October 15 2009

To the Hearing Committee

I am Terrence R Mooney Certified Public Account and my office is located in Absecon

New Jersey. I am a licensed member of the American Institute of Certified Public
Accountants as well as the New Jersey Society of CPA’s. I have been working in public
accounting since 1980. My firm is currently engaged to perform services for twenty
union locals, fifteen of which are Carpenter entities. I have been providing professional
services for union entities since 1983.

I was engaged by the United Brotherhood of Carpenters and Joiners of America in

August 2009 to perform an audit of the accounting records and internal controls of the
New York City District Council of Carpenters for the scope period of July 1, 2006 to
August 9, 2009. Our audit was concluded and a report issued on September 23, 2009
which is Exhibit 1. The deficiencies noted in the report are summarized as follows:

Administrative

Filings- LM-2, 990 and Bond Report

The officers of the District Council are responsible for the completeness and accuracy of
the annual filings of the LM-2, 990 and Bond Report to the International. The intent is to
provide the reader with a clear representation of the financial activity of the District
Council for that specific period. Although the Union relied on the professionalism of their
accounting firm to prepare said reports the ultimate responsibility is the Officers and
Trustees. The following are the related errors.

Based on the accounting findings in 1a, 1b, 2, 3, 5 and 6 per Exhibit I the filings of these
reports for the periods of audit are deficient. Due to the netting of income and expenses
(salaries, leases, rent) as well as the non-reporting of accurate cash transactions have
understated both income and expenses.

Accounting
The Union Constitution as well as the DOL provides accounting functions and internal
controls for the Officers and Trustees for the safeguarding of the union members funds.
as per Exhibit 1, errors occurred in these processes.

1-The council did not accurately report the receipts of both dues and charity funds
receipts during the period of audit. These funds were safeguarded and in the District
Council’s possession but not reported in there accounting system nor the related filings.
 2-The District Council’s policy on fines from tickets is to pay the related ticket,
due to fleet obligations and then deduct the related liability from the member’s paycheck.
This policy was not adhered to 100%; therefore members received benefits that they were
not entitled to.

3- The District Council’s Petty Cash policy is ineffective. Although minimal in

dollars the accounting procedures did not reflect the correct reporting of these
transactions.

4- The District Council’s procedures to secure deeds of property were ineffective.

The Council was only able to identify one deed out of three for property owned by the
council.

5- The District Council’s accounting procedures as to the netting of both income

and expenses understates the reporting of such transactions. Although these transactions
do not change the final net earnings of the council, for any period reported, the method
creates an underreporting issue on the standards established by the Department of Labor.

6- The District Council’s books of record did not report the ownership of a First
Trade Bank Certificate of Deposit in the amount of $133,000 for all periods audited.

7- The District Council banking relationship with Amalgamated Bank created a

concentration of risk to the member’s assets for excess FDIC coverage. Although noted
in the auditor’s report, no action by the Officers or Trustees is a fiduciary deficiency.

Conclusion
It was evident that the reliance of the New York District Council on their Certified Public
Accounting firm to provide accurate reporting, guidance with internal controls and
recommendations on Department of Labor guidelines was lacking. Per Exhibit I, we have
provided fifteen recommendations that the Council needs to implement as part of the
Standards of Care promulgated by the United Brotherhood of Carpenters and Joiners of
America. The International should implement the recommendations, and see to it that
implementation does occur.

Terrence R. Mooney
Certified Public Accountant
October 15, 2009