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Office of Labor-Management Standards
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Office of Labor-Management Standards (OLMS)

U.S. Department of Labor
Office of Labor-Management Standards
Seattle District Office
1111 Third Avenue, Suite 605
Seattle, WA 98101
(206) 398-8099 Fax: (206) 398-8090
July 28, 2011

Cathy Hulse, President
NALC Branch 1104
PO Box 1533
Vancouver, WA 98668-1533

Case Number:
LM Number: 090950

Dear Cathy Hulse:

This office has recently completed an audit of NALC Branch 1104 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 July 8, 2011, 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.

Cathy Hulse
August 2, 2011
Page 2 of 3

The audit of Branch 1104’s 2010 records revealed the following recordkeeping violations:

1. General and Reimbursed Expenses
Branch 1104 did not retain adequate documentation for general and reimbursed expenses
incurred by union officers and members totaling at least $14,146. For example, 67 out of 224
disbursements for parking, flowers, supplies, postage, training, airfare, entertainment, per
capita, storage, refreshments, and charitable donations were not supported with a union record
to verify the disbursement.

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. Receipt Dates not Recorded
Entries in Branch 1104 QuickBooks reflect the date the union deposited money, but not the
date money was received. Union receipts 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 Branch 1104 will retain adequate documentation in the future,
OLMS will take no further enforcement action at this time regarding the above violations.

Reporting Violations

Delinquent Form LM-3

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) for the period ending 12/31/2010 is
delinquent. The delinquent Form LM-3 should be submitted to this office at the above
address as soon as possible, but not later than August 1, 2011. Before filing, review the report
thoroughly to be sure it is complete, accurate, and signed properly with original signatures.

Cathy Hulse
August 2, 2011
Page 3 of 3

I want to extend my personal appreciation to NALC Branch 1104 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.