1. Fiduciary Responsibility Handling of Union Funds By AFGE Local Officers

2. Record Retention Retain Five Years From Date Filed Retain Indefinitely 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 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.

5. 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.

6. CSRA (cont’d) 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 union’s 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

7. 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 One’s 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. Violations of Fiduciary Obligations

8. 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.

9. D.O.L. Regulations (cont’d) 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. 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 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 (AFGE Recommends that the Bond be MORE than 10% )

10. This concludes our PowerPoint® presentation. Any recommendations or suggestions are appreciated. Please send email to nstfeedback@afge.org. nstfeedback@afge.org We hope you have found this presentation useful.