The Partnership That Can Prevent Embezzlement in Your Booster Club

Many booster clubs’ budgets are comparable to those of small businesses. Therefore, banks often competitively pursue booster clubs’ business. A strong partnership with your local bank will prevent many opportunities for theft and fraud in your booster club.

49 - Banker

Photo by Katelyn Caldwell

Carefully select a bank that understands the needs of a nonprofit – preferably booster – organization and is willing to stand beside you as a partner. Select a bank with a branch manager who is willing to be your central point of contact. In the spirit of transparency, each authorized officer should establish a professional relationship with the bank’s branch manager.

Here are a few tips to maximize your partnership with your bank:

Promptly transfer authority to newly elected officers. A booster officer’s greatest authority is to control financial activities. Therefore, the first task for newly elected officers is to promptly transition authority with the bank. This protects both the outgoing officers and the incoming officers.

Always pay with a booster check and avoid reimbursements. Prior to making a purchase, have the buyer request a booster check from the treasurer made out to the appropriate vendor for the purchase amount.

Do not allow people to make out-of-pocket purchases and request a reimbursement later. Booster expenditures should be budgeted and planned. Allowing out-of-pocket purchases contributes to impulse buying and increases the potential for purchases with lost receipts.

Always issue checks in sequence. This is a best practice that will help prevent the misappropriation of a check for an individual’s benefit. When checks are haphazardly issued, it becomes difficult to keep track of them all. Likewise, when checks are issued in sequence, they should clear the bank in the same relative sequence. This discipline allows for prompt investigation if an abnormality is discovered.

Do not authorize instructors (teachers and coaches) to sign booster checks. Elected booster officers are responsible to oversee the organization’s funds. Instructors should not handle any funds, period.

There are at least three benefits to this policy. First, it eliminates the opportunity for an instructor to give in to temptation and misappropriate funds for personal gain. Second, booster officers will have greater visibility to the program’s expenditures. Third, the instructor will be protected from suspicion of wrongdoing by this “arm’s length” relationship.

Select a bank that will enforce two signatures to authorize a check. Prudent booster clubs require two booster officers to authorize every check. It is important that your bank stand beside you on this requirement.

When my band booster club first implemented the two-signature rule, there were a couple of checks that inadvertently went out with only one signature. Our bank upheld the two-signature rule and did not clear the checks against the account. This accidental oversight actually demonstrated the strength of our partnership with the bank.

Select a bank that will protect you from external theft. Thus far, we have addressed the issue of theft and fraud from within. Your bank can also help to protect you against theft from outside the organization. Here’s a real life example.

In the midst of a hectic day, our treasurer mailed the payment for a booster invoice from her home mailbox. She placed the letter in the box, raised the flag, and left home to run an errand. Rather than signaling the mailman to pick up the letter, the mailbox flag signaled a thief to steal the letter before the mailman arrived.

The thief “washed” our check to remove the ink, then went for a $2500 shopping spree at Walmart. In the checkout lane, the cashier printed the check for the purchase amount, and then returned the voided check to the thief. This electronic transfer kept the actual check from returning to the bank. Later, the thief returned the merchandise for a cash refund at customer service.

Our bank stood by us in this predicament, and took charge of the investigation. Most important for us, they did not withdraw $2500 from our account. They coordinated with Walmart and local authorities to identify and prosecute the thief.

Our bank’s customer service through this incident reinforced their commitment to our partnership. We developed a much deeper appreciation for their role as our financial ally. And, we all learned to never mail a check from our home mailbox!

The Booster Leader

In my book, The Booster Leader: 35 Leadership Essentials for a Thriving Booster Organization, I share many more ideas to promote financial integrity in your club. The Booster Leader consists of…

  • Thirty-five proven leadership essentials that are quick and easy to implement
  • Eighteen inspirational stories that bring the leadership essentials to life
  • A twenty-nine point checklist to help you identify risks that may jeopardize your organization if not properly addressed (and the answers to help you resolve every issue!)

Now is the time to start leading your own thriving booster organization. In The Booster Leader, I show you exactly how to do it!

Question: How does your booster club partner with your bank to prevent theft and fraud? You can leave a comment by clicking here.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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