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What should you know about union audits?

On Behalf of | Jul 1, 2024 | Union Representation |

Union audits help to ensure transparency, accountability and compliance of labor unions. These audits are more than just a regulatory requirement. They also encourage financial integrity and build trust in unions and their members.

A union audit verifies that completeness and accuracy of a union’s financial records. An auditor reviews a variety of concerns, such as verifying that income and expenses are recorded properly. They also check to see if funds are being used in accordance with applicable regulations and union bylaws. Discovering discrepancies offers a union a chance to correct issues before they become worse.

What does a union audit look for?

Union audits can be handled in a variety of ways. Some unions have internal auditors to handle routine audits. External independent auditors are usually brought onboard for more detailed and impartial audits. Government entities will sometimes conduct an audit on a union.

Union audits cover several areas to ensure the overall financial and regulatory presentation is accurate. They will take a look at the financial statements, including the balance sheet, income statement and cash flow statement.

The auditor will review the internal controls the union has in place and determine if those are being upheld by union leaders. Regulatory compliance is another primary concern. This includes compliance with all governmental regulations that apply to the union.

What are the benefits of regular union audits?

Unions and their members can benefit from regular audits because they enable issues to be caught and addressed quickly. This is especially important when it deals with resource allocation. Doing what’s best for the union and the majority of members must remain a priority. Union audits can help to prevent fraud that makes it impossible to do this.

Regular audits can also provide union stakeholders with a comprehensive look at the financial and operational states of the union. This transparency is valuable, particularly when it comes to stakeholders holding union leaders accountable for their actions.

Union audits can help to protect the financial state of a union by encouraging integrity among those in charge of finances. It also helps with legal compliance. Accountability to the union members can help to keep the leadership on the right track. Ultimately, union leaders must ensure they have everything set up and moving forward in accordance with legal requirements and union bylaws.