U.S. Department of Labor Employment Standards Administration
Office of Labor-Management Standards
Pittsburgh District Office
1000 Liberty Avenue
Room 1411
Pittsburgh, PA 15222
(41 2)395-6925 Fax: (41 2)395-5409
May 29, 2008
Mr. Greg Cameron, Treasurer
Service Employees
LU 553
PO Box 178
Ranson, WV 25438 .
LM File Number 512-673
Case Number: -
Dear Mr. Cameron:
This office has recently completed an audit of SEIU LU 553 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 (LNIRDA). As discussed during the exit interview with you on May 16,2008, 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 Local 553's 2005 and 2006 records revealed the following recordkeeping violations :
1. General and Reimbursed Expenses
Local 553 did not retain adequate documentation for general and reimbursed
expenses incurred totaling at least $2,235. For example, expense check #for I
$1,234.82 was written to Staples on July 11,2005 for the purchase of a computer.
Also, check # for $1,000 was written on December 19,2006 to d for
the Christmas Party. However no documentation was retained in support of the
payments.As previously 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. Lost Wages
Local 553 did not retain adequate documentation for lost wage reimbursement
payments. 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 553 has maintained only some hourly rates on check
stubs. There are no vouchers and only vague descriptions of the union business on
the check stubs.
A sample of an expense voucher Local 553 may use to satisfy this requirement is
enclosed. The sample identifies the type of information and documentation that
the local must maintain for lost wages and other officer expenses.
Based on your assurance that Local 553 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 553 for fiscal years ending December 31,2005 and 2006, were deficient in the
following areas:
1. Disbursements to Officers
Local 553 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.
The union must report most direct disbursements to Local 553 officers and some
indirect disbursements made on behalf of its officers in Item 24. A "direct
disbursement" to an officer is a payment made to an officer in the form of cash,
property, goods, services, or other things of value. See the instructions for Item 24
for a discussion of certain direct disbursements to officers that do not have to be
reported in Item 24. An "indirect disbursement" to an officer is a payment to
another party (including a credit card company) for cash, property, goods,
services, or other things of value received by or on behalf of an officer. However,
indirect disbursements for temporary lodging (such as a union check issued to a
hotel) or for transportation by a public carrier (such as an airline) for an officer
traveling on union business should be reported in Item 48 (Office and
Administrative Expense).
2. Failure to File Bylaws
The audit disclosed a violation of LMRDA Section 201(a), which requires that a
union submit a copy of its bylaws with its LM report. Local 553 has never filed a
copy of its bylaws in the past.
Local 553 has now filed a copy of its constitution and bylaws.
I am not requiring that Local 553 file amended LM reports for 2005 and 2006 to correct
the deficient items, but Local 553 has agreed to properly report the deficient items on all
future reports it files with OLMS.
Other Violations
The audit disclosed the following other violation:
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 local should have been bonded for at least $3,900. LU 553 currently does not have bonding. OLMS requires that you have proof of adequate bonding, as you agreed, sent to our office by June 5,2008.
Other Issues
1. Expense Policy
As I discussed during the exit interview with you, the audit revealed that Local 553 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. Signing Blank Checks
During the audit, you advised that President Randall Conrad signs blank checks. Your union's bylaws require that all checks be signed by the president and 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. However, signing a blank check in advance does not attest to the authenticity of a completed check, and negates the purpose of the two signature requirement. OLMS recommends that Local 553 review these procedures to improve internal control of union funds.
I want to extend my personal appreciation to SEIU LU 553 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,
Enclosure