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Office of Labor-Management Standards (OLMS)

U.S. Department of Labor
Employment Standards Administration
Office of Labor-Management Standards
Resident Investigative Office
950 22nd Street North, Suite 607
Birmingham, Alabama 35203
(205)731-0239 Fax: (205)731-0305

January 12, 2007

Kenneth Holloway
PACE, LU 692
Post Office Box 430
Childersburg, Alabama 35044-0430

Re: Case Number

Dear Mr. Ferris:

This office has recently completed Energy (PACE), Local Union 692, determine your organization's compliance with the provisions of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). As discussed on December 14, 2006, during the exit recording and financial secretary, CAP. The matters listed below are since the audit conducted was limited in audit of Paper, Allied-Industrial, Chemical and under the Compliance Audit Program (CAP) to compliance with the provisions of the Labor Management Act of 1959 (LMRDA). As discussed on interview with Karen "Jane" Guy, the local's recording and financial secretary, the following problems were disclosed during the not an exhaustive list of all possible problem areas limited in scope:

Record Keeping Violations

Title II of the LMRDA establishes Section 206 requires, among other least five years by which each receipt balances, can be verified, explain, and clarified. As a general rule, all records used or received in the course of union business must be retained. This includes, in the case of disbursements, not only the retention but also adequate additional documentation 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 are written on it providing the additional those cases where (1) other equally descriptive documentation has been maintained, and (2) there is evidence of actual following record \ keeping deficient records:

Duplicate Receipts

The local does not issue or retain receipts. For example, the union regularly rents the union hall to individuals or organization not affiliated with the union. When rental money is accepted, receipts are not issue to substantiate the transaction. Union receipts records must include an adequate identification of each receipt of money. The records show the exact date the money was received, the identity of the sources of the money, and the individual amount received from each source.

As agreed, provided that Local 694 maintains adequate documentation as discussed above in the future, no additional enforcement action will be taken regarding these violations.

Reporting Violations

The CAP 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 LM-3 report filed by Local 692 for fiscal year ending December 31, 2005, was deficient in the in the following areas:

LM-3 Item 24 (Payments to Officer)

The name of one officer was not reported in Item 24 of the LM-3 report (All Officers and Disbursements to Officers). All persons who held office during the year must be reported in Item 24 regardless of whether or not they received an salary or compensation from the union. In this particular instance, who according to Secretary Guy served as a trustee, was not listed in the report.

Fixed Assets

In Item 29 of the LM-3 report for fiscal year ending December 31, 2005, fixed assets were indicated as being cumulatively valued at $35,980. Upon questioning, Secretary Guy stated that at some point in the past, someone developed that figure and it has been reported ever since. In reviewing the LM-3 reports, I can attest that that figure has been used since at least fiscal year ending December 31, 2003. In reviewing the union's records, supporting documentation exists that demonstrates that the union owns property in excess of $100,000. All fixed assets, including property owned, must be reported in Item 29.

Other Issues

During the audit, I advised Secretary Guy that authorization for the salary amounts paid to union officers could not be found in union records. While she referred me to the PACE Bylaws, Article VI Section 4, the provision therein cited was insufficient to comport with the requirements of for the local's "President, Executive Vice-President, and Recording/ Corresponding/ Financial Secretary." I recommend that Local 692 document the authorized salary amounts in its bylaws, when updated internal document (following discussion in the appropriate memembership and/or executive board meeting). When the authorized salary amounts have been recorded in union records, I would appreciate it if you would forward a copy of the record documenting the authorization to me at the above address.

I want to extend my personal appreciation to PACE, Local 692, for the cooperation and courtesy extended during this complaince audit. I strongly recommend taht you make sure this letter and the compliance to future officers. If we can provide any additional assistance, please do not hesitate to call.

cc: Karen "Jane" Guy, Recording