We have had these issues before and now our bylaws state that a school employee can attend as a comittee member but not as an elected offical. There is also a rule in place that says anyone employed by the school district is not allowed to sign checks-which require 2 signatures-because of past conflict of interest issues. We also keep 3 names on the account to make sure there are always 2 people available.

You know I have said many times that I don't think it is the PTO's position to pick up where the budget cuts left off nor is it the PTO's place to get involved in the school politics! You need to be sure that both the principal and treasure both understand their position as far as the PTO is concerned and if they have a conflict of interest they need to both step back!!

I'm wondering if you are public or independent schools? We are also having trouble with principle exerting control over expenditures. Our by laws state they must be approved by membership but how can you REALLY control this? We are an independent school and although we have a separate EIN, we are not 501(c) and are being faced with merging with the school funds or losing non profit status. We have fair participation in activities but very little interest to participate on the board, so we are concered about adding to our financials, paperwork, etc. Now I know why no one wants to be on the board, it is a total nightmare!

I suppose it would depend if the PTO is on the school's/BOE's EIN or a separate entity. If they're part of the school, then the principal can pretty much do what she's doing, as wrong as it is. But if you're separate, as my group is, as Michelle said it's TOTALLY inappropriate and should be remedied ASAP as diplomatically as possible. I'm pres, we have to have two signatures and I'm one of the signers. We actually have four authorized signers and I hold the checkbook, since I'm ALWAYS available. Two of the other signers work (one being the treasurer, and as a CPA she has awful hours sometimes)and we ended up going with extra authorized signers as an "in case", God forbid, something should ever happen to me or the VP and we need signers.

First off to sm2004, I completely agree with Serendipity. You need to take this woman aside and explain to her that there are rules that need to be followed. There is no need to do it publicly, but you do need to talk to her.
Secondly to Diamie and sm2004, some of the insurance coverages REQUIRE two signatures to be covered if a claim is made. Check with your insurance carrier and see if this is the case and if so, the question of having two signers on the account can be relayed as, this is what our insurance requires.
Two signatures is a good rule to cut down on the possibility of embezzelment. I am a signer on our council account with our treasurer and i know that many of our units have the President and treasurer as the signers. I don't know about elsewhere but it is completely common to have the President as a signer here.
As with the aforementioned Principals, kindly, politely and with a witness, discuss with them their roles in your group. Unless the bylaws state as such, they are not to make decisions for the group or unless the bylaws say so, can be involved in the vote (if needed) but in order to run things efficiently and to "lighten their already heavy load with all their hard work" (yes a little butt kissing with the principals can be very helpful since if you get on their bad side they can make things very bad for your group)
Approach it in a non-confrontational way and it might get through.

I too am having questions about what the principal's position is suppose to be. I hope someone can help...Our principal is great and does a lot with our PTO. But as new Pres. I thought it was a little odd that our previous treasurer went over the books with the principal instead of with me and our new tres. like I had requested since June. She (the principal)also told the new treas. that I could not have my name on our PTO account. For the last two years only one name has been on our account (the treas). But our new treas does not want it that way nor do I think it is a good idea. We want two signatures on every check. We also want the assisitant treas. and the co-pres on the account. Is it not a normal practice to have the Pres on the account?