Compliance & Regulatory Audits
Union & Labor Organization Audit (LM-2)
Modus helps labor unions get an independent audit that strengthens fiduciary oversight and member trust.
A union LM-2 audit shows members that their dues are handled with care. Modus helps labor unions and labor organizations get that independent audit faster and with less disruption, bringing top-firm rigor and AI-native speed to a process that usually eats up staff time.
What is a union LM-2 audit?
A union LM-2 audit is an independent audit of a labor organization’s financial statements that supports the annual report it files with the DOL. Larger unions with $250,000 or more in annual receipts file the detailed Form LM-2 with the Office of Labor-Management Standards, or OLMS, under the Labor-Management Reporting and Disclosure Act; smaller unions file the LM-3 or LM-4. The audit strengthens fiduciary oversight and gives members transparency into how their organization is run.
Who needs a union LM-2 audit?
- Local, national, and international labor unions filing Form LM-2 with OLMS.
- Unions whose constitutions or bylaws require an annual independent audit.
- Labor organizations seeking stronger fiduciary oversight for officers and trustees.
- Unions responding to member requests for greater financial transparency.
What a union LM-2 audit covers
- An independent opinion on the union’s financial statements, including receipts and disbursements.
- Testing of dues, per capita taxes, and other member-driven revenue.
- Review of officer and employee compensation and disbursements.
- Assessment of internal controls over cash, assets, and reporting.
- Support for the information reported on Form LM-2.
How Modus helps with your union LM-2 audit
Union books are transaction-heavy, which is where Modus makes the biggest difference. Modus ingests your ledgers and disbursement records, ties each item to its source, and flags issues early, so the independent audit moves quickly and your staff answers up to about 50% fewer questions. Modus makes the engagement faster and less disruptive; the audit opinion itself is issued by an independent firm.
Why choose Modus
- Deep familiarity with LMRDA reporting and the demands of member accountability.
- Source-linked support that backs your LM-2 filing and stands up to review.
- Up to about 50% fewer questions for your staff during fieldwork.
- Top-firm rigor at a middle-market price.
Frequently asked questions
Does a union LM-2 audit replace the LM-2 filing?
No. The LM-2 is the union’s own annual report to OLMS. An independent audit is a separate engagement that supports the reliability of your records and reported figures. Modus helps you get that audit efficiently so officers and members gain added confidence.
Is a union financial audit the same as a benefit plan audit?
No. Auditing a union’s own financial statements is distinct from auditing a union-sponsored benefit plan. Pension and health plans, including Taft-Hartley plans, fall under separate employee benefit plan audit rules. Modus can help you get either if you sponsor a plan.
How long does a union LM-2 audit take?
Most union audits wrap up in roughly four weeks. Because Modus automates much of the transaction preparation, the timeline depends mainly on how quickly your records are available.
Why Modus
Audits at the speed of business
Modus helps you get a faster, higher-quality Union & Labor Organization Audit (LM-2) — top-firm rigor, source-linked workpapers, and far fewer questions for your team.
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