PTA Leaders

Finance

The financial health of your PTA is crucial to the success of speaking up for all children and families. California State PTA provides guidance, support and training in board fiduciary duties and governance to support the work of your PTA.

Financial Checklist

PTAS ARE PUBLIC CHARITIES

PTAs are legally classified as “public charities” and are organized and operated exclusively for the exempt purposes recorded in Article II of all PTA bylaws.  Public charities may not carry on any activities not permitted under Section 501(c)(3) of the Internal Revenue Code (IRC).

As public charities, PTAs:

  • Are eligible to receive tax-deductible contributions
  • Are generally exempt from paying federal and state taxes
  • Must file federal and state Returns annually
  • May not use its funds to benefit a private person.

Additionally, PTAs are noncommercial and may not endorse a commercial entity or engage in activities not related to promoting the Purposes of PTA.  The name “PTA” may not be used in conjunction with commercial activities, including the promotion of commercial goods and services.

PTA OFFICERS ARE FIDUCIARIES

PTA officers and board members are PTA fiduciaries.  A fiduciary is a legal and ethical relationship of trust.  PTA members, supporters and donors trust PTA officers and board members to prudently:

  • Carry out the purposes of PTA (per bylaws Article II)
  • Protect the assets of the organization including cash, physical property, volunteers and the PTA’s reputation
  • Disburse assets to meet the needs of the children and members served by the PTA
  • Comply with federal, state and local laws
  • Ensure that the association remains transparent
  • Ensure continuity of the association.

Only a highly trusted PTA member may serve as a PTA fiduciary.

TEN FINANCIAL CONTROLS FOR ALL PTAs

Internal controls are the basic policies and procedures PTAs use to safeguard their assets, deter and detect errors, prevent fraud and theft, ensure accuracy, and produce reliable and timely financial reports:

  1. Association members elects a treasurer and other financial officers annually
  2. Association members approves all PTA programs, activities, fundraisers and expenditures
  3. The association adopts and monitors the PTA budget, approving changes as needed
  4. A minimum of two trained PTA members receive, count and record cash and checks received
  5. Following approval by the association and executive board, the president and secretary sign a Payment Authorization Form for each and every PTA expenditure
  6. Check-signers are not related by marriage or by blood
  7. Two authorized check-signers sign every PTA check
  8. The PTA auditor or another trained PTA member opens and inspects monthly Bank Statements
  9. The treasurer and other financial officers report “Income Statements,” “Budget Updates,” and other financial reports at each meeting of the association and executive board
  10. The PTA board orders a midterm and fiscal-year-end audit annually, which are reported to the executive board and association.

BUDGETS

Adoption of the budget does not authorize the expenditure of the money. Plans must be presented to Executive Board and the Executive Board must authorize expenditures. Amend budget by a vote of the association as needed. Refer to the California State PTA Toolkit.

FUNDRAISING

It is important to note that while PTAs help raise significant resources for schools and children, fundraising is not part of the primary mission of PTA. Often times PTAs must fundraise in order to support the vital programs and services on campus that support student learning and family engagement.

Fundraising   Healthy Fundraising  

ADDITIONAL RESOURCES