FREQUENTLY ASKED QUESTIONS

Leadership

Do local PTAs make their own decisions?
Can teachers serve on the Executive Committee?
Can anyone attend meetings of an Executive Committee or an Executive Board?
What is a PTA in good standing?

Finance

What is a 990 form?
May the PTA contract with a restaurant to provide food at a carnival for a discounted price? Can the profits go to the PTA?
If we are a public versus a private nonprofit charity, do we fall under the Brown Act?
Can the vendor's logo be placed on a t-shirt worn during a walk-a-thon in acknowledgment of their sponsorship?
Is it acceptable to have the PTA jog-a-thon headquarters at the sponsor's headquarters?
Can a PTA give out its tax ID# to people who make donations?

Fund-Raising

How do we handle non payment for candy that has been issued?
Can a PTA write a letter to parents requesting donations in lieu of a fund raiser?
How many fund raisers are allowed annually?
If a PTA cannot totally fund large purchases such as a computer lab or playground equipment in one year, how are the funds handled without encumbering a future board?
How much money can or should be carried over?

Budget

May a PTA release the entire budget at the beginning of the school year?
Are membership dues included in the gross income?
If you do not record the state and National PTA portion of membership dues as income, how would this money be entered?
Is a budget required?
Can any member of the association ask for a budget to be changed or can it only be changed at a budget meeting? What type of motion would the member make?
Is the PTA going to develop financial software? Can a PTA use Quicken, or a similar software product?
When the budget is approved, are the fund raisers included in the budget also approved or must they be voted on separately?
Can one bank deposit be made for three separate functions such as $100 for membership, $600 for a candy fund raiser, and $50 for the spirit shop?
Can a PTA bank at the local credit union? Is there a conflict since the credit union is not for profit and "owned" by the credit union members?
Recently the bank decided to stop sending back the canceled checks with the bank statement. Is this acceptable to use copies of the checks instead of the original?
Can checks be generated by computer?
If a PTA uses a computerized check register, is a hand written one still required?
Can the ledger be maintained in the computer?
Must all checks be saved permanently?

Taxes

On an interest bearing account, is the interest taxable and how is it reported?
Must a Form 1099 be completed if a corporation is paid $600 or more for services?
Do gross receipts include "money-in/money-out" such as for t-shirt sales which are not classified as a fund raiser?
If a unit has gross receipts of more than $100,000, but does not have assets over $250,000, which tax form should be filed?
Is a Form 1099 required for people who present assemblies?
What happens if the tax forms are not filed timely?
Do all PTA units end their fiscal year 6/30? Is it required that the fiscal year be the same as the North Carolina PTA?
When filing Form 990 for a fiscal year 7/1 through 6/30, what year form is used?

Check Writing

What should a PTA do about a NSF (non-sufficient funds) check?
How are the PTA books adjusted to reflect an NSF check that cannot be collected?
How far should the treasurer go to recover a $5.00 bank fee on a check that needed to be redeposited?
Explain "deposit promptly."
Must a receipt be issued for activities such as cookbook, pizza, or cookie dough sales?

Audit

How can bank statements be reconciled when the treasurer has not reconciled them, and it is difficult to determine if there are outstanding checks.
If there are problems with the audit, is the report still adopted by the association?

Commingling of Funds

If the school has an activity not sponsored by the PTA, can the PTA collect the funds and write checks for the activity on behalf of the school?

Treasurer

What steps can be taken if the past treasurer will not give up the past records?
What is the best way to organize receipts?
Do all the expenditures need to be read off at every board meeting or can they just be listed in the monthly treasurer's report?

Reflections

What are the deadlines for Reflections?

General

Who can join a PTA?
What do my dues pay for?
Aren’t all parent groups the same?
What does PTA do on a national level?

Parliamentary (Coming Soon...)

LEADERSHIP

Do local PTAs make their own decisions?

Each local units selects the programs and activities that it will undertake to address the needs of its local school and children. While PTA's national office creates many successful programs for local units to use, there are no PTA-mandated programs.

State and National PTA provide support to help the local PTAs succeed. For example, when working on local issues such as changing an intersection to make it safer, upgrading school water taps to remove the threat of lead contamination, enhancing reading standards, or other school or district concerns, National PTA is a welcome resource. In most cases, we have probably seen the same challenges elsewhere in the country. We therefore can advise local PTAs on the best practices observed, issues surrounding the problem, and the outcome, as well as provide them contact information for additional details.

Can teachers serve on the Executive Committee?

Yes, provided they are dues-paying members (in good standing) of that PTA.

Can anyone attend meetings of an Executive Committee or an Executive Board?

As a private organization, the PTA has the right to hold their meetings with only those listed in their bylaws as members of those committees. They are not open to anyone unless the Executive Committee or Executive Board grants a "courtesy seat" to the member or to a company representative to make a presentation. When their presentation or item of interest is complete, they must leave the meeting.

What is a PTA in good standing?

For a local PTA to be “in good standing,” it should comply with National PTA Bylaws and NC State PTA guidelines, including:

Adhere to the Purposes and basic policies of PTA

Adhere to NC State PTA policies and bylaws

Have bylaws approved by the NC State PTA every four years

Remit the national and state portion of the dues through the NC State PTA by the dates designated

FINANCE

What is a 990 form?

A 990 is an IRS Form entitled Return of Organization Exempt from Income Tax. If your PTA has an annual gross income of more than $25,000 you are required to file a 990 even if you do not receive a package. You can get help and information from the state PTA if you are required to file. Please make sure to keep a copy in your permanent PTA records.

May the PTA contract with a restaurant to provide food at a carnival for a discounted price? Can the profits go to the PTA?

Yes. PTA may contract with vendors, including restaurants, in order to hold a carnival. If the local restaurant provides food at a discounted price, the PTA will have the good fortunate of being able to make more money. Restaurants are required to follow Health Department guidelines. If a contract is involved, follow the guidelines for signing contracts.

If we are a public versus a private nonprofit charity, do we fall under the Brown Act?

The Brown Act has to do with officials elected to public offices (city councils, school boards) by the general population. PTA is a nonprofit, membership organization and does not fall under the regulations of the Brown Act. PTA is a public charity not a private foundation for Federal Income Tax purposes.

Can the vendor's logo be placed on a t-shirt worn during a walk-a-thon in acknowledgment of their sponsorship?

Yes. The vendor's logo can be placed on a t-shirt and worn during the sponsored event.

Is it acceptable to have the PTA jog-a-thon headquarters at the sponsor's headquarters?

If the jog-a-thon is being held at the sponsor's headquarters, there is nothing wrong with the PTA managing the event at the headquarter's site.

Can a PTA give out its tax ID# to people who make donations?

Yes. If the PTA is soliciting donations or sponsorship from vendors, they should be supplying their tax ID # when asked so that the vendor has documentation of the PTA tax exempt status and, therefore can legitimately deduct the donation.

FUND-RAISING

How do we handle non payment for candy that has been issued?

It is not recommended to issue candy without payment in advance. Generally, orders are taken and paid first. If candy has been issued without payment, and the customer will not pay, the PTA is in essence liable for payment. Contact the parent/customer by phone or mail and ask that they pay for the product that they agreed to purchase and already received.

Can a PTA write a letter to parents requesting donations in lieu of a fund raiser?

Yes. The request must be completely voluntary. Be sure to explain what the money will be used for, and ensure the moneys are deposited for that specific activity/program.

How many fund raisers are allowed annually?

When planning the year's activities, PTAs should use the 3-to-1 rule. For every fund raising activity, there should be at least three non fund raising projects aimed at helping parents or children or advocating for school improvements. All funds raised must be in the context of the Mission and the Objects of PTA.

If a PTA cannot totally fund large purchases such as a computer lab or playground equipment in one year, how are the funds handled without encumbering a future board?

The funds are designated for the specific activity. If the future board does not vote to continue raising money for the activity, the designated funds must then be gifted to the school for partial payment of the activity. However, before approving proposals for material aid to the school, a PTA should consider whether or not the proposed equipment or services is a public responsibility. If the association approves to raise the funds each year, establish an account that is specified for that particular activity.

How much money can or should be carried over?

As a guide, reserve funds should not exceed one-half of a PTA's budget for an average year. If it does, the indication is that the PTA is not giving as much service to children and youth as it should. In planning the budget, it is not uncommon for PTAs to have small contingency savings accounts for the following reasons: efficient management of funds, reserve to carry on programs during the summer and fall until dues are collected, and moneys to finance unexpected but approved projects or programs.

BUDGET

May a PTA release the entire budget at the beginning of the school year?

The PTA may not release the entire budget at the beginning of the year. The executive board may authorize the payment of bills within the limits of the adopted budget, but such action must be ratified at the next association meeting and recorded in the minutes. To facilitate the process of releasing funds, plan ahead to see what activities are going to be held and make motions to release funds up to the budgeted amount BEFORE activities occur. Checks may be written immediately upon presentation of a bill or receipt.

Are membership dues included in the gross income?

As directed, the North Carolina PTA and National PTA portions of the dues shall be forwarded through channels to the North Carolina PTA without requiring specific authorization by the association. These portions of dues should not be recorded as part of the unit PTA's gross income.

If you do not record the state and National PTA portion of membership dues as income, how would this money be entered?

This money is shown as "Income not belonging to the unit" and "Disbursements not belonging to the unit."

Is a budget required?

Yes. The budget is an outline of estimated annual income and expenses. It is part of the treasurer's duties to chair the budget committee and prepare a proposed budget. After the budget has been drafted, it should be presented by the treasurer to the PTA board/executive committee for consideration and then to the PTA association for approval. The treasurer presents the proposed budget to the association in writing and explains that budget amounts are estimated. The president asks if there are any questions concerning any item in the budget. If there are none, or after questions have been answered, a member moves to adopt the budget as presented or amended.

Can any member of the association ask for a budget to be changed or can it only be changed at a budget meeting? What type of motion would the member make?

Since the budget is only an estimate of the planned expenditures for the year, it may be necessary to amend it. The treasurer should review the budget monthly, compare it to expenditures, and bring a motion mid-year to amend if necessary. The budget may also need to be amended if new programs or projects are approved. Any voting member of the association may make a motion to amend the budget. To amend a previously adopted budget, it is necessary to have a two-thirds vote; with 30 days previous notice, a majority vote.

Is the PTA going to develop financial software? Can a PTA use Quicken, or a similar software product?

With the numerous software products already developed and on the market, it would not be cost effective for PTA to develop software. It is perfectly acceptable for a PTA to utilize one of these products and track their finances electronically. Remember to print out a hard copy of the monthly treasurer's report and affix it in the permanent secretary's minute book.

When the budget is approved, are the fund raisers included in the budget also approved or must they be voted on separately?

The proposed budget should be presented in writing after the proposed program has been adopted. You may present the budget as a whole, discussing the activities that you think will bring in income, and then discussing activities that will have expenditures. This would include all fund raisers. Give the membership the opportunity to ask questions regarding the budget, then vote on the budget as a whole. If a member has a question about a particular activity, you may pull that item from the budget until more information is obtained, and bring back an amended budget at the next association meeting.

Can one bank deposit be made for three separate functions such as $100 for membership, $600 for a candy fund raiser, and $50 for the spirit shop?

Yes, as long as each individual activity is accounted for separately in the treasurer's records, in the checkbook register and on the treasurer's report.

Can a PTA bank at the local credit union? Is there a conflict since the credit union is not for profit and "owned" by the credit union members?

A PTA may bank at a credit union if they are not charged a membership fee. PTA may not be a member of another organization.

Recently the bank decided to stop sending back the canceled checks with the bank statement. Is this acceptable to use copies of the checks instead of the original?

Yes. If the bank sends only copies of the checks, or allows the PTA to make copies, this is acceptable.

Can checks be generated by computer?

Checks may be printed on the computer as long as they are signed by two people authorized to do so. Electronic banking is strictly prohibited since there are no signatures required.

If a PTA uses a computerized check register, is a hand written one still required?

No. The computerized register is sufficient. However, a hard copy of the treasurer's report must be printed monthly and attached to the minutes as part of the permanent record. These records must be audited and the computer disks must be kept as part of the treasurer's records.

Can the ledger be maintained in the computer?

Yes. You may have to look at the treasurer's ledger book to see how to set up the computerized ledger. It is important that hard copies be printed out for audit, and the computer disks must be kept as part of the treasurer's records.

Must all checks be saved permanently?

Canceled checks for important payments such as taxes and special contracts must be kept permanently. They should be filed with papers pertaining to the transaction. Other canceled checks must be retained for seven years.

TAXES

On an interest bearing account, is the interest taxable and how is it reported?

Interest is considered as part of the gross receipts of the unit. If the gross receipts require that the unit file, then it is recorded on Form 990/990EZ.

Must a Form 1099 be completed if a corporation is paid $600 or more for services?

Federal and state laws require that when payment of $600 or more per calendar year is made to an individual (non-employee) or unincorporated business for services rendered or in payment for a grant, award, or scholarship, the employer must file Form 1099-MISC with the IRS. The form is not required to be issued to corporations. Form 1099-MISC must be sent to the recipients on or before January 31 of each year and filed with the IRS on or before February 28 of each year.

Do gross receipts include "money-in/money-out" such as for t-shirt sales which are not classified as a fund raiser?

Yes. All income to the unit, except for assessments money that the unit does not have control over or does not have any say in how it is used is considered as part of the gross receipts of the unit. It does not have to be classified as a fund raiser to be considered gross receipts.

If a unit has gross receipts of more than $100,000, but does not have assets over $250,000, which tax form should be filed?

If your gross receipts exceed $100,000, file Form 990 and Schedule A.

Is a Form 1099 required for people who present assemblies?

A Form 1099-MISC is required for anyone who is paid $600 in a year.

What happens if the tax forms are not filed timely?

The PTA will receive a notice from the IRS and may be assessed penalties and interest for the late forms. Respond immediately to any notice requesting that the fine be waived.

Do all PTA units end their fiscal year 6/30? Is it required that the fiscal year be the same as the North Carolina PTA?

No. Fiscal year is given in bylaws.

When filing Form 990 for a fiscal year 7/1 through 6/30, what year form is used?

The correct form to use is one for which the fiscal year begins. If the fiscal year begins July 1, 2000, and ends June 30, 2001, then the PTA would use the Form 990 for the year 2000.

CHECK WRITING

What should a PTA do about a NSF (non-sufficient funds) check?

Call the writer of the check, explain that the check was returned by the PTA 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.

How are the PTA books adjusted to reflect an NSF check that cannot be collected?

When a check has been returned by the bank, note it in the ledger and checkbook register along with the charges levied by the bank. Treat the charge as a disbursement.

How far should the treasurer go to recover a $5.00 bank fee on a check that needed to be redeposited?

Call the writer of the check, explain that the check needed to be redeposited in the PTA bank account and that the bank charged the PTA $5.00, and that the writer is now liable for the bank fee.

Explain "deposit promptly."

"Promptly." "Immediately." "As soon as possible." The treasurer should not keep cash in her car or home The deposit should be made the day of the event or collection of money, if at all possible. For safety reasons, the treasurer should not go to the bank alone. Two people should bank large deposits after the money has been counted and verified by two people. If a large amount of money is to be collected at a time when the banks are not open, arrangements should be made ahead of time to make a night deposit. Depending upon the community, a police or sheriff escort may be provided on request.

Must a receipt be issued for activities such as cookbook, pizza, or cookie dough sales?

A check may be used as a proof of purchase. If cash is the method of payment, then a numbered receipt should always be issued. If requested, provide a receipt regardless of whether the person paid by check or cash.

AUDIT

How can bank statements be reconciled when the treasurer has not reconciled them, and it is difficult to determine if there are outstanding checks.

Bank statements should be reconciled monthly. If that is not being done, then someone other than the treasurer should reconcile the statements. The executive board should insist that proper financial procedures be followed.

If the auditor determines that there are problems, then request the council or district come and do training. The bank can provide a list of checks it has received prior to the bank statement being mailed. Ensure that all bank statements be mailed to the school address. If the treasurer refuses to use correct procedures, the PTA executive board may ask her to resign using Due Process. Follow the procedures outlined in the Unit Bylaws for Local PTAs/PTSAs.

If there are problems with the audit, is the report still adopted by the association?

Yes. The audit report tells the status of the books. If the financial records are incorrect, then take steps to correct any problems. If the audit is done incorrectly, then do another audit. Request assistance from the council or district.

COMMINGLING OF FUNDS

If the school has an activity not sponsored by the PTA, can the PTA collect the funds and write checks for the activity on behalf of the school?

NO. This is called commingling of funds and is illegal. The PTA can help facilitate the activity but all funds must be deposited into the school account. All income must be reported on an annual financial report and if required, must also be reported on tax filings.

TREASURER

What steps can be taken if the past treasurer will not give up the past records?

The president should send a certified letter, return receipt requested, that all treasurer materials be returned to the PTA. Request that the person return the materials to the school office by a specific date, or arrange to have two executive board officers to pick up the records at a specific time and date. Ask the person to leave the materials by the front door if she doesn't want any contact with the PTA officers. Talk to the principal to see if he can facilitate the process. Call the bank and freeze the account, and if records are not returned, close that account and open a new one.

If mismanagement of funds is suspected, conduct an audit using past executive board and/or committee records. Request past statements from bank. Contact council or district for assistance. If audit shows moneys are missing, contact law enforcement.

What is the best way to organize receipts?

Organize receipts in a way that makes sense to you. One way is to keep receipts in an envelope with the month written on the outside of the envelope. Attach receipts to warrants; write check number and date on the receipt when the check is written, and file them in the order of the check number.

Do all the expenditures need to be read off at every board meeting or can they just be listed in the monthly treasurer's report?

The treasurer should provide a written treasurer's report at every executive board meeting with the expenditures listed. Board members should be given an opportunity to ask questions concerning any expenditure. It is the responsibility of the entire executive board to ensure that proper financial procedures are being followed.

REFLECTIONS

What are the deadlines for Reflections?

Click here for more information about Reflections.

GENERAL

Who can join a PTA?

PTA is an inclusive organization that is open to all adults who care about children and schools.

We have learned that the main thing parents want from schools is to help their child succeed academically, emotionally, and personally. PTA bridges the connection between homes and schools. By getting involved with PTA, the child

What do my dues pay for?

Our members pay dues that include a small portion for the state and national offices. In return, local PTAs and members receive access to many valuable resources, information, and training programs.

As a local affiliate of a national organization, local PTAs may be eligible for discounted insurance for special events that are not covered by the school insurance. Non-PTA parent groups usually must purchase more expensive insurance policies to cover special events and liabilities or leave their members at risk.

Aren’t all parent groups the same?

All parent groups have a local component—a way for passionate, dedicated parents to get involved in K–12 schools. Many of the other groups, however, focus solely on fundraising. In fact, some parent organizations are actually owned and operated by privately held for-profit businesses, making these organizations driven more by profits than children.

While fundraising for items not covered by school budgets is an important component for school groups, we know that parents are interested and concerned in other school issues as well. In contrast to other parent groups, PTA parents have a broader role to play beyond fundraising in the education of their children.

PTA is a 501(c)(3) nonprofit, tax-exempt organization. Other independent parent groups must either complete a complicated process to file for tax-exempt status on their own, or must file taxes on all revenues received.

What does PTA do on a national level?

Not all decisions affecting a child’s school happen at the local level. That’s why, from day one, it has been the mission of National PTA to address the needs of all children. Children in every school. In every state. Across the entire nation. Even if you’re not a member, PTA still works for your child.

We have the vision and determination to push for national education policies. We have been a driving force in establishing school lunch programs, after-school care, immunization programs, school bus safety, and television rating standards, before they became law.

Today our government relations professionals are addressing the importance of parent involvement, safe and nurturing environments, and support for public schools. And together, with your membership, we can do even more.