The Basics

THE PTA TREASURER

The treasurer, elected by the members, is the legally responsible and authorized custodian of the funds of the PTA unit. The treasurer does more than make deposits and write checks. It is the treasurer who ensures that the unit’s finances are properly handled. This is a critical job, since proper handling of the unit’s finances will keep the unit in good standing and maintain its credibility with the members, the school, and the public.

A treasurer must be diligent, knowledgeable, and conscientious in order to maintain accurate and up-to-date records. These records should be kept in accordance with standard, accepted accounting practices and must comply with PTA bylaws and IRS regulations.

As an elected officer of the PTA unit, the treasurer is a member of the Executive Committee and the Board of Directors. The treasurer’s active participation in all Executive Committee and board meetings is imperative so that he or she has input into the business of the board and in the decision making.

Members of the Board of Directors of any non-profit organization have important responsibilities. Some of these responsibilities are imposed by law; others are the result of years of court decision which have imposed various “fiduciary duties” on directors.

What is Fiduciary Responsibility?

fiduciary (fi-du-ci-ar-y)

n. a person who holds something in trust for another; a trustee

A simple summary of PTA fiduciary responsibility might be "You are the safeguard of the children's money"

The ultimate authority for managing the affairs of the organization is vested in the Board of Directors. Because the law grants directors that authority, the law also imposes on the members of the Board of Directors an obligation to act in the best interests of the organization.

The law requires board members to act:

• In good faith

• With the care an ordinary prudent person in a like position would exercise under similar circumstances

• In a manner the board member reasonably believes to be in the best interests of the organization

What Fiduciary Responsibility Includes:

• Duty of Care—attending board meetings, keeping informed, and fulfilling responsibilities

• Duty of Obedience—following the organization’s bylaws and complying with state and federal law

• Duty of Loyalty—putting the interests of the organization first and promoting the organization’s purpose rather than any private intere

To effectively oversee the organization’s financial affairs, the duty of care requires that the board be informed about financial activities, including the adequacy of internal controls. Board members should expect the treasurer to present timely and adequate financial reports. (See Internal Control Systems, Samples of Treasurer’s Reports, and Appendix 2).

Another important concept under the duty of care is the distinction between delegation and abdication. At one time or another, most treasurers will need or want to delegate some of their responsibilities such as counting money, making bank deposits, presenting financial reports, and preparing IRS filings. Such delegation is legal, but delegation is not the same as abdication. Delegation does not relieve the treasurer of liability. The treasurer must make sure that any person to whom his or her responsibilities are delegated is fully trained in the appropriate procedures, and the treasurer must monitor those to whom he or she has delegated authority.

To fulfill the duty of obedience, all board members, including the treasurer, must know and understand the PTA’s bylaws and applicable state and federal law. The bylaws should be reviewed by the board at the beginning of each year, and the treasurer should keep a copy of the bylaws in the current year’s financial file. Participation in available training opportunities is crucial if board members are to understand and comply with state and federal law, including frequent changes in IRS regulation.

Under the duty of loyalty, each board member commits allegiance to the association. Actions and decisions of board members must promote the association’s purpose and well-being rather than benefit any individual. Conflicts of interest should be avoided wherever possible. When such conflicts exist, they must be fully disclosed. For more information, see Conflict of Interest Policy in Money Matters Overview.

Additional information about these responsibilities is outlined in the forms “PTA/PTSA Ethics/Conflict of Interest Policy” and “PTA/PTSA Basic Fiscal Management Procedures,” which can be found in Appendix 2.

Duties of the Treasurer

The specific duties of the treasurer are outlined in the bylaws (Article VII: Duties of Officers, Section 5, for local PTAs and Article IX: Duties of Officers, Section 5, for councils). The treasurer shall:

• Have custody of the checkbook and be responsible for all funds of the PTA unit.

• Develop, as chair of the Budget Committee, an annual budget to be approved by the local PTA membership (or council/region voting body).

• Keep a full and accurate account of receipts and expenditures of all monies of the PTA unit.

• Count all monies with three people present and deposit all monies in the bank with two people present the same day received.

• Make disbursements as authorized, in accordance with the approved budget.

• Co-sign all checks with the president, president-elect, or secretary. (No two officers who are related by blood or marriage or who reside in the same household may be signers on the checking account.)

• Make a monthly remittance of state and national portions of membership dues to Utah PTA.

• Present a treasurer’s report at every meeting of the Executive Committee, Board of Directors, and general membership.

• Make a financial report at the annual meeting and submit a full written "Year-End Financial Statement" to the incoming Executive Committee.

• Submit the books, after they have been closed for the year, for an AFR (Annual Financial Reconciliation) by an auditor or an AFR Committee.

FINANCIAL TIME LINE

All End-of-Year and Beginning-of-Year documents should be submitted via Givebacks under Compliance Submissions. Local units needing assistance with this procedure should work with the council or region treasurer for document submission.

The most current/digital version of all forms are available on the Utah PTA website: utahpta.org.

July 1

Fiscal year begins/change over PTA checking account signers , Givebacks ownership, and other financial platform ownership

By the 25th

• Membership dues (remit monthly) – National and state portions submit to Utah PTA via ACH through Givebacks or mailed with a check and remittance form

• Council membership dues (if applicable) – Council portions submit to council PTA via check and remittance form (Givebacks ACH not available)

August 1

• End-of-Year Documents (previous fiscal year) – Year-End Financial Statement - Local PTA submit via Givebacks or to council/region

• Annual Financial Reconcilation report (AFR) – Local PTA submit via Givebacks or to council/region

• E-filed/Accepted IRS Form 990 – Local PTA submit via Givebacks or to council/region

• Sales Tax Refund Request – Local PTA submit via utahpta.org/treasurer

August 15

• Council review of Local Unit End-of-Year Documents – Council approve or reject uploaded documents in Givebacks.

• Council review of Local PTA Sales Tax Refund Requests – Council submit to region via utahpta.org (accept/advance)

September 1

• Region review of Council/Local End-of-Year Documents – Region approve or reject uploaded documents in Givebacks.

• Region review of Local/Council PTA Sales Tax Refund Requests – Region submit to Utah PTA via utahpta.org (accept/advance)

September 25

Membership dues – early bird remittance deadline

October 1

• Beginning-of-Year Documents - Budget – Local PTA submit via Givebacks or to council/region

• Budget approval minutes – Local PTA submit via Givebacks or to council/region

• Signed Ethics Conflict of Interest Form – Local PTA submit via Givebacks or to council/region

• Signed Basic Fiscal Management Form – Local PTA submit via Givebacks or to council/region

• Proof of insurance – Local PTA submit via Givebacks or to council/region

October 15

• Council review of Local Unit Beginning-of-Year Documents – Council approve or reject uploaded documents in Givebacks.

• PTA board list (current year) – Local PTA submit via Givebacks or to council/region

November 1

• Region review of Council/Local Beginning-of-Year Documents – Region approve or reject uploaded documents in Givebacks.

• Local, council, and region report #1 due – Online via Utah PTA website

December 1

Membership dues - remittance deadline to participate in Utah PTA programs

February 1

• Arts Education Fund Grant deadline – Online via Utah PTA website

• Local, council, and region report #2 due – Online via Utah PTA website

May 1

PTA board list (next year's incoming) – Local PTA submit via Givebacks or to council/region–

June 1

Local, council, and region report #3 due – Online via Utah PTA website

June 30

• Fiscal year ends and financial books must be closed.

• Begin preparation of End-of-Year Documents: Year-End Financial Statement, Annual Financial Reconciliation report (AFR), E-filed/Approved IRS Form 990, and Sales Tax Refund Request.

BASICS OF PTA

Mission and Purposes

PTA is a child advocacy organization. The Mission and Purposes of Utah PTA and National PTA outlined in this handbook apply also to the local or council PTA unit, as specified in the bylaws in Article II. All PTA decisions, financial and non-financial, should be made with the Mission and Purposes in mind.

Structure of PTA

National PTA is comprised of 54 Congresses: 50 states, the US Virgin Islands, Puerto Rico, and military schools overseas.

National PTA identifies each unit (state, region, council, and local) by an eight-digit PTA Unit ID Number. (Example: 12345678)

Utah PTA is divided into twenty regions. Generally there is one school district per region, except in areas with small districts (see the regions map that shows what school districts are in which region at the back of this handbook). At the head of each region PTA is a region director who serves on the Utah PTA Board of Directors. One or more associate directors assist the region director, as the size of the region warrants.

Ten of Utah's regions are large enough to be divided into councils. Each council has a council president, treasurer, and other board members to train and assist the local PTAs. Councils work with the region boards to oversee the local PTAs in their area. In the ten regions where there are no councils, the region director and board fill the role.

The most important interaction with children and their parents happens at the local PTA level. The rest of the levels serve to support the work of the local PTA.

The council treasurer can and should be the first person whom a local treasurer contacts with questions about financial issues. If additional information or help is needed, the local treasurer can then be referred to the region director (or region treasurer, if applicable) and then, if necessary, to the Utah PTA Treasurer. Frequent communication between local treasurers and council treasurers will help facilitate appropriate accounting practices and avoid misunderstandings and problems. Training of local treasurers by council treasurers should occur throughout the year.

Utah PTA identifies each unit by the Employer Identification Number (EIN) assigned by the IRS (Example: 12-3456789). All PTAs in Utah in good standing fall under a group tax-exemption granted to Utah PTA. The EIN is used on bylaws, Sales Tax Refund Request forms, and IRS filings and correspondence.

WORKING WITH THE PRESIDENT

The treasurer, elected by the members, is the legally responsible, authorized custodian of the funds of the PTA unit. However, the president, who bears full responsibility for the total affairs of the PTA unit, must work closely with the treasurer at all times and have a complete understanding of all financial matters.

Frequent, effective communication between the treasurer and the president is vital. In addition, as the president fulfills his or her role in the PTA’s money matters, the president and treasurer create a system of checks and balances that help ensure that everything is being handled properly.

Here are a few of the financial responsibilities the president should fulfill:

• Fiduciary responsibility. All members of the Board of Directors have the same fiduciary responsibility (mentioned earlier in this handbook), part of which is to provide financial oversight. The president, as well as the other board members, should be studying the reports of the treasurer, requesting additional information, and asking questions of the treasurer on a regular basis. The treasurer should not take offense to such scrutiny. The treasurer, in fact, should encourage a thorough examination of his records so that allegations of mishandling cannot be made at a later date.

• Budgeting process. The president should serve as a member of the Budget Committee (see section on budgeting in this handbook). The president should also study and understand the budget-to-actual analysis so appropriate budget amendments can be proposed as needed.

• Internal controls. The president plays a vital role in maintaining an adequate internal control system (see Internal Control Systems in this handbook). Among other things, the president is the preferred second signer on all checks, approves all Check Request forms, and reviews the monthly bank statement before giving it to the treasurer. The president should also be available and willing to count money and make deposits at the bank as needed.

• Protection of tax-exempt status. The president should understand and help ensure compliance with the IRS’s requirements of 501(c)(3) organizations, including rules about corporate sponsorship (see Fundraising section).

• Embezzlement or mismanagement of funds. In the unfortunate event that embezzlement or mismanagement is suspected (or known), the president must follow established guidelines (see Mismanagement of Funds section), including holding a hearing with the person involved. The president also bears a great responsibility to ensure that no public or private statements are made about a suspected problem.

MEMBERSHIP

Working with the Membership Chair

Treasurers and membership chairs should work together to remit the state and national portions of membership dues through Givebacks or by check sent with a Dues Remittance Form to the Utah PTA office by the 25th of each month. (Utah PTA is required to make its remittance to National PTA on a monthly basis.) Membership dues remittance can be made quickly and easily through Givebacks or by check payable to Utah PTA.

A membership list with at least a name and email address or phone number can be uploaded to Givebacks. Givebacks will calculate the total national and state membership dues payable based on the number of members with dues outstanding. Payment will be made through ACH eCheck with a flat $2.00 fee. Once the eCheck is sent, you can see a breakdown of all payments made. A printout of the payment receipt should be attached to a Check Request form for your records. Council dues are still paid by check. 

The state and national portions of dues do not belong to the local PTA and are never considered to be part of the local PTA’s income. They should be recorded as a “payable” or as “receipts/disbursements of monies not belonging to us.”

The treasurer’s current file should contain an up-to-date membership roster, which includes each member's name and contact information (email address or phone number).

INFORMATION

Dues

Local dues vary according to local PTA bylaws. Council dues vary according to council bylaws. Utah PTA and national dues are established by vote of the delegates at Utah PTA Business and Resolutions Meeting at the Leadership Convention and National PTA Convention. Dues cover costs of printing, mailing, leadership training, developing programs, and maintaining Utah PTA and National PTA offices. Membership dues are not fundraisers. Dues sustain the function and Purposes of PTA.

Accurate Records

• The membership chair keeps an up-to-date roster of PTA members.

• The treasurer keeps record of total amount for membership received and dues paid.

When Dues are Due

Membership dues must be submitted to Utah PTA via Givebacks ACH or check w/ Dues Remittance form by the 25th of every month and...

• By September 25th to be eligible for the Back-to-School Award.

• By December 1st to qualify for Reflections, other Utah PTA programs, and to receive sales tax refunds.

• By February 1st of the current year to be a PTA in good standing on Utah PTA records and to be eligible for other membership awards programs.

Year-Round Schools

A year-round school may designate its enrollment month and “membership year” according to its calendar, as long as Utah PTA remittance dates are met. If the school has several tracks (for example, there are four tracks in the 45-15 plan), the annual membership drive should be extended to allow sufficient time for parents from all tracks to join.

MONEY MATTERS OVERVIEW

The PTA Fiscal Year

A fiscal year is a twelve-month accounting period. Many businesses conduct their financial operations based on a fiscal year rather than the calendar year. PTAs in Utah operate on a fiscal year of July 1 to June 30, as specified by Article XII of the local PTA bylaws and Article XIII of the council bylaws. Each PTA unit is required to operate within that accounting period. The fiscal year corresponds with the term of office.

Resources

• Utah PTA Treasurer Handbook—This newly revised handbook contains detailed information on many topics of interest to the treasurer. It also includes sample "Tools" forms; such as Money Counting forms, Check Request forms, and Treasurer's Reports.  It also includes required "Reports" forms; such as Year-End Financial Statement and AFR Report.

• The Financial section of the annual Utah PTA President Handbook—Each president receives a copy of this handbook.

• Treasurer page of the Utah PTA website (utahpta.org/Treasurer)—The most current information on financial matters can be found here. It is updated as often as possible. 

• National PTA’s Financial section of the Local Leader Kit—Register at ptakit.org for access to the Local PTA Leader Kit.

• IRS website (irs.gov)—for forms and instructions for IRS Form 990EZ and 990N, as well as publications on tax-exempt issues.

• Stay Exempt—Tax Basics for 501(c)(3)s online workshop and web-based mini-courses at StayExempt.IRS.gov.

A Unit in Good Standing

For a local PTA to be “in good standing,” it must be in compliance with National PTA and Utah PTA bylaws and guidelines, including the following:

• Adhering to the purposes and basic policies of PTA.

• Having an EIN (Employer Identification Number) from the IRS on file with Utah PTA.

• Submitting the names and contact information of current officers to council/region or on Givebacks.

• Having current bylaws renewed every three years.

• Remitting national and state portions of membership dues to Utah PTA by dates designated.

Note: The current procedure requires local PTAs to make monthly remittances, by the 25th of each month, with a final remittance by June 25.

• Submitting approved budget and minutes, proof of insurance, and signature pages for Basic Fiscal Management Procedures and Ethics/Conflict of Interest Agreements to council/region or on Givebacks. 

• Submitting Year-End Financial Statement, AFR (Annual Financial Reconciliation) report to council/region or on Givebacks, and Sales Tax Refund Request to council/region or on Utah PTA website.

• Filing IRS Form 990N or 990EZ online and submitting confirmation of acceptance via Givebacks or to council/region.

If a local PTA is not in good standing, neither the unit nor the students attending the PTA’s school are eligible to participate in PTA programs (such as Reflections or Battle of the Bands) or receive awards. Sales tax refunds will not be issued to PTA units not in good standing, and these units may be subject to loss of their tax-exempt status through Utah PTA’s group exemption.

Accountability and Transparency

“Accountability” and “transparency” are two buzz words that represent important concepts in accounting and financial operations. An attitude of open and full disclosure is important for all nonprofit organizations. The more transparent and accountable the PTA unit, the better. Providing relevant, reliable information about the PTA’s activities and its financial position—through newsletters, regular treasurer’s reports, and Year-End Financial Statements, for example—will fulfill the association’s responsibility to be accountable and transparent. Each PTA unit is accountable to its members, sponsors, community, and government regulatory agencies. Each local PTA is also accountable for the good reputation that PTA has earned over its long history.

Is Our Local PTA Tax Exempt?

Utah PTA has secured a 501(c)(3) exemption ruling from the IRS, recognizing it as a public charity. Each local PTA in Utah in good standing is covered under Utah PTA’s group exemption. (The IRS group exemption number (GEN) is 7212.)

One major advantage of exempt status under Section 501(c)(3) is that contributions to Utah PTA and its subordinate units may be treated as charitable contributions by donors in calculating their federal income taxes. If a potential donor needs verification of a local PTA’s exempt status, the local PTA should contact the Utah PTA office by email at kids@utahpta.org, who will provide a letter about the group ruling. Another significant advantage of exempt status is that most PTA fundraising activities are exempt from federal income taxes.

Utah PTA also has an exemption from sales tax from the Utah State Tax Commission. State law requires every PTA to pay sales tax on purchases under $1000 and then request a refund. Utah PTA has established a procedure for applying for a refund; instructions and forms are located in the Treasurer Handbook and at utahpta.org/Treasurer. The Utah PTA tax-exempt number is 12510060-002-STC. For purchases over $1000, vendors may request a tax exemption certificate; PTAs can obtain that certificate by calling the Utah PTA office or by emailing kids@utahpta.org.

What is an IRS Determination or 501(c)(3) Letter?

The IRS issues a “determination letter” to organizations that have qualified for tax-exempt status. Because Utah PTA, as a central organization, determines which PTAs are included as subordinates under its group exemption ruling, anyone seeking to verify that a PTA in Utah is tax-exempt should contact the Utah PTA Treasurer. Utah PTA can provide a letter about the group ruling and a copy of its determination letter from the IRS for potential donors, sponsors, or grantors. According to IRS Publication 4573, “donors may rely upon central organization verification with respect to deductibility of contributions to subordinates covered in a Section 501(c)(3) group exemption ruling.”

What is a Form W-9?

Someone who is giving money to your PTA may ask you to complete "Form W-9," entitled Request for Taxpayer Identification Number and Certification. The form is used simply to verify the PTA name, address, and EIN.

• On line 1: You will put Utah Congress of Parents & Teachers, Inc. 

• On line 2: You will put your PTA name

• On line 3: You will check “C Corporation”

• On line 4: You will put “5”

• On lines 5 and 6: You will put your school address

• In Part I: You will put your PTA’s EIN number (**-*******)

• The president or the treasurer can sign and date the form

What are the Requirements for Acknowledging Donors or Sponsors?

IRS Publication 1771, Charitable Contributions – Substantiation and Disclosure Requirements, explains the federal tax law for charities (like PTAs) that receive tax-deductible contributions. The publication can be downloaded from the IRS website (IRS.gov). Information about how the law applies to PTAs can be found in the Treasurer Handbook.

What Tax Filings Must a PTA Do?

All PTAs are required to file a tax return "Form 990" with the IRS. Most will file a "990N," electronic notice (e-postcard) for tax exempt organizations not required to file "Form 990" or "990EZ." Please refer to the Utah PTA website for current instructions.

Conflict of Interest Policy

Members of the Board of Directors (board members) of a PTA serve in a fiduciary capacity and owe a duty of care, a duty of obedience, and a duty of loyalty to the PTA. Board members shall conduct themselves with integrity and honesty and act in the best interests of the PTA. Disclosure by a board member of any potential or actual conflict of interest is required by the standard of good faith and for the benefit of the PTA and protection of each individual. All board members must abide by the following conflict of interest policy:

• Board members and/or their families shall not use their relation to the PTA for financial, professional, business, employment, personal, and/or political gain.

• A conflict of interest exists when a board member would have to participate in the deliberation or decision of any issue of the PTA while, at the same time, the board member and/or his or her extended family has financial, professional, business, employment, personal, and/or political interests outside the PTA that could predispose or bias the board member to a particular view, goal, or decision.

• Board members shall declare to the officers of the PTA conflicts of interest (stating the nature of the conflict and pertinent information as appropriate) between their duties of the PTA and/or their extended families’ financial, professional, business, employment, personal, and/or political interests.

• When a conflict of interest is declared, the board member shall not use his or her personal influence or position to affect the outcome of the vote and shall leave the room during deliberations and the vote.

• The minutes of the meeting shall reflect that a conflict of interest was declared.

• Board members shall not:

  • Use PTA’s name, influence, or resources for their benefit or gain when running for any public elected office or while serving as an elected official.

  • Directly or indirectly use their current PTA position, the PTA name, or the organization for or against any specific candidate for elected office, which is contrary to federal tax laws and the guidelines and policies of the PTA. (Past PTA experience may be listed in any brochures.)

The Utah PTA Ethics/Conflict of Interest Policy is located in the Utah PTA President Handbook, in the Treasurer Handbook, and on the treasurer page of the Utah PTA website. Each PTA board should review this policy at the beginning of the year, obtain the appropriate signatures on the form, make a copy of the form for all signers, and submit the signed original to Givebacks or council/region treasurer by October 1st.

PTA Funds vs. School Funds

All PTA monies belong to the association, and decisions about the disbursement of PTA funds must be approved by the general membership. Because the PTA is a private association, PTA monies should never be commingled with the funds of any individual, the school, or another organization. All monies deposited in a PTA account, with the exception of the Utah PTA and National PTA portions of membership dues, will be considered to be PTA income by the IRS. The PTA should not allow school or other funds to “flow through” its checking account. If the PTA sponsors a project or program in cooperation with the school, all funds should be accounted for and separated prior to the immediate deposit of the PTA portion into the PTA bank account.

Each PTA’s approved budget includes only income and expenses that the association has approved. No other funds may be deposited into or paid out of the PTA accounts by the treasurer unless the association has authorized the transaction by amending the budget. The treasurer may be held personally responsible for unauthorized deposits or expenditures. This means that the PTA treasurer must never deposit any non-PTA funds in the PTA accounts and never deposit any PTA funds in non-PTA accounts. This particularly applies to the school’s accounts. School funds are public monies and are spent in accordance with the school system’s budget. PTA funds are private monies, not controlled by the school system, and are spent in accordance with the association’s budget.

For an event to qualify as a PTA activity (that is, the funds generated belong to the PTA) ALL of the following criteria must be met:

• If there was a contract involved, the PTA president must have signed the contract in accordance with the provisions of the bylaws.

• The PTA must have been involved in the creation, planning, and implementation of the activity, and the PTA must have a properly structured committee for the activity and provide the majority of the staffing for the activity through volunteer PTA members.

• The activity must have been approved by the PTA membership as a part of the PTA’s approved budget.

If the event does not or cannot meet these criteria, then the activity is not a PTA activity; the money raised at the activity does not belong to the PTA; and it may not be deposited in the PTA’s bank account. The corollary also applies: If the event does meet these criteria, the money raised does belong to the PTA.

School District Foundation Guidelines

Foundations, in most instances, are the fundraising arm of school districts. They are organized to receive tax-deductible donations, conduct fundraising, keep an accounting of individual school contributions, and disburse funds to schools for projects.

If a PTA has identified a substantial need at its school that will take considerable funds to implement, coordination with the school district foundation is recommended before embarking on a major fundraising campaign. The PTA can work with the foundation to have parents contribute directly to the foundation for the project and, if possible, apply for matching funds from the foundation.

Remember: PTAs are not in the fundraising business. Foundations are established to fundraise for school districts. PTA funds should always be used to further PTA’s Mission and Purposes. A PTA does not raise money to be diverted into other channels, such as providing support to other organizations or individuals, no matter how worthy.

• The region director or designee may serve on the school district foundation board when invited by the foundation to do so.

• The region director/designee acts as a liaison between the school district foundation and council/

• local PTAs:

  • Serving as a resource by providing input and direction as to community and educational needs.

  • Working with the school district foundation in the development of community-wide projects.

• Local PTAs act as a liaison between the parents and the foundation:

  • Identifying needs in their school/community (relaying this information through the region 

  • director/designee).

  • Informing parents of the function of a foundation.

  • Informing parents of current foundation projects.

  • Informing parents of current funding needs of the foundation.

• Local PTAs may select fundraising projects suggested by the foundation.

• PTAs may not raise funds for the foundation, although they may work with the foundation on specific PTA projects.

ANNUAL FINANCIAL RECONCILIATION (AFR)

What?

• An AFR report is not a bank statement or bank verification. It is a statement by the officers that their records are correct, or a reconciliation carried out and signed by an “auditor.”

Why?

• An AFR is required by PTA bylaws.

• An AFR of the treasurer’s records is for the protection of the treasurer. It relieves the treasurer of responsibility, except in the case of fraud.

• An AFR provides for accountability to the PTA membership.

Who?

• “…by an auditor or an AFR Committee of not fewer than three members…” (Article VII, Section 6).

• “Members of the AFR Committee shall be members of PTA/PTSA” (Article VII, Section 6a).

• “…appointed by the Executive Committee” (Article VII, Section 6a).

• “…shall not be any officer who may sign the checks or be related to, by blood or by marriage, or reside in the same household with, any of the officers who may sign the checks…” (Article VII, Section 6b).

• An AFR committee would perform an Internal AFR following Utah PTA's recommended AFR procedure (see AFR sections of this handbook).  An outside auditor is not required to perform an AFR "in accordance with generally accepted auditing standards."  Agreed-upon procedures (based on the recommended internal AFR procedure) or a review is sufficient to fulfill this requirement.  A professional auditor who is a member of the PTA could perform an Internal AFR such would be performed by an AFR committee.

• The qualifications of an auditor (in lieu of an AFR committee) are not specified by the bylaws. Consider the following in selecting auditors:

  • Familiarity with PTA and its activities

  • Accounting and/or auditing experience, preferably with non-profit organizations

  • Diligence and commitment

  • Honesty and fairness

  • Availability

  • Does NOT have to be a member of the PTA being audited

When?

Financial records should be put in order for the AFR process shortly before the end of the fiscal year.

• The fiscal year is July 1st to June 30th.

• The outgoing treasurer should strive to have all transactions completed as early in June as possible. For local PTAs on a traditional calendar, this should be fairly easy. Those on a year-round calendar will have more difficulty, but adequate planning can minimize the number of last minute transactions.

• Once the books are closed for the AFR, the outgoing treasurer may not complete additional transactions. In no case should the outgoing treasurer make deposits or write checks after June 30! 

• Outstanding bills are common and can be paid by the incoming treasurer on or after July 1. By way of summary, no transactions should occur between the time the books are closed for AFR, which will be |no later than June 30th, and the time the incoming treasurer begins transactions, which will be no earlier than July 1st.

How?

• Once the financial records are put in order–including the preparation of a Year-End Financial Statement–the treasurer shall deliver them to the AFR Committee.

• The following items are needed to conduct the audit:

1. 1. Copy of last audit report

   2. Year-End Financial Statement

   3. Monthly Treasurer's Reports

   4. Bank statements and reconciliation reports—including June 30th

   5. General ledger, or transaction report, organized by category

   6. Check register

   7. Funds Received forms, with supporting documentation

   8. Check Request forms, with supporting documentation

   9. Copies of meeting minutes, including the approved annual budget, as well as any amendments that were approved during the year

   10. Current membership list

   11. Current bylaws (and standing rules, if any)

   12. Any other information requested by the auditor/AFR Committee

• The June 30th  bank statement and reconciliation must be included in the materials given to the auditor/AFR Committee.

• “The auditor or AFR Committee shall submit its report to the new Executive Committee no later than August 1” (Article VII, Section 6d).

  • Make sure that the AFR report has been signed and dated by the auditor/AFR Committee.

  • Include AFR “working papers” (such as an AFR procedure checklist and suggestions for improving financial policies and procedures) with the records audited.

  • The Year-End Financial Statement and the AFR report should be submitted to Givebacks or council/region treasurer no later than August 1.

• “The [AFR] report shall be presented for adoption at the first general membership meeting of the new school year" (Article VII, Section 6d). The Year-End Financial Statement should be presented at the same time. The motion to adopt the AFR report is made as follow:

  • The treasurer could make the motion: “I move that the AFR report be adopted as presented.” If the motion comes from the budget or finance committee, no second is required. Otherwise, there needs to be a second.

  • The president asks: “Are there any (further) questions about the AFR report?”

  • After questions, if any, the president calls for the vote: “If there are no (further) questions, we will take the vote on the motion to adopt the AFR report as presented. All in favor, please say aye. All opposed, say nay.”

  • The president then reports on the result of the vote: “The motion to adopt the AFR report has passed (failed).”

• The AFR should be filed with the PTA's permanent records, with a copy placed in the subsequent year's file.