Local Government Commission

of the  

Pennsylvania General Assembly

County Officer and Employee Fiscal Security Act

In 2006, the Local Government Commission authorized its staff to become part of a working group to review current laws relating to bonding and security for elected and appointed county officials and employees who act in a fiduciary capacity. Over a period of three years, the staff met periodically with representatives from the County Commissioners Association of Pennsylvania, the Pennsylvania State Association of Elected County Officials, the Departments of State, Revenue and Auditor General, the Pennsylvania Game Commission, and the Pennsylvania Fish and Boat Commission. The working group developed legislation that modernizes bonding and security requirements for county officials and employees responsible for the handling of money as collection agents for both counties and the Commonwealth, and protects counties and the Commonwealth against losses of money and other property sustained as a result of fraudulent or dishonest acts.

Senate Bill 834 entitled the County Officer and Employee Fiscal Security Act, which added the first chapter into Title 16 (Counties) of the Pennsylvania Consolidated Statutes, was made applicable to counties of the second class through the eighth class, including home rule counties. The General Assembly passed the bill and the Governor signed it into law as Act 106 of 2011.

Under the act, counties are empowered to select their method of coverage, whether it is an individual bond, a blanket bond, or crime-fidelity insurance (or any combination of the three) in amounts determined by the county commissioners, or legislative policy-making body in home rule counties, to satisfy the required overall coverage for officials and employees. The previous specific amounts of individual bonds, which had not been updated in over 50 years, were repealed. Counties annually determine the amount of security coverage needed, in whatever form, that would be sufficient to protect against risks of loss. If the amount is not sufficient, it does not relieve a county of any liability incurred for losses above the amount of security it has purchased. In addition, a Commonwealth agency, such as the Pennsylvania Game Commission, retains any existing rights it may have with regard to approval of the amount of a bond or other security. Furthermore, the act specifically authorizes counties to employ risk managers to assist them in compiling information relevant to determining the amount of security needed.

Additional information on Act 106 and its application may be found on the County Commissioners Association of Pennsylvania webpage, "County Public Officials Bonding Changes."