I have posted many times on the tragedies of a group that is not a separate entity of the school. I have posted many times on the fact that unless the group is separate, with its own non-profit numbers, codes and ratings, that the money does, in fact, belong to the school (aka the principal and/or district) and it can be taken over by the principal/district and spent any way they decide. It was their students and their non-profit status that you used to make the money. Ergo, their money.
I would think, but don't know for sure, that if your school had been listed as a separate entity from the school, that the IRS would be the agency to seek out for justice. They would have had your group's Mission Statement and Bylaws to fall back on, and in this case that would have made a difference.
That said, here is what I would do. Get together copies of your Mission Statement and Bylaws, along with copies of Meeting Minutes and Treasury Reports. Take them to a criminal attorney or the District Attorney for your area on behalf of the students and parents. It may prove futile, you may not have a case, but I would think that at the very least, you are dealing with fraud, no matter who has rights to the money. I would also look into filing a civil action against the board as well as the principal. I know it sounds harsh, but again, you should have your mission statement, your bylaws and your various meeting minutes to back you up. Imagine what Judge Judy would have to say about this. I think you would get restitution and damages. The IRS should be contacted because I'm sure they'll be interested in the amount of money they knew nothing about... The district should also be interested because I'm sure they have guidelines as to how many fundraisers the 'school' is allowed to run vs how many the parent group is allowed to run. If the 'school' used the money differently than what was earmarked for another, 'parent promised' purchase, then the district has been duped as well (just looking for a way to maybe get the district office on your side).
IMMEDIATELY BEGIN INCORPORATION PROCEDURES TO BECOME A NON-PROFIT GROUP SEPARATE FROM YOUR SCHOOL. CALL THE IRS AND GET HELP NOW. GO DIRECTLY TO THE IRS. DO NOT NOT PASS GO. DO NOT COLLECT $200. GO DIRECTLY TO THE IRS. Get your ducks in a row. Find out if there is a way to freeze the remaining monies in your group account. Do your group checks require two signatures? If so, who's signatures?
Meanwhile, be careful how you notify parents of this issue. I don't think this notification can go home in backpacks. Send home a note instead, that calls a meeting to discuss fundraising legal issues. Advertise and get a guest speaker from the IRS. Send home a note that says you are working to correct your status as a group working under the school umbrella and will be seeking to have parents who are attorneys in attendance. Make your own agenda as a group of concerned parents. Post your meeting time, place and agenda all over town. Run it in the newspaper and on the local TV channel. Do whatever you have to do to get people there.
Other than filing criminal/civil charges, I guess the only other thing to do is chalk this up to a very expensive lesson about incorporation of PTO's in general. I would take my story to the other PTO groups at the other schools in your district and beyond.
Good Luck. I hope you get justice.
[ 03-13-2004, 10:59 AM: Message edited by: TheMetzyMom ]