Administering an apprenticeship fund can be complex, requiring funds to follow not only good educational administration practices but also good business practices. A chapter in the soon-to-be-released Trustee Handbook: A Guide to Labor-Management Employee Benefit Plans, Eighth Edition, published by the International Foundation, addresses these practices. In Chapter 26 of the book, author Andy Staab gives special attention to the types of written policies that apprenticeship funds should have and some that trustees are encouraged to consider. The excerpt below details Staab’s suggestions for must-have policies to effectively run your fund like a business.

This excerpt is from Chapter 26, Running an Apprenticeship Fund Like a Business in the Trustee Handbook: A Guide to Labor-Management Employee Benefit Plans, Eighth Edition. See detailed table of contents for the book.

In recent years, DOL has focused substantial attention on apprenticeship fund administration. These initiatives have led to numerous fund examinations around the United States and uncovered some abuses—particularly with respect to fund assets. The  result  has  been  a  new  crop  of  apprenticeship  fund  policies  and  internal  controls. While these plan rules may seem onerous at first, they provide evidence to regulators that a fund is aware of the potential for abuse and that the fund has taken steps to eliminate or greatly reduce such a risk. The board of trustees of an apprenticeship fund has a responsibility to make sure its fund is operating in accordance with all applicable state and federal regulations as well as plan documents. Accordingly, a  fund’s board of trustees should seek the input of plan professionals—particularly fund counsel and the fund auditor—to develop written policies that help trustees and other fund personnel meet this challenge. The website for the International Foundation of Employee Benefit Plans has a page devoted to sample employee benefit plan policies. (Click on the “Multiemployer” link for samples specific to multiemployer plans.)

Policies that all benefit plans should have are:

• Document retention
• Conflict of interest
• Trustee expense reimbursement
• Disaster recovery
• Investment.

Apprenticeship fund trustees are also encouraged to consider writing and implementing policies concerning:

Social media. There was a time when a social media policy was considered optional, but social media has become increasingly important—particularly as a means to communicate plan information. The purpose of such a policy can be to limit social media usage, or it can embrace social media as a part of apprenticeship and journeyworker education.

Staff expense reimbursement. It is vital to provide employees with guidance on what purchases on behalf of the fund are permissible and how the cost of these items will be reimbursed. The same importance given to trustee expense reimbursement should be applied to staff expense reimbursement. Although a trustee expense reimbursement policy is a good model from which to design a staff expense reimbursement policy, be mindful that the types of expenses incurred by trustees and staff vary. For staff, it is the daily expenses that are affected. Mileage is an example of a typical staff expense. A board of trustees should not presume there is only one method for tracking mileage reimbursement. There are as many variations as there are staff members claiming mileage reimbursement. Trustees should consult with the fund auditor to develop a policy that covers a specific mileage calculation methodology.

Credit card use. If a fund has a credit card, there should be a policy that states who is authorized to use the card, a credit limit per purchase and per individual, and who will serve on the credit card statement review committee. The review committee should include trustees who do not have authority to use the credit card. Otherwise, the concept of self-oversight creates the possibility of abuse.

Equipment and vehicle use. A policy is needed that addresses staff use of fund property. If a fund owns motor vehicles, there should be criteria for authorized users, such as having a valid driver’s license, insurance, etc. Usage criteria should also be stated. If a fund owns a trailer for towing, the policy should consider the ordinary wear and tear that hauling a trailer might have on a staff member’s vehicle. It is not unreasonable to ban staff members from using their personal vehicles for towing apprenticeship fund trailers and other property. Although an outright ban might impede convenience, it avoids the problem of answering how to compensate for vehicles damaged by towing. Additionally, this policy should address when and how tools owned by the fund can be used by staff, apprentices and journeyworkers. On the flip side, there might be instances in which instructors use their own tools, and the question arises whether they should be reimbursed for doing so.

Financial review. This policy should be developed with the fund auditor and touch on fiscal management issues. A financial review committee is generally charged with helping determine fund budgets, developing a plan for economic downturns and assessing insurance needs. Most apprenticeship funds have one or two persons responsible for monitoring cash receipts, cash disbursements, and payroll and inventory control. The board of trustees typically delegates to the financial review committee responsibility for regular oversight and reporting on these cash flow matters to limit the potential for abuse and malfeasance.

Graduation/completion ceremony. Since the issuance of the DOL Field Assistance Bulletin 2012-01, funds have had to create or revise their policies concerning the use of fund dollars to pay for ceremonies and dinners that recognize the completion of training pro-grams. DOL has proclaimed such a policy essential to the administration of an apprenticeship fund and provided an outline of what should be included in such a policy. The policy should be drafted by fund counsel and indicate which entities are permitted to pay for activities associated with graduation ceremonies.

Skills contests. In Field Assistance Bulletin 2014-02, DOL addressed, among other things, what fund expenditures are appropriate with respect to apprenticeship skills contests. DOL also offers an outline of what should be in a skills contest policy.

Discrimination. Any training fund that functions as an employer should have employment policies concerning discrimination with respect to gender, race, age, etc.

Sexual harassment. Plans should clearly state in the student handbook and employee manuals (or in a separate document) what is unacceptable behavior and the consequences that will result from such actions. Trustees should consult with legal counsel in developing this policy.

Drugs and alcohol. Following the model for sexual harassment, a policy should also be prepared and distributed concerning the use of drugs and alcohol. Likewise, fund counsel should be asked to assist with the development of this policy.

The International Foundation offers many additional resources for your training and education fund. Visit out our Apprenticeship Resources web page for news, survey data, case studies and upcoming educational opportunities. 

Justin Held, CEBS
Senior Research Analyst/Educational Program Specialist at the International Foundation