Oct. 18 11:55 a.m.: This story has been updated to reflect additional comments from Sarah Grace concerning taxes filed for the PTO.
Sarah Grace has pushed back against accusations that she did not file taxes for the East Athens Elementary Parent Teacher Organization during her time as treasurer from 2014-2016.
Grace, who is the Democratic candidate for the 94th State House District, said she submitted the necessary tax form for fiscal year 2014 for the tax-exempt organization.
“The PTO as non-profit entity does not pay taxes. There is simply a requirement that an organization complete a 990 e-postcard confirming gross receipts for the tax year. The 990 postcard is a short online form. I filed twice as treasurer. I don’t know why that is not reflected,” Grace said.
According to IRS.gov, a small exempt organization — like the PTO, whose annual receipts total $50,000 or less — is required to submit a 990-N (e-Postcard) annual electronic notice.
A conflicting statement from the PTO executive board said no tax information had been provided for that tax year.
“We contacted the IRS to check the status of our tax filings, at which point we learned that taxes had not been filed,” according to the statement.
A cross examination on IRS.gov showed the East Elementary PTO does not have tax filing on file for the 2014 fiscal year, ending in July 2015.
According to IRS.gov, the Select Check database for exempt organizations like the PTO group that fill out the 990-N (e-postcard) is updated weekly.
The issue originally arose in August when a discrepancy of $5,823.05 was found after the PTO group elected a new executive board.
“Our first order of business was to create a budget for the upcoming year, and we began seeking information needed to do that immediately,” reads the statement from the PTO executive board.
According to meeting minutes from Sept 1 of this year, Athens City Schools Superintendent Tom Gibbs recommended the PTO group hire a CPA to clarify the differences between balances from the former treasurer’s account ending on May 30 and the bank statements from the same period.
CPA Alex Couladis made recommendations to the PTO group in an email dated Oct 6.
He found several issues in his examination of the organization’s revenues and expenses as related to a discrepancy reported.
“After a summary and review of the treasurers (sic) report and the bank statements I am unable to determine the nature of differences between the treasurers (sic) reports and the cash balances,” Couladis said in the email.
Couladis went on to request Grace produce a summary of the total revenue and expenses for the two-year period that she was in office.
Grace said the CPA never communicated his request to her, but stated she gave necessary information to the current executive members.
“That report included transactions that had not yet cleared the bank account,” Grace said. “I maintained a detailed ledger of revenue/expenses by category in the YNAB (You Need a Budget) software that I shared with the PTO board.”
“When I departed as treasurer for the East Elementary PTO, the financial records were balanced and in order,” Grace said in a statement. “All of the records, both paper receipts and the electronic ledger, were provided to the new board.”
Another issue Couladis raised was a cash deposit of $1651.60 in August from a book fair event in May.
The PTO executive board said it was not previously aware that Grace held this amount of money prior to the deposit and was surprised by this extra deposit.
“The plan was to include the new PTO treasurer in the process of making a deposit, recording the transaction, and reconciling the account to make the transition easier,” Grace said.
Grace continued by saying the process was slowed down because of their conflicting schedules.
“I wanted to do my best to let people know before I cashed their checks. I was trying to be considerate of individuals that might not keep large amounts of money in their checking accounts,” she said.
As mentioned in meeting minutes from Oct 7, the executive board voted not to pursue the matter legally after communications from Couladis.
“Short of involving law enforcement to determine if there has been a misappropriation of funds,” Couladis said in his Oct 6 email, “I would advise starting with an accurate cash balance on 7/1/2016 and create a system to better account for revenues and expenses on a monthly basis.”
The PTO executive board said it will file back taxes to bring the group to current.
“As creating a budget to move forward on PTO initiatives for this year has been our sole goal, we are no longer pursuing this matter,” reads a statement from the organization.
“We were elected on a platform of transparency and working to better the school that our children, educators, staff and community are proud to walk through.”