The next issue in our review of the MFT Complaint concerns the State Board allegation that the MFT fails to maintain adequate records to document how much consumers have paid and that the proper amounts were deposited to trust.   In subsequent sections of the Complaint, the State Board asserts that the MFT in some instances collected and deposited consumer funds in excess of the purchase price of the consumer preneed contract.  In other instances, MFT records reflect consumers have far less in trust than what Chapter 436 requires.   So, the State Board seems to be asserting that the MFT lacks sufficient records and reports for establishing an audit trail that would confirm proper administration of consumer funds.

We do not see how a single record could be create that covers all aspects of the administration of consumer funds.  Many funeral homes issue a receipt to consumers when cash or a check are received.  But a receipt cannot reflect whether the consumer funds were deposited to trust.   Sellers can create a report that documents both the receipt of funds and the transfer of those funds to the trustee.   But, the trustee would then have to create a corresponding record or report of the receipt of such funds, and whether any amount of such funds were then reimbursed back to the seller for sales expense or origination fees.   A series of records and reports are needed to create an audit trail.