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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
San Francisco District Office
90 7th Street, Suite 2825
San Francisco, CA 94103
(415) 625-2661 Fax: (415) 625-2662






September 28, 2012

Mr. Joseph Upchurch, Business Representative
Painters Local 169
8400 Enterprise Way
Oakland, CA 94621
Case Number:
LM Number: 045392


Dear Mr. Upchurch:

This office has recently completed an audit of Painters Local 169 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 Office Manager Lynn Christopherson on September 24, 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 169’s 2011 records revealed the following recordkeeping violations:

1. Meal Expenses


Local 169’s 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, records of executive board dinners did not include this information. 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.

2. Disposition of Property


Local 169 did not maintain inventories of t-shirts given away to members and other union related individuals. The local also did not maintain any documentation showing the disposition of old computers and equipment. The union must report the value of any union property on hand at the beginning and end of each year in Item 28 of the LM-2. 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 28.

Other Violations

The audit disclosed the following other violation(s):

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 Local 169 shares the responsibility of transporting bank deposits with other Painters locals. The representatives of those other locals are not covered under Local 169’s bond. During the audit, the local agreed to change these deposit procedures, limiting the responsibility to only those members covered under Local 169’s bond. As a result, OLMS will take no further enforcement action regarding this issue.

I want to extend my personal appreciation to Painters Local 169 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. Tim Deal, President