U.S. Department of Labor
Employment Standards Administration
Office of Labor-Management Standards
Washington, D.C. 20210
September 28, 2006
Mr. John J. Sweeney
President
American Federation of Labor and
Congress of Industrial Organizations
815 16th Street, NW
Washington. DC 20006
Dear Mr. Sweeney:
The Office of Labor-Management Standards (OLMS) within the Department of Labor (Department) has
recently completed a compliance audit at your headquarters under the International Compliance Audit
Program (I-CAP). The purpose of this audit was to assess compliance with provisions of the Labor-
Management Reporting and Disclosure Act of 1959, as amended (LMRDA) by the American Federation of Labor
and Congress of Industrial Organizations (AFL-CIO or Federation). The I-CAP team conducted an exit
interview on September 6, 2006, with Mr. Jonathan Hiatt, General Counsel, and Ms. Deborah Greenfield,
Associate General Counsel, to review its findings, including the issues and problem areas identified
during the audit as well as actions required to correct deficiencies and recommendations to enhance
internal controls.
Officials of your organization were informed at the exit interview that an amended Labor Organization
Annual Report, Form LM-2, for the fiscal year ending June 30, 2005, is required to be submitted within
thirty days from the date of this letter to correct reporting and other deficiencies. On September 8,
2006, the Federation provided a letter describing in detail the burden involved in amending the Form
LM-2 to address one of the deficiencies identified in the audit. In light of this showing, the
Federation may submit its amended fiscal year 2005 Form LM-2 and a response to this closing letter
within sixty days of the date of this letter.
Specific information relating to these deficiencies is presented below, as is information regarding
previously reviewed reporting periods. Additionally, your organization's Form LM-2 for the subsequent
fiscal year should be prepared or, if already filed, amended so that it does not contain the deficiencies
noted here. We will schedule an on-site follow-up in approximately six months to review corrective
actions taken, to discuss the amended Form LM-2s filed by the Federation, and to continue cooperative
efforts to prevent and/or correct LMRDA deficiencies. This letter outlines the I-CAP audit's civil
findings as discussed during the exit interview. It does not purport to be an exhaustive compilation of
all possible problem areas or violations since the compliance audit was limited in scope.
AUDIT DETAILS:
Reporting Deficiencies - LMRDA Section 201
Section 201(b) of the LMRDA requires that labor organizations file with OLMS an annual financial
report that accurately discloses the union's financial condition and operations. The following
deficiencies were noted in regard to the AFL-CIO Form LM-2 for the fiscal year ending June 30, 2005 (the
audit period of July 1, 2004 to June 30, 2005). The deficiencies identified in this section must be
corrected in an amended Form LM-2 report for the FY 2005 reporting period. Further, subsequent Form
LM-2 filings must be prepared so as not to contain these deficiencies.
1. Disbursements to the District of Columbia Treasurer for property taxes and business improvement
taxes were inaccurately reported on Schedule 18, General Overhead (itemization page 582 of 863) by the
AFL-CIO. The Form LM-2 instructions require these disbursements be reported in Item 65, Direct Taxes,
of Statement B, Receipts and Disbursements.
2. Automobile allowances for employees were incorrectly reported in Column (F), Disbursements for
Official Business, on Schedule 12, Disbursements to Employees, of the Form LM-2. The Federation paid
monthly car allowances of $650 to certain employees. The car allowances were intended to cover car
repairs, maintenance, and payments. All allowances, except for mileage or meals, paid to employees on a
daily, weekly, monthly, or other periodic basis must be reported next to their names in Column (E),
Allowances Disbursed, on Schedule 12.
3. Automobile insurance paid by the Federation on behalf of employees receiving monthly car
allowances was incorrectly reported in Column (F) on Schedule 12. Disbursements for the personal car
insurance of employees must be reported next to their names in Column (G), Other Disbursements, on
Schedule 12.
4. Disbursements for the monthly lease, maintenance, servicing, insurance, gas and oil costs of
automobiles leased by the Federation for certain employees was incorrectly reported in Column (F) on
Schedule 12. The Federation advised that employees assigned leased automobiles may use those vehicles
for personal as well as business purposes. The Federation advised that it does not require each
individual assigned a leased automobile to submit an annual mileage report stating the total miles
driven that year and the percentage of business use of the leased automobile.
If an automobile leased or owned by the union is used for both official and personal business, the
cost of operating the car is reportable in one of the following ways, as appropriate:
a. The union may break down the operating and maintenance costs of the car into the portion for
official union business and the portion for personal use. The portions may be computed on the basis of
the mileage driven on official union business compared with the mileage for personal use. The portion
for official union business should be reported in Column (F) and the other portion in Column (G) on
Schedule 12.
b. Alternatively, rather than allocating these costs between Columns (F) and (G), if 50% or more of
the use of the vehicle was for official union business, the total cost may be entered in Column (F)
with an explanation in Item 69 indicating that the vehicle was also used part of the time for personal
business. Likewise, if less than 50% of the use of the vehicle was for official union business, the
total cost may be entered in Column (G) with an explanation in Item 69 indicating that the vehicle was
also used part of the time on official union business.
5. The Federation incorrectly reported disbursements for personal charges on its credit cards by
officers and employees and the reimbursements from them for those charges. The charging of personal
items on Federation credit cards is in violation of the Federation's travel policy. However, the travel
policy makes allowances for "accidental" personal charges mandating that it is the union official's
responsibility to repay the Federation. The audit revealed certain instances in which personal credit
card charges were incurred and were promptly repaid. Those transactions were misreported in Column (F)
on Schedule 11 or 12, or in Items 50- 54. None of the reimbursed personal expenses were reported in
Schedule 14, Other Receipts, as required. Personal credit card charges must be reported in Column (G),
Other Disbursements, of Schedule 11 or 12, next to the name of the individual who incurred those
charges. Additional explanation regarding these transactions may be reported in Item 69, but is not
required.
6. The Federation incorrectly reported disbursements for non-reimbursed personal credit card charges
in Column (F) of Schedule 11 or 12, or in Items 50- 54. The audit revealed certain instances in which
personal expenses charged to a Federation credit card were not reimbursed by the officer or employee
who incurred the charges. Personal expenses must be reported in Column (G) of Schedule 11 or 12, next
to the name of the individual who incurred those expenses.
7. The Federation correctly reported gross accounts receivable and gross loans receivable in Items
23 and 24. However, the Federation should revise the manner in which it reports allowances for doubtful
accounts receivable and allowances for doubtful loans receivable. During the audit period, these
allowances were reported in Schedule 10, Other Liabilities. The allowances for doubtful accounts may be
reported in Item 69, Additional Information, pursuant to the instructions for Item 23 or, in the
alternative, they may be reported as negative amounts in Schedule 7, Other Assets, using the same
descriptions originally reported in Column (A) of Schedule 10 by your organization. Item 69 must provide
details of how the allowances were determined by your organization if they are reported in this manner
in Schedule 7.
8. The Federation incorrectly included members of Directly Affiliated Local Union (DALU) 461
(Armstrong World Workers) on Schedule 13, Membership Status; these members merged with United
Steelworkers of America during the audit period. This DALU had 392 members.
9. The Form LM-2 did not contain sufficient information regarding one transaction for $153,290 in
which assets were disposed of by the Federation during the audit period. Item 69, in support of Item 15
on the Federation's Form LM-2 disclosed a disposal of fixed assets during the reporting period in the
amount of $153,290. The audit revealed that this included 87 computers that were sold for $11,064 and
18 computers that were scrapped, and that these transactions were not properly reported.
Columns (B) and (D) of Schedule 3, Sale of Investments and Fixed Assets, report $11,064 as both the
"Cost" and the "Gross Sales Price" of the 87 computers that were sold. The actual original cost of the
87 computers that were sold during the reporting period must be reported in Column (B) of Schedule 3.
Item 69 in support of Item 15 must disclose information related to only the 18 computers that were
scrapped. This information must include the type of assets, their value at the time of disposal, and
the original cost or other basis of the assets that were disposed of in a manner other than by sale.
10. Although the Federation operated a union gift shop for which an inventory system was maintained,
the Federation did not report inventory on the Form LM-2. There was no inventory reflected on Item 28
of Statement A, Assets and Liabilities or Schedule 7, Other Assets. The Form LM-2 instructions require
that all assets be reported.
11. Although the Detailed Summary Page - Schedules 14 through 19 contained the correct overall
total, the Federation transposed vendor totals in the itemization pages of Schedule 19, Union
Administration. Specifically, disbursement amounts to four vendors were reported incorrectly on line
(I) of their respective Schedule 19 itemization page of the Form LM-2, as shown in the table below. The
Federation stated that this was due to a clerical error as the information was entered manually.
Amount
Amount
Vendor
Reported
Reportable
Xerox Corporation
$ 6,828
$ -0-
Int'l Association of Machinists $42,966
$ 6,828
College Park, LLC
$24,650
$42,966
Makras Real Estate
$ -0-
$24,650
12. The Federation did not reflect the beginning and ending balance for a Paris, France bank
account in Item 22 of Statement A, Assets and Liabilities. The Paris bank account is for use by the
AFL-CIO Paris office. The AFL-CIO should provide financial information regarding all of its bank
accounts.
13. The I-CAP team found that the beginning and ending balances for the Federation's southern
regional bank account were incorrectly reported on Statement A, Item 22, of the Form LM-2. This occurred
because the revolving fund balance was reported on the Form LM-2 and not the book balance as reconciled
at both the beginning and ending of the fiscal year. The checking account balance should be obtained
from the Federation's books as reconciled with the balances shown on the bank statements.
14. On August 1 and 2, 2000, the AFL-CIO Executive Council voted to authorize the Federation to pay
the travel costs incurred by the spouses of the three executive officers and to treat any such
expenditures as taxable compensation. Disbursements for the travel expenses of officers' spouses must
be reported in Schedule 11 next to the name of the officer whose spouse incurred those expenses.
Federation disbursements for spousal travel expenses, however, were generally misreported in Items
50-54, with the exception of $248 in expenses for the travel of President Sweeney's spouse, which was
correctly reported next to the officer's name in Column (G) of Schedule 11.
If the spouse's travel was necessary for conducting official union business, such disbursement must
be reported in Schedule 11, Column (F). If the spouse's travel was necessary for conducting official
union business and was essentially for personal benefit, such disbursement must be reported in Schedule
11, Column (C).
15. The Federation misreported disbursements for certain charges on its credit cards for restaurant
expenses and non-lodging hotel expenses incurred by officers and employees. These disbursements were
incorrectly reported in Items 50- 54. Direct and indirect disbursements to, or on behalf of, officers
or employees must generally be reported next to their names on Schedule 11 or 12. One exception to this
rule is that indirect disbursements for temporary lodging or transportation by public carrier necessary
for conducting official business while the officer or employee is in travel status are reportable in
Items 50-54. However, non-lodging hotel expenses (such as food and refreshments) included on hotel
bills and paid by the union through a credit arrangement must be reported in Schedule 11 or 12, next to
the names of the officers or employees who incurred those expenses. If necessary for conducting
official union business, such disbursements must be reported in Column (F). If not necessary for
conducting official union business and essentially for the personal benefit of the official, such
disbursements must be reported in Column (G).
Restaurant expenses charged to Federation credit cards must also be reported in Schedule 11 or 12
as indirect disbursements next to the names of the officers or employees who incurred those expenses.
Sections 214.571 through 214.577 of the LMRDA Interpretative Manual set forth the rules and provide
examples for reporting direct and indirect disbursements for food and refreshments for officers, for
employees, for general membership gatherings, and for the entertainment of individuals outside the
union.
Basically, the rules are as follows:
a. Credit card charges for food and refreshments for officers and employees when necessary for
conducting official union business must be reported next to their names in Column (F) of Schedule 11 or
12.
b. Credit card charges for food and refreshments for officers and employees when not necessary for
conducting official union business - essentially for the personal benefit of the officers and employees
- must be reported next to their names in Column (G) of Schedule 11 or 12.
c. Credit card charges for food and refreshments for general membership gatherings should be
reported in Items 50-54, as appropriate.
d. Individual credit card charges for food and refreshments for more than one officer or employee
should be divided equally among such officers and employees and the portion for each officer or
employee should be reported next to their name in Column (F) or (G) of Schedule 11 or 12, as
appropriate.
e. Individual credit card charges for food and refreshments when an officer or employee conducts
official union business with someone outside the union should be reported as follows. The officer or
employee's portion of the tab must be reported in Column (F) of Schedule 11 or 12 and the other
individual's portion of the tab should be reported in Items 50 - 54, as appropriate.
16. The Federation incorrectly reported in Items 50-54 disbursements for certain travel expenses of
its vice presidents who are also officers of unions affiliated with the Federation. The Federation paid
various travel expenses, including per diem, for these officers to attend meetings. The Federation
sometimes paid the officers directly for these expenses and sometimes paid them indirectly via
disbursements to the other labor unions. These disbursements (other than indirect disbursements for
temporary lodging or transportation by public carrier) must be reported next to each respective
officer's name in Column (F) of Schedule 11. Additional explanation regarding these transactions may be
reported in Item 69, but is not required.
Inadequate Recordkeeping - LMRDA Section 206
Pursuant to Section 206 of the LMRDA, every person required to file any report under Title II of the
LMRDA shall maintain records on the matters reported which will provide in sufficient detail the
information and data from which the documents may be verified, explained, or clarified and checked for
accuracy and completeness. All required records must be maintained for at least five years following
the date the financial report is filed. Records over five years in age must be maintained if necessary
to verify reports filed within the last five years. For example, records such as meeting minutes that
note approval for spousal travel or officer salary increases must be retained for as long as they remain
necessary to verify current financial activities of the union. There were instances noted during this
audit where the Federation did not comply with the recordkeeping requirements of Section 206. During
the exit interview, AFL-CIO officials were informed that sufficient documentation must be maintained,
regardless of amount, for a minimum of five years.
17. The Federation did not require any itemized meal receipts for any officer or employee. These
itemized receipts are necessary to ensure disbursements are solely for union business purpose and to
sufficiently fulfill the recordkeeping requirement as defined under Section 206 of the LMRDA. The
Federation should maintain itemized meal receipts in the future for disbursements of both officers and
employees.
18. Two accounts payable transactions, one for $75,000 and one for $19,440, were not supported by
adequate documentation that clearly and sufficiently identified the union business purpose. The AFL-CIO
should retain sufficient documentation in their files to clearly support the union business purpose of
each transaction.
19. During the audit period, a contractor for the AFL-CIO, who was also the president of the
Alliance for Retired Americans, received payments totaling $36,000 from the AFL-CIO. There was no
contractual documentation available to support the payments, although the Federation informed the I-CAP
team the work was for consulting services to the AFL-CIO. The Federation should maintain adequate
documentation to support the purpose of all contracts.
20. The Federation did not maintain supporting documents to substantiate the membership numbers reported
on the Form LM-2 for its associate members in Working America. Although the AFL-CIO included the
membership for Working America on Schedule 13 of the Form LM-2, the Federation did not have supporting
documentation available in its files to substantiate the Working America membership numbers presented
on the Form LM-2. The AFL-CIO received a verbal membership number from Working America and entered this
number onto the Form LM-2 for the audit period. The AFL-CIO has taken steps to receive periodic written
membership reports from Working America that will be used to report the membership number in the fiscal
year 2006 Form LM-2 filing. The I-CAP team will review the membership reports during the six month
follow-up.
21. The Federation did not maintain a detailed subsidiary ledger within its general ledger to track
furniture and equipment. When fixed assets were acquired they were not labeled with an individual
inventory number. The Federation has asset tracking software that should be used to identify each fixed
asset to ensure the assets of the AFL-CIO are accounted for and adequately safeguarded. The Federation
began using its asset tracking software during the on-site audit and the I-CAP team will review its
progress during the six month follow-up.
22. The Federation failed to maintain certain receipts. Most missing receipts were for meal
expenses, but receipts were also sometimes missing for parking, taxis, fuel, hotel charges, and airline
charges. The Federation expense policy states that original receipts and other supporting documentation
for travel and other expenses incurred on behalf of the Federation must be maintained and submitted
with the employee's expense report.
The Federation also failed to maintain receipts necessary to verify reports filed within the last
five years. The I-CAP team selected a sample of transactions from the previous five years to determine
whether supporting documentation had been maintained and funds were used solely for union purposes. In
over 40% of the officer and employee disbursement transactions selected for review, no original
receipts for airfare, meals, and other expenses were available for review. The Federation provided
credit card bills with no supporting documentation detailing the itemization of the charge. In addition
meal charge receipts often did not include written, detailed explanations of union business conducted
and the full names and titles of all persons incurring the restaurant charges. The Federation should
maintain itemized receipts to substantiate the union business purpose of disbursements and provide
detailed explanation of the union business conducted along with the full names and titles of all
persons incurring the restaurant charges.
23. The Federation failed to retain written travel authorizations in the union records. The Federation
travel policy requires each employee to complete a travel authorization form prior to travel in order
to obtain proper travel authorization. The audit revealed that such travel authorization forms were
often completed and transmitted to the travel agency, yet were not retained in the union records.
Officer Holding Prohibitions - LMRDA Section 504
Section 504(a) of the LMRDA prohibits persons convicted of certain offenses from holding labor
organization office or employment for a period of thirteen years from the date of conviction or release
from prison, whichever is later.
24. While the Federation does include a question on its employment application regarding criminal
convictions, it does not conduct criminal background checks of officers and employees. During the exit
interview, the I-CAP team emphasized the importance of verifying background information to ensure
individuals do not hold office or employment in violation of LMRDA Section 504.
Internal Controls
Adequate internal financial controls are essential to prevent the misuse of funds and to support the
financial responsibility and other obligations under Title II and Title V of the LMRDA. Title V of the
LMRDA stipulates, among other things, the fiduciary responsibility of officers of Labor organizations.
As a general matter, weaknesses in financial controls can lead to violations of Section 501 of the
LMRDA.
25. The AFL-CIO did not have a travel policy applicable to officers. To better safeguard Federation
funds, the I-CAP team recommends revision to their travel policy to include provisions for officers that
are uniformly enforced. During discussions with AFL-CIO officials, they agreed to implement a travel
policy applicable to officers. In the six month follow-up, the I-CAP team will review the progress of
the Federation to revise the policy.
26. The Federation did not have written loan agreements to document the loan terms and conditions for
the following four loans: $75,000 to Union Community Fund, $400,000 to the Alliance for Retired
Americans, $560,000 to the National Labor College (formerly the George Meany Center for Labor Studies),
and $185,000 to the Center for Working Capital. The Federation was able to provide the Executive Council
meeting minutes that identified approval of each of these four loans. Good internal control practices
over loans consist of documenting stipulations in a loan agreement, such as the terms and conditions of
the loan.
27. The Support Services Department did not have a system in place to receive cash. The Federation
received cash receipts in this office averaging $1,400 a year. The cash was forwarded to the Accounting
Department for deposit with no assurance that all cash was remitted. As of April 2006, based on the
review by the I-CAP team, the Support Services Department no longer receives cash. Cash is remitted
directly to the Accounting Department and the accounting staff deposits the funds.
28. Duties involving the processing of cash receipts were not segregated. One staff member at the
Federation received checks, entered receipts into the general ledger, prepared the deposit slip, and had
the ability to deposit checks at the bank. The I-CAP team did not, however, find any evidence that this
staff member made any deposits during the audit period. The I-CAP team recommends that duties be
appropriately segregated, with one staff member assigned to receive and list the receipt of checks
along with reconciling the list to the canceled deposit slips; a second employee to record receipts in
the general ledger; and a third staff member to prepare the deposit slip and deposit the checks at the
bank.
29. The Federation did not require a receipt log be maintained for checks received by the Civil,
Human and Women's Rights Department, the Politics and Field Department, and the Support Services
Department. These departments received a number of checks. For example, during the audit period the
Civil, Human and Women's Rights Department received $82,630 in receipts. The checks were provided to
the Accounting Department for deposit with no confirmation all checks had been remitted. To fully and
accurately account for all Federation funds, it is recommended all checks be forwarded directly to the
Accounting Department. If checks are received by these offices, a duplicate receipt log should be
maintained by one staff member. A second staff member should reconcile the receipt log to the physical
checks and then remit the checks to the Accounting Department to deposit at the bank.
30. An affiliate made joint fundraising transfers from its federal political committee to the
AFL-CIO's Committee on Political Education-Political Contributions Committee (COPE-PCC). Under an
arrangement between the affiliate and the AFL-CIO, the affiliate deducted corresponding amounts from
its per capita tax payments. The affiliate's political committee ceased making transfers to COPE-PCC in
February 2004 but the affiliate continued to make the deductions from its per capita tax payments, in
an amount that totaled $18,000 during the audit period, and the AFL-CIO continued to accept the reduced
payments. The Federation explained to the I-CAP team this was an inadvertent error and it has taken
steps to rectify the matter. It is recommended that the Federation regularly verify per capita tax
amounts due in order to ensure receipts are properly recorded.
31. The I-CAP team reviewed the Federation's signature cards used to identify staff members who are
authorized to approve disbursement transactions. The accounting staff relies on these signature cards
in order to process disbursements. The I-CAP team identified signature cards that were not completed in
their entirety and in some cases signature cards were not in the Federation records. Of the payments
reviewed, there were three payments where the first level signatory did not have a signature card on
file and in two of the three payments there was no approval by the second level signatory as required
by AFL-CIO disbursement policy. The I-CAP team also found that one Department Head approved his own
telephone expense and did not have the required second level approval signature. Further, the I-CAP
team identified that one staff member is authorized approval authority for all Federation expenses
related to the Publications Department. There was no signature card in the Federation records outlining
the authority for this staff member. The I-CAP team recommends that the signature cards be periodically
updated and completed in their entirety. To better safeguard union funds, disbursements should be
approved only by the authorized officials reflected on the signature cards and disbursements should not
be made by the accounting staff without approval by authorized officials.
32. The audit revealed that the executive assistants to the Federation's three executive officers
and another Federation employee were allowed to approve their own travel expenses. The I-CAP team
recommends that these employees not be allowed to approve their own expenses. Instead, another
Federation official should be assigned the responsibility of reviewing and approving such travel
expenses so that the authority to disburse union funds will be adequately segregated and union funds
will be better safeguarded.
The audit also revealed that the three executive assistants and another Federation employee regularly
received reimbursement for actual travel expenses rather than per diem as is mandated in the
Federation's employee travel policy. The I-CAP team recommends that the employee travel policy apply to
all employees.
33. On August 1 and 2, 2000, the AFL-CIO Executive Council voted to adopt, as policy, the AFL-CIO's
existing practice regarding travel by spouses of the executive officers. The minutes state that "from
time to time, the Federation pays the travel costs incurred by the spouses of the three executive
officers of the AFL-CIO. In accordance with current law, any such expenditures are treated as part of
the taxable compensation reported to the Internal Revenue Service each year for the officers." To
ensure that this spousal travel policy is not abused, the I-CAP team recommends that the AFL-CIO
Executive Council review and revise the policy to make it more detailed and specific regarding matters
such as the circumstances under which the Federation will pay spouses' travel costs. The I-CAP team
also recommends that the policy impose specific travel reimbursement limits for spouses' travel
expenses.
AFL-CIO Trades Departments
34. During the audit, the I-CAP team determined that the Department of Professional Employees (DPE)
and the Transportation Trades Department (TTD) of the AFL-CIO had not filed annual reports with OLMS
and neither Department's finances were included on the Form LM-2 of the AFL-CIO. All other Trades
Departments of the AFL-CIO file individual annual reports with OLMS. The DPE and TTD in addition to the
AFL-CIO were notified in writing that they are required to comply with the LMRDA as both Departments
meet the definition of a labor organization. The Departments have each filed with OLMS a Form LM-1,
Labor Organization Information Report, and have indicated they will file the appropriate fiscal year
report.
Prior Year Amended Form LM-2 Reports
35. In 2003, the Department reviewed the Federation's Form LM-2 reports for the fiscal years ending
December 31, 2000, and December 31, 2001, along with the six-month period ending June 30, 2002. As a
result of the review, the Department sought amended Form LM-2 reports for those periods yet these
reports have not been filed with OLMS. OLMS requests that the Federation submit these amended reports
within sixty days from the date of this letter.
Prior Year Form LM-2 Deficiencies
36. In the review of sampled transactions from the previous five years, there were deficiencies
identified in two categories on the Form LM-2. The I-CAP team examined 10 leases with rental deposits,
where the Federation was the tenant, to determine whether the deposits were correctly reflected on the
fiscal year 2004 Form LM-2. Since one rental deposit totaling $3,250 was incorrectly reported on the
Federation's books, Schedule 3, Other Assets, was understated. The I-CAP team also sampled items during
the previous five years to determine whether fixed assets were correctly reflected on the Form LM-2.
Four of the items identified were incorrectly listed as furniture instead of computer equipment. Funds
held for leases should be correctly reflected as an asset in Schedule 7. Because the lease is still
active, and the four items were incorrectly listed, subsequent filings must correctly reflect fixed
assets and rental deposits.
At the conclusion of the exit interview, the I-CAP team directed the Federation to submit an amended
Form LM-2 for the fiscal year ending June 30, 2005, and a response to this closing letter within thirty
days from the date of this letter. On September 8, 2006, the Federation provided a letter describing in
detail the burden involved in amending the Form LM-2 to address one of the deficiencies identified in
the audit. In light of this showing, the Federation may submit its amended fiscal year 2005 Form LM-2
and a response to this closing letter within sixty days of the date of this letter. The response letter
will identify the corrective actions implemented by the Federation based on the results of the
compliance audit. In addition, the Federation must submit within sixty days from the date of this
letter the amended Form LM-2 reports for fiscal years ending December 31, 2000, December 31, 2001 and
the six-month period ending June 30, 2002. Further, the Federation has agreed that subsequent Form LM-2
filings will reflect the findings addressed in this letter and that the Federation's report for the
fiscal year ending June 30, 2006, will be prepared or, if already filed, amended, to reflect these
findings. We will schedule an on-site follow-up in approximately six months to review LMRDA compliance
and the amended FY 2005 Form LM-2, discuss the corrective actions that have been taken, and continue
cooperative efforts.
We want to express our appreciation for the cooperation and courtesy extended by you and your staff
during this compliance audit. If we can be of any assistance in the future, please do not hesitate to
call us.
Sincerely,
/SIGNED/_________
Kim Marzewski, Chief
Division of International Union Audits
cc: Secretary-Treasurer Richard Trumka
Last Updated: 10/02/06
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