Counterfeit $50 notes found at Sydney school fete.

A community fundraising event has suffered a serious blow after counterfeit $50 notes were discovered circulating at a school fete in Sydney’s inner west.

Police said the notes were used at the Kegworth Public School’s annual autumn fete in Leichhardt on Sunday.

Inspector Gary Coffey said organisers discovered about $500 worth of counterfeit notes as they were counting the day’s takings.

“They noticed a number of counterfeit notes had been presented and accepted by the vendors inside the school,” he said.

“It’s pretty disappointing for the organisers of this event.

“It’s a community event, a community school, and when these type of incidents happen it’s really disappointing because obviously the funds that they raise from these events go towards the school and the school community.”

It was a serious blow for the organisers.

In a statement, the NSW Department of Education said, "During the school autumn fete... a small number of suspect $50 notes were detected.

"NSW Police were contacted and are currently investigating the matter."

Kegworth Public School Parents and Citizens Association organises and runs the annual fete, which is known as the Kegworth Autumn F.A.R.E.

Last year the Autumn F.A.R.E raised about $39,000, which the P&C said would be donated to the school.

The counterfeit notes have since been handed to the Australian Federal Police for further investigation.

Inspector Coffey said NSW Police would continue to investigate whether similar notes had been more widely circulated in the local area.

He also urged members of the public to learn how to distinguish a counterfeit banknote from a real one.

"They need to be mindful of the security features [of genuine notes] and actively look for them," he said.

"Things such as whether or not the note is plastic. Does the Australian coat of arms appear on the right hand side of the note when you hold it up to the light?

"If you look for those security features you'll certainly notice the difference between a genuine note and a counterfeit note."

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This post originally appeared on ABC News.