Maintaining Adequate Financial Controls, Policies, and Procedures

Whether local trustees are elected or appointed, the responsibilities of the position should not be a customary rubber stamp of local practices that conflict with the Labor-Management Reporting and Disclosure Act (LMRDA), Department of Labor (DOL), or IRS provisions. The Trustee position should not be a member of the local executive board, as it would cause a conflict of interest for the trustee and the financial oversight that is required of the position. The Trustee’s primary task is to ensure that all union resources (money and assets) are used for legitimate union purposes, as authorized by the membership, in accordance with your local constitution and bylaws. In addition, trustees should ensure that the local is complying with all legal requirements for financial reporting, recordkeeping, and bonding.

Each local affiliate should have provisions establishing set frequencies for trustees to conduct an audit. Local audits should be conducted annually, at a minimum. If there is no constitutional language, a motion is needed to establish set time frames. However, the constitution should be amended to provide for periodic internal audits. During the audit, trustees should review the disbursements, receipts, DOL and IRS compliance, and conduct an inventory of local assets. LMRDA provisions require officers and employees of the union to ensure that union funds and other assets are used solely for the benefit of the union and its members. Trustees are the first line of financial controls that a local should have in addition to various policies to ensure financial oversight is maintained.

Having policies and procedures in place defines acceptable and unacceptable practices. Written policies and procedures are clear and reflect the values and principles of your local. They ensure uniformity and consistency in decision making and operational procedures. They can clarify functions, responsibilities, and establish accountability. Policies and procedures assist with the day-to-day management of your local and can be invaluable in ensuring the local is running in an efficient and business-like manner. Problems can be managed quickly and effectively through existing policies.

When implementing policies, consider involving officers and stewards. This will promote awareness, understanding, and ownership when the policy is implemented. Present and explain the policy to your local membership and move to adopt the policy. Local union officers should consider implementing the following policies:

• Travel and Expense
• Leave Without Pay (LWOP) and Other Compensation
• Credit Card Use

Additional policies could include a Computer Access and Internet policy, and a Local Grievance Handling policy. If you currently have policies in place, review them regularly to ensure that they are current and in line with changes within the local.

Finally, local officers should have computer back-up procedures in place for computer financial files, password access for QuickBooks, and other financial banking requirements. These and other important directives should be stored in a locked fireproof safe. ■