Question: Money guidelines....crossing?!?

A friend has asked me the following and would like to know if it is written anywhere in rules... A bunch of 5th grade parents (not PTO) has decided to raise funds for a "Stepping Up Celebration" and the school PTO will be collecting the money so that it is accounted for. The PTO is saying that the parents have raised too much money and PTO is now going to keep $500 of it. Is that allowed and legal? I mean the parents raised money for a specific thing, not for the PTO to deem that they have now made to much and keep a portion...

Asked by Anonymous

Answers:

Community Advice

mum24kids writes:
It's kind of written somewhere, but not terribly easy to understand. If people are really inclined, though, they can look up Statement of Financial Accounting Standards 116. It depends on how the fundraising was done, but what you describe sounds Not Cool. By running the money through the PTO, it's a PTO event. But if everyone knew that the money was being raised for that event, and especially if this was just a donation campaign where people were asked to donate money, then the funds should be put towards it. If this was a direct donation campaign, and you raised more than necessary, then technically people should be asked if they want their money back, or if they want to make it a donation to general PTO operations instead. If it was a fundraising event, that's not really practical, but every effort should be made to spend the funds raised on the 5th grade ceremony, and AFTER that, if there is leftover money, then the PTO Board could keep it (or perhaps designate that it be put towards next year's ceremony). But to say that the PTO is going to take money off the top before it even happens just because they think too much was raised is really going to leave a bad taste in people's mouths and not want them to help out for the next year. A more appropriate way of doing this in the future is to have the Stepping Up Celebration become a formal part of the PTO budget and make the committee for it be a PTO committee. Then the Board can either decide to regularly fund it out of general operations, or the Board can designate a specific activity have its funds directed to pay the Stepping Up Celebration ("proceeds from the math carnival will be used to offset the expense of the Stepping Up Celebration"). Then, since it's a Board designation, if the fundraiser takes in too much money, it is within the Board's authority to put the extra funds to their general operations. If the amount budgeted for Stepping Up is clear at the beginning of the year, you won't have the same problem again, regardless of how much is raised.