Interesting topic! We have a situation in our school where the technology department for past years has ran yearbook monies (which he is in charge of selling) through our PTO. Last year when I joined the board, a couple of us questioned why the school's fundraiser, not sponsored by the PTO, is being funneled thru our account. If all the yearbooks do not sell, and if we have any NSF checks, then we eat those monies. I asked again this year, and was told that when they sent in their fundraisers to the county several years ago, they weren't aware of this fundraiser, so PTA agreed to handle for them. We are now PTO, and we had over $1000 come thru our account, and then a check written to them. We do not budget this expense, so it would just show monies coming in and going out. I agree with the person above - it can't be legal if you want the books to balance as they need to. We're reviewing the issue again next week in our budget meeting. Something's not right!
Thanks for the responses. I also don't know why they think donations to the school are not tax deductible. I've not spoken with the OM parents, only the 6th grade teacher rep. He admits he doesn't understand any of this. (*sigh* that's why I'm the treasurer.....)
I'll try and get it all cleared up and out of our account next week. I think we'll need to change the bylaws and make sure all the officers know about the rules before accepting bookkeeping engagements on my behalf. lol!
I'm not sure about their story of donations to the school not being tax deductible. I think they just didn't want to go through the school's/school district's paperwork involved in a process like this. If the Odyssey of the Mind was a PTO sponsored program, then it wouldn't be a problem, but this situation seems a bit on the unethical side if not illegal under IRS rules as the poster above believes.
I think your group should write one check to the school in the amount this group deposited, designate that it is for this group, and wash your hands of the situation immediately. They can get their expenses reimbursed through the school which is probably the way they were supposed to be doing it in the first place.
No, it's not legal. Any money you put into your account IS supposed to be YOURS AND NO ONE ELSE'S. Are you going to claim that income on your 990? Probably not. Are you giving it away again without a line item in your budget- probably so.
IT is wrong.
Our Odyssey of the Mind team has solicited donations from private companies and individuals. They have deposited the funds into the PTO's checking account, and now they want us to pay their expenses out of these funds. They said they had to do this because contributions to the school are not tax deductible, but contributions to the PTO are. (We received 501(c)3 status this year.) When all is said and done, we will pay the remainder of any donations to the school. Is this legal? Several of us are not comfortable with this arrangement.
