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National Representative 2012 - 2013 Preventing Theft in Your PTA

National Representative 2012 - 2013 Preventing Theft in Your PTA. Preventing Theft in Your PTA. By the end of this workshop you will know:. How to define: theft, fraud, and embezzlement How to recognize the signs of theft, fraud, and embezzlement 10 tips for fraud prevention

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National Representative 2012 - 2013 Preventing Theft in Your PTA

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  1. National Representative 2012 - 2013 Preventing Theft in Your PTA

  2. Preventing Theftin Your PTA

  3. By the end of this workshop you will know: • How to define: theft, fraud, and embezzlement • How to recognize the signs of theft, fraud, and embezzlement • 10 tips for fraud prevention • What to do if you suspect theft

  4. *Note During this workshop, we may refer to the terms theft, fraud, and embezzlement interchangeably for illustrative purposes.

  5. What is Theft?

  6. Theft is, “The action or crime of stealing.” source: askoxford.com

  7. Miramar PTA Treasurer is Latest to Face Theft Charges Source: The Sun Sentinel, 2012 PTA Theft In the News Glendale Mom Convicted in $6,000 PTA Theft Fraud Source: The Arizona Republic, 2011 Video: KKSL-TV, Salt Lake City

  8. What is Fraud?

  9. Fraud is, “Wrongful or criminal deception intended to result in financial or personal gain.” source: askoxford.com

  10. What is Embezzlement ?

  11. Embezzlement is, “…Steal or misappropriate (money placed in one’s trust or under one’s control). source: askoxford.com

  12. Withholdingor under reporting collected dues is another method of stealing funds at the local, state, and national level.

  13. TheImpact of Stealing, Fraud, and Embezzlement… Hurts Children!

  14. Damaged Reputation and Relationships Loss of Members and Outreach Loss of Advocacy and Grant Dollars The NegativeImpact…Hurts Children!

  15. The Fraud Triangle Donald R. Cressey

  16. Opportunity Fraud Triangle Motivation Rationalization

  17. Opportunity Fraud Triangle Motivation Rationalization

  18. Opportunity Fraud Triangle Motivation Rationalization

  19. Theft Warning Signs

  20. Delayed Reports • Cash Receipts • Multiple corrections to the ledger • Lifestyle changes • Missing money on Friday, replaced on Monday • Signatories are related • Checks made out to “cash” • Large checks, pre-signed checks, or bouncing checks • Not following internal controls • Avoid or delay annual audit

  21. Opportunity Fraud Triangle Motivation Rationalization

  22. Tips to Prevent Theft

  23. Conduct annual audits • Send to board member withoutsignatory responsibilities for review • Have 2 signatories (not related) • Do a monthly review of activities • Verify cash logs, provide receipts and bank deposit slips • Make bank deposits immediately • Have 2 people count cash at all times • Review accounts payable vendors • Secure the checks, don’t pre-sign checks, look for missing checks or checks made out to cash • Track all bills and use original invoices • Ask for proof of tax payments

  24. Reasons Why Theft Is Not Reported

  25. Negative Publicity • Concern for safety if the offender makes threats • Legal action by the offender • To avoid embarrassing the offender and/or offender’s children/family

  26. The Downside of Not Reporting Theft

  27. Sets precedent for additional thefts • Creates an environment that encourages theft • Loss of credibility and respect for your PTA among members, the community, partners, and donors • Voids bonding insurance policy (if not prosecuted) • Encourages perpetrator to steal from other organizations

  28. What to Do if You Suspect Theft

  29. DO NOT make accusations! (libel or slander issues) • Determine suspect’s access to other PTA resources • Gather facts, documents, and interviews • Identify all accounts involved and consider freezing or closing them • Contact the authorities • Contact the insurance company

  30. A Brief FAQ Theft and Insurance

  31. Q. What does a fidelity bond cover? • A. Protects the cash of the PTA unit against theft, fraud, and embezzlement. • Q. Who should be covered under this policy? • A. Anyone in your PTA who has access to or handles money (e.g., Treasurer, President, Fundraising Chair) • Q. How else should a PTA handle its fidelity bond policy? • A. Inform the insurer of any changes (people) during the year and cover the position, not the person. See if a “blanket” policy would be a better value. Fidelity Bonds

  32. Questions?

  33. (800) 307-4PTA (4782) info@pta.orgPTA.org For a copy of this presentation, visit http://pta.org/1949.htm

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