U.S. Department of Labor Office of Labor-Management Standards
Philadelphia-Pittsburgh District Office
Suite 760W
170 S. Independence Mall West Philadelphia, PA 19106
(215) 861-4818 Fax: (215) 861-4819
May 26, 2016
Mr. Timothy Mulvenna, Treasurer
National Association of Letter Carriers (NALC) Branch 157
9607 James Street
Philadelphia, PA 19114
Case Number: 140-6007077
LM Number: 081-043
Dear Mr. Mulvenna:
This office has recently completed an audit of National Association of Letter Carriers (NALC) Branch 157 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 Randy Zebin and Vice President Joseph Rodgers on May 23, 2016, 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 Branch 157’s 2014 records revealed the following recordkeeping violations:
1. Meal Expenses
A labor organization 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.
While Branch 157 did maintain itemized receipts, the 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, the receipt from Leonardo’s Italian Bakery dated July 30, 2014 did not note the purpose for the expense.
2. Disposition of Property
A labor organization must report the value of any union property on hand at the beginning and end of each year in Item 28 of the LM-2 (Other Assets). The labor organization must retain an inventory or similar record of property on hand to verify, clarify, and explain the information that must be reported in Item 28. The CAP disclosed that Branch 157 does not maintain such a record.
3. Failure to Record Receipts
Branch 157 did not record in its payroll account receipts associated with ADP Payroll fees totaling $4,898.11 between October 1 and December 24, 2014. 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.
Based on your assurance that Branch 157 will retain adequate documentation in the future, OLMS will take no further enforcement action at this time regarding the above violations.
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 Branch 157 for the fiscal year ended December 31, 2014 was deficient in the following areas:
1. Disbursements to Officers
Branch 157 did not include some payments to Vice President Joseph Rodgers totaling at least $2,500 in Schedule 11 (All Officers and Disbursements to Officers). According to the ADP Payroll Services records, Vice President Rodgers’ gross salary was $74,760 while the Form LM-2 reflected $72,260. As you explained during the exit interview, this difference was explained by Mr. Rodgers’ flexible spending account. However, as we discussed, the LM-2 report should reflect gross salaries before deductions.
I want to extend my personal appreciation to NALC Branch 157 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: Mr. Randy Zebin, President
Mr. Joseph Rodgers, Vice President