politics
Audit Shows ‘Hundreds of Thousands’ of Dollars Unaccounted for at U of T Union USW 1998
Scathing audit of Local 1998 alleges mismanagement and lack of accountability at union that represents U of T's clerical and professional employees.
Photo by Lori Whelan from the Torontoist Flickr Pool.
A scathing audit of the union chapter that represents U of T’s clerical and professional employees reveals “hundreds of thousands, if not millions, of dollars over the audit period of 2009 to mid-2014” unaccounted for or possibly mismanaged [PDF]. The report, released in December, alleges a lack of accountability by United Steelworkers 1998 to union members, including: mismanagement of funds and staff, spending without proper approval, inadequate disclosure of financials including operating without an approved budget, and spending “substantially” more than their income.
Local 1998 represents 7,000 members across five locations, according to information on their website.
The released report is an interim audit—a full audit couldn’t be done due to lack of information and “inability to obtain requested financial records.” Conducted by request of the Ontario and Atlantic Canada district of the union, the report says it is “firm in our conclusions concerning Local 1998’s apparent inability (or unwillingness) to follow the same basic financial procedures as all other USW Locals.”
Part of the issue is USW 1998’s lack of a financial secretary. The person elected for the position has had an “inexplicable reduction in hours” and her replacement was “unable to perform the extensive requirements of the position due to the university’s refusal to permit her necessary leave time.”
Because there has not been an approved budget for the local since 2011, according to the report, the union was not able to be accountable to its members about budgeted expenses. The audit found vast spending without approval and an inability to consistently follow policies and procedures.
For instance, the U of T union did not say when its expenses exceeded its income. In an update to the members, it was revealed the local lost $17,000/month with 86 per cent of expenses being spent on salaries and benefits [PDF]. The update also says there are still $80,000 in projected expenses and bills that were not shown in submitted monthly financial statements.
Paul Tsang, the president of that local, said that during a January 15 board meeting [PDF] bargaining for a new agreement has taken up a lot of funds. “Finances are usually in deficit during bargaining years, the most critical time of the local, which occurs every three years,” he said during the meeting. “We save the other two years to pay for it.”
However, the audit also found that “[t]here are questions about approximately $26,000 of payments to Paul Tsang during the audit period.” This includes lack of receipts for reimbursement, some expense payments being made twice, and questionable reimbursements for “meetings, gifts, computers, software, and travel.”
There were other issues with employees whose memberships as a part of the union were questionable, and employees who were not fulfilling their mandated responsibilities.
In light of the interim audit, the USW will instate several procedures to oversee getting the U of T local back on track. During the January board meeting, Tsang said he has met with the auditors and will prepare a 2015 budget for member approval, but that budget doesn’t lock the union into a course of action.
In a notice [PDF] sent out to members, the U of T Local executive said it will commit resources to proper training of staff in financial oversight and rearrange its bylaws to be more in line with USW’s own. It will also develop a strategy for job evaluation, and delay its election to allow for progress on these recommendations.
Neither the USW or Local 1998 have responded to Torontoist’s requests for an interview.
Local 1998 Interim Audit Report December 11 2014 by Torontoist