Even if your Union has consistently submitted accurate and timely annual financial reports (LM forms) to the Department of Labor (“DOL”), received no complaints from members or external parties and maintained full compliance with the Labor-Management Reporting and Disclosure Act (“LMRDA”), your organization may still be selected—at random—for a Compliance Audit Program (“CAP”) review.
There is also an I-CAP (International Compliance Audit Program) in place. The main difference between the CAP and I-CAP programs is the union type: the CAP focuses on local unions and intermediate bodies, and the I-CAP focuses on international and national unions.
A CAP audit goes beyond a standard financial statement review. While it does scrutinize the Union’s financial practices, its broader aim is to assess overall compliance with the LMRDA or, in some cases, the Civil Service Reform Act. The audit examines the Union’s financial and operational compliance and may reveal deficiencies like financial mismanagement, inadequate recordkeeping, violations of reporting requirements, internal control weaknesses, and governance issues.
Being proactive is the best defense. Preparing for a potential CAP audit in advance not only reduces the stress and uncertainty that can accompany a DOL audit but also reinforces your Union’s commitment to transparency and accountability. Simulating an audit scenario can serve as a valuable internal exercise, demonstrating to both leadership and members that your Union is well-organized, compliant and ready to respond effectively to any DOL inquiries.
Our Labor Unions Services Team has years of experience preparing Internationals and Locals for DOL CAP audits by performing simulated CAP audits for our Union clients (sometimes referred to as mock CAP audits). We can help you be ready and feel confident in the event of an actual DOL CAP audit.
Author: Austin Miller, CPA | [email protected]
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Reach out to our Labor Unions Services Team to discuss how we can assist in strengthening your Union’s operations and ensuring you’re always audit-ready with our simulated CAP audits .
