Angst over bonding prompts treasurer’s resignation

COLUMBIA — For almost a year, Alison Martin had no idea she was breaking the law.

Martin, former secretary-treasurer for the Boone County Family Resources board of directors, discovered the problem at an Oct. 3 meeting when the board, at the request of member Steven Tatlow, was discussing its bylaws. To her surprise, those bylaws said the treasurer needed to have a surety bond before taking office.

Martin became treasurer in January. When Martin asked at the meeting whether she was bonded, Executive Director Les Wagner assured her that she and other board members were bonded — through insurance.

But Martin began her own research and discovered that, in spite of what Wagner had told her, she lacked the surety bond required by state law. In an Oct. 9 e-mail, she asked that the board suspend her until the problem was resolved.

Instead, board member C.J. Dykhouse offered to take over as treasurer, and Martin said she felt pressured to resign. On Oct. 11, she quit but stayed on as a member.

“With C.J. running to the rescue, I felt pressure to leave, frankly,” Martin said in an interview. “It’s obvious that I didn’t belong in that position, that they didn’t want me in that position.”

After Martin resigned, Jane Kruse, an assistant to Wagner who also is an attorney, acknowledged in an e-mail that Martin was not bonded.

Boone County Family Resources is a public entity with a $7.7 million annual budget that serves people with developmental disabilities. Its board is appointed by the Boone County Commission.

Missouri statutes regarding the boards of county health and welfare programs are explicit. They require that “before taking office, the treasurer shall furnish a surety bond, in an amount to be determined and in a form to be approved by the board, for the faithful performance of his duties and faithful accounting of all moneys that may come into his hands.”

“The state statute really clarified it,” Martin said, “I went online, and I looked after that meeting, and it was right there, clear as a bell.”

In the Oct. 9 e-mail, Martin asked Joanie Chenault, one of Wagner’s executive assistants, to fax her “the document or receipt that shows” she’s bonded. In response, Chenault gave her part of the agency’s insurance policy, which indemnified employees against loss through theft by an employee.

That’s when Martin called Rob Carlson at the Missouri attorney general’s office and asked if the policy was a surety bond. Carlson told her it sure didn’t sound like one.

Bonding companies do extensive background checks to determine whether people can be trusted with public money, but they also guarantee that the agency will get any missing money back, either from the company or the employee, according to J.D. Weisbrot, president of J.W. Bond Consultants. Insurance policies rarely do individual background checks and often fight claims.

Weisbrot said that while anybody can get insured, only the “cleanest of the clean” can get a surety bond. In fact, Weisner said, about 78 percent of applicants are turned down nationwide.

In her e-mail more than two weeks after Martin resigned, Kruse wrote that “while strict compliance with the law would require a surety bond, as a practical matter, the coverage needed by the agency already exists.”

She mentioned errors and omissions coverage and theft coverage under two different insurance policies.

Wagner said that while surety bonds are different from insurance, Boone County Family Resources has “a thorough and complete insurance policy” that is adequate to cover all aspects of its activities.

But Martin said she would rather do things by the book.

“I don’t see any ambiguity in what that law says, and I want to follow the law on a board where I act as a treasurer,” she said.

Gaps in Martin’s training for the treasurer position appear to be at the root of the problem. Martin said there was never a discussion of her duties and she had little oversight of money management.

“I did what they asked me to do,” Martin said. “There was no real education about it. I signed minutes, and last month I signed when we changed insurance policies.”

Asked if she thought it was strange that she was acting as treasurer without doing any of the work normally associated with the office, Martin said, “No because I’d never seen anyone else do it. Nobody else thought it was weird.”

Last month, Martin began to change her mind.

“Having gone through the legal obligations in the October meeting and the bylaws, I thought it was weird, and I started asking questions,” Martin said. “John Patton (the board’s attorney) said the treasurer used to do a lot more, but that changed. He made me feel like it was a figurehead position.”

For almost a year, no one asked questions about Martin’s work or demanded anything beyond the occasional signature. She had to learn about the position on her own.

Wagner said that, in fact, the board’s treasurer has no additional fiduciary responsibilities beyond those of other board members and therefore requires no special training.

As far as letting Martin know she needed to be bonded, Wagner said, “I think that the fact that the treasurer needs a surety bond has been overlooked by the agency. We didn’t know she needed to provide one.

“In the future, whoever holds the office will need to provide (a surety bond), and the agency will pay for it.”