Fiduciary Responsibility

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Fiduciary Responsibility

• Handling of Union Funds
• By AFGE
• Local Officers

2
Record Retention
Retain Five Years From Date Filed

• IRS form 990 and all supporting documents
• Dept.of Labor forms and all supporting documents

• Cash receipts support and journal
• Cash disbursement support and journal
• Checkbooks, check stubs, cancelled and voided
  checks
• Bank statements
• Dues deduction listings (customer packages)
• List of direct-pay members
• List of assets

Retain Indefinitely

• AFGE National, Council, AFL-CIO, Affiliation
  Permanent Charter
• Constitution and Bylaws
• Meeting Minutes

3
Many Times with the Election of New Officers, the
IRS/DOL Records may be lost. It is very Important
to Provide a Copy to National for Safe Keeping
and Future Reference.
4
Civil Service Reform Act (CSRA) Labor-
Management Reporting and Disclosure Act (LMRDA)

• Laws that give Dept. of Labor authority over
  labor unions.
• CSRA - covers labor organizations representing
  federal employees
• LMRDA - covers labor organizations representing
  private sector employees

The law imposes upon union officers a fiduciary
obligation , that they occupy positions of trust
in relation to the union and its members as a
group which requires that they hold its money and
property solely for the benefit of the
organization and its members.
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CSRA (5 U.S.C Section 7120)
Establishes Standards of Conduct for Federal
Labor Organizations
States in part that a labor organization shall
insure
The prohibition of business or financial
interests on the part of organization officers
and agents which conflict with their duty to the
organization and its members and the maintenance
of fiscal integrity and the conduct of the
affairs of the organization, including provisions
for accounting and financial controls and
regular financial reports or summaries to be made
available to members.
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CSRA (contd)
General Fiduciary Obligations Impose Upon
Officers the Requirements That They

• Hold money and property solely for the benefit
  of the union and its members
• Manage, invest and disburse union funds and
  property only as authorized by the unions
  constitution and bylaws or resolution properly
  adopted in accordance with the constitution and
  by-laws
• Refrain from any financial or personal interests
  which conflict with those of the union
• Account to the union for (pay over to) any
  profits received as a result of transactions
  conducted on behalf of the organization

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Violations ofFiduciary Obligations

• Allegations of Violations of the Fiduciary
  Obligations are Investigated and are Enforced by
  the D.O.L.
• Violations of the Obligations Could Lead to
  Internal Union Discipline by D.O.L and by AFGE
  National Under Article XVIII of the AFGE
  National Constitution.
• Actions that Include, Committing Any Act of
  Fraud , Embezzlement , Mismanagement, or
  Appropriating to Ones Own Use Any Money,
  Property, or Thing of Value Belonging to the
  Local or the Federation
• Embezzlement or Other Improper use of Union
  Funds Would Constitute Grounds for a Civil Suit
  and in Some Situations, e.g., Embezzlement or
  Theft, Criminal Prosecution.

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D.O.L. Regulations

• Local must maintain accounting and financial
  controls necessary to assure the maintenance of
  fiscal integrity.

• Officers and other individuals shall refrain
  from--directly or indirectly(for example a spouse
  or family member) - any business, financial, or
  personal interest which would conflict with their
  fiduciary obligation to the union.
• Activities include(but not limited to) Buying
  from, selling to or leasing to, directly or
  indirectly, the local or having an interest in a
  business that takes part in any of these actions.

• No local shall directly or indirectly make any
  loan to any officer or other individual acting on
  behalf of the union which results in the total
  indebtedness on the part of the officer or
  individual to the union in excess of 2,000.

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D.O.L. Regulations (contd)

• AFGE provides bond coverage, premium billed to
  local
• Coverage amount extends fully to each officer and
  employee, 1/2 of coverage amount extends to shop
  stewards
• Annual audit is required for bond to be in force

Bond must be at least 10 of funds or other
property handled Total funds handled (liquid
assets at start of year annual receipts for
year) Funds Handled 75,000 Bond Required
(10) 7,500
(AFGE Recommends that the Bond be MORE than 10 )

• Every officer, agent or other individual
  handling the funds of the union (other than a
  labor organization whose property and annual
  financial receipts are less than 5,000 in
  value), shall be bonded to provide protection
  against loss by reason of acts or individual,
  either directly or through connivance with
  others.

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