PTCO Spending Policies Guidelines
The mission statement of the PTO/PTCOs of the Cherry Creek School District is to support the education of our students. This means that money raised is to be used to enhance the education of our students. The IRS requires that all non-profits state their mission and use their tax deductible donations for that mission. To do this, the following practices should be observed. For more detailed information, refer to the Parents’ Council Procedures and Practices Handbook.
1. The majority of the tax deductible funds raised by the PTO/PTCO are to be used for direct educational enhancement. Auxiliary items such as Hospitality and After Prom may be supplemented by the PTO/PTCOs but the amount should be viewed in context of the percentage of the total budget and should not be the primary expenditure.
2. Monies raised are to be spent in a timely manner to most benefit the students that attended the school during the fundraising efforts. Parent donors expect that the funds contributed should benefit their children.
3. The IRS requires that the funds be spent for the purpose indicated when solicited. If PTOs solicit for specific funding goals, then recordkeeping will have to indicate any unused funds so that they can carry over to the next year for the same purpose.
4. The IRS does not allow non-profits to accumulate “profits”. PTO/PTCO’s should not carry balances unless a specific expenditure has been identified. The IRS does not allow “profits” to accumulate without potential taxation. The PTO may indicate that a reserve is required under the bylaws to cover expenses that will be due before funds are raised, (ie TA salaries) or money that has been earmarked for a specific purpose such as an ongoing fundraising for computers, playground equipment etc. PTOs can also “prefund” their budget as long as their intent is clearly indicated in the minutes and has been approved by the general population annually. Once the approved reserve has been funded, any additional donations should be spent or any additional fundraisers should be limited until the funds have been allocated and spent.
5. Grant Requests - Teachers and staff should be informed of funds available and encouraged to make grant requests under policies established by the PTO/PTCO’s for items that would enhance the education of their students.
6. PTO Grant Accounts held at the district – an accounting should be done annually to ensure that unexpended funds aren’t being held year after year. Unused funds should be returned to the PTO for future allocation or released by the PTO to the Principal for expenditure.
7. The IRS does not allow non-profits with the “Educational Support” mission to benefit individuals. Funds can be raised with PTO support for the occasional community needs BUT no funds can be deposited into the PTO account and then disbursed to a family or an individual. This includes “Thank You” gifts within certain guidelines outlined in our manual. Any funding solicitations for individual needs should indicate the alternative payee and include language that these donations are not tax deductible.