PTO Today

A few simple financial controls can protect your parent group’s bank account as well as your volunteers who are handling money:

Accept cash at one place only. For carnivals and similar events, sell tickets at a single pay station. The fewer people who handle money, the better.

Create a paper trail. Always use paper receipts for cash transactions. For carnivals, tally each sale and compare the number of tickets taken at each booth with the total dollars collected.

Work in pairs. Always have two people present whenever cash is being collected or counted. After the cash is counted, have each counter initial a form certifying how much money is being turned over to the treasurer.

Make deposits immediately. Never let cash—or checks, for that matter—sit for a few days. Funds should be deposited as soon as they’re turned over to the treasurer. If your event is at night, lock the money in the school safe and deposit it the next morning.

Keep it simple. Never take IOUs. Never mingle parent group cash with your own. Don’t ever deposit PTO money in your account, then write a check to the group for the same amount. And never float a loan to the group, then take the money out of cash receipts as repayment.

Cover yourself. Get bonding insurance for your group. It’s well worth the cost. You can find insurance information at ptotoday.com/insurance.

This week’s question from our Ask a Question section comes from an anonymous poster:

Do most PTO’s have their own independent from the school bank account? Ours is combined with the school’s account so we really don’t have control of our money.

Craig writes:

Most PTOs do have their own bank account. It’s really the only way to properly manage your budget, and it’s certainly the most efficient way to run your group. You’ll need an Employer Identification Number (EIN) from the IRS if you don’t have one. Having an EIN doesn’t mean you’re an employer — it’s like a social security number for businesses, and it only takes a few minutes to obtain (IRS.gov). You also should put some strong financial controls into place. You may need to demonstrate to the school that you will do this. There have been lots of cases of theft from PTOs, and the school may be concerned about that. The number one thing you should do is have your bank statement sent to someone who is not a signer on the checking account — maybe even the principal, if this helps your situation. The article 5 Smart Financial Controls offers simple, easy-to-implement ideas that will protect your money.

Related links/More articles related to PTO or PTA finances and budgets:

http://www.ptotoday.com/pto-today-articles/article/400-what-every-treasurer-should-know

http://www.ptotoday.com/pto-today-articles/article/71-budget-basics-for-ptos

http://www.ptotoday.com/pto-today-articles/article/218-how-to-manage-your-budget

http://www.ptotoday.com/pto-today-articles/article/396-annual-audit-how-and-why

http://www.ptotoday.com/filesharing/document/80-pto-today-sample-parent-group-budget

Is your group helping parents understand and manage the Internet and all its related risks and opportunities? If not, you’re missing out on a great chance to serve and connect with parents. I know I really appreciated when our school HSA put on an educational evening for parents at our school.

As the parent of a 12-year-old (and three more coming after), yes — the Internet scares me. I love all the things it makes possible for our family. But I’m also leery of the social mistakes that are so much easier for kids to make these days. I think back to my youthful missteps and shudder at the thought of having all of them captured for eternity on computer servers. Yikes.

It’s why I’m such a big fan of PTOs and PTAs putting on Internet Safety Nights at their schools. Whether you do it with local law enforcement or by using our ready-made Internet Safety Night planning kit (which comes with a built-in expert presentation), it’s a topic that many of your parents are actively concerned about. It’s the most requested service topic among parents we’ve surveyed.

To me, building parent involvement at school, building a community around the school, then serving parents on school-related topics are three pillars of PTO and PTA work. Internet Safety Night fills that third bill perfectly.

We’d love to hear if your group has already planned or is planning anything around this key topic. Would you share your group’s thoughts on addressing Internet Safety on our message boards?

Treasurer’s reports, meeting minutes, fundraising results, bank statements… how much should you make public to your parent group and the school? The question of transparency comes up a lot! In this week’s video blog Tim answers the question, “just how transparent should our parent group be?”

How open is your group with information? How do you share your records so that there are no misconceptions? We’d love to hear from you.

One of my favorite features on ptotoday.com is the Ask a Question section. You ask whatever PTO-related question is on your mind, and we send out our crack editorial and customer service teams to find the answer.

Ask your question here.

My tip this week is based on some common advice we give in answering those questions: Read your bylaws. Bylaws are a key organizing document of a PTO, and every PTO should have them. They state, in writing, the most basic rules of the group: what the officer positions are and what the duties of each office are, when elections are held, etc.

Your group should also have a second set of written rules called policies. These are things that are important to the way you do business but aren’t as basic as bylaws. For instance, your bylaws might say you must hold a general meeting once a month. Your policies might say that meetings are held on the first Tuesday of the month at 7 p.m. in the school cafeteria.

There are two important reasons to have written bylaws and policies: to have a ready answer to questions-especially when disputes arise-and to record a basic set of best practices so that future leaders can use them as a guide.

If you haven’t done so recently, take the time to review your group’s bylaws and policies. Make sure they fit the current needs of your group, and if they don’t, revise them. If your group doesn’t have bylaws and policies, this is a good time to get started on putting some in writing. We have lots of resources to help:

• Bylaws and nonprofit topic page on ptotoday.com
• Sample bylaws and other resources on the File Exchange
• “How To Write PTO Bylaws” article

OK, guys, time for my annual plea — please, please take these simple steps to protect your finances:

1. Make a rule that someone besides your treasurer receives and opens the bank statement each month. Temptation is much greater if a financially struggling treasurer knows she can write a check to cash and then just rip it up when it comes back from the bank.
2. Have an audit committee that will review the books at least once per year. (It can be all volunteers; doesn’t need to be accountants.)
3. Get bonding insurance. It’s cheap, it provides real protection, and it’s worth it.

Just this month, there has been another flurry of embezzlement stories from school parent groups. A PTA treasurer in California admitted she stole $35,000. And in Kentucky, a PTO president was charged with taking $10,000. We’ve seen dozens of these every year since PTO Today started in 1999.

The key to keeping your group out of these headlines is to make it much more likely that a misdeed will be noticed. The typical culprit in these crimes is a very normal volunteer, often in financial stress, who notices how easy it would be to “borrow” some funds for a while. I can’t recall a single embezzle case (or a big loss) in a group that followed the above steps.

Final plea: If you’re a treasurer, will you please make instituting these steps your job? Sometimes leaders worry they’ll be insulting their treasurer if they ask about these matters. You can solve that easily by taking on the task yourself. (And consider adding a few more easy-to-follow finance best practices while you’re at it.)

Has your group struggled with this issue? Or put some good controls in place? Would love it if you’d share your feedback and experience on our message boards.

This time the stealing from the PTA was done by a couple! Ugh. When the parents at Erdenheim Elementary School in Erdenheim, PA, decided to switch from a PTA to PTO an audit was done and numbers just weren’t adding up… to the tune of $17,000! Ouch. Unfortunately, this group learned the hard way about the importance of fiscal controls in PTOs and PTAs.

Yup, in the world of what PTOs and PTAs can and can’t do in the political realm, this one is definitely a no-no.  Neither schools nor any 501c3 non-profit is allowed to specifically endorse candidates for public office.  This Idaho group did and is now on the hot seat.

As an FYI, it *is* OK for a non-profit to be involved with politics, but only in approved ways.  Example:  it is OK for a non-profit to try to help educate voters on an issue.  Additionally, OK for a non-profit to hold, say,  a “meet the candidates” night.  Big difference, too, between supporting a particular candidate and supporting a cause.  OK, for example, for the cancer society, to advocate for more cancer research funding.  Wouldn’t be OK for cancer society to promote a particular candidate by name, even if that candidate was loudly for increased research funding.  Subtle but key difference.

Trouble (legal trouble or just ill will within a group) often starts when school staff or district officials push the parent groups to endorse a bond levy or tax override vote.  Has your group been in this position? 

Wow — this is the harshest sentence we’ve seen yet for a PTO or PTA embezzle case.  This Arkansas treasurer convicted of taking $23,000 (and that’s just what they can prove).

We do like the fact that this case was prosecuted and taken seriously. Too often, groups or schools try to sweep these cases under the rug or prosecutors downplay the damage.  Make no mistake — this is stealing from kids and violating a trust.  There’s also often even further damage to the support and involvement at a a particular school for years.

More than worth it to use smart, basic money hanbling procedures.  And to get insured.

Former president from outside Denver arrested — after her kids tried to play lookout on her getaway effort  –  for stealing from her group.  Grrrr.

In this case, the method was forging her co-signers signature on dozens of checks.  Our most basic of financial best practices – making sure that a non-signer opens the checking statement each month — would have likely prevented this one.  Also hope they’re insured.