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Microsoft word - afge_lu2663_120408.doc

U.S. Department of Labor
Office of Labor-Management Standards Kansas City Resident Investigative Office Two Pershing Square Building 2300 Main Street, Suite 1000 Kansas City, MO 64108 (816)502-0290 Fax: (816)502-0288 December 4, 2008 Ms. Allegra Oliver, President Government Employees AFGE AFL-CIO Local 2663 4801 Linwood Blvd Kansas City, MO 64128 Dear Ms. Oliver: This office has recently completed an audit of AFGE Local 2663 under the Compliance Audit Program (CAP) to determine your organization’s compliance with the provisions of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). As discussed during the exit interview with Belinda Wolf Whitaker and you on December 3, 2008, the following problems were disclosed during the CAP. The matters listed below are not an exhaustive list of all possible problem areas since the audit conducted was limited in scope. Title II of the LMRDA establishes certain reporting and recordkeeping requirements. Section 206 of the LMRDA and Title 29 of the Code of Federal Regulations (C.F.R.) Section 403.7 require, among other things, that labor organizations maintain adequate records for at least five years after reports are filed by which the information on the reports can be verified, explained, and clarified. Pursuant to 29 C.F.R. Section 458.3, this recordkeeping provision of the LMRDA applies to labor organizations subject to the requirements of the Civil Service Reform Act of 1978 (CSRA) as well. Therefore, as a general rule, labor organizations must retain all records used or received in the course of union business. For disbursements, this includes not only original bills, invoices, receipts, vouchers, and applicable resolutions, but also documentation showing the nature of the union business requiring the disbursement, the goods or services received, and the identity of the recipient(s) of the goods or services. In most instances, this documentation requirement can be satisfied with a sufficiently descriptive expense receipt or invoice. If an expense receipt is not sufficiently descriptive, a union officer or employee should write a note on it providing the additional information. For money it receives, the labor organization must keep at least one record showing the date, amount, purpose, and source of that money. The labor organization must also retain bank records for all accounts. The audit of Local 2663’s 2007 records revealed the following recordkeeping violation: Disposition of Property Local 2663 did not maintain an inventory of hats, jackets, Bibles and other property it purchased, sold, or gave away. The union must report the value of any union property on hand at the beginning and end of each year in Item 30 (Other Assets) of the LM-3. The union must retain an inventory or similar record of property on hand to verify, clarify, and explain the information that must be reported in Item 30. Based on your assurance that Local 2663 will retain adequate documentation in the future, OLMS will take no further enforcement action at this time regarding the above violation. Pursuant to 29 C.F.R., Section 458.3, the reporting requirement under 29 C.F.R. Section 403.2 [see Section 201(b) of the Labor-Management Reporting and Disclosure Act (LMRDA)] is made applicable to labor organizations subject to the requirements of the CSRA. This provision requires labor organizations to file annual financial reports that accurately disclose their financial condition and operations. The audit disclosed a violation of this requirement. The Labor Organization Annual Report (LM-3) filed by Local 2663 for fiscal year ending December 31, 2007 was deficient in the following areas: 1. Item 13 (During the reporting period did your organization acquire or dispose of any assets in any manner other than by purchase or sale?) should have been answered "Yes" because the union gave away Bibles during the year. The union must identify the type and value of any property received or given away in the additional information section of the LM report along with the identity of the recipient(s) or donor(s) of such property. The union does not have to itemize every recipient of such giveaways by name. The union can describe the recipients by broad categories if appropriate such as “members” or “new retirees.” In addition, the union must report the cost, book value, and trade-in allowance for assets that it traded in. Money Market Account Reported As Investment Local 2663 improperly included the value of a money market account as an investment in Statement A (Assets and Liabilities). For LM-3 reporting purposes, OLMS considers a money market account to be cash and should be reported in Item 25. Cash Reconciliation The audit revealed the disbursements reported on the local’s 2007 LM-3 report failed to reconcile with the local's bank statements by $737.00. Investigation showed this to be a reporting error. This error caused the local to inadvertently underreport the disbursements on its 2007 LM-3 report, even though the book balance reflected the correct amount of total disbursements. These errors were corrected, and the local provided an amended report reflecting the correct amounts during the course of the audit. Local 2663 has agreed to properly report the deficient items on all future reports it files with the Office of Labor-Management Standards (OLMS). The audit disclosed the following other violation: Inadequate Bonding Pursuant to 29 C.F.R. Section 458.35, officers and employees of any labor organization subject to the CSRA are required to be bonded in accordance with Section 502(a) of the LMRDA. This provision requires that union officers and employees be bonded for no less than 10 percent of the total funds those individuals or their predecessors handled during the preceding fiscal year. Officers and employees of Local 2663 were bonded for $5,000; however, they must be bonded for at least $12,500. The audit revealed that Local 2663’s officers and employees were not bonded for the minimum amount required at the time of the audit. However, the union obtained adequate bonding coverage and provided evidence of this to OLMS during the audit. As a result, OLMS will take no further enforcement action regarding this issue. I want to extend my personal appreciation to AFGE Local 2663 for the cooperation and courtesy extended during this compliance audit. I strongly recommend that you make sure this letter and the compliance assistance materials provided to you are passed on to future officers. If we can provide any additional assistance, please do not hesitate to call. Sincerely, ||||||| || |||||||| Investigator cc: Belinda Wolf Whitaker, Treasurer

Source: http://www.unionfacts.com/audit_pdfs/AFGE_LU2663_120408.pdf

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