The Labor-Management Reporting and Disclosure Act (LMRDA) requires labor organizations to meet basic standards and fiscal responsibility. These requirements pertain to financial reports and elections. Section 206 of the LMRDA requires the retention of financial records specifically for five years. Therefore, all types of financial records, beginning with the year 2021 to the current year, must be maintained and retained to comply. To ensure that your union’s funds and other assets are properly accounted for and used solely for the benefit of your union and its members, every local and state affiliate should have trustee(s), whether they are elected or appointed. Trustees provide financial oversight and other specific duties, including auditing financial records and union assets. Trustees should facilitate an audit of financial records at least once a year or in accordance with the frequency outlined in the local or state constitution and bylaws.
Trustee Audit Check List:
- Receipts journal
- Disbursement journals
- Cancelled checks and check stubs; a copy of cancelled checks should be provided with the bank statements
- Bank statements
- Certificates of Deposits verified
- Dues Check Off (DCO)
- Vendor invoices
- Petty cash verified /receipted
- Checking and savings account(s) verified in the name of the local/state affiliate
- Credit card statements.
- Vouchers for all union expenditures with original receipts attached
- Bank deposit and transfer receipts.
- DOL and IRS annual reports filed/verified
- Insurance coverage-workers’ compensation
- Inventory all fixed assets annually (and as needed)
It is important to keep all electronic documents, including recordkeeping software, used to prepare and retain financial data and records. It is important to ensure that you have a backup storage plan in place for your electronic documents and financial records. Financial records contain information protected by the Privacy Act, therefore the only method to discard financial records is to shred them. It is permissible to shred any financial records prior to the year 2021.
Are there criminal provisions if any person willfully violates the provisions of the LMRDA? Absolutely! Any person who willfully makes a false entry in, or willfully conceals, withholds, or destroys, books, records, reports, or statements required to be retained, can be fined up to $10,000 or imprisoned for up to one year, or both. The Secretary-Treasurer’s Department provides virtual training to ensure that local and state presidents and treasurers are aware of their responsibilities. Virtual training is also available for trustees who provide required financial oversight of the funds used for the sole benefit of the members and the union. Election records must be preserved and retained for one year from when the ballot count has been certified. The LMRDA requires all election records to be retained, including membership eligibility lists, copies of nomination and election notices, voting instructions, return envelopes, marked, challenged, unused ballots, and tally sheets. The election official designated in the Constitution and Bylaws is the custodian of the election records. If there is no designated election official, the treasurer should retain the election records.
Fiduciary Responsibility and Secretary-Treasurer Training
The Secretary-Treasurer’s Department provides virtual fiduciary training for local officers who are unable to attend fiduciary training during the pre-convention work-shops. We recommend that local and state presidents and treasurers attend at least one Secretary-Treasurer’s Workshop per year. To schedule virtual Fiduciary Responsibility training, contact Annette August-Taylor, Executive Assistant to the Secretary-Treasurer, at 202-842-8528 or email [email protected].
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