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Office of Labor-Management Standards
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Office of Labor-Management Standards (OLMS)

U.S. Department of Labor
Employment Standards Administration
Office of Labor-Management Standards
Chicago District Office
230 South Dearborn Street
Room 774, Federal Office Building
Chicago, IL 60604
(312)596-7160 Fax: (312)596-7174

December 23, 2008

Ms. Connie Hite, Treasurer
Steelworkers AFL-CIO
Local 6805
P.O. Box 1807
Warsaw, IN 46581
LM File Number 062-700
Case Number: -

Dear Ms. Hite:

This office has recently completed an audit of Steelworkers Local 6805 under the Compliance Audit Program (CAP) to determine your organization's compliance with
the provisions of the Labor-Management keporting and Disclosure Act of 1959 (LMRDA). As discussed during the exit interview with Mr. Armando Espinoza and
you on December 15,2008, 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.
Recordkeepin-g Violations
Title I1 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 organization 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
Ms. Connie Hite
December 23,2008
Page 2 of 4
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 6805's 2007 records revealed the following recordkeeping violations:
1. Meal Expenses
The majority of expenses for meals did not include written explanations of union
business conducted or the names and titles of the persons incurring the restaurant
charges. Union records of meal expenses must include written explanations of the
union business conducted and the full names and titles of all persons who incurred
the restaurant charges.
2. Reimbursed Auto Expenses
Union officers and employees who received reimbursement for business use of
their personal vehicles did not retain adequate documentation to support
payments to them totaling at least $1000 during 2007. The union must maintain
records which identify the dates of travel, locations traveled to and from, and
number of miles driven. The record must also show the business purpose of each
use of a personal vehicle for business travel by an officer or employee who was
reimbursed for mileage expenses.
3. General Union Expenses
Local 6805 did not retain adequate documentation for union expenses totalin at
least $4000. For example, no backup documentation was available for check
in the amount of $440 payable to USW District 7 for a golf outing or check & the amount of $946.87 payable to Remembrance Bibles. Additionally, the union
did not record a list of recipients for 15 watches that were purchased with check
in the amount of $765.50 payable to Financial Innovations.
Ms. Connie Hite
December 23,2008
Page 3 of 4
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.
Based on your assurance that Local 6805 will retain adequate documentation in the
future, OLMS will take no further enforcement action at this time regarding the above
violations.
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 6805 for fiscal year ending December 31,2007, was deficient in the following area:
1. Disbursements to Officers (LM-3)
Local 6805 did not include some reimbursements to officers totaling at least $5,000
in the amounts reported in Item 24 (All Officers and Disbursements to Officers). It
appears the union erroneously reported these payments in Item 54 (Other
Disbursements).
The union must report most direct disbursements to Local 6805 officers and some
indirect disbursements made on behalf of its officers in Item 24. A "direct
disbursement" to an officer is a payment made to an officer in the form of cash,
property, goods, services, or other things of value. See the instructions for Item 24
for a discussion of certain direct disbursements to officers that do not have to be
reported in Item 24. An "indirect disbursement" to an officer is a payment to
another party (including a credit card company) for cash, property, goods,
services, or other things of value received by or on behalf of an officer. However,
indirect disbursements for temporary lodging (such as a union check issued to a
hotel) or for transportation by a public carrier (such as an airline) for an officer
traveling on union business should be reported in Item 48 (Office and
Administrative Expense).
We are not requiring that Local 6805 file an amended LM report for 2007 to correct
the deficient items, but Local 6805 has agreed to properly report the deficient items
on all future reports it files with OLMS.
Ms. Connie Hite
December 23,2008
Page 4 of 4
I want to extend my personal appreciation to Steelworkers Local 6805 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. Armando Espinoza, President