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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
PastWebinarsareAvailableOnlineforyourreview24hoursaday/7daysaweek!
www.ncpta.org/index.php/events/webinars/past-webinars/
Questions?