Familiarize yourself with how and where your unit keeps its records (both electronic and paper)
Familiarize yourself with your unit's Treasurer forms (for requesting reimbursement/invoice payment/depositing money) and update them if necessary
Get a tutorial from your outgoing Treasurer on how your unit keeps their check register. If you are still using Excel or a paper based check register, it may be wise to upgrade to money management software like Quicken, MS Money etc. (See our list of tools)
Prepare your filing system now for your Permanent Records Binder and your "Monthly Reports & Treasurer Requests" (see below for a list). Go all out! Make labels, a cover sheet, and fill in as many documents as you can. You will want to reference these documents during the year and you will need to prepare them for the Audit Committee. It's easier if you already have a place to put them as soon as you receive them. Ask your outgoing Treasurer what worked for them. You will receive a lot of paper, and being prepared to receive it is the best way to stay on top of your job!!
Double check the ending balance recorded on the previous year's audit. That should be your July 1 starting check register balance.
Visit the bank with the outgoing Treasurer or President to ensure the signature cards are up to date (you should have 3 authorized signers). Get a copy of your signatory authority page for your Permanent Records Binder, you will need it for the audit.
Questions to Ask Your Outgoing Treasurer
As you transition into your role, here are a few questions you may want to ask:
Are there time limit restrictions for how quickly reimbursement checks should be issued?
How are voided checks recorded?
What happens if a check you deposited is returned as unpayable?
How do you manage cash box requests? (Note: NEVER make a check out to "Cash")
How do you process credit card payments and receive that money in your checking account?
If you have after school classes that require you to pay teachers, ask how the W9s and 1099s are prepared and filed. (See Hot Topics)
How do you create a list of gross receipts for the end of year audit and tax filing?
How do they coordinate with the Membership Committee Chair to get a Membership list and pay dues?
REMEMBER: ALL BOARD MEMBERS, not just the Treasurer, have fiduciary responsibility for the financial position of the PTA.
Previous Year's IRS 990 (copy of the confirmation email if you file the 990N postcard)
Bylaws (and Standing Rules if applicable)
Officer Update Form with contact information
Bank signatory paperwork (showing who is authorized to sign checks)
Current year Insurance policy
Calendar - List of board and meeting dates
Current adopted budget and any budget amendments
Copy of all contracts signed by the president
501(c)(3) determination letters (school year covers two calendar year's letters)
Sales tax exemption certificate (if applicable)
1099 Filing for After School Classes (if applicable)
Your Monthly Records should include:
Meeting Agenda and Minutes (All Executive Board and General Membership meetings)
Treasurer Report (Account Reconciliation) with Budget Report
Bank Statement (and PayPal statement if applicable)
Deposit records and expense records in the order they appear in your bank statement
Good Standing & Non-Profit 501(c)(3) Federal Income Tax Exemption
All Virginia PTA units are covered under the umbrella of the Virginia PTA's 501(c)(3) non-profit status granted by the Internal Revenue Service in 1986. This group exemption (under number 3229) exempts your local unit from paying federal income tax on money earned, allows donations to be claimed as tax exempt and also allows your unit to apply for Virginia Sales Tax Exemption.
In order for the Virginia PTA to include a local unit under the group exemption, they need to be able to provide the IRS (if asked) with 5 current pieces of documentation that are required for all non-profits. When you provide those 5 items to the Virginia PTA your unit is considered to be in "Good Standing" and is therefore eligible to request a 501(c)(3) Unit Verification Letter from the Virginia PTA.
You generally request your 501(c)(3) Verification letter in November. You can give a copy of this 501(c)(3) letter to any sponsors, businesses or individuals making donations to your local unit so that they can claim their donation as tax exempt.
Abiding by federal guidelines is extremely important to maintain tax-exempt status and ensuring your PTA is financially sound. Here you’ll find basic information about maintaining your 501(c)(3) status.
Local units need a 501(c)(3) IRS Determination Letter (from the Virginia PTA) in order to obtain an exemption from paying Virginia sales tax. The Local Unit Treasurer can apply for and obtain a Virginia Sales and Use Tax Certificate of Exemption Letter from the Commonwealth of Virginia by completing an online application. Your Sales and Use Tax Exemption Certificate is renewed every 5 years. Virginia PTA is registered under a consolidated or "joint" registration for solicitation of contributions with the Virginia Department of Agriculture and Consumer Affairs and local units are included under that registration. The proof of chapter 5 compliance sequence number is #26006.
Completing an annual fincancial review and providing a copy of it to the Virginia PTA is one of the requirements to keep your unit in Good Standing and maintain your non-profit status. Your treasurer records also must be reviewed when a treasurer leaves office – before the new treasurer takes control of the books
Your Financial Review Committee should be comprised of three PTA members who are NOT authorized signers on your unit's bank account.
Ideally your financial review should be complete within 30 days of the end of your fiscal year (generally by July 30th) and provided to the Executive Board to adopt. This allows the incoming Treasurer to fully transition into their new role and allows the incoming Executive Board to use the valuable summer months to prepare for the coming year.
Please remember, at your first General Membership PTA meeting of the new fiscal year General Membership should review and approve the financial review. The president and treasurer that are in office at the time of the vote should sign page 1. Please email the entire financial review report and any additional information from the financial review committee or auditor to firstname.lastname@example.org. A copy should be placed in the minutes and records for that meeting by the Secretary and the Treasurer should send a copy to the Virginia PTA by October 31st at the very latest.
Last Day of School: Target deadline to submit all Treasurer Reimbursement Requests
June 30th: Fiscal year ends and so does spending under the 20XX-20XX budget.
July 1st - 9th: Treasurer reconciles checking account to June 30, fills out their portion of the financial review report and prepares all materials for the Financial Review Committee.
July 10th - 20th: Financial Review Committee conducts their review and provides a full completed report to Executive Board
July 20th - 30th: File 2020 taxes for 2020-2021 fiscal year and send a copy to Virginia PTA. Visit the bank to update authorized signers (three signers is best practice).
August 1st -- Treasurer transition complete! Treasurer starts work on the 2021-2022 Budget in collaboration with a Budget Committee or the Executive Board.
Month of August - Finalize your 2021-2022 Calendar. Prepare for Back to School events. Conduct a practice run for processing payments and collecting membership dues!
At Your First General Membership Meeting of 2021-2022 - General Membership votes to adopt the 2020-2021 financial review report and a 2021-2022 budget.
The financial review report is mailed to Virginia PTA within 15 days.
All local PTA units that have gross receipts of less than $50,000 must file an IRS Form 990N (e-postcard). If the PTA's gross receipts are $50,001 or more, but less than $250,000, the unit may file a Form 990EZ. If a PTA's gross receipts are over $250,000 they must file a full Form 990. If you fail to file taxes for 3 years in a row you risk losing your federal tax-exempt status.
You should strive to have your tax filing complete as soon as possible, ideally before the new Treasurer takes over the books (so by July/August). At the very latest you must have filed with the IRS within 5 months of the 15th day when your fiscal year ends (generally November 15th).