Finance Basics

PTA FINANCE BASICS

The PTA Treasurer serves a crucial role in your association. As you get started in your position you should first familiarize yourself with the organizational documents that govern your PTA, including your Bylaws and the annual filings needed to maintain the financial health of your PTA. At the start of your term you should also take time to set-up your recordkeeping system and review the Annual Financial Review document. Putting proper financial procedures in place at the start of the school year provides transparency for your members, helps protect your PTA from theft and fraud, and prepares you for a quick end of year Financial Review.

Non-Profit Status

All PTAs in Virginia are organized and chartered by Virginia PTA and covered under the umbrella of Virginia PTA’s 501(c)(3) non-profit, tax-exempt status granted by the Internal Revenue Service.

Virginia PTA’s federal group exemption exempts your local unit PTA from paying federal income tax on money earned, allows donations to be claimed as tax-exempt, and enables your local PTA unit to apply for a Virginia Sales Tax Exemption. Virginia PTA files annually with the IRS to affirm your PTA is in good standing and should remain under our federal tax exemption.

As a subordinate of Virginia PTA, your local PTA is also covered in Virginia PTA’s annual filing to the Virginia State Corporation Commission (SCC) and the Virginia Department of Agriculture and Consumer Services (VDACS). This umbrella coverage enables your local PTA to fundraise, solicit charitable contributions, host charitable gaming activities, raffles, and the like in the Commonwealth of Virginia.

 Standards of Affiliation ( aka 501(c)3 Determination) Letter

Annually, Virginia PTA provides your PTA with a Standards of Affiliation (SOA) verification letter that verifies your PTA’s good standing as a 501(c)(3) non-profit under Virginia PTA. Your SOA letter can be provided to sponsors, donors, grant makers and other companies to validate your IRS status as a 501(c)3 exempt from federal income tax as well as your coverage status with the Virginia SCC and VDACs.

Standards of Affiliation letters are automatically uploaded to your PTA’s Givebacks (MemberHub) account AFTER ALL annual Good Standing materials have been submitted to Virginia PTA via Givebacks (MemberHub). Your Annual Standard of Affiliation letter is valid from compliance due date (August 1) to compliance due date (August 1). Please be mindful of this, if you have something that you renew annually using your SOA letter, you should complete that renewal prior to your end of fiscal year transition to the incoming PTA Board. Within Givebacks (MemberHub) you will find your unit’s letter by looking under Compliance / Enter Submissions.

All Standards of Affiliation materials are due annually by August 1st.

• Learn More about Standards of Affiliation

Fiscal Year

PTAs in Virginia have a fiscal year of July 1 to June 30.

Virginia Sales Tax Exemption

Virginia sales tax exemption is not connected with the IRS or federal income tax exemption. The Virginia Department of Taxation administers the Sales Tax exemption, and can exempt your local PTA from paying sales tax on purchases. Having a sales tax exemption is not required for your PTA. Learn more about applying for Virginia Sales tax Exemption and if it is a good fit for your PTA’s spending practices. If your PTA has a Sales Tax Exemption, it typically needs to be renewed directly with the Virginia Department of Taxation every five years.

Money Management Basics

• Three Authorized Signers. Your PTA checking account should have three authorized signers, the Treasurer, President and Secretary.
• Two Signatures on Checks. All checks should have two signatures, ideally the Treasurer with the President as co-signer. Virginia PTA dues may be remitted electronically by just the President or Treasurer.
• Check Recipient. You should not sign checks written to yourself or to Cash.
• Reimbursements. All requests for reimbursement should be include a Treasurer Request/Reimbursement Form and the receipt(s). Best practice is that Reimbursement Requests are submitted within 30 days of the expense and by the last day of the school year.
• Two People Count Cash. All cash/checks from events should be counted by two people. See Cash Management Guidance for more tips.
• Monthly Reporting. At EVERY Executive Board and General Membership Meeting the Treasurer should provide a Bank Reconciliation Report AND a Budget Report.
• Monthly Bank Statement Verification. One person without signature authority should review the bank statements alongside the Treasurer Reconciliation Report.
• Keep PTA funds separate. PTA funds should NEVER be deposited into a personal account, school account or the account of any other organization or group. Likewise you should not deposit school funds or personal funds into your PTA account.

Preparing a Budget