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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
July 29, 2011

Mr. Ernie Boland, Treasurer
Sheet Metal Workers, AFL-CIO Local 267
378 Glenda Lane
Ringgold, GA 30736

Case Number:
LM Number: 063556

Dear Mr. Boland:

This office has recently completed an audit of Sheet Metal Workers Local 267 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 14, 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 267’s 2010 records revealed the following recordkeeping violations:

1. General Expenses
Local 267 did not retain adequate documentation for expenses totaling at least $200. For
example, there were some receipts missing from a vendor.


Mr. Ernie Boland
August 2, 2011
Page 2 of 3

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. Meal Expenses
Local 267 did not require officers and employees to submit itemized receipts for meal
expenses totaling at least $200. The union must maintain itemized receipts provided by
restaurants to officers and employees. These itemized receipts are necessary to determine
if such disbursements are for union business purposes and to sufficiently fulfill the
recordkeeping requirement of LMRDA Section 206.

Local 267 records of meal expenses did not always include written explanations of union
business conducted or the names and titles of the persons incurring the restaurant charges.
For example, the local purchased meals at Wally’s for membership meetings. 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.
Also, the records retained must identify the names of the restaurants where the officers or
employees incurred meal expenses.

3. Receipt Dates not Recorded
Entries in Local 267’s receipts journal reflect the date the union deposited money, but not
the date money was received. Union receipts records 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 receives
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.

4. Lack of Salary Authorization
Local 267 did not maintain records to verify the officer salaries. The union must keep a
record, such as meeting minutes, to show the current salary authorized by the entity or
individual in the union with the authority to establish salaries.

Based on your assurance that Local 267 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


Mr. Ernie Boland
August 2, 2011
Page 3 of 3

Labor Organization Annual Report (Form LM-3) filed by Local 267 for the fiscal year ended
December 31, 2009 was deficient in that:

1. Cash Reconciliation
It appears that the cash figures reported in Item 25 (Cash) are not the figures according to
Local 267’s books after reconciliation to the bank statements. The instructions for Item 25
state that the union should obtain account balances from its books as reconciled to the
balances shown on bank statements.

2. Failure to File LM Report
The audit disclosed a violation of LMRDA Section 201(b), which requires that a union
submit a copy of its financial report (LM report) within 90 days after the end of the union’s
fiscal year. Local 267 did not file its LM report for December 31, 2010 within the 90 days.

Local 267 has now filed its LM-4 report for December 31, 2010.

Local 267 must file an amended Form LM-3 for the fiscal year ended December 31, 2009
to correct the deficient items discussed above. I provided you with a blank form and
instructions, and advised you that the reporting forms and instructions are available on the
OLMS website (www.olms.dol.gov).
this office at the above address as soon as possible, but not later than August 12, 2011.
The amended Form LM-3 should be submitted to
Before filing, review the report thoroughly to be sure it is complete, accurate, and signed
properly with original signatures.

I want to extend my personal appreciation to Sheet Metal Workers Local 267 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