Before developing a budget, we recommend that you review the Money Matters section from the Annual Resource guide (a copy of which is supplied to each local unit President, and is available online in the members-only area of the National PTA web site.)
In addition, it is strongly suggested that an audit be done annually (see To Audit, or Not to Audit) to ensure you are starting on solid financial ground.
The Finance Committee
A finance or budget committee usually has the responsibility for developing a budget for the PTA. This committee may be elected or appointed according to the PTA bylaws and usually consists of three or five members, one of whom is the treasurer, who may act as chair.
Effective budgeting includes consideration of the PTA's stated goals and planned activities, as well as the financial needs to achieve these. The committee should study the previous year's budget and treasurer's reports to determine how well that budget met the organization's needs.
Next, members should determine the projected financial requirements, taking into consideration the funds needed for the approved programs, projects and leadership development. They should determine the sources of funds to meet these requirements.
From this information, the committee develops the annual budget. Budgets cover a one-year period. How the year is defined should be determined in the bylaws.
Approving the Budget
After the budget has been drafted, it should be presented by the budget committee chair to the PTA board/executive committee for consideration and then to the PTA membership for approval. This presentation is made during the organization's general meeting where a quorum is determined to be present. A majority vote of the members present and voting is required for adoption. The budget is presented item by item to allow for discussion and amendment of each section.
Amending the Budget
Since the budget is only an estimate of the planned expenditures for the year, it may be necessary, from time to time, to amend it. When there are additional expenses or a change in an allocated expenditure, the budget may be amended by a vote of the association at any regular meeting or at a special meeting called for that purpose. To amend something previously adopted, it is necessary to have a two-thirds vote; with previous notice, a majority vote.
Approval of Expenditures
The adoption of the budget authorizes the treasurer to pay for routine expenses covered in the budget only if such authority is provided for the treasurer in the local PTA bylaws. If the local PTA bylaws do not so provide this authority, the treasurer shall pay bills only when the board/executive committee or local PTA members vote to expend the money, and then only upon presentation of properly signed vouchers, as required in the state bylaws.
All expenditures must be reported to the board/executive committee and included in the regular report of the treasurer to the membership. Any additional expenditures not provided for in the budget must have approval of the membership. The regular financial report should be attached to the minutes of the meeting at which it is presented. Changes in the budget, including both income and expenditures, must be presented as amendments to the budget.
Emergency Reserve Fund
The emergency reserve fund is considered to be an integral part of each PTA's planning and budgeting process. The emergency reserve fund is intended to serve as a means to retain financial stability in the event of an unforeseen development such as unplanned expenses arising from a project or an unexpected increase in inflation. The amount of the fund will vary according to each PTA's size.
Should you have any questions regarding this matter please feel free to contact the Connecticut State PTSA office.
Suggested Activities for Developing a Budget
∞ Study records of past receipts and expenditures.
∞ Study the plans for the year's activities and suggest ways and means of procuring whatever funds are needed.
∞ Set up a budget showing the allotment of expenditures year's activities on the basis of the funds on hand and all or part of the anticipated receipts. Expenditures should equal receipts.
∞ Present at each regular meeting of the executive board/executive committee a statement showing how the amounts expended to date compare with corresponding items in the approved budget.
∞ Recommend to the association any budget revisions that are necessary for the effective development of its work.
∞ Recommend to the association, after approval by the board/executive committee, a plan to provide for sufficient funds in the budget to enable the association to carry on its program during the summer and prior to the start of membership enrollment in the fall.