TAKING CARE OF BUSINESS: FINANCIAL STANDARDS CODE for AFSCME OFFICERS and TRUSTEES

1. TAKING CARE OF BUSINESS: FINANCIAL STANDARDS CODE for AFSCME OFFICERS and TRUSTEES Presented by the AFSCME Auditing Department

2. Program Presenters - Tom Kulikosky, CIA, CPA - William Del Pino, CPA - Cathy German, CPA

3. AFSCME Financial Standards Code Approved by International Executive Board Assists allFinancial Officers in Carrying Out the Responsibilities of their Elected Offices Financial Standards Code

4. AFSCME Financial Standards Code-Article I Establishes Minimum Financial Standards for the Handling of Funds and Records Maintenance Compliance with the Code is Required for all AFSCME Affiliates Financial Standards Code

5. Article II - Custody of Funds - In Federally Insured Institutions - In Name of Union - Contain UnionFundsOnly All Bank Accounts Must Be:

6. Investments Union Officers Have a Fiduciary Responsibility to Manage and Invest Union Funds Prudently and In Accordance with Union Policies.

7. Investments - InsuredBank Accounts - Insured Government Investments - Other Investments Consistent with Affiliate Constitution

8. Key Points Regarding Investments Investments in Name of Union Safe and Insured Investments- Treasury Bills - Government Notes & Bonds, CD’s -Avoid Putting Principal at Risk

9. Article IIIMaintaining Records

10. Transaction RecordsCashbooks or Journals AreRequired - Manual Cash Book - Receipts and Disbursements - Computerized Cash Book

11. Income RecordsDocumentation for Receipts: - Dues Deduction Rosters - Dues Rebate Transmittal - Remittance Advice - Deposit Slip Copy

12. Bank RecordsBank Statements & Canceled Checks: -Keep Checks With Bank Statement -Reconcile Bank StatementsMonthly -Request Missing Checks or Bank Statements -Verify Deposits to Deposit Slips

13. Paid Bill Records Paid Bills or Invoices - When Signing Checks, Write the DatePaid, AmountPaid,and CheckNumber on Your Copy of the Bill or Invoice

14. Voided Checks Records - Before Storing a Voided Check, Write “VOID”Across the Check inInk and Tear Off the Signature Portion - Retain All Voided Checks VOID

15. Per CapitaTax Payment Records Copies of All InternationalandCouncilPer Capita Tax Reports

16. All Officer and Employee Expense Reports and All Receipts for Expenses Reimbursed Union Business PurposeMUST be Explained as Part of the Supporting Documentation Reimbursement Records

17. 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

18. Financial Records Copies of Financial Reports Filed with the International Union: -Surety Bond Report -Local Union Annual Financial Report (LUAFR) -Large Affiliates send CPA report instead of LUAFR

19. Financial Records Minutes of any Executive Board, Membership or Committee Meeting at which any Financial Decisions were Made, Approved or Rejected Should be Retained in the Union Records.

20. Financial Records All Financial Records (Including theMinutes of Executive Board and Membership Meetings) Must Be Kept for a Minimum of SixYears

21. - Retain Copies of Transmittal, Remittance Advice or Membership Documents - Make Deposit Promptly and Keep Check Copy with Deposit Slip - Record Deposits in Receipts Journal Article IV - Income

22. Dues Trust Fund Used to Isolate Dues Dollars -Councils Receiving Dues from Employers - Locals Receiving Dues from Employers - Amounts Payable to Otherse.g. Insurance - PAC Separate Segregated Fund

23. Article VExpenditures - Authorization - Union Money Can Only be Spent with ProperAuthorization - Authorization Should only be Given for Expenditures that Serve a Legitimate Union Purpose Unauthorized Expenditures

24. Article VExpenditures - Authorization There Are Four Types of Authorizations: - Required by Law - Payroll Taxes or IRS Fines - Required by Constitution - Council and International Per Capita Taxes & Surety Bond Premium - Required by Contract - Lease for Office Rental - Vote - Must be Approved by the Executive Board or Membership or in Annual Budget.

25. Annual Budget • Estimate Income and Expenses • Tool for Determining if You can Afford Certain Expenditures • Requiredfor All Large Affiliates • Strongly Recommendedfor All Affiliates BUDGET

26. Article VIExpenditures - Procedures Before You Write a Check, You Need: - Authorization- Approval in Minutes, Budget etc. - Documentation – Such as Supporting Invoices or ExpenseReports - Explanation- Expenditures Should Be Solely for the Benefit of the Union Members

27. Writing Checks/Making Disbursements Checks Should Never Be Written Payable toCASH Checks should be Written Payable to either vendors or individuals CASH

28. Writing Checks/MakingDisbursements All Checks Must be Signed byTwo (2) Officersof the Unionas Authorizedper the Affiliate Constitution It is Recommended that at least Three (3)Signatories be Registered with the Bank for each Affiliate Account as per the Affiliate Constitution. July 28, 2010 ABC Supplies 100.00 One Hundred Dollars Officer 1 Officer 2

29. Writing Checks/MakingDisbursements Never Pre-Sign Checks - Do not Sign any Check before the Date, the Name of thePayee and the Amount have been Entered on the Check Never UseaRubber Stamp for Check Signing Purposes Officer Signature

30. Expense Reports - Each Item Reimbursed Must Have Receipt Attached and Show: (1) Date (2) Amount (3) Union Business Purpose -Indicate Union Purpose on Receipt or on Expense Report

31. NO ATM CARDS Bank Debit Cards or ATM cards May Not be Used Under Any Circumstances

32. Article VIIExpenditures - Documentation - Receipts and Invoices Must Be Maintained to support all Disbursements - Union Business Purpose Must be Clearly Explained - Expense Reportsare Required to Document All Reimbursements to Officers and Members

33. Expense Reports Meals or Entertainment Items List: - Name(s) and Union Relationship of Person(s) Entertained - Explanation of Union Business Discussed - Union Purpose of the Meeting

34. Article VIII - Minutes Executive Board Meetings Membership Meetings Committee Meetings

35. Minutes -Permanent Record of Actions and Decisions -Note Financial Authorizations

36. Financial Reports The Following Reports Must be attached to Minutes: • Monthly Financial Report • Budget • Audit Report Financial Report

37. Article IX - Reporting

38. Financial Reports • Must Be Prepared Monthly • Reported to the Executive Board and Membership • Attached as a Permanent Part of the Local’s Minutes Financial Report

39. Financial Statements - Financial Reports will Vary Depending on the Size and Activities of the Affiliate - More Detailed Reports for Larger Affiliates Financial Statement

40. Financial Reports - Smaller Affiliates -Listing of Income - Listing of Expenses - Excess or (Deficit ) for the Period - Beginning and Ending Cash Balances -Schedule of Unpaid Bills

41. -Income Summarized by Type -Total Income - Expenses Summarized by Type -Total Expenses -Net Income or (Loss) Financial Reports-Larger Affiliates Income Statement

42. Financial Reports - Larger Affiliates -Assets by Type -Total Assets - Liabilities by Type -Total Liabilities -Net Assets or (Deficit) Balance Sheet

43. Other Financial Reports • Budget vs. Actual Reports • Year to Date Balances • Comparative • Supporting Schedules Financial Reports

44. Government Reporting You May Be Required to FileOne (or More) of the Following:*Due Date -IRS Form 990, 990-EZ or 990-NMay 15th -IRS Form 1120-POLMarch 15th -DOL Form LM-2/3/4 March 31st * Calendar-Year Filers

45. AFSCME Reporting Every Affiliate Must File: • Surety Bond Report Due by March 1st of Each Year • Local Union Annual Financial Report (LUAFR)Due May 15th(or 4 ½ Months After Fiscal Year End) • Large Affiliates Send a Copy of their CPA Report instead of a LUAFR

46. Large Affiliate Reporting • All Councils and Local Unions with 2,000 or More Members ( Large Affiliates) Must: • Prepare a Monthly Report Showing Actual Income and Expenses vs. Budgeted Income and Expenses for the Month and Year-to Date • Prepare Quarterly Financial Statements and Annual Budgets and Submit Copy to the International Secretary-Treasurer on a timely basis • Have an Annual Audit Performed by a CPA

47. Article X- Confidentiality & Disclosure -Bill of Rights in AFSCME Constitution- Full and Clear Accounting - Government Required Disclosure-990 and LM - Don’t Disclose Confidential Information Without Authorization - Limit Requests to Legitimate Union BusinessPurposes

48. Article XI - Audits -Required At Least Once Each Year - Upon Change of Officers - When Circumstances Warrant - Consult your Local’s Constitution

49. Audits -Audits are Performed byTrustees or Independent AuditorsNot Otherwise Connected With the Union - All Councilsand any Local Unions over 2,000 Members Must Have an Annual CPA Audit

50. Trustee Audit -Trustees Are Not Voting Members of Executive Board - Arms-Length Relationship Between the Trustees and the Executive Board - Must be Independent in Order to Perform Audit