PEF moves to strengthen division financial safeguards, accountability


By CARLOS J. GARCIA The issue of financial accountability


has come front and center to our organization in the face of a current case involving a particular PEF division’s use of a PEF purchase card. After having reviewed the


recommendations of the PEF trustees presented to the delegates at the recent PEF convention, and weighing the pros and cons of the current purchase card system, I have decided to eliminate the use of PEF purchase cards. I will write to affected parties currently


using the purchase card informing them of the implications of this move and how transitions will be handled. In the meantime, this article will focus on expectations for financial accountability in PEF divisions. There are 223 divisions within PEF.


Each division has basic fiscal requirements. These include: • An annual division budget that is


approved by the division’s steward council. Each division council shall adopt a budget that is approved by the division council on or before April 1 and forwarded to PEF headquarters with the first quarterly financial report; • Quarterly financial reports must be


reported to PEF headquarters, regional coordinators and the membership of the division, including an inventory of fixed assets (e.g., furniture, fixtures) owned by the division. These reports should be made available for review at least two weeks after having been submitted; and • Annual audits are required to be


submitted to PEF headquarters. An audit committee must be established annually to conduct the audit. It is to be composed of at least three persons, with only one being a steward and/or officer of the division. The yearly audit of the division’s financial activities must be reported to the council, the membership and to PEF central offices within 90 days after the end of the fiscal year. The quarterly reports to PEF


headquarters contain certain requirements. The quarterly reports are to be submitted with vouchers that identify date, location, purpose and members present for an event/meeting. Itemized receipts are required for all purchases. For those divisions that are currently on the purchase card, they must meet the same requirements as those on a checkbook, except for the quarterly report. Even though


quarterly reports are not being submitted, itemized receipts and attendance lists should be collected and kept for all expenses made with the purchase card. Purchase card transactions also require a sign off that should be completed within two weeks of a purchase. These specific requirements have been


in place in the PEF policy manual since 2002 (available to all members on the PEF website). Some examples of what we have found


since taking office are the following: • Prior PEF administrations did not


require a division budget to be submitted to the PEF secretary-treasurer, as required by the PEF constitution; • There are divisions that do not have


the required officers in place (e.g., council leader or treasurer); • There is no specific requirement to


keep itemized receipts contained in any of the PEF policies dealing with PEF finances; • When originally put in place by the


previous PEF administration in 2009, users of the PEF purchase card were instructed that they did not need to keep itemized receipts, contrary to existing PEF policy and to US Department of Labor requirements; • There are divisions that have not


submitted the required annual audit; • There are divisions that have not


submitted required quarterly reports; • In some cases, required


documentation is missing when reports are submitted; • There are divisions that have not


followed certain requirements as stated earlier. This could include no reporting to regional coordinators, no reporting to membership or no sign off within two weeks of purchase card transactions; and • We have identified conflicting


language in PEF policies that give conflicting guidance to divisions on how to operate. For example, within the PEF Rules for Forming a Division, contained in the PEF policy manual, there is a requirement that division councils prepare and approve a budget, but in a later section, it also instructs the division to form a budget committee that prepares the budget. PEF headquarters has worked diligently


over the past two years to address issues that impede financial accountability. What actions have we taken? • We have required all divisions to


submit a division budget to PEF headquarters; • We are continuing to ensure that all


Page 6—The Communicator December 2014 - January 2015


GUEST SPEAKER – PEF Secretary- Treasurer Carlos J. Garcia speaks to members at OASAS statewide Hispanic Heritage Month celebration.


—Photo by ScottMorlock


PEF divisions complete all required PEF reports; • We have written to all division council


leaders, treasurers and regional coordinators reminding them that itemized receipts are required for all purchases whether using the checkbook or the purchase card; • We have reminded all council leaders,


council treasurers and regional coordinators that they are to provide a list of PEF members present at any meetings where PEF funds are expended; • We have provided technical assistance


to at least 60 divisions to bring them into compliance. Once in compliance, we have waived penalties, resulting in a significant sum in dues monies being restored to divisions so that they can provide needed services and benefits to members; • We are completing an extensive


overhaul of PEF headquarters’ and regional offices’ hardware and software to ensure efficient and timely information to divisions; • We have provided technical assistance


to all division treasurers who have requested assistance, so that they can do their jobs with minimal impediments; • We have met directly with members in


numerous divisions to hear member concerns that help us to assess practices and procedures; and • PEF trustees have conducted audits of


individual divisions and have made recommendations for improvement of division operations. With an annual budget of $36 million


($1.35 million to divisions), we remain committed to ensuring you receive the financing, support and services to be able to function at the local level to support the growth of our organization. PEF is a membership-driven union. Information is power. Hopefully, the information presented here will help you, as an individual member, to understand how you can be a part of the process in moving our union forward. Wishing happy holidays to all!


PEF Information Line: 1-800-553-2445


SECRETARY-TREASURER’S SPECIAL REPORT


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