Treasurer Resource Guide 2023

Table of Contents

About PTA

Leadership Competencies 3

Texas PTA Diversity, Equity, and Inclusion Policy 4

Standards of Continuing Affiliation 5

Getting Started 6

Keeping Records 7

Sample Plan of Work 8

PTA Budgets 10

Sample Budget 11

Handling Money 12

Sample Deposit Form 14

Protecting Your PTA with Insurance 15

Raising Money 16

Spending Money 17

Sample PTA Funds Request 19

Reporting 20

Sample Financial Report 22

When to Collect Sales Tax 28

Financial Reconciliation 29

Financial Mismanagement 30

FAQs 32

Training & Learning Resources 35

Texas PTA Staff and Board of Directors Support 37

Notes 38

Easy access to all of the live links in the

Resource Guide are available at a scan of

the QR code.

About PTA

VISION Every child’s potential is a reality.

MISSION To make every child’s potential a reality by engaging and empowering families and communities to

advocate for all children.

PURPOSES

● To promote the welfare of children and youth in home, school, places of worship, and throughout the

community.

● To raise the standards of home life.

● To advocate for laws that further the education, physical and mental health, welfare, and safety of

children and youth.

● To promote the collaboration and engagement of families and educators in the education of children

and youth.

● To engage the public in united efforts to secure the physical, mental, emotional, spiritual, and social

well-being of all children and youth.

● To advocate for fiscal responsibility regarding public tax dollars in public education funding.

VALUES

● Collaboration: We will partner with a wide array of individuals and organizations to broaden and

enhance our ability to serve and advocate for all children and families.

● Commitment: We are dedicated to children’s educational success, health, and well-being through

strong family and community engagement, while remaining accountable to the principles upon which

our association was founded.

● Diversity: We acknowledge the potential of everyone, without regard, including but not limited to: age,

culture, economic status, educational background, ethnicity, gender, geographic location, legal status,

marital status, mental ability, national origin, organizational position, parental status, physical ability,

political philosophy, race, religion, sexual orientation, and work experience.

● Respect: We value the individual contributions of members, employees, volunteers, and partners as we

work collaboratively to achieve our association’s goals.

● Accountability: All members, employees, volunteers, and partners have a shared responsibility to

align their efforts toward achieving our association’s strategic initiatives.

PTA NATIONAL STANDARDS FOR FAMILY-SCHOOL PARTNERSHIPS

● Standard 1: Welcome All Families The school treats families as valued partners in their child’s

education and facilitates a sense of belonging in the school community.

● Standard 2: Communicate Effectively The school supports staff to engage in proactive, timely, and

two-way communication so that all families can easily understand and contribute to their child’s

educational experience.

● Standard 3: Support Student Success The school builds the capacity of families and educators to

continuously collaborate to support students’ academic, social, and emotional learning.

● Standard 4: Speak Up for Every Child The school affirms family and student expertise and advocacy

so that all students are treated fairly and have access to relationships and opportunities that will support

their success.

● Standard 5: Share Power The school partners with families in decisions that affect children and

families and together—as a team—inform, influence, and create policies, practices, and programs.

● Standard 6: Collaborate with Community The school collaborates with community organizations and

members to connect students, families, and staff to expanded learning opportunities, community

services, and civic participation

Leadership Competencies

Skills and Abilities Demonstrated by Effective Leaders

Successful leaders are effective leaders. Think of some of the most effective PTA leaders

you have worked with. They fill their PTA role well, but their leadership capacity goes beyond that. They

have skills and abilities that allow them to step into various roles. They see the value people have to offer

and seek their involvement. They provide a clear purpose that others want to follow. They lead with

integrity and strive to improve continually.

Texas PTA has identified a set of competencies that effective leaders demonstrate. Current and potential

leaders can use these skills and abilities to improve their leadership. Local or Council PTA nominating

committees can use them to recruit, nominate, and elect effective leaders. The competencies also drive

our Full Circle Leadership Development program.

This list is by no means exhaustive. Rather, it is representative of the qualities PTA leaders demonstrate

in the work they do to make every child’s potential a reality.

Competencies

Descriptions

Integral to All Categories

Communications

Listens actively and conveys information clearly, concisely, and accurately in both

writing and speech

Adaptive

Creativity

Sees and thinks of new ideas, alternatives, and ways to do things

Continuous Learning

Pursues the development of skills and knowledge

Forward-Thinking

Critical Thinking

Obtains all relevant information, identifies problems and causes, evaluates information,

and determines criteria that indicate solutions

Motivation

Demonstrates and promotes interest and enthusiasm

Vision

Demonstrates a clear understanding of the future and how to get there

Interpersonal

Collaboration

Works as a team to achieve a common purpose, putting service before self

Initiative

Steps up unprompted and goes above and beyond with excellence

Relationship Building

Develops trust and mutual respect, and values diversity

Intrapersonal

Empathy

Expresses verbal and nonverbal recognition of feelings, needs, and concern for others

Integrity

Does the right thing when no one is watching

Self-Awareness

Assesses their own strengths and weaknesses

Technical

Delegation

Shares responsibilities, including guidance and follow up

Time & Resource

Management

Effectively prioritizes and manages the resources to accomplish the goals of the group

or project

Texas PTA Diversity, Equity, and Inclusion Policy

This Policy has been developed by the Texas PTA Diversity, Equity, and Inclusion Task Force,

adopted by the Texas PTA Board of Directors (“Board”), and is intended to be consistent with the

National PTA’s Diversity, Equity, and Inclusion Policy. This policy is also designed to further the

commitment of Texas PTA to diversity, equity, and inclusion: To continually be a voice for all children by

reflecting diversity and inclusivity in our membership, leadership, program content, advocacy, training,

partnerships, and communications.

We acknowledge the potential of everyone without regard, including but not limited to: age, culture, economic

status, educational background, ethnicity, gender, geographic location, legal status, marital status, mental

ability, national origin, organizational position, parental status, physical ability, political philosophy, race,

religion, sexual orientation, and work experience.

Effective Date: This policy was amended as of May 23, 2023, shall be reviewed by the Board every two

years, and shall remain in effect until amended or replaced in its entirety as a result of action by the Board.

Scope: This policy shall guide Texas PTA, its Board, all constituent divisions (Local PTAs and other divisions,

including Council PTAs), and their respective members.

Definitions: For the purpose of this policy:

● Diversity is the representation of and respect for people from different backgrounds and

identities—including but not limited to race, ethnicity, culture, religion, socioeconomic status, age,

geographic area, sexual orientation, gender identification, language, approaches to learning,

diagnoses, or exceptionalities impacting learning or access to learning, and physical appearance. It

also involves bringing different ideas, perspectives, lived experiences, talents, values, and worldviews

to represent the wide variety of children, caregivers, educators, and communities within the PTA family.

● Equity provides fairness and access to resources, opportunities, and outcomes so that all communities

are provided with what they need to be engaged and successful. This moves beyond an “equal across

the board” approach to include the following:

a) Recognize and address bias and privilege.

b) Understanding and attending to specific individual and community needs, providing additional

resources to those with greater needs.

● Inclusion is actions, behaviors, and social norms that strive to ensure all people feel safe, welcomed,

and accepted. This means putting diversity into action with skill and intentionality, striving to ensure

everyone feels respected, supported, and valued—and can fully participate with an equal voice and a

right to be heard. This includes actively seeking out voices that have been traditionally

underrepresented and/or marginalized.

Policy: Texas PTA, its Board, and its constituent divisions (Local PTAs and other divisions, including Council

PTAs) shall:

● Promote and encourage awareness, inclusion, and engagement of all diverse populations represented

in the community.

● Openly assess beliefs and practices to ensure inclusiveness and equity and to guard against

discrimination.

● Strive to ensure that the membership, leadership, programs, partnerships, and published materials

reflect the diversity of their communities.

● Facilitate communication with families in their communities in languages they understand to the extent

possible.

● Identify and address barriers that hinder inclusivity.

● Foster programs and practices that eliminate bias, prejudice, and misunderstanding.

● Advocate for funding, laws, and regulations that support programs, policies, and services that meet the

health, safety, and educational needs of all student populations in Texas public schools.

● Provide resources and training that develop a more diverse and inclusive group of members, leaders,

and community.

Texas PTA first adopted a Cultural Diversity and Inclusion policy on July 26, 2012.

Local PTA

Standards of Continuing Affiliation

Each membership year, Local PTAs must meet both of the following requirements to

attain Active Status with Texas PTA. The membership year begins on August 1.

1. Remit to Texas PTA state and national membership dues for at least 20 members.

2. Submit to Texas PTA the name and contact information (mailing address, phone number, and email

address) of at least one current executive board member, preferably the president.

Local PTAs must comply with all of the following standards to remain in Good Standing with Texas

PTA. Local PTAs that do not maintain Good Standing will be subject to a Local PTA Retention Plan as

described below.

1. Maintain Active Status with Texas PTA.

(see requirements above)

2. Report all additional members and remit state/national dues to Texas PTA each year.

3. Submit to Texas PTA the name and contact information for all additional executive board members

within 15 days of election or appointment.

4. Review Local PTA bylaws (and standing rules, if applicable) every three years and submit to Texas PTA

for approval.

5. Each year, within 60 days of fiscal year-end, electronically file and have accepted by the IRS the

appropriate “Form 990 Return of Organization Exempt from Income Tax”.

Local PTA Retention Plan (initiated when a Local PTA does not maintain Good Standing)

Notification: Texas PTA will notify the PTA of the actions required to attain Good Standing. The PTA will have

30 days from the date of the notification to meet all Good Standing requirements to avoid

moving into the Restriction Phase.*

Restriction: While in the Restriction Phase, the PTA is not eligible for awards, programs, or grants

administered by Texas PTA or National PTA. The PTA will have 30 days to meet all Good

Standing requirements to avoid moving into the Restructure Phase.

Restructure: For PTAs that do not attain Good Standing following the Notification and Restriction Phases,

Texas PTA may begin the process of restructuring the leadership of the PTA or revoking the

PTA’s charter. A PTA that signs an Action Plan may temporarily move into Intervention, giving

them time to resolve any outstanding issues. The PTA will continue to be ineligible for awards,

programs, and grants administered by Texas PTA and National PTA until Good Standing is

achieved.

Intervention: Once in the Intervention Phase, Texas PTA will assign a support team to assist the PTA. If all

Action Plan requirements are not resolved by the agreed-upon date, the PTA will be moved

back into Restructure. *With cause, Texas PTA may place a Local PTA that has not met all

Good Standing Requirements into the Intervention Phase early.

1. Active Status is used to determine eligibility in many Texas PTA programs and services. Please reference specific

program eligibility requirements to ensure your PTAs participation.

2. PTAs submit executive board member information to Texas PTA electronically via the Texas PTA website.

3. Bylaws are submitted via the Bylaws Submission Form found on the Texas PTA website.

4. Proof of filing and acceptance is the Exempt Organization Business Master File issued regularly by the IRS.

Getting Started

● Register as a PTA leader within 15 days of election or appointment at txpta.org/office-intake.

● Complete all mandatory training available at txpta.org/pta-training within 30 days of election or appointment.

● Join your PTA.

● Work with the outgoing treasurer to review your responsibilities and become familiar with the PTA’s financial

practices. Some important things to ask include:

○ Does the PTA have a sales tax permit? If so, does the PTA file sales and use tax returns monthly,

quarterly, or annually? Does the PTA have sales tax to remit?

○ Which IRS Form 990 did our PTA file this year?

○ Are there any outstanding or recurring bills?

○ What financial tracking system does our PTA use?

● Become familiar with the adopted budget and work with other executive board members to determine any

needed amendments before the new year begins.

● Develop a plan of work and submit it to the executive board for approval.

● Coordinate the addition and removal of the authorized signers on the bank account. Ensure you have access

to bank and e-commerce accounts.

● Guide incoming executive board members on effective financial strategies for the PTA.

● Sign the Texas PTA Confidentiality, Ethics, and Conflict of Interest Agreement.

● Ensure the PTA President has appointed a non-signer to review all PTA accounts monthly.

Responsibilities

The treasurer is the authorized custodian of the PTA’s funds and serves as chair of the budget and finance

committee. A general overview of responsibilities may be found below.

● Study all references to duties and finances in the PTA’s bylaws and standing rules (if applicable) and Texas

PTA's policies available at txpta.org/policies.

● Ensure the PTA meets all requirements of the Standards of Continuing Affiliation.

● Ensure a budget, approved by the membership, is in place at all times.

● Ensure all cash funds are counted by multiple individuals and documented with a deposit form.

● Make timely deposits to the PTA bank account.

● Make disbursements per the budget, as adopted by the membership, and verify that a funds request form and

necessary documentation accompany each transaction.

● Keep an accurate and detailed account of all monies received and disbursed.

● Present a financial report and provide a budget vs.actual report at all regular membership and executive board

meetings.

● Reconcile account statements monthly, as soon as received.

● Keep on permanent file the PTA Employer Identification Number (EIN), as assigned by the IRS, and if

applicable, the sales tax permit, as assigned by the Texas Comptroller in accordance with the Records

Retention Policy.

● Electronically file the appropriate IRS Form 990 within 60 days of the end of the fiscal year.

● Present proof of acceptance by the IRS of the appropriate Form 990 filed by the previous treasurer at the first

executive board meeting of the year.

● File sales tax returns to the Texas Comptroller as required (annually, quarterly or monthly) if the PTA has a

sales tax permit.

● Submit all required items to the Financial Reconciliation Committee promptly.

● Maintain records in compliance with the PTA’s Records Retention Policy.

Required Monthly Duties

● Deposit funds and make payments, as needed.

● Record transactions, including sales tax and state/national dues in liability accounts.

● Coordinate with the membership chair to report members/dues to Texas PTA.

● Prepare financial reports (dated from the last meeting to the current meeting) and present at all regular

membership and executive board meetings.

● Review the budget for any necessary amendments and present proposed amendments at the next

membership meeting for approval.

● Reconcile the checkbook/financial records to the account statement.

● Reconcile any e-commerce, credit card, or merchant accounts to the account statement.

● Check the Local PTA Roster to confirm that your PTA is in Good Standing. If not, identify what’s missing.

Keeping Records

Compiling and maintaining a complete record of your activities can help the PTA Leaders who follow behind

you. Passing important information to your successor gives them what they need to get started. A PTA should

follow its records retention policy to be sure they are properly storing the records they need to maintain

regulatory compliance.

How to Compile Your Records

Ask yourself, “If I knew nothing about the job, could I do it with this information?” Depending on your position,

you may need hard copy materials at your fingertips. If so, use a loose-leaf folder or binder with tabbed

dividers. Other positions could easily keep their records electronically via cloud-based storage or on a USB

drive.

other required documentation.

Online & Point of Sale Payment Collection Systems

The PTA’s membership must vote to authorize recurring payments, credit/debit cards, and online and/or point

of sale payment collection system(s) by amending their standing rules or, in the absence of standing rules,

adopting a separate policy. PTAs should note that all adopted policies must be reviewed and adopted annually

by the membership. Visit the Texas PTA E-Commerce Policy at txpta.org/policies for detailed information

regarding the policy requirements.

Sample Deposit Form Deposit #

_______________ PTA

Deposit Form/Formulario de Depósito

(To be used when giving funds to Treasurer/Para uso cuando se dan fondos al Tesorero)

Event/Evento Date/Fecha

Person completing form/ Phone No/

Persona llenando el formulario Núm. Del tel.

Please make sure that there are always 2 people counting money to protect the reliability of the count.

Asegúrese de que siempre hay 2 personas que cuenten el dinero para proteger la rescisión del conteo.

Bills/

Billetes

Amount/

Cantidad

$100

$50

$20

$10

$.50

$.25

$.10

$.05

$.01

Total

Membership $ Total/Total de Membresías

$ to Local PTA/$ a PTA local

$ to State/National/$ a Estado y Nacional

Total # of Members/# total de miembros

# of Reg Members/# de miembros regulares

# of Life Members/# de miembros vitalicios

Check #/

# del Cheque

Name/

Nombre

Amount/

Cantidad

Total

Total Checks/Total de Cheques

Total Cash/Total de Dinero

Total Deposit/Total de Depósito

Deposit Budget Category(s) & Amount(s)

línea de presupuesto de Depósito & Amount y

Cantidad(es)

Counter’s Signature/Firma de Contador Date/Fecha

Treasurer’s Signature/Firma de Depositante Date/Fecha

Counters should retain either a copy or a photo of this form.

Los contadores deben mantener una copia o una foto de esta forma.

For Treasurer’s Use Only/Para uso exclusivo del Tesorero:

Staple or electronically append

supporting documentation.

Engrapar o agregar

electrónicamente

documentación de apoyo.

Entered in computer/Ingresado en la computadora

Cleared bank/Una vez el cheque haya sido cobrado

Protecting Your PTA with Insurance

Texas PTA strongly encourages PTAs to obtain adequate insurance protection against liability and financial

loss due to fraud, embezzlement, or dishonest acts.

Texas PTA negotiated a group discount with Association Insurance Management (AIM) (800-876-4044) to

obtain insurance coverage at affordable prices. Similar coverage may be obtained from any insurance

company, locally or otherwise.

AIM offers several types of coverage listed below, and PTAs may secure any combination of coverage at any

time during the year. Additional information may be found at txpta.org/pta-insurance.

Event/General Liability Coverage

● $1,000,000 or $2,000,000 liability coverage per occurrence (no deductible)

● Protection from lawsuits if someone is injured at one of your events

● $5,000 per person medical payment included (no deductible)

● Option for increased medical payments: $10,000, $25,000, and $50,000

● Option for Media Liability to cover misuse of the content on your PTA website or social media

● Option for Hired and Non-owned Auto Liability

● Option for Abuse and Molestation Coverage

Event/general liability insurance covers carnivals, bounce houses, dunking booths, fun runs, skating parties,

auctions, and more.

Directors & Officers Liability Coverage

● $1,000,000 liability limit (no deductible)

If someone sues the officers of your PTA for mismanagement, misrepresentations, dissemination of false or

misleading information, or inappropriate actions, this coverage pays to defend them against those actions.

Embezzlement Coverage (Fidelity Bond)

● Coverage available: $10,000 to $250,000 (usually based on annual revenue)

● $250 deductible

Embezzlement insurance covers monetary losses sustained by a PTA through any fraudulent or dishonest

act(s) or embezzlement committed by any of the elected officers, members, volunteers, or employees.

Note: For embezzlement insurance to apply, a PTA must have account statements reviewed monthly by a

non-signer and conduct an annual financial reconciliation.

Business Personal Property Coverage (Inland Marine)

● Coverage available: $10,000 to $250,000

● $250 deductible

Property insurance covers items such as raffle merchandise, auction items, and fundraising supplies while in

your PTA's care, as well as your PTA’s personal property like popcorn machines, school store supplies,

emergency relief supplies, and more.

Raising Money

Most PTAs need to raise funds to provide programs and services throughout the year; however, fundraising

efforts should not be the primary emphasis for PTAs. The three programs or non-fundraising activities to one

fundraiser guiding principle is recommended by Texas PTA. PTAs should fundraise for the amount that is

necessary to accomplish their goals for each fiscal year and not build a nest egg for future use. This principle

provides guardrails that prevent a PTA from losing focus on the primary emphasis of the promotion of the

purposes of the PTA.

There are many methods to raise funds, and PTAs will be approached by numerous external groups that offer

their products and services to assist the PTA in raising money. PTA Leaders must evaluate these opportunities

carefully and consider all legal and community-related implications.

When using a fundraising company, protect the PTA by having all information in writing. A contract protects

you, the PTA, and the fundraising company. With a contractual agreement, all parties assume responsibility for

complying with the terms, but the PTA also begins with a clear understanding of who handles what. Make sure

the contract is an agreement between two organizations, not two individuals. The president only signs

contracts with executive board approval, and the signer adds their title after their name to show they are

signing for the PTA. Note the following elements when reviewing the contract:

● cost and profit percentages

● list of approved promotional materials

● desired services

● procedure for handling damaged, unsold, or returned merchandise

● dates for delivery and payment due consistent with verbal agreements

Each year, the treasurer should prepare a report of all fundraising events since the last sales tax return was

filed, including dates held, tax-free day designations, total sales, taxable sales, and sales tax collected to be

used by the incoming treasurer.

Information regarding sponsorships, auctions, bingo, raffles, movie nights, and donors/charitable contributions

can be found in the Fundraising Resource Guide.

Non-Commercial Policy & Co-Venturing

PTA bylaws include the requirement to be non-commercial:

● The name “PTA” is not to be used in conjunction with the commercial activities of other organizations,

including the promotion of their goods or services.

● A PTA does not raise money for other organizations or individuals, no matter how worthy their cause.

Commercial co-venturing is becoming a popular form of fundraising for PTAs. Commonly, a business

will advertise a cooperative fundraising effort in which a portion of its sales will be forwarded to the PTA

as a gift. The size of the gift is determined by how successful the business is in selling its product or

service.

● Given PTA’s non-commercial policy, the only appropriate role in such a venture is a passive one. The

PTA must refrain from active promotion or marketing of the business’s products or services and do no

more than inform members of the agreement.

● Agreements should be structured so as not to appear as an endorsement of a product or company. If

this is not possible, the PTA should not enter into the agreement.

Spending Money

PTA Expenses

Consider the following when spending PTA funds:

● The PTA membership must authorize the expenditure of all funds by adopting and amending the budget

throughout the year. Each executive board member and sub-committee chair prepares a plan of work

(POW). The POWs are approved by the executive board and guide the work and provide detail regarding

how PTA funds intend to be spent.

● Funds Request Forms are submitted to the treasurer to request a payment or reimbursement. All requests

should include the associated receipts or invoices justifying the payment. Before payment, the budget line

and amount should be confirmed, and the funds request form should be signed by the committee chair

responsible for the budget line per their plan of work. Additionally, the form may require the signature of an

additional account signer or the PTA president before payment.

● Purchases or reimbursements should never be paid for with PTA cash.

● Check signers should never sign a blank check or issue disbursement without receipts or sufficient written

documentation.

● Checks should never be made payable to “cash.” If cash is needed for a specific event, the event chair

should complete a funds request form for the amount of cash needed to have change for the event. The

check should be made payable to the volunteer responsible for the start up cash. The start-up cash should

then be deposited in the bank at the end of the event.

● Authorized signers on the bank account(s) may not sign a check where they are also the payee.

Gift Cards/Gift Certificates

Any gift cards purchased by the PTA should not exceed $25 in value and must be retail-specific (that is,

branded cards of restaurants or stores). Generic cards (for example, MasterCard, Visa, and so on) are not

permitted.

Gift cards are cash equivalents, so PTAs should exercise the same care when storing and distributing gift

cards.

If a gift card is donated to the PTA to subsidize PTA expenses, the gift card should be kept by the treasurer

until it is needed for a PTA expense. Once needed, the individual should complete a funds request form and

provide the receipts to the treasurer immediately after purchase.

Recurring Payments

The PTA’s membership must vote to authorize recurring payments by amending their standing rules or, in the

absence of standing rules, adopting a separate policy. PTAs should note that all adopted policies must be

reviewed and adopted annually by the membership. Visit the Texas PTA E-Commerce Policy at

txpta.org/policies for detailed information.

Recurring expenses should be documented with vendor, amount, frequency, and login info so the subsequent

executive board may access and determine ongoing use.

Debit/Credit Cards

The PTA’s membership must vote to authorize the use of a debit or credit card by amending their standing

rules or, in the absence of standing rules, adopting a separate policy. PTAs should note that all adopted

policies must be reviewed and adopted annually by the membership. Visit the Texas PTA E-Commerce Policy

at txpta.org/policies for detailed information on debit/credit card requirements.

Donations to Individuals and Groups

PTA members expect that most of the money raised by your PTA will be spent on programs and services that

benefit the students of your school. However, there may be times when it makes sense to donate to another

non-profit. While the PTA may never donate money to any person or family, they may donate to another

non-profit if it shares a common purpose with PTA.

Donations may be made to another non-profit provided all of the following criteria are met:

● The PTA membership votes to donate.

● The group has 501(c)(3) status and the PTA has documentation to prove that.

● The group shares at least one common purpose with PTA found at txpta.org/our-mission.

PTA policy concerning non-partisan, non-sectarian, and non-commercial activity must be followed.

Donations to Schools

Texas PTA has a policy that PTAs never turn funds over to the school to be spent at their discretion. There are

times when the best decision is to give funds to the school for a designated purpose. Often, schools can

purchase items at a significant discount where, if the PTA writes the check, they will have to pay the full retail

price. Other times, the PTA may decide to fund a portion of the school's purchase. When the best fiscal

decision is to have the school make the purchase, certain guidelines must be followed:

● The membership approves the donation amount to be made and its purpose.

● Funds are only given for a specific, designated purpose agreed to in writing between the PTA president

and the appropriate school official. Some district policies require that donations be made to the district

and not a local campus. Some school districts will not allow a donation to be made for a certain

purpose. Make sure you understand your school district’s policy before donating.

● A sample donation form to the school/district agreement can be found at txpta.com/treasurer. Local

school district procedures and policies may require that this form be modified.

● The written agreement specifically states the following information:

○ the nature of the item to be purchased;

○ the intended use;

○ the timeframe within which it is to be purchased;

○ the agreement to provide the PTA with a copy of the invoice;

○ the agreement that any excess funds will be returned to the PTA;

○ the agreement that all funds will be returned to the PTA if any of these terms are not met; and

○ the agreement on who is responsible for installation (if applicable), maintenance, and insurance.

Playground Equipment

If the PTA members approve the purchase, or assistance with the purchase, of playground equipment for the

school, the PTA should not directly purchase or install the playground equipment. The liability for any injuries

from the playground equipment remains with the PTA regardless of any exemption statements made by the

campus principal or school. It is important to note that Texas public schools may not be sued for injuries.

Instead of the PTA purchasing the playground equipment, the PTA should provide a check to the school if

funds are approved and indicate that the funds are earmarked for playground equipment. The school will then

choose the company to purchase the equipment and the contractor to install the equipment.

Field Trips

Field trips are a great way to give back to your school community. However, the PTA could face liability if the

field trip is the PTA’s event or the PTA gifts money to the school for a field trip. Gifting money to the school

significantly reduces liability, but is no guarantee the PTA will not be held liable. Review the information

provided by AIM Insurance by clicking the link Field Trips: What You Should Know at txpta.org/pta-insurance.

Sample PTA Funds Request Check #

_______________ PTA

Funds Request Form

PAYEE SUMMARY

Payable to Date Requested

Address Phone

Requestor Date Needed

Budget Category(s) to be Charged & Corresponding Amount(s)

Budget Category

Amount

Budget Category

Amount

PURCHASE SUMMARY

Item Purchased

Place of Purchase

Amount

TOTAL

Receipts and/or invoices must be attached. A sales tax exemption form should be used when feasible.

CHECK DELIVERY INFORMATION

Please indicate where you would like this check

sent or how you would like to receive it:

APPROVALS

Committee Chair’s Signature Date

Treasurer’s Signature Date

2nd Signer’s Signature ((if Standing Rules require 2 signatures) Date

FOR TREASURER’S USE ONLY

Receipt/Invoice Date

Date Paid

Date Received

Payment Method

Plan of Work/Motion

Total Payment

Reporting

Financial Tracking Systems

How a PTA tracks its PTA finances is a decision of the treasurer in conjunction with the executive board. Some

PTAs have budgeted funds to pay for online financial tracking systems. Other PTAs have few transactions and

prefer paper ledgers or spreadsheet programs to track their finances. Texas PTA is partnered with

myPTEZ.com to provide free membership and a fee-based financial tracking system for our PTAs. The paid

product includes a web-based application with multiple user logins, customer support, training, and the

functionality you need to track your PTA’s finances. The reports in this resource guide use the myPTEZ format

and terminology.

Membership Dues

As the treasurer, you work closely with the membership chair to correctly report and remit dues. The local

portion of PTA dues should be a budgeted income line. The amount of a PTA’s local dues can be found in a

PTA’s bylaws. The state and national portion of PTA dues should be recorded in a liability account, as this

money belongs to others. The state and national portion of PTA dues, and an associated membership roster,

should be sent digitally or by mail to Texas PTA regularly, at least monthly. Each funds request form from the

membership chair requesting payment to Texas PTA should include a membership roster that reconciles with

the payment. Likewise, any membership deposit should include the membership roster that reconciles with the

deposit.

The PTA can also recruit members for free through JoinPTA.org, a mobile-friendly website where anyone can

join a PTA using a credit or debit card. When a member joins through JoinPTA.org, they will be added to a

PTA’s myPTEZ account immediately. If your PTA is not currently on JoinPTA.org, visit txpta.org/join-pta to learn

how to add your PTA and complete the ACH authorization agreement. Payment for the local portion of dues

collected through JoinPTA.org is made once a month via ACH to the bank account provided to Texas PTA.

Payment is within seven business days of the month's end. An email is sent to the president and treasurer

notifying them of the amount of the ACH being sent. This payment covers all JoinPTA.org transactions for the

previous month.

Financial Report

The bylaws require that the treasurer present the financial report at all regular membership and executive

board meetings and at other times when requested by the executive board or members. These reports must

be given at every meeting for all accounts, not just the general account. Separate reports are prepared for

executive board meetings and membership meetings because the reports will cover different reporting periods.

The financial report provides the income and expenses of the PTA for the period from the last meeting, for the

year to date, and also includes the adopted budget, as amended (if applicable).

The written financial report should include the following information:

● The periods covered

● The starting balance (cash balance forward) at the beginning of the period. This amount should

agree to the adjusted cash balance (ending balance) from the last meeting report.

● Each budget line item's income (receipts) and expenses for the current period being reported, year

to date, and the adopted budget, as amended (if applicable)

● The balance of PTA funds at the end of the period

● Sales tax and state/national dues liability changes and balance as of the date of the report.

● The ending balance (adjusted cash balance) as of the end date of the report

This information can be provided in two separate reports, if that is how the financial tracking system reports the

information. Your financial software may refer to liabilities as escrow or off budget.

Copies of the report(s) are distributed electronically or on paper to the members in attendance. The

membership can then see where the income and expense lines fall relative to the budget.

Financial reports are filed rather than adopted. The reports are provided to the secretary and attached to the

meeting minutes, which are provided to the Financial Reconciliation Committee and maintained permanently.

A verbal report should also be given that includes the following information:

● starting balance;

● total income and expenses for the current period;

● change to sales tax liability during the current period;

● change to state/national dues liability during the current period; and

● ending balance of the sales tax liability and state/national dues liability accounts.

○ Note- in the myPTEZ financial software, this information can be obtained from a balance sheet

as of the ending date of the report.

Preliminary and Final Annual Financial Report

The treasurer presents a preliminary annual report to the membership at the annual meeting, the final meeting

of the year. This report is for information only and is not officially adopted. At the annual meeting, the financial

report may serve as the preliminary annual report if it includes the year-to-date actuals and the adopted

budget.

Once the PTA’s fiscal year is complete, the outgoing treasurer prepares a final annual financial report and

provides it to the financial reconciliation committee.

The financial reconciliation committee presents the financial reconciliation report, and the incoming treasurer

presents the final annual financial report at the first regular membership meeting of the new year. The financial

reconciliation report and annual financial report are filed after the PTA has formally adopted the financial

reconciliation report.

Sample Financial Report

Note: Your PTA’s Financial Report may differ due to variances in software.

Terrific PTA

Financial Report September 20, 20__ to December 10, 20__

Selected Period

Year to Date

Budget

Cash Balance Forward

$2,701.76

$3,000.00

Receipts

Membership: Local Dues

$858.00

$1,100.00

$1,375.00

Donations

$75.00

$200.00

$250.00

Fundraiser: Fall Festival

$4,059.00

$4,000.00

Fundraiser: School Supplies

$0.00

$7,986.00

$8,000.00

Fundraiser: T-Shirts

$1,460.00

$1,855.00

$2,000.00

Total Receipts

$6,452.00

$16,050.00

$16,925.00

Expenses

Bank Fees

$12.00

$15.55

$70.00

Clothes Closet Donation

$100.00

Council Dues

$75.00

Credit Card Fees

$33.22

$56.32

$80.00

Fundraiser: Fall Festival

$996.32

$1,000.00

Fundraiser: School Supplies

$0.00

$5,986.52

$6,000.00

Fundraiser: T-Shirts

$1,678.00

$1,800.00

Hospitality (PTA Meetings)

$26.51

$58.99

$200.00

Insurance

$0.00

$400.00

Leadership Training

$0.00

$1,169.88

$1,200.00

Legislative Action (Rally Day)

$0.00

$400.00

Life Membership

$0.00

$125.00

Membership Promotion

$26.51

$52.33

$150.00

Newsletter

$50.00

$150.00

$700.00

Parent Education

$0.00

$36.00

$100.00

PTA Administration

$16.78

$55.69

$150.00

Reflections Awards

$0.00

$300.00

Scholarships

$500.00

Student Programs

$750.00

$2,500.00

Teacher Appreciation

$87.69

$255.99

$900.00

Website

$0.00

$125.00

Total Expenses

$4,365.03

$12,496.59

$16,925.00

Net Receipts

$2,086.97

$3,553.41

$0.00

Cash Balance

$4,788.73

$6,553.41

Change to Liability Acct: Sales Tax Payable

$1.07

-$174.19

Change to Liability Acct: State & National Dues

-$868.50

$27.00

Adjusted Cash Balance

$3,921.30

$6,406.22

December 10, 20 ___ balance of Sales Tax Liability is $83.85 and balance of State/National Dues Liability is $0.

IRS and State Sales Tax

IRS Group Exemption

In a ruling dated September 14, 1967, the Internal Revenue Service (IRS) held that Texas PTA and its PTAs

are exempt from federal income tax under the provision of Section 501(c)(3) of the Internal Revenue Code of

1954. As a result of this ruling, Local and Council PTAs are not required to file Form 1023 to obtain this status.

This ruling further holds that contributions to Texas PTA and its Local or Council PTAs are deductible to the

donor as charitable contributions for federal income tax purposes

Texas PTA is required by law to report annually to the Internal Revenue Service a list of all PTAs in Good

Standing with the state PTA. Texas PTA’s group exemption covers the PTAs listed. For a PTA to be considered

in Good Standing, it must comply with the Standards for Continuing Affiliation as published on the Texas PTA

website at txpta.org/standards-of-continuing-affiliation. Any PTA not included in the list sent to the Internal

Revenue Service would be subject to income tax on all earnings.

To request a copy of the IRS Determination Letter and a Letter of Good Standing, email

[email protected] and include your contact information along with your PTA’s name, city, and PTA

ID number.

Federal EIN

Each PTA is issued a nine-digit tax identification number, known as an Employer Identification Number (EIN)

or federal ID number. Texas PTA provides this number at the time a PTA is organized. A PTA’s EIN is a part of

the permanent records of the PTA and is kept on file with Texas PTA. The PTA bylaws will list the EIN assigned

to the PTA.

The EIN is used for all PTA bank accounts. The number is also required when filing the appropriate IRS Form

990 or applying for a State of Texas sales tax permit. Be sure to use your PTA’s EIN, not Texas PTA’s EIN,

when filing the 990.

IRS Form 990

A PTA’s gross receipts in a given fiscal year determine the appropriate IRS Form 990 that should be filed.

Gross receipts are the total amount the PTA receives from all sources during its annual accounting period

without subtracting any costs or expenses.

Note: Sales tax collected, state and national dues, and any carryover from the previous year are not sources of

revenue to the PTA and are not included in the calculation.

The IRS Form 990 is an informational return only. It must be filed electronically. No money will be due if filed

timely and accurately. If the PTA is assessed penalties for failure to file, contact the Texas PTA office for

assistance before paying.

While the IRS provides a filing deadline no later than four and a half months after the fiscal year end, Texas

PTA requires that PTAs electronically file and have their 990 accepted within 60 days of the fiscal year end.

PTAs must file one of the following IRS Form 990s annually:

● 990-N: Gross receipts are normally $50,000 or less per year.

● 990-EZ: Gross receipts greater than $50,000 but less than $200,000 per year.

● 990: Gross receipts of more than $200,000 per year.

Texas PTA receives notification from the IRS throughout the year of 990s that have been filed and accepted.

PTA’s who do not file timely will be subject to the Retention Plan found in the PTA’s bylaws. Failure to file the

IRS Form 990 for three consecutive years will result in the PTA’s tax exemption being revoked by the IRS.

IRS Form 990-N

PTAs with gross receipts normally less than $50,000 should file their 990-N electronically directly with the IRS.

If the PTA is at least three years old and averaged $50,000 or less in gross receipts for the preceding three tax

years (including the year for which calculations are being made), the PTA may file the 990-N. This notice asks

for the following information:

● Employer Identification Number (EIN). This can be found in Article I of the PTA’s bylaws.

● Tax year ending (prepopulated with the fiscal year-end date)

● Confirmation that the organization has not terminated or gone out of business

● Confirmation that the organization’s annual gross receipts are $50,000 or less

● Legal name (prepopulated with PTA Texas Congress)

● DBA name (PTA name)

● Mailing address (school’s address)

● Website address (if the organization has one)

● Name of a principal officer (president’s name)

● Address of principal officer (school’s address)

The 990-N filing guide and video on how to file are located at txpta.org/treasurer. Filing at irs.gov is free. Be

sure that the IRS accepts your return before considering the filing to be complete. An IRS 990 login is unique

to the individual filer and does not need to be passed down.

IRS Form 990-EZ/990

PTAs with gross receipts of more than $50,000 but less than $200,000 are required to file the 990-EZ. PTAs

with gross receipts of more than $200,000 must file the 990.

PTAs filing Form 990-EZ may be able to do so electronically without the assistance of a paid preparer by using

a fee-based online service. If filing a full Form 990, PTAs may want to engage the services of a licensed tax

preparer. If engaging the services of a licensed tax preparer, be sure they are aware of the Texas PTA

requirement that PTAs file their 990 electronically within 60 days of the end of the fiscal year. Because of this

requirement, make sure the licensed tax preparer is aware that filing for an extension is not an option.

When completing Form 990-EZ/990, two numbers must appear on page one in the appropriate place. The first

number is the Texas PTA group exemption number (GEN) 1889. The second number is the Local or Council

PTA’s Employer Identification Number (EIN). Note: Do not use Texas PTA’s EIN when completing the return.

Schedule A must be completed and attached to Form 990-EZ/990. Due to the group nature of our exemption,

all PTAs are considered non-profit for the same reason. Therefore, all PTAs must check the box (currently Box

10) in Part I of Schedule A indicating the reason for public charity status.

Some Local and Council PTAs may be required to file a Schedule B if they meet the requirements. To

determine whether your PTA is required to file Schedule B, first complete your PTA’s Form 990-EZ/990.

Organizations that received $5,000 (in money or property) from any one contributor will be required to file

Schedule B. Refer to the IRS instruction booklet for Schedule B for line-by-line instructions on how to complete

Schedule B. If your PTA does not meet these requirements, check the box (currently Box H) on the

990-EZ/990.

If the Local or Council PTA reported more than $15,000 from total gaming on line 6a and/or $15,000 or more

from fundraising and special events on line 6b, then Schedule G, Parts II, and III must be filed with the

990-EZ/990.

In addition, all PTAs must complete Supplemental Schedule O. This schedule lists other expenses not

included in Part 1, Lines 10-15, with a total that agrees to Part 1, Line 16 of the 990-EZ/990.

The last three years’ returns must be available for public inspection upon request. An organization is not

required to provide a copy of its Form 990 if the organization has made that form publicly available, but must

nevertheless make the form available for in-person inspection.

Change In Accounting Period

A PTA may change its year-end by adopting a bylaws change. Until the bylaws change has been adopted by

the membership and approved by Texas PTA, the IRS cannot be notified of this change in the PTA’s year-end.

If the PTA files a 990-N and the treasurer observes that the fiscal year does not match the fiscal year

designated in the bylaws, contact the Texas PTA Finance Department at [email protected], who will notify the

IRS. This correspondence will correct the error and ensure the appropriate year-end is on file with the IRS.

The fiscal year cannot be changed on the 990-N.

If a PTA is required to file a 990-EZ/990 and votes to change its fiscal year, the PTA must file two Form 990s,

one reflecting the old fiscal year and a second one for the month(s) between the previous fiscal year-end and

the new fiscal year-end. For example, if a PTA wants to change from a May 31 to a June 30 year-end, a Form

990-EZ/990 is filed for the 12 months ending May 31. A Form 990-EZ/990 is also filed for the short year of one

month ending June 30. After that, a return is filed for each year ending June 30. On the other hand, if a PTA

wants to change its year-end from June 30 to May 31, a return is filed for the short year ending May 31 for 11

months and, after that, every 12 months ending May 31. The change in the accounting year is indicated via the

electronic filing program on the return for the short year.

If a PTA has changed its year-end within the last ten years and was required to file a long-form 990, it must

now file Form 1128 to request IRS approval to change its year-end. Additionally, a Form 990-EZ/990 is filed for

the short year, and a bylaws amendment to reflect the change is adopted.

IRS Form 1099-NEC

All PTAs must file Form 1099-NEC with the IRS if they pay an individual or unincorporated business $600 or

more during a calendar year for services rendered. An example where this would apply is for paid guest

speakers. A 1099 is not required when payments are for the purchase of merchandise. The Form 1099-NEC

must be sent by the PTA to the payee on or before January 31 of each year and filed with the IRS, and Form

1096 by January 31 of each year. Form 1099 includes the name and address of the payee, their social security

number or EIN, and the total amount paid during the calendar year. Form 1096 summarizes all 1099-NEC

issued by the PTA during a calendar year. Even if the PTA issued only one 1099-NEC, a 1096 must still be

completed.

To obtain the above forms, visit the IRS website, irs.gov/forms-pubs/order-products. You may also

electronically file these returns using the IRS’s File Information Returns Electronically (FIRE) system. For

more information, visit irs.gov/FIRE .

Exemption from Paying State Sales Tax

PTAs are not required to pay the Texas sales tax on items purchased for use in presenting programs or

carrying on the work of the PTA. This exemption was granted to Texas PTA and covers all PTAs in Good

Standing.

All PTAs should be individually listed with the Texas Comptroller’s office. You can verify if your PTA is listed at

comptroller.texas.gov/taxes/exempt/search.php. If your PTA is not listed and wants to be listed individually,

complete Form AP-207 with the Texas Comptroller’s Office at comptroller.texas.gov/taxes/permit/.

When PTA members purchase items for the PTA, they present an exemption certificate to the retailer

(available at comptroller.texas.gov) to remove the sales tax. Some retailers have their own certificates and

request the purchaser to sign them. Texas does not issue exemption numbers, so your exemption certificate

requires no number to be valid. However, retailers will often ask for a tax exemption number. The information

that the retailer needs is the eleven-digit Texas Taxpayers Identification Number issued by the Texas

Comptroller. This allows the Texas Comptroller’s office to verify that tax-free sales were legitimately sold to a

tax-exempt entity. Your PTA does not have to have a sales and use tax permit to be exempt from paying state

sales tax.

Exemption from Paying State Hotel Occupancy Tax

Texas PTA and its affiliates are exempt from the state hotel occupancy tax but must pay the local hotel

occupancy tax. To avoid paying the state tax, provide the hotel with a completed hotel occupancy exemption

certificate and a copy of the letter from the Texas Comptroller’s office granting this exemption found at

comptroller.texas.gov/taxes/exempt/search.php.

Tax-Free Days

PTAs may hold two, one-day (24-consecutive hours) tax-free sales (when the PTA is the determined seller) or

auctions each calendar year. These sales or auctions are designated in the executive board or membership

meeting minutes before the event. Sales of otherwise taxable items made during the 24-hour period

designated as the tax-free sale or auction are not taxed. A PTA may also participate in the annual State Sales

Tax Holidays designated by the Comptroller’s office if the PTA is selling items included in the Sales Tax

Holiday.

The Texas Comptroller’s office has ruled that brochure/catalog sales are not eligible for a tax-free declaration

by the PTA because, for these sales, the PTA is acting as an agent for the vendor, who is the seller. The PTA

collects sales tax on the sales price and remits it to the vendor to remit to the Texas Comptroller’s office.

The PTA is the seller when a for-profit fundraising company does not coordinate the fundraising; the PTA is not

using the marketing materials of a fundraising company, such as brochures and order forms; the PTA

purchases inventory from a vendor for a certain price; the PTA resells those items for a profit or loss and

assumes all responsibility and risk. When the PTA is the seller and not acting as a representative of a for-profit

fundraising company, the PTA is responsible for the proper collection and remittance of any tax due. The PTA

may take advantage of the one-day, tax-free sale provision if appropriate.

The Texas Comptroller’s office has ruled that PTAs may consider advance-order sales as one of their tax-free

days, provided the following criteria are met:

● All orders must be submitted by the PTA to the supplier before the delivery of the merchandise.

● All merchandise must be delivered to the PTA by the supplier on one day (it need not be the same day

as indicated above).

● The merchandise must be delivered to the purchaser over a reasonable period of time. Texas PTA

recommends this period of delivery not exceed three weeks.

● The tax-free day is the day of delivery to the PTA or the day of delivery to the customer if the delivery

occurs in one day and not over a multi-day event. The PTA may decide which of the two options they

prefer.

A tax-free sale must not be a year-long activity, such as a school store.

If the PTA only sells taxable items during the two designated tax-free sale days, the PTA is not required to

obtain a sales tax permit.

Sales and Use Tax Permit: Collecting and Reporting State Sales Tax

A PTA must have a sales and use tax permit if the PTA sells tangible items, such as handicrafts, candles,

t-shirts, cups, books, and school supplies other than on the two designated tax-free days allowed. Before

submitting an application for a sales and use tax permit, the PTA must be listed as a tax-exempt entity on the

Texas Comptroller’s website. Note: Do not apply for a sales and use tax permit until confirming that the PTA is

listed as tax-exempt. If the PTA is not listed, complete and submit Form AP-207 at

comptroller.texas.gov/taxes/permit.

The permit is issued by the Texas Comptroller’s office. The form requires the PTA’s EIN to complete the

application. The school address is recommended to be used for the application, returns, and correspondence.

Make at least two copies of the permit. Keep one copy with the treasurer’s permanent records, and give the

other copy to the fundraising chair or coordinator to display during sales. There is no fee for the permit, and it

remains valid until a request to cancel it is made by the PTA or canceled by the Texas Comptroller.

When the PTA’s permit is issued, it will be assigned a reporting period. This could be monthly, quarterly, or

annually. Most PTAs are set up quarterly, but a request can be made by the PTA to move to an annual filing

basis after a few quarterly returns are filed and it is evident the PTA does not have enough taxable sales to

require quarterly filings. For annual filers, the return is due on January 20 for the previous calendar

(January-December) year. If the due date falls on Saturday, Sunday, or a legal holiday, the return may be

postmarked on the next business day and still be considered timely. The return must be filed if the PTA has

a permit, even if the PTA had no taxable sales during the reporting period. There are penalties for late

filing.

Sales tax collected should be recorded as a liability and not as income to the PTA. This liability should be

reported on each financial report until the sales tax is paid to the Comptroller’s office.

Consider the following when completing the sales tax return:

● Total sales are the amount of PTA receipts resulting from the sale of tangible property. PTA

membership dues, an admission price to an event, and donations are not considered sales. Total sales

are the accumulation of income from spirit wear, school supplies, cookie dough, school store

merchandise, and so on. This includes both nontaxable and taxable sales.

● Taxable sales are the total amount of the sales on which sales tax should be collected. In the previous

bullet, the cookie dough fundraiser sales would not be included as taxable sales because cookie dough

is non-taxable. Any taxable sales that occurred during the two tax-free days designated by the PTA are

not included in this calculation.

● The Texas Comptroller requests computation on income in whole dollars only. In addition, there is a

.5% timely filing discount. As a result, there is always a small amount left in the sales tax liability

account after sales tax is paid to the Comptroller’s office. The PTA should zero out the balance in the

sales tax liability account and increase the PTA’s donation income by that same amount.

● PTAs are authorized to submit sales tax electronically to the Comptroller via WebFile, even if the PTA

has not adopted e-commerce policies.

A PTA purchasing taxable items for resale must first obtain a sales tax permit and issue a resale certificate to

the seller instead of paying sales tax. A PTA that only sells taxable items on designated tax-free days can

provide an exemption certificate to the seller rather than a resale certificate. A PTA does not have the option of

paying the sales tax when the merchandise is purchased to avoid collecting the sales tax as the merchandise

is sold. When the items are resold, the PTA must collect and remit the sales tax to the Texas Comptroller

unless the taxable items are sold during a tax-free day.

The following items are not subject to sales tax:

● PTA food sales made at a PTA fundraising event are exempt from sales tax unless the PTA is in direct

competition with a retailer required to collect sales tax. In this circumstance, the PTA would be required

to collect sales tax.

● There is no tax on admission tickets (including those at carnivals), fees, or raffle tickets, provided all the

proceeds go directly to the PTA.

● Student directories, yearbooks, cookbooks, and any other publications of the PTA are exempt from

sales tax.

A PTA may participate in the annual State Sales Tax Holidays if they are selling items included in this event. In

addition to clothes, footwear, and some backpacks, Texas families also get a sales tax break on most school

supplies priced at less than one hundred dollars ($100.00) purchased for a student in an elementary or

secondary school. These days do not count as one of the PTA’s two tax-free days.

Generally, profit is not a factor in determining if sales tax must be collected and remitted to the state on the

sale of an item. The exception to this general rule is when a PTA purchases food from a for-profit business and

then sells it at no markup to its members. In this circumstance, the sales are not exempt from sales tax

collection. PTA cannot act as a conduit to circumvent the sales tax collection on a sale that does not benefit

the PTA.

The following sales scenarios illustrate the exception:

● If the PTA purchases pizza from a restaurant and sells it to their members for the same price the

restaurant sells it for, sales tax is collected. A resale certificate is given to the restaurant because the

PTA will resell the pizza. The pizza is not being used for the PTA’s use and is being sold as a

convenience to the PTA’s members.

● If the PTA purchases the pizza from the restaurant to provide dinner at the expense of the PTA, and the

membership does not pay for the pizza, the PTA is exempt from paying the sales tax.

● If the PTA purchases the pizza from the restaurant and sells the pizza for a profit, no sales tax is

collected. The pizza is being used as a fundraiser for the PTA and is non-taxable.

Any of the above taxable items could be deemed not taxable if sold on one of the PTA’s two tax-free days.

If the PTA is selling items where the collection price includes sales tax, the PTA must inform the purchaser that

sales tax has been included in the price. All information must state, “Sales tax included in price.”

For more information, visit the Texas Comptroller’s website at comptroller.texas.gov.

When to Collect Sales Tax

Taxable

Nontaxable

Cookie Dough

Popcorn, popped *

Spaghetti supper

Concession sales*

Raffle tickets

Cookbooks produced by the PTA

Cookbooks purchased for resale

Student directories produced by the PTA

Other writing and publications of the PTA

Books not written by the PTA

Gift wrap

School supplies

T-shirts

Admission ticket (if the PTA is the provider of the amusement)

Admission ticket (if the PTA is not the provider of the amusement)

Discount coupons

Horticultural products such as flower arrangements, roses, carnations,

holiday greenery, and poinsettias

Agricultural products (plants and seeds), the products of which ordinarily

constitute food for human consumption

Pumpkins from the pumpkin patch

Pumpkins that have been carved, painted, or decorated

Silent auction items (depends on the items auctioned)

Garage sale items

Pictures with Santa

Booth rental fee

Confetti eggs at carnivals

Face painting

Educational activities such as coloring, painting, crafts

Gift items sold at Santa’s Workshop

Sales of magazine subscriptions sold for a semiannual or longer period (six

months or greater) and entered as second class

Sales of magazine subscriptions sold for a shorter subscription period (less

than six months) and sales of individual issues

* These items would be taxable if the PTA is not the determined seller by both purchasing inventories and determining the sales price.

Additional information from the Texas Comptroller’s Office regarding fundraisers and Texas sales tax

can be found under Resources at txpta.org/treasurer.

Financial Reconciliation

A financial reconciliation reviews a PTA's records to ensure that the governing documents are followed and that

income and expenses are properly documented and conform with the adopted budget and the PTA’s governing

documents. The financial reconciliation committee must include all PTA accounts (including bank accounts, online

payment processors,and credit cards).

Remember, the treasurer is legally responsible for all the PTA’s funds. However, all executive board members of the

PTA have a fiscal responsibility to ensure the PTA’s funds are being used as directed by members (via the adopted

budget) and that procedures and policies are being followed in the collection and spending of PTA money.

A financial reconciliation is required to be performed at the following times:

● the end of the fiscal year (year-end);

● any authorized check signer is added or deleted on any bank account; or

● any time deemed necessary by the president or three (3) or more members.

For the year-end financial reconciliation, the president appoints the financial reconciliation committee (consisting of

no fewer than three (3) members) at the annual meeting. For any other financial reconciliation, the president

appoints, subject to the approval of the executive board, a financial reconciliation committee within 10 days of

request, and the reconciliation must occur within 20 days of the appointment.

The appointed financial reconciliation committee members cannot be:

● authorized signers;

● current secretary;

● incoming treasurer;

● majority student members;

● related by blood or marriage to each other, current secretary, or any authorized signers; or

● reside in the same household as the authorized signers or current secretary.

All members of the committee should sign a confidentiality agreement. All information provided to the committee

and the discussions held are confidential; therefore, meetings should be conducted in a private location and only

include appointed committee members. The committee may contact the outgoing treasurer and president for any

clarification required. All findings should remain confidential until the report is delivered.

Preparing for the Financial Reconciliation

The treasurer presents the following financial records to be reviewed by the committee:

● current year annual report (budget vs. actual) or budget vs. actual for the period under review;

● balance sheet (to show sales tax or state/national dues liability balances);

● general ledger (all transactions for the period under review);

● all financial reports for the period under review;

● all receipts/invoices with funds request forms;

● all bank receipts with deposit forms;

● all checks for all accounts - cleared, voided, and unused (check images from bank suffice);

● bank statements and reconciliations for all accounts;

● electronic payment collection system documentation (reports from PayPal, Square, merchant account, etc);

● IRS Form 990-N confirmation of acceptance or a draft of the appropriate 990-EZ or 990;

● Sales and Use Tax permit and returns; and

● all correspondence with any taxing authority.

The secretary presents the following records to be reviewed by the committee:

● minutes from membership and executive board meetings (including presented financial reports, last financial

reconciliation report, Statement Review by Non-Signer forms, etc.);

● current membership roster and executive board roster;

● all bylaws, standing rules, and/or policies during the period under review;

● signed Confidentiality, Ethics, and Conflict of Interest Agreement; and.

● Current contracts

Financial Reconciliation Checklist

PTAs can visit txpta.org/financial-reconciliation to download the current financial reconciliation checklist and report.

During the Financial Reconciliation

● Checks are only written in the case of an emergency.

● The committee adheres to the Financial Reconciliation Checklist provided on the Texas PTA website.

● If the reconciliation is being performed at year-end or due to a check-signer addition/deletion, the update of

the account signers with the bank should occur during the reconciliation so that business can resume

immediately following the reconciliation.

Issues with the PTA’s Records

If the Financial Reconciliation Committee finds issues with the PTA’s records, perform the following steps:

● Contact the treasurer or secretary to secure additional records or information.

● If the matter cannot be settled to the committee’s satisfaction, contact the president to determine what

additional steps need to be taken.

● The president can request additional guidance from the Council PTA or Field Service Representative. A

Council PTA can request additional assistance from Field Service Representative if the Council PTA cannot

resolve the matter.

● When evidence that theft, fraud, or embezzlement has occurred, the Texas PTA Theft, Fraud, and

Embezzlement Policy (found at txpta.org/polices) must be followed and the Texas PTA Treasurer should be

notified by completing the form within the policy or emailing [email protected].

Immediately Following the Reconciliation

● Give the PTA records and supplies to the treasurer (incoming treasurer, if this is a year-end reconciliation)

so that they can proceed with business.

● For the year-end reconciliation, if the PTA files Form 990-EZ or 990, the outgoing treasurer electronically

files and provides the confirmation of acceptance by the IRS and a copy of the filed Form 990-EZ/990 to the

incoming treasurer. Additionally, proof of a confirmed 990 filing is presented at the next executive board

meeting.

Reporting the Results

● For the required year-end or check-signer addition/deletion financial reconciliation, the committee shall:

○ Provide a copy of the report to the treasurer immediately following the conclusion of the

reconciliation.

○ Present the report findings and recommendations at the next executive board meeting.

○ Present the report for adoption at the next membership meeting.

○ File the financial reconciliation report and annual/budget vs. actual report permanently with the

secretary.

● For a reconciliation deemed necessary by the president or three or more members, the committee shall:

○ Hold the report until the next membership meeting.

○ Present the report for adoption at the next membership meeting.

○ File the financial reconciliation report and annual budget vs. actual report permanently with the

secretary.

○ Provide a copy of the report to the treasurer.

○ Present the report findings and recommendations at the next executive board meeting.

● If a financial reconciliation cannot be completed due to the inadequacy or unavailability of the records, the

membership shall be notified, and the report shall indicate the review is incomplete and include

recommendations to correct the situation.

Financial Mismanagement

Mistakes in managing the PTA’s finances can occur, and sometimes a trusted individual will take advantage of

their role in the PTA for their own financial benefit. It is important to seek help from your Council president or

FSR as soon as possible to limit any additional losses to the PTA. If theft, fraud, or embezzlement is

suspected, the PTA is required by the bylaws to follow the Texas PTA Theft, Fraud, and Embezzlement Policy

found at txpta.org/policies.

Financial Red Flags

● Bank statements are not seen by the treasurer and nonsigner monthly.

● Financial reports are not given at executive board or membership meetings.

● The beginning balance of a financial report doesn’t agree with the last reported ending balance.

● Amounts in the financial reports do not balance the total.

● Money is counted by only one person.

● Checks or deposits are missing.

● Checks are made payable to a check signer’s family members.

● Checks are made payable to “Cash.”

● Checks are payable to the same payee made out for the same amount each month.

● Two or more signers on the bank account are related by blood, marriage, or reside in the same

household.

● Receipts are not given for money received.

● Receipts are missing from funds request forms.

● The membership did not approve the budget.

● The membership did not approve fundraising activities.

● The amount of profit doesn’t agree with the amount in the contract signed with the fundraising company.

● Less money was deposited for a fundraiser than paid to the company for the product received.

● Bills are received for unbudgeted items not in the budget.

● Individual PTA members profit monetarily from any fundraiser.

● Children are used to raise funds for PTA.

● The required annual financial reconciliation report was not presented to the membership at the first

membership meeting of the new year.

● The financial reconciliation committee consists of signers on the bank account or of individuals related

to those signers.

● Treasurer is missing meetings and not responding to emails and phone calls.

FAQs

When does the new treasurer take over the books?

The bylaws provide that the treasurer assumes their duties following the close of the fiscal year; however, the

outgoing treasurer should finalize all transactions at the close of the fiscal year, file a 990-N, or draft the

990-EZ/990, and then turn the books over to the Financial Reconciliation Committee for review. The outgoing

treasurer electronically files Form 990-EZ/990 upon completion of the financial reconciliation. The confirmation

of acceptance by the IRS and a copy of the filing are provided to the incoming treasurer.

Incoming treasurers should receive the books directly from the Financial Reconciliation Committee upon

completion of their work.

When should we update the signature cards at the bank?

Upon the outgoing treasurer turning the books over to the Financial Reconciliation Committee, incoming and

outgoing officers should go to the bank and update the signature card. Contact the bank to verify the

documents that are required to change signatures.

Can I pay sales tax when we purchase our merchandise for sale, so I don’t have to collect it when we

sell it?

No; sales tax must be collected from the end-user (customer) on the retail price, not the wholesale price.

The school district is requesting a copy of our annual report from last year. Should we provide it to

them?

Determine first why the district is asking for the information. These requests could be related to a GASB 39

request or question.

GASB, the Governmental Accounting Standards Board, establishes accounting and financial reporting

standards for U.S. state and local governments (including school districts). GASB 39 is a standard that says all

entities (PTOs, Booster Clubs, etc.) associated with a primary government (school district) are potential

component units. If an entity is a component unit, then it should be evaluated to determine if it should be

included in the financial reporting entity (school district).

The following criteria determine if an entity is a component unit:

● The economic resources received or held by the separate organization are entirely for the direct benefit

of the primary government, its component units, or its constituents.

● The primary government, or its component units, is entitled to or has the ability to otherwise access a

majority of the economic resources received or held by the separate organization.

● The economic resources received or held by an individual organization that the specific primary

government, or its component units, is entitled to or has the ability to otherwise access are significant to

that primary government.

PTAs are not supporting organizations, clubs, or booster groups for any schools. They are separate legal

entities with distinct missions, visions, and purposes. Local PTAs work in harmony with school personnel, but

they are not part of any school. Because of this, PTAs are not required to give financial information to a school

district, especially under GASB 39.

We want to have good relationships with our school districts; however, we must evaluate what information we

share with them and how we share it. Perhaps they simply need to know how much support we gave a specific

school the past year. This would be a number we could generate and provide without needing to share the

entire annual report.

Can we have a fundraiser to raise money for a student who needs an operation?

No, funds cannot be raised through the PTA for an individual, no matter how worthy the cause.

The student’s family may be encouraged to apply to the Texas PTA Emergency Relief Fund found at

txpta.org/awards-grants . PTAs are encouraged to donate to this fund, but contributions may not be earmarked

for a specific individual.

Do I have to pay sales tax on prizes purchased as giveaways at a carnival?

No, items purchased for PTA use are exempt from sales tax.

If we make no profit on our school supplies, do we have to collect and pay sales tax?

Yes, profit is not a factor in determining what items require sales tax collection.

How much money can we carry over to next year?

There is no established minimum or maximum amount. It will vary by PTA based upon when the PTA holds its

fundraisers. If the PTA has no fundraiser until spring, the PTA will need to carry over more than if major

fundraisers are in the early fall. A PTA should not raise more funds than is necessary to carry out its

tax-exempt function.

A local business wants to contribute to our PTA but needs proof of our tax-exempt status. What do I

give them?

Provide the business a copy of Texas PTA’s IRS Determination Letter and a Letter of Good Standing for your

PTA. These documents can be obtained by contacting [email protected] and including your contact

information, your PTA name, city, and PTA ID number.

A business has agreed to donate to our PTA. However, they insist on writing the check to "PTA Texas

Congress." What should we do?

You can allow them to write the check to "PTA Texas Congress. Once you receive the check, mail it to Texas

PTA, Attention: Finance, 408 West 11th Street, Austin, TX 78701, with a note that includes the PTA’s Texas

PTA ID#, PTA name, address, contact information, and an explanation of the situation. Texas PTA will then

send your PTA an ACH transaction for the amount of the donation check. Please allow up to 10 business days

for this process.

Can our PTA be a paying member of our local Chamber of Commerce?

Yes, as long as the PTA membership has approved the membership and its associated expense. This expense

should be included in the budget.

Can PTAs have capital projects that benefit the school?

Unlike many other non-profits, PTAs do not have their own capital projects. If a PTA determines that they want

to contribute to a long-term project, such as donating towards the cost of a school marquee, they would (a)

present this to the PTA membership for approval each year and (b) write a check to the school for their

contribution along with completing the appropriate paperwork that specifies where this contribution will be

applied and the timeframe in which the school can keep the donation. PTAs do not carry over money for

long-term projects. Each year, the members for that year make decisions on how PTA funds will be spent.

The only two liability accounts that PTAs have are for State/National Dues and Sales Tax. These accounts are

not the PTA’s money; the PTA is just temporarily holding the money until payment is remitted to the appropriate

organization.

Can our PTA give door prizes?

Yes, as long as the item is nominal in value and money is not collected to be eligible. Texas PTA has defined

nominal as not more than $25.00 in value.

For example, a door prize may allow a chance to win based on attendance at a meeting.

Are PTAs permitted to hold a raffle where multiple prizes are awarded by drawing from various

containers, or does this constitute more than one raffle?

Per a written response from a representative with the Office of the Attorney General, as long as the prizes are

awarded at one event/occasion, multiple containers to draw from can be used to constitute only one event/one

raffle.

Can our PTA hold drawings for prizes?

Yes, PTAs can have drawings for prizes of nominal value. One example includes when a parent purchases a

PTA membership, their name goes into a drawing. This means that they have purchased the rights to be a

member and get discounts from PTA partners. Another example would be if there is a purchase involved and

they receive something for that purchase, such as $xx.xx amount in carnival tickets purchased; their name

goes into a drawing.

Can PTAs pay for workshop fees, speaking engagements, salaries, or fees to associations for school

district employees?

PTAs may elect to pay for workshop fees or reimburse for continuing education through a faculty scholarship

process. Similar to student scholarships, criteria must be established and published either in the PTA’s

standing rules or in a policy voted on by the membership. A committee would be appointed to select the

recipients. The scholarship would allow them to take a class or attend a workshop that furthers their education.

Travel expenses (mileage, airfare, hotel fees, and meals) should be carefully considered before including them

in the scholarship. These expenses could be considered taxable to the recipient and could create potential

liability for the PTA. Before paying travel expenses, you should always check with the PTA’s insurance

company.

Professional speakers can be compensated for their services. If the professional speaker is paid more than

$600, then a Form 1099-NEC is provided to them by January 31 of the following year. School district

employees are not allowed to be compensated for speaking engagements by the PTA, but a token donation to

another 501(c)(3) is permissible. For example, if the school district employee is a member of another

501(c)(3), a donation to their organization would be acceptable as long as it has a common purpose with PTA.

If the school district employee is not a part of another like-minded non-profit, a donation to the school library for

a purchase of a book would be a great use of the funds. This same policy would apply to PTA volunteers.

A letter to the individual who spoke, along with where the money went, is a great way to let them know how

much the PTA appreciates their time and efforts.

This money could come out of the “Programs and Parent Education” budgetary line item.

PTAs may fund supplemental employee positions under certain restrictions. The school district would have to

be willing to accept the donation, and it is imperative the PTA understand they are funding a position, not a

specific individual. The PTA cannot participate in the selection of the employee or any other part of the

employment process. The PTA also cannot guarantee to fund projects over future school years, as these

decisions are made annually by the membership of the PTA.

● PTAs do not donate towards teacher payroll.

● PTAs do not donate towards paying taxes.

● PTAs do not donate towards association fees for other organizations.

● PTAs do not donate towards paying rental expenses of the school building.

If a school district is experiencing financial troubles, PTAs do not give money to them for the maintenance and

operations (M and O) portion of the budget. In addition, Article III: Basic Principles of the PTA’s bylaws states,

“...that the legal responsibility to make decisions has been delegated by the people to the boards of education,

state education authorities and local education authorities.” Taxes, rent, and payroll are legal obligations of the

school district; therefore PTAs do not involve themselves financially in these areas.

Training & Learning Resources

Texas PTA believes that volunteer at-home accessibility to FOUNDATIONS Training is important. As such, all

required training is located at txpta.org/courses. Our volunteer leaders across the state can access quality

educational resources to support success within their roles and build strong PTAs.

FOUNDATIONS Required Training

● Essentials is a high-level orientation to PTA, taken online via the Texas PTA website at

txpta.org/pta-training. It contains the mainstay information that every PTA Leader should know.

Executive board members should take this training at least once in their PTA career. Leaders are

encouraged to take Essentials (formerly titled Foundations Leader Orientation (FLO) and Leadership

Orientation Training (LOT)) again whenever the training is updated.

● Basics courses contain detailed information to support PTA Leaders in their executive board position.

Every executive board member must attend a Basics course for their position at least once every two

years. These training sessions are available on-demand at www.txpta.org/courses. Basics content

includes an online training video, a companion Resource Guide, and other supporting resources.

a. PTA Leaders can access the Resource Guides via the Texas PTA website. Visit

txpta.org/local-pta-leaders to download free PDFs.

Reminder: Both Essentials and Basics courses are mandatory for executive board members. The path to

ensure that all required training has been completed is explained in the following graphic.

FOUNDATIONS: Spotlights

Spotlight courses offer short, in-depth reviews of important topics and recurring PTA functions, such as Bylaws

and Standing Rules, Financial Reconciliations, Conducting a Meeting, and Nominations and Elections.

Spotlights are free and optional, but offer vital insights on specific and timely topics.

Newsletters and Alerts

Texas PTA provides content-specific newsletters based on your PTA position. Registering as an executive

board member with Texas PTA each year helps ensure you receive important updates and position-specific

newsletters! Visit txpta.org/officer-intake to access the form.

All executive board members are encouraged to closely follow Texas PTA legislative advocacy efforts by

subscribing to Under the Dome, our advocacy newsletter, at txpta.org/newsroom. You can sign up for advocacy

Action Alerts at txpta.org/take-action.

Leadership Development Resources

Texas PTA training goes beyond the FOUNDATIONS by offering Leadership Development resources. The

topics covered result from polling PTA leaders across the state.

All PTA leaders are encouraged to visit txpta.org/leadership to discover Extra Credit courses to continue their

leadership development and to investigate the Full Circle Leadership program.

Texas PTA Staff and Board of Directors

Support

BOARD OF DIRECTORS | txpta.org/bod

The Texas PTA Board of Directors are your volunteer representatives at the state level. From the president to

the directors at large, Texas PTA Board members can help answer your questions and address your needs.

You can reach them at the address above.

COMMUNICATIONS | [email protected]

The Communications team manages and produces all Texas PTA communications, including The Voice (our

quarterly newsletter), specialized newsletters (advocacy, healthy lifestyles, arts in education, environmental

awareness, membership, and field service), social media outlets, and the Texas PTA website. They also serve

as Texas PTA’s contact for all media inquiries.

FINANCE | [email protected]

Texas PTA understands the responsibility of managing your member dollars. The Finance team is charged with

monitoring Texas PTA resources according to the annual budget, as adopted by the Board of Directors.

Members of the Finance team are also available to support PTA leaders in their compliance with state and

federal financial requirements, such as filing the annual 990 with the IRS and sales tax filings with the State

Comptroller.

LEADER ENGAGEMENT | [email protected]

The Leader Engagement team gives direct support to PTA leaders and members. They assist with standards

of continuing affiliation, bylaws and standing rules, organizing PTAs, and general questions on leading and

managing a PTA.

MEMBER RELATIONS | [email protected]

The Member Relations team is responsible for developing recruiting resources that may be adapted for all

levels of PTA – early childhood, elementary, and secondary. Staff assists with member recruitment strategies,

processes membership rosters and dues, and coordinates membership awards and the distribution of

membership cards to Local PTAs.

PROGRAMS | [email protected]

The Programs team is focused on connecting PTA members and leaders with the information they need to be

successful and develop programs. The Programs team is your contact for student and staff programs, such as

Reflections, Texas PTA’s scholarship, and educators awards, as well as Texas PTA’s turnkey campus program

library- Connect. Whether your PTA is registering for LAUNCH or requesting a Connect Program, the

Programs team is available to assist you.

Notes

Texas PTA

txstatepta

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THIS ITEM IS FOR PTA USE ONLY