5 ways to protect your pto from embezzlement

How to Prevent Theft From Your PTO

This is one of those posts that I make in the hope of sparing you and your PTO from ever having to deal with this the horrible situation of theft or embezzelment.

But just like a whole lot of things, prevention is key.

Your group is should have very specific financial controls and policies in place to make theft and embezzlement a non-issue.

If you choose to not take any preventative steps, then know that your group will fall victim to a predator sooner or later.

And no one really wants that to happen, so read on to discover what to do!

This post will cover five different ways to secure the financial well-being of your PTO and prevent financial fraud, theft, or embezzlement!

Cash Controls

I’ll start off with a tough dilemma for PTOs. And that’s handling cash!

At events, such as at the membership table or carnival ticket sales booth, you’ll definitely need to accept cash.

We’re just not at a point in society where it’s practical to not accept cash. But cash is easy to steal, especially at busy events.

In order to prevent or at least reduce the likelihood of someone stealing money from your PTO, reduce the opportunities to take it!

Limit access

At events where cash will be handled, have just two or three trusted people stay with the cash at all times.

It’s impossible to safeguard cash with more hands than that going in and out of the cashbox during the event.

Adults only

Also, insist that only adults handle the money.

Kids sometimes have sticky fingers and a looser understanding of the consequences.

So leave the money collection and handling job to adults!

There are plenty of other ways kids can help at events.

Printable Treasurer Forms including Cash box start up form and cash counting form to manage money and PTO finances
Help your Treasurer get organized in mere minutes with these forms included in the printable Treasurer’s Planner!

Use Cash Trackers and Counting Forms

To begin the event, your PTO Treasurer should provide a cashbox filled with some start up cash.

There should also be a half completed Cash Box Start Up Form in the cash box, and the event money handlers should count the start up amount and finish up the form.

Designate money counters

After the event where cash is accepted, designate a few people to count the money as a group.

All the counts should match up and the Cash Counting Sheet should be signed off by all counters.

Also remember to use the cash counting forms to reconcile the cash boxes and ensure the numbers match up.

Deposit immediately

Deposit all money right away.

Many banks offer after hour deposits, so use this service to safeguard PTO money.

If that’s not possible, protect the money in the school safe and then deposit the next available banking day.

Leaving wads of dollars hanging around school or even at someone’s home is just asking for trouble.

Deposit it straight away and eliminate the chance it’ll be swiped!

Limit cash acceptance

In order to insulate your PTO from having a loss, it’s totally acceptable to not accept cash in certain situations.

Fundraising being one of them!

Here’s why I advocate for NOT accepting cash for product fundraisers…

A few years ago, I got a call from the school Principal.

A parent was upset, because she hadn’t received her PTA fundraiser order for her co-worker.

She claimed she sent in cash as payment for the order, despite the fact that the fundraiser order forms made it clear that cash wasn’t accepted.

Wanting to keep the peace and appease the parent, the Principal and the PTA President made the call that the PTA would have to reimburse the parent for the cost of the order.

We were stuck and out the $76. Ugh!

Fast forward about 6 years and more and more parents prefer to pay via credit or debit card anyway.

Use a free e-payment service like Cheddar Up instead.

How to protect your PTO and prevent theft or embezzlement. Great information for all PTO Presidents, Treasurers and Officers! Pin to read later! #ptoanswers #pto #pta

Payment Controls

This section will focus on controls you can put into place to make sure payments are being done in the correct way.

And by correct way, I mean in a way that pushes off the possibility and opportunity for embezzlement.

No cash

Never pay in cash.

Never ever, ever.

Here’s why…

There’s absolutely no paper trail with cash, so your PTO has no way of proving payment unless you’re lucky enough to get a receipt.

If money is withdrawn from the bank, that’s not proof the money went to pay for anything in particular, only that it was withdrawn.

So no cash as payments!

Say no to plastic

Resist the temptation to get a credit card or debit card for your PTO.

You’ll find that it’s nothing but trouble in the end!

Yes, it does make paying for things easier.

BUT not everyone is good about keeping receipts, so you might end up with a charge that can’t be verified as a legitimate PTO expense.

That’ll get flagged during the annual audit and it might open up the person who made the purchase liable for reimbursing the PTO for the expenditure.

If an officer or committee member can’t afford to pay for a PTO expense out of pocket and wait to be reimbursed, then the PTO Treasurer can always issue a check to pay the vendor.

I know it’s more of a headache with more hoops to jump through, but it is better than someone draining the PTO bank account from unauthorized charges or having to chase down receipts.

Printable PTO Treasurer forms including full page payment request form and 3 to a page check request form
Printable PTO Treasurer forms save so much time and make it easy to get organized as treasurer! All the forms you need to succeed as Treasurer in the Treasurer’s Planner.

Reimburse the right way

The PTO Treasurer should never reimburse for any expense that wasn’t approved by the PTO, whether it was something in the annual budget or is permitted by agreement during a meeting.

The reimbursement request should be accompanied with a reimbursement form and a receipt showing what was purchased, the cost and the date of the purchase.

This way, the Treasurer and anyone else can confirm that it is a legitimate PTO expense to reimburse.

Checks and Balances

One year, I was nominated to be PTO President.

I was game to go, but there was only one problem: My husband had been slated as Treasurer.

Neither of us are embezzlers, but having us be the primary names on the PTO bank account with the sole authority to sign checks would’ve looked really, really bad.

I know I would’ve been suspicious as all get out if another couple tried to be President and Treasurer of a PTO at the same time.

We resolved this by finding a new treasurer!

Learn from this and don’t have people who are related with signing authority or access to the PTO bank accounts.

It’s a smarter idea to spread around responsibility for PTO financial matters and have at least two (unrelated) people on the PTO bank account, and 2-3 PTO officers with the online PTO bank account passwords.

Allowing only one person to have access to everything is a dangerous position to put your PTO in.

Two signatures

Similarly, another suggestion that’s super common for theft and embezzlement prevention is to have two people sign PTO checks.

Good advice, but know that this tactic alone is not enough to prevent embezzlement!

Just Google PTA embezzlement or PTO embezzlement and you’ll find many instances where someone simply forged the second signature!

Planned Oversight

The Treasurer should have an open door, open book policy.

The Treasurer should issue a monthly report with enough information on it to allow it to be cross checked with the monthly bank account statements.

The President, in addition to one to two PTO officers without bank account access as well should be reviewing the bank statements and the Treasurer’s reports on a monthly basis, looking for inconsistencies like:
-Missing check numbers
-Checks made out to cash
-Unexplained low balances

An annual audit should happen, without fail.

The audit should be conducted by a person who isn’t an officer on the PTO board.

The auditor should be independent of the PTO.

These forms are part of the Treasurer’s Planner, designed to get Treasurers organized in just minutes with all the forms they’ll need right at their fingertips!

Get Paper Protection


Don’t overlook the protection that Bond Insurance provides.

This type of insurance protect the cash of the PTO against theft, fraud and embezzlement.

Anyone in the group who handles money is covered.

This type of insurance isn’t expensive to get, so don’t try to scrimp on this protection!

Update your Bylaws and Standing Rules

All of the financial controls outlined in this post should be incorporated into your PTO’s bylaws and standing rules. You’ll probably have to update them to work the new controls into them.

If you need the exact process to follow to ensure they’re updated correctly, watch this video:

How to Revise PTO Bylaws and Standing Rules

After your governing documents (those are the PTO bylaws and standing rules) have been updated, make sure to give a copy to every officer and committee chair, so everyone is literally on the same page!

More Ways to Limit Risk and Loss

Another idea to limit the damage to your PTO from theft is to not roll over so much money from year to year in your groups’ checking or savings accounts.

With less in the account, the opportunity to steal is lower.

So what to do if not rolling it over?

Spend it!

So even if all of the other financial controls you put into place flop, at least there won’t be so much lost. And with less money in the account, your group is less of an interest to someone looking to steal.

Ideally, you should keep enough money accessible to fund PTO activities and programs for the first few months of the school year, or until your first major fundraiser of the year, no more.

Alternatively, if your PTO is saving up for a large purchase, consider putting those funds into a short term CD.

You’ll earn a little interest and those funds won’t be touchable until the term of the CD is up! That’s a win-win!

Wrapping up!

In conclusion, here’s how to protect your PTO from theft, fraud or embezzlement:
1. Control Cash. Reduce the hands touching it, count it, then deposit it.

2. Double check payments and money leaving the account to ensure it’s going to legitimate PTO expenses.

3. Implement checks and balances. Don’t let all of the responsibility or access fall onto any one person. Spread it around to reduce the odds of wrongdoing.

4. Get up close and personal. Have a few people aside from anyone with access to the bank account to review the monthly bank statements. Insist upon an independent annual audit.

5. Get Insurance and update your Bylaws and Standing Rules to reflect the financial control methods outlined in this post.

6. Bonus! Don’t keep tons of extra money in the PTO bank account. Spend it or put it into stable investments like bank CDs.

Watch this!

How to Prevent Theft from Your PTO |

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