PTA Finance Training

2016 California State PTA

The Finance Team

Association Members

The President

The Treasurer

Board Members

The Secretary

The Financial Secretary

The Auditor

Financial Accountability

Executive Board (Article V – election of officers)

Treasurer & Financial Secretary (Article VI – duties of officers)

Auditor

(Article VI – duties of officers)

Fiduciary responsibilities

Handling, recording and reporting

Monthly, bi-annual, and on-going

• Approves programs

• Approve the budget

• Authorizes expenses

• Approves minutes

The association is the ultimate authority (Bylaws Article VIII, Section 3)

Association Responsibilities

• Releases budgeted funds to the board

• Ratifies every check

• Approves budget changes

• Fiduciary duties: care, loyalty, obedience

• Transparency duties: simple, complete & clear

Board Responsibilities

The board is subordinate to the association (Bylaws Article VIII, Section 3)

Board Responsibilities

The board is subordinate to the association (Bylaws Article VIII, Section 3)

• Transacts business as authorized by the association

• Authorizes payment of bills within budget limits

• Authorizes payment of unbudgeted bills within approved limits

• Receives PTA money

• Gives a receipt for PTA money received

• Deposits money into a PTA bank account

Financial Secretary (Bylaws Article V)

• Records money received and deposits

• Presents report at board and association meetings

• Gives a copy of the deposit slip to the treasurer

• Audit the financial records:

• mid-term and year-end

Auditor (Bylaws Article V)

• Present audit reports per schedule in bylaws

• Verify the completion and filing of taxes

• upon resignation of the treasurer or financial sec.

• upon resignation of any check-signer

• Recommended: 5-minute audit of bank statements

The Budget

Treasurer’s Reports

Budget-to-Actual

“Treasurer’s Report”

Annual Financial Report

Sunny’s PTA Budget

Fiscal Year2015

Receipts Dues Fundraiser #1

$1,000.00 $32,000.00

Total receipts: $33,000.00

Expenses Supplies Field trips

$500.00 $32,500.00

Total expenses: $33,000.00

Estimated

Budget-to-Actuals

Receipts

Dues

Fundraiser #1

$1,000.00

$32,000.00

Total receipts: $33,000.00

Expenses

Supplies

Field trips

$500.00

$32,500.00

Total expenses: $33,000.00

$300.00

$22,000.00

$22,300.00

$400.00

$3,500.00

$3,900.00

Actuals Estimated

• prepare the budget (committee & board)

• report budget-to-actuals to the board

• adopt the budget (association)

• change the budget (association)

• release funds to the board (association)

The BUDGET Process

Budget-to-Actual Receipts

Budget-to-Actual Disbursements

Sunny’s Executive Board Treasurer’s Report

Income Dues Fundraiser #1

$1,000.00 $22,000.00

Total income: $23,000.00

Expenses

Check #500 - Supplies for book fair

Check #501 – 3rd grade field trip

$500.00

$2,500.00

Total expenses $3,000.00

Previous balance on April 12, 2015 $6,510.00

Ending balance on May 12, 2015 $26,510.00

Sunny’s PTA Treasurer’s Report

Sunny’s PTA Treasurer’s Report

Sunny’s PTA Annual Financial Report

7/1/15 thru 6/30/16

Income Membership Income Donations

$1,000.00 $22,000.00

Total income:

$23,000.00

Expenses

Program expenses

Operating expenses

$20,000.00

$3,000.00

Total expenses $23,000.00

Sunny’s PTA Annual Financial Report

Sunny’s PTA Annual Financial Report

• membership count and dues monthly

• a copy of all government filings (990, 199 and RRF-1)

• a copy of the approved budget

• a copy of the approved programs

• a copy of the mid-term and year-end audits

Remit to Council/District

• insurance premium (annually in the fall)

• Workers’ Compensation Payroll Report for (November)

Handling Receipts (money received)

“Two person” rule (not related or living together)

– handling PTA mail that contains money

– handling donations and membership dues

– handling cash at a PTA fundraiser

Handling Receipts (cont.)

• Processing cash and checks received

– “For Deposit Only” & PTA bank account #

– Record all cash and every check on a CVF

– Attach adding machine tape totals to CVF

Handling Receipts (cont.)

• “Cash Verification Form” (CVF)

– Two person rule – verify and sign CVF

– Deposit / attach deposit slip to the form

Cash Handling – Video Example

Authorizing Payments

• association “releases” the funds to board

• board authorizes payments

• association ratifies checks

• president/secretary sign Payment Authorization

• treasurer writes check

Writing Checks

• “Two person” rule

– signers may not be related or living together

• Record checks in the register and ledger

• Present a list of checks to association for ratification

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Banking

Deposits

• Every deposit has a corresponding Cash Verification form signed by two people

• Deposit is counted by two people – the depositor and the bank teller

Banking (cont.)

ATM and Credit Cards

• Never for purchases or withdrawals

• Deposit-only card is allowed

Banking (cont.)

Bank Statements

• Mailed to PTA address, not someone’s home

• Request copies of checks written

• Opened and inspected by an elected officer who isn’t authorized to sign checks.

Banking (cont.)

Five Minute Audit of Bank Statements

Online payments or ATM withdrawals

Two authorized signatures on every check

Deposits and checks match reports

Banking (cont.)

Reconcile Bank Statements

• Bank balance Vrs. Treasurer’s records

Treasurer records reflect real-time

– Non Sufficient Funds – returned checks

– Contact payers ASAP

- Collect fees - NSF check = negative to the income account - When collected = use same income account

Dealing with NSF Checks

PTAEZ

• Designed by PTA for PTA!

• Form 990 and 199 solution

•Multiple users

• California PTA specific reports

PTAEZ

• Web based software

• Continuity

• • Accessibility/Transparency

• Your own web store

•Manage membership & volunteers

Annual Government Filings

Step 1: Prepare your Annual Financial Report

Step 2: File with the IRS

Gross receipts < $50,000 990N

Gross receipts > $50,000 990EZ or 990

Step 3: File with the FTB

Gross receipts < $50,000 199N

Gross receipts > $50,000 199

Annual Government Filings

Step 4: File with the AG RRF-1

Raffles

• Legal raffle –

• California Attorney General’s website

• www.ag.ca.gov/charities/raffles.php

• Registration Form

• Charitable Trust (CT) Number required

http://www.ag.ca.gov/charities/raffles.php

General liability $1,000,000

Directors & officers $1,000,000

Bonding $15,000

Workers’ Compensation 1st $1,000 is covered

Insurance

• Follow the Green, Yellow, Red guide

• Follow all PTA financial and approval procedures

Insurance

Election

Appoint Committees

Assessments, Goals, Plans

Preliminary Budget

end-of-term Audit

1st PTA Meeting

• Approve End-of-term Audit • Annual Financial Report • Approve programs • Approve fundraisers • Adopt Budget

remit dues monthly

Mid-term Audit

Sept

March

May

July

Nov

January

February

August

April

June October

December

End of Term

Annual Financial Report

Mid-term

Start of

school

Last PTA Meeting • Approve preliminary budget • Approve paying summer bills

pay insurance premium

Workers’ Compensation form

update bank account signatures

Attend training

nonprofit filings

(990, 199, RRF-1)

1. Collect the financial records (see audit checklist)

Summary of Audit Steps

2. Audit the financial records

3. Make appropriate inquiry of treasurer as needed for clarification

4. Meet with president and financial officers to discuss recommendations and corrections

5. Complete and sign the Audit Report

6. Present to the board and to the association

Collect the financial records (see audit checklist):

• ledger of income and disbursements

Audit Checklist

• checkbook registry

• bank statements

• treasurer’s reports

• cash verification forms

• payment authorization forms (w/ receipts, invoices, etc.

• meeting minutes (board and association meetings)

Verify STARTING BALANCES

• on bank statements

Audit Checklist

• on treasurer’s reports

• on check registry

• on budget

Check BANK STATEMENTS

• reconciled monthly

Audit Checklist

• match treasurer’s reports

• match ledger

• match check registry

Check MEMBERSHIP and DUES

• verify amount collected

Audit Checklist

• verify amount remitted to council or district PTA

Check MINUTES REPORTS

• all expenditures approved in board minutes

Audit Checklist

• all expenditures approved/ratified in association minutes

Check AUTHORIZATIONS FOR PAYMENT

Check CASH VERIFICATION FORMS and bank deposits

Check TREASURER REPORTS

Verify that taxes have been filed.

Audit Report

Fill in the Audit Report form.

Present the report to the association. Any association concerns should be addressed confidentially by the board.

Present the report to the board and answer questions as needed.

Paying a contractor

2. Certificate of Insurance

1. W-9

3. 1099-MISC

Paying Workers

Paying an employee

2. Personal Income Tax

1. Register with State EDD

3. State Disability Insurance

Paying Workers

Paying an employee

5. Unemployment Insurance

4. Employment Training Tax

6. Payroll Tax Deposit

Paying Workers

Paying an employee

8. Social Security

7. Federal Income Tax

9. Medicare Tax

Paying Workers

Paying for a school staff position

1. Deposit funds with the school district

2. Fiduciary Agreement form

Paying Workers

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