The Flagler County school district is proposing a new policy that would require parent-teacher organizations (PTOs), booster clubs and individuals donating money to schools to follow stricter guidelines and accounting practices when fundraising, including providing monthly profit and loss statements to school principals. It is doing so even though district officials say there are no concerns about fraud or mismanagement, and even though the policy would create an onerous new layer of administrative requirements.
The district wants to have more oversight of crowdfunding and other fundraising efforts and to standardize methods and platforms used, as when an organization sets up a GoFundMe account for one cause or another. But the need for the policy and its lack of clarity perplexed several school board members
Board members Janie Ruddy and Lauren Ramirez are concerned that the proposed policy will be unnecessarily heavyhanded, discouraging fundraising or the involvement of parents, whose volunteer service should not be saddled with accounting-like duties. Both board members have close involvement with PTOs and other school-based organizations. Neither sees financial issues or fraud that would warrant a more controlling policy. Nor does Patty Wormeck, the district’s finance chief, and the administration’s point person for the policy.
“We don’t want to make it more difficult. Are we seeing accounting issues that are resulting from this? Are we worried about fraud, is that what it is?” Ruddy said.
“Not to my knowledge,” Wormeck said in a discussion about the policy at a Tuesday workshop. The district just wants a consistent system. In some cases, crowdfunding platforms were charging unnecessarily high fees, Wormeck said. Beyond that, “on my level, I don’t feel that there’s a concern about fraud. I think it’s just making sure that people stick within the guidelines.”
If anything, she said, some recommendations that had been proposed by a Florida School Board Association consultant known as NEOLA (for North East Ohio Learning Associates) were set aside for being too cumbersome. One recommendation was to make financial reporting a weekly requirement. “We felt that was just way out of control,” Wormeck said. Why the additional policy to start with? The answer was not clear.
“Are we creating more administrative work for bookkeepers?” Ruddy said. PTOs and booster clubs are separate entities from student-related accounts. “So why would the school bookkeeper be involved in their financial fundraising?” Ruddy was also concerned about requiring profit and loss statements. Wormeck said that’s already required, though no existing policy spells that out for the sort of organizations Ruddy and Ramirez are referring to.
To Ramirez, parent-teacher organizations are entirely voluntary, but require treasurers. “Being a treasurer, it’s almost like owning a business. You’re your own CPA. It’s a lot of work,” Ramirez (who owns a business) said, recalling when her husband was the treasurer for the Belle Terre Elementary PTO. (Ruddy is a former president of that PTO). Ruddy’s husband is the treasurer at Flagler Palm Coast High School.
“You’re not getting paid to be a PTO treasurer, and it’s a lot of work.” Ramirez worries that too many administrative burdens will discourage parents from getting involved. “What this is requiring is more work, more like if you own a business, and I own a business, and that’s why I have an accountant, a CPA.” She said she doesn’t have time to do that as a volunteer.
The district has a crowdfunding policy already (Policy 6605). It applies to fundraising “for a specific classroom or school activity, including extra-curricular activity,” or to buy supplies. Al such fundraising requires the approval of the principal. It refers to no profit and loss statements. It was effective last August.
Policy 6610 controls internal funds, which are defined as “unbudgeted public funds” overseen by each school’s principal. Those include athletics, music events, concession sales, fund-raising by student body groups, gifts and contributions, paid admissions to entertainment, publications, school stores, summer programs, and so on.
Non-student organizations such as parent-teacher organizations and alumni associations, or booster clubs, are accounted for separately, but fundraising follows the same principles. PTOs still show their books as a measure of accountability.
Internal funds are audited annually and must “use a uniform system of accounting as directed by the Superintendent,” and “make monthly and annual reports.” But the policy is unclear about the separation between strictly internal funds such as athletics and PTO funds. It does not mention profit and loss statements. With those policies in place, it wasn’t clear why the district needed yet another one–or why the crowdfunding policy couldn’t be tweaked to accommodate the district’s concerns.
“If someone’s giving our school bookkeeper funds, there should be some kind of accountability acknowledging you did receive these funds,” Wormeck said. PTOs and booster clubs have their own bank accounts. The funds would not be channeled through the school. But if an organization or an individual is raising funds for a school purpose, that money has to flow through the school bookkeeper, Wormeck said–triggering the controls. “Their other option is to buy something on their own as the PTO group,” Wormeck said.
In essence–as Ruddy described the scenario–if a parent were to hold a monthly art auction and generate $1,000 a month for a school, that fundraising would require a P&L statement, even though currently no such requirement is in place. “If it’s an individual parent, bless them for wanting to raise money to us. Why do we want to put more obstacles in place here?” Ruddy asked. Similarly with PTOs, she asked, if they have separate bank accounts, a separate treasurer, a separate oversight, including state reporting requirements, “Why would we police that and make it more difficult when they already have their own standards of reporting?”
“If they are giving the funds directly to the school, there has to be some kind of accountability for that,” Wormeck said. There was no accountability over such funds previously, she said, although even Wormeck’s reading of the policy seemed uncertain at times.
The school board attorney said that absent controls, sooner or later, funds will be mismanaged and diverted. “There is going to be negative press and media attention and investigation when someone eventually does get arrested, because that’s what happens if there’s not oversight of these funds,” David Delaney said.
There have been no local cases in recent memory as Delaney describes them. The one issue has been the reverse of what Delaney was describing: the oversight was the problem, not the organization being overseen. Former Belle Terre Elementary Principal Terence Culver was forced out in June 2020–but not because of PTO mismanagement. Rather, it was his oversight and management as principal, and his own alleged misuse of PTO resources, among other issues, that was in question. (A Florida Department of Law Enforcement investigation found Culver’s management problematic, but not criminal.)
If there is fraud in a PTO, Ruddy said, countering Delaney’s scenario, “that’s a standalone organization, then they’re liable. If we connect it and say we’re supposed to provide the oversight, we’re now co-liable, and we’re putting additional work on the bookkeeper. I feel like they’re separate entities for that reason.”
The Flagler Education Foundation would not have to comply with the policy, even though the foundation raises money on behalf of the district, too. The foundation operates under separate policies. That further perplexed some board members.
The discussion was inconclusive, with Board member Will Furry supporting the policy and Board Chair Christy Chong remaining silent throughout but for a clarifying question.
“This is a policy that is recommended for the board to consider. The Board does not have to take this policy. However, we do still have a responsibility of reporting for funds that are provided to us” from private entities, Superintendent LaShakia Moore said. “What we would ask is that you continue to mull over it.”
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