U.S. Department of Labor
Office of Labor-Management Standards
Boston District Office
JFK Federal Building, Suite E-365
Boston, MA 02203
(617) 624-6690 Fax: (617) 624-6606
December 4, 2013
Mr. Alan Clee, President
Government Security Officers Local 273
P.O. Box 6724
Boston, MA 02114
Case Number: 110-1117682()
LM Number: 544000
Dear Mr. Clee:
This office has recently completed an audit of Government Security Officers Local 273 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 on December 4, 2013, 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.
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 Government Security Officers Local 273’s 2013 records revealed the following recordkeeping violations:
1. General Expenses and Debit Card Expenses
Local 273 did not retain adequate documentation for expenses and debit card disbursements incured by union officers and employees. The local had expenses totaling at least $2,135.53 for which there were either no validating vouchers/receipts/bills, or the receipts were not documented with the union purpose. For example, the local failed to retain a union voucher to validate the payment of $1,144.50 to a union steward for mileage expenses during an arbitration.
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 273 did not retain adequate documentation for lost wage disbursements
for officers and employees totaling at least $628.18. 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 while Local 273 did retain union lost
wage vouchers for most lost time disbursements, two payments did not have a voucher and
one voucher did not note the date lost wages were incurred.
During the exit interview, I provided a sample of an expense voucher Local 273 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.
3. Receipt Dates Not Recorded
Local 273 did not utilize a financial ledger so the only dates recorded for receipts were the dates of deposit on the monthly bank statements. Union receipt records must show the date of receipt. The date of receipt is required to verify, explain, or clarify amounts required to be reported in Statement B (Receipts and Disbursements) of the LM-3. The LM-3 instructions for Statement B state that the labor organization must record receipts when it actually receives money and disbursements when it actually pays out money. Failure to record the date money was received could result in the union reporting some receipts for a different year than when it actually received them.
Based on your assurance that Government Security Officers Local 273 will retain adequate documentation in the future, OLMS will take no further enforcement action at this time regarding the above 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 LM-3 filed by Government Security Officers Local 273 for fiscal year ending March 31, 2013, was deficient in the following areas:
1. Cash Reconciliation
It appears that the cash figures reported in Item 25 are not the cash figures according to the union’s books as reconciled to the bank statements. The instructions for Item 25 state that the union should obtain account balances from its books as reconciled to the balances shown on the bank statements.
2. Disbursements to Officers
Local 273 did not include some disbursements to officers totaling at least $1,500 in Item 24 (All Officers and Disbursements to Officers). It appears that the local erroneously reported these payments in Item 48 (Office & Administrative Expenses).
The union must report most direct disbursements to Local 273 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).
Local 273 failed to report the disbursement to members of health plan rebates totalying
$23,326 in Item 50 (Benefits). The disbursements were made by check from the local’s
Health Care Account.
Government Security Officers Local 273 must file an amended Form LM-3 for fiscal year ending March 31, 2013, to correct the deficient items discussed above. I 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 6, 2014. Before filing, review the report thoroughly to be sure it is complete, accurate, and signed properly with original signatures.
The audit disclosed the following other violation(s):
1. Inadequate Bonding
The audit revealed a violation of LMRDA Section 502 (Bonding), which requires the 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 273’s officers are currently not bonded, but they must be bonded for at least $5,259. Local 273 should obtain adequate bonding coverage for its officers immediately. Please provide proof of bonding coverage to this office as soon as possible, but not later than January 6, 2014.
I want to extend my personal appreciation to Government Security Officers Local 273 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.
cc: Pat Hayes, Financial Secretary