Selected Annotated Bibliography on Union Accounting and Financial Reports

Selected Annotated Bibliography on Union Accounting and Financial ReportsAuthor(s): Robert H. Sexton and Herbert G. Heneman, Jr.Source: Industrial and Labor Relations Review, Vol. 2, No. 1 (Oct., 1948), pp. 116-120Published by: Cornell University, School of Industrial & Labor RelationsStable URL: http://www.jstor.org/stable/2519263 .

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BIBLIOGRAPHY

SELECTED ANNOTATED BIBLIOGRAPHY ON UNION ACCOUNTING AND FINANCIAL REPORTS

ROBERT H. SEXTON AND HERBERT G. HENEMAN, JR. *

Sound financial and accounting practices are as important for efficient operation of a union as they are for a business organization. In only a few unions, however, has this necessity been clearly recognized. Considerably less effort and attention have been devoted to accounting practice and procedure in unions than in comparable business organizations. Consequently these practices are neither as complete nor as efficient, in most cases, as those prevailing in industry and government. The lag in union financial practices may be attributed, in part, to the short period of time that many unions and locals have been in operation, and to the fact that many unions and locals have had to rely upon persons unfamiliar with accounting principles to do their bookkeeping. There has, however, been noticeable improvement in the caliber of accounting practice in some unions in recent years. The present selected annotated bibliography is designed to call attention to outstanding examples of current union accounting practices.

Perhaps the outstanding feature of present union accounting methods is their variation in quality and efficiency. In general, each international pre- scribes a financial or accounting system for member locals, so that there is substantial variety in practices. On the other hand, the growing trend toward public reporting of union financial statements, resulting in part from federal and state legislation, will probably require greater comparability and improved quality of both accounting practices and statements.

It is the hope of those compiling the present bibliography that future re- visions of the bibliography will be able to report substantial improvement in both the caliber and practice and the quantity of technical information made available on this important and timely subject.

For those who wish to consider possible improvements in current accounting procedures, attention is invited to the University of Minnesota Industrial Relations Center Technical Report Series, Number 1, "Accounting Methods for Local Unions."

* Mr. Sexton is Research Assistant, and Mr. Heneman is Assistant Director and Research Associate, Industrial Relations Center, University of Minnesota.



BIBLIOGRAPHY 117

GENERAL: UNION ASSETS, RESOURCES, AND FINANCIAL PROCEDURES

Bureau of Labor Statistics, U.S. Department of Labor. "State Laws Requiring Union Registration and Financial Reports." Monthly Labor Review: Vol. 64, pp. 1052-1056, June 1947. Lists legislation in effect April 1947 in ten states, briefly describes provisions

of laws, and discusses legal status of registration provisions, items included, use of reports, attitude of organized labor, and union registration in Great Britain.

Daly, J. J. "How Rich Are the Unions; Organized Labor Is Neither Weak Nor Poor, the Unions Have Been Growing through the Years." Nation's Business; Vol. 33, pp. 25-26, November 1945. Discusses assets and financial resources of national labor unions. Gives

examples of properties owned and sums raised by assessment of members. Contends annual income reports to Commissioner of Internal Revenue are of little value in determining assets of unions.

Hamburger, Siemon L. Background and Special Features of Trade Union Accounting, New York: Educational Department, International Ladies" Garment Workers' Union (AFL), 1710 Broadway. 8 pp, mimeographed. Explains basis for setting up a union auditing procedure. Outlines principles,

procedure, and accounting methods used by a union. Discusses dues collection, dues recording, local union records, district council records, joint council records, general (national) office records, periodic reports to general office, audit procedure in general, and the job requirements of union auditor.

"Of, By, and For the People." Economic Outlook. Department of Research and Education, Congress of Industrial Organizations, 718 Jackson Place, N.W., Washington 6, Vol. 7, No. 2, February 1946. 8 pp. Issue devoted to description of practices of CIO unions in organization,

financial structures, and constitutional provisions to protect rights of indi- viduals and to limit amounts of dues, fees, and assessments. Gives table showing following financial practices of CIO national and international unions: annual salary of highest paid officer, initiation fee, monthly dues, portion of dues going to international union (per capita tax), how international levies special financial assessments, international assessments paid the previous year by typical member, international reports on receipts and expenditures to membership, provisions for audit and publication of financial reports, and lists requirements with respect to reporting financial condition of locals to individual union members.

Peterson, Florence N. American Labor Unions. New York: Harper, 1945. Chapter VIII, "Finances and Dues," pp. 113-146, includes a general discus-

sion of costs of administration, financial records, dues and assessments, and initiation fees of American unions. Also explains methods used by parent organizations to control local unions, and lists in tabular form the financial



118 INDUSTRIAL AND LABOR RELATIONS REVIEW

requirements (dues limitations, etc.) in the constitutions of nearly 200 national and international unions.

Sexton, Robert H., and Heneman, H. G. Jr. Accounting Methods for Local Unions. Industrial Relations Center, University of Minnesota, Technical Report Series, No. 1, Minneapolis, 1947. Appraisal of selected financial and accounting practices of local unions,

including presentation of a simplified model or standard system suitable for adoption by local unions. The standard system is sufficiently flexible so that it may be modified to meet the particular accounting requirements of individual international unions, and is at the same time designed for use by persons who have not had previous accounting training or experience.

Taft, Philip. "Dues and Initiation Fees in Labor Unions." Quarterly Jour- nal of Economics: Vol. 60, pp. 219-232, February 1946. Describes amounts of dues, fees, and assessments among unions, with com-

parison of AFL and CIO unions. Contrasts AFL and CIO viewpoints and methods in levying dues, fees, and assessments.

"UAW's Red Ink." Business Week, No. 912, p. 90, February 22, 1947. Journalistic comment on the scale of financing of a large CIO national

union and its losses through strike fund expenditures.

Volk, Herman. "Financial Statements of Trade Unions." Journal of Ac- countancy: Vol. 73, pp. 131-142, February 1942. Discusses the problems and technicalities of trade union accounting and

auditing. Presents auditor's report and some exhibits from an audit of the accounts of a large local union.

Volk, Herman. "Trend toward Regulation of Labor Unions by Government Agencies." Journal of Accountancy: Vol. 83, pp. 208-213, March 1947. Lists seven U.S. Government forms which unions must fill out. Gives pro-

cedure for claiming exemption from federal income tax. Discusses Massachu- setts law compelling registration and financial reporting by unions and unions' need for professional advice to fill out U.S. Treasury Form No. 990 (Revised).

Wolfson, Theresa. "Union Finances and Elections." Annals of the American Academy of Political and Social Sciences: Vol. 248, pp. 31-36, November 1946. Discusses the locus of executive control in unions, the extent of control, and

how it is maintained. Gives short description of financial practices and sources of revenue of unions.

UNION ACCOUNTING SYSTEMS

Bird's Eye View of Local Finances. Department of Research and Education, International Brotherhood of Pulp, Sulphite and Paper Mill Workers, Fort Edward, New York, November 1, 1946. 16 pp., mimeographed.



BIBLIOGRAPHY 119

Instructions to local officers, apparently issued to aid in installation of new accounting system. Title page lists duties of each financial officer, forms used on each job, and page references for description of performance of each duty. Duties are clearly defined in minute detail. An inventory form is used as starting point for new system, in which financial secretary receives all payments from individual members and records receipts on cash sheet having five receipt classifications. Stamps are used as dues receipts, and bottom of cash sheet has provision for computing amount due international office as well as the number of stamps issued on each sheet. Dues payments are posted to ledger cards, which are devised to allow rapid posting.

A work sheet is provided for computing monthly totals of cash sheets for the aid of auditors. When money is turned over to treasurer, he receipts the cash sheet, and at the end of the month cash sheet duplicates are sent to the international office. The treasurer provides for safekeeping and deposit of union's money, issues checks for all expenditures, and keeps an itemized record of expenditures. He keeps single column receipt and expenditure journals, itemizing receipts from the financial secretary by cash sheet number only. He makes a monthly report to the membership in the form of a simplified balance sheet, which is provided. Local union trustees make quarterly audits, copies of which are sent to the international office. No payroll ledger is used. Short- cutting techniques have avoided duplication of effort and records without unduly limiting the efficiency of the system.

Clark, Lewis J. Guide for UPWA Local Unions' Financial Secretary-Treas- urers. United Packinghouse Workers of America (CIO), 515 Engineering Building, 205 West Wacker Drive, Chicago 6, 1947. 32 pp. Describes a "universal" bookkeeping system prepared by the UPWA Inter-'

national Secretary-Treasurer to meet the requirements of "present or future National or State legislation," and shows samples of all forms used. System appears to be simple, consisting mainly of the Financial Secretary's receipts and disbursements journals, payroll ledger sheets, and members' dues records. The payroll ledger is set up to show quarterly totals, apparently to aid reporting of social security deductions as quarterly totals as required by law, and itemized deduction columns are provided.

Locals are given the option of recording members' dues payments on ledger cards or of using a daily record book. In the second case, no mention is made of posting these payments to any composite record for the individual. There is no specific mention of local audits, although the international apparently makes periodic audits of local books. Where check-off systems are in use, the international is informed monthly by the employers of the sums paid the locals. There is no clear-cut definition of the duties of the financial secretary, of the treasurer, or of the combined job. Apparently the treasurer's job, where it exists alone, is to keep duplicate records on single-column journals instead of the multi-column journals used by the financial secretary. Pamphlet also gives instructions and sample answers for completing U.S. Treasury Form No. 990 (Revised).



120 INDUSTRIAL AND LABOR RELATIONS REVIEW

Financial System of UIU Local Unions. Pamphlet No. 1, Educational Depart- ment, Upholsterers' International Union of North America, 2812 North Broad Street, Philadelphia. 16 pp. Describes a standardized accounting system to be followed by all locals,

and lists forms with short descriptions of their uses. Clearly defines duties of financial secretary, treasurer, trustees, and auditors. Secretary handles all membership records as well as all payments from individual members, giving receipts or receipting in the members' dues book, and recording payments in the cash receipts record, which is a seven-column journal with provision for computing summaries of the amount to be turned over to the treasurer and the amount due the international. The international receives duplicate sheets of the cash receipts record. The secretary also keeps the membership ledger, which has a numbered page for each member. All forms are reproduced as they are mentioned in the context. Treasurer's books are more complicated than secretary's, including receipts from several sources and all disbursements. Pay- ments must be authorized by vouchers from a warrant book made out by the recording secretary and signed by the president. There is no separate payroll ledger. Duplicate pages of the treasurer's monthly accounts are forwarded to the international. Local union trustees and auditors make quarterly and annual audits, copies of which are sent to the international office. The system is thorough without being complicated.

Blood, Ross. "Labor's Answer to Its Critics by Outlining Fully Just What Happens to Your $1.25." Shipyard Worker, a series of articles running from September 24 to December 3, 1945. A detailed description of the accounting and budgetary process in the Inter-

national Union of Marine and Shipbuilding Workers (CIO), written clearly so that the average union member can understand the content of the articles easily.

"Planning Union Finances." Labor and Nation: Vol. 1, p. 42. Discussion of the budgetary control system inaugurated by the International

Union of Marine and Shipbuilding Workers (CIO). In addition, a table is presented which analyzes several items selected from a number of union finance accounts. The analysis indicates that union expenditures can be assessed with fair regularity in relation to the kind of industry in which the union operates.

REPORTS AND PROCEEDINGS

Almost all international and national labor and trade unions make available records, reports, and proceedings of annual conventions. These often contain a financial report which sometimes gives information on local finances. A good example of a recapitulation of finances of the locals is the following: Financial and Statistical Report, April, 1944 to March 31, 1947, International Ladies' Garment Workers' Union (AFL), 1710 Broadway, New York 19, June 16, 1947.



Documents

Selected Annotated Bibliography on Union Accounting and Financial Reports