Olms interpretative Manual

WHOMUSTBEBONDED:“FUNDS”

531.502SEE 29 CFR453.7, 453.14

531.505MORTGAGENOTE

As 29 CFR Section 453.14points out, the term “funds” is not confined to cash butincludesaswell notes,marketable securitiesandotheritems ofa similarnature.If adeed oftrustissecurity foran indebtedness evidencedby anote which possessessome measureof

negotiability,suchanotewouldberegarded as“fundsorotherproperty”for bondingpurposes.(TechnicalRevisions:Dec. 2016)
531.510FUNDSCOLLECTEDFOR CHARITY

Individuals who are asked to make charitable collections for organizations such as theUnitedGiversFund,RedCross,etc.,areagentsofthesecharitieseventhoughtheyalsomayhavepositions in the union, such as steward, etc.Consequently, those persons who undertake suchcollections need not be bonded with regard to the funds collected on behalf of the charities.Ontheotherhand, ifthe amountscollected forthe charitiesare forconvenience firstdepositedinto

the union’s account and then later remitted to the charities, in computing the amount of his bondrequiredbysection 502of theAct, the treasurerof the labororganization would have to treatthesefundsas being “handled” withinthe meaningofthe Act.

WHOMUSTBEBONDED:“HANDLED”

531.602SEE 29 CFR453.8, 453.9.

531.605FACTORSTOCONSIDER

Various factors must be considered in determining what constitutes “handling of funds orother property.”These include such matters as custody, access, actual authority, powers,responsibilities,supervision, fiscalcontrols, andthenature of the funds orotherproperty.

531.610PERSONHANDLINGSMALLAMOUNTSSEE29CFR 453.8(a).

*531.615PHYSICALCONTACTWITHUNIONDUES

Clericalemployeesofaunionwhosedutiesincludethereceiving,recordingandsortingofunion dues payments and who are closely supervised by the Secretary-Treasurer of the union areonlyrequired to be bondedwith respect tothatportion of thedues thatare paid incash.

Undersection453.8(c)ofthebonding interpretativebulletin,clericalemployeeswhohaveonly physical contact with checks, securities or funds or perform only ministerial functions underclose supervision are not required to be bonded.On the other hand, there is a significant risk oflossinvolved in the processingofthe cash receipts, andbonding is required.

(Technical Revisions: Dec. 2016)531.620OPPORTUNITYTODEFALCATE

The purpose of the bonding provision is to protect the funds of the union against asignificantriskof loss.Thus,it isnot thephysicalhandlingof fundswhich iscontrolling noreventhe authorityto handle funds, but rather the opportunityto defalcate.If a particular person hasactual access to, or the opportunityto abscond with union funds, he must be bonded even thoughhisaction would not beauthorized by the union.
531.623ABSENCEOFPHYSICALCONTROL

Eventhoughpersons donothandle fundsorproperty physically,theynevertheless

“handle” within the meaning of section 502(a) of the Act where they perform significant dutieswithrespectto the fundsor property so asto give themaccess, controlor custody overthefundsor property.

29CFR 453.8(d)

531.630POWEROFTRUSTEES

WhentheBoard ofTrusteesistheentitypossessed ofthe ultimatepowerand chargedwiththemajorresponsibilityofdetermining whetherthebulkofthetransactionsanddisbursements arebona fide, regular, and in accordance with the trust instrument, it must be considered to handlefundsand property and must be bonded accordingly.

531.640DISBURSEMENTAUTHORITY

Officers and trustees authorized to sign checks or make cash disbursements clearly fallwithinthedefinition.Whetherotherswhomayinfluence,authorizeoraffectdisbursementsalsododepends on their specific duties and responsibilities.

(TechnicalRevisions:Dec. 2016)

29CFR 453.8 (e)

531.650PERSONS WHOSIGNCHECKS

Personnelwhodo nothandle cashbut areonly authorizedto signchecksarerequiredtobebonded.This would be true regardless of whether such personnel are the sole signers or co-signersof the checks.

531.651PERSONSWHOHAVEACCESS TOSIGNATUREDEVICE

Personnel who have access to a check signature device must be considered as “handlingfundsorotherproperty”withinthemeaning oftheActandmusttherefore bebondedin additiontothose whose signatures areaffixed to the checks.