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Rules for Missouri Fire Protection Districts

VI. Treasurer Powers and Duties

Parenthetical numbers in the text refer to sections of the current Revised Statutes of Missouri, abbreviated as RSMo.

Treasurer Powers and Duties

  • Options for selection
  • Duties
  • Financial statement
  • Bill paying
  • Personal liability

Options for selection
The treasurer does not have to be a member of the fire district board. If the board chooses to have the secretary be a non-board member, it may want to consider combining the secretary and treasurer roles. Statutes specifically authorize this combination (321.170). The arguments for and against this are similar: Combining the administrative and financial operations is more efficient where they are operating well. But having a secretary and a treasurer who cross-check one another also has merit. The board should discuss the pros and cons of these options.

Duties

The fire protection district’s treasurer has the care and responsibility for all moneys coming in any manner to the district (321.180). Because of this, bonding is required before the treasurer can function. The board establishes the amount of bond necessary, with a $5,000 minimum set by statute. (For many similar public positions, this bond is set at the largest amount handled during any month of the preceding year plus 10 percent.) The district pays for the bond, which must be a “corporate fidelity bond” (321.180).

 “The treasurer shall keep strict and accurate accounts of all money received by and disbursed for and on behalf of the district in permanent records” (321.180).

Accounts Payable and Payroll Check Register (PDF)

Financial forms

The Missouri State Auditor's Office provides a financial form in the Local Government Forms and Reports section of its website, http://auditor.mo.gov. It is provided as an electronic form (Microsoft Excel) and in a printer-friendly format (PDF). Only an inventory must be added.

Financial Statement and Instructions (PDF)

Financial statement
Two statutes require FPDs to file an annual financial statement (105.145 and 321.180). Found in different sections of the statutes, each has slightly different requirements. Combined, these requirements are:

A “detailed financial statement” must be prepared (321.180) “in such summary form as the state auditor shall prescribe” (105.145).

It is due four months after the end of the fiscal year (the fiscal year is the calendar year) (321.180).

It must be filed with the state auditor’s office and with the county clerk of each county in which the district has territory.

If the financial statement is overdue, beyond the April deadline, no pay or expense reimbursement for the governing body is allowed while it is overdue.

Bill paying
Because government predates our modern banking system, the procedures that have evolved for government finance are often more complicated than modern banking practices and banks may not understand them initially.

Only the treasurer can write checks on the district’s account. To do so, however, the treasurer must receive instructions from the board. Traditionally, a “warrant” has been used to instruct the treasurer. The warrant sometimes takes the form of a “list of bills” and a “motion to pay the bills,” which are voted on by the board and then given to the treasurer, who writes the checks. In some traditional local governments, the board members or maybe the board secretary and board president sign a warrant that is given to the treasurer, who then writes and signs the checks. The multiple signatures discourage theft or financial mismanagement.

Some fire districts use a single document as both warrant and check, which must be signed by the secretary and countersigned by the president. It is a warrant, but it becomes a check when the treasurer signs it. Separate warrants and checks can be used, but using one document for both purposes is easier.

Some banks have balked at accepting checks with multiple signature lines. If a district’s bank complains, explaining that the first two signatures are for district purposes usually suffices. Only the treasurer’s signature is needed on the bank’s signature card, but the additional signatures warrant that the expenditure was authorized and that the account on which it is drawn has sufficient funds.

Personal liability
The treasurer of any local governmental body, including a fire district board, is personally liable for the safety of all public money, with two minor exceptions:

  • Acts of God, including earthquakes, forest fires and floods
  • Aacts of a public enemy, such as the other side in a declared war.

This means if the bank fails or the money is stolen, the treasurer can be personally sued to make up the loss. (Fortunately for a treasurer who is married, a spouse does not have the same liability and jointly owned assets cannot be seized to pay the debt.)

Because of this risk of personal liability, the treasurer should ensure that all moneys are promptly deposited in a bank and that the money is adequately insured by the Federal Deposit Insurance Corporation (FDIC) or by a bank’s pledge of collateral for any money above the FDIC coverage limit. The district should require the bank to update the collateral schedule periodically, at least once a quarter. (Regardless of how many different bank accounts a fire district has, the FDIC insurance limit applies only once, not to each separate account. In other words, the FDIC rules are different for government bank accounts than for individual accounts.) Similarly, the treasurer should ensure that all recommendations from the fire protection district’s audit are scrupulously followed, because doing so will reduce the treasurer’s liability risk.

A surety bond does not relieve the treasurer of this personal liability risk. The purpose of the surety bond is to protect the taxpayers, not the treasurer. Some homeowners insurance may protect a treasurer who has financial responsibility for a fire district. Those who are considering this role should research their options. They may need to purchase a special policy or an additional rider on a homeowners policy to protect themselves from the risks of this type of public service.

 

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