Secretary-Treasurers’�Town Hall�

Presented by Jason Busch

CWA Finance and Membership Administrator

jbusch@cwa-union.org

202-340-9410

Areas to Cover

• Annual Budget
• Expense Reimbursement
• Double Dipping

Why prepare a Budget?

• Preparing a Budget will help you answer the following questions:
• What percentage of the Local’s budget is allocated on to an expense?
• Are we spending to much on certain items and not enough on others?
• Are we allocating funds to areas, programs and activities that help build the Local Union and involve members?

Predicting Income

• To predict income, you should forecast what your membership may be and identify all other sources of income such as: interest on savings and investments, royalty income, hall rental income, etc.
• The bulk of a Local’s income is derived from membership dues and thus, may be difficult to predict. Some of us are in periods of growth, some locals are fairly stable, and other are faced with declining membership. In the interest of safety, it usually makes sense to assume the “worst possible” scenario in making membership predictions.
• DO NOT include income that cannot be accurately predicted and DO NOT include unrealistic income for the sole purpose of balancing a budget.

Ways to Predict Income

• There are several ways to help you predict income, such as:

​

• Using an average of Income from QuickBooks or other Accounting Software
• Using an average of Income from the Local’s Dues Summary Report.
• Using an average of Income from the Local’s LM report.

QuickBooks Example

Dues Summary Example

1. Pull MOR Report for Membership Numbers
2. Pull Settled Transactions by Date Range

​

​

Budgeting for Expenses

• To plan for future expenditures, you should decide:
• which services and activities you want to provide to your members and
• determine how much each will cost.

Budgeting for Expenses

• Take into account the following four types of expenditures:
1. Those that are required by law, such as payroll and property taxes.
2. Those that are required by the CWA Constitution, such as affiliation fees.
3. Those that are required by contracts, such as leases, equipment rentals, employment contracts, etc.
4. Those that are determined by the local.

Budgeting for Expenses

• Listing all existing programs, services and activities individually and come up with an amount for each.
• Listing all programs proposed for the coming year.

​

Budgeting Expenses

• You should also include a “contingency line” in the budget, because it is impossible to predict with certainty all events that will occur in a coming budget year. Also, you may want to include a line call “Special Project” to allow for items and issues that were not foreseeable at the time that the budget was prepared.

​

• Contingency Line: a future event or circumstance which is possible but cannot be predicted with certainty.

Budgeting Expense - Sample

Budget - Example

Budget Review

• Compare your total expenditures to total income and if you have a surplus, you may want to bank it for future use, or expand your local’s programs.
• If you have a deficit, you should decide which activities must be reduced or eliminated.

​

Expense Reimbursement

• Items Needed for all expenditures:
1. Authorization
2. Documentation
3. Explanation

​

• However, reoccurring monthly expenses do not need authorization if it is stated in your By-Laws or written Cash Disbursements Policy.

What the DOL is Looking for?

• Payments to Vendors
1. Does the Local have a written Cash Disbursement Policy?
2. Do you have supporting documentation for payments to vendors?
3. Was it for a legitimate business purpose?
4. Was it properly approved?
5. Was it accurately recorded in the Local’s accounting system?

​

IT IS IN YOUR BEST INTEREST TO IMPLEMENT A CASH DISBURSEMENT POLICY, IF YOU DO NOT ALREADY ONE

​

Cash Disbursements – DOL Requirements

• Records should include:
1. Written Cash Disbursement Policy
2. Copy of Expense Voucher
3. Disbursement should have supporting documents such as receipts, bills, etc.
4. Proper Authorization

​

• Recommendations (See Example Expense Voucher)
• ALL expenditures MUST be:
1. Authorized
1. As put forth in the Local Bylaws
2. A membership meeting motion
3. Local Executive Board action
2. Documented
• Supporting invoice, bill or receipts attached to a signed and dated voucher
3. Explained
• Explain the activity which caused the expense
4. Signed by two Officers
• Normally, the Local Treasurer and Local President
• A small number of other Officers should also be signatory

​

​

​

​

​

​

​

Expense Voucher - Example

Travel Reimbursement / Credit Card– DOL Requirements

• OLMS requirements:
1. Adopt a clear policy on reimbursed travel expenses and credit card payments
2. Establish what documentation is needed for an official OR member to be reimbursed
3. Establish a procedure that provides for approval of travel expense claims and credit card payments
4. The union must then properly report all expense payments on the appropriate line items and schedules on the Form LM-2, LM-3 or LM-4 it files.

Adopt a Clear Travel Reimbursement / Credit Card Policy

• Policy should answer the following questions:
1. Who is eligible to receive reimbursed travel expenses?
2. Under what circumstances may reimbursed travel expenses be paid? What if the local already pays the official a monthly expense allowance?
3. What travel expense are covered by the policy?
4. Must the travel or other expense have been authorized in advance?

Establish What Documentation is Required to Approve Payment

• What Documentation is Required?
1. Airline Receipts
2. Itemized Hotel Receipts
3. Itemized receipts for meal purchases
• For those with per diem policy the DOL and the International require receipts
4. Mileage expenses supported by:
1. Log that lists Beginning and ending mileage each day
2. The destination
3. Purpose of each trip
4. Print out of google maps or similar documentation of mileage
5. Authorization for reimbursement should be in writing

​

​

Approval of Travel Expense / Credit Card Reimbursements

• In order for the travel expense to be eligible for reimbursement, it should be for union business and authorized in accordance with the Local’s constitution and Bylaws.
• How is it approved?
1. Depending on the Local’s Travel Policy the expenses should be approved by a vote of the executive board, membership or officers.
• Once identified, the process should be specified in the Local’s Constitution, Bylaws and/or expense policy.
• If the policy requires approval of individual expense claims by the membership, there should be a motion and vote recorded in the meeting minutes.

​

Travel Expense Voucher - Example

Salary and Allowance Authorization

• Local’s must retain documentation for salary, lost wages, and allowances
• Authorization must be documented:
1. Does it state in the Local’s Constitution or Bylaws?
2. Was it approved in Membership Meeting by motion and approval?
3. Was it approved in Executive Board Meeting by motion and approval?
4. What does the allowance cover?

​

​

Double Dipping

• Double Dipping occurs when you obtain money from two sources for the same date(s) and time(s).

​

• For example: When an Officer, Member or Employee gets paid by their employer for hours worked and then gets paid by the Local or Headquarters for the same exact hours.

Lost Time – DOL

• DOL Recommends:
1. Unions adopt clear policies and procedures for making lost time or similar payments
2. Use Vouchers that require detailed information to support lost time payments
3. NOTE: If an employee is taking vacation paid by the employer they are not eligible for lost wages from the union (double dipping) unless there is approved bylaw language that allows this exception to the rule. However, if you are submitting lost wages to CWA Headquarters you will not get paid for vacation days.

​

These practices will allow the union to properly report lost time payments on the Labor Organization Annual Report, Forms LM-2, LM-3, or LM-4.

Lost Time – DOL Recommendations

• DOL Suggests answering the following questions in as much detail as possible:
1. Who is eligible to receive lost time payments from the union and for what purpose?
1. Does your Local permit payments to officials attending training programs, labor council meetings, or rallies?
2. What about stewards handling grievances or members serving on a negotiating committee?
2. What rate of pay applies to a union lost time claim?
3. How are union lost time claims approved and by whom?
• Does it require a vote of the membership or the executive board and is it recorded in the meeting minutes?

Lost Time – DOL Recommendations

• How are union lost time claims documented in the union books and records?
1. What detail is required to document a lost time claim:
• Lost-Time Voucher stating hourly rate, explanation of lost time and number of hours.
2. What document is provided to substantiate the hourly rate;
• Bargaining unit contract
• Paycheck Stub

Lost Time - Voucher

Lost Time Voucher - Example

Full-Time/Part-Time Reimbursement by the International

• Receipts for all expenses required.
• CWA has adopted the IRS per diem chart for meal expenses as part of their accountable plan. These rates will be used to satisfy the substantiation requirements. This charts sets rates for daily meals and incidentals by location within the continental United States.
• When out-of-town on approved International work, Local members will be reimbursed up to the IRS per diem. If no over-night stay is required, the reimbursed amount will be $25.00.
• When traveling, the most economical and practical mode of transportation should be used.

​

​

Full-Time/Part-Time Reimbursement by the International

• The IRS standard business mileage rate is used to determine the amount reimbursed for personal car use.
• Hotel expenses will be paid, excluding incidentals. (ie. Movies, liquor, etc.) Room service will be paid for personal meals up to the IRS per diem.
• Lost-Time wages will be paid for the approved number of days. Overtime will not be paid.
• Expenses must be submitted for reimbursement within 90 days.

​

All Full and Part-time reimbursements should be entered into the International’s Concur system.

Local Financial Records

• Insure there are no missing bank statements.
• The bank statements are reconciled to the accounting system on a monthly basis and the ending balance agrees with the last bank statement (adjusted for outstanding checks and deposits not posted to bank statements).
• Any bank charges and interest are recorded in the check register.

​

Recommendations: Do’s

• Transparency
• Documentation, Documentation, Documentation
• Segregation of Duties (Checks and Balances)

Authorization

Custody

Record Keeping

• Provide Financial Reports at every membership meeting.
• Use the voucher system for the approval of expenditures.

Recommendations: Do’s

• Have the Executive Board review all expenditures monthly.
• Maintain record of fixed assets
• Adopt policies for cash disbursements, cash receipts, payroll, etc.
• Retain proper documentation and receipts for expense reimbursement and credit card expenses. (Date, where, who attended, what it was for, business purpose)
• Trips - Date, number of miles driven, whether the trip was business or personal, and if business, the purpose of the trip.

​

Recommendations: Do’s

• Maintain accurate membership records, including status and dues payments.
• Maintain adequate records of all contracts and agreements.
• Maintain adequate records for payroll – Salary/wage approval, I-9, employment agreement, etc.
• File required forms and pay required taxes timely.

​

​

Recommendations: Don’t

• Do NOT Hire Family members or their businesses.
• Credit Cards – BEWARE!
• Credit Cards are the leading cause of Locals getting into financial and legal difficulties. A Local significantly increases its financial and legal exposure by issuing credit cards to officers in the name of the Local.
• Do NOT utilize a debit card that accesses the Local’s bank account.

​

Resources:

• Refer to the CWA UOPM Section 11.11 for a handy checklist of both IRS and Federal forms, together with their filing deadlines.

​

Important Resources

• www.irs.gov
• www.dol.gov
• CWA Uniform Operating Procedures Manual

http://www.cwa-union.org/pages/uopm

• Local Officers Resource Manual

CLOSING

• Documentation is the key
• Just because it was done in the past does not mean it was correct
• Always hear, “That is the way we have always done it.” “That is the way the past administration did it.”
• You have a fiduciary responsibility to your members. I strongly urge you to review your finances and be aware of how money is being spent.

WHEN IN DOUBT, YOUR STAFF REP WILL HELP YOU FIGURE IT OUT!!!