Fidelity Bond Protects Your Club From Insider Theft
By Bob Wilbanks, NCSN

What would your club do if the treasurer stole $16,000 from your bank account? What would your council do if their treasurer embezzled $19,000? Well, we didn’t just dream up those events, or even the figures. It can happen and it has happened recently. While we see no purpose in naming the organizations involved, the situations do point out that both clubs and councils process a lot of money when they sell scores, or perhaps hundreds, of ski trips each year. Most ski clubs have five- and even six-figure cash flows, so perhaps America’s ski clubs have been lucky in that our losses (as far as the NSCN knows) have been limited to so few and for relatively small amounts. In the council’s case, they recovered most of their money, but, although the club’s treasurer has been indicted, he is still a free man and the money is still missing.

Obviously, every club needs to establish procedures that prevent this sort of thing but (at least in the case of the club) requiring two signatures didn’t help -- and the absence of two signatures didn’t require the bank to reimburse the club either. Frequent audits might help put a reduction on the amount of such losses but probably will not stop them totally.

The answer to this problem is probably securing a fidelity bond against officer theft that will probably cost your club less than a couple of hundred dollars per year. Essentially, a fidelity bond is a business insurance policy that protects the club in case of any loss of money or property due to officer dishonesty. It’s like a “guarantee” to the club that their officers will be honest and it insures your club for any type of stealing by theft, forgery, larceny or embezzlement by its officers -- but does not cover liability due to poor job performance. See your insurance agent for details.

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