PTAs looking at financial controls

FROM STARNEWSONLINE.COM-

Embezzlement charges directed against two area women active in parent support organizations that strive to better education underscore the financial vulnerability of volunteer groups when safeguards are lacking or neglected, experts said.

Deputies in New Hanover and Brunswick counties drew warrants earlier this month, accusing the women affiliated with the Sunset Park Elementary PTA and the Lincoln Elementary PTO with stealing thousands of dollars from their groups. Though filed within a day of each other, authorities say the cases are unrelated.
The allegations raised questions about the strengthening of financial protections in an era where experts have noted an anecdotal rise in white-collar crimes. Those interviewed in the past week believe the upswing is at least partially attributable to economic hardship.
Authorities charged Dana Leigh Brooks, 38, with 12 counts of embezzlement over accusations she stole more than $5,000 from Lincoln’s PTO between February and June. She came to the attention of authorities after the group received multiple complaints from parents concerning a recent fundraiser where ordered items were never delivered. Sgt. April Stanley, a spokeswoman for the Brunswick County Sheriff’s Office, said that when the funds were examined, it was discovered the goods were never paid for and there was a discrepancy in the finances.
A day earlier, deputies charged April Ann Powell, who resigned as president of Sunset Park’s PTA in December, with one count of embezzlement after evidence suggested she allegedly used the group’s money to pay off her personal debts during the latter part of 2010. Cpl. Jerry Brewer, a spokesman for the New Hanover County Sheriff’s Office, said he could not confirm the precise amount involved but did say it was thousands. Contacted last week via phone, Powell, 34, declined to comment on the case.

Since news about the alleged embezzlement schemes emerged earlier this month, questions have swirled over whether financial safeguards are strong enough.
Two officials with the New Hanover County Council of PTAs, which supports the network of local groups, said the system in place is adequately designed to provide financial oversight. The issue, they said, was PTA groups have been allowed to amend their bylaws, and there exists no authority to ensure that policies and procedures are being followed correctly. Part of that is about to change, though.
Council President Denise Szaloky said the Sunset Park episode has prompted other groups to evaluate their policies and strengthen their financial protections. Soon, she said, all the groups in North Carolina are expected to adopt uniform bylaws to increase financial oversight and bolster other controls–a move proposed last year.
“If you follow your bylaws … there are procedures in place that would not allow this to happen,” said Gina Baran, the council’s treasurer. “This is something that should not occur.” In addition to the obvious fiscal impacts, exposure to theft can make it more difficult for donation-reliant nonprofits like parent-teacher associations to raise money.
“It makes your next fundraiser that much more difficult because people question the seriousness of the group in protecting its money,” said Tim Sullivan, founder and president of PTO Today, which helps parents form support organizations at local schools. “It stinks when you’re putting sweat and energy into a good cause and suddenly people are talking negatively about it.”
While PTAs and PTOs differ in their affiliations and organizational structure, both work to better education by providing everything from classroom supplies to playground equipment. Though affiliated with a certain school, the groups function independently and rely on private donations. Nevertheless, with government belt-tightening obliging school districts to pare back their budgets, schools have grown more reliant on parent support groups to sustain traditional education levels.

Crime experts agree that fraud is not unique to PTAs and PTOs. Indeed, news reports from around the country show the prospect of volunteers diverting money for personal gain is nothing new. And though many say the proportion of nonprofits that actually fall victim is miniscule, white-collar crimes have certainly increased in scope and frequency during the economic downturn.
In Bedford, Va., for example, authorities charged three people in 2009 – including the fire chief – with looting more than $150,000 from a volunteer fire company. In another case, a volunteer and two former employees at a catholic church in Danville, Calif. were arrested last year on suspicion of embezzling nearly $600,000 from the religious institution, according to Associated Press reports.
While the problem might be relatively small compared to the number of organizations in existence – one expert noted as many as 1.5 million nonprofits nationwide – some insiders contend that press coverage makes it appear worse and often taints the industry’s reputation.
James Martinez, a spokesman for the National PTA, said the advocacy group does not track the number of times these kinds of allegations arise but does monitor media reports and believes only a “handful” are ever exposed.
“Parents groups in general do great things but unfortunately, this happens, but it doesn’t happen all the time,” he said, speaking on the two recent cases in Southeastern North Carolina. “Corruption, which is what it is, happens on every level of any system around the world.”