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by Rod Taylor – ABATE Legal Services
STATE FARM AGENT LIKES ABATE ARTICLES – HERE IS WHY
Rod -Thank you for the great articles every month. As an Abate member, an avid motorcyclist, and insurance agent, I look forward with great interest to your article each month in the Hoosier Motorcyclist. In my office, we work hard to educate our customers on the coverage’s you frequently write about. I was rereading your article from July about uninsured/underinsured coverage and wanted to share an idea with you and ask you a question. State Farm no longer offers uninsured/underinsured coverage on our Personal Liability Umbrella Policy. However, you can still get 1MM of uninsured/underinsured on your individual motorcycle policy if you carry 1MM in BIPD. Could I get your permission to reprint that article and share it with our customers that ride? I know I’m preaching to the choir, but I’m trying to share this with all our customers that ride! Sincerely, David Wiese, State Farm Agent Attica, IN Phone: (765) 762-6151.
David, Hoosier Motorcyclist is ok with your reprinting the article referred to below. Please give ABATE and Hoosier Motorcyclist credit in your brochure. We need all the members we can get. And thanks for being an ABATE member and watching out for your insured motorcyclists. I will be reprinting your email to me in Hoosier Motorcyclists so we can all learn. Ride safe, Rod
HOW TO DETER OR CONTROL STEALING BY THOSE HANDLING ABATE MONEY
This article is based on a conversation between Gino Johnson C.P.A. and Jay Jackson, Executive Director of ABATE of Indiana and Hardtail of the MRF, concerning the security and accounting for checks written by the Motorcycle Riders Foundation (MRF). For many companies the requirement of dual signatures is a solution and is what ABATE LEGAL has recommended to treasurers for ABATE organizations for years. But Jay Jackson and Hardtail of the MRF asked Gino to discuss the situation where dual checks may not work. Here is Jay’s question and Gino’s excellent response. All treasurers (and those responsible for money) for any organization should memorize this advice.
Q. (From Jay Jackson to Gino Jackson) Unfortunately, being a national organization, geographically (MRF) we are spread across the country. It is not efficient, or perhaps not even feasible, to bounce around for signatures. Do you have any suggestions as to how to accomplish the same results (double signature) without physical signatures?”
A. (Answer of Gino) If it is not feasible for there to be two signatures, then the person writing the checks could make a copy of the checks written along with the invoices and send those with a copy of the bank statement each month to the treasurer or other board member. At least there would be a check and balance to the disbursements. Even if the recipient did nothing with the information, it gives the appearance that a review process is in place.
The income (of the organization) is also at risk. The same person is going to be receiving the checks and depositing them. It would be easy (for that person) to not record a membership and redirect a check to a personal account. It is difficult to systematically verify the income is being handled correctly. I suppose a listing of all payments for membership and donations received each month could be mailed with the expense reports referenced above. Or if it is accounted for in QuickBooks a report can be generated from there.
We have started to recommend using Quickbooks online version. It allows multiple people to have access to the books at any given point in time. The downside is that it is a software as a service, which means there is a monthly fee instead of a one time purchase.
From Rod— Following Gino’s advice and Jays needs will assistance MRO organizations throughout the county. Along that line we set forth some previous articles on the subject of honesty and proper accounting within MRO’s.
RULES OF JULIE BACON (former) TREASURER OF A.B.A.T.E. OF ILLINOIS
Q. Julie and I had the following conversation. “Rod, what can we do to eliminate calls from our Chapters (Regions in other states) that complain that a local treasurer/assistant has “borrowed” money from their local ABATE account.
A. The problem is that “honest people are trusting people” and as such we are vulnerable unless we strictly follow the rules implemented by most not for profit corporations. As Julie and I discussed, the solution is very simple. RULE 1: Follow the rules. RULE 2: Require dual signatures on all ABATE checking accounts (See Gino’s exception above). RULE 3: Require bonding for accounts that will have balances over $5k. Bonding is cheap and it spares us of having to eat our own. If you have a loss, simply report it to the bonding company. They will send your (Chapter or Region) the money lost and will collect the amount “borrowed” from our errant money caretakers. Believe me, those folks are brutally efficient at collecting amounts taken. People like “Luca Brasi” work for them and some of them are lawyers. The only problem is that bonding companies are particular as to the individuals they will agree to bond, as they like making money. Come to think of it, a rejection by a bonding company may be a good way to delegate the asking of and receiving answers to embarrassing questions of one of our fellow members. RULE 4: If the member can’t get bonding, should they be handling our money? I don’t think so, unless you are willing to suffer Julie’s prediction. She is good at saying, “I told you; just follow the rules.”
JULIE’S SIMILAR QUESTIONS FROM YEARS AGO – DO YOU SEE A PATTERN HERE?
Q. We have been hit by yet another round of misappropriations in our A.B.A.T.E. local organization by someone we trusted. What can we do to make sure this does not happen in the future? Julie Bacon, Treasurer, A.B.A.T.E. OF ILLINOIS
A. Probably nothing to guarantee that it never happens, but there are several things we can do to minimize the chances and the amounts at risk. Here are some simple rules.
- Don’t let people who desperately need money, handle the money. Get a credit check from those handling the funds. There should be no privacy issues when it comes to those handling the life blood of the organization – dollars.
- Even if you get a good person to handle the money – get two of them for a check and balance. Always require dual signatures on any checks. (SEE GINO EXCEPTION ABOVE)
- You should bond any money transactions over the amount you can’t afford to lose. Bonding is cheap compared to the risk. The local A.B.A.T.E. organization should decide the threshold of its pain – namely what amount can it afford to lose through misappropriation and then bond over that amount. The good part about bonding is that the bonding company will get a credit history from these persons and will be responsible for getting the money back if there is a theft. The bonding company will ask the questions that we are usually embarrassed to ask. In short, they will screen our people for us. Of course, they will pay us up front if we have a loss. Bonding is cheap compared to the alternative.
- The reason for number 3 above is that A.B.A.T.E. does not have to be the bad guy. In other words, we do not have to eat our own if we have someone that betrays our trust.
- What do you do when you think we have been had by a person entrusted with our funds? Nip it in the bud. Worst case is that you embarrass yourself by asking the “who, what, when and where” questions. If you have done your job with A.B.A.T.E., you will have followed our loss procedures and the theft will be minimal. If you have required dual signatures and one signature was forged, the bank may be responsible for the loss, and you have done a good job for A.B.A.T.E.
- What do we do when we find a theft? Do we hang/prosecute them or? A policy should be followed that takes into account our legal requirements, but also should allow for explanations for the failure of trust. The mistake should be evaluated. When in doubt, call us for advice. Many treasurers and I have been through this too many times, and we are here to help you through this tough situation. Usually the bonding company sends Luca to the prosecutor’s office and takes that job away from us.
What are the reasons for going through all of this? A.B.A.T.E. needs the money – that is our life-blood for what we do. But most importantly – to protect, preserve, and defend the integrity and credit worthiness of A.B.A.T.E. The world needs to have confidence in our business practices.
THANK YOU FOR UPDATING MY WILL
Just a note to thank you for the service you provided me in updating my will. As I previously explained, it will make things much easier on my surviving three cousins upon my passing. Once again, thank you very much for your help, and to ABATE members.
Respectfully, D. Collins, South Bend Indiana
Ride Safe & Free,
ABATE Legal Services
All questions from ABATE members are answered confidentially unless otherwise authorized and only after the matter is concluded, except when authorization for publication anonymously or otherwise is given for pending matters. Remember, injured ABATE members pay only 28 ½% of total recovery motorcycle crash cases, and expenses as approved by client. Elsewhere, you may pay 33 ⅓%, 40% or even 50% of your recovery. In those cases, ABATE members are not charged for recovery of damage to their motorcycle, and have access to a 24-hour toll-free telephone number. Call us at 1-(800)-25-RIDER. Questions? Submit them to: RodTaylor@abatelegal.com © 2019.