Trustees act as internal auditors. The primary duty of Trustees is to uncover any fraud or misuse of union funds. The secondary function of Trustees is to review the way that the Secretary-Treasurer is doing his or her job and to suggest ways that the financial affairs of the local could be improved.
Duties Of Trustees
- Trustees act as internal auditors.
- The primary duty of Trustees is to uncover any fraud or misuse of union funds.
- The secondary function of Trustees is to review the way that the Secretary-Treasurer is doing his or her job and to suggest ways that the financial affairs of the local could be improved.
- To carry out these functions, Trustees should audit the activities of the Secretary-Treasurer every six months and report the results of the audit to the membership and mail a copy to the National Secretary-Treasurer’s Office in Ottawa.
- Specifically, Trustees have the following responsibilities:
Trustees should investigate the following:
- That proper financial controls are in place and being used.
- That the ledger is up to date and properly completed.
- That the statement of income and expenses for the period under review has been completed properly.
- That monthly bank reconciliation’s have been completed properly.
- That projected income is adequate to cover projected expenditures.
- That surplus funds are invested properly.
- That the inventory of equipment and supplies is up to date.
- That the local’s insurance is adequate to cover the replacement of all equipment inventoried.
- That all changes to the local’s bylaws have been approved by CUPE.
- Complete the Trustees Audit Program.
- Develop recommendations to deal with any problems found during the audit.
- Send a copy to the office of the National Secretary-Treasurer in Ottawa.
- Distribute copies of the trustees report to the membership and make a verbal report that highlights any recommendations for changing procedures.
- Request help if you are having trouble completing the audit or if you suspect any dishonesty.
Assemble Materials and Reports
- Before starting an audit, Trustees will need the following from the local’s Secretary-Treasurer for the period to be audited:
- Yellow copy of all per capita receipts submitted for the period under review.
- Secretary-Treasurer’s completed ledger (in paper form).
- For all accounts of the local - bank statements and returned cheques, or if applicable, bank books and returned cheques.
- Cheque stubs.
- Copies of all bank reconciliations completed by the secretary-treasurer.
- Documentation for all disbursements during the period (this would include authorization vouchers and/or invoices).
- Deposit book(s).
- Statement of income and expense forms previously completed by the secretary-treasurer.
- Minute book(s) which detail all expenditures approved by the membership.
- Copy of local’s by-laws.
- Employer’s dues check-off list (or whatever documentation is used by the secretary-treasurer to ensure dues are deducted properly).
- Receipt book (or whatever type of documentation, in addition to the bank deposit book, is used by the secretary-treasurer to record money received by the local).
- Copy of any insurance policy held by the local on account of assets owned by the local (if applicable).
- Copies of any financial reports presented by the secretary-treasurer to the executive and/or membership during the period under review.
- Any T-5’s (which show investment income for the local) received for the period under review (if applicable).
- If the local has rental revenue, copies of any rental agreements.
- If the local sells supplies, all documentation or records kept to record the transactions.
- Copy of the CUPE constitution.
- You should also have:
- Scrap paper
- Red pen (for totals)
- A computer if the treasurer used a spreadsheet or bookkeeping program to record and classify transitions.
- The Secretary-Treasurer must complete a Secretary-Treasurer’s Report to the Trustees form. This form consolidates the information on the monthly treasurer’s report forms for the period being audited.
- Trustees do more than just check to see if all funds spent by the local can be accounted for.
- A big part of any audit is checking to see if proper controls are in place.
- To be of value to your locals, Trustees report back and often make recommendations.
- To help trustees make recommendations, CUPE has developed a set of Suggested Recommendations (PDF download).
- These recommendations suggest things that trustees can suggest if they have concerns about anything they find during their audit.
- To help guide trustees through an audit, CUPE has developed a Trustees’ Audit Program. (PDF download)
- By going through the steps outlined in the program, a complete audit of a local’s books can be carried out by Trustees.
- CUPE Education has a workshop for local union trustees.
- Trustees are sometimes faced with missing documentation, or cheques, poorly done books that don’t balance, etc.
- Trustees cannot complete an audit until all missing documentation is accounted for and until the Trustees understand exactly how the Secretary-Treasurer documented each transaction in the Ledger.
- If documents are missing, ask the Secretary-Treasurer for them.
- If the missing material is not forthcoming, contact your CUPE representative and explain the problem.
- If you can’t follow how the Secretary-Treasurer did the bookkeeping, ask him or her to explain how they handled each transaction that you didn’t understand.
- If you find the explanations reasonable and there is no evidence that cheques or invoices have been tampered with, accept the explanations and make recommendations on how the bookkeeping could be improved.
- If you remain suspicious contact your representative.
- If you find evidence of fraud such as unexplained withdrawals, forged signatures, phoney expense vouchers, etc. immediately contact your representative and the CUPE Accounting Department in Ottawa.
- Collect any evidence of wrongdoing and give it to one trustee who will be responsible for turning it over to the police or the CUPE Accounting Department.
- Make sure that no one can tamper with or destroy the evidence. Do not discuss the findings with anyone except other trustees, the police, your representative or the CUPE Auditor.
- It is important not to alert a thief that you are on to them.
- And it would be terrible to damage someone’s reputation if your suspicions were unfounded.