Arkansas State Board of Embalmers and Funeral Directors Service Laws, Rules, and Regulations (LRR) Practice Exam

What must the Secretary-Treasurer do regarding the bond required by the state?

1. Only provide it upon request

2. Give bond in a sum as the board may direct

3. Negotiate directly with the insurance company

4. Provide annual statements to the state

The correct answer is: Give bond in a sum as the board may direct

The requirement for the Secretary-Treasurer to give bond in a sum as directed by the board is rooted in the necessity for financial assurance and accountability within the organization. This bond acts as a form of insurance, protecting the entity from potential losses that could arise from the improper handling of funds by the Secretary-Treasurer. By establishing a specific sum as determined by the board, it ensures that there is a tailored level of coverage that reflects the financial responsibilities of the position. This provision supports good governance and financial integrity, ensuring that all parties involved— such as stakeholders, clients, and regulatory bodies— have confidence in the management of funds. The other responses suggest less rigorous or unclear obligations that do not align with the established policies for financial stewardship. Merely providing a bond upon request does not ensure that a reliable and adequate bond is in place at all times. Negotiating directly with an insurance company places the responsibility for selecting appropriate coverage on the Secretary-Treasurer, which could lead to variations in coverage quality or amounts based on individual discretion rather than collective board oversight. Providing annual statements to the state is certainly a best practice for transparency and accountability; however, it does not fulfill the specific obligation of establishing a bond amount that the role requires. Therefore, giving