The Missouri State Board of Embalmers and Funeral Directors will meet December 9th, and their agenda includes a proposed regulation for new preneed recordkeeping requirements. Borrowing perhaps from other states’ preneed audit manuals, the regulation sets out a list of journals, ledgers, documents that a preneed seller would be required to maintain. For an industry that has been selling preneed decades without much oversight, the recordkeeping requirements may look rather intimidating.

The regulation would require the following books and records:

• Receipt Journal
• Disbursement Journal
• Trust ledger or joint account ledger
• Individual contract ledger
• Copies of all related agreements
• Correspondence related to preneed contracts
• Accountings of disbursements
• Checkbook registers, bank statements and canceled checks
• Records of electronic transfers
• Reconciliations
• Preneed files that relate to an account transaction
• Credit card transaction records

Looking to audit manuals from states such as Texas , one might be able to glean the nature of the records sought, and their purpose. However, the Missouri preneed law differs from Texas (most other states) in that all consumer payments must be deposited directly to trust. This caused problems for larger sellers, and the State Board allowed sellers to use clearing accounts that were maintained solely for preneed payments. Some of the records set out by the regulation do seem directed at the use of clearing accounts.

For sellers that have all consumer payments made directly to the trustee, the proposal raises questions about how they can comply. Will the trustee’s accounting records suffice for receipt and disbursement journals?

The individual contract ledger requirement will also be a concern for some sellers. The Texas audit manual sets out a sample ledger, and this may seem burdensome to Missouri funeral homes. But, other states’ audit programs (Florida, for example) will look at the seller’s administrative programming to determine if it complies with the preneed law, and accurately administers payments. So, Missouri sellers will have to see what their regulators have in mind.