I agree with Jewel3 and JHB that having a pro review your books is a good thing, and you should take advantage of the offer. However, I would be just a bit cautious about how the district is approaching this issue. You use the words "umbrella". If you are an independent 501c3, (and not under a group exemption like a PTA chapter is to the National PTA), then you are legally independent of the school district. Yes, you function at their pleasure, but it's a courteous relationship, not a legal one. I'm not an IRS agent nor an attorney, but that's the way I understand the relationship from having filed for 501c3 a couple times.
Welcome the free professional service, but make it clear you maintain the PTO's independence with respect to decision making, spending, fundraising etc.
Great advice, Jewel3. In our elementary, the school auditor did our audit each June. (We formed a new by-the-book organization in the wake of an embezzlement.) I don't know that they "required" us to let them do the audit, but we eagerly accepted. It was great. One less thing for us to worry about.
And the auditor was always very helpful, very objective. It was never a negative experience. The small things he found "wrong" were ways for us to tighten up for the next year. Another great benefit was that it silenced all those corner cutters who seem to think following the rules, providing a receipt, filling out a required form was optional for them. "It's required and the auditor will be looking for that next summer, so..." Magic words!
They may or may not have the right (legal standing) to audit your finances, but it is absolutely true that your continued existence does primarily depend upon the district's level of goodwill toward your organization. Just imagine trying to operate without the access your PTO currently enjoys. I suggest that you embrace this as an opportunity to strengthen your relationship with the district. Besides, transparency in all that you do is critical to gaining and keeping the trust of those your PTO works with (parents, principal, and district).
Your PTO should have nothing to worry about if you have conducted yourselves -- from your by-laws to how PTO meetings are conducted to how you've dealt with parents to how the books have been kept -- in an upstanding manner.
Our PTO is it's own entity - nonprofit registered with the IRS and the state.
Suddenly, the school district administration wants to "audit" us. They claim that since we can't exist without them, we fall under their umbrella, so they have the right to do this.
My question: 1. should I be worried about this request? and 2. Do they really have the right to do this?
