Guidance For Government Audits

While very few union professionals rejoice at the prospect of a government audit of their employee benefit plans or their financial operations, one way to think about them is as a real-world performance assessment. Pitta LLP has deep ties to the labor movement, and we support a healthy, compliant union environment. Our attorneys can provide you with legal counsel for many types of government audits.

Types Of Audits Your Organization May Face

The U.S. Department of Labor (DOL) enforces the Labor-Management Reporting and Disclosure Act and is a primary source of union audits. Areas in which your organization might be asked to demonstrate compliance by the DOL include:

  • Bonding — Unions must carry a bond to cover the loss of organizational assets in case of embezzlement.
  • Elections — Voting opportunities to elect union officers or change dues charged must be fair and impartial.
  • Reporting — Unions are required to file a number of reports with the DOL, including detailed financial statement audits.

Other federal agencies that regularly conduct audits of unions include the Internal Revenue Service (IRS) or the Employee Benefit Security Administration (EBSA). The IRS concerns itself with whether the union or a sponsored benefit plan is compliant with federal tax regulations, and EBSA checks if a union is operating its benefit plans in compliance with the Employee Retirement Income Security Act (ERISA).

If you receive correspondence related to a government audit, a Pitta LLP lawyer can explain the potential implications and how to respond to the government's requests.

Can A Union Be Audit-Proofed?

Engaging in strong organizational housekeeping can prevent panic if you are ever faced with an audit notice. You can improve the compliance-related health of your union by:

  1. Updating (or creating) written policies for records retention, conflicts of interest, investments and expense reimbursement
  2. Establishing internal control systems for audit-worthy items and testing them regularly
  3. Conducting your own internal audit and finding out how you would fare if a federal agency audited you in this area

Call Pitta LLP At 212-652-3890 For Government Audit Guidance

Our firm has advised labor unions for more than 40 years and can help you navigate a government audit without fear. Visit one of our three conveniently located offices in New York, call us at 212-652-3890 or email us to set up an appointment.