City of Plano Permits
If your club is planning on selling any food or concessions as part of a fundraiser, you need to apply for a Temporary Food Event Application through the City of Plano. You do not need this permit to sell prepackaged food (e.g. Granola Bars or Chips). This application would only be required for prepared food (e.g. Slices of Pizza, Hot Dogs or Nachos. The permit fee is $20 for non-profits.
For questions, contact David Hightower with the city of Plano at (972) 941-7143.
If you are planning to sell non-food items (e.g. T-Shirts) at a campus please contact your campus administrator. If you are doing so at an athletics location (like the Football Stadium) please contact the athletics department.
IRS Regulations on Fundraisers
Booster clubs need to be aware of IRS regulations that govern them. In Publication 557-Chapter 3, the IRS prohibits the use of individual accounts by booster clubs. Under these rules, tax-exempt organizations cannot require people to participate in fundraisers. Likewise, booster clubs may not require an amount be “donated” in lieu of participating in the fundraiser. People may choose whether or not to participate in a fundraiser and may choose whether or not to donate to the booster club.
But, if a person decides not to participate, that person cannot be excluded from having the benefit of the fundraiser and cannot be penalized in any way for choosing not to participate in the fundraiser. Therefore, regardless if a person participates in a fundraiser and regardless of the amount of revenue raised, that person cannot be denied the opportunity to receive an equal benefit.
Booster clubs must benefit the group as a whole and not its individual members. The IRS prohibits the use of individual accounts by booster clubs. Individual accounts are those accounts used by a booster club to credit an individual with revenues raised. The booster club would use these accounts to benefit the individual by offsetting the individual’s expenses with the amount the individual raised.
Raffles in Texas are governed by the Texas Attorney General. Plano ISD is prohibited by Texas law from sponsoring or conducting any raffle. Raffles may only be conducted if they are a Booster Club/PTA fully sponsored event.
A raffle is defined as the award of one or more prizes by chance at a single occasion among a single pool or group of persons who have paid or promised a thing of value for a ticket that represents a chance to win a prize.
The Charitable Raffle Enabling Act, effective January 1, 1990, permits qualified organizations to hold raffles with certain specified restrictions. In general, a qualified organization is:
- A nonprofit organization that has existed for at least three preceding years, during which it has had a governing body duty elected by its members and is exempt from federal income tax under Section 501(c)(3), IRS Code; does not distribute any of its income to its members, officers or governing body; does not devote a substantial part of its activities to attempting to influence legislation; and does not participate in any political campaign.
Specified restrictions are:
- May hold only 2 raffles per calendar year and only one raffle at a time
- The prize may not be money
- Only booster club members may sell tickets (students cannot sell raffle tickets)
- Raffle tickets must state the name and address of the organization holding the raffle, the price of the ticket, date prize is to be awarded and description of each prize to be awarded that has a value of over $10
- No one may be compensated directly or indirectly for organizing or conducting a raffle, or for selling raffle tickets
- The winner must pay income tax on any prize. If the value exceeds $600, the booster club must provide an IRS form 1099 to the recipient
- Tickets may not be advertised through paid advertising
The language of the law is very technical. If you are considering holding a raffle to benefit an organization, check the statutes to be sure you qualify.
Crowdfunding fundraising can be easy and convenient for everyone involved; however, there may be significant drawbacks to this type of fundraising method. Typically, this type of online fundraising platform deducts a percent from the total proceeds plus charges other administrator fees.
Funds raised from crowdfunding fundraising should never go to an individual’s account. Money needs to be directly transferred to the Booster Club’s bank account.
To open a bank account, The Booster Club must first obtain an Employer Identification Number (EIN) from the IRS. (See Tax information section)
The Booster club shall not use only the school’s name on its checks or on its literature. It must include the Booster Club’s name on the bank account.
Two officers must sign each disbursement. School district employees may not be a signer on Booster Club bank accounts for any campus or programs. Two family members shall not both be signers on a Booster Club bank account.
All funds received should be receipted and deposited as soon as possible. Commingling of Booster Club funds and school activity funds is prohibited. School employees may not accept loans of funds from parents and student organizations.
Bank deposits should be prepared as follows to ensure the integrity of the financial reporting:
- Separate all currency and coins by denomination and carefully count and record it in the appropriate section of the bank deposit form.
- A tape may be run of any checks included in the deposit rather than indicating the checks individually on the deposit slip. A copy of the tape should be retained with your copy of the deposit records.
- Total the deposit slip.
- Tally the pre-numbered cash receipts and make certain this total matches the deposit total.
- Attach the cash receipt verification with a copy of the deposit slip and file in date order.
- For large deposits, have another individual independently count the currency only (not the coins or checks) and verify the currency has been correctly recorded on the deposit slip.
- Both individuals should initial the deposit slip next to the currency amount on the deposit slip.
- Seal the deposit in a deposit bag in the presence of the second individual. This is called dual control and places the organization in a better position to challenge any claim that the bank may make that the currency received was not correct.
Upon receipt of the monthly bank statement, the balance indicated on the statement shall be reconciled to the bank account balance in the general ledger as of the last day of the month. The reconciliation should be completed within thirty (30) days of the date of the bank statement.
Items needed for reconciliation:
- Bank reconciliation form
- Prior month's bank reconciliation
- Bank statement
- Check Register and/or Cash Disbursement tabulation
- Cash Receipts journal
- General Ledger
Cash Receipt Procedures
All cash collections received by the Booster Club for fees, dues, fundraising, etc. must be deposited upon receipt. All funds must be supported by some type of record documenting the source and amount of funds. Such documentation should be readily available for audit purposes.
It is recommended that deposits be made daily if the total receipts on hand exceed $250.00. If daily receipts are less than $250.00, deposits shall be made within one week even if the receipts for all days combined are less than $250.00. All money must be deposited prior to holidays and weekends.
At a minimum, the organization's membership should be provided with a financial statement and bank reconciliation at each meeting. The financial statement should provide a comparison of budgeted versus actual expenditures and receipts. Cash receipts and disbursement reports should be available for review when needed and at the financial review. Click here for information about creating financial reports and a downloadable sample spreadsheet.
- Booster Clubs should establish easy-to-use methods for managing the club’s money. You may utilize Quicken, Excel or any other spreadsheet program to track expenditures and revenue.
- All transactions should be recorded in the Booster Club’s financial records (checks matched to a request for expenditure and deposit receipts matched to a bank statement).
- The Booster Club’s books and bank accounts should be reconciled monthly.
While it is generally thought that boosters should spend all money raised in a given year, keep in mind that incoming officers for the following year need start-up money. Clubs should allow enough carry over money to provide new officers sufficient funds to begin the year and fund activities until a fundraiser is held. Carryover balances will vary from club to club and year to year. There is no set amount.
If an unusually high amount of excess funds exists when the year is complete, be sure to inform members. Provide explanation as to how the funds will be used going forward. Review bylaws to see if a vote by the members is required to carry over funds.
Booster clubs should seriously consider the purchase of liability insurance to protect the organization and its members.
Booster Clubs are a separate entity from the school district. As such, Booster Clubs ARE NOT protected from liability by governmental immunity. Carefully read any contracts in their entirety and/or service agreements you are asked to sign by a vendor. Unless your group is covered by its own general liability insurance policy (either an annual policy or one day event policy), by signing a contract that includes an Indemnification Clause, Hold Harmless Clause, or a Waiver of Liability Clause, the booster club is accepting, in the name of the group and its’ officers, the risk for any and all losses (property damage, bodily injury, personal injury, etc.) incurred or resulting from the event you are contracting for.
Coverage to be considered should include general liability, officer’s liability, business personal property (if booster owned property exists), and fidelity (otherwise known as bond) coverage.
Why is an audit necessary?
An audit is an examination of the financial records of the Booster Club. It assures that all income and expenditures are accounted for and consistent with the budget and goals for the year. It also verifies that the bank balance and ledger balance are reconciled. The audit is to protect the Booster Club officers and the organization.
When is an audit conducted?
An audit should be conducted at the end of the fiscal year, when there is a change in treasurer or when there is a change in any officer who signs Booster Club checks.
Who conducts the audit?
An audit may be conducted by an outside party, such as a CPA or an audit committee. The audit committee should be comprised of at least two members of the Booster Club (not the President or Treasurer or any other office with check signing responsibility).
What are the audit procedures?
Suggested steps for the audit committee:
- Review reconciled bank statements and canceled checks to determine that:
- Disbursements have been properly documented with an invoice or receipt.
- Disbursements have been properly approved.
- Checks have been properly signed.
- Checks have been deposited or cashed by the payee indicated.
- Checks have been accounted for in the proper sequence (no missing checks).
- Check addition and subtraction on cash receipts and deposits.
- Compare cash receipts and deposits to the bank statement.
- Verify that receipts and disbursements were allocated to the correct account or budget category.
- Verify that income from sales, dues, or any other sources have appropriate backup. The total amount collected should match the amount deposited into the bank account.
- Review the Treasurer's monthly reports and check them for accuracy. Review the beginning and ending balances on reports to verify that correct ending balances were carried forward as beginning balances on subsequent reports.
- Determine that only applicable Booster Club officers are authorized signers on bank account(s). Former officers should not remain on the account(s) as authorized signers. In addition, the faculty sponsor shall not be an authorized signer on the account.
- Obtain proof that all applicable sales taxes were paid.
- The audited financial report should be signed by all members of the audit committee and submitted to the campus principal or designee no later than August 1 following the end of the fiscal year.
- Verify that 1099's were issued if applicable.
Ways to Protect Your Organization against Embezzlement
- Money should never be kept at a treasurer's home.
- Two people should always count the money, and both should sign the receipt verifying the amount.
- Two signatures should be required on all checks.
- Have a member who does not have check signing authority review the bank statement monthly before giving it to the treasurer. This person is looking for red flags including: checks showing up in non-sequential order, checks made out to cash, cash withdrawals, checks written out to non- approved vendors, checks written for non-approved expenses, and checks written out to individuals.
- Never sign a blank check or a check made out to "cash."
- The treasurer should arrange to deposit the money in the bank as soon as the conclusion of the project.
- Money should be deposited into the organization's bank account daily, even if a project is ongoing.
- All bills must be paid by check, never cash.
- Conduct an annual audit of the books.
- In order to protect the booster club and it’s financial well-being, standard internal controls must be in place to prevent the loss of funds through carelessness, mistakes, or misappropriation.