Two years ago, the Missouri State Board of Embalmers and Funeral Directors met in Independence to discuss their staff’s recommendations for seller record keeping requirements and the scope of preneed examinations. As the minutes somewhat reflect, the staff proposals were met with strong public opposition. (This blog documented those issues in prior posts that are listed below.) As a consequence, the board voted to table the staff proposals one month, and scheduled a meeting for January 6, 2016. When discussion of the proposals was renewed on January 6th, the public again pressed for more clarity on the record keeping requirements and to revise the scope of preneed examinations. Funeral directors were actually demanding that the Board place more emphasis on tracking consumer funds, and less emphasis on individual contract review. After a lengthy discussion the Board entertained a motion to allow the staff to continue examinations under the existing guidelines so long as a more detailed audit guideline was completed by Fall 2016. That was met with strong public criticism, and the motion was withdrawn. The Board then moved on to other business and eventually in to closed session. The Board’s move into closed session normally signals the end of the matters to be discussed in open session, and accordingly, the public leaves. But on this date, Board subsequently reconvened in open after the public had left and took up the staff proposals. With two members absent, a mere quorum of 3 Board members voted to approve the staff’s original examination proposal. (January 6, 2016 State Board minutes)
So since December 2015, Missouri preneed consumers have paid almost $1 million in preneed contract fees. While the Board and their staff argued about record keeping requirements, local prosecutors put a handful of funeral directors in jail for preneed fraud. The Board’s failure to pursue those funeral directors for fraud led legislators to question who the Board was really seeking to protect. Yet, preneed examinations continue to place more emphasis on preneed contract compliance than on whether consumer funds have been deposited with the bank.
The State Board returns to Independence this December 13th, and the members need to take up reform of the financial examination process. In our next post, we will outline our reform proposal to the State Board.
Prior blog posts: The use of sampling vs. 100% contract reviews; the need for exit interviews, and the need to search for fraud.