Office of Labor-Management Standards (OLMS)
U.S. Department of Labor
Employment Standards Administration
Office of Labor-Management Standards
Los Angeles District Office
915 Wilshire Boulevard
Los Angeles, CA 90017
(213) 534-6405 Fax:(213) 534-6413
August 12, 2008
Ms. Joan Gifford, Secretary-Treasurer
Communication Workers of America Council
PO Box 70635
Pasadena, CA 91117-7635
LM File Number: 069-899
Case Number: ||||||||||
Dear Ms. Gifford:
This office has recently completed an audit of Communication Workers of America (CWA) Council 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 July 2, 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.
The audit disclosed the following:
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.
The audit of CWA Council’s 2007 records revealed the following recordkeeping violation:
Receipt Dates not Recorded
Entries in CWA Council’s receipts journal reflect the date the union deposited money, but not the date money was received. Union receipts must show the date of receipt. The date of receipt is required to verify, explain, or clarify amounts required to be reported in Statement B (Receipts and Disbursements) of the LM-3. The LM-3 instructions for Statement B state that the labor organization must record receipts when it actually received money and disbursements when it actually pays out money. Failure to record the date money was received could result in the union reporting some receipts for a different year than when it actually received them.
Based on your assurance that CWA Council will retain adequate documentation in the future, OLMS will take no further enforcement action at the time regarding the above 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 CWA Council for fiscal year ending September 30, 2007, was deficient in the following areas:
1. Disbursements to Officers
CWA Council did not include some reimbursements to officers totaling at least $668 in the amounts reported in Item 24 (All Officers and Disbursements to Officers). It appears the union erroneously reported these payments in Item 48.
The union must report most direct disbursements to CWA Council 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).
2. 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 and bylaws. CWA Council amended its constitution and bylaws in 2006, but did not file a copy of its LM report for that year.
CWA Council has now filed a copy of its constitution and bylaws.
I am not requiring that CWA Council file an amended LM report for 2007 to correct the deficient items, but CWA Council has agreed to properly report the deficient items on all future reports it files with OLMS.
I want to extend my personal appreciation to Communication Workers of America Council for the cooperation and courtesy extended during this compliance audit. I strongly recommend that you make sure this letter and the compliance materials provided to you are passed on to future officers. If we can provide any additional assistance, please do not hesitate to call.
cc: Mr. Phil Hanneman, Chair