Your union may choose to provide certain officials with credit cards for union-related expenses. While they offer convenience, union credit cards can pose a serious risk to your organization’s finances if the proper policies and oversight are not in place. The Office of Labor-Management Standards (OLMS) recommends unions implement the following practices to manage credit card use and prevent abuse.

1. Establish clear policies and procedures for credit card use and payment.

OLMS doesn’t provide one specific credit card policy for unions to use, but instead offers general guidelines for developing a strong policy. Your policy should be documented and added to your union’s bylaws or approved at an executive board or membership meeting, and documented in the meeting minutes or other policy manual or document.

According to OLMS, your union’s credit card policy should include the following:

• • Authorized Users: Your policy should establish who is authorized to use union credit cards, whether each authorized user will receive his/her own card or share a single card, and how cards/PINS will be safeguarded.
  • Authorized uses: Your policy should specify the types of purchases that can be charged to union credit cards. The policy should also identify which kinds of purchases require pre-authorization and by whom.
  • Prohibited and/or restricted uses: Your policy should clearly state which purchases are prohibited, as well as the consequences of prohibited credit card use. Examples of typically prohibited credit card uses include ATM withdrawals, personal purchases, and cash back. If certain uses are allowed but restricted, those restrictions should be clearly stated.
  • Expense limits: The policy should specify dollar limits for different types of expenses (i.e., per diem limit for meal charges for union business travelers, air travel class limitations, maximum lodging charges).
  • Documentation requirements: Your policy should specify exactly what documentation credit card users are required to submit, as well as who will review this documentation.

2. Require detailed documentation for each credit card charge and payment.

The Labor Management Reporting and Disclosure Act (LMRDA) outlines several recordkeeping requirements with which unions must comply. Unions must maintain the following documentation related to credit card use:

• • All credit card statements and information for payments to credit card vendors.
  • Original itemized receipts for each credit card charge.
  • For group meal expenses, a written explanation of the specific union business conducted, and the full names and titles of all individuals incurring the food and beverage charges.

3. Monitor for compliance regularly.

Unions should carry out regular reviews or audits to ensure compliance with established credit card policies. During these audits, one or more officers’ credit card expense reports and supporting documentation for a given period should be selected and reviewed, and any unusual activity reported to the executive board.

Protecting Your Union’s Financial Health

A strong credit card policy and system of oversight are critical for safeguarding your union against fraud and abuse. Another way you can maintain your union’s financial health is by partnering with RBT CPAs’ union accounting team. Our CPAs are here to support all of your union’s accounting, tax, audit, and advisory needs so that you can focus on your core mission of advocating for your members. Contact us today and find out how we can be Remarkably Better Together.