If your by-laws are weak or incomplete (as you are new), make a motion to amend your by-laws to include checks and balances in your money procedures.

Here are some recommendations:
1--Only the treasurer and president can sign checks.
2--The treasurer and president must be bonded.
3--Two people always present to count money. One of them must be Treasurer or President.
4--Checks must be deposited within one business day and checks must be deposited within two business days.
5-- We have our books audited by an accountant once a year, when the old treasurer leaves and the new one comes on.
6---Establish a budget at the beginning of the year and stick to it. Anything not budgeted must be voted on at the PTO meeting. You cannot move funds from one budget item to another without a vote.

As to your problem with this person, sorry, but someone has to bite the bullet and just tell her of your concerns, but let her know that as an officer of the PTO, you have a duty to uphold. If she handles the money, then this is going to be voted on at the next PTO meeting and the issue of her problem with the other group is going to be discussed. Hopefully, this will scare her off.

You just need to understand that the parents are looking to you and your leadership as to how you are going to handle this AND not handling this sends a big message to parents too!!!! It is going to be a difficult conversation, but it must be done.

Good luck---You might want to consider adding to your by-laws about how to remove someone from office.

Whenever drawings are held, do them publicly, in front of everyone or a crowd and we usually let a kid draw the name! (Except that once, a child drew my son's name for a bike raffle, the mutterings and comments started going around, since my son had a fairly new bike, I told them to draw another name, but if he hadn't, I would have kept the bike!)

people are going to complain and comment no matter what you do.!!!

Well I am shocked! This person should not even be anywhere NEAR your board. It paints all of you with a very dirty brush if a proven (though not convicted) embellzeller is on your board.
How will you ever fundraise without people wondering where all of your money is going????

To get rid of her- you need to make some very tough standing rules- and toughen up your by -laws as well. There should be a definite procedure for removing an elected officer for conduct unbecoming etc.

I would call a meeting of the full executive board, and say the reputation of your group is in question. Without specifically calling names- say you are putting some tough rules into place (to regain your good reprutation) that it has nothing to do with personalities involved- but for the good of the group.
Some rules to consider including:
1. Money Procedures. NO ONE counts any money alone. ALL money collected MUST be dposited by the treasurer. The treasurer must be present when all money is counted (if that is not possible- then her designee'). If no one is available the money is not collected un til they are available. (This will be a pain during fundraising season- BUT sounds like it is necessary).
2. You group is a united front. You may all have disagreements from time to time- but that is what meetings are for. If you talk behind people's backs- then you are showing you don't want to be on the board. In other words- what happens at the meeting- Stays at the meeting!

You can come up with other rules- but you get the idea!
Good luck- and I truly hope you get your problem person OFF your board!

I admit everyday I wonder how this happened. We have enough to do this summer without worrying about this. We are a brand new school. Going on yr. 2. This year was ok and I do have to stretch that ok. The bylaws were very, very vague and mention nothing about "removing" anyone. As far a board, the 05 yr consisted of the president, v.president, 2nd v.president(the one I'm trying to remove), secretary and treasurer. That's it. The treasurer is the "problem's" cousin. The 05-06(as of now) board only consists of the pres, v.pres and 2nd v.pres.
Again I had nothing to do with her being there and now here. Principal wants her out, but also does not want to participate in the removal.
I can tell you in the last month she has had her hands in all money areas concerning the PTO and it makes me sick. But the principal made it clear that this is not my reign yet and I need to stay clear. I keep thinking "what did I get myself into!" I knew this was going to be a hard job, but........ Sadly I have let this woman get the best of me. I just have to remember it's for the kids. I do want to thank you all for your advice.

Look in your bylaws. Do you have a procedure for removing an officer? If not, then look in Robert's Rules for a recommended procedure. Your board should be able to take a vote regarding her removal. Typically 2/3 majority is required.

I don't get it...why would you even consider keeping this women on the board!? Embezzlement is a felony!! Even if it wasn't legally pursued, it was proven. Too bad it wasn't pursued, she should be in jail! All of you know the hard work and effort that goes into fundraising, to be stolen by a fellow parent/volunteer...no thank you! Trust is a very important characteristic that needs to be apparent when choosing your board members, directly involved with money, or not. I, obviously, would get her off the board immediately. How to go about it, I don't know! It doesn't sound like she'll step down very gracefully. I hope there is someone out there that has had to ask someone to resign and knows the process.

I agree with Laney, that you will need to contantly keep this woman in her place.
Let everyone know exactly what this womans deal is and don't allow her to bully you or other members.
How about enlisting others, such as the board of ed and/or superintendent? Keep them abreast of this womans dealings.
I would also document every single conversation or transaction with this woman. A tedious process, for sure, but will hold up if you have ever have to justify your actions.
Good luck and hang tough.
If there is anything I have learned from this message board, it's that not everyone who is a parent has the best of intentions.