The United Automobile Workers union has announced that it is revving up its internal audit function in response to a federal investigation into its finances. The UAW’s former president, Gary Jones, resigned earlier this month as a federal corruption probe into bribery and other wrongdoing at the major autoworkers union plays out. He had been on administrative leave. So far the investigation has resulted in 10 guilty please among UAW members and 13 charges, including the indictment of Jones.
In the wake of the alleged fraud, the UAW has promised several reforms, including an overhaul of its internal audit function. The UAW is planning to hire four new internal auditors with specialties in accounting and tax regulation to bolster an expanded internal audit function. It also plans to conduct a comprehensive internal audit of financial controls, and it has hired Deloitte to conduct the review.
“The UAW is committed to putting in place checks and balances and accounting reforms that prevent financial malfeasance,” said Ray Curry, secretary-treasurer of the union in a statement “This top-to-bottom assessment of our financial and accounting procedures and policies will result in a stronger and more stringent financial oversight of all expenditures and financial transactions. With the support of our entire International Executive Board, we will keep the membership and staff updated on our progress and changes.”
The announcement came just three days after former president Jones officially resigned his union membership. The Detroit News has identified Jones as “the unnamed UAW leader accused of helping orchestrate a conspiracy that involved embezzling more than $1 million in member dues and spending the money on personal luxuries, including private villas, golf and expensive liquor.” Jones has not yet been charged in the case.
New External Auditor
In addition to the four auditors and retention of Deloitte, the UAW has also retained a new external accounting firm, Calibre CPA Group of Bethesda, Maryland, that would conduct a one-year “lookback” into all financials, and handle financial reporting moving forward. The union also plans to amplify internal training on new accounting procedures, centralize financial operations, and will work to recover “100 percent of any misappropriated funds prior to any restitution afforded by the courts.” 