U.S. Department of Labor
Office of Labor-Management Standards
Cleveland District Office
1240 East 9th Street, Suite 831
Cleveland, OH 44199
(216) 357-5455 Fax: (216) 357-5425
May 13, 2011
Mrs. Barbara Taylor, Financial Secretary Case Number:
United Steelworkers LU 1-1237
837 Steele Avenue
Newark, OH 43055-8651
Case Number:
LM Number: 042-686
Dear Mrs. Taylor:
This office has recently completed an audit of United Steelworkers LU 1-1237 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 you on March 30, 2011, 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.
Recordkeeping Violations
Title II of the LMRDA establishes certain reporting and recordkeeping requirements. Section
206 requires, among other things, that labor organizations maintain adequate records for at least
five years by which each receipt and disbursement of funds, as well as all account balances, can
be verified, explained, and clarified. As a general rule, labor organizations must maintain 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.
Mrs. Barbara Taylor
May 13, 2011
Page 2 of 4
The audit of Local 1-1237 2009 records revealed the following recordkeeping violations:
1. General Reimbursed Expenses
Local 1-1237 did not retain adequate documentation for reimbursed expenses incurred by
the union totaling at least $500.00. For example, the union made a contribution to
Salvation Army in December 2009 for $500.00. There was a voucher on file, however, no
supporting documentation for this disbursement.
As previously noted above, labor organizations must retain original receipts, bills, and
vouchers for all disbursements. The president and treasurer (or corresponding principal
officers) of your union, who are required to sign your union’s LM report, are responsible
for properly maintaining union records.
2. Failure to Record Receipts
Local 1-1237 did not record in its receipts records some employer dues checkoff checks
totaling at least $1,038.00. For example, dues checkoff Check dated October 23,
2009 for the amount of $1,038.00 was not recorded in the union’s cash book or deposited
into the union’s checking account. Union receipts records must include an adequate
identification of all money the union receives. The records should show the date and
amount received, and the source of the money.
Based on your assurance that Local 1-1237 will retain adequate documentation in the
future, OLMS will take no further enforcement action at this time regarding the above
violations.
3. Information not Recorded in Meeting Minutes
During the audit, you advised OLMS that the membership authorized expenses at the first
membership meeting of the year. Local 1-1237 maintained no minutes of that meeting and
any other meetings during the fiscal year. Minutes of all membership or executive board
meetings must report any disbursement authorizations made at those meetings. The
minutes also should include approval for specific union related disbursements.
Reporting Violations
The audit disclosed a violation of LMRDA Section 201(b), which requires labor organizations to
file annual financial reports accurately disclosing their financial condition and operations. The
Labor Organization Annual Report (Form LM-3) filed by Local 1-1237 for fiscal year ending
December 31, 2009, was deficient in that:
Mrs. Barbara Taylor
May 13, 2011
Page 3 of 4
1. Failure to File Bylaws
The audit disclosed a violation of LMRDA Section 201(a), which requires that a union
submit a copy of its revised constitution and bylaws with its LM report when it makes
changes to its constitution or bylaws. Local 1-1237 amended its constitution and bylaws in
2006, but did not file a copy with its LM report for that year.
Local 1-1237 has now filed a copy of its constitution and bylaws.
2. Cash Reconciliation
It appears that the cash figures reported in Item 25 are not the cash figures according to the
union’s books after reconciliation to the bank statements. The instructions for Item 25 state
that the union should obtain account balances from its books as reconciled to the balances
shown on bank statements.
3. Failure to Record Receipts
In addition, the failure to record receipts results in a reporting violation which unions must
report financial information accurately on the LM report.
4. Failure to File LM-3 Report for fiscal year ending December 31, 2009
Local 1-1237 did not file the Labor Organization Annual Report (Form LM-3) for fiscal
year ending December 31, 2009 within 90 days from the end of the fiscal year, as required.
On December 3, 2010, our office received the delinquent report in question. As a result, no
further action will be taken by OLMS on this matter.
Other Issues
Reconciliation of the Union’s Bank Accounts
During the audit, you advised that you reconcile the union’s bank accounts and financial
books at the end of the fiscal year only. OLMS recommends that Local 1-1237 reconcile
the union books and bank records, monthly to help ensure that all receipts and
disbursements are accurately recorded and handled.
Mrs. Barbara Taylor
May 13, 2011
Page 4 of 4
I want to extend my personal appreciation to United Steelworkers LU 1-1237 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: Mr. Jeremy Woodward, President