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

U.S. Department of Labor
Office of Labor-Management Standards
Nashville District Office
233 Cumberland Bend Drive, Suite 110
Nashville, TN 37228
(615) 736-5906 Fax: (615) 736-7148

April 5, 2011

Ms. Dora Hamilton, International Union Auditor
Auto Workers AFL-CIO Local 1086
3030 South 9th Street, Suite 2GB
Kalamazoo, MI 49009

Case Number:
LM Number: 034088

Dear Ms. Hamilton:

This office has recently completed an audit of Auto Workers AFL-CIO Local 1086 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 31, 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.

The audit of Local 1086’s 2008 records revealed the following recordkeeping violations:

General Reimbursed Expenses

Local 1086 did not retain adequate documentation for reimbursed expenses incurred by the
financial secretary totaling at least $400. For example, the financial secretary received
reimbursement for lodging expenses, but a receipt was not attached to the voucher. As
noted above, labor organizations must retain original receipts, bills, and vouchers for all
disbursements. The president and treasurer (or corresponding principal officers) of your


Ms. Dora Hamilton
April 5, 2011
Page 2 of 2

union, who are required to sign your union’s LM report, are responsible for properly
maintaining union records.

Based on your assurance that Local 1086 will retain adequate documentation in the future,
OLMS will take no further enforcement action at this time regarding the above violations.

Reporting Violation

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 1086 for the fiscal year ended
December 31, 2008, was deficient in that:

Disbursements to Officers (LM-3)

Local 1086 did not include some reimbursements to officers totaling at least $1,000 in the
amounts reported 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 Local 1086 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).

I am not requiring that Local 1086 file an amended LM report for 2008 to correct the deficient
items, but Local 1086 has agreed to properly report the deficient items on all future reports it
files with OLMS.

I want to extend my personal appreciation to Auto Workers AFL-CIO Local 1086 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