Finances

All checks to Peralta District are to be sent to Nancy. All questions should be directed to Linda or Nancy.

Please send all PTA paperwork to our financial area representatives as listed below:

Carol-Ann Koch-Weser
cakwca [at] comcast [dot] net		 New Haven, San Leandro, Livermore, Albany
Joan Nurge
jrnrph [at] comcast [dot] net		 Berkeley Council, Newark
Linda Contreras
linda_mei66 [at] hotmail [dot] com		 Pleasanton Council, Hayward, Castro Valley
Nancy Mitchell
nancyrm [at] mac [dot] com		 Fremont Council, San Lorenzo Council
Susan Nathan
susan [dot] nathan [at] comcast [dot] net		 Alameda Council, Oakland

 

Insurance/Workers' Comp 2012-2013:
Councils: $131     Units: $199
Late Fee: $25

Councils and Units Out of Council: Make checks payable to and send to Peralta District PTA
Units In Council: Make checks payable to and send to your council

Important: All PTAs must file tax returns. See the Tax Information section for more details on filing your tax return.

Reports

Please send copies of the following reports (hard copy or pdf) to your Financial Area Officer (see home page):

Annual Financial Report, Approved Budget, Year-End and Mid-Year Audits, Tax Returns (IRS and FTB), and Unit and Council RRF-1 Forms. Workers Comp form should accompany insurance payment and remittance form.

FAQs: PTAs Non-Profit Status

What documentation is needed to prove our non-profit status as a PTA Unit?

When PTA Units are asked to prove their 501(c)(3) nonprofit status, they need to supply the following documentation – all of which is provided through Peralta District PTA:

  • A letter from the IRS verifying the Employer’s Identification Number (EIN - the federal ID number) of the Unit. All units received one when they were first formed, but that paper is probably long ago buried. The EIN can also be found on your Audit Report Forms. If you’re unsure of your Unit’s EIN, contact the Peralta District PTA President as we maintain a list of all Unit and Council EINs.
  • Letters of determination that were issued in the 1940's by the IRS and in the 1970's by the State of California stating that the California State PTA is in fact a nonprofit organization.
  • A letter of "affiliation" that California State PTA provides stating your unit is in good standing and falls under the State PTA nonprofit status.

How do I get this documentation?
All PTAs contact the Peralta District President and request this packet.

In your request, remember to include:

  • Reason for the request (e.g. need for a matching grant, bank requirements, etc)
  • Unit president's name and home address
  • Name and email of person requesting the documentation

Email this request to the Peralta District PTA president at: president [at] peraltadistrictpta [dot] org. The president will forward it to the proper person at the State PTA. You will receive by return email the proper documentation to substantiate your non-profit status. During the week, this documentation will probably be emailed to you the same day. On a weekend, the process will not take place until Monday.

EXAMPLE:
As an example, all banks now require PTAs opening a bank account to supply documentation that includes:

  • Copy of IRS letters of determination as proof of 501(c)(3) status
  • Copy of PTA association minutes recording the election of officers and/or a letter from the unit secretary giving the names of the signers elected.
  • Copy of PTA Unit bylaws

Once you get this packet together, keep it in an accessible place, perhaps in a permanent binder that goes to a new Unit President or Treasurer with each new school year.

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Budgets

Unit Budget
Notes to the Budget

UNIT BUDGET / ANNUAL FINANCIAL REPORT / IRS WORKSHEET
COUNCIL BUDGET / ANNUAL FINANCIAL REPORT / IRS WORKSHEET
DISTRICT BUDGET / ANNUAL FINANCIAL REPORT / IRS WORKSHEET

For a downloadable sample budget, please access:
www.capta.org/sections/finance/budget.cfm

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Treasurer's Reports

A monthly report must include:

  • Balances at the beginning and end of the period covered
  • Amounts credited to the general fund and any special funds
  • Receipts and disbursements with a detailed written report
  • The report must be posted and/or distributed. Copies of the report must be provided to the president and secretary and added to the treasurer's file, which must be placed on file for audit.

If the PTA has a Financial Secretary, the duties are detailed in the bylaws. Normally, the financial secretary receives funds from fundraisers, or in the case of councils and districts, from units and councils, and deposits them in the bank. The financial secretary's monthly reports should reflect all deposits of that reporting period.

The Annual Financial Report reports gross receipts and disbursements for the fiscal year. The report is distributed to the executive board, to the membership, and may be required by federal and state tax agencies. The council and district PTA may also require reports. Annual Financial Report for Units (PDF)

At the time the treasurer does the Annual Financial Report, he or she can also fill out the unit's tax return. After the audit has confirmed the validity of the figures, the treasurer can sign (or have the president sign) and send in the tax form. If the treasurer feels unqualified to fill out the tax form, professional help should be sought. This is a legitimate PTA expense. If your budget has been formulated correctly, filling out the tax form should not be too difficult. The time-consuming part of the tax form is making the attached schedules that ask for details of income and expenses. Although the tax return is not due to the IRS until November 15th (for those on a fiscal year ending June 30th ), there is no reason why it should not be completed in August.

For examples of these reports, please consult the Forms sections of the Toolkit.

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Audits

All unit, council and district PTAs must conduct audits semiannually. An audit is a formal examination of the financial books and records of the financial officers of the PTA. It serves to certify that receipts and expenditures, as authorized in the minutes, are in conformity with Bylaws for Local PTA/PTSA Units, Standing Rules, and budget limitations. The PTA audit serves as an official examination of the financial records conducted by the auditor or appointed audit committee at the times specified in the Bylaws for Local PTA/PTSA Units, Article VI, Section 8 and when there is a change in financial officers.

Audits should be done in a timely manner. Do not procrastinate doing audits, which are required at mid-year and at the close of the term, usually June 30 th . If you do not have an auditor, the audit can be done by committee. Contact your council or district if you need an auditor or an audit, or if your auditor cannot find the errors present in the accounting.

For more information on the audit procedure, please access:
www.capta.org/sections/finance/pta-audit.cfm

Audit Report
Audit Checklist

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Per Caps & Remittance Forms

Per Caps are membership dues forwarded by units to their Council / District / State / National PTA. Each unit has a different amount for membership dues, as does each council, district and state.

For units in Peralta District who belong to a Council, your District / State / National dues are $4.00 per member. In addition , you will remit a portion of your dues to your council. Your council will have its own remittance form with which to remit dues, insurance, and other payments. Make checks payable to your council.

For units NOT belonging to a council (Out Of Council), you remit $4.00 per member to Peralta. Make checks payable to Peralta District PTA and send them to the financial secretary with the proper form. The form is included on this web site and can easily be downloaded.

Our councils are: Alameda, Berkeley, Fremont, Pleasanton, and San Lorenzo . If you do not live in one of these cities, you are Out Of Council.

Out of Council remittance form for unit: PDF | DOC | XLS

Council treasurers: each of you has a Peralta District PTA Remittance form for sending us your per caps, insurance and other payments. Click to download your council's remittance form.

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Insurance / Workers' Comp

Insurance

California State PTA provides Comprehensive General Liability coverage with a $1,000,000 limit that covers all unit, council and district PTAs in the state when they are involved in allowable PTA activities.

insurance stoplight image

The policy is designed to cover allowable PTA events. It is critical that before planning any PTA activities, the RED, YELLOW and GREEN pages be reviewed. Certain activities and events are prohibited because they are excluded by the insurance policy or because they are dangerous or jeopardize the safety of our children and youth.

Every PTA president should have a copy of the Insurance and Loss Prevention Guide that is mailed to them each winter. Please consult this booklet for details on our policy. New presidents should have “inherited” this booklet from the previous president.

The policy period runs from January of one year to January of the next year. The premium for this policy CHANGES EVERY YEAR in September. The new premium amount will be advertised on the web site and in our newsletters. You will not receive an invoice for this premiums – district notification is your official invoice. The basic insurance is due to Peralta District by December 6th of every year. Premiums mailed after December 6th should include the $25 late fee. Council deadlines should be set two weeks earlier to allow processing time.

Please do not pay your insurance until you know this new amount. You may use the previous year’s amount for budgeting purposes.

The amount includes both Insurance and Workers Comp. All PTAs pay for Workers Comp even though they may have no employees. For further information on the Workers Comp form, please see the Financial/Workers Comp section of this web site.

For units out of council, please make checks for insurance/WC payable to Peralta District PTA and send them along with a Peralta remittance form to the financial secretary.

For units belonging to a council (Alameda, Berkeley, Fremont, Pleasanton, and San Lorenzo) please make checks payable to your council and send them along with the proper council remittance form to your council financial secretary or treasurer.

The Certificate of Insurance can be found in the Insurance Loss and Prevention Guide distributed to each PTA president. These guides are issued in November in preparation for the new insurance year, which runs from January 5th to January 4th. The certificate can also be found on the State PTA web site using a username and password from that booklet. The form cannot be distributed on other websites.

Our insurance broker is:
BB&T Insurance Services
Ph: 800-733-3036
www.pta.bbt-knight.com | capta [at] bbandt [dot] com

Workers' Comp

Each year, PTA units, councils and districts remit to the California State PTA for insurance and workers' comp. Workers' comp payments are required even though you did not hire or pay anyone the previous year. Up until 2006, all units paid the same amount. Those units that paid workers over $1,000 will be charged an extra 3.5% for that amount paid, minus the $1,000 allowance. For example, you can pay people up to $999 and still not pay any extra premium. If you pay someone $1,001, the 3.5% will be charged on the $1.

The Workers' Comp reporting year is from January 5th of one year to January 4th of the next year. This is also the policy period of our insurance coverage. For those PTAs (most of us) on fiscal years of July 1st to June 30th , this means you must be familiar with last year's accounts to properly fill out this form.

Additionally, if units/councils/districts wish to purchase addition Bonding Insurance which increases the amount of coverage to $50,000, they may do so by completing the Excess Bond Application. The application and payment of $90 is sent directly to BB&T Insurance Services before January 5, 2012.

Workers' Comp Form (PDF)
Excess Bond Application (DOC)

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Tax Information

ALL PTAs MUST FILE TAX RETURNS. This is part of your duty as an IRS Exempt Organization.

District and Council PTAs are not allowed to instruct units on how to fill out 990 or 990-EZ IRS Informational Tax Returns. The official policy of the California State PTA is that the unit should hire a professional to aid in tax return preparation and that this is a legitimate PTA expense. We are allowed, however, to give you information on how to prepare your budget, your treasurer's reports, and your annual financial report in order to facilitate the organization of your data for the tax accountant. Here are several documents that may aid in your data organization.

  • Tax Preparation Checklist
  • www.irs.gov - Website of the IRS for downloading this year's forms. Select "Charities and non-Profits" then "Resources - Forms and Publications."
  • http://www.efile.form990.org - Website of The Urban Institute which allows you to complete and electronically file form 990, 990-EZ, 8868 (extension to file) and supporting Schedules (A, B, etc.) Your Annual Financial Report must be organized along the lines of the IRS categories to properly fill out this form.

IRS

  • Gross Income less than $50,000 – file form 990-N online
  • Gross Income between $50,000 and $200,000 – file form 990EZ
  • Gross Income over $200,000 – file form 990

Franchise Tax Board

In order to file this new form, you will need to have obtained your FTB entity number. These numbers were mailed out to units in the spring of 2011. If you have misplaced your number, please contact the financial secretary for your individual unit number.

State of California

All PTAs must now file annual RRF-1 forms with the CA Attorney General’s office. RRF-1 forms require that you have a Charitable Trust number. In order to get one, an application for a Charitable Trust number must be filled out and the number received by November of 2012.

Guide for Initial Registration instructions for Form CT-1:

  • Founding documents: you will need current unit bylaws, the whole document.
  • IRS form 1023 – not necessary.
  • IRS determination letter: The CAPTA created letters of determination for all its units. Letters were given out in the spring of 2011 by Peralta District PTA. You will need a new one if the name of your president has changed. Contact the State PTA at sales [at] capta [dot] org for an updated letter.
  • $25 initial registration fee.

Sample Registration (CT1 "Red" Form)

If you already have a Charitable Trust number due to raffle activity in previous years, you do not need to fill out another application. HOWEVER, if you already have a CT number, you need to have been filling out RRF-1 forms during the previous years. Contact the Peralta financial secretary if this is an issue for you.

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Sales Tax

Sales tax is paid by units at the time of purchase. Consequently, resale use permits are not required by units to conduct sales of those items. Units are exempt from collecting and remitting sales taxes for items sold. Units may have to inform the vendors of their exclusion status and insist on paying sales taxes to the vendors. Units may have to adjust vendor invoices to reflect sales taxes. If units are unable to obtain the cooperation of the vendors, they may have to consider using different vendors. If no other vendor is available, sales taxes should be remitted by the unit to the Board of Equalization via written letter. For further information, the web site for the Board of Equalization is: www.boe.ca.gov

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For Councils and Districts

An annual report - the Registration/Renewal Fee Report (RRF-1) - is required for PTA Councils and Districts by the Attorney General's Office of the Sate of California. It is due on November 15 th for the fiscal year ending June 30 th . This form requires a Sate Charity Registration Number. If you do not have this number, you can apply for it at the same time you send in the RRF-1 forms. The web site for downloading these forms is: www.ag.ca.gov/charities/forms.htm

The Charity Registration Form is also called the Annual Registration Form, and its number is CT-1CF. A $25.00 fee for first-time registration is now in effect. The RRF-1 form requires no fee for revenue under $25,000 a year. There is a sliding scale for income over $25,000, so be aware of this requirement.

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PTA Raffle Requirements

A completed registration form and registration fee must be submitted by September 1st of each year (September 1 through August 31) during which a raffle is expected to be conducted. A check in the amount of $20.00 payable to Department of Justice must accompany this registration form.

A Nonprofit Raffle Report must also be submitted for each raffle conducted the previous year (September 1 through August 31.) Reports are due on or before September 1 st . Both these forms can be downloaded from the Attorney General's web site: www.ag.ca.gov/charities/forms.htm

There are additional reporting requirements (Form W2-G) for winnings of $5,000 or more or if the winning amount is more than 300 times the cost of the ticket. Consult the web site for these requirements.

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For PTAs That Are Employers

For clarification of determining whether a person is an employee or an independent contractor, see the California State PTA Toolkit (5.6.1.)

Due to the increasing reporting requirements of the State of California, the State PTA recommends that if you want to pay someone for a service, you go through your school or school district. The school district, in paying the person, assumes withholding responsibilities and also liability for the employee / independent contractor.

If you do pay people: an independent contractor is defined as an individual who is not an employee of the business entity for California purposes and who receives compensation or executes a contract for services performed for that business. You must report to the EDD (Employment Development Department) within twenty (20) days of EITHER making payments totaling $600 or more OR entering into a contract for $600 or more with an independent contractor in any calendar year, whichever is earlier.

Report independent contractor information on the Report of Independent Contractors form (DE 542.) To obtain forms and/or information, call the hot line number (916) 657-0529 or the toll-free number 1-888-745-3886. The web site is www.edd.ca.gov and access "Forms and Publications."

The California EDD requires that any employer who pays compensation must also file a DE 6 Quarterly Wage and Withholding Report. All DE 6 copies, which show PTA-paid wages and the required deductions, must be attached to the Workers' Compensation Annual Payroll Report form when forwarding to the California State PTA via your Council or District PTA.

IRS form 1099-MISC must be filled out after payment over $600.00 to any independent contractor. To download this form, please access charities and non-profits / forms at: www.irs.gov

It is recommended that a professional knowledgeable about hiring employees and reporting requirements be consulted to ensure that all government regulations are met. This is a legitimate PTA expense.

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Incorporated Units

PTAs incorporated in the State of California are required to have on file with their legal records a copy of the PTA's Articles of Incorporation along with current bylaws and minutes. As a corporation, these legal records may be requested at any time for review. In addition, PTA bylaws and Articles of Incorporation may not conflict.

YEARLY FILINGS
Incorporated units need to file State tax returns, form RRF-1 with the Attorney General, and form SI-100 with the Secretary of State. See the various web sites for downloads of these forms.
www.ag.ca.gov
www.sos.ca.gov

If PTA membership should determine to dissolve the corporation but remain a 501(c)(3) organization, there are instructions for dissolving the corporation and filing the dissolution with the Secretary of State. These include the General Guide for Dissolving a California Nonprofit Corporation, a Certificate of Dissolution, and a Corporate Records Order Form if you do not have your corporate information. For more information, please access the Attorney General's web site: www.ag.ca.gov

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Fundraising

Fundraising is the method of raising money to finance PTA programs and projects. The fundraising project must support the goals of PTA and be related to the educational, charitable, and philanthropic purposes as a tax-exempt organization.

It should involve as many members as possible and be fun. It should not be a burden to the school staff or parent volunteers, compete with or detract from school lunch and nutrition programs, or conflict with other PTA, school, or community events. Children should never be used to sell door-to-door or exploited to raise funds. It cannot involve commercial or advertising obligations. See National PTA Annual Resources for PTAs, Money Matters which prescribes the ethics of fundraising.

The fundraising project must have the approval of the membership in advance of the event and the vote must be recorded in the minutes. Projects must have a specific purpose. The project, if it is an ongoing activity or program, must be approved each year by the association membership.

PTAs are exempt from taxes under Section 501(c)(3) of the Internal Revenue Code. To retain the tax-exempt status, PTAs must pay attention that fundraising does not become its primary focus. All PTAs function under the exempt status of the California State PTA and the National PTA. An individual unit can have an affect on the entire organization. Disregarding the prohibition against substantial commercial activities could result in having to pay tax or a tax penalty and/or loss of tax-exempt status by the IRS.

Most PTA fundraising activities are exempt from federal income taxes, because a majority of the work performed at the unit level is conducted by volunteers and they sell donated merchandise.

For more information on fundraising, please access:
www.capta.org/sections/finance/fundraising.cfm

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Inventory Organization

The California State PTA Finance Commission has developed helpful guidelines to aid in keeping track of inventory. The following is a document of sample inventory report forms.

PTA Inventory

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Financial Responsibilities of Board Members

All board members and chairmen are expected to:

  • Accept office or position only when willing to uphold the policies and procedures of the State
    and National PTA;
  • Accept office only when willing to prepare oneself to fulfill the responsibilities of the office;
  • Study and follow unit bylaws and standing rules;
  • Attend and participate in meetings;
  • Abide by the will of the majority;
  • Respect the privacy of the business of the executive board;
  • Protect members' privacy by allowing no distribution of membership lists to outside interests;
  • Meet deadlines and fulfill assignments promptly;
  • Give accurate and detailed account of all monies entrusted to them;
  • Delegate instead of doing it all yourself;
  • Develop and strengthen leadership;
  • Attend conferences, workshops and convention;
  • Maintain a procedure book to pass on to one's successor; and
  • Resign if unable to perform the required duties of the office.

Revised Toolkit section 2.3.20 - page 43-44

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Financial Red Flags

  • No treasurer's reports at executive board or association meetings.
  • Reports are given orally with written information to be provided "later."
  • Treasurer's reports list only general categories without sufficient detail.
  • Treasurer misses meetings.
  • Audits not performed as scheduled.
  • No one from unit attends any council/district meetings or workshops.
  • Board members not turning in correct amount of money; accounting irregularities in their own fundraisers/activities.
  • Inability of treasurer or chairman to say how much money the fundraiser made.
  • A PTA mom offers to "do" the fundraiser with her own business.
  • No monthly financial reports; no audits.
  • Board unfamiliar with unit bylaws.
  • Banks that do not return processed checks (or copies of such.)
  • Unapproved meeting minutes.
  • Unapproved budgets or yearly calendars.
  • President (or other officer) not reviewing bank statements.
  • School staff member as treasurer.
  • School staff the greater percentage of the board.
  • Demands from staff/principal for "gifts" to school.
  • A treasurer who is disorganized and can't get reports ready for meetings.
  • A president who writes the checks because the treasurer has no experience.
  • Inquiry calls by concerned parents, teachers, or principal.
  • Calls on the same matter from two different sources.
  • Failure to provide a year-end audit on request.
  • Providing skimpy or misleading information.
  • Subsidizing memberships for anyone (students, etc.)
  • Paying per caps/insurance consistently late.
  • Lack of or incomplete minutes, particularly in matters involving use of funds.
  • PTA paying for aides or specialists one year and expecting/obligating next year's board to do the same.
  • Getting involved in supporting petitions for more teacher hours, etc. Boards are not obligated to take either side of a dispute.
  • Anxious principal who wants projects funded without going through the process set up by the PTA.
  • Overbearing principal who wants the PTA to do what he/she wants regardless of the proper procedure.
  • Fundraising project that will benefit a board member financially.
  • Unit board not following financial procedure because they "never did before"; board that claims it "didn't know."
  • Only one person counting money.
  • Only one person signing checks; only one person on bank signature card.
  • Signing of blank checks.
  • Receipts not attached to Requests for Reimbursements.

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Recommendations

When questions arise, consult the PTA Toolkit and / or unit bylaws. Most of the answers can be found in one of those two documents.

Tax questions can be answered by accessing www.irs.gov/charities/ the IRS web site.

The chairman should give an accurate account of income and expenses for his/her fundraiser at the next board meeting.

If a PTA is considering becoming an employer, it should check out the tax withholding and reporting requirements carefully.

Units should be able to comply with council or district requests for audits or other financial information.

An additional officer should reconcile the bank statement.

Raise questions privately. Do not accuse anyone of stealing money.

Build trust with your membership to encourage open discussion.

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Internal District Forms

The following three forms are for use by district officers only.

District Request for Reimbursement (PDF | DOC)

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Additional Topics

The California State PTA web site has an excellent section on specific questions on the topics of sponsorship, Scrip, fund raising, carry-over funds, budget, banking, taxes, E-commerce, check writing, audit, commingling of funds, treasurer, and gifts to schools. Please access:
www.capta.org/sections/finance/faq.cfm

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