DOL CAP Audit Series
CAP audits generally begin with a phone call from the investigator to a union official to discuss arrangements for the audit. This is usually followed up by a letter outlining the following:
- The arrangements discussed for the onsite audit and interviews
- Information to be provided at the opening interview
- A Document Checklist outlining all the documentation to be prepared for the investigator’s review
- A CAP Financial Questionnaire to be completed requesting details on items such as bank account information, salaries, credit and debit cards, bonding, computer software, individuals in oversight, and more.
Items that are commonly requested within the Document Checklist include bank account statements and reconciliations, board and membership meeting minutes, disbursements records, leave and payroll records, membership and dues records, receipts records, investment records, fixed asset inventories, listings of asset and liability balances, independent auditor reports, and copies of the constitution, bylaws, and financial policies. It’s important to note that the OLMS investigator will want original records, not copies. If the OLMS investigator requests to take any original documents offsite, we strongly encourage the Union to make copies of any original documents before they leave the union premises.
When the investigator arrives for the opening interview, which is to be with the Union’s primary officers, prepare for a multi-hour meeting where the investigator is likely to ask questions regarding the following:
- The Union's membership, jurisdiction and leadership
- Descriptions of receipt and disbursement records are to be made available
- Software used and related access controls
- Internal controls over safeguarding and recording receipts, approving cash disbursements and credit card charges, reconciling and reviewing financial reports, processing payroll, etc.
- The process for receiving and recording cash receipts
- The process for approving and disbursing cash disbursements
- The process for determining officer and employee salary and allowance and processing related payroll
- The process for approving and paying lost wages
- The nature and policies surrounding officer and employee expenses
- Record retention policy and maintenance
And much more.
After the opening interview, the investigator may start reviewing the documentation prepared or may schedule a day and time to return to do so. OLMS investigators may work individually and sometimes in a team. The OLMS team will generally try to work at the Union location. Some situations, such as insufficient working space for the OLMS team or lack of Union officials or employees onsite at the union location, may necessitate the OLMS investigators to return Union records to their site and perform their procedures there instead. If that situation occurs, the OLMS team will give the Union a receipt for any records removed from the premises. We recommend that the Union make copies of any records taken offsite by OLMS.
The amount of time the audit takes varies widely – it can take weeks, months, or perhaps even longer to complete. It is impossible to place a time frame on the duration of the compliance audit because much of it depends on the size of the Union, the availability and condition of the Union’s records, types of compliance issues discovered by the CAP audit team, the workload of the OLMS investigator and the level of cooperation with the CAP audit team by Union officials.
Before issuing the closing letter, the investigator will meet with union officials for an exit interview, during which the OLMS investigator discusses any findings from the audit and any recommendations. If applicable, the OLMS investigator will also discuss any steps that the Union must take to comply with laws, such as amending previous Form LM filings or amending financial reporting during this meeting. During the exit interview, union officers and employees have the opportunity to share their opinions and concerns. If there is additional information that comes to light during this meeting, the OLMS investigator may review the information and revise their findings and recommendations accordingly.
After the exit interview, a closing letter is issued by the OLMS investigator to the union officers, which includes any points of recommendation and required changes that are noted from the audit. This letter is also posted to the OLMS website, where it can be accessed by members of the Union and the general public.