Article V - Expenditures - Authorization
Union money can only be spent with proper authorization. Authorization should be given only for expenditures that serve a legitimate union purpose. It is the duty of all union officers, including the Executive Board, to exercise adequate monitoring of all authorizations to ensure that funds are spent only for legitimate union purposes. Officers and employees have a fiduciary responsibility to ensure that the union’s assets are managed prudently and all expenditures are for the exclusive benefit of the affiliate and its members. Proper authorization is accomplished by the following methods:
Payments required by law need no further authorization. Examples include taxes on property owned by the union, payroll taxes withheld from salaries and allowances of union officers and employees, fines and/or penalties assessed against the affiliate or other payments required by government or regulatory agencies.
Payments required by a union constitution (constitution may be the International, Council or Local Union Constitution) to which the affiliate is subject need no further authorization by either the Executive Board or membership. Examples include International Union and Council per capita taxes, and payment of fees for bonding of officers and employees as required by the International Constitution. (This may also be a requirement of federal law.)
Payments to meet contractual obligations, provided proper advance authorization of the original contract or policy was obtained from the membership (or delegate assembly) or the Executive Board, may be made without further authorization. Examples include payments made pursuant to leases on office or meeting space, automobiles, and equipment; salaries for employees covered by a collective bargaining agreement or other contract; payment of fringe benefits or employee salary deferrals into a retirement fund covered by terms of a contract; and payments being made on a time-payment contract for property of any nature.
Payments may be authorized by vote of the membership, Executive Board, a committee of the Executive Board, or other delegate assembly as outlined in the constitution of the affiliate. Examples include:
- By motion properly made and carried authorizing the expenditure of a specific amount (or “not to exceed a specific amount) for a specific purpose. The motion in its entirety should be entered in the minutes.
- By motion properly made, carried and entered in the minutes, authorizing regular payment of recurring obligations (example: rent for a meeting hall once each month). Having been made, such authorization will stand unless canceled by motion made, carried, and entered in the minutes at a subsequent meeting. Recurring obligations must be authorized at the beginning of each fiscal year.
Long-term obligations such as mortgages, rental agreements, equipment rental and other extended time period agreements should be reviewed annually and upon change of officers. Short-term contract obligations should be reviewed quarterly or monthly to ensure compliance, accuracy and agreement to terms.
- By motion properly made, carried, and entered in the minutes, authorizing the officers to enter into a purchase or service contract. Once signed, the contract becomes a recurring obligation, and required payments may be deemed authorized. A copy of the contract must be attached to the minutes of the meeting at which it was approved and must also be made a part of the financial officer’s records.
- By motion properly made, carried, and entered in the minutes approving a budget for the coming year. This budget shall set forth the anticipated income and the sources thereof, and the anticipated expenditures and their purposes. While it is recommended that all AFSCME affiliates adopt annual budgets, all Councils and any local having 2,000 or more members are required to adopt an annual budget in advance of their fiscal year. Affiliates should avoid deficit based budgets.
By itself, a budget does not authorize any particular expenditure. No payment should be made or costs incurred until the proper approvals for the expenditure have been made. Some affiliate constitutions may authorize certain officers to spend up to the budgeted amount for line items. Other constitutions may require specific Executive Board approval for each expenditure.
Budgeted versus actual income and expenses should be monitored monthly to ensure the affiliate stays within spending targets.
In general, financial officers have authority to reasonably reallocate amounts between budget line items as long as the bottom line remains unchanged. Any such changes should be presented to the Executive Board. Should the bottom line of the income or expense budget require modification, the revised budget must be submitted to the Executive Board for review and approval. All changes to the budget must be clearly recorded in the minutes.
The budget must be attached to the minutes of the meeting at which it is presented and approved, or revised and approved, and made a permanent part of the affiliate’s records. All Councils and those locals having 2,000 or more members are required to file a copy of the affiliate’s adopted budget, and any major modification or revision to such budget, with the International Secretary-Treasurer within ten days after its adoption.
Since all such budget authorizations are entered in the minutes, the minutes themselves are to be considered a part of the financial records and must be retained for a period of seven (7) years.