U.S. Department of Labor
Employment Standards Administration
Office of Labor-Management Standards
San Francisco District Office
90 7th Street
Suite 18-100
San Francisco, CA 94103
(415) 625-2661 Fax:(415) 625-2662
September 9, 2009
Mr. Jeff Hayes Jr., Secretary-Treasurer
Laborers Local 886
8400 Enterprise Way
Ste 110
Oakland, CA 94621
LM File Number: 040-391
Case Number: ||||||||||
Dear Mr. Hayes Jr.:
This office has recently completed an audit of Laborers Local 886 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, Business Manager Ken Lusby and Office
Manager Josephine Duenas on September 2, 2009, 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.
The audit disclosed the following:
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.
1. Accounts Receivable
The audit of Local 886’s 2008 records revealed that work papers are discarded. For
example, the union did not retain work papers to substantiate $24,832 in accounts
receivable. When the work paper was re-created during the audit, the amount
differed by $1,050. Based on your assurance that Local 886 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-2 filed by Local 886 for fiscal year ending December 31, 2008, was deficient in the following areas:
1. Disbursements to Officers
Local 886 did not include payments to officers and employees totaling at least $2,000 in Schedule 11 (All Officers and Disbursements to Officers) and Schedule 12 (Disbursements to Employees).
The union must report in Column F of Schedules 11 and 12 (Disbursements for Official Business) direct disbursements to officers and employees for reimbursement of expenses they incurred while conducting union business. In addition, the union must report in Column F of Schedules 11 and 12 indirect disbursements made to another party (such as a credit card company) for business expenses union personnel incur. However, the union must report in Schedules 15 through 19 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. The union must report in Column G (Other Disbursements) of Schedules 11 and 12 any direct or indirect disbursements to union personnel for expenses not necessary for conducting union business.
2. Other Receipts
Local 886 did not report the correct amounts reimbursed by a third party fund.
Itemized and non-itemized amounts were over-reported by nearly $2,500 on
Schedule 14.
I am not requiring that Local 886 file an amended LM report for 2008 to correct the
deficient items, but Local 886 has agreed to properly report the deficient items on
all future reports it files with OLMS.
I want to extend my personal appreciation to Laborers Local 886 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,
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Investigator
cc: Mr. Ken Lusby, Business Manager