U.S. Department of Labor
Office of Labor-Management Standards
Dallas District Office
A. Maceo Smith Fed. Bldg.
525 Griffin Street, Suite 300
Dallas, TX 75202
(972) 850-2500 Fax: (972) 850-2501
July 7, 2011
Ms. Loretta Thomas, Financial Secretary
Communications Workers of America (CWA)
Local 86782
13146 HWY 110
Whitehouse, TX 75707
Case Number:
LM Number: 030392
Dear Ms. Thomas:
This office has recently completed an audit of Communications Workers 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, President Claretta Allen, Vice-President Johnny Gross, Recording
Secretary Joyce Sheffield, Trustees Kent Gee, Tarodney Wallace, Mark Gilmore, Chief Stewards
Brendan Blakenship, Craig Widemon, Jimmy Wade, Paula Taylor and Sam Buckner on June 13,
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.
The audit of Local 86782’s 2010 records revealed the following recordkeeping violations:
1. General Reimbursed and Credit Card Expenses
Local 86782 did not retain adequate documentation for reimbursed expenses and credit
card expenses incurred by President Claretta Allen, Vice-President Johnny Gross and
Ms. Loretta Thomas
July 7, 2011
Page 2 of 4
Financial Secretary Loretta Thomas totaling at least $6,428. For example, transactions
conducted at Wal-Mart, Albertson’s, Cityview Florist, Broassang’s Flowers, Sweet Sue’s
Restaurant, China King, Carreta’s Café, Fat Catz Louisiana Kitchen and Ryan’s had no
supporting documentation.
As 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 86782 did not require officers and employees to submit itemized receipts for meal
expenses totaling at least $1298. 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 86782 records of meal expenses did not always include written explanations of union
business conducted or the names and titles of the persons incurring the restaurant charges.
For example, meals purchased at Sweet Sue’s Restaurant, China King, Carreta’s Café, Fat
Catz Louisiana Kitchen, Ryan’s, Whataburger, Chick-Fil-A, Popeye’s, and Luby’s Café
had no supporting documentation. 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. Lost Wages
Local 86782 did not retain adequate documentation for lost wage reimbursement payments
to any of its principal financial officers and employees for the entire audit period. 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 Local 86782
created a lost time tracking voucher that identified the officer’s name, position, date of lost
wages, total hours and reason; however, they did not use or maintain the voucher. The
payment document record in which the union used did not specify the date for which lost
wages incurred, the number of hours lost each date, and a description of the union business
conducted.
Ms. Loretta Thomas
July 7, 2011
Page 3 of 4
During the exit interview, I provided examples in which Local 86782 may use to satisfy
this requirement. The example identified the type of information and documentation that
the local must maintain for lost wages and other officer expenses.
4. General Receipt Records
Local 86782 failed to maintain proper records and adequate documentation for income
received for the rental of its union hall. Union receipts records must include an adequate
identification of all money the union receives. The records should show the date and
amount received, and the source of the money.
The proper maintenance of union records is the personal responsibility of the individuals who are
required to file Local 86782's LM report. You should be aware that under the provisions of
Section 209(a) of the LMRDA and Section 3571 of Title 18 of the U.S. Code, willful failure to
maintain records can result in a fine of up to $100,000 or imprisonment for not more than one
year, or both. Under the provisions of Section 209(c) of the LMRDA and Section 3571 of Title
18 of the U.S. Code, willful destruction or falsification of records can result in a fine of up to
$100,000 or imprisonment for not more than one year, or both. The penalties provided in
Section 209(c) and Section 3571 of Title 18 apply to any person who caused the violations, not
just the individuals who are responsible for filing the union’s LM report.
Reporting 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-2) filed by Local 86782 for the fiscal year ended
September 30, 2010, was deficient in the following areas:
1. Failure to File Constitution and Bylaws
The audit disclosed a violation of LMRDA Section 201(a), which requires that a union
submit a copy of its revised constitution and bylaws with its LM report when it makes
changes to its constitution or bylaws. Local 86782 amended its constitution and bylaws in
June 2009, but did not file a copy with its LM report for that year. A copy of the amended
constitution was obtained during the course of the audit; therefore, no further action will be
taken regarding this violation.
2. Disbursements to Officers and Employees
Local 86782 did not report all lost wage reimbursements to its officers and employees in
Schedule 11 (All Officers and Disbursements to Officers) and Schedule 12 (Disbursements
to Employees). It appears that the local erroneously reported these payments in Schedules
15 through 19.
The union must report in Column F of Schedules 11 and 12 (Disbursements for Official
Ms. Loretta Thomas
July 7, 2011
Page 4 of 4
Business) direct disbursements to officers and employees for reimbursement of expenses
They incurred while conducting union business. In addition, the union must report in
Column F of Schedules 11 and 12 indirect disbursements made to another party (such as a
credit card company) for business expenses union personnel incur. However, the union
must report in Schedules 15 through 19 indirect disbursements for business expenses union
personnel incur for transportation by public carrier (such as an airline) and for temporary
lodging expenses while traveling on union business. The union must report in Column G
(Other Disbursements) of Schedules 11 and 12 any direct or indirect disbursements to
union personnel for expenses not necessary for conducting union business.
3. General Receipts Record
Local 86782 failed to report any rental income figures on Statement B, line item 42 of its
LM report. Union receipts records must include an adequate identification of all money the
union receives. The records should show the date and amount received, and the source of
the money.
Local 86782 must file an amended Form LM-2 for the fiscal year ended September 30, 2010, to
correct the deficient items discussed above. I explained to you the filing procedures and the
availability of filing software on the OLMS website (www.olms.dol.gov). The amended Form
LM-2 must be electronically filed as soon as possible, but not later than July 21, 2011. Before
filing, review the report thoroughly to be sure it is complete and accurate, and properly signed
with electronic signatures.
I want to extend my personal appreciation to Communications Workers of America Local 86782
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
cc:
President Claretta Allen, Vice-President Johnny Gross, Recording Secretary Joyce
Sheffield, Senior Trustee Kent Gee, Trustee Mark Gilmore, Trustee Tarodney Wallace,
Plant Chief Steward Brendan Blakenship, 1st Shift Chief Steward Sam Buckner, 2nd Shift
Chief Steward Craig Widemon, 2nd Shift Assistant Chief Paula Taylor and 3rd Shift Chief
Steward Jimmy Wade.