Here is an update and a bit more background.
When orginally volunteering to work on the playground committe, she emphaticlay told us that she was going to do the grant work for us. She did not want to be involved in anything else (media, soliciting, fundraising) she explained that she did not want to do these things and she did not have time. When approached about how the grant work was going (by the principal and the pres at the time) she told them that SHE decided not do work on those things, but she was working with a local polotician (a Senator) and that she was going after larger donations from companies. She explained that she had read a book (fundraising for dummies) and that she was going to everything in her power to get the playground in by Sept 1, 2007. The principal and pres told her that she was going out of bounds. She never informed anyone about this, and did not ask permission to represent the PTO to anyone other than the grants. We then started getting phone calls from people in local clubs (lions, elks) that rest assured that our playground project would be addressed with the membership, but our 'boss' really needed to stop being so 'driven and determined' (wording changed as not to offend). She was going to these meetings and being extremely pushy, and at times, beligerant. When we phoned the Senator, and spoke with his aide, she too told us that she is 'very passionate' about 'her' cause. The Senator would do what he could (and even added his name to our fundraising letter), but he has other things to do as well. Talk about being embarrassed.
To top everything off, she misrepresented herself to a local club as being the person who 'has raised over 100K by herself". When this got back to us, it was the last straw. She has not raised this money, and certainly not 100K. We need 100K to do our playground, and so far our parents have raised 40K... albeit nickels and quarters. We are very proud of the work that our family has done and would never tell people that 'we' have raised this money.
We are having a meeting with her in 1 week where she will be told what she can work on. If she cannot comply with the principal's and the PTO guidelines, she will be asked to step aside. We really don't want to burn our bridges in the community, and we certainly do not want to come across as pushy or a bully group. There are 12 other schools in our district, and we do not want to offend them or hamper their future playground projects either.
Hopefully, we can resolve this matter without any further ado.

Beignets is onto something. There is something deeper here, something that has not been addressed from past perceptions held by parents. Many years in non-profit highlights the fact soliciting donations is the hardest and most rewarding at the same time. Think back to all those dinner phones calls you may receive from time to time ... a lot of fun aren't they. No one wants to be on the 'people to contact' list and when they find they are most are never happy.
This person was willing to take on this task, from the posts sounds as if was given very little supervision and now everyone wants to micromanage due to some rumors by those who most likely did not step up. Are those people now ready to step up? Is your board ready to take on this task? It can and will most likely happen if handled negitively.
Due to the emotional factor, the Principle one-on-one with this person is the best place to begin the discussion process, report their findings and suggest an action for the pto board.

why would someone act like that, volunteer for a job and not be a team player, and even go so far as to 'badmouth' the same group for which she is seemingly working hard for to raise money for???
something just doesnt add up.
either the rumors are all false (often the case, but people believe what they want to believe) or else its just a lot of interpersonal conflicts going on between that person and someone (maybe the head of the pto??) on the board. thats what it sounds like from the stuff posted.

do you want to give the boot to someone willing to take on the most hated job of raising $$$$ for your group? or do you want to find a way to make it work?? it really all depends on the reasons for that persons actions, and if they really are as non teamlike as is represented here, and if you WANT to find a happy solution.

bottom line, sounds like only YOU know how to handle this, becuase surely you or the pres or principal, have an inkling as to this persons motives and if there is truth to the 'bad behaviour' rumors.

a nice chat with your principal face to face with this person, should iron out all the problems and dispell the myths and grapevine talk, and hopefylly keep the donations coming in.

Bless her for taking this on, it is one thing that I hate doing...hitting up donations. I however would caution that your principal really needs to address this and maybe even your superintendent. The harm that this person could be doing in your community is huge! She is representing herself as a pto member that represents your school, that represents your district.
Maybe having someone go with her, work with her, and truth is if she cant handle her business in a professional way then give her something else to do. That community, school relationship is too important to dismiss it!

Thanks for the advice. Yes, we have proof and documentaion of events. Hoopefully, this won't come back to haunt us. She can be, and has been, vindictive in the past. It is only her second year in our school, but others have delt with her in different organizations and in her past job.
As for the bylaws, it seems the PTO has never had to deal with a problem like this in the past (just my luck) and there have been no provisions made for it in the bylaws. It only says things about removal of officers.
We will br meeting with her again next week, and laying down the law. If she cannot accept the terms being laid out, then she will be forced to leave the committe.. Wish us luck.

It wouldn't be wrong at all, in fact it is probably the best thing you can do. If you hadn't already had a meeting with her that would have been my first suggestion. There are some pitfalls however:

--are you SURE what you are saying is true. If so perhaps you can document the times it has occurred in order to let her know the specific reasons she is being asked to step down.

--are there provisions in you bylaws to do this properly. Ours contain portions that allow us to remove a member only after very specific steps are taken.

--where's the money she has raised? I would suggest if you know who the donors are that you personally or someone else on the board contact them to "thank" them for their contributions in the name of the PTO in case this member has done any damage. You can make that a segway to introducing the new coordinators so that if they have and questions they don't recontact the exact person you're trying to disempower.

--if you know with whom she is currently working, set up a meeting and introduce yourselves and the new primaries. It'll allow for a smoother movement forward.

--Finally--and this is tough--if you can end this on a positive note of some sort--thanking her for her work to date and letting her know that you appreciate what she's done, then it will probably be easier all around

I don't envy you. Anytime you are doing something like this it is hard--but you're doing it seemingly for the right reasons....and it will impact the organization in a positive way if you are able to get your arms around it quickly.

Good luck
d