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U.S. Department of Labor
Office of Labor-Management Standards
Philadelphia District Office
Suite 760 West, The Curtis Center
170 S. Independence Mall West
Philadelphia, PA 191 06
(215)861-4818 Fax: (215)861-4819

July 21, 2010

Mr. Albert Lipscomb, Treasurer
Painters Local 1970
328 Tree Street
Philadelphia, PA 19148

Dear Mr. Lipscomb:

This office has recently completed an audit of Painters Local 1970 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 22, 2010, 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.

The audit of Local 1970's 2009 records revealed the following recordkeeping violations:
1. Disbursement Documentation

Local 1970 did not retain adequate documentation for one disbursement. Specifically, no receipt was maintained for a December 5, 2008 Christmas Party Bar Bill paid to District Council 21 totaling $3,080.

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. Lack of Allowance Authorization

Local 1970 did not maintain records to verify that the allowances reported in Item 24 (All officer and Disbursements to Officers) of the LM-3 was the authorized amount and therefore was correctly reported. The union must keep a record, such as meeting minutes, to show the current allowances authorized by the entity or individual in the union with the authority to establish allowances. During the course of the audit, you provided meeting minutes documenting the membership's approval of officer allowances.

Based on your assurance that Local 1970 will retain adequate documentation in the future, OLMS will take no further enforcement action at this time regarding the above violations.

I want to extend my personal appreciation to Painters Local 1970 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.

Sincerely,

Investigator