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From what you've posted I 'd agree the school seem to be hiding something and the member of public part seems to have dug a bigger hole. Out of interest is the head the type who appears in local newspapers regularly?

A teacher's point of view. It looks like the PE department at the school had a system for looking after valuables, which means there was certain acceptance that valuables were brought onto the school premises - in this case a watch which is a perfectly acceptable item to possess. Somewhere that...

It may have been a supply teacher who officially isn't a member of a staff though the fact they have said it was a member of public is very strange.

As a teacher that is the bit I find a bit strange as a teaching assistant would be a member of staff. Does the school have a leisure centre attached that is open to the public? I'd also try to find out who gave permission to get the box, did the teacher sanction it or did the kids themselves...