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Whenever an authorization vote has not been taken, the treasurer must wait for approval prior to reimbursing the member. The member presents the Payment Authorization/Request for Reimbursement form to the treasurer with proof of money spent, such as an invoice marked “paid,” a dated cash register receipt, etc. The treasurer presents each bill at a meeting of the executive board or the association, and a motion must be made to pay it. Discussion and vote follow. The action of the executive board must be ratified at the next association meeting.

When bills are approved for payment, the secretary records the motion, listing the bills approved (authorized) for payment in the minutes.

The secretary signs the Payment Authorization/Request for Reimbursement form to denote that the expense has been approved and the motion is included in the minutes. The president signs the Payment Authorization/Request for Reimbursement form to denote it is a PTA-authorized expenditure.

The Payment Authorization/Request for Reimbursement form is given to the treasurer.

The treasurer prepares the check and records the check number on the Payment Authorization/Request for Reimbursement.

The Payment Authorization/Request for Reimbursement form is filed for review in the financial review.

The treasurer obtains the signatures of two authorized signers on the check for the protection of the PTA’s funds.

The treasurer distributes the check.

Follow proper procedures to guard against misappropriation of funds. The responsibility of establishing and maintaining correct procedures rests with each member of the PTA executive board.

The Payment Authorization/Request for Reimbursement form is a combination of two forms: Payment Authorization and Request for Reimbursement. The Payment Authorization/Request for Reimbursement should include the following information: date, check number, payee, amount to be paid, and budget line item(s), with the signatures of the secretary and the president authorizing the payment, following association approval. Receipts must be attached.

Budget approval is not authority for the expenditure of funds except as stated in the bylaws. The committee chairman must first present plans that include a detailed budget to the executive board for approval. The executive board has the authority to authorize association bills within the limits of the budget adopted by the association. All monies/payments must be within the approved budget and either preapproved (funds released) by the association at an association meeting or ratified by the association at the next association meeting. To release funds for any activity, a motion must be adopted at an association meeting. “I move to release up to $600 for the fall festival. Budget category: fall festival.” The treasurer should provide a budget-to-actual comparison report to the executive board at least quarterly with the variance on all released funds.

After authorization by the executive board or the association, the presentation of a fully supported Payment Authorization/Request for Reimbursement Form permits the treasurer to write checks. An authorization for payment must be signed by the president and secretary. It is not necessary to wait until the next association meeting to reimburse monies.

Persons authorized to purchase items for the PTA, for which the expense will be reimbursed, may request an advance in an amount not to exceed estimated expenses. The advance must first be approved by the executive board. (Request for Advance)

Adoption of the budget does not authorize the expenditure of the money. Committee plans must be approved by the executive board and funds must be authorized by the executive board or association before plans are implemented or any funds are expended. Bills must be presented for payment.

Neither executive board nor association approval is required to disburse funds not belonging to a unit (Funds Not Belonging to the Unit). All these checks must be ratified at the next association meeting.

Can We Write This Check Decision Tree — Color

Can We Write This Check Decision Tree — Black and White

Every PTA must establish procedures for non-sufficient funds (NSF) checks. At a minimum, PTAs should require that the payee is liable for whatever fee the bank has charged for the transaction. These procedures should be documented in the standing rules.

Tips for handling checks received by the PTA in payment for goods or services and returned from the bank for non-sufficient funds:

• Call the writer of the check, explain that the check was returned by the bank and provide the reason given by the bank. Remember to state that the writer is now liable for whatever fee the bank has charged for the transaction. Document all conversations, including unsuccessful attempts to contact the check writer.
• If the unit has not received payment within 10 days, contact the check writer again to discuss the matter.
• Thirty days from the initial contact, if payment still has not been received, send the writer of the check a certified letter:
  • State in full why the money is owed to the PTA.
  • Demand payment in cash or bank issued money order plus the bank fee. Do not accept another check. (For cash, issue a written receipt to the payer, signed by two individuals.)
  • State in the letter that according to California Civil Code § 1719, if the unit files with the Small Claims Court, it will sue for the amount of the check plus three times that amount in damages.
  • Keep a copy of the letter for the files.

The decision to pursue a money matter in the courts should be decided by a vote of the PTA executive board. If the unit or council is incorporated, check the Articles of Incorporation to determine who should be involved in making such a decision. Remember, this is a confidential matter and should not be discussed outside the executive board meeting.

The court may require that the PTA provide a copy of a motion authorizing the filing of the claim and the individual authorized to represent the association.

For proper direction, rules, and procedures for filing in Small Claims Court, check with the clerk of the municipal court in the unit’s area. It may be necessary to provide the court clerk with a copy of the minutes that include the motion (resolution) designating certain officers to act for the association in court.

A savings account may be opened in the name of the PTA, to earn interest on funds not currently needed, by vote of the executive board and recorded in the executive board minutes. For protection, make a motion to deposit or transfer funds from the checking account to the savings account.

The earning of interest does not jeopardize the PTA’s tax-exempt status. Earned interest becomes part of gross income. Include the amount of funds in the savings account and any activity for the period in each treasurer’s report.

Invested funds should be in a federally-guaranteed and insured account.

PTA bank statements should be sent to the PTA’s permanent address, usually the school. Statements should never be sent to the home address of a check-signing officer.

Most banks will prepare and mail bank statements monthly on the date requested by the PTA. When establishing the statement date, take into consideration the timing of executive board and association meetings. While the bank statement should be used to help create the Treasurer’s Report, it may be necessary to include on the Treasurer’s Report income received and checks written after the most current bank statement date. The end date for each Treasurer’s Report should be just before the date of the meeting so that the information given to the executive board and/or association is as accurate and up-to-date as possible.

If a physical bank statement cannot be mailed to the school site, a non-check signer, usually the financial reviewer, should be added as view only person on the bank account. They can review the statement online and then sign a downloaded copy PDF of the statement.

Try to use a bank that returns canceled checks or provides copies with the bank statements. This will facilitate the financial review process. If canceled checks are not returned, the bank must provide photocopies or copies that may be printed from online access. If the cost of obtaining a paper bank statement is cost prohibitive for the PTA, a non-check signer may print the statement from the PTA’s online access. If electronic statements are available, a copy should be sent to the elected officer who is reviewing the bank statement monthly.

Another elected officer who does not sign checks (often the financial reviewer) must open, review, sign and date the bank statements prior to presentation to the treasurer for reconciliation. Using the treasurer’s financial reports, minutes and the bank statement, conduct a five minute financial review.

Five Minute Financial Review Procedure

Step 1:  Look at the checks. Verify

• Two signatures on every check
• Payee, amount and date match the treasurer’s report
• Purpose of payment is included in the check’s note section

Step 2:  Look at the deposits. Verify

• Date and amount match the treasurer’s report
• Deposits have been timely

Step 3:  Assure no online payments or withdrawals have been made using a debit/ATM card. Assure no cash withdrawls have been made.

Step 4:  Reconcile the bank statement to the treasurer’s report.

• Make adjustments for checks that have not cleared and deposits not shown.

Step 5:  If necessary, contact the treasurer to determine the source of any errors. Corrections, if required, are included in the next treasurer’s report. Report findings, if any,  to unit president, treasurer and financial reviewer (if the reviewer isn’t the financial reviewer).

The five-minute financial review will not reveal that the treasurer allocated income incorrectly, but it will point out that a deposit showing on the treasurer’s report didn’t actually make it to the bank or that a check cashed by the bank didn’t show up on the treasurer’s report. If this happens, ask more questions and investigate further.

Reconciling Bank Statements

The treasurer should reconcile the monthly bank statement(s) and compare with the check stub/register balance promptly to ensure that bank and financial records are correct. Identify differences, note outstanding checks and determine the adjusted bank balance at the end of the month. This establishes the funds available against which checks may be written.

After reconciliation, file all supporting receipts, details of deposits, canceled checks in numerical order and duplicate deposit slips. Make notations in the check register of all cleared checks, not any uncashed checks, and indicate that the account was reconciled. Provide a copy of the reconciliation, along with the bank statement(s) to the financial reviewer or other non-check signer for review. The officer reviewing the reconciliation should sign and date the reconciliation and return it to the treasurer. The treasurer shall place the reconciliation, bank statement(s), and all other items listed above on file for financial review.

The Annual Financial Report reports gross receipts and disbursements for the fiscal year and has separate sections for amounts belonging to the association and amounts NOT belonging to the association. The report is distributed to the executive board, to the membership, and may be required by federal and state agencies. Copies of these reports must also be uploaded to the document retention system, as required in the bylaws.

If the fiscal year is different from the budget year and the term of office, a financial report showing all the gross receipts and disbursements for that annual period must also be produced.

See Annual Financial Report (Sample).

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 contract is a legally enforceable agreement between two or more persons or organizations. All contracts must be approved in advance by the PTA membership and signed by two elected officers, one of whom must be the president.

The appropriate officer/chairman must have authorization from the executive board before negotiating a contract. Receive the contract in writing. Understand the terms and conditions of the contract. Have the contract reviewed by legal counsel and/or the California State PTA insurance broker if needed. Ensure that the length of the contract is limited to the current membership year and does not encumber future boards.

All contracts must be approved by the association prior to being signed.

When entering into a contract, the president is responsible for the agreement and should clearly identify that it is the PTA entering into the contract and not the president as an individual. The signatures on a written contract should be formatted as follows: “ABC PTA by Jane Smith, President, 2019-2020.”

Signing a contract obligates the PTA to comply with the terms and conditions of the contract and to pay the stated sum. The fact that the activity is not a financial success or that the PTA has insufficient funds to meet its obligation has no effect on the responsibility assumed.

Do not sign a contract that makes the PTA responsible for injury or damages. See Hold Harmless Agreement

Units should check with their local school district before hiring any independent contractor or teacher for a classroom or school site to ensure that school district policies and procedures are followed. Independent contractors must provide current certificates of insurance, which the PTA must retain in its files. Directors, teachers, or instructors hired as independent contractors must carry their own general liability insurance and Workers’ Compensation Insurance. See PTA as an an employer

A monthly report for each bank account must include

• balances at the beginning and end of the period covered;
• amounts credited to the general fund and any special funds, separated by PTA income belonging to the association and PTA income NOT belonging to the association;
• receipts and disbursements with a detailed written report, separated by PTA expenses belonging to the association and PTA expenses NOT belonging to the association;
• the report must be posted and/or distributed. Copies of the report must be provided to the president and secretary. Information provided should be included in the minutes or attached to the minutes.

The Treasurer’s Reports are created in two distinct sets – one covering the periods from association meeting to association meeting, and the other covering the period from executive board meeting to the next executive board meeting. The end date for the report should be just before the date of the meeting so that the information is as accurate and up-to-date as possible.

NOTE: Any account owned by the PTA to which deposits are made or from which payments are made is considered a “bank account” and requires a monthly treasurer’s report. This includes PayPal, Stripe, Square, and other financial processing accounts.