AFSCME 41 st INTERNATIONAL CONVENTION CHICAGO, ILLINOIS FINANCIAL STANDARDS CODE JULY 13, 2014
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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
William Del Pino
Cathy German
AFSCME AUDITORS
PRESENTERS
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 IIIMaintaining 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 ExpenseReports 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 Time-Payment 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 VExpenditures - 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
Equipment Rental
Meeting Hall Rental
Prior Authorization Required:
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 VIIExpenditures - 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 BeAttached 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
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
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
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