Question: Questionable Financial Practices

I was elected as president of a small PTO. The PTO is not a separate entity from the school; it uses the school's EIN on it's bank accounts, is not incorporated, and does not have 501 (c)(3) status. The treasurer has been doing the job for 5 years and they no longer even hold elections for that office. Parents are just told that the principal wants this particular woman doing the job. The only two people on the bank account are the treasurer who is a CPA and her sister who is a teacher at the school. There are no bylaws, there is no annual budget, and there are no audits ever done. My two Co-VP's and I have some concerns about these practices and I approached them (the treasurer and her sister) last night about instituting a system of checks and balances to protect all of us. I suggested a monthly reconciliaton of the bank statement and receipts by another board member and an annual audit at the end of the year. I was met with extreme defensiveness and tears. They threatened to quit if we went further with trying to institute these practices. They also told me if I go to the principal he will defend them because he is the one that wants them to do this job. I sent an email of my resignation last night because I refuse to be a part of a group like this. Should I take further action or just walk away?

Asked by Anonymous



Advice from PTO Today

bblake writes:
You might consider meeting with the board and discussing putting together bylaws and becoming organized. Explain the reason behind it all - protect you all as individuals as well as the group. You are not saying anything is wrong, it just is best practices to put in place so that in the future everyone is protected. You might want to ask to discuss it at a PTO meeting and see if anyone is interested. It may be that everyone is happy with the way things are and feel no need to change anything.

Community Advice

nurseaudra writes:
I wrote bylaws and presented them to the rest of the board and they told me that they do not want to have bylaws. They said that they are participating to have fun and I am trying to put too many rules in place.

Advice from PTO Today

Craig writes:
Nurseaudra -- Bylaws don't have to be a bunch of detailed rules. They can be quite simple, and that's where you should start. You have officers and a board, so you already have some rules in place. Writing bylaws is simply a matter of putting those in writing so the people who come after you won't have to start from scratch. Your simple bylaws can include what offices constitute the board, when elections are held, and very broad things like that. In addition, you can write the bylaws so that people don't feel pinned down. For example, elections are held each may at a date to be determined by the executive board, rather than elections are held on the second Tuesday in May.

Community Advice

pngai writes:
If you're using the school's EIN on your bank accounts, the school has responsibility for your finances and the principal is the boss.

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