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? Have a discussion of the duties listed in the course book.

501 (c) (3) Organization PTAs are private and autonomous, and not connected to schools PTA Mission Statement in relation to tax-exempt status Protecting tax-exempt status

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

“Federal Employer Identification Number” or “Federal Tax ID” required under the rules for 501 (c) (3) tax-exempt organization Obtained from IRS when the PTA is organized Notify Illinois PTA office of your FEIN immediately upon receipt Not to be confused with the State Sales Tax Exemption Number EIN FEIN TAX ID Number

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

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

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 continued 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 and 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

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.

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

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 should be reviewed by non-signatory BANK ACCOUNTS Have additional discussion of bank statements as needed.

INTEREST BEARING ACCOUNTS Making your money work for you is fiscally responsible! Long-range project reserves? Report all interest to the IRS Discuss PTAs who have reserves

ELECTRONIC BANKING 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 (including ATMs) General Electronic Banking Controls Secure passwords

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

TREASURER’S FINANCIAL REPORT Presented 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 the 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 Have discussion of details of each report and when to file them.

See 990EZ and 990 forms for instructions on which Schedules 990N: gross receipts are less than or equal to $50K 990EZ: gross receipts are greater than $50K but less than $200K 990: gross receipts are equal to or greater than $200K See 990EZ and 990 forms for instructions on which Schedules may need to be included. All forms are due to the IRS no later that the 15th day of the 5th month after your tax year ends.

INCORPORATION 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 Officers and Directors can be the same people. A single person can be both an officer and director and can be listed as such on the form. So one person is listed twice.

INSURANCE 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.

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

APPENDIX www.illinoispta.org 800 877-9617 Springfield, IL 62705-0907 Sample Expense Voucher Sample Deposit Voucher Sample Cash Box Request Form Sample Audit Sample Budget Sample Monthly Treasurer’s Report Sample Annual Financial Report Illinois Sales Tax and PTA Sales Tax Liability for Certain Fundraisers Sample Completed 990-EZ with Schedules Information Needed to Complete Form 990N PTA Budget Exercise www.illinoispta.org 800 877-9617 Springfield, IL 62705-0907 Illinois PTAP.O. 907

RESOURCES Illinoispta.org PTA.org www.cyberdriveillinois.com www.stayexempt.irs.gov irs.gov