We are a small school and PTO. I was treasurer for the school 2 years ago and I have agreed to do the term again this fall. My problem is the treasurer from last year is now president. She has her own company and ordered portfolios from her own business for the PTO officers. The principal and her discussed this, but not the board as a whole. She asked me constantly for a check for reimbursement, in which I didn't feel comfortable with. I asked a friend that was President of another local PTO her opinion and she suggested that I email you guys for a formal opinion. I asked my President for some documentation on the order so no one would think that she is profiting off the PTO and this made her very angry. I feel that as President of the PTO and ordering from your own company might be a conflict. I don't feel comfortable first with writing a check without the whole boards approval, and secondly with the issue of the President ordering things from her personal business for the PTO. She came to my house and wrote her own check in the meantime...and then proceeded to tell me that she was going to vote me off her board. Well I don't believe that she can vote me off her board alone, but I don't feel as though I can work with her now. I was just trying to be professional and didn't feel comfortable writing my name on a check because of the appearance that it might make...not to mention she lives 3 houses down from me. My questions are... Should I have not questioned writing her a check, since we never discussed it as a board? Should I not ask for a catalog page to staple to the invoice showing that she made no profit from the sale? Can she vote me off the board?
Thanks for all the advice...momtres

So if you wrote her a check today and a member saw that she spent $XXX on porfolios is she confident that she will be able to justify this? I see more of a problem with justifying a purchase to the membership than anything else. Also do you have anything about spending and reimbursments in your by laws? Anything over $50 needs membership approval and I could get reimbursed for $5 unless I have a reicept!
I say no proof of how much you spent....sorry no cash- I am accountable to the membership and need to be able to show where this money went. Also don't you need this for audits??
May the force be with you!

We have a board approved budget before we spend anything. Once it is approved by the board, that's a different story. I know that PTA's are very stringent about benefiting from the PTA, but PTO is really whatever your bylaws say. Also, don't you need atleast two signers on the check? What does the other check signer think?

Our Bylaws limit Executive Board spending power: The board can only approve bills up to $100 that were not already specifically budgeted in the annual budget (which is approved by the membership at our first meeting of the year). Any other spending needs membership approval. Also, we do not issue reimbursement checks without a receipt. We don't have any rules that would prohibit a parent from being a PTO vendor.

As treasurer, I find great comfort in the Bylaws and our annual budget. They take so much of the emotion out of decisions. Just follow your organization's rules, and you remove your own personal feelings from the issue. It's probably no more your exclusive decision whether or not to reimburse her, than it was her decision to buy the portfolios in the first place. It might go against your values, but you work for the whole organization.

If you still feel your Bylaws are too lax, spearhead a committee to write a proposed set of bylaw revisions to ensure proper controls are in place.

P.S. Step back for a minute - does this expenditure represent a significant dent to your budget? Sometimes it's better to swallow hard than to gag.

Hi,
I truly understand your delema. You are 100% correct in asking for some type of a receipt and reason for her purchase. Yes, I also agree that it's a conflict of interest if she is ordering from her company.
She can not get you off the PTO. You would have to be voted off and to tell you the truth, if they did that, I would wonder about the other members, including the principal.
You should look over you by-laws and then maybe sit down with the principal and discuss how you feel and how you both are going to deal with this problem. Obviously, the other person who is president now thinks she has a lot of power. It's gone to her head. Does she remember that everything she does is for the sake of the school and not herself. She is only suppose to help to make it a positive and profitable experience for your school. Maybe she should resign. Don't give up. I've been through a lot too being a treasurer on our PTO and if you'd like to e-mail me I'd be more than happy. Good Luck!

LucyandEthel1@aol.com

I am also a treasurer and have run into similar conflict of interest issues. I told my board that there are legal and tax issues when a board member profits from the activities of a PTO (or any nonprofit). Because of these issues, my board is going to adapt a conflict of interest questionaire that all board members must sign. It should be known that the the I.R.S. "frowns" upon board members benefiting from the activities of a not for profit. If your PTO files a 990, it specifically asks you 1) whether any net income came from a related party 2) Whether any part of net earnings was spent benefiting a related party and 3) Whether there were any "excess benefit transactions.
You were right to have concerns. If I were you, especially if the amount is immaterial to the financial statements and the price charges was FMV, I would not make an issue for the money already spent, but use it as a learning opportunity to put the necessary procedures in place to prevent this from reoccuring. Good Luck

[This message has been edited by jjant (edited 08-25-2001).]