If you are a 501c3 (or plan to be in the future), the IRS wants you to get receipts for that kind of expense. In our budget, teacher allocations account for about 15%, too high to just ignore. We give the teachers a note in June with an estimate of the amount of credit they'll get in September after our new budget is approved. This way, they can collect receipts all summer. Once they reach the max, they turn in the receipts and we cut a check. They can request their check any time throughout the year (and a few don't even bother to submit a request).

We file the receipts but never review them. Teachers spend TONS more of their own money than we reimburse, so we don't feel it's right to judge the merits of the specific items they buy.

Wow, $175 per teacher, you are very generous!
We alot an amnount per teacher but each teacher must submit their purchases via receipt and ourt PTO reimburses via our Treasurer. Having the 'paper trail' keeps things legit.
I think giving the money out at holiday time could pose a problem, will they look for it at the same time each year? What do your by-laws say, if anything, and if not, now would be the time to revise them for future Board members.

The only thing I would add to the prior post is now is a good time to reveiw your money handling procedures and maybe create a set of treasury bylaws or a notebook of rules for future use. You live and you learn.

I really do not think there is anything you can do at this point because whats done is done. I think you can just learn from your mistakes and make sure the group handles matters such as this correctly the next time around.

You stated in your original post that the matter was being debated and you were suprised to find out that money had been handed out. Who made the decision and who handed out the money?

Regardless, I really do not think you need to worry about the IRS coming down on you. They are typically not in the business of running around chasing small non profit groups for matters such as this. I can tell you that our taxes were filed wrong for many, many years. It was only about 3 years ago when a new treasurer picked up on this and contacted them to find out how to straighten the whole thing out and file everything correctly. Nothing happened to us. I have never heard of the IRS coming down on PTO groups for minor mistakes. I have never read a single post here from any member who the IRS was after. Just make sure your books note the amounts as teacher gifts, learn from your mistakes and move ahead.

I just found out that district policy is that any money that PTO gives the teachers must run through school funds. Since the money was already handed out, is there anything that can be done? I really could use some advice. Thanks!

We dont hand out checks either when we did do this. They get a voucher and have to submit receipts for the alotted amount at one time. We have never given them a check and I believe they would have to claim it on their taxes if they did especially for that amount.

Cindy S

We did stop this because keeping track of what each teacher spent was too much work. Now they all get the same gift.