Treasurer Basics: Budgets, Audits, Signers, Insurance, Incorporation, and IRS

1. TREASURER B.A.S.I.I.C.C.S

2. TREASURER B.A.S.I.I.C.C.S • Budgets • Audits • Signers (Banking) • Insurance • Incorporation and IRS • Checks (Outgoing Money) • Cash (Incoming Money)

3. BUDGETS Must a budget be balanced? No.You are certainly allowed to “spend down” reserves from previous years or do extra fundraising if you have a long-term goal for the money. Have a plan! Just don’t keep more than 2 times your annual budget from year to year. Who is responsible for staying within budget? Everyone!Not just the treasurer, but all officers and members are responsible for making sure that expenses stay within the budgeted amounts or change budgets/plan extra fundraisers accordingly! The Treasurer is responsible for keeping others up-to-date on the current status. Is a budget changeable? Who can change it? Yes!It is a “living document.” What do your Standing Rules say? The Standing Rules should indicate a threshold under which the Board can change a budget line. Otherwise, the whole membership can vote to change the budget. And you can adjust your Standing Rules via a vote of the membership to make sure it is accurately reflecting what will work best for your unit. Just make sure you stick to it!

4. AUDITS Who can do an audit? A professional or a committee of non-signers — If you are using a committee of non-signers, the treasurer may attend and assist with questions, but the committee must have non-signers for final say. When/how frequently should an audit be done? An audit is done at the end of the fiscal year or when a treasurer leaves office (in the middle of their term). A member of your PTA can request an audit of the books at any time. A “mini-audit” should be done monthly. The Internal Revenue Service and/or the Oregon Department of Justice can audit your records as well.

5. AUDITS What is required to perform an audit? Copy of last audit report Bank statements for every month being audited All bank deposit receipts Receipts/invoices for all checks written Approved budget Minutes from general meetings and board meetings All treasurer reports (one per month) Check register/ledger from treasurer Cancelled checks from bank Any VOIDED checks Blank Audit form, found in the Forms section of the Oregon PTA Leadership Guide

6. SIGNERS (BANKING) Who should be signers on your bank account(s)? At a minimum, you should have three signers on every account (main checking, savings/MM, scrip (if applicable)) including (usually) the treasurer, the president, and a third officer. It is not specifically required that these positions are signers, but it is required that you have three (and they should be frequently available officers). You must have a member (who is not a signer) open, review, and initial bank statements –AND/OR- review the complete bank reconciliation on a monthly basis. (This is a “mini-audit.”) Every signer on your accounts must be a member of your organization. When should/how do you change signers on your bank account(s)? At the beginning of the fiscal year (July 1) or whenever officers change. Make sure you have meeting minutes, signed by the president and secretary, indicating by name and title who should be a signer on each account. Call the bank in advance to see what they will require to change signers. (Everyone in person at once? What type of identification? Etc.) Do you need cancelled checks back from the bank? Yes, this is a requirement for your audit and insurance. Digital images are fine and electronic statements are okay as long as you have others diligently reviewing the work/process of the treasurer/signers.

7. INSURANCE What type(s) of insurance should you consider for your unit? General Liabilityand Fiduciary BondInsurance are REQUIRED by the Oregon PTA, but the minimums may not be adequate insurance for your group. Accidental Medical, Property, and Officers Insurance are also available. Review the accompanying chart to make sure that you are insuring yourself appropriately. Each unit is different! How do you ensure that your insurance policy is valid? You must perform a yearly audit(see Audit section). Monthly bank statements –and/or- reconciliations reviewed bynon-signer(see Signer section). You must have a current officer listand initial paid membership on file with the Oregon PTA. You must pay your annual premiums(currently minimum is $150).

8. If your unit experiences an incident/loss, whom should you contact? DO NOT make accusations! (libel, slander) (If applicable) Determine suspect’s access to other PTA resources Gather facts, documents, and interviews Identify all accounts involved and consider freezing/closing them (If applicable) Contact the authorities INSURANCE

9. Should your unit be incorporated with the state of Oregon? Is there an advantage? Oregon PTA HIGHLY recommends that your PTA become incorporated (if not already). Some banks require articles of incorporation in order to open an account. There is a one-time $50 fee to incorporate and then $50 due annually to renew. Incorporation in Oregon comes with an additional layer of protection. If your PTA should be named in a lawsuit, the liability stops with the organization. What does this mean? Your personal assets can not be touched, if you are incorporated. You can still be named in a lawsuit, but your personal assets are not in jeopardy.* *Additional insurance is also available beyond the “corporate shield.” INCORPORATION AND IRS

10. As a non-profit, 501(c)3 organization, are you required to file taxes with the IRS? YES, all units MUST file tax forms with the IRS, but no taxes ($) will be paid (unless you are doing something you shouldn’t be…). You need to file 990-N (≤$50,000), 990-EZ(≤$200,000), or 990, the latter two WITH a Schedule A. The thresholds are based upon GROSS receipts for the year and INCLUDE all checks received from fundraisers, including scrip. The only receipts received that are NOT included are the membership amounts that you forward on to the Oregon PTA ($9.50 per member). As a non-profit, 501(c)3 organization, are you required to file taxes with Oregon? (NEW!) Regardless of whether you are incorporated or not with the state of Oregon, you must file a CT-12, and include copies of your 990 tax form with Schedule A. (If you file a 990-N, include a copy of your email reply.) Minimal Taxes (usually $10-$25 per year) will be required. INCORPORATION AND IRS

11. CHECKS (OUTGOING MONEY) How many unique, unrelated names are required on a check that you write? • THREE, namely • Payee • Signer 1 • Signer 2 Which officers (i.e. president, treasurer, etc.) can be authorized users on a debit card? • That’s a trick question. The answer is “DEBIT CARD? What debit card? We don’t use no stinking debit card here!” • If you MUST do an online purchase • Determine if the company will accept a business check or create a purchase order for your organization • Have a volunteer make the purchase then reimburse him/her PROMPTLY GOTCHA!!!

12. Must every check written have a receipt or can you advance money/petty cash? Every check MUST have written documentation to accompany the reason for writing the check. That can be in the form of a receipt, minutes from a meeting explicitly approving an expenditure, or even an email(=written!) from the volunteer responsible for bringing petty cash/making the purchase. AFTER the fact, include a receipt for the expenditure or a receipt indicating petty cash was received from volunteer. This can be a portion of your cash counting form that has a section for petty cash. If money was advanced to a volunteer to make an expenditure, the volunteer MUST provide a receipt for the expenditure AND return all remaining funds to the PTA. Get written acknowledgement from the volunteer in advance that they understand what is required of them. If possible, write checks to a merchant NOT a volunteer. CHECKS (OUTGOING MONEY)

13. How many people (minimum) are required to get cash and checks ready for deposit? TWO people must count and agree upon a total for any deposit, whether in the form of cash OR checks. These two counters must sign a document stating exactly how much coin/bills/check was received, and a total of all monies. The document should be kept securely APART from the money. If possible, make a copy (scanning is fine!) and include one copy with the money as well, but keeping the original separate, in a secure location is vital. Is it okay to take money home for one night, then deposit in the morning? If the money has not been counted, then NOOOOOO! If the money has been counted and documented, then the funds may be put in the responsibility of someone to make the deposit promptly in the morning. Make a note of who is taking custody of the funds. It is VITAL that the documentation is kept separately. CASH (INCOMING MONEY)

14. Is there a difference between cash and checks for the purpose of deposits? NO. Both cash and checks MUST be counted and accounted for by two volunteers. The single most common way for someone to misappropriate PTA funds is to avoid depositing some funds, whether it be cash OR their own check from the fundraiser mysteriously not getting deposited… Tip: If you have deposit slips for the bank, write the LAST NAME of the check writer as opposed to the check number. This will help you figure out if you deposited the item or not from a parent/member/etc. CASH (INCOMING MONEY)

15. Phone: 503-234-3928 Fax: 503-234-6024 (fax) Email: office@oregonpta.org Web: www.oregonpta.org CONTACT US…