PTA Treasurers play a crucial role in maintaining the health of the organization. This guide shares best practices for budgeting, banking and conducting a PTA audit, with specialized information on contracts, incorporation, insurance and federal tax requirements.
The budget is an outline of estimated income and expenses for the year. A finance or budget committee usually has the responsibility of developing a budget for the PTA. This committee may be elected or appointed according to the PTA bylaws and usually consists of three or five members, one of whom is the treasurer, who may act as chair.
A budget is not only a guide but also a working document. It shows a plan for spending those funds to meet the needs of the unit’s yearly activities, for obtaining funds and also should allow adjustments when those estimates are not exactly accurate following the amendment guidelines established. A budget does not dictate what a local unit must do. It simply presents what a unit intends to do. Just because a program or fundraiser is listed on the budget does not mean that it is required to be done. However, if an item is not on the budget, it cannot be done.
Developing the Budget
Effective budgeting includes consideration of the PTA’s stated goals and planned activities, as well as the financial needs to achieve these.
The committee should study the previous year’s budget and treasurer’s reports to determine how well that budget met the association’s needs. Next, members should determine the projected financial requirements, taking into consideration the funds needed for the approved programs, projects and leadership development. They should determine the sources of funds to meet these requirements.
From this information, the committee then develops the annual budget. The budget should show the allocated expenditures for the year’s activities, as well as the funds on hand and the anticipated receipts. Expenditures should equal receipts. Budgets cover a one-year period. How the year is defined should be determined in the PTA bylaws.
Approving the Budget
After the budget has been drafted, the budget committee chair should present it to the PTA board/ executive committee for consideration and then to the PTA membership for approval. This presentation is made during the association’s general meeting where a quorum is determined to be present. A majority vote of the members present and voting is required for adoption.
The budget is presented item by item to allow for discussion and amendment of each section. Funds should not be spent until the budget is approved and funds have been released by a quorum of members at an association meeting.
The budget committee should also seek approval of a plan to provide sufficient funds in the budget to enable the association to carry on its program during the summer and prior to the start of membership enrollment in the fall.
Amending the Budget
Since the budget is only an estimate of the planned expenditures for the year, it may be necessary, from time to time, to amend it. When there are additional expenses or a change in an allocated expenditure, the budget may be amended by a vote of the association at any regular meeting or at a special meeting called for that purpose.
To amend a budget item previously adopted, it is necessary to have a two-thirds vote; with previous notice, a majority vote.
Approval of Expenditures
The adoption of the budget authorizes the treasurer to pay for routine expenses covered in the budget only if such authority is given to the treasurer in the local PTA bylaws. If the local PTA bylaws do not provide this authority, the treasurer shall pay bills only when the board/executive committee or local PTA members vote to expend the money, and then only upon presentation of properly signed vouchers, as required in the state bylaws.
All expenditures must be reported to the board/executive committee and included in the Monthly Treasurer’s Report to membership. This report should display how the amounts expended to date compare with corresponding items in the approved budget. Any additional expenditure not provided for in the budget must be approved by the membership. The Monthly Treasurer’s Report should be attached to the minutes of the meeting at which it is presented. Changes in the budget, whether in income or expenditures, must be presented as amendments to the budget.