Is Your Money Safe with Your School Booster Club?

Article first published as Should You Trust the PTA with Your Money? on Technorati. An earlier version of this post incorrectly identified Julia Baldwin Elementary School as a PTA-member school; the updated version notes that the school instead operates a Home and School Club for fundraising.

Last week the parents at my kids' school got a friendly request: donate cash to the Home and School Club before the end of the year to claim a tax deduction for 2010. The appeal naturally didn't mention a shocking scandal brewing at a nearby school in our community. The San Jose Mercury News recently reported that two moms who served as Home and School Club officers at Julia Baldwin Elementary in South San Jose are facing up to three years in prison for stealing $30,000. The moms are accused of siphoning off funds earmarked for new jump ropes, school buses, and a kindergarten handwriting program, and treating themselves to manicures and lingerie from Frederick's of Hollywood. The pair also flashed club charge and debit cards at JCPenney, Old Navy, Piercing Pagoda, and other stores for their own benefit.

Wow. I ran the crazy story by my CPA husband, who has been auditing public companies for the past twenty-five years. "Can you believe that moms would steal like that?" I said.

"Most people will steal if they think they won't get caught," he replied.

Apparently, he's right. Theft from PTAs, PTOs and Home and School Clubs is more common than you think. A quick Google search reveals similar disturbing stories from Texas, California, Arizona, Washington, and Tennessee. According to the website PTO Today, even the nicest parents may be tempted to steal when need meets opportunity.

So how do you know if your money is safe with the booster club at your child's school? Parents should ask questions about the club's financial rules and policies. PTO Today recommends that organizations maintain a system of strict financial controls, such as requiring two signatures on every check, using financial request and disbursement forms, ensuring that cash is deposited in the bank promptly, and mandating that two people be present anytime cash is counted or handled.

According to my local paper, the new Home and School Club president at Julia Baldwin Elementary has now established these very guidelines. The club's former president and treasurer have already paid back the stolen funds and are awaiting trial.

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