LM-2 Prep Tips, Part 5: Everything Else

This article addresses Statement B – Receipts and Disbursements other than schedules 11, 12 and 15 through 19, which we have discussed in different articles.

The total of all expenses allocated to Schedules 15–19, including the allocations of the amounts on Schedules 11 and 12, are summarized on the Detailed Summary Page – Schedules 14–19, which then flows to Statement B.

While Schedules 1–10, as discussed in our article Statement A – Assets and Liabilities, support most of the balances on Statement A, schedules 2, 3, 4 and 9 also items listed on Schedule B. In fact, schedules 3 and 4 support Statement B only, while schedules 4 and 9 support both Statements A and B.

• Item 36 – Dues and Agency Fees – This item lists all the dues and agency fees received. In the event of an intermediate or parent organization receiving dues checkoff from an employer and then remitting to the reporting organization, if the intermediate or parent retains a portion as per capita, the reporting organization should report only the amount received. If amounts are withheld for any reason other than per capita, that should be explained on Item 69. If the intermediate or parent organization disbursed a portion of the reporting organization dues on behalf of the reporting organization, such as a bill payment to a third party, then this amount should be reported as received on item 36 and disbursed in the appropriate category.
  So, if your International Union withholds amounts from your local union dues check for things like officer benefits and supplies, these amounts must be reported as disbursements on the local union’s LM report and the dues receipts should be increased for the amount of the expenses withheld by the International Union.
• Items 43 and 60 (Schedules 3 and 4) – Sale and Purchases of Investments and Fixed Assets – These items and schedules provide detail of the sale of investments and fixed assets (information from Schedule 3 flows to Item 43) and the purchase of investments and fixed assets (information from Schedule 4 flows to Item 60). Remember that amounts promptly reinvested in similar type investments should be reported in the boxes at the bottom of Schedules 3 and 4, “Less Reinvestments”, in the same amounts. This will reduce the amount of receipts reported on your LM form.
• Items 44 and 62 (Schedule 9) – Loans Obtained and Repayments of Loans Obtained – These items and schedules provide detail for new loans obtained and repayments on those loans (e.g. If your union borrows money from a bank to build an addition to your union hall, the loan proceeds are reported in Column C while principal repayments are reported in column (D)(1). Interest is reportable in Schedule 18 – Overhead ). Total loans obtained from Schedule 9, Column C, flows to Item 44. Total repayments from Schedule 9, Column (D)(1), flows to item 62.
• Items 45 and 61 (Schedule 2) – New Loans Made and Repayments of Loans Made – These items and schedules provide detail for activity related to loans receivable during the reporting period. Total loans made and reported on Schedule 2, Column (C), flows directly to Item 61. Total cash repayments received and reported on Schedule 2, Column (D)(1) flows directly to Item 45.
• Item 46 – On Behalf of Affiliates for Transmittal to Them – If you are the intermediate or parent organization described in Item 36 above and receive dues checkoff from an employer to disburse to another organization, then you would disclose in this line the net of any amounts withheld. The actual disbursement of these funds will be included on Item 63 – To Affiliates of Funds Collected on Their Behalf.
• Item 48 – Other Receipts – These are amounts received that do not fall into the categories listed in Items 36 – 47. There is more detail required than just entering a number in the box. The Form LM-2 requires the reporting organization to separately identify any “major” receipts during the reporting period. A “major” receipt includes: 1) any individual receipt of $5,000 or more; or 2) total receipts from any single entity or individual that aggregate to $5,000 or more during the reporting period. The disclosure of major receipts will include the payers’ name, address, type of business, the purpose and date of each individual receipt of $5,000 or more. These are known as itemized receipts. The total of the aggregate receipts of less than $5,000 individually, but $5,000 or more in total for that payer are to be entered on the line labeled “Total non-itemized transactions with this Payee/Payor.” All other receipts in which the total amount received from a payer was less than $5,000 are aggregated and entered on Line 3 of the Schedule 14 section of the Detailed Summary Page – Schedules 14 – 19.
• Item 55 (Schedule 20) – Benefits – Report disbursements associated with direct and indirect benefits for officers, employees, members, and their beneficiaries (e.g., disbursements for life insurance, health insurance, and pensions). Do not include salary bonuses, severance payments, or payments for accrued vacation, which should be reported in Column (D) of Schedule 11 or 12. Direct benefit disbursements are those made to officers, employees, members, and their beneficiaries from the labor organization’s funds. Indirect benefit disbursements are those made from the labor organization’s funds to a separate and independent entity, such as a trust or insurance company.

Remember, your LM-2 must balance. That means that the total receipts minus total disbursements should equal the change in cash from the beginning of the reporting period to the end of the reporting period. This can be checked as follows:

If Line E does not equal the amount reported on Statement A, Column (B), Item 22, then there is an error that needs to be corrected.

This statement and its supporting schedules should be completed as accurately as possible. For the official instructions and to obtain more detailed information, please refer to the form instructions published by OLMS. If you are uncertain how to complete the schedules for unusual events or transactions that may have occurred during the reporting period, call the OLMS for clarification or consult with a professional well-versed in the nuances of the Form LM-2.