DOL CAP Audit Series
While CAP audits can examine any financial, business and compliance aspects of a Union, there are a handful of topics that tend to be examined frequently among unions, for example:
- Officer and Employee Expenses and Compensation – The method for approving officer salaries, adherence to DOL documentation requirements and Union policies for expense reimbursements and credit card charges, reporting of gifts on LM-30, background checks, etc.
- Record Retention – Adherence to DOL requirements and Union policy, etc.
- Internal Controls – Cash receipts and cash disbursements processes, fixed asset acquisition, safeguarding and inventory processes, documentation of control functions (e.g., review of reconciliations), segregation of duties, etc.
- Accuracy and Completeness of LM Reporting – Accurate reporting of officer and employee disbursements, completeness of entities reported under Item 10, giveaway reporting and documentation, netted transactions, descriptions of other assets and liabilities, officer activity (past, new, current), etc.
- Union-Owned Automobiles – Insurance coverage, mileage logs, written policy, etc.
- Bonding – Sufficient coverage, etc.
- Constitution and Bylaw Changes – Timely reporting and attachment of changes on LM report, etc.
Are You Prepared?
Whether you want to prepare for the possibility of such an audit or you have received a call or notice that your Union has been selected for one, there are things you can do to prepare for a CAP audit:
- Review your policies for adherence to DOL requirements: officer and employee expenses, travel, record retention, auto usage and documentation
- Prioritize and enforce collection and retention of credit card and employee reimbursement documentation
- Review internal control processes for appropriate segregation of duties and documentation that controls occurred as designed
- Review bonding for adequate coverage
- Consider performing a simulated CAP audit internally or with an outside accounting firm
Although CAP audits can sound scary initially, remember this is an opportunity to improve your Union’s operations and transparency.