For families all over CT, September signifies the start of a new school year. Whether you have school aged children or not, you will likely be exposed to some sort of fundraiser for your local Parent Teacher Organization (PTO) as they attempt to raise funds to supplement their school budgets. Unfortunately, it seems that today where there’s money, there’s theft! These organizations have fallen victim to a group of embezzlers that has cropped up throughout the state – the PTO Bandits!
How much can you really steal from a PTO?
Many assume that PTOs have few resources and likely comply with town audits as they are associated with municipal governments. The reality is that these organizations can accumulate significant amounts of cash through fundraising and the hard work of volunteers. In addition, these entities are entirely separate from the municipality that governs the school. Volunteers with limited training and often even more limited reporting requirements run these funds state and nation wide.
A Monroe elementary school lost over $45,000 earlier this year. The treasurer, who also previously served as president, made cash withdrawals, wrote checks to herself and funded a Disney vacation. A total of 226 illegitimate transactions went undetected, as she was the only person with access to the accounts. Similarly, a Meriden PTO lost over $22,800 over a period of six months through unauthorized debit card purchases and fabricated receipts and invoices. Southington and Ansonia PTOs were also victimized in the last two years, losing almost $30,000 combined!
Financial Controls for your PTO
PTO Today recommends implementing the following financial controls to help prevent the above situations in your town:
- Require two signatures on every check. No signature stamps, and nobody signs blank checks.
- Maintain a paper trail of original supporting documents for every transaction. Establish forms to document check requests, reimbursements, petty cash used, debit card, etc.
- Require the treasurer to report financial activity monthly, reviewed by someone outside of the organization such as the principal or vice principal of the school.
- Have board members review and sign monthly bank reconciliation(s), bank statement(s) with check images, and monthly financial reports.
Additional info at www.ptotoday.com/pto-today-articles/article/395-5-smart-financial-controls