In addition to Alan's comments,
From
Welfare Duties of the Relief Society:
The Relief Society president assists the bishop in assessing needs of families and individuals in the ward and suggesting ways to respond. President Gordon B. Hinckley taught: “It is imperative that bishops work closely with Relief Society presidents in administering Church welfare. This is normally accomplished in the monthly ward welfare committee meeting or, on occasion, in the ward council meeting. But emergencies arise, or there may be circumstances where greater confidentiality is required, in which case the bishop and the Relief Society president should consult together. Wherever there is material need in a family, the Relief Society president is best qualified to go into a home and assess the family’s needs” (“Standing Strong and Immovable,” Worldwide Leadership Training Meeting, Jan. 2004, 21).
So clearly the RS President should be aware of some situations in the ward. However, I don't know of any requirement for the Bishop to share all issues with her. I would expect the RS President would likely be involved with any assistance from the Bishop's Storehouse, but may not be consulted on financial-only assistance.
As for "funds were used up", I think leaders are aware that they will receive some additional scrutiny if the expenses exceed the donations. That's not to say there's a limit. It's simply an additional review to insure that procedures are being followed. But some leaders may feel undue pressure to limit expenses.
Then again, perhaps the Bishop is fully aware of the situation and due to the members (lack of) actions has decided to limit further help. One of the good quotes I've heard is that Fast Offering funds are to preserve life, not lifestyle. If, for example, a member is unwilling to downsize their lifestyle to match their financial situation, or take actions needed to help themselves, they may well find themselves receiving some "
tough love".
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