The Treasurer’s Watch: Audits as Guardians of the River

By Thomas Prislac, Research Director, Treasurer, Ultra Verba Lux Mentis. 2025.

A river is only as strong as the guardians who watch its flow. Within a labor organization, the Treasurer plays this role. The Treasurer is not simply a record keeper, nor a passive observer of staff accounting. They are the member-elected, independent steward of the current, tasked with conducting audits that ensure the river of dues revenue remains clear, lawful, and aligned with the course set by General Council.

Audits are not distractions from the journey. They are the soundings taken to make sure the river’s depth is true, that no diversions are hidden, and that every tributary is accounted for.

The COSO Internal Control Integrated Framework describes audits as part of the “monitoring” function: an ongoing assessment of whether internal controls are designed and operating effectively (COSO link). For a Treasurer, this means not waiting until waters flood, but conducting periodic internal audits to test the levees and locks before disaster strikes.

Under COSO, a Treasurer should:

• Test transaction authorization: Were expenses approved under union AP&Ps?

• Check segregation of duties: Were multiple sets of eyes involved in disbursements?

• Review reconciliations: Were bank statements matched to the general ledger monthly?

These audits are not optional; they are the levees that prevent the river from being redirected in secret.

The AICPA’s Generally Accepted Auditing Standards (GAAS) outline the principles of independence, professional skepticism, and evidence-based testing (AICPA link). While external auditors follow these standards annually, a Treasurer can mirror their spirit in internal reviews.

Key practices include:

• Sampling ledger entries for supporting documentation.

• Tracing expenses from ledger to receipts and back, confirming completeness.

• Testing cash flows for consistency with activity reports.

The AICPA also stresses the importance of documentation as audit evidence. If ledger entries lack hard copy or digital backup, the Treasurer must flag these as exceptions. A missing receipt may be small in dollars but large in risk, because even one gap erodes the ledger’s reliability.

The U.S. Department of Labor requires unions to file annual LM reports, and emphasizes the responsibility of officers to safeguard funds and maintain records for at least five years (DOL Office of Labor-Management Standards link).

From the DOL’s perspective, the Treasurer’s audits must ensure:

• Record retention: No data gaps in ledgers or missing backups.

• Documentation of authorizations: Proof of approval for every expenditure.

• Prevention of embezzlement: Regular internal reviews as deterrence.

DOL guidance is clear: failure to maintain adequate books and records is itself a violation, even if no fraud occurred. A Treasurer’s audits are therefore not just best practice — they are legal compliance.

A river must be measured not once, but continuously. Year-over-year analysis of the general ledger is the Treasurer’s way of sounding the depth of the channel.

• Comparative expense trends: Are organizing costs rising while membership remains flat?

• Revenue consistency: Do dues match payroll deductions year to year?

• Reserve strength: Are assets growing, or are liabilities eroding the banks?

This comparative analysis highlights risks early. It reveals not just where the river flows today, but how its course is shifting over time.

When the Treasurer finds missing receipts or data gaps, the water clouds. Here, COSO, AICPA, and DOL converge on the same point: exceptions must be documented and addressed.

• Identify: Note the missing documentation in audit workpapers.

• Investigate: Ask staff for explanations and locate replacement records.

• Report: Disclose the exception to the board, along with the remediation steps.

Transparency is critical. Even if the amount is small, the Treasurer must document the gap, because trust depends on clear water. Types of Audits the Treasurer Should Conduct:

1. Monthly Reconciliation Audits – Review bank statements, ledger entries, and receipts.

2. Quarterly Compliance Audits – Test expenses against AP&Ps and DOL recordkeeping rules.

3. Annual Internal Control Audits – Assess segregation of duties, approval processes, and safeguarding of assets under COSO.

4. Year-over-Year Ledger Audits – Compare revenues, expenses, and reserves across periods to detect anomalies.

5. Documentation Integrity Audits – Check for missing hard copy or digital records, report exceptions, and confirm remediation.

For a Treasurer, audits are not merely technical exercises. They are acts of stewardship, defending the river of dues revenue from misuse or neglect.

• COSO teaches that every control must be tested.

• AICPA teaches that every assertion must be supported with evidence.

• DOL requires that every dollar be recorded, retained, and reported.

Together, they form the Treasurer’s compass. By conducting these audits, and by insisting on year-over-year analysis and full documentation, the Treasurer keeps the river clear, its banks strong, and its course aligned with the will of the members.

In the end, audits are the Treasurer’s oath: to guard the current so that it always flows toward the collective good.