AFSCME 41st INTERNATIONAL
CONVENTION
CHICAGO, ILLINOIS
FINANCIAL STANDARDS CODE
JULY 13, 2014
TODAY’S HOST
Laura Reyes, Secretary-Treasurer,
AFSCME International
Additional Hosts
 Charles Jurgonis, Director, Financial
Services
 Jeff Taggart, Associate Director,
Auditing & Accounting
 Karen Tyler, Assistant Director,
Auditing
PRESENTERS
 William Del Pino
 Cathy German
AFSCME AUDITORS
PRESENTERS CONTACT INFORMATION
 William Del Pino
wdelpino@afscme.org
 Cathy German
cgerman@afscme.org
Today’s Topic
THE AFSCME
FINANCIAL
STANDARDS
CODE - 2013
REVISED
Financial
Standards
Code
AFSCME FINANCIAL
STANDARDS CODE
 Adopted by International
Executive Board
 Part of AFSCME IU Constitution
2013 AFSCME FINANCIAL
STANDARDS CODE
 Article I - Article XI
 Appendices
 Glossary of Terms
 Trustees Audit Guide
 Trustee Audit Checklist
Article I - Purpose and Scope
Establish Minimum Standards for
the Handling of Funds and
Records Maintenance
Article II - Custody of Funds
Bank Accounts Should Be:
 In Federally Insured Institutions
 In Name of Union
 Contain Union Funds Only
Investments
Union Officers Have a Fiduciary
Responsibility to Manage and
Invest Union Funds Prudently
in Accordance with Union Policies
Investments
Approved Investments:
 Insured Bank Accounts
 Insured Government Investments
 Other Investments Approved by
Executive Board
The Following Investments
Are Not Allowed :
 Purchase of Lottery Tickets or
Other Gaming Activities
 Investment in Any Illegal Activities
Investments
Safest Investments Available:
 Treasury Bills
 Certificates of Deposit
 Government Notes and Bonds
Petty Cash Fund
 Executive Board Sets Fund Amount,
Selects Custodian and writes Check to the
Custodian To Initiate Fund
 Petty Cash Receipts Maintained to
Document Expenditures From Fund
 Record Expenses in Petty Cash Journal
 Maximum Petty Cash Fund
$100.00
Article III
Maintaining Records
Transaction Records
Cashbook or Journals Are Required
 Manual Cash Book
 Receipts & Disbursements Journal
 Computerized Cash Book
Income Documentation
 Copies of Transmittal, Remittance
Advice or Membership Documents
 Make a Copy of all Checks Received
 Keep a Copy of the Deposit Slips
 Deposit Funds Promptly in full
Bank Records
Bank Statements & Canceled Checks:
 Keep Checks With Bank Statements
 Reconcile Bank Statements Monthly
 Request Missing Checks or Bank
Statements
 Verify Deposits to Deposit Slips
Bank Records
Check Stubs & Voided Checks:
 Before Storing a Voided Check,
Write “Void” Across the Check
in Ink and Tear Off the
Signature Portion
 Retain All Void Checks
VOID
Paid Bill Records
Paid Bills or Invoices
- When Signing Checks, Write
the Date Paid, Amount Paid,
and Check Number on Your
Copy of Bill or Invoice
Dues Payment Records
 International & Council Per Capita
Tax Reports
 Dues Deduction Rosters
 Council Rebate Transmittal
Reimbursement Records
All Officer and Employee Expense
Reports and All Receipts for
Expenses Reimbursed
Petty Cash Records
Records of Petty Cash Expenditures
- Petty Cash Slips
- Receipts
- Petty Cash Journal
Payroll Records
 IRS Form 941s
 IRS Form 940s
 IRS Form W-2s
 Required State & Local Payroll
Reporting
Financial Records
 Financial Reports Prepared
for the Membership or Executive
Board
 Federal Reports Filed With
the IRS (including Payroll) or
U.S. Department of Labor
Financial Records
 Copies of Financial Reports Filed
with the International Union:
- Surety Bond Report
- Local Union Annual Financial
Report (LUAFR)
 Surety Bond Certificate of Coverage
Financial Records
Mortgages, Loan Agreements, Lease
Agreements, Lease-Purchase or TimePayment Contracts, and anything
Which Involves a Financial
Obligation on the Part of the Affiliate.
Financial Records
All Documents Constituting Evidence
of Ownership by the Local Union of
Any Property or Equipment
Financial Records
 Minutes of any Executive Board, Membership,
or Committee Meetings at which any Financial
Decisions were Made, Approved
or Rejected.
 Personnel Records - Collective Bargaining
Agreements & Personnel Policies
Key Point
Financial Records, including Minutes
of Executive Board and Membership
Meetings, must be kept for a
minimum of Seven Years.
Article V
Expenditures - Authorization
There Are Four Types of Authorization:
 Law
 Constitution
 Contract
 Vote
Unauthorized
Checks
Required By Law
 Payroll Tax Deposits and Related
Payments (FICA, Unemployment
Taxes, etc.)
 Possible Fines Imposed by IRS
for Late Filing of Form 990
Required by Union Constitution
 International and Council
Per Capita Taxes
 Payment of Surety Bond
Premium to International
Required by Contract
Prior Authorization Required:
 Equipment Rental
 Meeting Hall Rental
Authorized By Vote
 Membership
 Executive Board
 Delegate Assembly
Key Points
Expenditures Must Be
Authorized and Documented
in the Minutes
Article VI – Expenditures Procedures
Before You Write a Check, You Need:
 Authorization
 Documentation
 Explanation
No Cash Payments
Exception: Petty Cash
Never Write a Check
Payable to Cash
Writing Checks/Making
Disbursements
 Never Pre-Sign Checks: Do not Sign any
Check before the Date, the Name of the
Payee and the Amount have been entered
on the Check
 Never use a Rubber Stamp for Check
Signing Purposes
No ATM Cards
Bank Debit Cards or ATM Cards
May Not Be Used Under Any
Circumstances
Check Signers
 Checks and Withdrawal Slips
Must Be Signed by Two Officers
 It is Recommended That at Least
Three (3) Signatories Be
Registered with the Bank for
Each Affiliate Account
Article VII
Expenditures - Documentation
Receipts and Invoices Must Be
Maintained to Support all Expenditures
Non-Taxable Payments
Accountable Plan = Expense Report
 Reimburse Actual Expenses
 Non-Taxable to Recipient
Expense Reports
Required to Document
Reimbursements :
Officers
Members
Employees
Expense Reports
Each Expense Item Reimbursed Must
Have Receipt Attached and Show:
(1) Date
(2) Amount
(3) Union Purpose
Expense Reports
 Original Receipts Must Be Attached
 Expense Reports Should Be Filed Timely
 The IRS Considers Filing within
30 Days to be Timely
Expense Reports
Meal or Entertainment Items List:
 Name(s) and Union Relationship of
Person(s) Entertained
 Explanation of Union Business Discussed
Expense Reports Required
Account For All Costs Paid Directly
by Affiliate:
 Direct Hotel Billings
 Charges on Union-Owned Credit Cards
 Payments to Travel Agency
Expense Reports
All Expense Reports Must Be Approved By
Someone Other than the Preparer
Union-Owned Credit Cards
 AFSCME Strongly Recommends
against the use of union-owned
Credit Cards.
 Circumvents the Requirement
that Two (2) Officers Sign
all Disbursement Checks.
Article VIII - Minutes
Meeting Minutes
 Record of Proceedings
 Permanent Record of Actions and
Decisions
 Document whether a Quorum was
present
 Minutes note Financial Authorization
for Expenditures.
Financial Reports
The Following Must Be
Attached to the Minutes:
 Monthly Financial Report
 Budget
 Audit Report
Article IX - Reporting
Financial Statements
 Prepared Monthly
 Reported to the Executive
Board and Membership
 Attached as a Permanent Part
of the Local’s Minutes
Large Affiliate Reporting
All Councils and any Local Union
with 2,000 or More Members
Must Prepare a Monthly Report
Showing Actual Income and
Expenses Versus Budgeted Income
and Expenses for the Month and
the Year-to-Date
Large Affiliate Reporting
All Councils and Local Unions with
2,000 or More Members Must:
 Prepare Quarterly Financial Statements
 Submit Copy to the International
Secretary-Treasurer
 Have an Annual CPA Audit
Government Reporting
You May Be Required to File
One (or More) of the Following:
* Due Date
 IRS Form 990,
990 EZ or 990 N
May 15th
 IRS Form 1120-POL
March 15th
 DOL Form LM-2/3/4
March 31st
* Calendar-Year Filers
AFSCME Reporting
Every Affiliates Must File:
 Surety Bond Report Due by
March 1st Each Year
 Local Union Annual Financial
Report (LUAFR) - Due May 15
(or 4 1/2 Months After Fiscal
Year End)
Article XI - Audits
Audits - How Often?
 Required At Least Once Each
Year - Check Your Constitution
 Upon Change of Officers
 When Circumstances Warrant
Audits - By Whom?
 Trustees
 Independent Auditors Not
Otherwise Connected With
the Union
Trustee Audit
Trustees May Follow Procedures
Outlined in the Trustees Audit
Guide
Audit Results
 Report on Material Deviations
from the Financial Standards Code
 Action Taken to Correct Audit
Discrepancies Must be Reported to
Executive Board and Membership
Audit Findings
 Findings Reported to Executive
Board and Membership
 Audit Report Attached to
Minutes of Meeting at which it
was Presented
Questions & Answers