Paying the bills
Your P&C's constitution details the required approval process for expenditure.
Where possible, purchase equipment and materials (especially large value items) by giving the funds to the school and having the purchases incorporated into the school budget. This recommendation is particularly relevant if your P&C is not registered for GST and is therefore not able to claim the input tax credits available with these purchases.
Purchasing
This section outlines how to make best use of the P&C's purchasing capabilities and the procedures that need to be followed.
Use an official order book to authorise all purchases. An official order from the P&C or one of its subcommittees prevents disputes about pricing, quantity and items ordered. This is particularly important with perishable items.
The use of purchase orders allows you to monitor approved purchases and identify unacceptable practices, such as someone mixing private and official orders together.
Each purchase order should clearly state:
- date of order
- supplier
- exact number and nature of items ordered
- who is placing the order.
Pre-number all order books and pre-stamp with the following:
Purchasing Policies and Procedures are available from Education Queensland.
P&C accounts are not permitted to use credit cards to make payments.
If the purchase is for a very small amount, use petty cash.
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Paying by cheque
Who can sign cheques?
At the AGM or at a general meeting, the P&C should authorise the president, vice-president, secretary, treasurer and other officers to sign cheques, with any two to sign each cheque.
Signatories to bank accounts will have to complete documentation at the bank and provide the bank with identification. The P&C should advise the bank in writing when signatories to bank accounts change or are cancelled.
Who cannot sign cheques?
The principal cannot be a signatory to any P&C account because the principal is not allowed to be an office holder of the P&C.
Paid employees of the P&C such as the tuckshop convener or outside school hours care director should not be officers of the P&C and therefore cannot be signatories to any accounts. This avoids any chance of conflict of interest or of officers having to make payments to themselves.
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Managing chequebooks
Keep a register of all chequebooks and the names of people holding the books.
All people holding chequebooks should keep them in a secure place. If a chequebook is missing, lost or stolen, have a stop payment put on those cheques. You can do this by a telephone call to most banks.
Never sign a blank cheque.
Order Not negotiable worded chequebooks, if possible. If this type is not available, mark/stamp Not negotiable – account payee only on every cheque when you receive the book. Cross out the words or bearer.
An officer other than the treasurer should certify and date the inside cover of the chequebook when all cheques have been properly marked or stamped.
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Completing cheques
Mark cheque butts with the date, payee, reason and amount for which the payment is made.
All expenditure must have supporting documentation validating the transactions, for example, payment vouchers, invoices or committee minutes. You must file this supporting documentation in cheque number sequence.
Invoices received from suppliers should quote your order number so that you can cross-refer to check accuracy.
If a cash cheque needs to be drawn for petty cash or a cash float, mark it 'please pay cash' at the top. Make the cheque out to the person to whom the cheque is given, who should then provide a receipt to support the payment.
Cancelled cheques, along with their butts, should be crossed with the word Cancelled, filed with invoices in cheque-number sequence and recorded in the cashbook as cancelled.
The auditor may request cheques that have been presented to and paid by the bank. These can be obtained from the bank by prior arrangement and will incur a bank charge. Attach these cheques to the relevant invoice.
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Electronic funds transfer (EFT)
For the reasons listed below, it is not recommended that P&Cs use EFT for making payments.
- Information Standard 42 requires absolute security of private information. Private personal details such as bank account numbers would have to be recorded for each supplier or employee who is to be paid by EFT. Access to such information and the systems they are recorded on would have to be restricted and the physical safety of the system ensured to comply with privacy requirements.
- You need dedicated hardware and specialised software.
- Security levels are necessary for adequate segregation of duties.
You should use petty cash only for small payments, such as those less than $10. You will find this payment method more efficient than writing many cheques for small amounts.
To use petty cash imprest system follow these steps:
- If the P&C approves a $50 advance to its secretary for petty cash, make a cheque out to the secretary with 'please pay cash' written on the top.
- Make an entry in the cash book with petty cash written after the secretary's name.
- As the secretary spends money from the petty cash, they keep a petty cash book record. (A petty cash book can be purchased from a newsagent or stationery store.)
- Receipts are pasted in the petty cash book for every item purchased with the cash. The secretary should sign the back of each receipt and give some detail of the item purchased.
- When the secretary has spent nearly all of the $50, they should request a recoupment of petty cash from the treasurer.
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Recoupment
- Total the individual payments since the last recoupment.
- Count cash on hand — the amount the secretary has left.
- Add the two amounts. They should equal $50.
- Categorise the total amount to be reimbursed into the appropriate types of expenditure.
- Make out another cheque to the secretary for the total of the payments to be reimbursed.
- The secretary should then mark the petty cash book as shown in the sample petty cash book new window 64k
(Example 12).
Complete the activity for Petty Cash
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