Whose Money is it Anyway? Top tips for managing PTA funds
Legally, the school and the PTA are two completely separate entities, which means the funds raised by the PTA belong to the PTA and not to the school. The funds shouldn’t be taken into consideration when preparing school budgets and do not need to be audited at the same time as the school funds.
The association is run by an elected committee and these committee members are legally accountable for the running of the association, including the management of the funds. The money should be kept in a separate PTA bank account, the signatories on the bank account should only be elected committee members and there should be a separate record of accounts kept for the PTA. The money shouldn’t be handed over to the school or kept in a school bank account.
Making Decisions
The decision on how to spend the funds ultimately lies with the elected committee members. They do need to be able to work closely with the school about this. We recommend that the school provides the association with a wish list of items they would like and then the committee makes a decision on which items they would like to buy and donate to the school. How often they make purchases for the school is something that the committee decides. Some will do it termly, some yearly and some when they are asked by the school – there isn’t a right or wrong way to do this, just find out what works best for your association and school. There also needs to be two-way communication about this because if the PTA have a suggestion on how to spend the funds that doesn’t appear on the wish list, the school should think it over as well, because it might just be a good idea they haven’t had yet, but there is no point in buying something for the school that they don’t want or need.
If you feel what you are being asked to fund is something that’s controversial or may create quite a reaction from your members, then it’s always best for the committee to consult their members to find out what they do or don’t want and then the committee members will know which way to vote. Remember, just because the school asks for something, the committee doesn’t necessarily have to agree to purchase it.
Aims and Objectives
Make sure whatever you buy also falls within the objects of your association. Check your own governing document but they are usually something like, “to improve the education of the children within the school.” This means if you are asked to fund whiteboards for the class rooms, this is an obvious fit. However, if you are asked to fund a dishwasher for the staff room, you need to discuss whether you think it would benefit the children. Again, this is a decision the elected committee members make.
The best way to spend the funds is for the PTA to purchase the items and donate the items to the school rather than just handing over cash donations. If the school has a preferred supplier then by all means investigate this, but if you can find the same item at a more favourable price you are under no obligation to go with the school’s supplier.
As the committee members are accountable for the spending of the funds, they shouldn’t hand over money without knowing how it is being spent. Cash donations should only be given in exceptional circumstances (such as a large build project at the school) and the school should issue a receipt to the PTA detailing exactly how the funds have been spent. This means you will have something in your records that shows the PTA is spending the money correctly. If it’s an anonymous “cash donation”, once it goes into the school bank account it becomes their money and, whilst unlikely, they could spend it on something that doesn’t fit the objects of the association. If you do give a cash donation for the full amount of something, do make sure you include any VAT as PTA’s aren’t VAT exempt and therefore have to pay. If you give a donation minus the VAT amount, this could potentially cause problems.
