[Code of Federal Regulations]
[Title 29, Volume 2]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR453.9]

[Page 206]
 
                             TITLE 29--LABOR
 
  CHAPTER IV--OFFICE OF LABOR-MANAGEMENT STANDARDS, DEPARTMENT OF LABOR
 
PART 453_GENERAL STATEMENT CONCERNING THE BONDING REQUIREMENTS OF THE 
LABOR-MANAGEMENT REPORTING AND DISCLOSURE ACT OF 1959--Table of Contents
 
Sec. 453.9  ``Handling'' of funds or other property by personnel 
functioning as a governing body.

    (a)(1) General considerations. For many labor organizations and 
trusts special problems involving disbursements will be presented by 
those who, as trustees or members of an executive board or similar 
governing body, are, as a group, charged with general responsibility for 
the conduct of the business and affairs of the organization or trust. 
Often such bodies may approve contracts, authorize disbursements, audit 
accounts and exercise similar responsibilities.
    (2) It is difficult to formulate any general rule for such cases. 
The mere fact that a board of trustees, executive board or similar 
governing body has general supervision of the affairs of a trust or 
labor organization, including investment policy and the establishment of 
fiscal controls, would not necessarily mean that the members of this 
body ``handle'' the funds or other property of the organization. On the 
other hand, the facts may indicate that the board or other body 
exercises such close, day-to-day supervision of those directly charged 
with the handling of funds or other property that it might be 
unreasonable to conclude that the members of such board were not, as a 
group, also participating in the handling of such funds and property. 
\8\ Also, whether or not the members of a particular board of trustees 
or executive board handle funds or other property in their capacity as 
such, certain of these members may hold other offices or have other 
functions involving duties directly related to the receipt, safekeeping 
or disbursement of the funds or other property of the organization so 
that it would be necessary that they be bonded irrespective of their 
board membership.
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    \8\ As to group coverage, see Sec. 453.16.
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    (b) Nature of responsibilities as affecting ``handling.'' With 
respect to particular responsibilities of boards of trustees, executive 
boards and similar bodies in disbursing funds or other property, much 
would depend upon the system of fiscal controls provided in a particular 
trust or labor organization. The allocation of funds or authorization of 
disbursements for a particular purpose is not necessarily handling of 
funds within the meaning of the section. If the allocation or 
authorization merely permits expenditures by a disbursing officer who 
has responsibility for determining the validity or propriety of 
particular expenditures, then the action of the disbursing officer and 
not that of the board would constitute handling. But if pursuant to a 
direction of the board, the disbursing officer performed only 
ministerial acts without responsibility to determine whether the 
expenditures were valid or appropriate, then the board's action would 
constitute handling. In such a case, the absence of fraud or dishonesty 
in the acts of the disbursing officer alone would not necessarily 
prevent fraudulent or dishonest disbursements. The person or persons who 
are charged with or exercise responsibility for determining whether 
specific disbursements are bona fide, regular, and in accordance with 
the applicable constitution, trust instrument, resolution or other laws 
or documents governing the disbursement of funds or other property 
should be considered to handle such funds and property and be bonded 
accordingly.

[28 FR 14394, Dec. 27, 1963, as amended at 30 FR 14926, Dec. 2, 1965]

                            Scope of the Bond