Rules for Missouri Ambulance Districts

VI. Treasurer Powers and Duties

Options for selection

The treasurer does not have to be a member of the AD board. If the board chooses to have a  secretary who is not a  board member, it may want to consider combining the secretary and treasurer roles. Statutes do not specifically prohibit this combination (190.055.1; 190.055.3). The arguments for and against this are similar: Combining the administrative and financial operations is more efficient when 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 and assure that no inconsistent duties reside in the same person.

Duties

As custodian of an AD’s money, the treasurer has the care and responsibility for all moneys coming into the AD in any manner and keeping all moneys in the various funds required by law (105.662; 190.041.2; 190.065.4; 190.074) or authorized by the board. Because of this, bonding is required before the treasurer can function. The board establishes the amount of bond necessary, with no 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 AD pays for the bond, which must be a “surety bond” (190.075). Instead of a bond set at the largest amount handled by the treasurer, the board may choose instead to purchase an employee dishonesty insurance policy; however, the treasurer must still have at least a minimal bond.

The AD through its treasurer must “keep true and accurate accounts of its receipts” (190.075). The treasurer must also keep strict and accurate accounts of all money disbursed for and on behalf of the AD in permanent records.

Financial statements and penalties

The treasurer should provide written, monthly reports to the board that include a report of revenues (money coming in) and disbursements (money going out), a balance sheet report (showing what is owned and owed), and comparisons of actual versus budget amounts. Unlike the minutes prepared by the secretary, the board should never approve the treasurer’s report, otherwise the report becomes the board’s report. Instead, the board would vote to “receive” the report, so as to make it a part of the AD’s records. The board should approve annual financial statements, but approval of the financial statements is usually based on the recommendation of its auditor, who often has malpractice insurance or may be subject to discipline from a state professional registry board.

Statutes require ADs to file a “detailed financial statement” that must be prepared “in such summary form as the state auditor shall prescribe” (105.145).

The code of state regulations (15 CSR 40.3.030) says that an AD’s annual financial statement is due to the state auditor’s office six months after the end of the fiscal year, whether audited professionally or not. If the annual financial statement is overdue, no pay or expense reimbursement for members of the governing body is allowed during the period the statement is overdue (105.145.5).

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 AD’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 ADs 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 an AD’s bank complains, explaining that the two signatures are for AD 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 an AD board, is personally liable for the safety of all public money, with two minor exceptions: (1) acts of God, including earthquakes, forest fires and floods; and (2) acts 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.)

A corporate fidelity 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 homeowner’s insurance may protect a treasurer who has financial responsibility for an AD. Those who are considering this role should  research their options. They may need to purchase a special policy or an additional rider on a homeowner’s policy to protect themselves from the risks of this type of public service. Similarly, the treasurer should ensure that all recommendations from the AD’s audit are scrupulously followed, because doing so will reduce the treasurer’s liability risk.

Collateral pledges

Because of this risk of personal liability, the treasurer should ensure that all moneys are promptly deposited in a bank and must ensure that the money is adequately insured by the Federal Deposit Insurance Corporation (FDIC), National Credit Unions Share Insurance Fund (NCUSIF), or by a bank’s pledge of collateral for any money above the FDIC or NCUSIF coverage limit (110.010.1). (Regardless of how many different bank accounts an AD 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.)

The AD should require the bank to up-date the collateral schedule periodically, at least once a quarter.

To ensure AD funds are not at undue risk, the law requires that the AD can only accept collateral pledges that are also used for state funds (110.010.1). The law for securing state funds lists 16 different types of collateral pledges plus FDIC/NCUSIF coverage (30.270).

• Bonds and other obligations of the US government, for example, treasury bills
• Bonds or obligations of the State of Missouri
• Missouri bonds of cities with population over 2,000, counties, school districts, or special road districts
• Bonds of any other state
• Bonds, etc., issued by farm or agricultural credit banks
• Bonds or irrevocable standby letter of credit issued by the federal home loan banks
• Bonds of any political subdivision established by the City and County of St. Louis
• Tax anticipation notes of first class counties
• Surety bonds from highest-rated insurance companies
• Out-of-state municipal bonds with the highest ratings
• Certain mortgage securities
• FDIC/NCUSIF coverage

State auditor concerns

The Missouri state auditor performs audits on public entities (29.200), including ADs, randomly, by order of the Missouri governor, or when enough taxpayers have signed a petition for such an audit. The AD must pay for the audit. Several ADs have been audited based on such petitions (29.230). An AD board of directors should review those audit reports, which are available on the Missouri State Auditor website, www.auditor.mo.gov.

The state auditor recommends that an AD establish certain policies and good auditing practices, which cannot be found in any Missouri statute. For example, the state auditor believes public entities should always have a current inventory of all their equipment and other property. That is good practice for any organization. An AD should inventory not just its vehicles, but all the equipment owned by the AD, including computers, chairs and file cabinets. Each item should be labeled and put on an inventory list, either electronic or paper, that is kept current. To establish a value threshold for what is put on an inventory list, the AD board should work with its accountant to follow generally accepted accounting principles (GAAP) for governmental accounting set by the Government Accounting Standards Board (GASB).

In the reports, the state auditor has chastised ADs for not having a travel reimbursement policy, not bidding health insurance every three years (as required by law) and not having a vehicle, credit card or wireless phone use policy. The auditor has also criticized ADs for not keeping close records on maintenance for ambulances and other vehicles.

The board might ask the AD’s accountant to download some of these audit reports, which can be used to educate the directors and office employees on sound financial management. Local governments have suffered losses (including by embezzlement) when basic accounting practices were not followed, or when the entity had little or no segregation of duties.

The Missouri Constitution in Article VI, Section 24, says that as prescribed by law, all ADs shall be audited; however, the law (190.075) only says “an annual audit shall be made of its books, records and accounts” — nothing per se about hiring an auditor.

Regardless of legal requirements, there may be practical reasons for a board to hire its own auditor, for example, to ensure integrity of the AD’s accounting practices. Bond holders and organizations providing grants may also require audits. The board should make sure to select a competent, insured auditor who specializes in governmental accounting that performs true audits and not just lesser “compilations” or “reviews.” Check with the other local officials to find out which auditors are being used by these entities.