1. AFSCME 41 st INTERNATIONAL CONVENTION CHICAGO, ILLINOIS FINANCIAL STANDARDS CODE JULY 13, 2014

2. TODAY’S HOST Laura Reyes, Secretary-Treasurer, AFSCME International

3. Additional Hosts  Charles Jurgonis, Director, Financial Services  Jeff Taggart, Associate Director, Auditing & Accounting  Karen Tyler, Assistant Director, Auditing

4.  William Del Pino  Cathy German AFSCME AUDITORS PRESENTERS

5.  William Del Pino wdelpino@afscme.org  Cathy German cgerman@afscme.org PRESENTERS CONTACT INFORMATION

6. Today’s Topic THE AFSCME FINANCIAL STANDARDS CODE - 2013 REVISED Financial Standards Code

7. AFSCME FINANCIAL STANDARDS CODE  Adopted by International Executive Board  Part of AFSCME IU Constitution

8. 2013 AFSCME FINANCIAL STANDARDS CODE  Article I - Article XI  Appendices  Glossary of Terms  Trustees Audit Guide  Trustee Audit Checklist

9. Article I - Purpose and Scope Establish Minimum Standards for the Handling of Funds and Records Maintenance

10. Article II - Custody of Funds Bank Accounts Should Be:  In Federally Insured Institutions  In Name of Union  Contain Union Funds Only

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

12. Investments Approved Investments:  Insured Bank Accounts  Insured Government Investments  Other Investments Approved by Executive Board

13. The Following Investments Are Not Allowed :  Purchase of Lottery Tickets or Other Gaming Activities  Investment in Any Illegal Activities

14. Investments Safest Investments Available:  Treasury Bills  Certificates of Deposit  Government Notes and Bonds

15. 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

16. Article III Maintaining Records

17. Transaction Records Cashbook or Journals Are Required  Manual Cash Book  Receipts & Disbursements Journal  Computerized Cash Book

18. 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

19. 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

20. 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

21. 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

22. Dues Payment Records  International & Council Per Capita Tax Reports  Dues Deduction Rosters  Council Rebate Transmittal

23. Reimbursement Records All Officer and Employee Expense Reports and All Receipts for Expenses Reimbursed

24. Petty Cash Records Records of Petty Cash Expenditures - Petty Cash Slips - Receipts - Petty Cash Journal

25. Payroll Records  IRS Form 941s  IRS Form 940s  IRS Form W-2s  Required State & Local Payroll Reporting

26. 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

27. 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

28. 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.

29. Financial Records All Documents Constituting Evidence of Ownership by the Local Union of Any Property or Equipment

30. 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

31. Key Point Financial Records, including Minutes of Executive Board and Membership Meetings, must be kept for a minimum of Seven Years.

32. Article V Expenditures - Authorization There Are Four Types of Authorization:  Law  Constitution  Contract  Vote Unauthorized Checks

33. Required By Law  Payroll Tax Deposits and Related Payments (FICA, Unemployment Taxes, etc.)  Possible Fines Imposed by IRS for Late Filing of Form 990

34. Required by Union Constitution  International and Council Per Capita Taxes  Payment of Surety Bond Premium to International

35. Required by Contract  Equipment Rental  Meeting Hall Rental Prior Authorization Required:

36. Authorized By Vote  Membership  Executive Board  Delegate Assembly

37. Key Points Expenditures Must Be Authorized and Documented in the Minutes

38. Article VI – Expenditures Procedures Before You Write a Check, You Need:  Authorization  Documentation  Explanation

39. No Cash Payments Exception: Petty Cash Never Write a Check Payable to Cash

40. 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

41. No ATM Cards Bank Debit Cards or ATM Cards May Not Be Used Under Any Circumstances

42. 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

43. Article VII Expenditures - Documentation Receipts and Invoices Must Be Maintained to Support all Expenditures

44. Non-Taxable Payments Accountable Plan = Expense Report  Reimburse Actual Expenses  Non-Taxable to Recipient

45. Expense Reports Required to Document Reimbursements : Officers Members Employees

46. Expense Reports Each Expense Item Reimbursed Must Have Receipt Attached and Show: (1) Date (2) Amount (3) Union Purpose

47. Expense Reports  Original Receipts Must Be Attached  Expense Reports Should Be Filed Timely  The IRS Considers Filing within 30 Days to be Timely

48. Expense Reports Meal or Entertainment Items List:  Name(s) and Union Relationship of Person(s) Entertained  Explanation of Union Business Discussed

49. Expense Reports Required Account For All Costs Paid Directly by Affiliate:  Direct Hotel Billings  Charges on Union-Owned Credit Cards  Payments to Travel Agency

50. Expense Reports All Expense Reports Must Be Approved By Someone Other than the Preparer

51. 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.

52. Article VIII - Minutes

53. Meeting Minutes  Record of Proceedings  Permanent Record of Actions and Decisions  Document whether a Quorum was present  Minutes note Financial Authorization for Expenditures.

54. Financial Reports The Following Must Be Attached to the Minutes:  Monthly Financial Report  Budget  Audit Report

55. Article IX - Reporting

56. Financial Statements  Prepared Monthly  Reported to the Executive Board and Membership  Attached as a Permanent Part of the Local’s Minutes

57. 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

58. 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

59. 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 15 th  IRS Form 1120-POL March 15th  DOL Form LM-2/3/4 March 31st * Calendar-Year Filers

60. 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)

61. Article XI - Audits

62. Audits - How Often?  Required At Least Once Each Year - Check Your Constitution  Upon Change of Officers  When Circumstances Warrant

63. Audits - By Whom?  Trustees  Independent Auditors Not Otherwise Connected With the Union

64. Trustee Audit Trustees May Follow Procedures Outlined in the Trustees Audit Guide

65. 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

66. Audit Findings  Findings Reported to Executive Board and Membership  Audit Report Attached to Minutes of Meeting at which it was Presented

67. Questions & Answers