PTA Financial Review: When You Need One and How to Prepare

Every PTA that handles significant funds should have some form of independent financial review. Not because anyone is suspected of wrongdoing — but because external review is good governance, and good governance protects volunteers from unfair suspicion. If something ever looks wrong with the books, having a documented review process is the first line of defense for everyone involved.

Financial review vs. audit: what's the difference?

A financial review (also called an internal review or internal audit) is an examination of financial records by a qualified person or committee within the organization. It is not a CPA-certified audit. It's a structured check that the records are accurate, complete, and consistent with the bank statements.

A formal audit, by contrast, is conducted by a licensed CPA and issues an opinion on the financial statements. Most PTAs don't need a formal audit — a thorough internal review is appropriate for organizations under $500,000 in annual income. Organizations above that threshold, or those with 501(c)(3) status and significant grants, should consult an accountant about whether a formal audit is advisable.

When a financial review should happen

Best practice is once per year, typically at or near year-end. Some PTAs conduct the review when a treasurer transitions out — this protects both the outgoing and incoming treasurer by establishing a clean starting point.

Who conducts the review?

The review should be conducted by someone who is not the current treasurer and who has no conflict of interest with the finances. Common choices: a former treasurer who is still a member, a board member with financial background, or a two-person committee appointed by the board. The National PTA recommends that the reviewer not be a close family member of the treasurer.

How to prepare as treasurer

Assemble the following for the reviewer:

• All bank statements for the period being reviewed
• Monthly treasurer reports corresponding to those statements
• All check stubs, receipts, and deposit documentation
• The board-approved budget and any amendments
• Meeting minutes where financial approvals were recorded
• Any 1099s or payroll records if applicable

The reviewer will check that your reports agree with the bank statements, that all disbursements had proper authorization, and that income was received and deposited promptly. A clean set of organized records makes this process straightforward — a disorganized set makes it stressful for everyone.

Common questions

What if the reviewer finds discrepancies?

Most discrepancies are clerical — a transaction recorded in the wrong month, a fee that wasn't entered, a category that was miscoded. Document the finding, correct the records, and note the correction in the next board report. If the discrepancy is significant or can't be explained, bring it to the board immediately.

Does a co-op school also need a financial review?

Yes — for the same reasons. The co-op school year-end reporting guide covers this as part of the annual close process.

EasyTreasurer keeps a clean record of every report generated — organized by month with the underlying data preserved — which makes any financial review significantly faster to complete.