KAR 3:080. Fidelity bond, penal sum for treasurer, finance officer, and others.
RELATES TO: KRS
AUTHORITY: KRS 156.029(7), 156.070, 160.560(2)
FUNCTION, AND CONFORMITY: KRS 156.029(7) requires the Board of Education to
develop policies and to promulgate administrative regulations by which the Department
of Education shall be governed. KRS 156.070 authorizes the Board of Education
to promulgate administrative regulations necessary for the efficient
management, control, and operation of the schools and programs under its
jurisdiction. KRS 160.560(2) requires each local board of education treasurer
to be bonded in accordance with Kentucky Board of Education administrative
regulations. This administrative regulation establishes a penal sum for the
bond of treasurer and requires the bonding of other school employees.
Definitions. (1) "Total current assets" means the 61XX series in the
balance sheet object codes as provided in 702 KAR 3:120.
(2) "Total revenue"
means codes 1000-4999 in the revenue object codes as provided in 702 KAR 3:120.
Section 2. (1) A
local board of education shall require a fidelity bond from the board
treasurer, the finance officer, and others holding similar positions who are
responsible for district funds or who receive and expend funds on behalf of the
(2) A local board
of education, on the advice of the Commissioner of Education, shall determine
the amount of the penal sum of the fidelity bond for all employees by July 1st
of each year.
(3) The local
board of education shall submit the fidelity bonds to the Commissioner of
Education for approval no later than July 31st of each year. A district shall
not resubmit a multiyear bond for approval in subsequent years if the bond
amount is still adequate.
Section 3. A bond
shall not be approved if the Commissioner of Education determines that the bond
is inadequate to safeguard the funds of the district board of education.
Section 4. The
cost of bonds shall be a liability of the general fund or of any account which
the specific bond protects. The penal sum of any bond shall be determined by
the following table based on an exposure factor of twenty (20) percent of the
total current assets plus ten (10) percent of the total revenue in the prior
Up to $25,000
$25,001 to $125,000
$125,001 to $400,000
$400,001 to $1,000,000
(SBE 21.080; 1 Ky.R. 70; eff. 11-13-1974; Am. 1552; eff.
12-9-1990; 28 Ky.R. 1690; 2028; eff. 3-18-2002; 35 Ky.R. 635; 1461; eff.