The 411 on Local Trustees’ Responsibilities

(This article first appeared in the July-August issue of The American Postal Worker Magazine)

No matter the size of an organization or what it does, there are always concerns related to funding. It could be a social club, the Boy Scouts, your bowling league – or your local union.

Members of organizations often elect or appoint fellow members they trust to periodically review finances and report on their findings. How was the group’s money spent? Who spent it? Who authorized the spending?

Elected or appointed trustees play a key role in making sure that your union’s funds and other assets are properly accounted for and used solely for the benefit of your union and its members. Few tasks could be more critical to the well-being of the local union.

The trustees’ primary task is to ensure that all union resources are used for legitimate union purposes, as authorized by the membership in accordance with your constitution and bylaws.

They don’t have to be accountants – it doesn’t take a degree to verify receipts, payments, and authorization to spend local funds.

Trustee Language in Your Constitution

Your local constitution should establish a trustee committee and outline its specific duties.

In addition to monitoring how funds are spent, trustees should be charged with ensuring that the local union is properly complying with legal requirements for financial reporting, recordkeeping, bonding, and loans.

If your local constitution doesn’t call for a trustee committee, the president can appoint a committee to perform these functions or a motion can be made by the executive board or at a membership meeting to form one.

Should Local Trustees be Elected or Appointed? The local constitution should stipulate whether trustees are appointed or elected. Electing trustees helps to ensure that the review team is not “stacked” and that it has the confidence of the members. But electing trustees doesn’t always guarantee that you will get members who are able to do the job. Appointing trustees permits the selection of the capable members who might not necessarily get elected.

How Many Trustees Does the Local Need? The number of trustees is decided by the local. However, there should rarely be more than three to five trustees. Some locals require that there be trustees from each craft. This can be problematic, as there is no guarantee that you will have a member willing to serve from each craft. Remember, the review of finances and verification of compliance with the law are the primary objectives for trustees – not craft representation.

Frequency of Internal Reviews: The frequency of the reviews should be stated in the constitution. Internal reviews of local finances by the trustees are recommended at least twice or quarterly during the year.

External Review or Audit: There should also be language in your constitution that mandates a review of your finances by an accounting professional at least every term of office, or even annually for large locals.

The reason for outside review is to have a third party verify local finances. At the end of each term of office, new officers should insist upon a review of the local’s finances to establish the funds they are now responsible for and what liability may belong to former officers.

Trustees on Your Local Executive Board: It is recommended that trustees not be members of the local union executive board, even though they may be elected trustees. The job of the executive board is to be a deliberative body that provides leadership and executes the decision of the members and the board, if the constitution permits. The job of a trustee is oversight, review and verification of the use of union funds.

Although a trustee can approve spending as a member during a vote on a motion, that is not the same as being responsible for reporting on the proper use of union funds. It could present a conflict of interest to make decisions on local spending and review that same spending.

Verification of the Local Treasurer’s Report: One of the more important duties of local trustees is verifying the local treasurer’s report. Every local should provide a financial report to its members and executive board at each regular board and membership meeting. After the treasurer’s report is presented to the membership, it’s simply filed for audit, and no other action is necessary. There is no need for a motion to accept it.

The proper way to handle the treasurer’s report would be as follows: After the treasurer presents the report, the chair would thank the treasurer, state that, “The treasurer’s report will be filed for audit,” and move on to other business.

Audit vs. Review

The time for formal action on your financial reports is when the local’s financial records have been audited or reviewed by the trustees or a professional accountant.

There is sometimes confusion about the difference between an audit and a review of financial records. Generally, an audit is a detailed verification of transactions. This type of verification can take weeks to complete (for larger locals) and can be very expensive.

A review is a less detailed examination of financial records, but is detailed enough to provide the accountant performing the review with some assurance as to the reliability of the financial information or records. A review, which is usually less expensive than a full audit, is accepted by the Department of Labor as a satisfactory outside review of the local’s finances.

The law requires transparency regarding the union’s finances. Trustees’ committees can help local officials comply with this obligation. To assist you in complying with this requirement, the Secretary-Treasurer’s Department has training material for local trustees on its webpage, www.apwu.org/departments-divisions/secretary-treasurer.

Local officers or members who need more information about trustees and trustee committees should contact Roosevelt Stewart in my office.