School Support Organizations

Audit Services provides assistance to schools in working with their support organizations, most notably parent/teacher organizations and booster clubs. We have included some attachments below that may be useful to your school's support organization.

Formal vs. Informal Organization
Guidelines for Forming an Organization (updated 09/10/12)
Sample By-Laws: Gilbert Elementary
Cash Control Memo: November 6, 2006
Info on Form 990-N (added 10/19/10)

Indemnification

Schools should also make their organizations aware of Governing Board Policy BHE - Indemnification. This policy states that in order for the organization and its officers to be included as an "indemnitee" for the sake of liability, the organization must be "in good standing" with the District. An organization is not considered to be in good standing if it fails to provide the district with all updated records and financial information within the time period prescribed by the Superintendent (as noted in this policy).

Legal Services has issued a memo and other information related to what steps organizations must take in order to be covered under policy BHE. Below is a link to that information.

Legal Services - School Support Organization Packet - 7/08

Part of the requirements for indemnification is to complete and application for Governing Board approval which can be downloaded below (this is also included in the Legal Services packet above).

NEW - May 2013 - FY 2013-14 Governing Board Application for Approval - NEW - May 2013

Please contact Audit Services at x20130 if you have any questions regarding Governing Board approval.

Frequently Asked Question

(from the Office of the Auditor General - August 2011)

Question: Should school districts allow booster clubs, parent-teacher organizations, parent-teacher-student organizations, or foundations to use the districts’ employer (taxpayer) identification numbers for the purpose of opening a bank account in the organization’s name?

Answer: No. Districts should not provide their employer (taxpayer) identification numbers to booster clubs, parent-teacher organizations (PTO), parent-teacher-student organizations (PTSO), or foundations for the purpose of opening bank accounts. District bank accounts must be authorized by the school districts’ governing boards and are limited to only those allowable under Arizona Revised Statutes. Therefore, districts should communicate to all known booster clubs, PTOs, PTSOs, and foundations that bank accounts must be established under the independent organizations’ own employer (taxpayer) identification numbers rather than the districts’ numbers.

Question: Are School Improvement Advisory Council's (SIAC) required to obtain Governing Board approval in order to be considered indemnified?

Answer: No, SIAC's are already considered an "instrumentality" of the District and would automatically be covered under the District's indemnification policy

NEW Question: May a PTO/Booster Club conduct a raffle?

NEW Answer: First, all fund raising that the booster want to do must first be approved by the school principal/asst principal. Even though it may be legal to have a raffle, the Principal may not support that type of fund raising.

Second, Governing Board policy IGDF-R, page 2 of 6 states: "Raffles and other "games of chance" will not be conducted by student clubs or organizations or the school itself. Parent-teacher organizations and booster clubs are solely responsible for conducting a raffle or other game of chance, including compliance with state law". With this policy, no students should be participating in selling tickets/collecting cash etc - only booster club members.

Finally, entities that are not school controlled (such as off-campus, clubs, clubs sponsored by civic groups, or parent-teacher organizations) and entities that also fit within the tax exempt categories defined by A.R.S. 43-1201 may hold raffles if they also meet the requirements of A.R.S. 13-3302.B. In order to be eligible, the outside organizations need to also meet the following tests:

The organization must be exempt from federal income tax under Section 501 of the Internal Revenue Code.

The nonprofit organization needs to have been in existence continuously in Arizona for a five year period immediately prior to conducting the raffle.

No person except a bona fide local member of the sponsoring organization may participate directly in the management, sales or operation of the raffle.

Updated 05/17/13