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PTO finances a bank account or school club accout....

16 years 2 months ago #98078 by hwilker
I have just been informed by our principal that our school corporation is considering mandating that all PTO's move their money into a school "club" account rather than in a bank. I have some concerns because this would force us to pay for purchases out of pocket and then get reimbursement or use a purchase order to get money for purchases rather than being able to write a check. I am also concerned that they are trying to "control" our money. Is this legal for them to do? Do we as a PTO have a choice? :confused:
16 years 2 months ago #98079 by mykidsmom
Sometimes you do, we didn't. Our Principal saw too many times PTO's loose money to a parent. What we were able to do as I was getting very tired of waiting 6 weeks for reinbursment was to have a credit card for our purchases only. The bill comes to the school and our treasurer keeps a paper trail (reciepts on a form) and our ledger is reconciled with the school every month with and audit done at the end of the year.

In this day and age, ask to have a contract between the PTO and school about the money that you have earned for this account. Our by-laws clearly state that the school's Business Manager will hold our funds yet MUST issue payouts when needed.

I AM A RARE 'BREED' AND WE HAVE A RARE SITUATION WHERE THIS HAS WORKED. Please sit and talk this out and on both sides it needs to be made clear what everyone is expecting. If you really want to have some knowledge under your belt, call the school district and talk to someone in the know about PTA/O's and any rules. Your state's Dept. of Education....hey, it's only a phone call and you have an concern (I don't like the word "issue"). Communtication....it can be a beautiful thing. [img]smile.gif
16 years 2 months ago #98080 by NMmom
Hi there!

We actually lost our PTO for a few years completely over missing PTO funds. Now the superintendent of schools has to okay all the money we spend (purchase req.). It is a pain, but it is better than not having a PTO at all.
16 years 2 months ago #98081 by tradechi
You need to call a community meeting and have the parents decide to be an independant entity. Then you need to follow the (501)(c)(3) trail (incorporate as a not for profit). You'll see it in other forums. Get your own tax id and your own bank account. IRS.gov. The school can't take the money and can't demand what you do with it. The incorporation status also protect officers from any misdoing, unless its their own and it's illegal action. Require two signatures on each check and write it up in your bylaws. Be fair and generous with your fundraising earnings and the school should not have a problem. But I think that parents will be more willing to contribute to fundraisers, knowing they have some control over it. They can be officers and membership decides on how money is spent or how a budget is put together. Insurance coverage will also covers any major problems. Most districts will tell you that your activities are covered, but without a separate rider or a totally separate account you probably are not covered. The lost funds of NMmom probably could have been covered. Or just say someone breaks an arm at the Fun Fair.

See if a parent is a accountant or attorney, even better, that specializes in not for profit and get things rolling. :eek:
16 years 2 months ago #98082 by JHB
I agree the PTO should establish itself as an independent entity with proper structure and controls. But to operate successfully, it must be sanctioned by the school. And that generally means either complying with the policies/rules the school or district requires or negotiating a compromise. So that fact that you become a 501(c)(3) doesn't necessarily solve the problem.

There seems to be a trend in some areas of districts wanting more control and assurance over money raised by students and families. They've just been burned too many times with embezzlement, infighting, inconsistent administrations, etc. Some are trying to take over the treasury function - not necessarily control of how the funds are used, but just administration. Others want the parent organization to focus more on volunteer efforts and turn fundraising back over to the school.

I suggest you talk to your principal and find out exactly what is being planned and what's involved. Is it negotiable? If you come up with a solid plan for financial controls, will they consider an alternative? If there's no compromise, then get all the terms agreed to in writing. That the PTO decides how the funds will be used, what a fair turn-around time is, the process for requesting disbursements.

You have to pick your battles. If this is a "done deal" then do what you can to safeguard the organization and make it a smooth process.
16 years 2 months ago #98083 by mykidsmom
JHB....that you for saying what I wanted to say with the right words.
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