Question: Can board change spending plans?

Last year, our general membership voted to spend $6,000 to purchase a sign for our school. The sign had not been purchased yet, but one member spent the summer getting estimates, permits, etc. This year, we have new officers who included the sign in the budget but reduced the amount to $2,500 (which is not enough to purchase the sign). Is this year’s board required to honor last year’s vote, or are they within their rights to make the change?

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Advice from PTO Today

Elly writes:

Elly likes to see groups follow through on their financial commitments each year, but she certainly understands that it’s just not possible sometimes. As a matter of fact, Elly knows one PTO that fundraised for years and earmarked several thousands of dollars to build a new playground, only to discover later that building on the intended site was not feasible. Ugh.

Plans, priorities, and objectives do change from time to time; it’s OK, and even necessary, for officers to cut back on spending or move funds around as needed. There are a couple of exceptions: First, if parents had contributed to past fundraisers heralded as “Help Us Buy a New School Sign,” your officers should not use the money to pay for a different cause; it’s a matter of building trust with your supporters. Also, it matters how the vote by the general membership was worded. Typically, members vote to authorize the officers to make a purchase. That leaves the final judgment up to the board whether to actually make the purchase. It’s possible to word a motion so specifically that a purchase must be made, but that would be an unusual case—and not a good idea in most instances.

Another thing Elly would like to know is whether your group allocated the difference ($3,500) to another line item in the budget. If so, Elly thinks your board should probably take the time to explain to your membership why this budget revision took place. You should give parents the opportunity to discuss it and offer their input, too.

Remind your members that budget forecasting, particularly in this economy, is not an exact science. (For instance, say your treasurer estimated profit for your fall fundraiser at $12,000 but it barely netted $6,000.) That way, parents will better understand budget variances as they come up and your group’s need for flexibility down the road.

Community Advice

badpants writes:
This is how our parent group avoids that very thing. At the end of the school year, we transfer all funds (less $2000) to what we call the Project Account, which is a separate account, managed by a separate treasurer. As a board, we hold an allocation meeting to determine exatly how much money to contribute to specific line item expenses. The project manager is usually the treasurer from the previous board. So, a treasure would serve 2 years on the board and then as out-going, would move to project treasurer. The project manager gets our line item budget and is responsible for dispersing the amount that we determined for the item we assigned.