’s all about the children.

Voucher SystemVoucher System

Used for reimbursement

Used for check request

Important part of paper trail

Any receipts or other documentation should be attached to the voucher.

ReceiptReceipt• Receipt all transactions.

Membership money

Fundraisers

Donations

Petty cash

• Two people should always count the money.

• Never deposit PTA funds in a personal account or a school account.School funds are public monies and PTA funds are private monies.

• Never “pass” school money through a PTA account.This adds to your gross receipts and could have filing consequences with the IRS.

Money & ChecksMoney & Checks

Bylaws - Section 11.5 Checks.Bylaws - Section 11.5 Checks. All bills of All bills of this local PTA shall be paid by check. Checks this local PTA shall be paid by check. Checks must be signed by two of no more than four must be signed by two of no more than four officers authorized by the board of directors officers authorized by the board of directors to sign checks, except that none of these to sign checks, except that none of these officers so authorized shall be related, and at officers so authorized shall be related, and at least one of these authorized officers shall be least one of these authorized officers shall be the Treasurer. The signing of blank checks is the Treasurer. The signing of blank checks is prohibited. prohibited.

No school employee should have signature authority on PTA checks unless they are a duly elected PTA officer.

The PTA can’t ‘give’ money to the school or any person or organization without a specific use for the money. The IRS and your members hold the PTA accountable for the use of that money.

PaymentsPayments

Pay all obligations by check (no cash)

Checks create a paper trail of all expenses that can validate a transaction.

Don’t use Credit/Debit cards, Electronic Payments.

Never sign a blank check.

Funds not spent in one budget year should be held and included in the new budget.

No PTA Board has the authority to write checks to the school or the principal or for unbudgeted items to “clean out” the account.

Membership IncomeMembership IncomeThe state and national portions of the dues do

not belong to the unit and are never recorded as part of local PTA income. In accordance with the bylaws, this money must be sent into the State PTA Office by the 15th of each month and, therefore, is not a budgetary item. These funds should be shown as receipts and disbursements not belonging to the PTA on each Financial Report.

To solicit memberships and then fail to forward

State and National dues is a fraudulent act.

NCPTA’s membership year begins July 1 and ends June 30.

Membership payments received after June 30th are credited to the next membership year.

ContractsContracts

Only the president is authorized to sign a contract after approval by the Board of Directors and/or general membership.

Contracts signed by anyone other than the president may not be legally binding to the PTA. The signer may be personally responsible.

If the unit is not incorporated, the contract signer (including the president) can become financially responsible if something goes wrong with a fundraising project.

Board members should not receive payment for a product or service for the PTA unless a Fair Market Value has been established and recorded in the minutes.

Fund-RaisingFund-Raising

The primary emphasis in PTA should be focused upon the promotion of the Mission. The real working capital of a PTA lies in its members, not in its treasury. Fund-raising is not a primary function of the PTA.

Children should never be exploited or used as fund-raisers. K-6 students are not allowed to solicit or sell door-to door in any fund-raising activity.

Remember, It’s all about the Children

Fund-Raising (contFund-Raising (cont’’d)d)

It is strongly recommended that the PTA only hold the number of fundraisers needed to meet their budget (and not vise/versa).

If the unit is not incorporated, the contract signer can become financially responsible if something goes wrong with a fundraising project.

Fundraising income category should be kept separate from fundraising expenses.

Bad ChecksBad Checks

If your PTA receives a bad check (NSF)– Contact the person who wrote the check asking that funds be made available

– Contact the bank the check is drawn against and they can tell you if and when money is available.

– Consider going to the bank the check is drawn against and getting a tellers check.

TaxesTaxes

Your PTA is a “consumer” when it purchases supplies or equipment that it will use or give to the school. This includes items and equipment for which PTA writes the check directly to the supplier: office supplies, award certificates and trophies, computer hardware and software, and playground equipment. The sales tax paid on these purchases may be refunded twice a year from the NC Department of Revenue. File form E-585

Your PTA is a “merchant” when it purchases merchandise to sell in order to raise funds. PTAs must have a Merchants License on file with the NC Department of Revenue and present their vendor with a completed Certificate of Exemption in order not to be charged sales tax on resalable merchandise. PTAs cannot claim a refund for sales tax paid on resalable merchandise.

If your unit grosses more than $50,000 (new for 2010 tax year)

Must file IRS-990EZ or 990

Must also file form if the IRS sends the form even if you grossed less than $50,000.

If your unit grosses less than $50,000 (new for 2010 tax year)If your unit grosses less than $50,000 (new for 2010 tax year)

Must file Form 990-N, Must file Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Electronic Notice (e-Postcard) for Tax-Exempt Organizations not Required To File Form 990 or 990-EZOrganizations not Required To File Form 990 or 990-EZ. Before this . Before this law was enacted, these small organizations were not required to file law was enacted, these small organizations were not required to file annually with the IRS. annually with the IRS. 

Required e-postcard Required e-postcard informationinformation• OrganizationOrganization’’s names name

• Any other names your organization usesAny other names your organization uses

• OrganizationOrganization’’s mailing addresss mailing address

• Organizations website address (if Organizations website address (if applicable)applicable)

• OrganizationOrganization’’s EINs EIN

• Name and address of a principal officer Name and address of a principal officer of your organizationof your organization

• OrganizationOrganization’’s annual tax periods annual tax period

• A statement that your organizationA statement that your organization’’s s annual gross receipts are still annual gross receipts are still normally $50,000 or lessnormally $50,000 or less

In closing...In closing...

• Please review NCPTAPlease review NCPTA’’s Finance s Finance section on our websitesection on our website

• Visit Visit www.ncpta.orgwww.ncpta.org frequently frequently for financial updatesfor financial updates

• Contact the State Office at Contact the State Office at [email protected]@ncpta.org if you need if you need any assistance.any assistance.

And remember…And remember…

ItIt’’s All About the s All About the ChildrenChildren

Questions and Questions and DiscussionDiscussion