U.S. Department of Labor
Employment Standards Administration
Office of Labor-Management Standards
Philadelphia District Office
170 S. Independence Mall West
Room 760
Philadelphia, PA 19106
(215)861-4818 Fax: (215)861-4819
June 11, 2007
Mr. Roger Cook, Treasurer-Chairman
Rail Road Signalmen AFL-CIO
Local Lodge 105
23 Sycamore Drive
Mechanicsburg, PA 17050
Re: Case Number
LM File Number: 513-403
Dear Mr. Cook:
This office has recently completed an audit of Rail Road Signalmen LLG 105 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 (LMR A). As discussed during the exit interview with you on June 7, 2007, 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 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 Local Lodge 105's records revealed the following recordkeeping violations:
1. General Reimbursed Expenses
Local Lodge 105 did not retain adequate documentation for reimbursed expenses incurred by Roger Cook. Cook provided the union with convention expense receipts totaling $508.31 but the union issued check dated July 31, 2006 for $544.37 as reimbursement for convention expenses. Local Lodge 105 paid Cook $56.06 without any receipts or other backup documentation.
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. Meal Expenses
Local Lodge 105 did not require officers to submit itemized receipts for meal expenses. The union must maintain itemized receipts provided by restaurants to officers and employees. These itemized receipts are necessary to determine if such disbursements are for union business purposes and to sufficiently fulfill the recordkeeping requirement of LMRDA Section 206.
Local Lodge 105's records of meal expenses did not include written explanations of union business conducted or the names and titles of the persons incurring the restaurant charges. Union records of meal expenses must include written explanations, of the union business conducted and the full names and titles of all persons who incurred the restaurant charges. Also, the records retained must identify the names of the restaurants where the officers or employees incurred meal expenses.
3. Receipt Records
Local Lodge 105 did not maintain all deposit records received from the unions bank. Specifically, deposit slips received from the bank were not routinely maintained. Bank records must be retained for all accounts. The president and treasurer (or corresponding principal officers) of your union, who are required to sign your unions LM report, are responsible for properly maintaining union records.
Based on your assurance that Local Lodge 105 will retain adequate documentation in the future, OLMS will take no further enforcement action at this time regarding the above violations.
Reporting Violation
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 Local Lodge 105 for fiscal year ending December 31, 2006, was deficient in the following area:
Disbursements to Officers
Local Lodge 105 did not include meal disbursements on behalf of officers in the amounts reported Item 24 (All Officers and Disbursements to Officers). It appears the union erroneously reported these payments in Item 54 (Other Disbursements).
The union must report most direct disbursements to Local Lodge 105 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).
I am not requiring that Local Lodge 105 file an amended LM report for 2006 to correct the deficient items, but Local Lodge 105 has agreed to properly report the deficient items on all future reports it files with OLMS.
I want to extend my personal appreciation to Rail Road Signalmen LLG 105 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.
Investigator
cc: James Delozier, President