Local PTA bylaws require an audit/financial review of the financial records at specified times, including change of treasurers and at the end of the fiscal year, and usually indicate how and when the auditor or audit committee should be selected. A copy of the annual audit report/financial review and the final financial statement must also be sent to Free State PTA within 120 days of the close of the fiscal year.
Unless specified by the PTA’s bylaws, there is no requirement that the audit be performed by a CPA. The “audit” is not a strict audit in the sense defined by CPAs, but rather a financial review. That said, the Charitable Solicitation Division of the State of Maryland does require an “audit by an independent CPA if contributions are $500,000 or more” and a “review by an independent CPA if contributions are at least $200,000 but less than $500,000”.
DEADLINE: Audits/financial reviews are due to Free State PTA by October 31st.
THE PTA FINANCIAL REVIEW/AUDIT
WHO CAN PERFORM AN AUDIT?
1. An auditor can be someone who has accounting experience
2. Or an auditing committee of not less than three (3) PTA members selected by the board of directors who are not signers on the account.
WHO SHOULD NOT BE AN AUDITOR OR AUDIT COMMITTEE MEMBER?
Anyone with signature authority for the financial records being audited
WHEN SHOULD AN AUDIT BE DONE?
• Annually – at the end of the fiscal year (which is June 30th) and completed during the summer before the first general meeting. The review period is from July 1st to June 30th. The financial review is due by October 31st.
• Upon change of treasurer – an audit should be done if there is a change in treasurer at any time other than at the end of the fiscal year.
WHAT SHOULD BE PROVIDED FOR THE AUDIT?
The treasurer should deliver the following to the auditors:
- a copy of the last audit report
- checkbook and cancelled checks
- bank statements and deposit receipts
- treasurer’s book or ledger
- the annual financial report
- itemized statements and receipts of bills paid
- check requests/disbursement
- a budget adopted by the membership with any amendments noted with the adoption dates
- treasurer’s reports
- forms: Disbursement Request Form, Cash Verification Form, Advance Form
- current bylaws and standing rules
- any other information requested by the auditor/auditing committee
- copies of board of directors, executive committee and general meeting minutes
THE AUDITING PROCESS
The National PTA Money Matters Quick Reference Guide provides a step-by-step process to follow in conducting a financial review.
1. Compare the starting balances with the last financial review.
2. Check all documents for mathematical accuracy.
3. Check that all income and expenditures are allocated into the same budget lines of the approved budget and are accurately reflected in the annual financial report.
4. Prepare written report of findings, signed by all financial review committee members, and forward to the Board of Directors.
The financial review committee investigates, examines facts, draws conclusions from the facts and presents a written report of its work to the Board of Directors.
An important responsibility of the Board of Directors is to report the results of the annual financial review to the membership at the first general membership meeting of the school year. Share a copy with Free State PTA.
Treasurers who need assistance filling out these forms or for boards who need to get their financial review completed, contact firstname.lastname@example.org.