We are in the process of developing next year's budget and I'm trying to find information that explains / defines the required reserves. Does the state PTA provide recommendations regarding reserves?
The WSPTA recommends PTAs maintain a minimum of six months operating expenses in reserves in either a savings or checking account—preferably a savings account. Your local unit standing rules should contain information on how many months of reserves are carried over each year and what account these reserves are kept. To calculate the figure for six months operating expenses, take your total budgeted expenditures and divide it by twelve, then multiply that number by six (or the amount of months your local unit decides to maintain in reserves).
The purpose of maintaining reserves is to cover operating expenses in the event the PTA doesn’t raise the amount of money budgeted. However, holding too much in reserves isn’t recommended because the money raised by PTA should be spent to benefit students.
There may be specific circumstances a PTA may need to carry over significantly more in reserves, such as a PTA that needs three years of operating expenses in reserve during a period a school is being rebuilt after a fire—during which time students are dispersed among other schools.