This might be of interest to you. You are a private school, so it may not apply directly, but I'd guess it's all part of the same general set of commonly accepted best practices. Private school parent organizations are frequently considered more of a committee, and thus part of the school, than an independent entity.
Alabama Department of Education issues financial accountability guidelines for booster clubs, other school-related organizations blog.al.com/bn/2007/12/guidelines.pdf
Note - the sentence about PTAs and PTOs both having national organizations is incorrect. PTAs do, PTOs do not.
There are definitely generally accepted best practices for school finance/accounting. I think a very common one is that any school-affiliated funds must be managed by the school. (Think of all the school clubs and the classes that might raise money for special projects.) If the entity is under the school umbrella, the school needs to be accountable for the funds.
Here in Texas, these are called "Activity Funds". I think that may be a common term. Often these things filter down from universally recognized accounting practices. It's not like the school just gets to dump all the funds in a big account and take over, the funds still need to be reserved for the activity for which they were raised.
So if your organization is part of the school, what they told you may well be true. And that may not be the end of the world. In fact if relations between the administration and the parent group are good, it might relieve you of some administrative burden. Your leverage is strongest before funds are raised. Parents have a lot of power. I would think even more in a private school when the choose/pay to attend. If this is indeed true, I'd focus on hammering out agreements that safeguard the funds.
** How will funds be allocated?
** Who makes final decisions on spending?
** How are expenses reimbursed?
Say, for instance, the PTO is organizing a fundraiser and hopes to raise $10,000 net. You'd have a plan that everyone agrees to in advance as to where it goes (either dollars or percentage), priorities, what happens with shortfall/extra.
If everyone is in agreement, then the parent group can still organize and support the fundraiser. If not....(you decide).
Is it a school auxiliary, or have you incorporated and obtained 501(c)(3) status as an independent organization?
I've heard there are parent-teacher committees that are not independent, but rather committees set up by the school.
If you are independent, I can't imagine that there's a law saying that any independent organization that wants to donate money to the school has to consolidate its account with the school. It seems that would be an accounting nightmare, if not a violation of IRS guidelines or the law.
Of course, you don't want to anger the director and manager; they can make your life difficult. I guess for a private school, they probably can exclude you from the building (in a public school, the public can request space, even for non-school-related activities).
The business manager and executive director of the private school that my children attend would like to consolidate the PTO and school accounts. This has never been done before and I totally oppose it. They stated that by joining both accounts they would itemize all of our expenditures and other transactions. They also said that they could do it because under some Alabama law, (a law they failed to identify) stated that because PTO was a school auxillary, that the accounts had to be combined. They also stated that if we refused to consolidate the accounts that PTO would have to seperate itself from Cornerstone and that we could not fundraise nor have any meeting at the school. My officers and I have called for an emergency meeting today, I am just in desperate need to research whether or not this is legal thing for them to do.
