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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
Los Angeles District Office
915 Wilshire Boulevard, Suite 910
Los Angeles, CA 90017
(213) 534-6405 Fax: (213) 534-6413


August 1, 2011



Mr. Sean Pierce, Treasurer
Service Employees AFL-CIO LU 280
1838 E. Huntington Dr.
Duarte, CA 91010
Case Number: | | | | | | | | | | | | |
LM Number: 039653


Dear Mr. Pierce:

This office has recently completed an audit of Service Employees AFL-CIO LU 280 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 28, 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 Violation

Title II of the LMRDA establishes certain reporting and recordkeeping requirements. Section 206 requires, among other things, that adequate records be maintained for at least 5 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, all records used or received in the course of union business must be retained. This includes, in the case of disbursements, not only the retention of original bills, invoices, receipts, and vouchers, but also adequate additional documentation, if necessary, 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 note can be written on it providing the additional information. An exception may be made only in those cases where 1) other equally descriptive documentation has been maintained, and 2) there is evidence of actual oversight and control over disbursements.

In the case of receipts, the date, amount, purpose, and source of all money received by the union must be recorded in at least one union record. Bank records must also be retained for all accounts.

The audit of Local 280’s 2010 records revealed the following recordkeeping violation:

Other

Local 280 failed to maintain records necessary to verify and explain or clarify the accuracy or completeness of reports required to be filed with the Secretary of Labor. Specifically, adequate documentation was not retained for the Union Federal Bank – Strike Fund account.

As agreed, provided that Local 280 maintains adequate documentation as discussed above in the future, no additional enforcement action will be taken regarding this violation.

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-2 filed by Local 280 for fiscal year ending September 30, 2010, was deficient in the following area:

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 280 amended its constitution and bylaws in 2007, but did not file a copy with its LM report for that year.

Local 280 has now filed a copy of its constitution and bylaws.

Other Issue

The audit disclosed the following other issues:

Use of Signature Stamp

During the audit, you advised that it is Local 280’s practice for former Treasurer | | | | | | | | | | | | | | | | | | to sign all union checks and to sometimes stamp the signature of President Richard Castro on union checks. Article VI - Part A, Section 10 and Part C, Section 8 of Local 280’s bylaws requires that checks be signed by the president, secretary, and/or a designated vice president. The two signature requirement is an effective internal control of union funds. Its purpose is to attest to the authenticity of a completed document already signed. However, the use of a signature stamp for the second signer does not attest to the authenticity of the completed check, and negates the purpose of the two signature requirement. OLMS recommends that Local 280 review these procedures to improve internal control of union funds.

I want to extend my personal appreciation to Service Employees AFL-CIO LU 280 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: Richard Castro, President