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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
Minneapolis Resident Investigator Office
900 Second Avenue South, Suite 450
Minneapolis, MN 55402
(612) 370-3111 Fax: (612) 370-3107
June 6, 2011

Mr. Steven Lewsader, President
Communications Workers AFL-CIO Local 7201
75 So. Owasso Blvd
Little Canada, MN 55117

Case Number:
LM Number: 036752

Dear Mr. Lewsader:

This office has recently completed an audit of Communications Workers AFL-CIO Local 7201
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 and Treasurer Joanie Siegfried on April 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 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 7201’s 2010 records revealed the following recordkeeping violations:

1. Meal Expense Charged to Credit Card

Mr. Steven Lewsader
June 6, 2011
Page 2 of 3

Local 7201 did not retain adequate documentation for a credit card expense incurred by Ms.
Siegfried totaling $345 at Kozlak’s Royal Oak Restaurant. Ms. Siegfried retained an
itemized receipt for the expense and the notation on a voucher indicated that expense was for
“Mtgs.” Such a description does not sufficiently identify the union business conducted that
required the expense be incurred. In addition, Ms. Siegfried did not identify who was present
for the meal. 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. During the exit interview, Ms. Siegfried
explained that the meal was for an executive board meeting.

2. Lost Wages
Local 7201 did not retain adequate documentation for most of the lost wage reimbursement
payments to you and Vice President Christy Kuehn totaling at least $52,000. Records must
be maintained in support of lost wage claims that identify each date lost wages were incurred,
the number of hours lost on each date, the applicable rate of pay, and a description of the
union business conducted. The audit found that you and Ms. Kuehn submitted vouchers that
identified the number of hours lost on each date and the rate of pay claimed. Further, you
submitted check stubs from Qwest Company show that you lost wages from the company
during the periods of the lost wage claims or during the weeks of the lost wage claims.
However, neither you nor Ms. Kuehn identified on the lost wage vouchers the union business
conducted that required the lost wages be incurred.

During the exit interview, I provided you with an OLMS compliance tip regarding lost time
payments. The tip identifies the type of information and documentation that the local must
maintain for lost wages.

Based on your assurance that Local 7201 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-2) filed by Local 7201 for the fiscal year ended
September 30, 2010, was deficient in the following area:

Disbursements to Officers

Local 7201 did not include some direct disbursements to officers totaling at least $1,228 in the
amounts reported in Column F (Disbursements for Official Business) of Schedule 11 (All
Officers and Disbursements to Officers). Expense vouchers show that officers were paid per
diem for meals and incidental expenses related to attendance at conferences and were reimbursed
for various expenses such as postage and small office supplies. During the exit interview, Ms.


Mr. Steven Lewsader
June 6, 2011
Page 3 of 3

Siegfried confirmed that she erroneously included per diem payments for meals and incidental
expenses in the amounts reported in Column E (Allowances) of Schedule 11. The LM-2
instructions for Column F identify examples of disbursements that are required to be included in
Column F, and include “expenses that were reimbursed directly to an officer.” As noted in the
LM-2 instructions, allowances to be reported in Column E include those allowances made on a
daily, weekly, monthly or other periodic basis, but do not include allowances paid on the basis of
mileage or meals (which are required to be reported in Columns F or G).

Further, Ms. Siegfried was indirectly reimbursed for a $345 meal expense to Kozlak’s Royal Oak
Restaurant (mentioned above) which was not included in the amount reported in Column F of the
Schedule 11 next to Ms. Siegfried’s name. During the exit interview Ms. Siegfried confirmed
that the meal expense was erroneously reported in Schedules 15 through 19.

Direct disbursements to officers and employees for reimbursement of expenses they incurred
while conducting union business must be reported in Column F of Schedules 11 and 12
(Disbursements for Official Business). In addition, indirect disbursements made to another party
(such as a credit card company) for business expenses union personnel incur must be reported in
Column F of Schedules 11 and 12. However, indirect disbursements for business expenses union
personnel incur for transportation by public carrier (such as an airline) and for temporary lodging
expenses while traveling on union business must be reported in Schedules 15 through 19. Any
direct or indirect disbursements to union personnel for expenses not necessary for conducting
union business must be reported in Column G (Other Disbursements) of Schedules 11 and 12.

I am not requiring that Local 7201 file an amended LM report for 2010 to correct the deficient
items, but Local 7201 has agreed to properly report the deficient items on all future reports it
files with OLMS.

I want to extend my personal appreciation to Communications Workers Local 7201 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: Ms. Joanie Siegfried, Treasurer