Office of Labor-Management Standards (OLMS)
Employment Standards Administration
Office of Labor-Management Standards
Buffalo District Office
130 South Eimwood Street
Buffalo, NY 14202;2465
(716) 842-2900 Fax: (716) 842-2901
Mr. Michael Geddes, President
7563 Stone Road
Whitesboro, NY 13492
LM File Number 065-281
Case Number: -
Dear Mr. Geddes:
This office has recently completed an audit of Machinists Lodge 2310 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 Secretary Treasurer Gary Pecorello, and Grand Lodge Auditor Jack Hecker on June 19,2008, 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.
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 Lodge 2310's 2007 records revealed the following recordkeeping violations:
1. General and Credit Card Expenses
Lodge 2310 did not retain adequate documentation for general expenses and credit card expenses incurred by union officers and employees totaling at least $949.54. For example, documentation was not retained for disbursements made to VFW Post 9591 for meeting hall rental. Also, no original receipt or invoice was retained for a payment made to Symantec using the union's credit card. 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
Lodge 2310 did not retain adequate documentation for lost wage reimbursement payments to union officers and employees totaling at least $261.74. 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 Lodge 2310 did not maintain records in support of lost wage reimbursement
During the exit interview, I provided a sample of an expense voucher Lodge 2310
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.
Based on your assurance that Lodge 2310 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 Form LM-3 filed by Lodge 2310 for fiscal year ending December 31,2007, was deficient in that:
Disbursements to Officers
Lodge 2310 must report most direct disbursements to its officers and some indirect disbursements made on behalf of its officers in Item 24 (All Officers and Disbursements to Officers). 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). Lodge 2310 did not report Trustee Debbie White and payments made to her during the audit period in Item 24.
I am not requiring that Lodge 2310 file an amended LM report for 2007 to correct the deficient items, but Lodge 2310 has agreed to properly report the deficient items on all future reports it files with OLMS.
Composition of Executive Board
Lodge 2310's current bylaws state that the two chief stewards serve on the union's
executive board. The audit revealed that these individuals do not function in this
capacity. Lodge 2310 was advised to clarify the situation in the future. If the chief steward positions are on the executive board, these individuals would need to be listed as officers on the union's LM-3 report in Item 24.
I want to extend my personal appreciation to Machinists Lodge 2310 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: Gary Pecorello, Secretary Treasurer
Jack Hecker, Grand Lodge Auditor