Financial Review Checklist Pta

Standard Operating Procedure: PTA Financial Review & Audit

Document ID: SOP-FIN-PTA-001
Effective Date: 2023-10-27
Version: 1.0.0
Review Cadence: Annual (Every August)

1. Executive Summary & Purpose

This document establishes the institutional-grade framework for the monthly and annual financial review of Parent Teacher Association (PTA) accounts. The purpose is to ensure fiscal transparency, mitigate risk of embezzlement or mismanagement, and maintain 501(c)(3) compliance.

2. Scope & Prerequisites

• Scope: All PTA-managed accounts, including operating checking, savings, and merchant services (e.g., Square, PayPal).
• Prerequisites:
  • Tools: Ledger/Accounting software (QuickBooks/Excel), Bank Statements, Reconciled receipts, IRS Form 990 (for annual filings).
  • Access: Dual-signature authority mandates; read-only access for Audit Committee members.

3. Roles & Responsibilities (RACI Matrix)

4. Step-by-Step Procedure

Phase I: Monthly Reconciliation

• Document Collection: Download bank statements, credit card statements, and digital payment processor reports.
• Transaction Matching: Cross-reference every ledger entry against the corresponding bank statement line item.
• Receipt Verification: Match physical/digital receipts to every debit/expense transaction. Flag any expenditure >$100 lacking a receipt.
• Deposit Audit: Verify that total cash/check deposits match the bank-validated deposit slips.
• Discrepancy Resolution: Reconcile outstanding checks and pending merchant transfers.

Phase II: Monthly Approval

• Treasurer Report: Generate the "Monthly Financial Statement" detailing opening balance, total income, total expenditures, and closing balance.
• Executive Board Review: President or non-signer must verify the statement against the source documents.
• Minutes Entry: Record the formal approval of the financial report in the meeting minutes.

Phase III: Annual Audit

• Year-End Close: Finalize all accounts at the end of the fiscal year.
• Evidence Collection: Collate all budgets, check registers, bank statements, and tax filings.
• Independence Check: Ensure the Audit Committee members were not authorized signers on the account during the period under review.
• Verification Report: Compile the Audit Committee report and present to the membership for a formal vote of acceptance.

5. Quality Assurance & Pro-Tips

• Metric Thresholds: Zero tolerance for "unexplained" variances. Any variance exceeding $0.00 must be investigated and documented.
• The "Dual-Signature" Rule: Never authorize an expenditure or sign a check where the recipient is the signer or a family member.
• Pro-Tip: Utilize digital storage (e.g., Google Drive/Dropbox) for all receipts. Paper receipts fade; digital scans constitute permanent, legible records.
• Common Pitfall: Failing to account for "float" (outstanding checks). Always ensure the bank statement reflects the cleared balance, not the ledger balance.

6. Frequently Asked Questions (FAQ)

Q: What do we do if we find a discrepancy that cannot be resolved? A: Immediately isolate the discrepancy, report it to the President and the Principal, and initiate an internal forensic audit. If theft is suspected, notify the insurance carrier and law enforcement per local bylaws.

Q: Can the Treasurer and President share a bank login? A: Absolutely not. Each board member requiring access must have their own unique login credential to maintain an audit trail of who performed specific transactions.

Q: How long should financial records be stored? A: Per IRS guidelines, maintain financial records and tax filings for a minimum of seven (7) years.