Petition 3: Background Checks and Bonding for People Who Handle Society Money

Act 15-020 is amended as shown. Inserted text is marked <<…>> and removed text >>…<< with strikethrough, per Act 08-190.

15-020 >>Bonding<< <<Background Checks and Bonding for Persons with Financial Access>>

>>The Secretary-Treasurer is responsible for bonding Society employees and members, including NSS National Convention Treasurers, who have access to significant Society funds on a regular basis.<<

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A. Persons covered

This Act applies to every Society employee, volunteer, or individual contractor who:

1) has signature authority on any Society bank or investment account, including accounts opened by divisions, commissions, or conventions;

2) holds a Society credit card, debit card, or spending-platform card;

3) has individual authority, however granted, to initiate or approve payments or transfers of Society funds;

4) can create or change entries in the Society’s accounting records; or

5) receives or handles cash, checks, or other payments to the Society as a regular part of their duties, including treasurers of the National Convention, of commission seminars, and of commissions.

A person with none of these responsibilities is not covered. Participating in collective Board of Governors or committee votes on budgets, grants, or expenditures, without individual transactional authority or other access listed above, does not by itself make a person covered. Read-only access for financial oversight does not by itself make a person covered. Internal organizations and separately organized NSS Activities are excluded when handling only their own funds; a person acting for them who has access listed above to Society funds or Society accounts is covered. This Act does not extend to the National Speleological Foundation’s own personnel solely because they manage investments under an agreement with the Society.

B. Background checks

1) Except during the transition in section F, each covered person must complete a background check and receive clearance under the adopted criteria before receiving access listed in section A. A new check and clearance are required at least every three years while that access continues.

2) Checks must be conducted through a qualified consumer reporting agency, with required disclosures and written authorization, and in compliance with applicable federal, state, and local law. The Society must pay the cost.

3) The Board of Governors must adopt written screening procedures and evaluation criteria. At minimum, screening must verify identity and search relevant criminal conviction records using lawful reporting periods and reasonable jurisdictional coverage. Criteria must relate to the financial responsibilities involved, including relevant fraud, theft, and embezzlement. Procedures must address the nature and age of relevant conduct, its relationship to the duties, and relevant explanatory information. An arrest alone is not proof of misconduct. Screening must not include credit history.

4) Results are confidential and must be delivered only to a designated reviewer who is not a covered person, normally the chair of the Financial Review Committee. The reviewer applies the criteria and informs the person responsible for granting financial access only of clearance status and its expiration date. The Board of Governors must designate an eligible alternate whenever necessary. A reviewer must recuse themselves from reviewing their own report or the report of anyone with whom they have a personal, financial, or supervisory relationship that could impair impartiality.

5) No covered person may receive, review, or decide another covered person’s background-check results; a person may receive their own report. Procedures must provide the notices, access to the report, opportunity to correct or explain information before a final adverse determination, and reconsideration by an independent alternate reviewer required by law or this Act. Disclosures required by law are permitted. Records must be securely retained and disposed of under written retention procedures consistent with applicable law.

C. Bonding

1) The Society must maintain fidelity bond or crime insurance covering loss caused by dishonest acts of every covered person in their covered duties. A blanket policy may satisfy this requirement if its terms cover the relevant employees, volunteers, individual contractors, accounts, and activities. General liability or directors’ and officers’ insurance does not substitute for this coverage.

2) The Secretary-Treasurer must arrange and document coverage. At least annually, the Board of Governors must review and record its determination of appropriate coverage limits, deductibles, exclusions, and scope, considering accessible funds, transaction exposure, and the Society’s financial controls. The Financial Review Committee must receive policy documentation sufficient to verify coverage.

D. Administration and annual verification

1) The Executive Director, or the person lawfully exercising that authority, must maintain a current roster of covered persons, their financial responsibilities, clearance expiration dates, and insurance status, without background-check results. Persons granting access and division, commission, and convention leaders must promptly report changes. The roster and supporting compliance documentation must be available to the Financial Review Committee.

2) By the spring Board of Governors meeting each year, the Financial Review Committee must verify screening and insurance compliance against the roster and applicable records and report its findings in writing to the Board. The report must state the total number of covered persons, the number with current clearance, the number with required insurance coverage, and the number of exceptions. It must describe corrective-action status, including unresolved prior exceptions, without names or check results. This aggregate report must be included in the minutes. Individual exceptions must be reported to the Board separately and confidentially, without check results. Notwithstanding Act 05-121 and Appendix J, confidential individual exception reports and background-check records must not be attached to member-facing or public minutes; only the aggregate report is included.

E. Noncompliance

1) A person without required clearance or insurance coverage must not receive or retain access listed in section A. On learning of noncompliance, the reviewer or Financial Review Committee must promptly notify the authority responsible for that access. That authority must promptly restrict or suspend the affected access, document corrective action, and report its completion to the Committee. Refusal to authorize a required check, an expired clearance, or a final denial of clearance prevents continued financial access. Any action based on report contents must follow section B. Restriction of financial access does not itself remove a person from elected office, terminate employment, or impose membership discipline; those actions remain subject to applicable law and existing governing procedures.

F. Transition

1) Within 60 days after this Act takes effect, the Board of Governors must adopt the screening criteria and procedures and designate eligible reviewers; the Executive Director or the person lawfully exercising that authority must establish the roster; and the Secretary-Treasurer must confirm and, where necessary, arrange required insurance coverage.

2) Persons already holding covered access may retain it during a transition of no more than 120 days, subject to required insurance coverage after the first 60 days. By day 120, each must receive clearance under section B. The designated reviewer may accept a documented prior check completed within three years only if it meets the adopted screening scope and evaluation criteria; its renewal remains due no later than three years after the original check.

3) The Financial Review Committee must report transition compliance, any missed transition deadline, and outstanding corrective actions to the Board of Governors within 150 days, and that report must be included in the minutes. Section E applies when the applicable transition deadline expires.>>