Advice from PTO Today

Craig writes:
Good question. It certainly seems innocent enough -- people work hard for the PTO, so why not let them have this little perk that doesn't cost the group anything? On the other hand, if you do get audited, it's going to require some explaining as to why all of your expenses are reimbursements rather than paid directly by the group. And it will complicate your bookkeeping because you're adding a layer between you and your purchases. What happens when someone puts a bunch of items on their credit card and forgets to save the receipts? What if you have to return an item or get it serviced? These things can be overcome, but they're complications. On top of that, I'm not a tax expert, but I'm pretty certain that your members who do this will need to declare this benefit (which they did not pay for because they are being reimbursed) on their personal income taxes. When it comes to bookkeeping, I'm a strong believer in keeping things as simple and straightforward as possible, so I would recommend against this. And yes, you definitely should establish bylaws. Here's a helpful article called How To Write PTO Bylaws.

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Advice from PTO Today

Craig writes:
It might be easiest to address your situation by putting a number of new financial controls in place, including, for example, requiring pre-approval for reimbursement of any purchase over say $25. Make sure everybody is well aware of the new policies, then enforce them. That way you'll be getting your finances in order rather than targeting a specific individual. The article 5 Smart Financial Controls provides some other important policies you might implement.

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