While the protection of bonds required under the Act must extend to
any actual loss from the acts of fraud or dishonesty in the handling of
``funds or other property'' (Sec. 453.7), the amount of the bond depends
upon the ``funds'' handled by the personnel bonded and their
predecessors, if any. ``Funds'' as here used is not defined in the Act.
As in the case of ``funds or other property'' discussed earlier in
Sec. 453.7, the term would not include property of a relatively
permanent nature such as land, buildings, furniture, fixtures, or
property similarly held for use in the operations of the labor
organization or trust rather than as quick assets. In its normal
meaning, however, ``funds'' would include, in addition to cash, items
such as bills and notes, government obligations and marketable
securities, and in a particular case might well include all the ``funds
or other property'' handled during the year in the positions occupied by
the particular personnel for whom the bonding is required. In any event,
it is clear that bonds fixed in the amount of 10 percent or more of the
total ``funds or other property'' handled by the occupants of such
positions during the preceeding fiscal year would be in amounts
sufficient to meet the statutory requirement. Of course, in situations
where a significant saving in bonding costs might result from computing
separately the amounts of ``funds'' and of ``other property'' handled,
criteria for distinguishing particular items to be included in the
quoted terms would prove useful. While the criteria to be applied in a
particular case would depend on all the relevant facts concerning the
specific items handled, it may be assumed as a general principle that at
least those items which may be handled in a manner similar to cash and
which involve a like risk of loss should be included in computing the
amount of ``funds'' handled.
[30 FR 14926, Dec. 2, 1965]
