Hopefully your parent teacher group has never suffered the sting of embezzlement. You may even think since it has never happened to you, that it’s a rare occurrence. Unfortunately, embezzlement is the #1 claim type AIM Insurance handles. And, as you might suspect, those involved with the school and parent teacher group are often tight-lipped about the affair. No one wants to be remembered as the school or PTO whose funds were stolen.
But, the truth is in the world of parent teacher groups embezzlement is common. The worst part is sometimes the embezzlement continues for years without being noticed, depriving schools and students of the valuable funds needed for student excellence. Need more evidence of how widespread embezzlement is in parent teacher groups? Here are just a few recent news stories where embezzlement insurance could help.
July Education Embezzlement Insurance News
- Teacher Misuses Decade of PTO Funds
- Former Principal Investigated for Theft
- Former Basketball Coach Accused of Mishandling Booster Club Funds
AIM Insurance can attest to a correlation in embezzlement claims and the health of the economy. When money becomes tight due to economic pressures the allure of dipping into parent teacher funds is increased. With the economic impact of coronavirus causing a surge in unemployment and economic downturn, embezzlement claims are again on the rise. People are often shocked to discover someone they consider a friend could embezzle funds from the group. The perpetrators often start with a small amount, just enough to cover a small gap in money and have every intention of paying it back. Unfortunately, those situations sometimes get worse and a person borrows more from the parent teacher piggy bank without being able to pay it back.
The best way to protect your PTA, PTO, and Booster Club funds from embezzlement is with embezzlement insurance. The standard bond limits offered by AIM cover $10k, $25k, and $50k. Embezzlement insurance protects your funds from anyone your organization entrusts with the money. This includes group officers and even couriers who would try to embezzle your funds.
AIM Insurance offers affordable embezzlement protection with a $250 deductible. You can learn more about coverage HERE.
Embezzlement insurance is the single best way to protect your group’s funds. However, an ounce of prevention is worth a pound of cure. There are a few easy ways to help prevent a desperate person from embezzling your group’s funds.
The more eyes you have on your group’s funds, the more likely you are to discover a discrepancy. The easiest way to do this is to make sure all accounting of you parent teacher group’s funds are countersigned. Your bank accounts should be reviewed monthly and signed by someone who does not have access to the funds or authorization to sign checks. You should also conduct a documented annual review of your books by a review committee or a qualified accountant.
For additional security, beyond embezzlement insurance, require all group checks to have two signatures. This works best when the Treasurer holds the checkbook and its accounting, but cannot sign checks. Requiring two other officers to sign all checks.
Keep Charge Cards Close
Limit access to your group’s debit/credit card. It is easier to track expenses when only one or two parent teacher officers have access to the charge card. If you use charge cards often, this can be a hassle for your officers but it’s better than not keeping track at all.
Empty Your Petty Cash
In the past, not having a petty cash drawer was unthinkable. But today, very little requires cash payments. It is much easier to track transactions through check and charge, than cash. Instead, keeping a small stockpile of money around can invite unscrupulous activity.
There is no substitute for embezzlement insurance. But, good bookkeeping is great prevention. While nobody likes to be that person, keeping all your receipts accounted, and your financial records up to date makes it extremely difficult for someone to embezzle funds. This includes doing an annual review of your financial records. It’s a good practice to have your group’s financial records professionally audited. Some CPAs will even offer the service for free to parent teacher groups.
How to Report an Embezzlement Insurance Claim
Despite ardent prevention, embezzlement can still happen. Being a victim of embezzlement is not your fault. However, you do need to take the steps to resolve the issue. Because embezzlement, robbery, and theft are serious crimes you will need to involve law enforcement before reporting an embezzlement insurance claim. This is the most difficult step. Because of the nature of embezzlement the suspect is not a strange but a familiar person, maybe even a close friend. However, for the claim you will need a copy of the police report naming the suspected embezzler.
Once you have involved law enforcement, reporting an embezzlement claim with AIM is simple. Go to THIS PAGE. Fill out the PDF, provide a copy of the police report, and return to AIM by email, fax, or mail.
Embezzlement can be devastating to a parent teacher group. Especially as the funds stolen are likely earmarked for a future purchase. Additionally, there is a betrayal of trust from the people around you that you consider friends. Only time can heal the rift.
Protecting your group’s funds is critical to navigating a difficult time. And as we face inflated unemployment people can become desperate. Provide yourself a sense of security with embezzlement insurance knowing your organization’s hard-earned dollars will stay where they belong.
Get an embezzlement insurance quote HERE.