Question: PTO Bank Account and School/Principal Programs

I'm confused. I thought school funds were not suppose to be mixed with PTO funds in the bank. (?) In the past few years, the PTO has allowed the Principal and Vice Principal to use the PTO bank account as a conduit for their programs to avoid the red tape of getting reimbursed through the School District (at my old school we only did this as an exception). There are 3 concerns. First, this requires the Treasuer to include these school funds on our Monthly/Annual Budget Reports. The problem is that it is very confusing for board members to read since the amount of additional principal funds about $40k (about the PTO's budget). Second, the Treasurer is writing checks to himself from the PTO fund to be reimbursed for paying for items out of the principal programs. The anounbt is about $10,000. Third,it allows the Principal and Vice Principal to decide who is authorized over those accounts. My questions are; 1. Doesn't any money deposited into the PTO bank account count as income to te IRS? 2. Does this show the PTO as raising more money then we actually are? 3. What if the principal's funds are from the State,Federal or private grant? Is this OK?

Asked by Anonymous



Community Advice

gjcoram writes:
1. Yes, that's part of your gross income. But then I think the funds you pay out for those items can also count as part of your "programs/services" provided.

I always had the PTO president sign any checks to reimburse me (treasurer) for expenses.

3. I would think that question is a matter for the granting agency: if their checks are written in such a way that the bank will let you deposit them, then I think it's OK. Those funds are probably "donor-restricted" so the treasurer might have some extra accounting work to do, to be able to prove that the money was spent for the purpose funded by the grant.

If it were me, in my school district, I would have a brief chat with the assistant superintendent for finance and see what she said.

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