I'm not a CPA but I've been a PTO treasurer several times. I probably do some creative accounting that would make you bristle, but it's worked for us for many years. I believe our monthly treasurer's report should be a decision-making tool, not just a list of the financial transactions for the month.

First of all, we set an annual budget, broken down by income and expense spread over about 20 categories. We include our beginning bank balance above the income section since it's money we can spend on our expenses. We devise an expense plan that consumes all our projected income, including our beginning balance. We define an "expense" category to set aside our bylaw-mandated carryover balance. I know that's not a real expense in accounting land, but doing this allows us to create a balanced budget that is intuitive for our members to understand. I suppose we could also remove the carryover line and show the amount as the budget balance at the bottom of our report. That would work too, but we've always done it the other way so our budget balances to zero.

We show NET profit projections for our fundraisers so the members get a feel for the real $$ available from these efforts. That means we don't show an expense category for a fundraiser. We post expenses to the fundraiser's income category throughout the year. If someone really wants to know the breakdown between gross income and expense for a fundraiser, we have to go to the transaction register. We don't lose the detail because our computer system keeps each transaction, but we don't show separate categories on our monthly report to the membership.

You're right it's important to know year to year how much was spent on a particular project, so we break out the income/expense for the committee chairs so they can see how their committee was run in the past. In this case, the treasurer needs to be able to tell the chairperson how much she should plan to spend in order to make her projected net income goal. Unless you look at the detailed transactions from past years, you're in the dark. However, on the monthly treasurer's report, I think it's more important for our members to be able to see at a glance if an event came in under or over budget, or to see how much is left in a particular category like staff appreciaton, for example.

Our monthly report shows a column for budget, a column for actual to date, and the variance column.

I hope this answers your question. It's hard to explain without a visual example. As a CPA, your insight will be very helpful to us neophytes. Let us know what you come up with for your PTO.

HELP! Our treasurer believes that there is a type of accounting that I don't believe exists. I know of cash basis and accrual basis. However, for several years now our PTO makes up their own accounting. It appears that they put all of the income and expenses into one account. Therefore, at NO time from one year to the next can anybody determine how much money is being spent or how much money is being made. I vote....make income an income account and show cash receipts. Have expense reflect expense. They look at me like I am crazy. It is so difficult to make good decisions because the "detail" is often impossible to determine without good financial statements. Now, I am a CPA...so, maybe I missed this type of accounting. Has anybody heard of this?