When you say "vote on" do you mean that they alone decide, leaving the rest of the board out of the decision? Or do you simply wonder if they should abstain from or be included in voting on the proposed allocations?
My belief is that the entire board should be able to offer suggestions for allocation of funds. Then, at a meeting with a quorum present, there should be a motion, second and vote on each allocation.
Like Jewel says, check your bylaws. There should be specific policies for approving projects and spending.
Some people come into our lives and quickly go. Some stay for awhile and leave footprints on our hearts. And we are never, ever the same."
"The ultimate aim of karate lies not in victory or defeat but in the true perfection of one's character."
It all depends on how the by-laws for your PTO addresses this issue. In my opinion, it seems unusual that the fundraising committee, as opposed to the board members, decide the activities for the year and decide how the funds raised are allocated. That this committee manages these activities in entirety seems to invalidate the reason for having a PTO board (in other words, what does the board do, then?).
Is it ethical and legal for the Fundraising Committee to vote on the proposed items and also make allocation of the funds? Shouldn't the PTO or School Principle decide on what items are to be purchased and the Fundraising Committee raise the funds to purchase those items?