Education: Counting the float at every raffle: As school fund-raising becomes big business, PTAs will soon have to register as charities, says Julia Hagedorn

Last year Stephanie Jones (not her real name) wrote to the chair of the Parent-Teacher Association (PTA) at her daughter's school to ask for a copy of the constitution, the minutes of the last meeting and the latest available audited accounts. The answer she received was most unexpected:

'You are, I believe, the same lady who submitted a number of questions to the Governors' Meeting. I have to tell you that this, coupled with your letter, creates the impression that you are a professional complainer rather than someone who genuinely cares about the children and the school.'

This turned out to be only the opening salvo in a still unresolved and increasingly acrimonious crusade by two parents in a Westminster primary school to find out some simple background facts about their school's PTA. All Mrs Jones wanted was for ordinary parents, who raise the money, to know where the money went and to have some say in how it should be spent.

It took until August this year for the PTA committee members to see any accounts, which showed an opening account in 1993 of pounds 13,334 - a large sum for a small school to hold in a bank. They also showed that pounds 3,601 had been spent that year on 'school equipment, donations and voluntary fund'; nothing had been itemised.

When Mrs Jones began her inquiries, she also discovered that legally she was entering a grey area. Nothing was laid down about how a PTA should manage its money. Could it be left on deposit for years? What happens if an outgoing chair suddenly decides to buy all the teachers a present from the PTA fund? Do the parents baking late at night for next day's cake stall have any say about how the profits of their endeavour will be spent?

Next year such confusion should cease to exist. Under the 1992 Charities Act, school fund-raising bodies that collect more than pounds 1,000 a year will be required, from 1 January 1994, to register with the Charities Commission. They will have to submit audited accounts to the commissioners each year, along with an annual report; and they will have to supply copies of these accounts to any member of the public within two months of the request.

Since the PTA committee has the final decision on how fund-raising income is managed, parents and teachers on the committee will become de facto trustees. It will be their duty to notify the commission. While no one yet knows what checks will be in place, trustees could in theory be punished with a fine or even imprisonment if they do not register.

Margaret Morrissey of the National Confederation of Parent Teacher Associations (NCPTA), of which about half the schools in England and Wales are members, is concerned about the new legislation. She fears that in areas where it has been a struggle to establish a PTA, the paperwork involved will frighten off many parents. Her organisation is inundated, she says, by calls from parents and teachers who are alarmed about what is happening and do not understand the forms they have to fill in.

But the commission maintains that registration is straightforward and says many PTAs are in the process of registering. Parents simply have to produce a governing document - based on a model constitution, agreed with the Charity Commission and the Inland Revenue, which is supplied by the NCPTA - and fill in a questionnaire.

It is where the Charities Act impinges upon the 1993 Education Act that matters begin to get more complex. Anne Mountfield, in a new book, School Fundraising, sifts through the potential pitfalls of the legislation. She points out, for example, that contrary to many people's belief, schools and charities are not automatically exempt from tax on fund-raising and trading. So far, it has attracted little attention from the

Inland Revenue, but now that the grant-maintained sector is showing an increasingly entrepreneurial streak, schools are likely to arouse fresh interest.

A further complication is that the 1993 Act gives all maintained school governing bodies the power to accept and hold gifts and donations on trust. School governors may, therefore, find themselves in the position of having to register as charity trustees: will this conflict with the PTAs' interests?

According to Mrs Mountfield, 'As schools' voluntary funds grow ever larger, both the funds and those in charge of them deserve the highest standard of protection. The best way to protect governors and trust managers from accusations of malpractice or the school from the effects of inadvertent mismanagement or, in rare cases, of fraud, is for school funds to be placed under broad-based trusteeship with the published policies, accounts and procedures for accountability known to all concerned.'

Schools would do well to take heed of this. Earlier this year an Audit Commission report on schools' management of their finances estimated that pounds 330m flowed through school voluntary funds in 1991-92, but one in four schools ran these funds in ways 'which would require corrective action if public funds were

involved'.

The NCPTA is currently more concerned about the way headteachers sometimes dragoon parents into making particular spending decisions. The organisation estimated that parents contributed pounds 55m to schools in England and Wales in 1991, and its policy is that funds raised by the PTA should not be used for books and equipment. However, in 1991, an NCPTA survey showed that 96 per cent of PTAs in primary schools and 84 per cent in secondaries were asked for help precisely in these areas.

Mrs Mountfield suggests that one solution here is to give headteachers a non-voting role as honorary president of the school association, reducing their power to influence how money is spent.

At Drayton Park Primary School in north London, for instance, the headteacher may suggest to the PTA how money should be spent, but he has no power to influence the final decision. The PTA recently installed a real lifeboat in the playground, at a cost of pounds 25,000 - a decision that was reached through a democratic vote by the PTA committee. Such meetings are open to parents, and the accounts are made available. As Richard Lucraft, a committee member, says: 'You have to run these things properly when you are dealing with other people's money.'

'School Fundraising: what you need to know' by Anne Mountfield, from the Directory of Social Change, Radius Works, Back Lane, London NW3 1HL, pounds 9.95 plus pounds 1.50 postage.

(Photograph omitted)