Question: Paying in advance for school purchases?
Our parent organization agreed to pay for a phone system and equipment for the school. The equipment has not been purchased yet, nor has a final price quote been given by the vendor. If we issue a check before the equipment has been purchased, the money might be used for something other than what was intended. If we promised the school a certain amount, can we carry over that amount into our next fiscal year and wait for the bill when the equipment is finally installed? If so, how do we list it in our budget and treasurer’s report?
Advice from PTO TodayElly writes:
It’s nice that your parent group has offered to make this purchase on behalf of the school. Congratulations on being in a position to help with such a major undertaking!
Elly has a few items for you to consider so that you don’t get any wires crossed. First, if your group contributes funds for phone equipment, then Elly thinks school administrators should ensure that the gift is used for just that specific purpose. If your administrators can’t promise that, then no deal.
The best way for your group to work around this potential issue is to have the school send you an invoice for the purchase order. Then, your group can simply write a check for the agreed-upon amount to the school (not to the vendor) and designate it as a donation to the school. (Your PTO does not want to be the buyer in this case because the school will have the relationship with the vendor for ongoing maintenance and warranty work.)
Elly says you’re wise to allot a set dollar amount for the gift instead of agreeing to purchase the phone equipment outright. (What if it ends up costing hundreds or even thousands more than you had originally budgeted? Eek!)
As far as listing this item on your budget sheet, the process is simple. (Elly is assuming that your executive board voted to allocate the funds and then recorded this item in the minutes.) This year’s new working budget should include an expense category for the phone system donation for that set dollar amount you allocated. When you pay the invoice, you’ll just post the transaction (the check) against that expense category.
That’s it. Good luck “ringing in” the new school year!
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