Auditors Urge Shutting West Virginia Funeral Examiners Board
West Virginia's Board of Funeral Service Examiners fails to protect the public against unscrupulous operators and should be disbanded, according to the Legislature's auditors.
They cited four cases in the past few years where they say the board delayed for many months suspending or revoking funeral directors' licenses despite evidence they had taken customers' advance payments that should have been held in trust.
Lawmakers should consider removing the board's oversight function to another state agency, or else replace all board members and ensure that two have no working ties to the funeral industry, according to Performance Evaluation and Research Division Director John Sylvia.
"Consumers of funeral services and goods are often in a distraught emotional state when making these high-cost transactions," Sylvia wrote. "The evidence demonstrates a relatively high risk of dishonest business practices by unprofessional funeral service providers."
Board Executive Director Regina Anderson, in an audit response, said board attorneys have advised them not to take disciplinary actions without formal complaints and when there are criminal cases to wait for convictions before acting.
"We now find ourselves being chastised for failing to act according to the interpretation of your attorneys when our attorneys have advised to the contrary," Anderson wrote. The board currently consists of three funeral directors and one citizen member, with three more due to be appointed, she wrote.
According to Anderson, the board also is never informed of embezzlement by funeral directors unless there are media reports. "We only find out by chance," she wrote.
Auditors focused mainly on the case of Chad Harding, former president of the board, who kept his license after he was found in an August 2016 federal court judgment to have received more than $900,000 from filing false claims for funeral services against more than 100 consumers who bought "preneed policies" with Homesteaders Life Co. The $2.8 million in treble damages for racketeering were paid by another businessman.
A month later, in September, the board first contacting Harding about its charges against him.
The month after that, the state attorney general's office filed a motion in state court to permanently prohibit Harding from selling preneed funeral products and services.
In July this year, the board voted 3-2 to accept Harding's settlement proposal for having his funeral director and crematory licenses suspended for six months, followed by six months' probation and $25,000 to cover the board's legal fees. Three board members subsequently resigned.
Anderson wrote that the board was looking at additional legal fees of about $50,000 if it pursued the case instead of settling it and the final outcome would not have been guaranteed.