Last updated on April 8th, 2026
A CAP audit (CAP standing for “Compliance Audit Program”) is an investigation conducted by the U.S. Department of Labor’s Office of Labor-Management Standards (OLMS). CAP audits are specially designed for unions covered by the Labor-Management Reporting and Disclosure Act (LMRDA) and the Civil Service Reform Act (CSRA). The purpose of these audits is to verify union compliance with these laws, investigate potential violations, and provide compliance assistance. CAP audits are broader in scope than audits conducted by independent auditors and require extensive preparation. Let’s talk about what is involved in a CAP audit and what you can do to ensure your union is prepared.
How is a union selected for a CAP audit?
Your union may be selected for a CAP audit for several reasons. A small number of unions are selected at random each year for CAP audits. Otherwise, factors considered by OLMS when selecting a union to audit include:
- Union size
- Geographic location
- Length of time since last audit
- Availability of investigators
- Failure to file required annual financial reports in a timely manner
- Discrepancies in financial reports
- Complaints received by OLMS regarding the union’s finances
What does a CAP audit entail?
A CAP audit begins with an interview of the primary financial officer, during which the investigator gathers detailed information regarding the union’s financial records, bookkeeping, and internal controls. The OLMS investigator may also request the presence of other employees involved in maintaining union financial records, such as bookkeepers or accountants. Union presidents are also often present for these interviews. During a CAP audit, the OLMS investigator reviews various financial records. Investigators may request any information from the union’s financial disclosure reports from the previous five years. Financial records typically reviewed during a CAP audit include, but are not limited to, original records (not copies) of the following:
- Bank account records: bank statements, duplicate deposit checks, debit/credit memos, and bank reconciliations
- Records for investments and all other assets, including inventories of fixed assets
- Receipts records: duplicate receipts, receipt journals, member ledger cards
- Disbursement records: canceled checks, check stubs, disbursement journals, payroll ledgers, vouchers, expense receipts, bills, credit card statements, and other supporting documents
- Audit reports prepared by union auditors or external accountants
- Minutes from executive board meetings and membership meetings
- Current constitution and bylaws
- Financial policy documents
Audit findings and recommendations will be shared with key union officials upon completion of the audit in the form of an exit interview and a closing letter. The investigator will offer compliance and technical guidance related to LMRDA and CSRA requirements. At this stage of the process, union officials have the opportunity to ask questions and contribute comments. The closing letter will then be made accessible to union members on the OLMS website.
How can you prepare for a CAP audit?
- Ensure your union’s financial records for the last five years are complete and accurate
- Review your union’s policies for compliance with LMRDA and CSRA requirements
- Ensure accurate and timely LM-2 reporting
- Review and strengthen your union’s system of internal controls
Have Confidence in Your Union’s Compliance
When you partner with RBT CPAs, you can be confident in your union’s compliance with financial reporting and recordkeeping regulations. Beyond assistance with DOL audits, RBT CPAs’ union accounting team provides a full range of accounting, bookkeeping, and CFO services. Our union-specialized services include internal control reviews, financial statement preparation, forensic audits, LM-2 preparation, and more. Call RBT CPAs today for all of your union’s accounting needs and find out how we can be Remarkably Better Together.