Welcome to Online Training!

Transcription

1 2.0 Welcome to Online Training! You have been elected/appointed to a position of trust. Your instructor, will provide you with information relating to federal laws, constitutional responsibilities, and suggestions for building a stronger local/state union. If you have any questions at the conclusion of this presentation, please do not hesitate to contact me, or your instructor, Roosevelt Stewart. Yours In Union Solidarity, Elizabeth Powell

2 2010 Secretary-Treasurer s Training Seminar Orlando, FL March 26-27, 2010 William Burrus President Elizabeth Powell Secretary-Treasurer

3 Webinars Fiduciary Responsibilities of Union Officers New Officers Training & Responsibilities LM Reporting Local Elections (Officers, committee members) DOL & IRS Requirements and Audits Travel & Expenses Recording Secretary Duties COPA Funds Trustee Training Renting vs. Owning Budgeting

4 LMRDA

5 LMRDA Labor Management Reporting and Disclosure Act, of 1959 as amended. It is the law and is commonly referred to as the Act. The Act is the authority by which Department of Labor officials issues regulations for labor unions.

6 How did the LMRDA come about? It was the direct outgrowth of a Congressional investigation conducted by the Select Committee on Improper Activities in the Labor or Management Field in 1957.

7 Why was the LMRDA created? The committee began a highly publicized investigation of labor organization racketeering and corruption; its findings of financial abuse, mismanagement of labor organization funds, and unethical conduct provided much of the impetus for enactment of the LMRDA's remedial provisions.

8 LMRDA: Sec. 501(a) Fiduciary Responsibility pg 23 All officers, shop stewards and representatives of the union hold a position of trust to the union and its members. It is the duty of each person above to hold its money and property solely for the benefit of the union and its members. All officers must manage, invest and expend that money in accordance with the union s constitution and bylaws and any resolutions of the governing bodies adopted thereunder.

9 LMRDA: Sec. 501(a) Fiduciary Responsibility All officers, shop stewards and representatives are prohibited from taking adverse action against the union and from representing a party taking adverse action against the union.

10 LMRDA: Sec. 501(b) Fiduciary Responsibility pg 23 All officers, shop stewards and representatives are obligated to recover damages to the union. If you refuse or fail to do so within a reasonable time after being requested to do so by any union member, such member may sue such officer, shop steward or representative in any district or state court to recover damages.

11 LMRDA: Sec. 501(c) Fiduciary Responsibility pg 23 If you embezzle or steal any monies, securities, properties or other assets of the union you may be fined up to $10,000 and/or imprisoned for up to five (5) years.

12 LMRDA: Sec. 101 Bill of Rights - pg 8 Equal Rights Every member of a labor organization, subject to reasonable rules and regulations in the constitution & bylaws, shall have equal rights and privileges to: Nominate candidates Vote in elections or referendums Attend membership meetings

13 LMRDA: Sec. 101-Bill of Rights Freedom of Speech and Assembly Every member shall have the right to: Meet and assemble freely with other members Express any views, arguments, or opinions Express his/her views upon any business properly before a meeting, subject to the union s established and reasonable rules (usually Robert s Rules of Order)

14 LMRDA: Sec. 101-Bill of Rights Dues and Assessments may only be adjusted or levied by the local union: By majority secret ballot vote of the members in good standing voting at a general or special membership meeting

15 LMRDA: Sec. 101-Bill of Rights Dues and Assessments may only be adjusted by a state organization: By majority vote by delegates at a regular or special convention By majority vote of members in good standing voting in a secret ballot referendum By majority vote of the executive board, if the constitution & bylaws provides such authority which will only be effective until the next regular state convention.

16 LMRDA: Sec. 104 Right to Copies of CBA pg 9 It is the duty of the secretary or corresponding principal officer to forward a copy to any employee who requests a copy. This pertains to non-members as well. Must maintain copies of the agreement at the principal office.

17 LMRDA: Report of Labor Organizations pg 10 Sec. 201(a): Every labor organization shall adopt a constitution and bylaws and shall file a copy with the DOL together with a LM-1 report. (Local are also required to file a copy with the national S-T Dept.)

18 LMRDA: Report of Labor Organizations Sec. 201(b): Every labor organization shall file an annual financial report: LM-2: Over $250,000 gross receipts LM-3: $250,000-$10,000 gross receipts LM-4: Under $10,000 gross receipts

19 LMRDA: Sec. 207 Effective Date (i.e. deadlines) All reports must be filed within ninety (90) days after the end of the local s fiscal year. There are no provisions for extensions!

20 LMRDA: Report of Labor Organizations Sec. 201(c): Right to examine records: the union shall make available the information required to be contained in these reports to any member for just cause to examine any books, records, and accounts necessary to verify such report.

21 LMRDA: Sec. 205 Reports Made Public Information All reports with the DOL are public information.

22 LMRDA: Sec. 206 Retention of Records pg 15 All records that include information that is required to file any of the reports mentioned in this act, must be retained for five (5) years. For example: right now financial records must be kept for the current year 2010, going back five (5) years: 2009, 2008, 2007, 2006, 2005.

23 LMRDA: Sec. 209 Criminal Provisions pg 16 Penalties of up to $10,000 or imprisonment of up to one (1) year or both may result from the following: Willful violations of the Act False statements Willfully concealing, withholding, or destroying books, records, reports or statements required to be kept by this Act The signers of the LM-1, LM-2, LM-3, LM-4 or LM-10 are personally responsible for the filing of the reports and for any statement contained therein known to be false.

24 LMRDA: Sec. 502 Bonding The union is required to have fidelity insurance for a minimum of 10% of the assets of the local, not to exceed $500,000. National provides for coverage of $2,500 for each local. Recommend a bond to cover all liquid assets (banking accounts, credit limits, receivables).

25 LMRDA: Sec. 503 Making of Loans pg 24 The union may not make, directly or indirectly, any loan in excess of $2,000 to an officer or employee. Violating this section may result in a fine up to $5,000 and/or one year in prison.

26 Dues Rebates & Christmas Gifts Taxation of rebated dues rule: only payment-no, with other payment-yes There is no specific prohibition against Christmas parties, buying members t-shirts, hats or jackets, but locals should avoid gift cards, and any cash disbursements as Christmas gifts. Locals may rebate member dues, which is permitted, however, local officers should consider lowering the dues if their income is excessive. The funds in the union treasury are for representation of the members and the administration of the union. That is why they are federally tax exempt. The local treasury is not a Christmas club account.

27 Let's Break for Questions!

28 National and Local Constitution

29 Constitution and Bylaws Your local/state constitution needs to be in compliance with the federal and state laws, and with the National Constitution and Bylaws. The local constitution can be amended by the executive board rather than through the regular amendment procedures to bring it in compliance.

30 Constitution & Bylaws When updating your constitution, make a table of contents and number the pages. We suggest that you have the Officer s Oath of Office and the Members Bill of Rights in your constitution.

31 Constitution: Art. 3 Membership A member in good standing is a nonsupervisory, dues paying member. Retired member who continues to pay full per capita taxes to the APWU, plus whatever local dues may be required by their local union, retain all the rights of full membership.

32 New language adopted at the August 2008 APWU National Convention A member s good standing status shall not be affected by reason of the fact that his/her paycheck for the payroll period is which his/her dues deductions are made is insufficient to permit such dues deduction by reason of illness, injury, (except for members on the automatic rolls or receiving pay for an approved on-the-job injury from the Department of Labor-Office of Worker s Compensation Programs) military leave, pregnancy leave, layoff, disciplinary suspension, lockout,or strike.

33 Constitution: Art. 10 Eligibility to Run and Hold National, State, or Local Office Art. 10. Sec. 1 (a) Eligibility for Office. To be eligible for nomination, the candidate must be a member in good standing.

34 Who is prohibited from for office? Any member not in good standing. A person who has been convicted or served any part of a prison term for robbery, bribery, extortion, embezzlement, grand larceny, burglary, arson, murder, rape, assault with intent to kill, or to inflict grievous bodily injury, and violation of narcotics laws. Criminal Background checks for the upcoming national elections

35 Constitution: Art. 10, Sec. 2 (b) Eligibility to Run For and Hold National, State, or Local Office Anyone who has held a managerial position with the responsibility of issuing or recommending discipline or applying or interpreting the CBA for a two-week period in a year is ineligible to hold office or be a delegate to a convention. This holds for a period of one year from the time the employee vacates such a position.

36 Constitution: Art. 10, Sec. 2 (b) Eligibility to Run For and Hold National, State, or Local Office Anyone who has applied for a management position must withdraw the application prior to acceptance of nomination for any office.

37 Constitution: Art. 10, Sec. 2 (c) Eligibility to Run For and Hold National, State, or Local Office Anyone who applies for a management job or is detailed to a management job after being elected or appointed to office, shall immediately vacate that office.

38 Constitution: Art. 10, Sec. 2 (c) Eligibility to Run For and Hold National, State, or Local Office (New language adopted at the August 2008 APWU National Convention) Any officer or former officer that has had a bond invoked and been found guilty pursuant to the APWU National Constitution, be prohibited from ever running or holding any office at any level of the APWU where a bond is required.

39 Constitution: Art. 12, Sec. 8 Election Process You are required to establish a local election committee, no member of which shall be a candidate for election. The election committee is responsible for the conduct of local elections and shall decide all controversies arising out of the election process.

40 Constitution: Art. 12 Sec. 8 Election Process Any member who feels aggrieved has 72 hours to file an appeal from the time they became aware of the violation. Appeals of the local election committee s (LEC) decision shall be in writing and shall be filed within 5 days of the receipt of the decision of the LEC.

41 Constitution: Art. 12, Sec. 11 Election Process - pg 31 Officers, declared elected through applicable procedures shall assume and hold office pending final determination, under the appeals procedures provided in this Article.

42 Constitution: Art. 15 Local and Membership Protection Any officer or member can be subjected to charges under Article 15 for violating the National or Local/State Constitution. Art. 15 procedures can be expensive and can require significant resources of a local. They should be only considered after all other attempts to resolve constitutional issues or alleged misconduct have been exhausted.

43 Constitution: Art. 15, Sec. 3 (c) Local and Membership Protection Art. 15, Sec. 3 (c) This language explains how the charges must be filed. Art. 15, Sec. 3 (f) Contains timeframe and procedures for filing charges. Charges must be filed within 120 days of becoming aware.

44 Constitution: Art. 20 All locals and area locals must be members of the state organization. Dues rate as set in the state constitution. Charges may be filed for non-compliance.

45 Let's Break for Questions!

46 Officer s Responsibilities

47 Why Are You an Officer? Unhappy with the way the union was run. You have resented not being kept informed of decisions that affected you. Management is always getting over on the workers and the union was ineffective. Union leaders were not responding to concerns of the members. No one else wanted the job.

48 Officer s Responsibilities Managing the Union Handling Finances Negotiations Grievances Visions & Goals Communications Effective Meetings Recruiting & Training Stewards Coalition Building

49 Handling Finances You are responsible for the members money. To many of the members, a measure of your ability to lead will be how you handle their money. Budgeting for the present and future. Salaries and benefits. Travel and Expenses. Managing your union office(s).

50 The Treasurer s Golden Rules: Five Sources of Authority to Spend $$$ 1. The Law. 2. The Membership, in the form of a motion. 3. The Constitution and Bylaws. 4. The Budget, adopted by the membership. 5. The Executive Board, as permitted in the Constitution or by the membership.

51 Responsibility of the Officer Basic Financial Matters We recommend having at least 2 names on all accounts, preferably 3. We recommend having 2 signatures on checks, for accountability. Must have one of the 5 sources of authority to spend money.

52 Records Keep records for 5 years. Keep minutes forever. File cabinet fireproof with a good lock. Have an In Case of Emergency envelope.

53 Negotiations Negotiate for results. Negotiate, don t trade. Understand what the other party wants. Make the business argument. Remember, if you had the power, you wouldn t be negotiating-you would just make them do what you wanted them to do.

54 Grievance Administration Do you have a SOP for grievance handling? How do you ensure that a member s grievance is filed? How do you notify the member that it is filed? How do you track your local grievances? Where are your grievance files kept? Can you account for all grievances filed? Do you advise members of settlements before they are signed?

55 New Officer Check List Transfer of all union records and property, including: Keys to file cabinet(s), office(s), and/or building(s) - change if necessary. Union computer(s). Financial records, both hard files and electronic files. Union credit card(s). Union checkbook.

56 New Officer Check List (cont.) Past 5 years of LM reports and IRS forms. Copy of local/state constitution. Copy of LMOU. Copy of Bond Certificate. Grievance records. All other union records or property. Changed names on bank account(s) and credit card account(s). Professional audit of financial records.

57 Newsletter Communications Bulletin boards Flyers/mailings Internet The challenge for union officers is to find an effective means of keeping their members informed, on different tours, facilities, and spread over a large geographic area.

58 Start on time Have an agenda Effective Meetings Control your meeting Use Roberts Rule s as a tool, not a club Recognize and welcome any new attendees End in a reasonable time-but don t shut off important discussion.

59 Recruiting and Training Stewards Regular steward training or updates Make sure that stewards know their responsibilities and liabilities. Identify floor leaders and recruit them for service as stewards or other duties Have a rap for members to challenge them to step up and be a problem solver

60 Coalition Building We can t do it by ourselves. The success of labor has always been bases on collective action and support of others in the community. Active affiliation with the local central labor bodies and the state federations of the AFL-CIO are good first steps. Postal employees do have a stake in local and regional issues. Its where you and your family live.

61 I THOUGHT I WAS THE ONLY ONE! Do You: Work excessive hours for your local? Give up your family time for your local? Always bring union work home? Won t take time off for personal vacation? Think it won t get done without you?

62 The Union Owes Me for All I Give Up for the Union Be very careful of the they owe me mentality. Some people steal because they feel they are not being adequately compensated for what they do. You volunteered for this job, that s a responsibility you took. The dues paying members of your local are not making you do this job or hold an office, so don t use your self imposed commitment as an excuse to steal from your members.

63 Local Minutes and Record Keeping

64 Legal papers.. Basic Record Keeping Your local should have a file system for these records: All minutes & reports made at meetings. Local Constitution and Bylaws. Local LMOU(s). Art. 15 charge files. Correspondence.

65 Minutes Accurate minutes are very important because the meeting minutes are the official and legal record of the union.

66 Purpose of Minutes To refresh the memory of members who attended the previous meeting. To inform those who were absent from the previous meeting. To allow tracking of unfinished business. To compile a history of the organization. To provide a legal record to verify authorization for expenditures.

67 Minutes (cont.) Keep binders of the minutes for each year. This binder is what the secretary will use to prepare the permanent meeting minutes. The minutes to be approved and reported to the next meeting are given to the president for review.

68 Taking Minutes What goes into the minutes? Heading: Name of the organization/committee. Type of meeting. Date and time of meeting. Location of meeting.

69 Information Recorded in Minutes Start time of meeting. Adoption of minutes from previous meeting. Reports of officers. Subject matters only All motions made. End time of meeting.

70 Tape Recording Meetings The use of a tape recorder can be of benefit in preparing minutes, but a transcription (word-for-word copy) of the tape recording should not be used as the minutes themselves. Type the minutes from your written notes, then play the tape to verify names, amounts, and the wording of motions.

71 Recording Motions The motion should contain the name of the maker of the motion and that it was properly seconded. Then the proposed action. Record the outcome of the motion: Unanimously adopted Adopted Motion failed (Include the vote count if one was taken)

72 Recording Motions Motions should not be recorded until it has been stated by the president or chairperson. The secretary should clarify the correct wording of motions, and should not hesitate to ask for the motion to be restated to ensure that it is correct. If practical, ask for a written copy of the motion. Recording the names of those who seconded or proposed amendments to a motion is optional. Motions that are not seconded or that are withdrawn are not recorded.

73 Permanent Minutes The permanent minutes should be prepared as soon as possible after the meeting and should be submitted to the president for review. The permanent minutes are then presented to the membership for correction and adoption.

74 Standing Motions Standing motions are defined as motion or rule that remains in effect until rescinded or amended by majority vote. They usually involve the administration of the reoccurring business of the local. Keep them all together in a separate binder for easy reference. Standing motions may remain in effect for years and should be passed on from administration to administration. Therefore, keeping a permanent record of these motions is important.

75 Renting vs. Owning

76 Renting vs. Owning Many locals struggle with the decision about whether to buy a building or lease commercial space for their union hall. Maybe the union owns space, has too much, and/or does not use it frequently enough to justify ownership.

77 Renting vs. Owning (cont.) Some locals have been hesitant about purchasing property for fear of being too involved in real estate. Purchasing property is not just about being in the real estate business it is also about making wise investments and making the best decisions about spending your union dollars.

78 Renting vs. Owning Advantages & Disadvantages Before you can make the right decision for your union, you need, of course, a full understanding of your needs. Only then can you factor in the advantages and disadvantages of owning or leasing property..

79 Ownership Advantages Appreciation in value. More control over the facilities, including maintenance and design. Ease of making alterations or additions to space. The right to select tenants for space the union does not use. Income from tenants. Avoidance of rent escalation.

80 Ownership Disadvantages Upfront costs - down payment, closing costs, legal fees, etc. Responsibility of building management, including inspections, permits Having to create a holding company Insurance (property, liability) Less flexibility when moving to another space Depreciation (local economic conditions may negatively impact value)

81 Leasing (Renting) Advantages Initial lower costs. Less risk. Less commitment and responsibility as a renter vs. being an owner/landlord. Flexibility to move.

82 Leasing (Renting) Disadvantages Little input regarding the appearance and maintenance of the building. Leasing/Renting can require a long-term commitment. No control over rent escalation.

83 Analyze Your Needs You may analyze your needs and find that you have too much space or not enough. Whichever the case may be, recognize that you have options. And don t forget the politics!!!!!

84 If Your Local Owns or Buys a Building It strongly suggested that the local establish a separate corporation wholly owned by the local to hold the title of your building. This LLC or Holding Company has the elected local officers as its board of directors and the members as stockholders.

85 If Your Local Owns or Buys a Building This corporation prevents a liability suit from reaching the local treasury. It limits the liability of the local. The local normally pay rent or leases from its corporation, paying enough rent to pay for the operating costs of the building. Normally, a separate LM is filed for this corporation. Legal advice will be need to set the corporation up.

86 Let's Break for Questions!

87 DOL & IRS Audits

88 DOL & IRS Audits We are a 501c(5) organization. Tax Exempt #2474. Local unions must pay sales tax. Locals don t have to pay taxes on the interest earned on investments.

89 Why Me???? DOL audits can be triggered by: Your local is scheduled for audit (approximately every 4-5 years) A member, an officer/steward has contacted the DOL with a complaint of mishandling of union funds. Your local has failed to submit LM reports that are required by law. The LM report submitted has raised red flags.

90 Why Me???? IRS audits can be triggered by a failure to file 990 forms, failure to pay payroll taxes, or any of the anomalies that the IRS flags on tax forms.

91 Most Used IRS Forms 940 -Report on federal unemployment taxes 941 Report on all wages, withheld taxes, and FICA and Medicare liability 990, 990-EZ, 990-N Report on annual receipts based on the size of the local 1099-Misc Report of payments to non-employees over $600 in a year (Go to the Secretary-Treasurer webpage for more info on IRS and DOL reports)

92 Should a Local Officer Contact the DOL or IRS? There is rarely an instance when you want to invite the DOL or IRS into your local. Many officers think that if they contact these agencies about problems in their locals that they will be showing that they are not guilty of any misconduct. We advise that you call the Secretary-Treasurer s Department first. Remember, any time you call on these agencies, they are not limited to only investigating a reported problem.

93 DOL & IRS Audits First things first: Review the year(s) targeted in the audit letter. Review the scope of information and the document(s) requested in the audit letter. Contact your local s attorney - or get one who works for unions!

94 Do DOL & IRS Audits Set up a location to help avoid disruptions in the office. Set up a location that will disallow unfettered access to employees. See if your attorney can arrange to have the records reviewed at his office. Specify a contact person to discuss any audit matters. Don t give the DOL or IRS all your documents!!!! Make copies.

95 Don t DOL & IRS Audits Go beyond what was requested - answer as accurately as possible but avoid lengthy discussion and don t volunteer information. Discuss or respond to impromptu questions or issues raised by the agents identify the issues in writing for an orderly response.

96 APWU Most Frequent Reporting and Other Violations, Last Two Years of CAP Closing Letters Item 24 (LM-3) Payments to officers Failure to file bylaws Inadequate bonding Acquire/dispose of property Counter-signature (signing blank checks) No policy for expenses

97 APWU Most Frequent Recordkeeping Violations, last two years of CAP Closing letters Receipt records (incomplete, no date) Officer/employee reimbursed expenses Officer/employee expenses: meal Items sold/given away Lost wages Meeting minutes Salary authorization Automobile: reimbursed expenses

98 IRS Audits Steps to make an IRS audit less stressful: Keep your receipts for all deductible expenses and capital purchases. Establish procedures that clearly show what your are doing with the union s funds, instead of doing what is convenient or easy. File and keep all 1099 s, as well as other informational returns sent to you by financial institutions and other businesses (such as brokerage firms) at year-end. Be careful how you describe things. If you buy capital items like office equipment, list them as capital purchases and put them on your depreciation schedule. Equipment or machinery with a useful life of over one year is considered a capital item.

99 IRS Audits Set up an organized filing system; it can be a big help if you are audited. An audit is a demand for you to prove the legitimacy of your tax information. Keep a journal of difficult or hard to understand transactions handled during the year. It is easy to forget your reasoning regarding accounting entries a year or two later. Don t take shortcuts when dealing with the IRS. If the proper thing is to write and exchange checks, do so instead of writing a net check.

100 Policies & Procedures

101 Policies & Procedures Policies & procedures are used to document routine and frequent processes involved in the day-to-day running of an organization. Having well-documented and well-understood workplace policies & procedures will help you manage your local. Policies & procedures define acceptable and unacceptable practices in your local. Policies & procedures help protect your local when officers/stewards are not complying with those policies.

102 Examples of Local Union Policies Grievance Handling (appeals, notification, settlements, complaints, tracking). Payment for lost time (LWOP) and other compensation. Travel and Expense Policy Security of Personal Information. Computer and Internet Policy. Steward Conduct and Office Policy.

103 Insurance Requirements for Your Local

104 Insurance Requirements for Local Unions As the President/Secretary-Treasurer of your local, one of the matters that must be addressed is the need for Property and Liability Insurance Coverage. This coverage is NOT to be confused with Surety or Fidelity Bond requirements.

105 Insurance Requirements (cont.) Property insurance is designed to afford protection to your local union for claims due to direct physical loss or damage of covered property (contents) at the premises of the insured. Loss of property may result from several outside forces, for example: fire, lightning, wind, theft, malicious mischief, vandalism, etc.

106 Insurance Requirements (cont.) Liability insurance may include coverage for: bodily injury on union premises, injuries caused by negligence of union employee, or property damage cause by union employee. These type of issues are normally covered under a general liability policy.

107 Insurance Requirements (cont.) Talk to you insurance agent about event riders and additional insurance for locally owned or leased vehicles. The Secretary-Treasurer s Department may be able to connect you with insurance providers who specialize in unions.

108 Worker s Compensation Insurance Another very important insurance item is state Worker s Compensation coverage for your local. This insurance is mandatory in all fifty states. This insurance covers employees of the local who sustain work-related injuries. Your insurance agent should be able to get you coverage. You can also consult your tax attorney or accountant regarding securing this insurance. Another source is your state s Department of Worker s Compensation.

109 Let's Break for Questions!

110 Record Keeping

111 Record Keeping When the DOL inspects local finances and spending, they want to examine your records. Failure to have the union records is not a defense and could result in civil and criminal penalties. For that reason, we want to make sure you understand financial record keeping what to keep and why.

112 Typical Problem Areas Payment receipts for goods and services provided by outside merchants/vendors Sometimes locals fail to obtain or keep original receipts documenting payments to outside merchants/vendors. Some examples include failing to maintain receipts from stores for payments for office supplies, meeting refreshments, petty cash purchases, and receipts from individuals providing services to the union, such as landscaping and janitorial services.

113 Typical Problem Areas (cont.) Payment receipts should contain the following information: Date. Description of goods and/or services. Amount. Nature or purpose of union business ( union business is not an adequate description) Name, address, and telephone number of entity providing goods/services.

114 Typical Problem Areas (cont.) Payment Receipts. If the vendor s receipt is not sufficiently descriptive, additional information should be added to the back, especially if the receipt is one of the very simple cash register receipts. A receipt is required whether the union pays the bill directly or an individual pays it and later submits a claim for reimbursement.

115 Typical Problem Areas (cont.) Credit card expenses. - Credit card slips and itemized receipts for each charge must be maintained; the union s or individual s monthly statement alone is not adequate. - The credit card charge slip will generally provide accurate information relating to the expense. Again, if these records do not provide the necessary details such as the date the expense was incurred, the name and address of the entity providing goods or services, the goods or services received, the amount, and the nature or purpose of the union business requiring the expense, this information must be added to the record.

116 Typical Problem Areas (cont.) Lodging, airfare, other travel expenses. In addition to obtaining an invoice or receipt, additional information identifying the purpose or reason for the travel must be recorded.

117 Typical Problem Areas (cont.) Meal and beverage records should contain: Names of individuals present. Names/addresses of restaurant(s) or bars(s). Nature of the union business. Restaurant receipts often do not provide all of this information. Anyone claiming reimbursement for this type of expense should write the missing information on the back of the receipt at the time of the expense to ensure the accuracy of this receipt for the union s records.

118 Typical Problem Areas (cont.) Union business - use of personal automobiles. Dates of travel. Names and locations traveled to and from. Number of miles driven and odometer readings. Business purpose. The approved basis for reimbursement must be noted in the union s bylaws, membership meeting minutes, or another union record.

119 Typical Problem Areas (cont.) Union business - telephone calls from home, cell phone, etc. If an officer or employee uses his or her home phone or cell phone to make union calls and is reimbursed by the union, the original copy of the individual s phone bill must be retained by the union. Union business calls should be circled or otherwise designated on the bill.

120 Typical Problem Areas (cont.) Lost time/lost wages. Dates incurred. Specific times and number of hours claimed. Rate per hour. Purpose of lost time. ( Union business or miscellaneous are insufficient descriptions and are not acceptable) If a union authorizes and pays lost time, the constitution and bylaws should clearly spell out the circumstances under which lost time will be paid.

121 Typical Problem Areas (cont.) Authorizations. Special care should be taken with authorizations for: Officer/employee compensation such as salary, fringe benefits including bonuses and/or vacation benefits, use of a union car, pensions, life, health or other insurance, other allowances, and expenses. These authorizations must be clear and unequivocal, and normally will be in the form of constitution and bylaws provisions or executive board and membership resolutions recorded in meeting minutes.

122 Typical Problem Areas (cont.) Authorizations. LARGE OR UNUSUAL TRANSACTIONS. Specific authorization, by executive board or membership motion, should be obtained for large and/or unusual transactions. Some examples would be major repairs to a building or office, purchase or lease of copy machines or computers, or a loan taken out by the local.

123 Typical Problem Areas (cont.) Membership/Executive Board meeting minutes. Unions must keep all membership and Executive Board meeting minutes if they contain information necessary to verify any information on the union s annual financial report. Audio or audio/visual recordings of meetings are also records that must be maintained for at least five years from the date that the report was filed.

124 Responsibility of the President and Treasurer The local president and treasurer, or corresponding principal officers, are personally responsible for ensuring that the union retains these records.

125 Responsibility of the President and Treasurer Any person willfully failing to maintain required records, making false entries in records, and concealing or withholding or destroying these records, can be criminally prosecuted. These penalties can include fines up to $100,000 and/or one (1) year in prison. These penalties not only apply to the union s officers who are responsible for the union s finances and records, but also to anyone (member, employee, accountant, lawyer) who causes a false record to be created.

126 Responsibility of the President and Treasurer The Secretary of Labor can also bring a civil action if it appears that a person has violated or is about to violate the recordkeeping requirements.

127 Member s Right To Review Books/ Records

128 Member s Right To Review Books/ Records Section 201(c) of the LMRDA gives members the right to examine any of the union s books and records that are necessary to verify a report filed with DOL. This is enforceable by the filing of a civil suit in federal district court by a member showing just cause for examination.

129 Just Cause Just cause relates to questions arising out of an examination of the annual report where discrepancies or unexplained items would provide reasons for an examination of the supporting books and records. The law does not contemplate the indiscriminate examination of all records without just cause, i.e. it does not permit fishing expeditions, since they constitute harassment without a valid purpose.

130 Just Cause (cont.) A Union member will have just cause only if he/she can point to something that would put a reasonable union member on notice that further investigation is warranted to assure the union s LM filings with the Secretary of Labor comport with the union s own records of its activities. Fernandez-Montes v. Allied Pilots Assn., 987 F.2d 278, 285 (5 th Cir. 1993).

131 Just Cause (cont.) Establishing just cause requires the union member to state what he/she wishes to verify in the LM Reports and how the particular union records he is requesting are expected to assist him in doing so. Id. (citing numerous.)

132 What To Do When A Member Requests Information Only Respond to Written Request for Records You Have Right to Deny the Request Make Sure You Response to Request

133 Let's Break for Questions!

134 Travel

135 Creating a Travel & Expense Policy The Three NO s No Receipts/3971 No Reimbursement No Exception!!!

136 Creating a Travel & Expense Policy Since Travel & Expenses are a major category of union expenditures, the DOL prefers a policy in writing detailing how the local pay for and reimburses travel and business expenses. The purpose of the T & E policy is to protect the organization s funds and ensure uniformity and accountability. The policy should be established by the executive board and presented to the membership.

137 What Your Travel & Expense Policy Should Cover Travel & Expense Vouchers. Choice of expense plan: GSA vs. Fully Receipted. Advances. Airfare. Hotel. Mileage. Ground Transportation. Business Meals. Incidentals. Phone Calls. Administrative Expenses. LWOP Compensation.

138 Creating a Travel & Expense Policy (cont.) Your T & E policy should not be in your local constitution. This will permit changes to the policy without the formal constitutional amendment process. The policy should however, be referenced in your constitution. (.in accordance with the local travel policy..)

139 Creating a Travel & Expense Policy(cont.) It should be clear that only expenses required for union business will be reimbursed. The purpose of reimbursements are to make the member whole for approved business-related expenses, not to compensate the member for union work.

140 Travel and Expense Voucher All vouchers must answer the 5 Ws: Who What When Where Why And how was the expense authorized.

141 GSA Plan vs. Fully Receipted Plan (cont.) The GSA Per Diem Plan is the Government Services Administration estimate of necessary expenditure for meals and incidental, accepted by the IRS, and tolerated by the DOL. It sets a per diem for each city/county. A Fully Receipted Plan is an expense plan that requires total accountability for all expenses; this must be done in accordance with IRS and DOL guidelines. The organization determines its daily per diem.

142 GSA Plan vs. Fully Receipted Plan The IRS and DOL differ on GSA vs. Fully Receipting The IRS accepts the GSA rate without the need to document actual meal and incidental receipts. The DOL has questioned the validity of GSA non-receipted rate, but in several recent audits of international unions has not questioned GSA travel per diem rates.

143 GSA Plan Rate is determined by the GSA for about 400 cities/counties. FY 10 Domestic Per Diem Rates - Effective October 1, 2009 September 30, 2010 State Primary Destination County Max Lodging M&IE Max Per Diem Rate First & Last Day 75% M&IE FL Orlando (January 1 - March 31) Orange $117 $56 $173 $42.0

144 Fully Receipted Plan Rate set must be reasonable and customary for union business No receipts = no money. Detailed receipts must be submitted to get reimbursed. It should have the name and address of the restaurant. The # of people who ate. The items ordered. Method of payment.

145 Fully Receipted Plan (cont.) The IRS and DOL have concerns with paying for alcohol consumed without the accompaniment of food, because you getting smashed is not for the benefit of the union. If you choose to reimburse for alcoholic drinks, we recommend that they are only reimbursed when consumed in proportion with the food consumed.

146 Advancing Funds Why you don t advance funds for travel. Large checks to individuals are a red flag for the DOL. You have no guarantee that proper expenditures are made. Better control over local travel dollars You don t have collection issues.

147 Advancing Funds for Travel Pay for airfare with the local s credit card or check. Pay for hotel with the local s credit card or check. The only advance payment should be a per diem check, if your local uses the GSA plan. You don t advance money under the fully receipted plan.

148 Advancing Funds You cannot advance funds more than 60 days before travel occurs. If you advance funds, they must be accounted for within 30 days of the travel occurring. All expenses must be submitted for reimbursement within 60 days. All reimbursements of overpayments back to the local must be made within 120 days. Failure to abide by the above rules will result in the union having to withholding taxes on the entire sum.

149 Hotel We suggest that the union pay for the hotel on a union credit card or by check. The local should pay for room and tax only. All other charges should be paid for by the individual. The local may reimburse the individual after the travel has occurred based on the hotel receipt.

150 Hotel (cont.) The policy must state that the union will not reimburse for movies or entertainment on a hotel bill, such as spa treatments, music selection on television, mini bar, personal items from the gift shop, or other resort activities.

151 Mileage: Deductible vs. Reimbursable The IRS code determines which expenses are not considered income and if not reimbursed can be claimed on your income tax The union determines which expenses are reimbursable Mileage is only deductible for the person driving the car, and it must be an officer or member on official union business who is authorized for expenses.

152 Recording Mileage Mileage should be recorded on a voucher and include the following: Starting address and miles on odometer Ending address and miles on odometer Total mileage Date of travel Purpose of the travel

153 Ground Transportation Ground transportation can be reimbursed for business purposes only, per the IRS. This includes between home and the airport and hotel, and to any meetings. This does not include from the hotel to a restaurant of your selection that is a personal expense.

154 Ground Transportation (cont.) You should stipulate in your travel policy what type of ground transportation will be reimbursed. For example, will rental cars be allowed? If so, what size? Can they get the prepay fuel option? GPS? Do they need special approval to rent a car?

155 Rental Cars And Mileage A rental car, if authorized, is reimbursable, but not the mileage. If the union does not reimburse for a rental car, authorized mileage may be reimbursed (if it is not reimbursed, then it is deductible).

156 Business Meals They are legal; however, we suggest that you require advance authorization. Submit a voucher with documentation (who, what, when, where, why). Business must be discussed immediately before, during or after. If you choose to reimburse for alcoholic drinks we recommend that they are only reimbursed when proportionate to the meals and people attending.(2 drinks per meal, per person)

157 Business Meals Must list names of each person. Can only be for those who are involved in the business being discussed, not for spouses or friends. If a spouse or friend comes, they need to pay for their own food. You can ask for a separate receipt for them.

158 APWU Travel Policy Alcoholic Beverages APWU will not reimburse receipts for alcoholic beverages that do not include accompanying meal service or for alcoholic beverages that are not in proportion to the meal service. Furthermore, alcoholic beverages purchased from retail stores are not reimbursable.

159 Incidentals Incidentals include tips. Tips come out of the daily rate for both the GSA and Fully Receipted plans. You may want put in your policy normal tip rates. Ground transportation, parking, and phone calls are not incidentals, but they are reimbursable.

160 APWU Travel Policy - Tips Reasonable tips for housekeepers, bell service, sky caps, cabs, etc. are reimbursable and are included in the allowable per diem total. (a)bellhop/skycap SUGGESTED TIP: $1-$2 per bag. (b)housekeeper SUGGESTED TIP: $2-$5 per day (Tipping daily rather than when you check out ensures that the tip will go to the specific person who cleaned your room). Be aware some hotels charge your room directly for housekeeping. (c)valet SUGGESTED TIP: $2-$3 per handoff. (d)room Service Waiter SUGGESTED TIP: 15%-20% of the total charge. (Check bill to see if gratuity has already been included, but do not confuse this tip with a delivery charge). (e)transportation tips such as United Transportation: Gratuity is generally included on the bill. Additional tips will not be reimbursed.

161 Phone Calls Hotel rates for phone calls are extremely high. The policy should address how the local will reimburse phone calls. The local may wish to provide calling cards, or require officers to use their union cell phones.

162 Let's Break for Questions!

163 BUDGETING

164 The LMRDA imposes a duty on union officers and stewards to manage the funds and property of the union solely for the benefit of the union.

165 Why Budget? Guide to where you re going financially. Control your money, instead of money controlling you. Creates extra money to spend on things that matter. Permits local to focus on common goals.

166 Why Budget? The approval of your local budget gives local officers the authority to spend local funds, within the budget, without the need to go back to the membership for an individual motion for each disbursement.

167 Who Should Set/Formulate a Budget? Presidents and Treasurers assume responsibility for insuring that the organization has written goals. The Executive Board.

168 Who Should Know About the Budget? The entire membership should review and vote to approve your local budget.

169 When Should a Budget Be Set? Near the End or at the Beginning of your fiscal year. Newly elected officers should review the budget, or formulate one if the local does not have a budget.

170 Process For Setting up a Budget 1. List constitutional duties and responsibilities. 2. Review any standing motions that mandate spending 3. Review previous budget or the local expenses and income. 4. Anticipate upcoming expenses and membership gain or loss. 5. Rank spending priorities.

171 Adopting the Budget Locals are encouraged to have a motion to accept the Budget as printed and to give authority to spend the total budget in aggregate. This permits the transfer of funds from one line item to another, without the need for individual action on each transfer, but within the total amount of the budget.

172 Adopting the Budget (cont.) Aggregate is defined as : Amounting to a whole; total -and as a mathematics term, as a transitive verb to amount or add up to a number. For example, The company's earned an aggregate $175,000 from it many enterprises.

173 Final Steps The Budget Committee must make decisions as to which line items get increased or cut and by how much. Objective: Ensure that expenses do not exceed income.

174 Financial Freedom The road to financial freedom is paved with good intentions. The solutions are easy; the decisions are not. Your can t attain financial freedom for your local if you don t know if your are financially lost.

175 You re Financially Lost If You Your local spends more than comes in each year. Your local has no method for tracking where the money goes. You pay the monthly minimum on the local s credit card bill and you are ok with it. (All local credit card should be paid off each month.)

176 You re Financially Lost If You You have no savings, investments, or any contingency funds. You make financial decisions you hope the membership will never discover. You make financial decisions you hope the IRS or Department of Labor will never discover.

177 Conclusion Financial freedom allows you to control your money, not the other way around. A budget is the first step to financial freedom and achieving your local s goals.

178 Let's Break for Questions!

179 COPA

180 Separate Segregated Funds Federal election law refers to a corporate or labor political committee as a separate segregated fund (SSF), though it is more commonly called a political action committee or PAC. As the name implies, money contributed to a separate segregated fund or political action committee is held in a separate bank account from the corporate or union treasury.

181 Commingling of Funds Corporations and labor organizations may not commingle their treasury funds with the funds of their political action committee.

182 The Federal Election Campaign Act prohibits corporations and labor organizations from using their general treasury funds to make contributions or expenditures in connection with federal elections. While corporations and labor organizations are prohibited from making contributions or expenditures in connection with federal elections, the Act and Commission regulations permit them to set up political action committees, which may make contributions to and expenditures on behalf of federal candidates and other committees.

183 A labor organization or its political action committee may solicit its restricted class at any time. The restricted class includes the union s members, its executive and administrative personnel, and the families of both groups. Twice in each calendar year, a labor organization may solicit non-member employees, its expanded class. (This creates an issue with COPA solicitations and your local publication.)

184 Limited Solicitees COPA committee or connected organization may solicit only a restricted class of persons associated with the connected organization. The general public may not be solicited. $ COPA committee may accept an unsolicited contribution, but may not inform individuals outside the restricted class that unsolicited contributions are accepted.

185 The One-Third Rule According to the One-Third Rule, an COPA committee must reimburse its sponsoring organization for that portion of the cost of prizes or entertainment that exceeds one-third of the amount raised in contributions.

186 One-Third Rule Examples Example 1: The local union spends $300 in treasury funds to purchase a TV set as a raffle prize. Sales of raffle tickets raise $600 in contributions. Since one-third of the amount raised ($200) is less than the cost of the prize ($300), the COPA committee should reimburse the local for the $100 difference.

187 One-Third Rule Examples Example 2: If the COPA committee raises $900 in contributions, then one-third of that amount ($300) is equal to what the association spent on the prize, so no reimbursement is necessary.

188 One-Third Rule Examples A local is having a dinner and plans to raise COPA money at the event. $1000 is spent on prizes and raffle tickets. $10,000 is spent on food and hall rental. $3600 is raised for COPA. The one third rule has not been violated as the normal costs relating to the banquet can be fully paid out of the Union treasury. One third of the COPA money raised is $1200. The cost for the raffle and prizes is less than one third of the COPA money raised, so no reimbursement is required and the full $3600 can be sent to COPA. 188

189 The ONE THIRD RULE (cont.) The key here is that the banquet is not to raise COPA funds, but COPA funds are raised at the banquet. The event can be for your installation, steward s appreciation, annual picnic, retirement party, or other function.

190 One-Third Rule Examples A Union is having it s annual picnic. Food, rental of picnic grounds, and prizes for kids costs $9500. COPA raffle tickets, prizes and a dunk tank to raise money costs $3000. $6000 is raised for COPA. All costs relating to the picnic can be fully paid by the Union. But one third of the COPA money raised comes to $2000. Since the local spent $3000 on COPA expenses, it must return $1000 to the Treasury, and $5000 is sent to COPA. 190

191 Contributions In the Name of Another Contributions by one person in the name of another person are prohibited. This means that no one may make or assist someone to make a contribution in the name of another. It is also prohibited to knowingly accept a contribution in the name of another.