A 501(c) organization is a nonprofit organization recognized under the U.S. Internal Revenue Code as exempt from federal income tax. There are many kinds of 501(c)s, the most widely-known of which are 501(c)(3)s—or charitable organizations. Unions, however, fall specifically under the category of 501(c)(5)s. Below are the distinguishing characteristics of 501(c)(5) organizations that enable unions to qualify as tax-exempt entities.

What is Section 501(c)(5)?

Section 501(c)(5) of the Internal Revenue Code provides a federal income tax exemption for labor, agricultural, or horticultural organizations. As labor organizations, unions fall under this definition for tax purposes.

Exemption Requirements

To qualify as a 501(c)(5), an organization must meet the following requirements:

1. The organization’s net earnings may not benefit any one member.
2. The organization’s primary purpose must be to better the working conditions of workers engaged in labor, agriculture, or horticulture, improve the grade of their products, or develop greater efficiency within its members’ occupations.

In general, an organization is not considered a 501(c)(5) organization if its primary activity is to receive, hold, invest, disburse, or otherwise manage funds associated with savings or investment plans.

Lobbying and Political Activities

Unlike 501(c)(3) organizations, which face greater restrictions regarding their participation in political and legislative activities, 501(c)5 organizations are permitted to achieve their exempt purposes through lobbying for pertinent legislation. 501(c)(5)s that engage in lobbying may be required either to notify members of the percentage of dues allocated to lobbying activities or to pay a proxy tax.

Direct or indirect participation or intervention in political campaigns—either in support of or in opposition to a candidate for public office—is not permitted as part of a 501(c)(5) organization’s exempt purpose. However, the organization can participate in certain political activities as long as it is not the group’s primary activity. Any expenditures related to political activities, however, may be subject to tax.

Reminder about Unrelated Business Income Tax

Though unions are generally exempt from paying income tax under Section 501(c)5, they may still be subject to tax for income classified as “unrelated business income.” Unrelated business income (UBI) is income from a trade or business that is regularly carried on and not substantially related to the exempt purpose of the organization. For more information about Unrelated Business Income Tax (UBIT), please refer to last month’s thought leadership article.

Partner with RBT CPAs

For all matters accounting, tax, audit, and business consulting-related, please don’t hesitate to reach out to our team at RBT CPAs. Our experts are here to assist and advise you. Contact us today and find out how we can be Remarkably Better Together.

As with many other nonprofit organizations, unions are particularly susceptible to fraud, corruption, and theft. This vulnerability often stems from inadequate internal financial controls and the fact that unions tend to manage large sums of money. In March of 2024, the House Committee on Education and the Workforce sent letters to 12 separate unions citing multiple examples of corruption in recent years. These instances of fraud—perpetrated primarily by union officials—include misuse of pension funds, embezzlement, wire fraud, money laundering, bribery, health insurance fraud, labor racketeering, converting funds, and more. To prevent such incidents and the financial and reputational damage they incur, unions must establish strong systems of internal financial controls.

Below is a list of preventative measures that union leaders can take to minimize the risk of fraud and corruption, recommended by the House Committee on Education and the Workforce and the Office of Labor-Management Standards.

Fraud Prevention Measures

1. Engage a third-party auditor to independently assess your union’s financial statements and compliance with regulations.
2. Provide appropriate training and education to union employees to reinforce proper accounting standards.
3. Establish internal reporting mechanisms, such as a hotline for reporting fraud.
4. Create clear disciplinary policies for fraudulent activity.
5. Require multiple layers of approval for purchases, such as double signatures on checks and other payments.
6. Enforce segregation of duties to ensure no single person has too much control over a given financial process.
7. Issue receipts for member dues and maintain records of dues payment status for each member.
8. Maintain receipts and disbursement journals to record all cash received and spent by the union.
9. Deposit dues and other funds regularly to the union’s bank account, identifying each deposit with a set of receipts in the union’s receipts journal.
10. Establish a clear understanding of the salaries, allowances, and expenses to which union officers are entitled.
11. Require prior authorization for large or unusual transactions.
12. Require full financial reports from the financial officer at each membership or executive board meeting.
13. Form an internal audit committee (union trustees) to conduct regular reviews of the union’s financial records. These periodic internal audits should include bank reconciliations, reconciliations of receipts with deposits, examinations of canceled checks, confirmation of documentation (invoices, bills, etc.) for all expenditures, and other measures.
14. Regularly review internal controls for effectiveness and update these procedures if necessary.

Partner With RBT CPAs to Prevent Fraud in Your Union

Don’t let your union fall victim to fraud or embezzlement. Our team at RBT CPAs is here to provide reliable outsourced accounting services for your union, conduct third-party audits, and offer additional guidance to help you prevent fraud within your organization. Give us a call today to find out how we can help you safeguard your union’s funds and reputation.

As one of its many provisions, the new tax law known as the “OBBBA” has established new parameters for 529 education savings plans. 529 plans can now be used to pay for additional qualified educational expenses—including trade school, workforce training programs, and other postsecondary credentialing costs. This expansion of 529 plans may benefit people pursuing educational routes outside of traditional college programs, such as those entering the skilled trades. This article provides an overview of 529 savings plans and their now-expanded uses.

What is a 529 plan?

A 529 plan is a tax-advantaged savings account that can be used to pay for qualifying educational expenses. The money in 529 accounts grows tax-deferred, and withdrawals for qualifying educational expenses are typically tax-free (depending on your state’s rules). U.S. residents of any income level are able to open a 529 account for a designated beneficiary—including a relative, friend, or the account holder themself. 529 plans were initially created as a way for people to save for college tuition. In 2018, “qualified expenses” covered under 529 plans expanded to include tuition for K-12 education as well. With the passage of the One Big Beautiful Bill (OBBBA) in July of 2025, 529 plan coverage has expanded even further to include additional educational expenses.

What do 529 plans cover now?

• 529 plans continue to cover expenses related to enrollment or attendance at an eligible postsecondary school. Qualified postsecondary expenses include:
  • Tuition and fees
  • Required books, supplies, and equipment
  • Special needs services
  • Room and board for students enrolled at least half-time
  • Computers and computer equipment, software, internet access, and related services
  • Fees, books, supplies, and equipment required for participation in an apprenticeship program registered and certified with the Secretary of Labor
  • No more than $10,000 paid as principal or interest on qualified student loans of the designated beneficiary or the beneficiary’s sibling
• Previously, 529 plan coverage for K-12 expenses was limited to tuition, with a maximum annual allowance of $10,000. 529 plans have now expanded to cover additional expenses related to enrollment or attendance at an eligible elementary or secondary public, private, or religious school. In addition, the annual limit for K-12 expenses has been increased from $10,000 to $20,000 per year. Qualified K-12 expenses now include:
  • Tuition
  • Curriculum and curricular materials
  • Books or other instructional materials
  • Online educational materials
  • Tuition for tutoring or educational classes outside of the home (i.e., at a tutoring facility)
  • Fees for a nationally standardized achievement test, advanced placement exam, or any exam related to college or university admission
  • Fees for dual enrollment in a higher education institution
  • Educational therapies for students with disabilities
  • 529 plans now also cover certain expenses related to enrollment or attendance at a recognized postsecondary credential program, including:
  • Tuition and fees
  • Books
  • Supplies
  • Equipment
  • Fees for required testing
  • Fees for continuing education

What do these changes mean for unions?

The addition of postsecondary credentialing expenses to the list of qualified expenses under 529 plans broadens the population that can benefit from these tax-advantaged accounts. The benefits of 529 plans are no longer limited to individuals pursuing conventional higher education routes; 529 funds can now be used to pay for workforce training, licensure programs, and professional development. Union members who participate in these kinds of credentialing programs may stand to benefit from this expansion. For additional guidance related to the new tax law—or for any other tax or accounting support—please don’t hesitate to reach out to RBT CPAs. Call us today and find out how we can be Remarkably Better Together.

The budget reconciliation bill, entitled the One Big Beautiful Bill Act (OBBBA), was signed into law by the president on July 4, implementing many significant tax and spending policy changes and extending several policies previously set to expire. The law’s provisions are wide sweeping, affecting individuals, businesses, and other organizations to varying degrees. This article highlights some of the key provisions of the legislation impacting union workers.

Please note that IRS guidance on the new legislation is still forthcoming. RBT CPAs will continue to provide updated information as this guidance is issued.

Permanent Extension of TCJA Tax Rates

The OBBBA makes permanent the tax rates and brackets established by the Tax Cuts and Jobs Act (TCJA) of 2017.

Standard Deduction

The OBBBA locks in the 2017 individual rate schedule and increases the standard deduction to $15,750 for single filers, $23,625 for heads of household, and $31,500 for joint filers, effective in 2025, with ordinary inflation indexing thereafter.

Child Tax Credit

The OBBBA permanently increases the Child Tax Credit (CTC) to $2,200 per qualifying child under the age of 17, effective for tax year 2025 and indexed annually for inflation. The maximum refundable portion has been raised to $1,700, also adjusted annually for inflation.

No Tax on Overtime

The OBBBA creates a temporary deduction of up to $12,500 ($25,000 for joint returns) for individuals who receive qualified overtime compensation (as defined by the Fair Labor Standards Act), available for tax years 2025 through 2028. The deduction applies only to overtime compensation and begins to phase out when the taxpayer’s modified adjusted gross income (MAGI) exceeds $150,000 ($300,000 for joint filers).

It is important to note that the deduction applies only to federally required overtime under the FLSA (Section 7), not to enhanced state overtime rules or those negotiated under collective bargaining agreements. W-2s will need to separately report qualified overtime compensation.

Expansion of 529 Plans

The OBBBA expands permitted uses of funds in 529 education savings plans by broadening the definition of “qualified expenses.” Tax-exempt distributions from 529 savings plans now apply to additional expenses related to enrollment in private, public, or religious elementary or secondary schools including books, materials, testing fees, tutoring costs, dual enrollment fees, and educational therapies—in addition to tuition. The OBBBA also increases the annual limit for 529 account distributions for K-12 expenses from $10,000 to $20,000. Additionally, the OBBBA allows 529 plan funds to be used for “qualified postsecondary credentialing expenses,” including tuition, fees, books, supplies, testing, equipment, and continuing education required for participation in a recognized postsecondary credential program.

Additional Guidance

The budget reconciliation bill is an expansive piece of legislation containing many significant policy changes. RBT CPAs will continue to keep our clients apprised as additional information and guidance is released regarding the OBBBA. In the meantime, if you have questions regarding the recent tax law changes, please don’t hesitate to reach out to our experts at RBT CPAs. And as always—RBT CPAs is here to support all of your accounting, audit, tax, and advisory needs. Contact us today to find out how we can be Remarkably Better Together.

As unions perform their primary function of supporting and advocating for union members, various financial processes are taking place behind the scenes every day. These financial processes include collecting and processing member dues, creating budgets, authorizing and tracking expenses, maintaining financial records, preparing financial reports, managing union bank accounts and credit cards, and conducting internal audits, among others. Managing these various processes—while keeping up with strict regulatory requirements—can be an overwhelming task. Enter: accounting software. Accounting software helps unions manage critical financial processes by streamlining financial operations, providing valuable data, and reducing the opportunity for error and oversight. Let’s take a look at some of the key ways in which accounting software can benefit unions.

Benefits of Accounting Software for Unions

• Streamlines financial processes
  • Tracks income and expenses (this data is essential for monitoring the union’s financial status and creating a union budget)
  • Automates payroll management
  • Aids in financial reporting by generating financial statements
  • Records and manages union dues payments
  • Aids in recordkeeping evaluations
• Automates time-consuming administrative tasks, reducing processing time and allowing employees to focus on other needs of the union
• Improves accuracy of financial records by minimizing manual data entry and reducing opportunities for human error
• Increases transparency in financial processes by providing accurate, easily accessible records that can be shared with union members and other stakeholders
• Provides data for informed decision-making related to union financials such as budgeting and fund allocation
• Helps unions maintain compliance with legal regulations by providing accurate financial records and minimizing errors
• Integrates with other tools and management systems to automatically transfer information between programs

Getting Started

There are several different options when it comes to choosing accounting software for your union. Some popular programs include QuickBooks, Sage, Peachtree, Aptify, and eMembership. When a union first decides to implement new accounting software, employees will need time and training to learn how to operate the new program. RBT CPAs offers QuickBooks training to help our clients learn and understand QuickBooks accounting software. For access to this training or other guidance on implementing accounting software, please don’t hesitate to reach out to RBT CPAs. Whether it’s providing accounting, bookkeeping or outsourced CFO services, assisting with IRS or DOL audits, or offering general financial consulting, RBT CPAs is here to support all of your union’s accounting, audit, tax, and advisory needs. When you partner with RBT CPAs, you can be confident in your union’s financial integrity and compliance, so you can continue to focus on the core goal of representing your members and keeping their best interests top of mind. Give us a call today to find out how we can be Remarkably Better Together.

Do you or your employees use union vehicles for reasons other than work? If yes, you need to be aware of the taxation rules for the personal use of company cars.

What is “personal use of a company vehicle/car”?

Personal use of a company car (PUCC) encompasses any use of a company-owned or company-leased vehicle for purposes not business-related. Examples of personal use include commuting to and from work, use on weekends or during time off, running personal errands, and use by someone other than an employee (i.e., an employee’s spouse or relative).

How do you record personal usage?

It’s important for employees to track both their business and personal use of company vehicles. Without proof that the vehicle was used for business purposes, all use of a company vehicle will be considered personal use by the IRS. Employees should keep detailed records of all business and personal use of the vehicle, including miles traveled, locations, dates, times, and the purpose of the travel.

Is personal use of a company vehicle taxed?

Yes. Personal use of a company car is considered a fringe benefit, meaning it is a form of non-cash compensation provided in addition to a person’s salary. As a fringe benefit, this value is included in the employee’s income and taxed accordingly.

How is the personal use of a company vehicle measured?

There are several methods of measuring personal use of a company car. The rules for calculating the value of fringe benefits are explained in IRS Publication 15-B.

1. General Valuation Method: This is the most common method for measuring the value of fringe benefits. Under this method, the value of the fringe benefit is equal to the Fair Market Value of the vehicle. The Fair Market Value (FMV) is the amount an employee would need to pay a third party to buy or lease the vehicle under the current market conditions in a given geographic location.
2. Cents-Per-Mile Method: The cents-per-mile rule uses the standard mileage reimbursement rate multiplied by an employee’s personal mileage to determine the value of PUCC. The standard mileage reimbursement rate for 2025 is 70 cents per mile. This method can be used if the vehicle is regularly used for business purposes or if the vehicle meets the mileage test (the vehicle is driven at least 10,000 miles during the year, primarily by employees).
3. Commuting-Valuation Method: This method can be used when employees are required to commute to work using a company vehicle and the personal use of the vehicle is limited to commuting and de minimis personal use (i.e., stopping for an errand on the way to or from work). The value of the PUCC is determined by multiplying each one-way commute by $1.50.
4. Lease Value Method: This method determines the PUCC value by multiplying the annual lease value of the vehicle by the percentage of personal miles (personal miles divided by total miles driven). The annual lease value is determined using the IRS’s Annual Lease Value Table.

Summary

If your employees use union-owned vehicles for personal use, it’s important to know that personal use of a company vehicle is a taxable benefit, and that this usage must be reported on employee W-2s. It is crucial for employees to keep detailed records of all vehicle usage for both personal and business purposes. For more information about the taxation of personal use of company cars and for assistance with reporting, please don’t hesitate to call RBT CPAs. You can count on RBT CPAs to support all of your accounting, audit, tax, and advisory needs. Give us a call today and find out how we can be Remarkably Better Together.

Why Should You Prepare a Budget?

Budgeting is a critical component of any organization. The American Federation of Government Employees discusses several reasons why preparing a detailed budget for your union is important:

1. A well-formed budget helps to ensure the financial health and security of your organization.
2. A budget acts as a guide for leadership when making financial decisions.
3. Union members want to know where their membership dues are going. Making the flow of money visible to members indicates transparency and encourages trust in union leadership.
4. Analyzing the union’s financial activity allows the organization to adjust or reallocate money if necessary.

How to Prepare a Budget

The task of creating a budget can seem overwhelming if you don’t know where to start. However, the process can be broken down into a few essential steps.

1. Determine Your Goals and Ask Key Questions

Before preparing a budget for the coming year, it’s important to consider your organization’s goals. Do you want to improve communication with union members? Provide more professional development opportunities? Increase community engagement?

According to the Union Operating Procedures Manual for Communications Workers of America, you should also take a look at your current finances and ask yourself some key questions:

• What percentage of funds is utilized for each area or purpose?
• Are we spending too much in any one area?
• Are we allocating funds to areas that help build and strengthen the union?

Once you have determined the answers to these questions about your organization’s goals and current fund allocation, you’ll be better able to make decisions about the upcoming year’s budget.

Now it’s time to prepare your budget. At its most basic, preparing a budget requires you to estimate two things: future income and future expenses.

2. Predict Income

To predict income for your organization, you’ll need to identify all reliable sources of revenue for the coming year. For unions, membership dues make up the majority of income. To predict revenue from membership dues, you’ll need to first predict membership numbers. The CWA Union Manual suggests you may want to assume the “worst case scenario” for membership estimates, predicting the lowest possible membership numbers and thus erring on the side of caution.

After estimating income from membership dues, you’ll want to identify all other sources of income such as investment earnings, interest on savings, fundraising activities, newsletter advertising, and government grants. You should not include in your estimates any income that is unreliable or unpredictable.

3. Estimate Future Expenses

To estimate your future expenditures, you should first look at your fixed expenses for the year. Fixed expenses include set predictable costs such as officer salaries, payroll taxes, property taxes, rent, phone and internet services, insurance, affiliation fees, etc. You’ll also want to consider variable expenses that change from month to month, including utilities, accounting services, and legal services, among others. You will then need to decide what activities and programs you want to provide for your members in the coming year and determine the cost of each of these. You may want to establish an “additional projects” category to cover any unforeseen programs or projects that might come up throughout the year (CWA).

4. Compare Income to Expenses

Once you have predicted your income and expenses as accurately as possible, it’s time to compare the two numbers to determine whether there is a budget surplus or deficit. If there is a deficit, you will need to cut back on some programs or services. If there is a surplus, you can set the money aside for future use or use the surplus to expand your program and service offerings.

Union Budgeting Tips

• Utilize a pre-made budget template to streamline the budget-making process (a sample union budget template can be found here).
• Take advantage of budgeting software to improve accuracy and efficiency. Many options for budgeting software are available, including QuickBooks’ budgeting function.
• Make sure all expenses are properly documented via bills and receipts.
• Regularly review expenses, comparing them with receipts and bills to ensure they match up.
• Be cautious of the risks of union credit cards. Limit the number of people authorized to use credit cards. It is usually safer to reimburse officers for expenses after the fact than to provide officers with union-owned credit cards (CWA).

Setting a budget is an important aspect of operating a union. For help creating a budget—and for all of your other accounting needs—contact our professionals at RBT CPAs. We’d be happy to work with you to achieve your budget and financial goals.

In the ever-evolving business landscape, local unions are increasingly recognizing the need for strategic financial management. One potential solution that’s gaining significant traction is outsourced accounting.

Access to expertise is the most appealing advantage of outsourcing accounting. Accounting firms are equipped with seasoned professionals who are well-versed in financial regulations, tax laws, and financial management best practices, and they stay up-to-date on changes and evolving trends. These professionals can provide advice on financial decision-making and ensure compliance with tax regulations, minimizing the risk of costly errors and penalties.

Cost savings is another major benefit. Hiring an in-house accounting team can be financially draining, with costs associated with recruitment, training, salaries, benefits, and office space. In contrast, outsourcing accounting offers a flexible pricing structure, allowing unions to pay for the services they need when they need them. This may reduce overhead costs.

By delegating financial management tasks to outsourced accountants, union leaders can concentrate on their primary roles, such as advocating for members’ rights, negotiating collective agreements, and organizing campaigns. What’s more, they get peace of mind that all accounting-related and regulatory requirements are covered.

Outsourcing accounting also provides an opportunity for enhanced data security. Reputable accounting firms invest in state-of-the-art security systems to protect data from unauthorized access and cyber threats. This level of security may be hard to achieve with an in-house team, particularly for local unions with budget constraints.

There’s also a technology advantage that comes from outsourcing. With an outsourced accounting firm, local unions can benefit from the use of cutting-edge technology. Most accounting firms employ the latest accounting software and tools, facilitating efficient, accurate, and timely financial reporting.

In addition, while in-house accountants can resign, fall ill, or go on vacation, leaving the union with a void to fill, accounting firms usually have staff on hand to ensure uninterrupted service.

What does outsourcing accounting entail for a local union? Initially, the union would need to define exactly what it is looking for in an outsourcing arrangement. Armed with this information, it may issue a “request for proposal,” asking potential firms to provide detailed information about their experience, approach to the work, timeline and costs, the team who will support the client, references, and more.

Beyond the proposal, the local union should meet face-to-face with representatives from the contenders to get answers to additional questions, clarify any arrangement, and ensure fit.

The outsourcing firm selected for the engagement then takes over the financial management tasks, which may include bookkeeping, payroll processing, tax preparation, financial reporting, internal and external auditing, advisory services and strategy setting, and budget planning and monitoring.

The firm should keep you informed through ongoing communication and may even provide value-added resources and information to support your union’s financial compliance, performance, and success. As your local union’s accounting requirements change, you can adjust your outsourcing arrangement to meet evolving needs.

For over 55 years, RBT CPAs has been providing accounting, advisory, audit, compliance and tax services to organizations and businesses – including local unions – across the Hudson Valley and beyond. If you’re interested in learning more about how your local and RBT CPAs can be Remarkably Better Together, click here to request an introductory meeting.

RBT CPAs never offshores work outside of the U.S., so you always know who is handling your financial information.

The Labor-Management Reporting and Disclosure Act (LMRDA) contains recordkeeping requirements for financial records that clarify or verify reports filed with the Office of Labor-Management Standards (OLMS). A union’s treasurer and president (or other corresponding principal officers) are responsible for ensuring their union meets these recordkeeping requirements.

After a report is filed with the OLMS, records must be maintained for five years. This includes all records used in the normal course of doing business and used to complete, read, and file the report (i.e., electronic documents and recordkeeping software). These records verify OLMS reports are complete and accurate.

Per an OLMS Fact Sheet providing guidance on LMRDA recordkeeping requirements, examples of records that should be retained include, but aren’t limited to:

• Receipts and disbursement journals
• Cancelled checks and check stubs
• Bank statements
• Dues collection receipts
• Employer checkoff statements
• Per capita tax reports
• Vendor invoices
• Payroll records

In addition, unions should retain records that help explain or clarify financial transactions, including:

• Credit card statements and itemized receipts for each credit card charge
• Former members’ ledger cards
• Bank deposit slips
• Bank debit and credit memos
• Vouchers for union expenditures
• Internal union financial reports and statements
• Minutes of all membership and executive board meetings
• Accountants’ working papers used to prepare financial statements and reports filed with OLMS
• Fixed assets inventory

If you are not sure about whether to keep a record, you can contact the nearest OLM field office for advice.

A quick scan of Compliance Audit Program outcomes from audits conducted thus far in 2024 very clearly shows details matter. From failing to record a vending machine’s beverage sales and missing itemized receipts for meal expenses to not having an inventory of property that was discarded and failing to obtain countersignatures on all checks, audits are uncovering numerous issues (although many simply require the issue be fixed going forward).

Unions are subject to other recordkeeping requirements related to financial reports (where records must be retained for seven years), as well as staff, their pay, and benefits. Refer to your union’s policies and handbook for details.

As you work to keep your union in compliance with recordkeeping requirements, you can count on RBT CPAs for all of your accounting, advisory, audit, and tax needs. Learn how we can be Remarkably Better Together by contacting us today.

RBT CPAs never offshores work outside of the U.S., so you always know who is handling your financial information.

NOTE: RBT CPAs is not a law firm and the content in this article should not be construed as legal advice. Should you have questions, it’s in your best interest to contact your legal counsel.

In the interest of transparency and accountability, there are stringent laws governing the use of credit cards and expense accounts for unions. These laws are intended to safeguard the funds of union members and ensure that all expenditures are in line with the interests of the union.

At the federal level, the Labor-Management Reporting and Disclosure Act (LMRDA) sets the foundation for these regulations. It mandates that unions maintain precise records of all income and expenditures, including credit card transactions and expense accounts. Any form of misuse or misappropriation of funds is considered a severe violation of this law and can result in hefty penalties or even imprisonment.

Still, expense accounts and credit cards provide a convenient and efficient method of paying for union activities.

A union expense account is designed to cover costs related to union activities. Permissible expenses include union meeting costs, training events, legal fees, and administrative expenses like office supplies and utilities. Funds can also be used for lobbying and campaigning initiatives that support the interests of the union members. However, there are strict limits on personal expenses. Funds cannot be used for personal trips, non-union-related meals, or personal items. Also, any kind of expenditure that could be seen as a conflict of interest, such as gifts to union officials, are strictly prohibited.

Credit cards, on the other hand, offer a convenient way to pay for union expenses, while offering the added benefit of providing detailed statements to track spending. However, they cannot be used for personal purposes or non-union expenses. It’s vital that cardholders adhere to guidelines set by the union to ensure financial transparency and responsible spending.

Compliance in managing these financial tools helps ensure a union’s financial stability by preventing unnecessary or excessive spending. It safeguards a union from potential legal implications related to misuse or fraudulent activity. It maintains trust among union members, as they can see their dues being used responsibly and transparently.

To promote compliance and reduce risks, union leaders should implement stringent policies and procedures around the use of expense accounts and credit cards by:

1. Establishing Clear Policies: Develop comprehensive guidelines that outline what expenses are permissible, the approval process for expenses, and the consequences of misuse.
2. Conducting Regular Audits: Regularly review and audit expense account and credit card statements to identify any irregularities.
3. Training: Provide training to all union members who have access to these financial tools. They should understand the policies and procedures, and the importance of compliance.
4. Limiting Access: Restrict the number of people who have access to union credit cards and expense accounts to minimize the risk of misuse.
5. Promoting Transparency: Regularly share financial reports with union members to promote transparency and accountability.

If you need any assistance setting up financial controls for credit card and expense account use and approvals or conducting an internal audit, as well as any accounting, advisory, audit or tax support, you can count on RBT CPAs professionals. Contact us to learn how we can be Remarkably Better Together.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.