U.S. Department of Labor Employment Standards Administration
Office of Labor-Management Standards
Cleveland District Office
1240 East Ninth Street
Room 831
Cleveland, OH 441 99
(21 6)357-5455 Fax: (21 6)357-5425
December 30, 2008
Mr. Thomas Craig, Secretary-Treasurer
Locomotive Engineers, IBT
Division 607
12081 Woodridge Drive
North Royalton, OH 44133
LM File Number: 012-779
Case Number: -
Dear Mr. Craig:
This office has recently completed an audit of BLET Division 607 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 a discussed during the exit interview with you on December 10,2008, 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 Division 607's 2007 records revealed the following recordkeeping violations:
Meal Expenses
Division 607 did not require officers and employees to submit itemized receipts for
meal expenses totaling at least $450.00. 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.
Division 607 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 charge. For example, the receipt for Local Chairman Maher's lunch with
about ETS on May 22,2007 only lists the date and the amount of the meal.
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.
Based on your assurance that Division 607 will retain adequate documentation in the future, OLMS will take no further enforcement action at this time regarding the above violation.
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
Division 607 for fiscal year ending December 31,2007, was deficient in the following
areas:
Disbursements to Officers
Division 607 did not report the names of some officers and the total amounts of
payments to them or on their behalf in Item 24 (All Officers and Disbursements to
Officers). The union must report in Item 24 all persons who held office during the year,
regardless of whether they received any payments from the union.
Division 607 must file an amended Form LM-3 for fiscal year ending December 31, 2007,
to correct the deficient item 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). The amended Form LM-3 should be submitted
to this office at the above address as soon as possible, but not later than January 16,
2009. Before filing, review the report thoroughly to be sure it is complete, accurate, and
signed properly with original signatures.
Other Issues
1. Expense Policy
As I discussed during the exit interview with you, the audit revealed that Division
607 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.
2. Single Signature on Checks
During the audit, Secretary-Treasurer Craig advised that it is Division 607's
practice for him alone to sign all union checks. The Local Division Rules in Section
13(a) of the BLET Constitution require that checks be signed by the Secretary-
Treasurer along with either the President, Vice President or Alternate Secretary-
Treasurer. The two signature requirement is an effective internal control of union
funds. Its purpose is to attest to the authenticity of a completed document already
signed. The use of only one signatory does not attest to the authenticity of a
completed document already signed. The use of only one signatory does not attest
to the authenticity of the completed check, and negates the purpose of the two
signature requirement. OLMS recommends that Division 607 review its check
writing procedures to improve its internal control of union funds.
I want to extend my personal appreciation to BLET Division 607 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,
cc: Patrick Maher, Local Chairman, BLET Division 607