The budget is a financial representation of the activities and operations a PTA expects to conduct during a specified time period. The budget estimates income and expenses for the fiscal year and must be presented to the association for approval and recorded in the association minutes. The budget should coincide with the association’s fiscal year.
Developing the Budget
The budget committee, which is appointed by the president or president-elect, has the responsibility for developing the annual budget. The treasurer is designated as the committee chairman. The budget committee may include financial officers, the principal or other designated representative, the president (ex officio), and others. The committee should:
- Invite board members to submit suggestions.
- Survey the associations needs and probable costs.
- Review the program(s) proposed by the program committee, including detailed expense projections.
- Meet soon after election to prepare the budget .
- Review past budgets, income, and expenditures.
- Estimate probable income from all sources.
- Balance probable income with probable expenses.
- Unallocated Reserve funds represent the amount remaining after making allocations for budgeted programs and activities and may be used to cover any unexpected or unplanned expenses in the current fiscal year.
- Carry-over funds represent the amount which is set aside to begin operations at the beginning of the next PTA fiscal year, prior to the onset of fundraising activities.
FUNDS NOT BELONGING TO THE UNIT
Council, district, State, and National PTA portions of membership dues and the Founders Day freewill offering are not a part of the units funds to be used for expenses. They should not be included in the annual budget as receipts for budget planning purposes. They also are not included in the gross receipts when reporting to the IRS (Gross Receipts 5.7.5, 241). These funds can be paid without the authorization of the membership. Such funds should be forwarded through channels immediately. Council or district PTA remittance forms must be issued to track and provide payment authorization.
All disbursement of funds not belonging to the unit must be recorded in the next treasurer’s report and payment reported to the association. PTA districts and councils set their own dates far enough in advance of the state deadlines to have sufficient time for such transfers to be received by the California State PTA office (Budget Sample, Forms 385).
SCHOOL BOND AND OTHER BALLOT MEASURE CAMPAIGNS
A PTA may spend a portion of its funds on election issues that have an impact on the education, health, or well-being of children and youth (Legal Guidelines for Campaign Activity 4.3.3a, 129).
A PTA may assist in raising funds or soliciting individual donations for coalitions or election issue campaign organizations without reporting the amounts, provided that all donations are strictly voluntary and the funds are given directly to the campaign organizations and not funneled through the PTA. Donations must not be made payable to PTA and may not be deposited in any PTA account.
Recommended Budget Line Items
When developing a PTA budget, consider including the following line items:
Carry-over Funds: Carry-over funds are needed for start-up expenses at the beginning of a new PTA fiscal year, prior to the onset of fundraising activities. To calculate the amount of this reserve review the prior years Annual Financial Report to determine which operation or program expenses require funding, and estimate costs for these items in the new fiscal year.
Convention: The annual California State PTA convention is usually held at the end of April or the first part of May. The unit should budget enough money to cover the cost of registration, hotel room, transportation and food for the allowed number of delegates based on the units membership (Attending Conventions and Conferences 2.8, 64).
Donations: Sometimes PTAs ask parents to donate funds for a specific program.
Fundraisers: Fundraising income is the gross income from the fundraiser. List each fundraiser individually. The expenses for conducting each fundraiser should be listed under Expenses individually by fundraiser.
Gross Income: This includes the total amount of income for the year, excluding council, district, State, and National PTA portions of the per capita dues and freewill offering.
Insurance: Participation in the California State PTA insurance program is required of all PTAs in California. Budget an amount that is similar to the actual expense from the previous years premium. Units are notified of the prem ium amounts each year in November. The premium must be forwarded through PTA channels to be received in the California State PTA office by January 31, or a late fee of $25 will be assessed by the California State PTA. Postmarks will not be accepted.
Membership Dues: Each association determines its own membership dues, but a portion of each membership must be forwarded through channels. The forwarded funds should be listed as Funds Not Belonging to the Unit. The budget should only reflect the amount of dues the unit retains as income.
Membership Envelopes: Membership envelopes should be listed as an expense.
Reimbursable Expenses: PTA should reimburse executive board members for any approved out-of-pocket expenses. PTA funds may not be used for personal expenses, personal acknowledgments, or personal use items. Appropriate out-of pocket expenses include copies, office supplies, etc. Unit, council and district PTAs should budget for out-of-pocket expenses and reimburse member upon submission of an expense statement and/or receipts. Receipts must be submitted for all reimbursable expenses. Unit, council and district PTAs may not budget for an officers allowance. The IRS considers an allowance as miscellaneous income that must be declared by the recipient as such and will be taxed accordingly.
Training/Workshops: Budget funds to send executive board members to council, PTA district, and California State PTA workshops.
Unallocated Reserve: Unallocated reserve funds represent the amount remaining after making allocations for budgeted programs and activities and ma be used to cover any unexpected or unplanned expenses in the current fiscal year.
Approving the Budget
The PTA shall not assume any financial obligation in any one term of office that will be carried over into the succeeding term. The proposed budget must be presented to and voted upon by the executive board and recommended for adoption to the association. After the budget is adopted by the association, it should be followed closely in all financial transactions.
For additional information on approval of budget see National PTA Annual Resources for PTAs.
Adoption of the budget does not authorize the expenditure of the money. Bills should be presented for payment authorization. Spending funds on unbudgeted items between meetings of the association is limited by an amount specified in the bylaws. Consult the bylaws for the specific amount allowed. The payment of these bills must be ratified at the next association meeting and recorded in the association minutes.
Request for Advance
Persons authorized to purchase items for the PTA, for which the expense will be reimbursed, may request an advance in an amount not to exceed estimated expenses.
To receive an advance for an approved expense, a Request for Advance Form (Forms 413) must be completed, approved by the president and returned to the treasurer with a Payment Authorization Form (Forms 411) attached. An Expense Statement (Forms 401) must be filed within two weeks after the completion of the activity. All receipts must be attached to the expense statement. If an advance greater than the expense is received, a refund of the difference should accompany the expense statement. If expenses exceed the amount of the advance, reimbursement of the difference should be made, providing the total is not in excess of the approved amount.
Amending the Budget
If adjustments are needed, the budget can be amended by a simple majority vote if a 30 day notice has been given; if less than 30 days, a two-thirds vote is required.