Fraud in a homeschool group

I received a phone call from a homeschool support group leader that broke my heart. She had just learned that her treasurer had embezzled over $10,000 from her group during the past two years. Her tale was heartbreaking as she spoke of what painful lessons she had learned and how to go forward.

The leader saw a few things that tipped her off:

• The treasurer’s business income had taken a recent financial hit making his personal finances in trouble.
• No budget was created.
• The treasurer was not detailed oriented.
• The treasurer did the bank reconciliation, so no one else saw the bank statements.The checkbooks was kept locked in the treasurer’s business office and frequently inaccessible.
• The leader had a difficult time getting the treasurer to write checks to members for expenses.
• The treasurer was married to the vice chair, who was a close friend of the leader, so the leader was reluctant to confront her friends.
• The board was small and few people were willing to volunteer, making the leader desperate and grateful when anyone said they would serve as treasurer.

Here is what the group is doing now:

• Consulting with a lawyer about criminal prosecution.
• Pursuing restitution from the treasurer.
• Using a bank account with on-line access for visibility.
• Having someone besides the treasurer do  the bank reconciliation.
• Creating a budget.
• Amending bylaws and policies to add accountability. The treasurer will be required to make financial report at every meeting.

I hope you never face a similar situation.

To prevent fraud in your homeschool group, follow the practices mentioned above and in my book Money Mangement for Homeschool Organizations which you can order from the Bookstore page.

I also offer an excerpt from the book, a list of Recommended Financial Practices in the Chapter titled Fraud: It Couldn’t Happen to Us. It’s so important that your homeschool group put in place good financial oversight that I’m offering that part of the book at no charge.

Carol Topp, CPA

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