Draft Final Audit Report of the 

Audit Division on 

Dr. Raul Ruiz for Congress 

(January 1, 2017 - December 31, 2018) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act.1 The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

About the Campaign (p. 2) 

Dr. Raul Ruiz for Congress is the principal campaign committee 

for Dr. Raul Ruiz, Democratic candidate for the United States 

House of Representatives from the state of California, 36th 

Congressional District, and is headquartered in Palm Desert, 

California. For more information, see the Campaign 

Organization chart, p.2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals $ 1,917,208 

Contributions from Political 

Committees 1,235,207 

o Transfers from Other Authorized 

Committees 17,829 

o Offsets to Operating 

Expenditures 7,810 

Total Receipts $ 3,178,054 

• Disbursements 

o Operating Expenditures $ 2,502,591 

o Contribution Refunds 29,857 

o Other Disbursements 5,868 

Total Disbursements $ 2,538,316 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

o

Findings and Recommendations (p. 3) 

• Misstatement of Financial Activity (Finding 1) 

• Personal Use of Campaign Funds (Finding 2) 

1 52 U.S.C. §30111(b). 
Draft Final Audit Report of 

the Audit Divison on 

Dr. Raul Ruiz for Congress 

(January 1, 2017 - December 31, 2018) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Part II. Overview of Campaign 

Campaign Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 4 

Finding 2. Personal Use of Campaign Funds 6 
 

Authority for Audit 

This report is based on an audit of Dr. Raul Ruiz for Congress (RRFC) undertaken by the Audit 

Division of the Federal Election Commission (the Commission) in accordance with the Federal 

Election Campaign Act of 1971, as amended (the Act). The Audit Division conducted the audit 

pursuant to 52 U.S.C. §30111(b), which permits the Commission to conduct audits and field 

investigations of any political committee that is required to file a report under 52 U.S.C. §30104. 

Prior to conducting any audit under this subsection, the Commission must perform an internal 

review of reports filed by selected committees to determine if the reports filed by a particular 

committee meet the threshold requirements for substantial compliance with the Act. 52 U.S.C. 

§30111(b). 

Scope of Audit 

Following Commission-approved procedures, the Audit staff evaluated various risk factors and 

as a result, this audit examined: 

1. the receipt of excessive contributions; 

2. the receipt of contributions from prohibited sources; 

3. the disclosure of contributions received; 

4. the disclosure of individual contributors’ occupation and name of employer; 

5. the disclosure of disbursements, debts and obligations; 

6. the consistency between reported figures and bank records; 

7. the completeness of records; and 

8. other committee operations necessary to the review. 

1 

Part I 

Background 
 

 

 

 

 

2 

Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

• Date of Registration September 23, 2011 

• Audit Coverage January 1, 2017 – December 31, 2018 

Headquarters Palm Desert, California 

Bank Information 

• Bank Depositories Two 

• Bank Accounts One checking and one savings account 

Treasurer 

• Treasurer When Audit Was Conducted John Pinkney 

• Treasurer During Period Covered by Audit John Pinkney (January 8, 2013 – 

Present) 

Management Information2 

• Attended FEC Campaign Finance Seminar Not Available 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash on hand @ January 1, 2017 $ 1,003,930 

Receipts 

o Contributions from Individuals 1,917,208 

o Contributions from Political Committees 1,235,207 

o Transfers from Other Authorized 

Committees 

17,829 

o Offsets to Operating Expenditures 7,810 

Total Receipts $ 3,178,054 

Disbursements 

o Operating Expenditures 2,502,591 

o Contribution Refunds 29,857 

o Other Disbursements 5,868 

Total Disbursements $ 2,538,316 

Cash on hand @ December 31, 2018 $ 1,643,668 

2 During pre-audit, the Audit staff provided RRFC the Internal Control Questionnaire to complete, which included 

these questions. Additionally, RRFC was asked these questions in follow-up correspondence. To date, the 

questionnaire has not been returned by RRFC. 
 

Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of RRFC’s reported financial activity with its bank 

records revealed a misstatement of disbursements for calendar year 2017. RRFC 

understated its disbursements by $16,794. In response to the Interim Audit Report 

recommendation, RRFC stated that it was prepared to make any necessary corrections to 

its reports, but information provided by the Audit staff has been inconsistent and unclear, 

and RRFC has not been provided with a comprehensive, consistent list of corrections that 

must be made. 

Subsequent to its Interim Audit Report response, RRFC demonstrated that two 

outstanding checks totaling $6,600 were actually voided by RRFC. After making the 

cooresponding adjustment to RRFC’s 2017 reported disbursements based on this 

demonstration, the Audit staff determined that RRFC’s financial activity for the audit 

period is materially correct and no further action is warranted. 

(For more detail, see p. 4.) 

Finding 2. Personal Use of Campaign Funds 

3 

During a review of reported disbursements, the Audit staff identified disbursements 

totaling $5,899 as potential personal use of campaign funds. The disbursements included 

purchases for vehicle-related expenditures such as parking, gasoline, and insurance 

payments. In response to the Interim Audit Report recommendation, RRFC stated that 

recordkeeping requirements were misread and misapplied by the Audit staff for these 

disbursements. RRFC believed that the declaration previously provided from the 

Campaign Manager should have resolved the finding, and that fuel expenses are a 

common category of campaign expenditures. As of the date of this report, no supporting 

documentation was provided by RRFC related to the personal use of campaign funds or 

demonstrating that the personal use expenses for the vehicles were of a de minimus 

amount. 

(For more detail, see p. 6.) 
 

Part IV 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of RRFC’s reported financial activity with its bank 

records revealed a misstatement of disbursements for calendar year 2017. RRFC 

understated its disbursements by $16,794. In response to the Interim Audit Report 

recommendation, RRFC stated that it was prepared to make any necessary corrections to 

its reports, but information provided by the Audit staff has been inconsistent and unclear, 

and RRFC has not been provided with a comprehensive, consistent list of corrections that 

must be made. 

Subsequent to its Interim Audit Report response, RRFC demonstrated that two 

outstanding checks totaling $6,600 were actually voided by RRFC. After making the 

corresponding adjustment to RRFC’s 2017 reported disbursements based on this 

demonstration, the Audit staff determined that RRFC’s financial activity for the audit 

period is materially correct and no further action is warranted. 

Legal Standard 

Contents of Reports. Each report must disclose: 

• the amount of cash on hand at the beginning and end of the reporting period; 

• the total amount of receipts for the reporting period and for the election cycle; 

• the total amount of disbursements for the reporting period and for the election cycle; 

and 

• certain transactions that require itemization on Schedule A (Itemized Receipts) or 

Schedule B (Itemized Disbursements). 52 U.S.C. §30104(b)(l), (2), (3), (4), and (5). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reconciled RRFC’s reported financial activity 

with its bank records for calendar years 2017 and 2018. The reconciliation determined 

that RRFC misstated disbursements for 2017. The following chart details the 

discrepancies between RFCC’s disclosure reports and bank activity. The succeeding 

paragraphs explain why the discrepancies occurred. 

 

4 

2017 Committee Activity 

Reported Bank Records Discrepancy 

Beginning cash on hand @ 

January 1, 2017 

$990,316 $1,003,930 $13,614 

Understated 

Receipts $1,803,606 $1,814,922 $11,316 

Understated 
 

 

 

 

 

5 

2017 Committee Activity 

Reported Bank Records Discrepancy 

Disbursements $698,170 $714,964 $16,794 

Understated 

Ending cash on hand @ 

December 31, 2017 

$2,095,752 $2,103,888 $8,136 

Understated 

The understatement of disbursements resulted from the following: 

• Disbursements not reported or reported incorrectly + 13,500 

• Contribution refunds reported but did not clear bank - 586 

• Unexplained differences + 3,880 

Net Understatement of Disbursements $16,794 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter during the exit conference with RRFC 

representatives and provided schedules detailing the misstatement of financial activity. 

RRFC representatives did not provide any comments. 

In response to the exit conference, RRFC submitted documentation which reduced the 

amount of the understatement on the FEC reports to $16,794 (reflected above in the Facts 

section). 

The Interim Audit Report recommended that RRFC amend its disclosure reports or file a 

Form 993 (Miscellaneous Electronic Submission) to correct the misstatement noted 

above, and reconcile the cash balance on its most recently filed report to include these 

adjustments and correct any subsequent discrepancies. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, RRFC stated that a finding of 

$16,794 is “scant” when compared to RRFC’s $5,716,370 in overall activity over the 

two-year period, and “is the result of inconsistent and confusing guidance provided by the 

auditors.” RRFC stated that it has cooperated throughout the audit process and it is 

prepared to make any necessary corrections to its reports, but it has not been provided a 

comprehensive list of the corrections that must be made. RRFC requested that the Audit 

Division “vacate the finding” and provide a corrected listing of the needed changes, upon 

which RRFC will promptly amend its reports to comply with the recommendation. 

Contrary to RRFC’s assertions that it has not been provided a comprehensive list of 

needed corrections, when the Audit staff notified RRFC of the reduced error amount 

following the exit conference, a revised schedule that outlined the errors was also 

provided to RRFC representatives. In addition, to ensure RRFC was provided adequate 

time to respond to the revised finding, the Audit staff extended the exit conference 

response period by three days. 

3 RRFC was advised by the Audit staff that if it chose to file a Form 99 instead of amending its disclosure 

reports, the form must contain all pertinent information that is required on the schedule. 
6 

Subsequent to the Interim Audit Report response, the Audit staff reached out to RRFC 

representatives to determine whether additional information was needed to prepare its 

amended reports. RRFC representatives replied and there were several communications 

regarding disbursements the Audit staff had classified as outstanding checks. RRFC 

representatives made the Audit staff aware that it had previously provided documentation 

showing that a $4,000 disbursement was actually voided and re-issued through its payroll 

vendor. In addition, RRFC representatives provided documentation not presented to the 

Audit staff prior to the issuance of the Interim Audit Report, demonstrating that another 

$2,600 outstanding check was also voided. The Audit staff agrees that these 

disbursements were voided and has consequently removed the two checks totaling $6,600 

from the bank disbursement totals. Therefore, in light of this documentation, RRFC has 

no material misstatement and no amendments are needed to its disclosure reports. 

Finding 2. Personal Use of Campaign Funds 

Summary 

During a review of reported disbursements, the Audit staff identified disbursements 

totaling $5,899 as potential personal use of campaign funds. The disbursements included 

purchases for vehicle-related expenditures such as parking, gasoline, and insurance 

payments. In response to the Interim Audit Report recommendation, RRFC stated that 

recordkeeping requirements were misread and misapplied by the Audit staff for these 

disbursements. RRFC believed that the declaration previously provided from the 

Campaign Manager should have resolved the finding, and that fuel expenses are a 

common category of campaign expenditures. As of the date of this report, no supporting 

documentation was provided by RRFC related to the personal use of campaign funds or 

demonstrating that the personal use expenses for the vehicles were of a de minimus 

amount. 

Legal Standard 

A. Use of Campaign Funds. Using campaign funds for personal use is prohibited. 11 

CFR §113.1 (g). 

B. Personal Use Defined. Personal use is defined as any use of funds in a campaign 

account of a present or former candidate to fulfill a commitment, obligation or 

expense of any person that would exist irrespective of the candidate’s campaign or 

duties as a Federal officeholder. 11 CFR § 113.1 (g). 

Commission regulation lists a number of purposes that would constitute personal use 

per se. This includes but is not limited to the use of campaign funds for: 

• Household food items or supplies; 

• Funeral, cremation, or burial expenses; 

• Clothing other than items of de minimis value used in the campaign such as Tshirts or caps; 

• Tuition payments; 

• Mortgage, rent, or utility payments; 
7 

• Admission to sporting events, concerts, theaters, or other form of 

entertainment unless part of a specific campaign or officeholder activity; 

• Dues, fees, or gratuities at a country club, health club, recreational facility, or 

other non political organization; and 

• Salary payments to a family member (unless the family member is providing 

bona fide services). 11 CFR §113.1 (g)(1)(i). 

Where a specific purpose is not listed as personal use, the Commission makes a 

determination, on a case-by-case basis, whether an expense would fall within the 

regulation’s definition of personal use. Examples of such other uses include: 

• Legal expenses; 

• Meal expenses; 

• Travel expenses; and 

• Vehicle expenses. 11 CFR §113.1(g)(1)(ii). 

C. Vehicle Expenses. If a committee uses campaign funds to pay expenses associated 

with a vehicle that is used for both personal activities beyond a de minimis amount 

and campaign or office-holder-related activities, the portion of the vehicle expenses 

associated with the personal activities is personal use, unless the person(s) using the 

vehicle for personal activities reimburse(s) the campaign account within thirty days 

for the expenses associated with the personal activities. 11 CFR §113.1(g)(1)(ii)(D). 

D. Recordkeeping. For those uses of campaign funds that involve both personal use 

and either campaign or office-holder activity, the committee must maintain a 

contemporaneous log or other record to document the dates and expenses related to 

the personal use of campaign funds. The log must be updated whenever campaign 

funds are used for personal expenses rather than for campaign or officeholder 

expenses. The log or other record must also be maintained and preserved for 3 years 

after the report disclosing the disbursement is filed, pursuant to 11 CFR §102.9 and 

104.14(b). 11 CFR §113.1(g)(8). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed disbursements by RRFC and determined 

that disbursements totaling $5,899 were not campaign related. These disbursements were 

for vehicle-related purchases, including gasoline ($5,861), parking ($22), and insurance 

($16). Personal vehicles were used by committee staff for both personal and campaign 

related activities. This is permissible; however, in accordance with 11 CFR §113.1(g)(8), 

when a vehicle is used for both personal and campaign-related activites, a committee 

must maintain a record which documents the personal usage, which RRFC did not 

maintain. In addition, there is no evidence of personal use activities being reimbursed by 

campaign personnel, as required under 11 CFR §113.1(g)(1)(ii)(D). The Audit staff 

requested that RRFC provide documentation such as receipts, dates of events, or any 

contemporaneous documentation that correlates these disbursements with campaign 

activity. Documentation was not provided by RFCC during audit fieldwork. 
8 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the personal use of campaign funds with RRFC representatives 

during the exit conference and provided schedules detailing the transactions. In response, 

RRFC representatives provided a declaration from the Campaign Manager attesting that 

the disbursements for gasoline were for campaign-related travel. The Campaign Manager 

further stated that because the congressional district is 6,000 square miles in area, 

extensive vehicle travel was necessary in connection with the campaign. 

With the exception of the declaration from the Campaign Manager, no supporting 

documentation was provided by RRFC to substantiate the campaign-related nature of 

these disbursements. The declaration does not meet the provisions of 11 CFR 

§113.1(g)(8) as it is not a contemporaneous log or other record which documents the 

dates and expenses related to the personal use of campaign funds. In addition, the 

declaration does not provide any evidence of reimbursements for the mix of personal and 

campaign related expenses, which is required under 11 CFR §113.1(g)(1)(ii)(D). For 

these reasons, the Audit staff concluded that these disbursements were not related to the 

campaign. 

The Interim Audit Report recommended that RRFC provide documentation 

demonstrating that the identified disbursements were for campaign-related activity. In 

accordance with 11 CFR §113.1(g), the documentation may include, but is not limited to, 

a record which documents the personal usage of the vehicle(s) and evidence of personal 

use activities being reimbursed to the committee by the campaign representative(s). 

Absent such demonstration, the Interim Audit Report further recommended that the 

$5,899 be reimbursed to RRFC by committee personnel who made the vehicle-related 

purchases. If reimbursed, RRFC should provide copies of the reimbursement checks 

received, along with the corresponding bank statements that demonstrated the check 

deposits into the RRFC bank account. RRFC should also provide any comments it deems 

relevant to this matter. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, RRFC stated that this finding is 

not supported by fact or law. RRFC made the following four points on how the personal 

use rules were misread by the Audit staff: 

1) Campaigns at all levels commonly incur expenses for fuel, whether directly or 

by reimbursing their personnel. These disbursements present no special issue 

of personal use, and to the contrary, Commission rules expressly provide that 

neither travel expenses nor vehicle expenses are per se personal use, but 

instead are evaluated on a case-by-case basis, like all other expenses; 

2) There is no general Commission requirement that campaigns must keep records 

to support fuel expenses. Rather, the additional documentation requirements 

cited by the auditors apply only when a campaign uses funds for both personal 

use and either campaign or officeholder use; 

3) The regulations take fuel expenses out of the category of per se personal use 

and treat them like other expenses, but the audit report takes the opposite 

approach and presumes the expenses to be personal use, requiring RRFC to 
prove otherwise. The auditors have created a new presumption of personal 

use; and 

4) The report rejects the evidence; the declaration from the Campaign Manager 

provided in response to the exit conference, that attested that the disbursements 

were for campaign-related travel. RRFC believed that the declaration should 

have resolved the finding, but because the evidence was not in the form of a 

comtemporaneous log or record, it did not meet the auditor’s erroneous 

understanding of the rules. 

As noted previously, RRFC staff used personal vehicles for both personal and campaign 

related activities. The use of campaign funds for purchases related to gasoline, parking 

and insurance for vehicles being used for personal and campaign related activites, 

resulted in the requirement to maintain a contemporaneous log or other record to 

document the dates and expenses related to the personal use of campaign funds, in 

accordance with 11 CFR §113.1(g)(8). 

9 

The Audit staff concurs that, pursuant to 11 CFR §113.1(g)(1)(ii), the Commission has 

the authority to determine, on a case-by-case basis, whether other uses of funds (vehicle 

expenses) in a campaign account fulfill a commitment, obligation or expense that would 

exist irrespective of the candidate’s campaign or duties as a Federal officeholder and 

therefore are personal use. 

Although RRFC provided a declaration from the Campaign Manager stating that the 

vehicle expenditures were not personal use, the declaration does not satisfy the provisions 

of 11 CFR §113.1(g)(8). The declaration is not a contemporaneous log or other record 

which documents the dates and expenses related to the personal use of campaign funds 

for the vehicles. The declaration also does not satisfy 11 CFR §113.1(g)(1)(ii)(D) 

because it does not demonstrate that the individuals using the vehicles for both personal 

activities beyond a de minimis amount and campaign/office holder-related activities 

reimbursed the campaign account within thirty days for the expenses associated with the 

personal activities, as required. RRFC did not provide any other documentation. Absent 

RRFC either submitting a contemporaneous log or other record for the vehicles which 

documents the dates and expenses related to the personal use of campaign funds rather 

than for campaign or office-holder expenses, or demonstrating that the personal use 

expenses for the vehicles were of a de minimis amount, the Audit staff concludes that the 

disbursements were a personal use of campaign funds.