Tenn. Code Ann. § 8-19-503: Unauthorized settlement with bonding company

If any agency of the state or any official or employee of the state makes such demand and settlement, without the prior approval of the comptroller of the treasury, for the loss of moneys of the state or the unauthorized removal of state property, and at a later time it is determined through audit or other investigation that settlement of the loss was made and had on an improper or incomplete basis, then the bonding company which guaranteed faithful performance by the employee responsible for such shortage in state moneys or property shall be liable to the state for any additional moneys or property found to be due the state up to the limit of such bond. If there still are moneys or property due to be reimbursed to the state, on account of such shortage in state moneys or property, then the bonding company of the employee making such unauthorized settlement shall be liable for any remaining amount still due the state up to the limit of such bond. Any moneys collected hereunder shall be paid into the state treasury.