Custodian of School Funds Bond - Statewide in Alabama

Brief Summary

If your board has told you to get bonded because you handle school money, the number you need is in the board's own resolution, not in the Code of Alabama. Code of Ala. 16-13-8 leaves the amount to the county or city board of education. Bring that figure and the board's name and the bond can be written in a day.

Alabama county and city boards of education may require any principal, bookkeeper or other person charged with custody of public school funds to post a surety bond under Code of Ala. 16-13-8, and Code of Ala. 16-13A-12 makes bonding mandatory for any such employee the board designates. The board fixes the amount, the State Superintendent of Education approves it, and the Alabama State Department of Education sets a $100,000 minimum. The board of education is the obligee.

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How to Apply for a Custodian of School Funds Bond:

• Get the bond amount and the position title from the board resolution or your appointment paperwork. ALSDE will not approve less than $100,000.
• Provide your full legal name, home address and Social Security number for the credit review.
• Provide the legal name of the county or city board of education to be named as obligee, and the term of the position if the board set one.
• Complete the bond application, review the quoted premium and pay it, or arrange payment by the board under Code of Ala. 16-13-9.
• Have the Public Official Bond form executed with the original signatures of the principal, the surety, a witness for each, and the board president or chairperson.
• Send the executed bond to the State Superintendent of Education for approval and keep the approved original with the board.

Detailed Information About the Alabama Custodian of School Funds Bond:

Which employees this covers

This bond is for the people below the superintendent and the chief school financial officer who still touch public school money: school principals, bookkeepers, central office cashiers, and anyone else a county or city board of education decides should be bonded. Code of Ala. 16-13-8 authorizes the board to require a bond from principals and from such other persons as may be charged with the custody and responsibility for handling public school funds. Code of Ala. 16-13A-12(a)(3) then lists any other employee of a local board handling local board of education funds as required by the board among the positions that shall be bonded. The superintendent and the chief school financial officer have their own mandatory bonds under the same section and are covered on separate pages.

The amount is set by the board

Neither statute states a dollar figure. Under 16-13-8 the amount is fixed by the county or city board of education, and under 16-13A-12 that amount is approved by the State Superintendent of Education. The Alabama State Department of Education's Public Official Bonding Instructions set the floor: a minimum of $100,000 for employees other than the superintendent and CSFO, which may be written either per occurrence or as annual coverage. Many boards bond these employees through a blanket fidelity bond rather than individual bonds, and the ALSDE instructions describe that fidelity option. If your board has asked you for an individual surety bond, use the amount in the board's resolution or your appointment paperwork, and expect the State Superintendent to check it against the $100,000 minimum.

Condition, obligee and filing

The bond is conditioned on faithful performance of the duties of the office and on accounting for and paying over to the proper authority all public school funds that come into the employee's hands. The obligee is the county or city board of education. The bond must be written by a surety company authorized to do business in Alabama. For positions ALSDE approves, the Public Official Bond form is executed with five original signatures, sent to the State Superintendent for approval, and the approved original is returned to the board. A certified copy stays on file with the State Superintendent under 16-13A-12(c). The bond runs for the term of the position shown in the board minutes, or is marked indefinite or continuous if no term was set.

Older custodian statutes were repealed

The Code once had sections titled Custodian of School Funds at 16-13-10 through 16-13-12 covering payroll, vouchers and removal. Act 2006-196 repealed them effective June 1, 2006 and moved school fiscal accountability into Chapter 13A. The bonding authority in 16-13-8 survived that act and remains the basis for this bond, and 16-13-9 still lets the board pay the premium from public school funds.

Eligibility and Requirements for a Alabama Custodian of School Funds Bond:

• A surety company authorized to do business in Alabama, as 16-13-8 requires.
• Bond amount fixed by the county or city board of education and approved by the State Superintendent, with a $100,000 ALSDE minimum.
• The county or city board of education named as obligee.
• Condition of faithful performance and of accounting for and paying over all public school funds handled.
• Personal credit review of the employee. Credit mostly shapes the rate at this bond size.

Alabama Custodian of School Funds Bond FAQs:

Official and Additional Resources for the Alabama Custodian of School Funds Bond: