MONEY MATTERS 101

DUTIES OF THE TREASURER The treasurer is the elected custodian of the PTA’s fund, financial records and official membership list. What are some of the specific duties of the treasurer? DUTIES OF THE TREASURER Have a discussion of the duties listed in the course book.

501 (c) (3) Organization PTAs are separate entities from schools PTA Mission Statement in relation to tax-exempt status Protecting tax-exempt status 501 (c) (3) Organization

PROTECTING PTA’s TAX – EXEMPT STATUS Strict compliance with all applicable federal, state and local laws is extremely important to prevent even the most well-intentioned effort from becoming a serious problem for a PTA. See IRS Publication 557, Tax-Exempt Status for Your Organization Available online at: www.irs.gov/pub/irs-pdf/p557.pdf Also see IRS Stay Exempt www.stayexempt.irs.gov PROTECTING PTA’s TAX – EXEMPT STATUS

“Federal Employer Identification Number” or “Federal Tax ID” required under the rules for 501 (c) (3) tax-exempt organization (Do not confuse this number with the sales-tax exempt number provided to you annually in the local unit packet ) Obtained from IRS when the PTA is organized Notify Illinois PTA office of your FEIN immediately upon receipt EIN FEIN TAX ID Number

AUDIT First step in building a budget; Purpose: to certify accuracy of PTA’s financial records; Audit committee make-up and procedure in bylaws/standing rules; Procedure: time frame, reporting to members, adoption of report AUDIT

AUDIT REPORT Name of PTA Fiscal year covered Opening balance Gross receipts (+) Expenditures (-) Ending balance Reconciliation to final bank statement Certification of audit committee See sample Audit Report in the course book Appendix AUDIT REPORT

Documents needed for Audit Committee Check book and check register Bank statements, cancelled checks, deposit slips, official correspondence with bank (cancelled checks should be kept with appropriate bank statements until the audit is conducted, at which time they may be attached to corresponding expense vouchers) Documents needed for Audit Committee

Ledger and receipt book Expense vouchers and invoices/receipts for all disbursements Treasurer's record of membership Financial reports and any other documents relating to PTA finances Copies of secretary's minutes

BUDGET The budget should reflect the goals and purposes of the PTA; Anticipated income and expenditures should be equal; Categorical expenses are broken down; Adoption and amendment is by membership only. See sample Budget in your course book appendix BUDGET

PTA funds should be budgeted for purposes that advance PTA work. Funds should be raised within the context of the mission ons purposes of the PTA Follow the policies of the National PTA and the government regulations for 501 (c) (3) tax-exempt organizations. FUNDRAISING

PTA’s purpose is not to be the fundraising vehicle for the school or school district. Any funds generated by a PTA, including the local portion of dues, should be predetermined and budgeted for the purposes that advance PTA work. Participation in local, council, district or region PTA activities and training; and State and National PTA Conventions is an appropriate and important use of PTA funds for their benefit in leadership development.

DUES Currently $4.25 per member: $2.00 to Illinois PTA $2.25 to National PTA Treasurer and Membership Chairman work together to make sure number of members and dues collected agree Membership Chairman should keep a current list of all members First dues payment is due to Illinois PTA State Office postmarked no later than October 1 of each year DUES

Recent information from the IRS requires that all dues deposited into your PTA account are considered gross receipts for the purpose of Federal 990 reporting. State and National portion of dues should be separated for purposes of reporting income to your membership.

Ledger – records income and expenses to the appropriate line item in the adopted budget Check Register – a general listing of receipts and expenditures in date order MANAGING MONEY

Managing Money continued Expense Voucher – to accompany disbursement Deposit Voucher – to accompany any money collected Counting Money – at least two people should verify cash received Managing Money continued

PTAs should keep funds in their own bank account; never deposit funds into school or school district accounts or personal accounts Two people should sign checks Never sign blank checks Never keep cash from PTA events at home for extended periods of time; deposit cash immediately after event Bank statements BANK ACCOUNTS Have additional discussion of bank statements as needed.

INTEREST BEARING ACCOUNTS Making your money work for you is fiscally responsible! Reserves for a long-range project? All interest should be reported to IRS INTEREST BEARING ACCOUNTS Discuss PTAs who have reserves

ELECTRONIC BANKING ATMs What is Electronic Banking and EFT?(Electronic Funds Transfer)? Refers to the movement of funds from one bank account to another Has become significant factor in today’s world Must enter into agreement with a financial institution to use EFT Examples of EFT in Operation including ATMs General Electronic Banking Controls Secure passwords ELECTRONIC BANKING ATMs

CREDIT CARDS Accepting credit card payments PTAs are discouraged from using credit cards for purchases

FOR More Information… Check out additional resources on these issues listed in your course book Make note of the resources listed

TREASURER’S FINANCIAL REPORT Given at each meeting of PTA – executive board and general membership Include opening balance, receipts and disbursements for a specific period of time, and a closing balance. See sample Treasurer’s Reports in your course book Appendix TREASURER’S FINANCIAL REPORT

GOVERNMENTAL REPORTING Federal 990 as required by your PTA’s gross receipts Form 1099 – Misc. – Statement for Recipients of Miscellaneous Income If required Annual Report to Secretary of State required for all non-profit corporations AG 990-IL – required for non-profit organizations with net income in excess of $50,000 GOVERNMENTAL REPORTING Have discussion of details of each report.

Provides additional liability protection for individual PTA members. Complete Form NFP-102 at www.cyberdriveillinois.com Registered agent Record Certificate of Incorporation Annual Report Amend bylaws as directed INCORPORATION

Liability – general coverage to protect you from incidents at PTA events Bonding –coverage for protecting your PTA from theft or dishonesty. PTA offers blanket bonding coverage. Check the specifics of your PTA’s coverage on your insurance policy. See AIM insurance information in the Illinois PTA local unit packet. INSURANCE

USEFUL TOOLS Legal document file Volunteer hours record Reminders Records Retention Schedule USEFUL TOOLS

Check out the course book Appendix Questions? Illinois PTA P.O. Box 907 Springfield, IL 62705-0907 800 877-9617 www.illinoispta.org