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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
Buffalo District Office
130 South Elmwood Street, Suite 510
Buffalo, NY 14202-2465
(716) 842-2900 Fax: (716) 842-2901







November 8, 2012



Mr. Stefan Krueger, Secretary-Treasurer
Teamsters Local Union 126

Case Number:
LM Number: 027370


Dear Mr. Krueger:

This office has recently completed an audit of Teamsters Local Union 126 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 President Angelo Cipollo on November 6, 2012, 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 126’s 2011 records revealed the following recordkeeping violations:

1. Lost Wages


Local 126 did not retain adequate documentation for lost wage reimbursement payments to former president in at least 46 instances. The union must maintain records 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 OLMS audit found that Local 126 maintained check stub carbons which did not detail hours and rates of pay, nor adequately describe the union business performed.

During the exit interview, I provided a compliance tip sheet, Union Lost Time Payments, that contained a sample of an expense voucher Local 126 may use to satisfy this requirement. The sample identifies the type of information and documentation that the local must maintain for lost wages and other officer expenses.

2. Lack of Salary Authorization


Local 126 did not maintain records to verify that the salaries reported in Item 24 (All Officer and Disbursements to Officers) of the LM-3 was the authorized amount and therefore was correctly reported. 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 126 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 Labor Organization Annual Report (Form LM-3) filed by Local 126 for the fiscal year ended December 31, 2011, 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. However, Local 126 did not submit a copy of its bylaws to OLMS.

Local 126 provided a copy of its current constitution and bylaws during the CAP.

Other Issue

Expense Policy

As I discussed during the exit interview with you and President Angelo Cipollo, the audit revealed that Local 126 does not have a clear policy regarding the types of expenses personnel may claim for reimbursement. OLMS recommends that unions adopt written guidelines concerning such matters.
I want to extend my personal appreciation to Teamsters Local Union 126 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. Angello Cipollo, President