2. FINANCIAL STANDARDS CODE Presenters: Cathy German, International Union Auditor William Del Pino, International Union Auditor

3. AFSCME 42 ND INTERNATIONAL CONVENTION LAS VEGAS, NEVADA FINANCIAL STANDARDS CODE WORKSHOP JULY 18 & 19, 2016

4. AFSCME FINANCIAL STANDARDS CODE Establishes Minimum Financial Standards Adopted by International Executive Board

5. 2016 AFSCME FINANCIAL STANDARDS CODE Article I - Article XI Appendices Glossary of Terms Trustees Audit Guide Trustee Audit Checklis t

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

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

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

9. Investments Approved Investments: Safest Investments – Insured Bank Accounts – Insured Government Investments – Other Investments Approved by Executive Board

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

11. Article III - Maintaining Records

12. Transaction Records Cashbooks or Journals Are Required Manual Cash Book Receipts and Disbursements Journal Computerized Cash Book

13. Income Documentation Copies of Transmittal, Remittance Advice or Membership Documents Make a Copy of all Checks Received Deposit Slips Deposit funds promptly in full

14. Bank Records Bank Statements & Canceled Checks: Keep Checks Copies with the Bank Statement Reconcile Bank Statements Monthly Request Missing Checks or Bank Statements Verify Deposits to Deposit Slips

15. 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

16. Paid Bill Records Paid Bills or Invoices - When Signing Checks, Write the Date Paid, Amount Paid, and Check Number on Your Copy of the Bill or Invoice

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

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

19. 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

20. Financial Records Minutes of any Executive Board, Membership, or Committee Meeting at which any Financial Decisions were Made, Approved or Rejected.

21. Key Point Financial Records, Including Minutes of Executive Board and Membership Meetings, Must Be Kept for a Minimum of Seven Years

22. QUESTION? How do you properly void a check?

23. Pick the Correct Answer: 1. Shred the void check 2. Write Void Across the Check In Ink 3. Write Void In Ink, Tear Off the Signature Portion & Retain the Void Check

24. Article IV - Income Retain Copies of Transmittal, Remittance Advice or Membership Documents Deposit Slips

25. Receipts Journal Manual or Computerized Date and Amount of Receipt Source of Funds Purpose of Funds

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

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

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

29. Required by Contract Equipment Rental Meeting Hall Rental Prior Authorization Required:

30. Authorized By Vote Membership Executive Board Delegate Assembly

31. Article VI - Expenditures Procedures Before You Write a Check, You Need: Authorization Documentation Explanation

32. No Cash Payments Exception: Petty Cash

33. PRESIGN CHECKS

34. NEVER USE A RUBBER STAMP FOR CHECK-SIGNING

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

36. Check Signers All Checks Must Be Signed by Two Officers It is Recommended That at Least Three (3) Signatories Be Registered with the Bank for Each Affiliate Account

37. Writing Checks Enter the Date, Amount, Check Number, Payee and Purpose on the Check Stub or Check Register

38. Bills or Invoices Write Check Number, Date, and Check Amount on the Face of the Bill, Invoice or Expense Report File Paid Bills in an Orderly Manner

39. Article VII Expenditures Documentation Receipts and Invoices Must Be Maintained

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

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

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

43. Expense Reports Original Receipts Must be Attached Expense Reports Should be Filed Timely

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

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

46. Expense Reports All Expense Reports Must Be Properly Approved by Someone Other than the Preparer

47. Union-Owned Credit Cards AFSCME Strongly Recommends against the use of Union-Owned Credit Cards Circumvents the requirement that 2 Officers sign all disbursement checks

48. QUESTION? Which of the Following Statements is True?

49. Pick the Correct Answer: 1. Checks & Withdrawals only Require 1 Signature 2. You Should Never Pre Sign a Check 3. ATM or Debit Cards are Allowed

50. Article VIII - Minutes

51. Meeting Minutes Record of Proceedings Permanent Record of Actions and Decisions Document whether Quorum was Present Previous Minutes were Read and Approved

52. Minutes Note Financial Authorizations: What Motions Were Made Who Made the Motions Who Seconded the Motions Whether the Motions Passed

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

54. Key Point Minutes are Part of the Financial Records of the Union and Must be Retained for Seven Years

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. Components of Financial Reports Total Income Total Expenses Excess or (Deficit) for the Period Beginning and Ending Cash Balances (Assets) Unpaid Bills (Liabilities)

58. Government Reporting You May Be Required to File One (or More) of the Following: * Due Date IRS Form 990/990-EZ May 15 th and/or 990-N IRS Form 1120-POL March 15th DOL Form LM-2/3/4 March 31st * Calendar-Year Filers

59. AFSCME Reporting Every Affiliate 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)

60. 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

61. All Councils and Local Unions with 2,000 or More Members Must: - Prepare Quarterly Financial Statements - Submit Copy to the International Secretary-Treasurer

62. Article X - Confidentiality of Financial Records

63. Disclosure Bill of Rights - Full and Clear Accounting Government Required Disclosure - 990 and LM

64. Article XI - Audits Required At Least Once Each Year - Check your Constitution Upon Change of Officers When Circumstances Warrant

65. By Whom? Trustees Independent Auditors Not Otherwise Connected With the Union

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

67. Trustee Audit Independence: Trustees Not Voting Members of Executive Board Arms-Length Relationship Between the Trustees and Executive Board

68. CPA Audit All Councils and any Local Union with 2,000 or More Members Must Have an Annual CPA Audit

69. 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

70. Questions & Answers

71. Instructor Contact Information Cathy A. German, CPA AFSCME International Union Auditor Email: cgerman@afscme.org Direct Line: (202) 429-1003 FAX: (202) 296-5279 Auditing Department: (202) 429-5032

72. Instructor Contact Information William Del Pino AFSCME International Union Auditor Email: wdelpino@afscme.org Direct Line: (202) 429-1004 FAX: (202) 296-5279 Auditing Department: (202) 429-5032