Frequently Asked Questions about Financial Matters

No matter how many accounts a local unit has, the treasurer is responsible for all funds of the local unit. It is not acceptable for any PTA to have an autonomous committee, or allows anyone to use its 501(c)(3) determination letter or its EIN.  If a committee is part of the PTA, then the funds belong to the PTA and are counted towards its gross receipts. ALL BOARD MEMBERS, not just the treasurer, have fiduciary responsibility for the financial position of the PTA.

The Virginia PTA Local Unit Resource Guide CD contains an entire section on "Financial Management" which includes a sub-section on what to do when you suspect missing funds as well as the need to have insurance coverage for the unit.  National PTA does the same through their quick reference guide, "PTA Money Matters" and in their trainings. These materials are sent to PTA units every year.

Training sessions are offered by Virginia PTA generally twice a year. This is in addition to trainings offered through the 21 districts and various councils.  

A local unit is responsible for obtaining their own insurance for the protection of the assets of their association.  State PTA coverage is limited to the Virginia PTA Board of Managers, employees, property and events of the Virginia PTA.

NOTE: Sometimes, PTAs (local units) encounter embezzlement.  When a local unit suspects embezzlement, the local unit should immediately contact the State Office for guidance and assistance.
  

The State Office does not store insurance records in its files for local units.  If a local unit did not keep its own insurance records and does not know the name of its carrier, the local unit can contact either RV Nuccio, Inc. or AIMS Insurance to see if either agency has any insurance records for the unit in question.  These two insurance companies provide non-profit coverage for PTAs and PTOs and are most used by PTAs in Virginia.  Google 'RV Nuccio' and/or AIMS Insurance to find contact information.

Non-profit law in Virginia requires that each non-profit conduct an end of fiscal year audit.  Virginia PTA requires that a local unit submit a copy of its annual adopted audit to the State Office in order to receive a 501(c)(3) Determination Letter.  A local unit needs this letter to receive Virginia sales tax exemption and to be eligible to accept donations/contributions from individuals and organizations.  It is the responsibility of the elected officers of each PTA association to conduct this audit as prescribed in the bylaws of the association.   

Each year, PTAs must apply for and obtain a Unit Verification Letter from the Virginia PTA in order to receive a group exemption under Section 501(c)(3) of the Internal Revenue Code granted to the Virginia Congress of Parents and Teachers by the Internal Revenue Service in 1986.   

This group exemption exempts the unit from paying federal income tax on money earned for use in its programs.  This exemption may also be extended to any donors who may wish to deduct contributions to the local unit – refer to the Internal Revenue Code for specific information about donor deductions.   

Local units will also need a 501(c)(3) IRS Determination Letter in order to obtain an exemption from paying Virginia sales tax.  Obtaining this letter from the Virginia PTA is just the first step in the process to receiving an exemption from Virginia sales tax.  The next step is to apply for and obtain a Virginia Sales and Use Tax Certificate of Exemption Letter from the Commonwealth of Virginia.  PTAs can obtain this letter by completing an on-line application at www.npo-tax.virginia.gov .  Specific instructions on the information that a unit will need to provide during the application process can be found in the Local Unit Resource Guide, but we have also included that information below for your reference.

Virginia Sales Tax Exemption

The Virginia PTA/PTSA, and its local units, councils, and districts have been granted exemption from Virginia sales tax by the Code of Virginia (Section 58.1-609.8). In order to utilize the exemption from paying Virginia sales tax, PTAs must furnish vendors with a copy of the Commonwealth of Virginia Sales and Use Tax Certificate of Exemption letter. To obtain a copy of this letter, local units must first request a copy of the 501(c)(3) IRS Determination Letter from the Virginia PTA Office by phone, mail, fax or email. The request must include the name of the local unit, address and district, the President’s name, address and phone. In order to receive the determination letter, the constituent association must be a “unit in good standing” (dues paid by December 1 and bylaws current) and must have all required information on file in the state office.  Once this letter is received, the local unit can obtain an application on-line at www.npo-tax.virginia.gov to receive a copy of the Sales and Use Tax Certificate of Exemption letter. Along with the completed application units will need to provide:

•  501(c)(3) IRS Determination Letter (obtained from the Virginia PTA office)
• Independent Financial Audit from a Certified Public Accountant if units grosses over $250,000 
• The first two pages of the local unit bylaws showing the unit’s name and purposes 
• Copy of form 990 or 990EZ
• Authorized Signature (President) 
• For Proof of Chapter 5 Compliance in Question 12 of the application, local units should write in “Sequence #26006”. This shows Virginia PTA is registered under a consolidated or “joint” registration for solicitation of contributions with the Virginia Department of Agriculture and Consumer Affairs.

Hopefully, with our assistance, PTAs will be able to navigate this process successfully.  In the meantime, should a unit have any questions or concerns, they should feel free to contact the Office Administrator at the Virginia PTA State Office at (804) 264-1234.

Exemption from the Payment of Federal Income Tax and Virginia Sales Tax

The federal exemption exempts a Local Unit from the payment of income taxes on money earned through its programs/fundraisers for the fiscal year and that donors can deduct their donations from their income taxes.

To qualify to receive the Virginia PTA federal tax exemption letter, your unit must:

1. Local Unit Dues Paid
2. Bylaws Approved
3. EIN Submitted
4. Officer Roster including names, addresses and phone numbers of all officers
5. Fiscal year-end audit or 990 if proceeds over $25,000

To qualify for the Virginia Sales Tax Exemption, your unit must:

1. Local Unit Dues Paid
2. Bylaws Approved
3. Officer Roster including names, addresses and phone numbers of all officers
4. Fiscal year-end audit or 990

The bylaws dictate how the local unit and its leaders must conduct association business.  Local unit leadership has the fiduciary responsibility of protecting the assets of their individual associations.  When a local unit discovers the appearance of financial misconduct and notifies Virginia PTA of this concern, Virginia PTA advises them as to the following steps that the local unit leadership must take to try to address the situation:

The unit must:

• Notify the State Office of possible misconduct, so that the State Office can notify the district director and the council, if applicable.  This provides a local team of experienced district and council PTA volunteers to advise and assist the local unit whenever and wherever possible.
• Confiscate all financial records in order to do a complete audit to determine if concerns are valid. 
• Immediately contact its bonding insurance carrier as to the carrier’s requirements and to ensure and/or verify coverage.