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Prepare an Financial Review Report, including recommendations, for each bank account or savings account. The form should list the account bank, branch address and account number. The report is presented as follows:

• Unless mismanagement is uncovered, the financial review and recommendations are presented to the treasurer and president.
• The report(s) and recommendations are then presented to, and the report adopted by, the executive board.
• The report(s) is then presented to the association for adoption. After the financial review report is adopted by the association, the report(s), checklist and recommendations are uploaded to the document retention system in accordance with the bylaws.

When called upon, at the association meeting read only the statement “I/The financial reviewer/financial review committee has/have examined the records of the treasurer (and financial secretary) of _____ PTA and find them

• to be correct,
• to be correct with the following recommendations, or
• to be substantially correct with recommendations, or
• to be partially correct but more adequate accounting procedures are needed so that a more thorough financial review report can be given, or
• to be incorrect.”

The financial reviewer, or in the case of a financial review committee, each committee member, must sign the report. If there were recommendations, the president should state that the treasurer and executive board is or will be addressing the issues. The financial review report is adopted by the association with the motion, “I move that the audit report be adopted.”

Whenever questions are raised by the membership, the president should appoint a committee to look into the concerns and report back to the association at the next meeting.

The Financial Review Checklist should be used, and each box marked in the negative should result in a financial review recommendation. Review each account separately. Check off items in red ink as they are reviewed. Do not correct errors. Ask the responsible financial officer to correct errors. After errors have been corrected, and the financial reviewer is satisfied that the financial accounts are correct, the financial reviewer needs to denote the ending date of the financial reviewer. If a manual ledger and check register exists, draw a double line across the ledger and checkbook register where the audit concludes and sign and date using red ink, “Reviewed by (name) on (date).” If a computerized accounting program is used, attach a copy of the cash account and the last page of the check register to the financial review report filed with the secretary minutes, sign and date using red ink, “Reviewed by (name) on (date).”

The financial reviewer ensures that the association’s financial transactions have been accurately recorded

• Include bank name, bank address, type of account and the account number on each report.
• Start review with records posted after the last financial review. Verify the amount shown on the first bank statement (adjusted for outstanding checks and deposits per the prior financial review) corresponds to the starting balance recorded in the checkbook register, ledger, and treasurer report, and the ending balance of the last financial review.
• Confirm bank statement was reviewed by another non-check signer if the financial reviewer had not been assigned that task.
• Verify there have been no ATM transactions.
• Make sure every check issued for the review period is substantiated with an authorization for payment, the reason and budget line item for the disbursement, appropriate payee and a receipt or bill. Each authorization should be signed by the president and the secretary. If the check has cleared the bank verify that there are two signatures and that both were from authorized check signers. Verify authorization/ratification in the minutes. Note: Checks issued for pass-through funds do not require pre-authorization but should be ratified.
• Check that all bank charges and interest earned are recorded in the checkbook register, ledger and treasurer reports.
• Trace each deposit slip to bank statement and checkbook entries. Verify deposits are properly supported and that a Cash Verification Form (Forms, Chapter 9) or equivalent was used for each deposit. Verify that at least one of the signers of the form was an officer or committee chairman. Ensure money was deposited promptly.
• Ensure collection process is in place for returned checks that includes reimbursement of applicable bank charges. A returned check is treated as reverse income and reimbursed bank charges are treated as reverse expenses. Verify returned checks have been properly reported.
• Verify deposits and checks have been properly recorded in the treasurer’s reports.
• Verify the deposits and checks have been properly posted to the ledger and check register. Note: Request computer reports that show all the various accounts affected by the transaction.
• Verify that all income and expenditures are allocated into budgeted categories.
• Make certain that council, district, State and National PTA portions of the membership dues have been kept separate from other receipts.
• Make certain that the number of memberships agrees with membership chairman’s report, and verify that membership monies collected correspond to membership monies forwarded.
• Remember that Totem memberships do not have a corresponding amount forwarded.
• Ensure payment for insurance premiums.
• Make certain the money collected for a specific purpose (special projects, Founders Day, scholarship funds, council dues, etc.) has been so disbursed.
• Check event reports to verify receipts and expenditures have been properly reflected in the financial records.
• If an advance has been given, verify that receipts and/reimbursements have been received and properly recorded. If money was returned, verify it has been redeposited into the PTA account.
• Compare figures on monthly treasurer and financial reports against ledger for accuracy.
• Ensure proper tax returns have been filed.
• Verify that the PTA-required Workers’ Compensation Annual Payroll Report form has been filed.
• Verify that all required state and federal report forms have been filed if PTA hires employee(s) or independent contractor(s).

The financial reviewer should feel free to contact the treasurer if there are questions or issues needing clarification. If an error in recording a transaction is found, the financial reviewer needs to recommend the entry be corrected. Any corrections made as a result of the review need to be listed on the next treasurer’s report.

The financial reviewer should not be punitive in the report/recommendations. Difference of opinion as to process should not result in a recommendation if the treasurer’s records are correct.

Some examples of recommendations are:

• Cash must be counted by two PTA members and each must sign the Cash Verification Form. On xxxx, xxxx, xxxx, and xxxxx there was only one signature.
• Authorization for expenditure must be voted on by the executive board or association before checks are issued. Check numbers xxx, xxx, xxx were issued before authorizations were approved.
• Authorization forms must be signed by the secretary and president for check numbers xxxx, xxx and xxxx.
• Check numbers xxx, xxx and xxx were issued more than six months ago. They should be voided, and investigated and reissued if necessary.

If assistance is needed, contact the council or district PTA. At any time during the process, California State PTA also may be contacted for information and assistance.

A financial review determines the accuracy of the books, detects inconsistencies or errors, provides recommendations for corrective action, protects the financial officers, verifies that funds were sent through channels as appropriate, and assures the membership that the association’s resources were managed in a businesslike manner within the regulations established for their use.

The person conducting the financial review should always be impartial and not related by blood or marriage nor reside in the same household as the president or other financial officers or any chairmen handling funds.

The financial reviewer is often a member of the budget, programs, or fundraising committees, but is never authorized to sign the PTA’s checks.

The financial reviewer may be an elected officer, appointed individual or committee, or a professional hired by the PTA in accordance with the procedures listed in the bylaws. The president, treasurer, financial secretary, secretary, or committee chairmen handling funds may not review the finances.

The president may be a part of the financial review committee, if necessary, as long as the majority of the committee are non-check signers.

All unit, council and district PTAs must conduct financial reviews semiannually or upon resignation of the treasurer, financial secretary, any check signer, or at any time deemed necessary by the executive board.

At the beginning of the year, the treasurer should organize the association financial documents in a manner which can easily be reviewed. The finacial reviewer should meet with the financial officers and explain what is required to conduct a financial review.

A written Financial Reviewer’s Report must be presented to the executive board and association after the books and financial records of the association have been financially reviewed. An Financial Review Checklist and separate Financial Review Report page is required for each account. A report detailing findings and recommendations makes up the third component of a financial review. If all is in order, the financial reviewer or financial review committee prepares a report, and the financial reviewer or each member of the committee signs it.

A report must also be submitted by the financial reviewer or financial review committee in the event that there are not adequate records available to conduct a proper accounting of the association funds. The financial review report must be officially adopted by the association and uploaded to the document retention system (Financial Review Report).

If the financial review is not conducted by a qualified accountant, a financial review committee must examine the financial review and sign the financial review report prior to the financial review report being presented to the executive board and association. A qualified financial reviewer is defined as someone who has been trained/licensed to conduct audits and/or review accounting records, such as a Public Accountant or Certified Public Accountant (CPA). They do not need to be currently employed in the field.

See Financial Review Report form and Financial Review Checklist.

A financial review is a formal examination of the financial books and records of the financial officers of the PTA. It serves to certify that receipts and expenditures, as authorized in the minutes, are in conformity with bylaws, standing rules, and budget limitations. The PTA financial review serves as an official examination of the financial records conducted by the financial reviewer, appointed financial review committee, or paid professional auditor at the times specified in the bylaws and when there is a change in financial officers.

Financial Review Schedule
Purpose of a Financial Review
Preparation for a Financial Review
Financial Review Procedure and Recommendations
Financial Review Report

Financially review the books and financial records of the association semiannually or as additionally specified in the bylaws.

Ensure the completed financial review is presented to a financial review committee, if required.

Prepare and present written reports for adoption by the association.

The outgoing financial reviewer is responsible for conducting the financial review at the end of the term of office. California State PTA recommends that if the financial review is not completed within two (2) weeks after the completion of the term of office, the president may appoint a committee to immediately review the books. The same time frame must be followed for the semiannual financial review.

Financially review the books upon resignation of the treasurer, financial secretary or any check signer, or at any time deemed necessary.

Review and sign monthly bank statements and reconciliations. (These duties may be assigned to any other non-check signing officer.)

Work with the treasurer to understand the record-keeping system.

Download the Financial Reviewer Job Description

Key Role – Financial Reviewer

• Reviews the books and financial records of a PTA to determine their accuracy
• Presents written reports on financial reviews to the board for review and the association for adoption
• Uploads copies of adopted financial reviews to the document retention system as indicated in unit bylaws

Getting Started

Preparation – To know more about your new position, review the financial reviewer’s files and materials from last term. It’s also worthwhile to talk to the outgoing financial review to get advice and tips about your new role.

Soon after the election, meet with the incoming treasurer and financial secretary to discuss how you can work effectively together.

Talk about ways to organize the unit’s financial records and documents so they can be easily reviewed.

Take time to learn more about PTA policies, procedures and resources for managing finances and conducting a financial review as outlined in the California State PTA Toolkit.

How Tos

The purpose of a financial review is to verify that PTA funds are collected and spent as approved by the membership. That’s why, when doing a financial review, your main duty is to:

• Determine the accuracy of a unit’s financial records
• Check that funds are handled in a business-like manner in line with PTA policies and procedures
• Make recommendations on best practices, noting inconsistencies or errors

This will help to assure members that your PTA resources and funds are managed responsibly.

As stated in your bylaws, a financial review is performed by the financial reviewer, appointed financial review committee or paid professional hired by a unit.

A financial review is performed by a committee, chaired by the financial reviewer, or it may be conducted by a qualified accountant.  Members of the financial review committee are appointed by the executive board and ratified by the association.  Please note that a PTA member who is a qualified accountant/bookkeeper may conduct a financial review without a committee.

PTA financial reviews are done twice a year, as a mid-term review and a year-end review. They are also conducted when a financial officer or check signer is replaced, a bank account closed and whenever a financial review is deemed necessary.

For a financial review, there are two California State PTA forms – Financial Review Report and Financial Review Checklist – to complete. Both forms are available online at: www.capta.org

Preparing For Financial Reviews – Getting ready for a financial review is a cooperative effort among PTA board members. To make the process smoother, the financial reviewer takes the lead to encourage everyone to put the unit’s records in good order.

All materials used to perform a PTA financial review are listed on the Financial Review Checklist and include:

• Financial records, books and reports
• Meeting minutes
• Unit Bylaws and Standing Rules
• State and federal government tax filings and report forms

For an upcoming financial review, work closely with the board to identify a date to collect the required records. And, set aside enough time to finish the review within two weeks. This helps ensure that a review is done quickly and on time.

Performing Financial Reviews – Reviewing is more than verifying addition and subtraction. It involves tracking all financial transactions through the records.

When working on a financial review, use the Financial Review Checklist to confirm that:

• Receipts are properly accounted for
• Expenditures are made as authorized in minutes and within budget limitations
• Financial transactions conform to PTA Bylaws, polices and procedures

In completing this form, check off items as you review the records. Keep a list of any inconsistencies or errors in the records as well as any documents that were not provided. That way, these items can be included as financial review recommendations in your final report.

On the Financial Review Report, you will also verify that all necessary report forms required by California State PTA for insurance, tax returns and other government filings were completed and filed by the due date.

In addition, when conducting a financial review, keep in mind that separate reviews are done for each PTA bank account.

Reporting Financial Reviews – After a financial review is done, you will prepare a written report for the board to review and adopt. This report includes the two forms, Financial Review Report and Financial Review Checklist, plus any financial review recommendations to change financial procedures.

As a next step, present the report at an association meeting for adoption. When giving your oral report, simply read the statement on the Financial Review Report form about your findings and state that the financial review recommendations are attached.

It is also important to remember that if a financial review report has recommendations or raises questions, the president should appoint a committee to look into the issues and report back to the association.

Did you know? … PTA Board Members:

• Adhere to PTA financial procedures as outlined in Bylaws and State and National PTA guidelines
• Protect members’ privacy by utilizing member information for PTA work only
• Attend PTA sponsored workshops or trainings
• Maintain a current procedure book to pass on to a successor, in hard copy or in electronic format
• Work together as a team to improve the lives of all children and their families

Other Useful Information

Resources:

California State PTA – www.capta.org

• PTA Leaders tab and more
• California State PTA Toolkit
• Running Your PTA Made Easy
• Insurance Guide – Also mailed annually to PTA presidents

Online Services:

• Officer Contact System – To enter officer and board member information and generate useful reports
• e-Bylaws – To revise and update PTA unit Bylaws
• Tax Filing Support Center – To help units meet Federal and State reporting requirements
• MyPTEZ – To handle PTA accounting needs and generate financial reports
• TOTEM – ELECTRONIC MEMBERSHIP SYSTEM – To join and renew membership and for PTAs to manage membership

National PTA – www.pta.org

• Run Your PTA tab and more
• E-Learning Workshops
• One Voice Blog

 

(Year-round PTAs adapt accordingly)

UPON ELECTION/MARCH/APRIL

President-elect appoints the budget committee to develop the budget based on proposed PTA programs for the upcoming year.

Treasurer-elect chairs budget committee.

Board-elect adopts preliminary budget.

MAY/JUNE

Present proposed budget for adoption to the current executive board and the membership at the last PTA meeting of the year.

Association approves and releases any funds required prior to the next association meeting in the fall. This allows the board-elect the ability to cover routine summer expenses as outlined in the bylaws.

AUGUST/SEPTEMBER

Re-present budget to association for adoption at its first meeting. Release any funds required prior to the next association meeting.

Present financial review and year-end Annual Financial Report to association. Upload copies of all documents to the document retention system.

Send the first remittance of per capita dues through PTA channels. Send dues as received and at least monthly thereafter. No remittance for E-membership dues.

OCTOBER

Confirm tax forms for prior fiscal year are filed as required with copies forwarded to council or district as directed (Tax Requirements) and uploaded to MyPTEZ. (Contact District PTA for assistance if needed.)

Remit payment for insurance directly to AIM, the California State PTA insurance broker, via the online portal by December 20, or a late fee of $25 will be assessed by California State PTA.

NOVEMBER/DECEMBER

Send per capita dues through channels. Send dues as received and at least monthly thereafter. No remittance for E-membership dues.

Balance membership totals with council and district membership reports.

Prepare books and financial records for the midyear audit.

JANUARY

Submit books and financial records for mid-year financial review, as specified in the bylaws.

Present budget versus actual report to the executive board and association and revise budget if necessary.

Ensure that Workers’ Compensation form and additional premium, if required, have been submitted to AIM by the appropriate due dates.

FEBRUARY

Send Founders Day freewill offering through channels to district PTA, when collected. The event may be held during a month other than February.

MARCH

Ensure all per capita dues have been forwarded through channels. No remittance for E-membership dues.

Register for convention.

APRIL

Issue convention checks for authorized expenditures for elected delegates, if necessary.

Begin transitioning with newly elected financial officers.

MAY/JUNE

Attend workshops for financial officers, when offered.

Submit books and financial records to outgoing financial reviewer for end-of-term financial review, as stipulated in the bylaws (after close of fiscal year).

Give financial records and materials to the incoming financial officer (except those in financial review).

Assist incoming officers with changing authorized signers at the bank as needed. The treasurer-elect should contact the bank to determine the requirements for changing authorized signers.

Prepare Annual Financial Report that reflects the fiscal year. Prepare and file tax returns (end of fiscal year) and upload to MyPTEZ. The fiscal year is listed in the bylaws and on previous tax returns. The recommended fiscal year is July 1 to June 30.

Ensure all per capita dues have been forwarded through channels so that there are no financial review exceptions. No remittance for E-membership dues.

Other pertinent dates should be added (or adjusted) to the calendar to meet time frames specific to each PTA and fiscal year.

A financially healthy PTA

• Ensures that only authorized check signers (as specified in the bylaws) are on the bank signature card. Removes previously authorized signers from the signature card whenever a resignation occurs or a new term begins.
• Prepares and presents monthly treasurer reports, budget-to-actual comparative reports, financial secretary reports, committee reports and financial review reports at board and association meetings.
• Ensures budget is approved by association, funds are released and expenditures are authorized prior to spending funds.
• Only pays bills which have been authorized by the executive board or association.
• Has the bank statements and reconciliations reviewed and signed monthly by a non-check signer; may be the financial reviewer.
• Conducts at least two financial reviews per year, in accordance with the bylaws. Financial reviews not conducted by a qualified accountant are reviewed by a financial review committee.
• Files the appropriate IRS Form 990 annually and all state forms required by due date.
• Conducts a membership campaign throughout the year and remits membership funds not belonging to the association monthly. No remittance is made for memberships received through the California State PTA E-membership program.
• Remits California State PTA insurance premium before December 20^th. Remits Workers’ Compensation Annual Payroll Report Form and any additional premium no later than January 31^st.
• Ensures all monies are counted by two PTA members, one of whom must be an officer or chairman. Cash verification forms are signed by everyone who counts monies. A signed copy of the verification form is kept by each person who participates in the count.
• Issues a receipt for donations (see Providing Documentation to Donors and Donation Receipt).
• Ensures checks, bill payments/electronic funds transfer authorizations and transfers between bank accounts are signed by two authorized check signers.
• Ensures officers receive training at convention, state, district, and/or council PTA workshops.