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Many problems with check payments can be avoided by having a clear policy in place from the start.

by Sandra Pfau Englund


Bad checks, particularly if your group receives them in payment for fundraising products, can be costly. Parent groups typically are liable for full payment on all fundraising products purchased, regardless of whether you are able to collect from the buyers.

You can avoid most bad-check problems by processing fundraiser payments before ordering merchandise. But fundraising companies say you’ll generally get more orders if people are allowed to pay on delivery.

The first step in dealing with bad checks is an ounce of prevention. If your group accepts checks, you should consider adopting check acceptance policies and procedures. Then, only accept checks that meet the guidelines. For example, it’s a good idea to implement these four policies:

  1. Require all checks to include the name, address, and telephone number of the person signing the check.

  2. Accept only checks with a current date; do not accept post-dated or pre-dated checks.

  3. Adopt a policy that requires the check writer to pay a service charge, in addition to any bank charges, when a check is not honored.

  4. Refuse to accept additional checks from people who have written bad checks and not made restitution in a timely manner. Restitution should include paying any service charges plus bank charges due.

Inform all parents and students about the policy. Let them know that they may make payments to the PTO by check only if the requirements are met. If possible, assign a person to review all checks prior to ordering the products or services being paid for. Double-check that only checks meeting the requirements are accepted for payment.

Despite your best efforts, you may receive a bad check or two. In most cases, these will be simple mistakes. Handle them quietly by notifying the check writer by phone or e-mail. There may be times, however, when you want to take legal action against the bad-check writer.

Most states have some form of check deception law. These laws make it illegal for a person to write a check that he knows will not be paid by his bank. Writing bad checks is usually a misdemeanor unless the dollar amount is fairly high—several thousand dollars in most states.

Check out Finance Manager—accounting software built just for PTO leaders

Often, willingness to pay the amount of the bad check plus any service or additional fees is a defense to a charge of writing a bad check. Therefore, before attempting to bring a claim against a person who writes a bad check, even in difficult cases, it is a good idea to send a written notice by certified mail, return receipt requested. The notice should do these three things:

  • Identify the check number, amount of check, bank on which the check was drawn, date on which the check was written, and the person or organization to whom the check was made payable.

  • Request that arrangements be made to make payment on the bad check and any additional charges due, within a set time (often 10 days).

  • Cite the state check deception law.

Keep a copy of the notice for the PTO’s records and an additional copy to file with any legal action that may become necessary. If the check remains unpaid after the notice period, take the check, the copy of the notice, and other documentation to your local clerk of court. The staff should assist you in filing a complaint.

It’s smart for PTOs to develop good financial policies and practices, considering the large amount of money groups typically handle. Developing a check acceptance policy is one step toward limiting the headaches bad checks can bring.

Sandra Pfau Englund is an attorney specializing in PTOs and other nonprofit groups.


# Suzie 2008-04-23 13:33
How do other parent groups deal with an officer writing bad checks? This year our president has writeen bad checks on more then one occasion. This information isn't reflected in our budget anywhere and the president feels that no one should know except for the treasurer.
Does anyone have any suggestions?
# Kathryn Lagden from PTO Today 2008-04-24 15:54
Hi Suzie - I've gone ahead and posted your question on our message boards. The boards are a great spot to get help and suggestions from thousands of parent group leaders. Check out the "Day to Day PTO Management" category -
# Jeni 2008-05-28 08:40
I am President of our PTO. We have a program at our bank called "resubmitt". The bank does not charge us for this it's a free service. The bank goes and keeps resubmitting the check when they think it might be a payday or what not, after several attempts the bank then turns it over to a collection agency, we may be out of the money but are not paying a service fee on any returned checks. This way maybe your president might quit writing the bad checks if she gets them turned into collections.
# Rolinda 2008-05-28 10:18
Jeni - I am the new Treasurer of our PTO. What bank does your organization bank with? I've never heard of that program and that would be great for PTO's everywhere,
# Kathryn Lagden from PTO Today 2008-05-28 11:07
Hi Rolinda -- I wanted to jump in as I'm not sure if Jeni will come back to this article and see your question. Best place to ask these specific questions is on the message boards - Might be a good idea to put a post on the boards and ask if anyone else has heard of the "resubmit" program. If you need help posting you can reach me directly at
# Clariss Ware 2008-07-07 15:27
Bad Checks

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