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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
Cincinnati District Office
36 East Seventh Street, Suite 2550
Cincinnati, OH 45202
(513) 684-6840 Fax: (513) 684-6845

July 6, 2011

Mr. Lou Grieco, President
CWA LU 34157
PO Box 427
Dayton, OH 45409-0427

LM Number: 060-149
Case Number :

 

Dear Mr. Grieco:

This office has recently completed an audit of CWA LU 34157 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 Treasurer Chris Stewart and you on June 29, 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 34157’s 2010 records revealed the following recordkeeping violations:

1. General Expenses and Reimbursed Expenses
CWA LU 34157 did not retain adequate documentation for union expenses totaling at least

$470. For example, documentation for TNG-CWA union officer training registration fees

was not retained to verify the date, amount, vendor, and purpose of the disbursement made.

Additionally, Local 34157 did not retain adequate documentation for reimbursed expenses


Mr. Lou Grieco
July 15, 2011
Page 2 of 3

incurred by Treasurer Stewart totaling at least $135 when Mr. Stewart was reimbursed for
purchasing pizza for a union membership meeting. The audit revealed the union did not
retain an original receipt verifying the date, amount, vendor, and purpose of the
disbursement.

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

2. Disposition of Property
Local 34157 did not maintain an inventory of hats, jackets, and other property it purchased,
sold, or gave away. The union must report the value of any union property on hand at the
beginning and end of each year in Item 30 (Other Assets) of the Form LM-3. The union
must retain an inventory or similar record of property on hand to verify, clarify, and explain
the information that must be reported in Item 30.

The union must record in at least one record the date and amount received from each sale
of union hats, jackets and other items.

3. Receipt and Disbursement Dates not Recorded
Entries in CWA LU 34157’s general ledger reflect the date the union deposited money, but
not the date money was received. Additionally, the union’s general ledger entries reflect
the date the union’s disbursements cleared the bank, but not the date the disbursements
were paid by the union. Union receipt records must show the date of receipt and
disbursement records must show the date the funds are paid out. The date of receipt and
the date of disbursement are required to verify, explain, or clarify amounts required to be
reported in Statement B (Receipts and Disbursements) of the Form LM-3. The Form LM-3
instructions for Statement B state that the labor organization must record receipts when it
actually receives money and disbursements when it actually pays out money. Failure to
record the date money was received or disbursements were paid out could result in the
union reporting some receipts or disbursements for a different year than when the
transactions actually occurred.

4. Information not Recorded in Meeting Minutes
Article V of CWA LU 34157’s Bylaws requires that expenditures in excess of $500 be
authorized by the majority of the membership at a legally constituted meeting and
expenditures in excess of $100 be authorized by the executive board. However, the
minutes of the union’s executive board and membership meetings do not contain any
reference to expenditure approvals. Minutes of all membership or executive board
meetings must report any disbursement authorizations made at those meetings.


Mr. Lou Grieco
July 15, 2011
Page 3 of 3

Based on your assurance that Local 34157 will retain adequate documentation in the future,
OLMS will take no further enforcement action at this time regarding the above violations.

Other Violations

The audit disclosed the following other violation:

1. Inadequate Bonding
The audit revealed a violation of LMRDA Section 502 (Bonding), which requires that
union officers and employees be bonded for no less than 10 percent of the total funds those
individuals or their predecessors handled during the preceding fiscal year.

The audit revealed that the amount of Local 34157’s bond was sufficient. However, the
bond included a deductible, which is a form of self-insurance that fails to meet the bonding
requirements of the LMRDA. Local 34157 obtained a bond without a deductible during
the compliance audit. As a result, OLMS will take no further action regarding this matter.

I want to extend my personal appreciation to CWA LU 34157 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. Chris Stewart, Treasurer