North Carolina PTA - Financial Basics and Budget Preparation · 2018-09-11 · Section 6.10 -...

FinancialBasicsandBudgetPreparation

Monday,September10,20187:30p.m.

FinanceMission

ItisallaboutthechildrenandyouthEnsurethatallthemoneyisspentonthePTAactivitiesthatsupportthemissionandvisionRememberthemoneyisnotyours!ItbelongstothePTAandyoumustactingoodstewardshipwhendecidinghowtousethefunds

BeforeTakingOffice

ü  Be sure that the books have been audited before accepting them. Confirm online by August 31 of each year that your PTA’s Financial Review has been conducted and the results shared with your Board to remain a PTA in “Good Standing”.

ü  Become familiar with duties outlined in the bylaws.

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

ü  Secure Bonding and Liability Insurance.

TreasurerToolboxØ LedgerØ AcopyoftheBudgetØ BankstatementsandcancelledchecksØ Receipts&VouchersØ CheckbookØ MeetingMinutesØ Otherimportantpapers:

AcopyofbylawsCopiesofForm990(IRS)EmployerIdentificationNumberStateTaxinformation10yearsofAudits7yearsofunitfinancialactivity3yearsofbudgets

SummaryofRolesandResponsibilities

Understandtherolesandresponsibilitiesofeverymemberofyourteam–yourPTABoard

WhatFinancialResponsibilitiesdoBoardMembersHave?

•  BothArticles7and11oftheUniformBylawscoverresponsibilitiesofBoard

•  UniformBylawsareavailableathttps://ncpta.org/index.php/leaders/leadership-tools-for-officers/

ClearlyallBoardMembershavefiduciaryresponsibilitiesandarechargedwithunderstandingthefinancesofthePTAunit.SeeStandingRulesforinformationaboutanyadditionalrequirementsinyourPTAunit.

UniformBylawswillguideyouonRolesandResponsibilities

•  TheUniformBylawsarethegoverningdocumentforyourPTA.

•  AllPTAunitsinthestateusethesamebylaws•  YoushouldhaveacopyreadilyavailablefromyourcurrentPTApresident.

Article7–BoardofDirectorsSection7.1 DutiesTheaffairsofthislocalPTAshallbemanagedbytheboardofdirectorsintheintervalsbetweengeneralmembershipmeetings.TheboardshallberesponsibletoassurethatallactivitiesandexpendituresofthislocalPTAshallbeconsistentwiththebudgetapprovedbythegeneralmembership.ThedutiesaredescribedinfurtherdetailinthisSection7.1ofthebylaws.Pleasereferthere.

Article11–FinanceandBudget•  Sections11.1through11.3discussthree

typesoffinancialreviews:•  Monthly•  Whenafinancialofficerleaves•  Annually

•  Section11.4-AnnualBudget•  Section11.5–Checks•  Section11.6–Expendituresandfund

availability•  Section11.7-Depositories•  Section11.8–Contractsandother

financialagreements

Section6.10-TreasurerTheTreasurershall:•  Collect,depositandmaintainallfundsofthislocalPTAinapproveddepositories

(including,butnotlimitedto,allmoniescollectedaslocaldues,raisedinPTAactivities,receivedascontributions,orotherwiseacquired);

•  DisbursefundsinaccordancewiththeannualbudgetadoptedbythislocalPTA,andmaintainrecordsidentifyingthepurposeandpayeeofalldisbursements;

•  Maintainacurrentrecordofincome,expenditures,assetsandliabilitiesofthislocalPTA,andmakeallfinancialrecordsavailableforinspectionandreviewbytheauditcommittee;

•  Presentafinancialreportofincomeandexpensesateachmeetingofthegeneralmembershipandtheboardofdirectors,whichreportshallcomparecurrentincomeandexpenditurestotheapprovedbudget;

•  RemitduestoNCPTAinaccordancewithArticle5ofthesebylawsandthecurrentNCPTAgoodstandingrequirements;

•  Prepareayear-endfinancialreportbyJune30showingthetotalincomeandexpendituresforthefiscalyear,comparingthosefigureswiththebudgetapprovedatthebeginningofthefiscalyear,andtheassetsandliabilitiesofthelocalPTA,andsubmitthatreporttotheincomingpresident,treasurerandauditcommittee;

•  Fileallrequiredtaxformsandreportsinatimelymanner,includingbutnotlimitedtotaxreturnsforthepreviousfiscalyear,andsubmitcopiesofallsuchfilingstothesecretaryofthislocalPTA;

•  Attheendofhis/herterm,transferallfinancialrecordstotheauditcommitteebyJuly1;andprovideassistancetotheauditcommitteeuponrequest.

MoneyandChecks

Bylaws-Section11.5Checks.AllbillsofthislocalPTAshallbepaidbycheck.Checksmustbesignedbytwoofnomorethanfourofficersauthorizedbytheboardofdirectorstosignchecks,exceptthatnoneoftheseofficerssoauthorizedshallberelated,andatleastoneoftheseauthorizedofficersshallbetheTreasurer.Thesigningofblankchecksisprohibited.

NoschoolemployeeshouldhavesignatureauthorityonPTAchecksunlesstheyareadulyelectedPTAofficer.

ThePTAcan’t‘give‘moneytotheschooloranypersonororganizationwithoutaspecificuseforthemoney.TheIRSandyourmembersholdthePTAaccountablefortheuseofthatmoney.

ReceiptsØ  Receiptalltransactions.

o  Membershipmoneyo  Fundraiserso  Donationso  Pettycash

Ø  Twopeopleshouldalwayscountthemoney.Ø  NeverdepositPTAfundsinapersonalaccountoraschoolaccount.

o  SchoolfundsarepublicmoniesandPTAfundsareprivatemonies.

Ø  Never“pass”schoolmoneythroughaPTAaccount.o  ThisaddstoyourgrossreceiptsandcouldhavefilingconsequenceswiththeIRS.

990IRSTaxFilings

Status FormtoFile

•  Grossreceiptsnormally≤$50,000 990-N•  Grossreceipts<$200,000,&Totalassets<$500,000 990-EZ

•  Grossreceipts≥$200,000,orTotalassets≥$500,000 990(longform)

990smustbefiledwiththeIRSbyNovember15thofeachyear.

ConfirmfilingdateinNCPTAdatabaseaftersubmittingthe990totheIRS

YOURBUDGET:ToolforOrganizing&Evaluating

Thebudgetisalegallybindingagreemententeredintobyyourmembershiptoguideyourwork.

Budget:GameplanforSuccess

•  Developabudget–  Involvebothlastyear’sandthisyear’scommitteechairsindeterminingfundingrequirements

– Startwithplanningtheprogramsfirst,thenplantheincometomeetthoseprograms.

– EnsurebudgetincludesonlyPTAincomeandonlyPTAexpenditures,notschoolincomeorschoolexpenditures.

Budget:GameplanforSuccess

•  Developabudget(continued):Importantfundraisingconsiderationsinbudgetdevelopment:– ConsidertheThreetoOneGuideline– BudgetisonehelpfultooltoensuretohelptheBoardavoidFundraisingFatigue

Budget:GameplanforSuccessConsidertheThreetoOneGuideline

•  Rememberthatfundraisingisjustameanstoanend–thatendbeingtheabilityofyourunittoperformitsprograms,projects,andadvocacyworkfortheyear.

•  Thisexercisewillhelpyoudocumentthatyouaremission-focusedratherthanfundraising-focused.

•  Asageneralguideline,considerthetotalnumberofprogramsandprojectsyouwillhave(includingFREEones)anddivideby3.Thisshouldtellyouthemaximumnumberoffundraisingventuresyoushouldbeconsideringfortheyear.

•  Recommendation:DocumentadiscussionofthisinyourBoardminutes,includingyourlistoftotalprogramsandprojects,alongwithyourlistoffundraisers.

•  YourBoardmustusejudgmentastowhatisconsideredaprogramorafundraiserinthisanalysis.

Budget:GameplanforSuccess

•  Adoptthebudget– ApprovalbyentiregeneralmembershipinageneralPTAmeeting.

– BoardofDirectorscanmakearecommendation,but–mustbefullgeneralPTAmembership.

Budget:GameplanforSuccess

•  Amendthebudget– Amendbyvoteoftheentiregeneralmembershipasprovidedinthebylawsofyourunit

– ChangesmayberecommendedbytheBoard,but–mustbefullgeneralPTAmembershipapproved

Checkoutthearchivedwebinaronthistopicatwww.ncpta.org/index.php/events/webinars/past-webinars/

InsuranceforyourPTAUnit•  GeneralLiability•  Bond•  Property•  Officer’sLiability

ManyunitsuseAIMInsurance(discountsforPTAunits).AIMrequiresthefollowing:

Eachmonth,aPTAmemberwhoisNOTauthorizedtosignchecksmustreviewthebankstatement,otherwise,bondinsurancemaybeforfeited.Reviewcoveredeventsforliabilitypurposes

BestPracticesinCashManagement

– CashCollections– CashDisbursements

Checkoutthearchivedwebinaronthistopicatwww.ncpta.org/index.php/events/webinars/past-webinars/

BestPracticesinCashManagement•  HandlingMoneyCollections:Howtogetyourmoneysafelytothebank

– PTAfundsmayNEVERbedepositedintoanyone’spersonalaccount

– SchoolfundsmayNEVERbedepositedPTAaccountandvice-versa

BestPracticesinCashManagement•  HandlingMoneyCollections:Howtogetyourmoneysafelytothebank(continued)– Moneyshouldalwaysbecountedbyatleasttwounrelatedpeople

– AlldepositssubmittedtotheTreasurershouldbeaccompaniedbyaFundsReceivedForm

– AcopyoftheFundsReceivedFormshouldbekeptbythecommitteechairandtheTreasurer

BestPracticesinCashManagement

•  HandlingMoneyCollections:Howtogetyourmoneysafelytothebank(continued)– HandlingBouncedChecks

•  Atthetimechecksarecollected,post/listfeesforreturnedchecks

•  Considerredepositdirectlytoissuingbankonpayday•  Phonecalltocheckwriter•  Lettertocheckwriter•  CollectionAgency•  Considera“NoChecks”list•  Inform/InvolvePrincipalonlyifrequestedtodosobyhim/her

BestPracticesinCashManagement

HandlingMoneyDisbursements:Howtoensuresafetyoffunds•  Allrequestsforfundsshouldbeinwriting,usingacheckrequest

form.Checkrequestformsmusthaveback-updocumentationprovingvalidityofexpenditure

•  Treasurersshouldnotdisbursefundswhichhavenotbeenbudgetedandcanbeheldpersonallyliableiftheydo.

•  YourStandingRulesmayoutlinegeneralruleabout“goingover”thebudget.

•  Alwayshavetwosignaturesonanycheck–bytwounrelatedparties

•  Neversignablankcheck•  PLEASEdestroy/closeaccountsforanyPTAcreditcardsordebit

cards.

PTADues•  LocalunitsmustpaymembershipduestoNCPTA($1.75)

andNationalPTA($2.25)foratotalof$4.00permember.•  StateandNationalduesarepayableviachecktoNCPTA.

NCPTAwillremitNational’sportionoftheduestoNational.•  StateandNationalduesaretobepaidbythe15thofeach

month.Noseparateinvoicewillbesent,butacopyoftheDuesRemittanceFormcanbefoundontheNCPTAwebsite.

•  SinglemembershipsversusFamilymemberships–rememberthatyoumustremit$4.00perpersontoStateandNationalPTA.IfaFamilymembershipcoverstwoadults,thenyoumustremit$8.00perfamilymembershiptoStateandNationalPTA.

FinancialReviewProcedures•  Mustbecompletedatendoffiscalyearoranytimethereis

achangeinchecksigners•  Options:Professional(paidCPAordonatedservices)or

Committeeofatleastthreemembers(cannotincludeanyauthorizedchecksignerortheschoolprincipal)

•  BylawsrequiretheFinancialReview/AuditCommitteetobeastandingcommitteethroughouttheschoolyear

•  Whathappensafterthereviewiscompleted?–  TheAuditCommitteereportsitsfindingstotheBoardofDirectors.

–  Acopyofthereportisincludedintheminutes.–  ConfirmationofthecompletedreviewissubmittedtoNCPTA

MonthlyFinancialReview•  Bankstatementshouldbeopenedbysomeoneonthe

FinancialReviewCommitteeandreviewed/initialedpriortobeingpassedtothetreasurerforthereconciliationwork

•  Monthlybankreconciliationshouldbedoneonatimelybasis.FinancialReviewCommitteeshouldreviewthisperiodically.

•  MonthlyreportsshouldbepreparedshowingtheapprovedbudgetfortheyearandtheactualresultsYear-to-Datesothatcommitteechairswillhaveanideaastowheretheystandagainsttheirbudgets.

•  EveniftheTreasurerisunabletoattendaBoardMeetingoraGeneralMembershipMeeting,afinancialreportneedstobemade.

MissingMoney

•  Musttakeactionorcanbeconsideredco-conspirators

•  GetHelp!Thesoonerthebetter!

•  ReviewtheinformationprovidedintheNationalPTABacktoSchoolKitathttp://www.ptakit.org

TheRoleofFundraisinginYourUnit

•  Keepinmindthatasa501(c)3organization,youmusthaveanon-profitpurpose.

•  Wefundraisetohaveenoughfundingtosupporttheprogramsandservicesthatweprovide.Notviceversa.Wedon’tprovideservicesbecauseweraisedthefundstoprovidethem.(Don’tgetthecartbeforethehorse.)

•  ThePTAdoesn’texisttoraisefunds,andifthatbecomesthecentralfocus,yourPTAunitneedsanintervention.

•  FundraisingFatiguecansetinreallyquickly.•  Limitthenumberof“Asks”-Whereelsecouldyousecurefundsbesidesparents?

ConsiderationofOtherSourcesofRevenueforyourPTAUnit

•  Grants•  Sponsorships•  OtherSourcesofFunding

Resources

www.ncpta.org

www.ptakit.org

office@ncpta.org

PastWebinarsareAvailableOnlineforyourreview24hoursaday/7daysaweek!

www.ncpta.org/index.php/events/webinars/past-webinars/

Questions?