1. They Elected YOU Treasurer! By Tracy Gruber ( adapted from Marlena Radabaugh ) Rochester Community PTA Council Treasurer September 2015 1

2. What is the structure of PTA? National PTA: www.pta.orgwww.pta.org Michigan PTA: www.michiganpta.orgwww.michiganpta.org Rochester Community PTA Council: http://www.rochester.k12.mi.us/pages/366/pta http://www.rochester.k12.mi.us/pages/366/pta Your school’s PTA 2

3. Who is the Treasurer? The authorized custodian, elected by the PTA members, who has charge of the funds of the organization. All PTA monies and assets are the property of the PTA. These must be surrendered at the end of your term – regardless of whether or not you like the individual who replaces you! 3

4. What is a 501(c)3? Your PTA is a 501(c)3 Non-Profit Corporation Exempt from income tax Exempt from property tax Exempt from paying sales tax on items purchased for your own consumption (you do pay Michigan State sales tax on items you sell) 4

5. What are my responsibilities? Training Paperwork and Dues Budget Banking Money Handling Records Meeting Reports License to Solicit Donations Michigan Sales Tax Audit IRS Taxes Treasurer Transition 5

6. Training National PTA’s “Money Matters” http://www.ptakit.org/Finance/index.aspx Michigan PTA’s “Local Unit Officers’ Handbook” http://www.michiganpta.org/images/pdfs/mipta_2 013_officershandbook.pdf http://www.michiganpta.org/images/pdfs/mipta_2 013_officershandbook.pdf Local Unit’s Bylaws and Standing Rules Michigan PTA’s Summer Leadership Academy Michigan PTA’s annual convention 6

7. Paperwork and Dues To Michigan PTA: $25 unit dues and officer names by June 1 Audit, annual budget, IRS 990 by December 1 Membership dues by 28 th of each month To Rochester Community PTA Council: $250 unit dues by November 1 Audit, annual budget, updated bylaws by November 1 Insurance (through AIM) annually 7

8. Paperwork – Insurance AIM (Association Insurance Management, Inc.) provides PTA-specific insurance: General liability Verify activities that are excluded Accident medical Bond insurance Property insurance Officers liability MUST review monthly bank statement as specified in their requirements to maintain Bond coverage www.aim-companies.com 8

9. Budget Is an outline of estimated income and expenses for the year Provides authorization for the Treasurer to pay expenses Is a living, breathing document that can be amended by majority vote when needed Covers the “fiscal year”, typically July 1 through June 30 9

10. Budget – Planning Budget is proposed by the Budget Committee Unit bylaws may specify committee members Approved by membership vote Should reflect: All income and expenses Your unit’s goals Use prior year’s as a guide 10

11. Budget – Adopting Present proposed budget at April meeting Vote to adopt budget at May meeting Gives the Treasurer authorization to make expenditures after July 1 11

12. Budget – Tips Items to include: Training Publishing Awards Supplies Founder’s Day Convention Dues Items to avoid: Petty Cash Miscellaneous Try to include these in other categories 12

13. Banking Have at least three signers on checking account Account requires two signers on every check Pay all bills by check (signed by two people), never by cash Use an endorsement stamp with your PTA’s information when receiving checks Use duplicate deposit slips when making deposits Reconcile monthly bank statement 13

14. Banking – Monthly Statement Bank statement should be reviewed by a non-signer Reconcile bank statement Signed bank statement with reconciliation becomes part of permanent records for 10 years (NOT 1 year) 14

15. Money Handling Always maintain a paper trail Three fill-in forms for money handling with your PTA members: Deposits Expenses Treasurer’s receipt 15

16. Money Handling – Deposits PTA member should give money to treasurer ASAP Member must fill out deposit form Money should be counted by member and Treasurer, sign deposit form to verify amount Treasurer must give member a receipt Treasurer should make deposit at bank promptly Ask bank about 24-hour deposit box, if needed 16

17. Money Handling – Cash Boxes Some events need a cash box stocked with start-up change Most PTA’s own a cash box to lend out PTA member should submit an expense request prior to the event Treasurer records the start-up cash as an expense of the event Cashing the check: Write check in Treasurer’s name, then cash check and ask for denominations requested (ask two other bank signers to endorse check) -or- Write check in member’s name so she can cash NEVER write check payable to “Cash” When the cash box is turned in, it should contain the start-up cash along with any profits (and a deposit form) Treasurer writes a receipt to the member for the entire deposit amount (profits + start-up cash) 17

18. Money Handling – Expenses PTA member should fill out expense request form Give form and receipt to Treasurer with enough lead-time for the check to be co-signed Establish a timeline policy and stick with it! Include receipt with EVERY request Some stores offer duplicate receipts Some stores offer to scan items at service counter to produce a receipt and then immediately return them If a receipt is fundamentally not available for that type of purchase, then member should write an explanation/receipt, sign with third party, and date it If a receipt was available for the retail purchase and member does not turn in, the expense request must be denied – no exceptions 18

19. Money Handling – Expenses All PTA expenses are paid by check, NEVER cash Expenses are never paid out of the event’s cash on hand (no paper trail!) Expenses are pre-authorized by the budget up to the category’s amount Treasurer cannot reimburse any expenses above budget amount without first amending the budget 19

20. What are the money handling “nevers”? Never sign a blank check Never issue a check made payable to “cash” Never mingle PTA funds with school or personal funds Never empower two related individuals to sign checks Never make exceptions to your PTA’s policies for anyone 20

21. Meeting Reports The Treasurer provides a monthly report at the executive board and membership meetings Budget vs. actual Account balances Does not need a motion to approve, it is a statement of facts Treasurer should remind members the checkbook, bank statement, and records are open and available upon request 21

22. Records All transactions should be recorded Excel, Quicken, etc. (aka “the books”) An Annual Report should be prepared at the end of the fiscal year, summarizing the year’s income and expenses 22

23. Records – Working Binder “Money Matters” and “Local Unit Officer’s Handbook” Copy of unit’s bylaws Copy of Standing Rules Copy of current budget Receipt book Checkbook Treasurer-related correspondence Copy of blank forms Officer/committee contact list Current year’s Treasurer reports from each meeting State of Michigan sales tax information Current membership roster Financial Management Checklist from “Money Matters” 23

24. Records – Current Year’s Easily Accessible Current year’s bank statements Current year’s cash distribution requests with receipts Current year’s cash deposit records Accumulation of documents for current year’s IRS taxes 24

25. Records – Long Term Storage Budget as adopted/amended Receipt books Checkbooks Deposit slips Accounting book/computer file backups Financial Management Checklist from Money Matters Copies of ALL monthly Treasurer’s reports Audit reports Bank statements Cash distribution Insurance binder and any records/claims Legal correspondence Michigan sales tax filings Organization documents IRS filings 25

26. Records – Retention Treasurer should maintain a “permanent records” or long term file Can be at treasurer’s house or at school Use PTA funds to purchase fire safe, file cabinet, etc., as appropriate Records Retention Schedule Is a list of the items and how long each should be retained Found in National PTA’s “Money Matters” Label items you add to permanent records with the retention date 26

27. Michigan Sales Tax – Exemptions Your non-profit PTA is exempt from paying Michigan sales tax on purchases of items that will be used/consumed by your PTA Michigan form 3372 should be used or follow store’s policy www.michigan.gov/taxes 27

28. Michigan Sales Tax – Remissions We must remit sales tax to the state on any tangible item we sell to our families, even if we do not intend to make a profit on it This holds true even if we paid sales tax to purchase said items. In that case, we pay sales tax on the profit we earned by using line 5i of the sales tax return to deduct the amount. To avoid any confusion, we can attempt to process our transaction with the vendor using a Michigan sales tax exemption certificate (purchasing with intent to resell). We do not remit sales tax on event tickets, even if food is included in the purchase price. If there is an event w/food ticket price vs event w/o food ticket price, then we must remit sales tax on the price difference because it is specifically covering food. 28

29. Michigan Sales Tax – Remissions www.michigan.gov/taxes for more information and to obtain a Sales Tax License www.michigan.gov/taxes 29 Examples subject to sales taxExamples not subject to tax Any tangible items Yearbooks Ready-to-eat food Spirit wear Silent auction items Pre-packaged food Event tickets Raffle tickets Donations PTA membership Market Day Participation fees

30. IRS Taxes IRS 990-N (e-postcard): gross receipts normally under $50,000 IRS 990-EZ: gross receipts under $200,000 and assets under $500,000 IRS 990: over the 990-EZ limits Due by 15 th day of 5 th month following fiscal year If your fiscal year is July 1 to June 30, the due date is November 15 http://www.irs.gov/Charities-&-Non-Profits/Form-990- Resources-and-Tools-for-Exempt-Organizations http://www.irs.gov/Charities-&-Non-Profits/Form-990- Resources-and-Tools-for-Exempt-Organizations 30

31. Audit Certifies the accuracy of the books and records of the financial officer Assures the membership that the PTA’s resources are being managed in a business-like manner Performed by outside auditing firm or 3-person person audit committee (bank non-signers), as approved at a membership meeting Performed annually after fiscal year closes on June 30 or before a new Treasurer assumes the books 31

32. Audit – Records Needed Budget and amendments Meeting minutes Last year’s audit report Bylaws Bank statements, reconciliations, and deposit records Expense requests Deposit forms 32

33. Treasurer Transition – Outgoing All membership dues for the school year have been submitted to MI PTA Complete: Prepare year-end financial report Prepare financial records for audit Audit IRS 990-N/990-EZ or have plan for doing so by November 15 – this is YOUR responsibility, not the incoming Treasurer’s Transfer all records, computer files, electronic passwords, and equipment to incoming Treasurer Work with incoming Treasurer to update bank’s signature card 33

34. Treasurer Transition – Incoming Verify that: Audit is complete Year-end financial report is complete IRS taxes – should be filed or have a plan for doing so Review: Audit and year-end financial report Treasurer’s information, files and records/permanent records Unit procedures, bylaws, standing rules “Money Matters” and “Local Unit Officers’ Handbook” Insurance coverage File new signature card at the bank Register for Michigan PTA’s Summer Leadership Academy (August) and Rochester Community PTA Council’s Leadership Day (first Thursday of school year) 34

35. FAQ 35

36. How do I maintain 501(c)3 status? IRS requires: Employer Identification Number (EIN) on file Group Exemption Letter on file Do not charter sub-organizations (such as scout troops) Do not pay for employees (of the PTA or school district) Follow the political lobbying rules – must be an “insubstantial” amount Do not engage in any political activity – cannot support candidates for public office Do not generate excessive unrelated business income File 990-N/990-EZ tax return by November 15 http://www.irs.gov/Charities-&-Non-Profits/Charitable- Organizations http://www.irs.gov/Charities-&-Non-Profits/Charitable- Organizations 36

37. How do I maintain good standing status? Bylaws are renewed a minimum of every 3 years 25 member minimum By 28 th of each month to Michigan PTA: Membership dues By June 1 to Michigan PTA: $25 unit dues Officer information By November 1 to Rochester Council PTA: Copy of audit Copy of initial approved budget Copy of bylaws if updated within last year $250 unit dues By December 1 to Michigan PTA: Copy of audit Copy of initial approved budget Copy of IRS taxes (990-N or 990-EZ) 37

38. Can my non-profit PTA make a profit? Non-profits can, and should, make a profit Build enough reserves to carry through tough years No pre-determined limit on reserves Enough to maintain cash flow before first fundraiser of year Enough reserves to replace a major fundraiser Save for a large purchase in the future Can purchase CD’s or establish a money market account Your membership makes these decisions by adopting/amending the budget 38

39. How do I know when everything is due? Refer to “Local Unit Officers’ Handbook” Keep a log and turn it into a calendar for future treasurers to use Communicate frequently with President Ask fellow treasurers for assistance 39

40. Can my PTA accept credit cards? YES for special events – through the RCS Foundation office Office: 248-726-3190 Sue Herring: sherring@rochester.k12.mi.ussherring@rochester.k12.mi.us Register your event date on their calendar Pick up equipment Process credit cards at event Return equipment and credit card slips to RCS Foundation office Can also investigate PayPal through National PTA 40

41. How does my PTA gift items to school? Money must be approved through the budget Gift MONEY, not the item, for major purchases Limits future liability claims Does not require PTA to pay for future related expenses Write a memo of understanding that states the intended usage Consider using a School Gift Request process 41

42. How do I handle a returned check? Have a policy in place before it happens! Mail a letter to the family and stick to the facts Request reimbursement for the check amount, as well as your bank fees, by cash or certified check Consider asking principal about extenuating circumstances Consider having a budget category for supporting students to make PTA-related purchases (mini- grant) Can refer family to RAYA for assistance The matter is private and confidential! 42

43. Does my PTA need a gaming license? Yes, if you conduct a: Raffle (pay per ticket) 50/50 drawing Bingo www.michigan.gov/cg 43

44. Do I need to write donation receipts? Yes. Members and contributors may claim Federal tax deductions for: Amount of membership above $5.50 remitted to state Any cash or item donation Volunteer expenses Example: if fundraiser ticket price includes dinner and charitable contribution, the contributor can claim a deduction for the contribution portion only Refer to “Money Matters” for example letters 44

45. 45 Where can I find help? Tracy Gruber, Rochester Council PTA Treasurer 248-703-1714 tgrub901@gmail.com Michigan PTA734-975-9500 National PTA800-307-4782 www.michiganpta.org www.irs.gov www.michigan.gov/treasury