If your group has always collected the reciepts, then continue to do that. Everyone already know the procedure and it is a safer approach in the case of an audit.

THANK YOU both for the back up!! I am very uncomfortable with not having receipts!!!! The person this request came from said herself that she is not good with money issues! I am not good with legal jargon so I figured the best place to go was to this board and it seems to be the answers I needed to say NO!! -- we are keeping the "HAVE TO HAVE" a reciept!! THANKS AGAIN!!

When we became an official 501c3 a few years ago, we asked the IRS about the receipt issue. They advised us to require receipts from the teachers to ensure our money was being spent in accordance with our PTO's mission. So...we give the teachers a letter with an envelope, asking them to collect receipts/copies for any classroom purchase up to our amount ($100 this year). When they have enough receipts, they turn in the envelope and we cut a check. We never look at the receipts and they know it. We don't intend to deny any purchases (ex: "What! you bought your 18 different color dry erase markers? Surely you can get buy with only 6!" or "Sorry, we don't reimburse for donut treats. They're not a healthy snack."), we just seal the envelope and keep it in our files on the remote chance we are ever audited. Amazingly, despite several reminders throughout the year, there are always 1 or 2 teachers who never get around to requesting their money, even though they all spend loads of their own $ on their students. By the way, we don't issue checks for each purchase, just when the teacher has accumulated enough receipts to reach $100.

I'm not sure about the legality of this but it seems to me like keeping the receipts is just a no brainer. Anything that will help cover yourself in case of questions should be kept. A reciept will be a detail transaction of what was purchased, whereas a form will only say that 50.00 was given to the teacher. Just attached to receipt to the request and be done with it. CYA.

I am wondering if anyone can help me by answering a question about money dispersment. We as a PFO give our teachers $50 a school year for classroom supplies BUT they have to put the request in writing AND include the receipts. We have a request from someone on our board to do away with the "HAVE TO HAVE" of the receipts. The alternative would be that the teachers would HAVE to fill out a request form for that fifty dollars so that there is a record of where the money is going and only the teachers who "want" the money get it! We KNOW that teachers spend MUCH more than $50 on classroom supplies so the money is'nt my issue. My question is, is it legal to not have receipts for the money going out or does the request form cover the receipt issue???? Also IF this was to be changed it would have to be changed in our by-laws so jumping off of another post that covered by-laws -- if you change the by-laws does a copy need to be sent to any state or federal office to stay with-in the tax-exempt status. I am new in the President's seat and don't want to mess up somthing major along the way!!!!
Thank You ALL for your thoughts in advance!!!!!