It’s Time for Your PTA Mid-Year Financial Review!

By Laura Ann Hawk-Loya, California State PTA Treasurer

Your bylaws state that you should be conducting twice yearly financial reviews of your financial records. For most PTAs that means you have a mid-year financial review coming up (double check your bylaws if you are not on a July 1- June 30 fiscal year). A financial review is required by both our insurance company and the California Attorney General’s office to ensure that PTA funds are being spent on things that the association has approved and that the money is being accounted for correctly and transparently. Failure to perform these reviews can result in the insurance company not paying claims if theft or mismanagement of funds is suspected.

A PTA financial review is not a true audit. It is a review of financial procedures and records but does not fall under GAAP (Generally Accepted Accounting Principles) rules and regulations. As a result, we will be changing the terminology in the next few months but the procedures themselves will be largely unchanged.

Who can perform the financial review?

Our insurance company requires a qualified accountant to perform the financial review but only if they are going to do it without a review committee to double check their work. AIM defines “qualified”  as someone who has been professionally trained/licensed to perform audits such as a CPA or other professional accountant. They do not need to be currently employed in the field. A bookkeeper/bank employee is generally not trained to do auditing.

A person who is not a qualified accountant may still be the financial reviewer. Their findings must be reviewed by an financial review committee. Your audit review committee can be made up of a combination of non-check signers and check signers as long as the majority are non-signers. The treasurer/financial secretary should not be a member of the committee as you cannot audit your own books.

The audit review committee appointment (and the auditor appointment if not elected to the position) must be ratified at the first general association of the year and their names should be recorded in the minutes.

What is the financial reviewer reviewing?

As the financial reviewer, you will use the financial review checklist to examine both the treasurer’s books and those of the financial secretary (if you have one). You will mark off items as you review them and make notes of any missing items. You will add up the total income and disbursements and fill out the financial review report form. Make sure you are adding up the actual deposit slips and check requests (and checking receipts) to come up with your totals, and that you are not just going by what it says on the bank statements.

Once you are done, present the report and any findings that need to be taken care of to the ex qecutive board if you are a qualified accountant (or to the financial review committee first if you are not). Once the committee and board have approved it, you will present it to the general association at your next meeting. Copies of the report should be uploaded to MyPTEZ for safekeeping.

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