Red Flag may be watching too many TV dramas! Let's put this in perspective. If you know the preschool just had their little cupcake/candy sale or Bingo night then you know the source of the money. If you don't have a flyer or any knowledge of the income and then she meets you in a coffee shop to hand you an envelope of money, you have reason to question where the money came from.
We assisted our pre-school a few times, but we always knew beforehand of their event and they asked us to hold their money before they even advertised it to their school population. We worked together as a team until they decided if they were going to be set up on their own (which they did during their second year). We gave them our suggestions and support while they were new to the system and they even came to our school events in appreciation for what we did for them.
Money-laundering - hardly. Being a supportive unit for a newcome - definitely!

That's not money laundering. (Gotta love those non-registered user anonymous posts.)

You need to make sure, if you are a 501(c)3, that the way the money will be spent fits in with the purposes of your organization. (This isn't as important if you're not a 501(c)3 organization.) And then report the income and expenses on your tax return, if you're big enough to file one. And to be on the safe side, I would suggest that there be some written agreement so everyone is clear on what is going on.

Red Flag makes a frightening statement so I looked up the following:

The Money Laundering Control Act of 1986 made money laundering a federal crime.

In the United States, Federal law provides (in part): "Whoever . . . knowing[ly] . . . conducts or attempts to conduct . . . a financial transaction which in fact involves the proceeds of specified unlawful activity . . . with the intent to promote the carrying on of specified unlawful activity . . . shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both."[6]


Since the money was not derived from an illegal activity and isn't being funneled through you to help perform an illegal activity such as tax evasion I can't see a problem, but I'm no lawyer or law enforcement official. Maybe you should check with the school district's business manager to see if this is legitimate. I would look at it as the group who raised the funds is making a donation to your group that is to be spent on a specific program, i.e. the preschool. Your group will be making the purchases for the program, so you will have some control of the funds-making sure it is for legitimate supplies and that all supplies are going to the preschool. Just my opinion here mind you.

We have done this at both PTOs in which I'm involved. It really does save the outside groups so much time and paperwork when they want to utilize their money. As WFS says, just make sure you get it on your books and track it like you would any other program you have.

If the money is not your PTO's - to spend as it sees fit- then what you are suggesting is called laundering and is illegal.

If they are not set up with their own tax ID and all, then its ok for you to temporarily carry that on your budget. Set them up as a line item on your budget. Place all deposits and expenses under that line item so it can be tracked accurately. Provide them with a copy of your budget each month when you report it at your PTO meeting as well.
As long as you are not carrying a large amount for a long period of time because they are saving for a big purchase, it shouldn't negatively effect your budget or tax reporting.