The Bond of Depository requirements are summarized in KRS 160.570. Each board of education shall appoint a bank, trust company, or savings and loan association to serve as its depository. According to the administrative regulation, by July 1 of each year the depository selected shall, before entering upon its duties, execute bond for the faithful performance of its duties, to be approved by the local board of education and the commissioner of education. Security for the bond shall be deposited with an escrow agent in an amount equal to the penal sum of the bond and shall consist of United States Government Bonds, Kentucky School Revenue Bonds, or Federal government agency obligations, including obligations of the Federal Farm Credit Banks, the Federal National Mortgage Association and the Federal Home Loan Bank.
The requirements for the penal sum of the Bond of Depository are summarized in 702 KAR 3:090. Accordingly, it shall be the duty of each local board of education, on the advice of the Commissioner of Education, to determine the amount of the penal sum of the Bond of Depository. The penal sum of the depository bond shall be at least equal to the average of the highest balance in each account in each month, for all accounts in the previous year. The penal sum of the depository bond shall be adjusted to reflect expected increases in the highest day balances due to anticipated changes of deposit amounts in the current year. No Bond of Depository shall be approved which, in the opinion of the Commissioner of Education, is inadequate to safeguard the deposits of the local board of education.
The Performance Bond requirements are summarized in KRS 160.560. Accordingly, by July 1 of each year the board treasurer shall execute an official bond for the faithful performance of the duties of his/her office to be approved by the local board and the commissioner of education. The bond shall be guaranteed by a surety company authorized to do business in this state, and shall be in an amount determined by the local board of education in accordance with the administrative regulations promulgated by the Kentucky Board of Education. The premium on the bond shall be paid by the local board of education. A copy of the bond shall be filed with the local board of education and with the Kentucky Board of Education.
The requirements for the penal sum of the Performance Bond are summarized in 702 KAR 3:080. Accordingly, it shall be the duty of each local board of education, on the advice of the Commissioner of Education, to determine the amount of the penal sum of the Performance Bond for employees who are responsible for board of education funds. No Performance Bond shall be approved which, in the opinion of the Commissioner of Education, is inadequate to safeguard the funds of the local board of education.