Federal Election Commission

Agency Financial Report

Fiscal Year 2021
Federal Election Commission

Agency Financial Report

Fiscal Year 2021

Federal Election Commission

1050 First St. NE

Washington, D.C. 20463

(202) 694-1000

1-(800) 424-9530

www.fec.gov

Released November 15, 2021
Contents

Message from the Chair 1

How to Use This Report 3

SECTION I – Management’s Discussion and Analysis 4

Section I.A: Mission and Organizational Structure 4

Mission Statement 5

Organizational Structure 5

Risk Identification and Mitigation 10

Section I.B: Performance Goals, Objectives and Results 14

Strategic Goal 14

Strategic Objectives 14

Section I.C: Analysis of FEC Financial Statements and Stewardship Information 23

Section I.D: Analysis of FEC’s Systems, Controls and Legal Compliance 26

Annual Assurance Statement on Internal Control 28

Section I.E: Limitations of the Financial Statements 29

SECTION II – Auditor’s Report and Financial Statements 30

Message from the Chief Financial Officer 30

OIG Transmittal Letter 31

Independent Auditor’s Report 33

Financial Statements 41

Notes to the Financial Statements 47

SECTION III – Other Information 71

Inspector General’s Statement on FEC Management and Performance Challenges 71

Management’s Response to the Office of Inspector General’s Statement on the Federal 

Election Commission’s Management and Performance Challenges 84

Payment Integrity Information Reporting 92

Reporting on Internal Control Assurances 93

Civil Monetary Penalties Adjustment for Inflation 94

APPENDIX 97

List of Acronyms 97
1

Message from the Chair

FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

OFFICE OF THE CHAIR 

November 15, 2021 

I am pleased to present the Federal Election Commission’s (FEC) Agency Financial Report (AFR) 

for Fiscal Year (FY) 2021. The AFR reflects the agency’s program performance and financial 

activities over the past year and demonstrates our continued commitment to administering 

the Federal Election Campaign Act of 1971, as amended. 

The FEC protects the integrity of the Federal campaign finance process by providing the public with 

accurate and accessible information about how candidates raise and spend funds to support their 

campaigns, enforcing the campaign finance laws, and encouraging voluntary compliance through 

timely advice and educational outreach. By furnishing the public with timely and transparent 

campaign finance data and fairly and effectively enforcing the law, the Commission safeguards 

against corruption or its appearance and provides the citizenry with crucial information by 

which to evaluate candidates for Federal office. 

The FEC continues to seek opportunities to make its systems and processes more efficient and 

effective, including efforts to redesign the FEC website and to migrate data to a cloud environment. 

As a result, the FEC has been able to accommodate a steep rise in the number of financial transactions 

reported to the agency over the last several years. At the same time, the FEC has continued to 

prioritize improving the customer service it provides and ensuring that campaign finance information 

is readily available to the public. 

 

With respect to the agency’s FY 2021 annual financial statements, the Commission received an 

unmodified opinion from its independent auditors. This unmodified opinion reflects the continued 

commitment by the Commissioners and FEC staff to ensure that the FEC’s financial statements fairly 

present the agency’s fiscal position.

Management, which consists of senior managers including the Chief Financial Officer, Acting 

General Counsel and Staff Director, continue to respond to risks included in the agency Risk Profile 

(see Section I) and challenges identified by the Inspector General (see Section III). 
2

In addition, the performance data described in the FEC’s FY 2021 AFR were compiled and evaluated 

using appropriate techniques for achieving the desired level of credibility for the verification and 

validation of performance data relative to its intended use.

The efforts described in this report reflect the work and dedication of the agency’s staff. The 

Commission is committed to continuing to fulfill the mission of the agency in the most efficient 

manner possible. 

Shana M. Broussard 

Chair 

On behalf of the Commission, 
3

How to Use This Report

.

 

This Agency Financial Report presents financial information, as well as relevant performance 

information, on the Federal Election Commission’s operations. The report was prepared pursuant to the 

Accountability of Tax Dollars Act of 2002 and Office of Management and Budget (OMB) Circular A136, revised, Financial Reporting Requirements, and covers activities from October 1, 2020 through 

September 30, 2021. 

The FEC places a high importance on keeping the public informed of its activities. To learn more about 

the FEC and what the agency does to serve the American public, visit the FEC’s website 

https://www.fec.gov/about/reports-about-fec/strategy-budget-and-performance/

The FY 2021 Agency Financial Report is organized into three primary sections:

Section I – Management’s Discussion and Analysis (MD&A) provides an overview of the FEC. It 

describes our mission, organizational structure, and regulatory responsibilities. It also includes relevant 

performance information related to the FEC’s strategic goals and objectives to provide a forwardlooking discussion of future challenges.

Section II – Financial Information, including the Independent Auditor’s Report, detailing the FEC’s 

financial performance by 1) highlighting the agency’s financial position and audit results and 2) 

describing the FEC’s compliance with key legal and regulatory requirements.

Section III – Other Information includes our Inspector General’s (IG) assessment of the FEC’s 

management challenges and the FEC’s response.
4

SECTION I – Management’s Discussion and Analysis

Section I.A: Mission and Organizational Structure

The Federal Election Commission is an independent regulatory agency responsible for administering, 

enforcing, defending and interpreting the Federal Election Campaign Act of 1971, as amended (FECA 

or the Act).1 Congress created the FEC to administer, enforce and formulate policy with respect to the 

FECA. The Act reflects a belief that democracy works best when voters can make informed decisions 

in the political process—decisions based in part on knowing the sources of financial support for Federal 

candidates, political party committees and other political committees. Public confidence in the political

process also depends on the knowledge that participants in Federal elections follow clear and welldefined rules and face consequences for non-compliance.

Under the Act, all Federal political committees, including the committees of Presidential, Senate and 

House candidates, must file reports of receipts and disbursements. The FEC makes disclosure reports,

and the data contained in them, available to the public through the Commission’s internet-based public 

disclosure system on the Commission’s website, as well as in a public records office at the Commission's 

Washington, D.C. headquarters. The FEC also has exclusive responsibility for civil enforcement of the 

Act and has litigating authority independent of the Department of Justice in U.S. district court and the 

courts of appeals. Additionally, the Commission promulgates regulations implementing the Act and 

issues advisory opinions responding to inquiries regarding interpretation and application of the Act and 

the Commission’s regulations.

Additionally, the Commission is responsible for administering the Federal public funding programs for 

Presidential campaigns. This responsibility includes certifying and auditing all participating candidates 

and committees and enforcing the public funding laws.

The FEC has chosen to produce an Agency Financial Report (AFR) and Annual Performance Report 

(APR) pursuant to the Government Performance and Results Act of 1993, as amended. The FEC will 

include its FY 2021 Annual Performance Report with its Congressional Budget Justification and will 

post it on the FEC website at https://www.fec.gov/about/reports-about-fec/strategy-budget-andperformance/ in 2022. 

1 The Commission’s primary responsibilities pertain to the Federal Election Campaign Act of 1971, Public Law 92-225, 86

Stat. 3 (1972) as amended (codified at 52 U.S.C. §§ 30101-30145) (formerly at 2 U.S.C. §§ 431-55) (the Act or the FECA).

The Commission’s responsibilities for the Federal public funding programs are contained in the Presidential Election

Campaign Fund Act, Public Law 92-178, 85 Stat. 562 (1971) (codified at 26 U.S.C. §§ 9001-13) and the Presidential

Primary Matching Payment Account Act, Public Law 93-443, 88 Stat. 1297 (1974) (codified at 26 U.S.C. §§ 9031-42).
5

Mission Statement

The FEC’s mission is to protect the integrity of the Federal campaign finance process by providing 

transparency and fairly enforcing and administering Federal campaign finance laws.

Organizational Structure

To accomplish its legislative mandate, the FEC is directed by six Commissioners, who are appointed by 

the President with the advice and consent of the Senate. By law, no more than three Commissioners can 

be members of the same political party. Each member serves a six-year term, and two seats are subject 

to appointment every two years. Commissioners may serve beyond their six-year terms until new 

Commissioners are confirmed. The Chairmanship of the Commission rotates among the members, with 

no member serving as Chair more than once during his or her six-year term. The Commissioners are 

responsible for administering and enforcing the Act and meet regularly to formulate policy and to vote 

on significant legal and administrative matters. The Act requires the affirmative vote of four members

of the Commission to approve official actions, thus requiring bipartisan decision-making. The FEC has 

its headquarters in Washington, D.C. and does not have any regional offices.

As noted in Figure 1, the offices of the Staff Director, General Counsel, Chief Information Officer and 

Chief Financial Officer support the agency in accomplishing its mission. The Office of the Inspector 

General, established within the FEC in 1989 under the 1988 amendments to the Inspector General 

Act, is independent and reports both to the Commissioners and to Congress. The specific roles and 

responsibilities of each office are described in greater detail below.
6

Figure 1: FEC Organizational Chart

Office of the Staff Director (OSD)

The Office of the Staff Director consists of four offices: 1) Management and Administration; 2) 

Compliance; 3) Communications; and 4) Equal Employment Opportunity. The Office of Management 

and Administration is responsible for the FEC’s strategic planning and performance and works with the 

Commission to ensure the agency’s mission is met efficiently. In addition, this office houses the 

Commission Secretary, the Office of Human Resources (OHR) and the Administrative Services 

Division (ASD). The primary responsibilities of the Office of Compliance are the processing and review 

of campaign finance reports and filing assistance, audits, administrative fines and alternative dispute 

resolution. The Office of Communications includes divisions charged with making campaign finance 

reports available to the public, encouraging voluntary compliance with the Act through educational 

outreach and training and ensuring effective communication with Congress, executive branch agencies, 

the media and researchers and the general public. The Equal Employment Opportunity Office 

administers and ensures compliance with applicable laws, regulations, policies and guidance that 

prohibit discrimination in the Federal workplace based on race, color, national origin, religion, age, 

disability, sex, pregnancy, genetic information or retaliation. The EEO Officer reports to the Staff 

Director on administrative issues but has direct reporting authority on all EEO matters. See 29 CFR 

1614.102(b). 
7

Office of General Counsel (OGC)

The Office of General Counsel consists of five organizational units: (1) the Deputy General Counsel -

Administration; (2) the Deputy General Counsel - Law; (3) the Policy Division; (4) the Enforcement 

Division; and (5) the Litigation Division. The Deputy General Counsel - Administration directly 

supervises the Administrative Law Team, the Law Library and all OGC administrative functions. The 

Deputy General Counsel - Law has the primary responsibility for assisting the General Counsel in all 

of the substantive aspects of the General Counsel’s duties and shares in the management of all phases 

of OGC programs, as well as directly supervising the agency’s ethics program. The Policy Division 

drafts for Commission consideration advisory opinions and regulations interpreting the Federal 

campaign finance law and provides legal advice to the FEC’s compliance programs. The Enforcement 

Division recommends to the Commission appropriate action to take with respect to administrative 

complaints and apparent violations of the Act. Where authorized, the Enforcement Division investigates 

alleged violations and negotiates conciliation agreements, which may include civil penalties and other 

remedies. If an enforcement matter is not resolved during the administrative process, the Commission 

may authorize suit in district court, at which point the matter is transferred to the Litigation Division. 

The Litigation Division represents the Commission before the Federal district and appellate courts in all 

civil litigation involving campaign finance statutes. This Division assists the Department of Justice’s 

Office of the Solicitor General when the Commission’s FECA cases are before the Supreme Court.

Office of the Chief Information Officer (OCIO)

The Office of the Chief Information Officer (OCIO) consists of four units: (1) Enterprise Architecture; 

(2) Operational Support; (3) Data Administration; and (4) IT Security. The OCIO provides secure, stable 

and robust technology solutions for Commission staff and the public. OCIO both develops and maintains 

the systems that serve as the public's primary source of information about campaign finance data and 

law and ensures agency employees have a technology infrastructure that allows them to perform their 

day-to-day responsibilities administering and enforcing campaign finance law. OCIO also develops and 

supports analytic reporting tools that help staff perform their disclosure and compliance duties. 

Office of the Chief Financial Officer (OCFO)

The Office of the Chief Financial Officer consists of three offices: (1) Budget; (2) Accounting; and (3) 

Procurement. The OCFO is responsible for complying with all financial management laws and 

standards, and all aspects of budget formulation, budget execution and procurement.
8

Sources of Funds

Figure 2 shows the agency’s appropriation and total obligations from FY 2017 to FY 2021.

$66

$67

$68

$69

$70

$71

$72

$73

FY 2017* FY 2018 FY 2019** FY 2020 FY 2021

in Millions

Appropriation

Total Obligations

* $8 million in 2 year funds related to the FEC office move not included in total.

** December 22, 2018 through January 25, 2019 the FEC was shut down for 35 days.

Figure 2: Summary of Funding (in millions of dollars)

The FEC also has the authority to collect fees from attendees of agency-sponsored educational 

conferences and webinars. The Commission may use those fees to defray the costs of conducting those

programs. The Commission works with its conference-management contractor to set registration fees at 

a level that covers only the costs incurred, which may include meeting room rental and conference meals 

and compensation. All other conference-related expenses, such as materials and staff travel, are paid 

using appropriated funds. Registration fees for FY 2021 were $71,934.

Personnel vs. Non-Personnel Costs

Figure 3 represents the Commission’s FY 2021 obligations by personnel and non-personnel costs. 

Personnel costs, which are primarily composed of salaries and employee benefits, accounted for 73

percent of the FEC’s costs. The remaining 27 percent of the Commission’s costs was spent on nonpersonnel items, such as infrastructure and support, software and hardware, office rent, building security 

and other related costs.
9

Figure 3: Fiscal Year 2021 by Major Category

Salaries & Benefits

73%

Other Non-Personnel 

Initiatives

17%

Facilities

8%

Other

2%
10

Risk Identification and Mitigation

In Fiscal Year (FY) 2017, the FEC formed a Senior Management Council (SMC) to manage internal 

control and Enterprise Risk Management (ERM) efforts in response to new requirements outlined in 

OMB Circular A-123. The SMC delivered to OMB an agency-wide Risk Profile to assist in the effective 

management of risk areas impacting FEC strategic, operational, reporting, and compliance objectives.

In FY 2018, the SMC took further steps toward effective management of risk by updating Commission 

Directive 53 Implementation of OMB Circular A-123: Internal Control Program to comply with ERM 

requirements. In FY 2018, 2019, 2020, and 2021 the SMC submitted an updated Risk Profile to OMB. 

As part of the annual Internal Control Review (ICR) process, program offices rated each risk from the 

Risk Profile, detailed how the risk affects their operations and identified mitigating activities in place to 

respond to the risk. The current Agency-wide Risk Profile is shown below and further discussion on 

risk is included in the remaining MD&A sections. 
11

Federal Election Commission - FY 2021 ERM Risk Profile

Identified Significant Risk

Inherent 

Risk 

Rating

Current Risk Response

Residual 

Risk 

Rating

Proposed Additional 

Action 

Proposed 

Implementation/ 

Monitoring Process

Budget Constraints That Limit 

Hiring and IT Modernization 

Initiatives

High

Reduction: seek

additional funds and 

prioritize available 

resources

High

Continue to seek additional 

funding. Provision of 

additional funding is not in 

Management’s control

OCFO and 

Congressional Affairs

Significant and Substantive 

Amendments to FECA/Pending 

Judicial Opinions

Medium Acceptance: monitoring Medium Not in Management’s 

control

OGC and 

Congressional Affairs

Absence of 

Quorum/Confirmation of 

Commissioners

High Reduction: Directive 10 High Not in Management’s 

control

OGC and 

Congressional Affairs 

Significant Increase in Federal 

Election Campaign Disclosure 

Activity

Very High Reduction: infrastructure 

improvements High

Move to scalable cloudbased computing and 

development of new efiling platform. Advocate 

for more funding to invest 

in IT infrastructure and 

additional FTEs.

OCIO Performance/ 

Monitoring Reports

Changes to Government-wide 

Directives including Human 

Capital and Operating 

Requirements 

Medium Acceptance: monitoring Medium

Continue monitoring 

centralized repository for 

new executive orders, 

directives, memorandums, 

and other guidance.

OGC and OHR
12

Identified Significant Risk

Inherent 

Risk 

Rating

Current Risk Response

Residual 

Risk 

Rating

Proposed Additional 

Action 

Proposed 

Implementation/ 

Monitoring Process

Disruptions to Agency 

Operations Medium Acceptance: monitoring Medium

Not in Management’s 

control. Continuous 

updates to the Disaster 

Recovery Plan, COOP, and 

Shutdown Plan. 

Monitored by Senior 

Management

Failure of Contractors to 

Provide Required Deliverables High

Reduction: monitoring 

of contracts by 

Contracting Officer's 

Representatives (CORs)

and review procurement 

process, including 

enhancements to 

objectives and 

requirements. 

Medium

Consistent monitoring of 

contractor performance 

and implementation issues.

Monitored by 

CORs/COs

Multiple Acting Positions, 

Including Key Positions Very High Acceptance: monitoring High

Continue to support hiring 

initiatives and streamline 

hiring process. Continuous 

monitoring of budget in 

order to fill positions when 

possible. Budget 

constraints are outside of 

Management’s control. 

Personnel and Finance 

Committees

Attrition and High Volume of 

Retirement Eligible Employees High

Reduction: succession 

planning and employee 

engagement efforts

High

Encourage succession 

planning, cross-training, 

and pooling support 

services and support 

employee engagement 

efforts. Retirement 

eligibility is outside of 

Management’s control.

Retirement Eligibility 

Report and FEVS
13

Identified Significant Risk

Inherent 

Risk 

Rating

Current Risk Response

Residual 

Risk 

Rating

Proposed Additional 

Action 

Proposed 

Implementation/ 

Monitoring Process

Major Functions Performed by 

One Individual Medium Reduction: cross-train and document processes Medium

Cross-train individuals to 

perform major functions. 

Document procedures and 

processes. Also, continuous 

monitoring of budget in 

order to fill positions when 

possible.

Internal Controls

Privacy and Data Protection Very High

Reduction: corrective 

actions and internal 

controls

High

Continue to implement 

corrective actions and 

enhance internal controls. 

Corrective Action 

Plan/Internal Controls

Assessments and System 

Authorizations Medium

Reduction: corrective 

actions and internal 

controls

Medium

Continue to implement 

corrective actions and 

enhance internal controls.

Corrective Action 

Plan/Internal Controls

Outdated Policies, Procedures, 

and Commission Directives Medium

Reduction: 

implementing, revising, 

and reviewing policies, 

procedures, and 

Directives.

Medium

Update policies, 

procedures, and Directives 

in response to the FEC 

move, new or revised 

regulatory guidance, and 

changing operating 

procedures.

Monitor as part of 

Internal Control 

Review
14

Section I.B: Performance Goals, Objectives and Results

This section provides a summary of the results of the FEC’s key performance objectives, which are 

discussed in greater detail in the FEC’s FY 2021 APR.

2 This report will be part of the FEC’s FY 2023

Congressional Budget Justification, which will be available at https://www.fec.gov/about/reports-aboutfec/strategy-budget-and-performance/ in 2022.

Strategic Goal

The strategic goal of the Federal Election Commission is to fairly, efficiently and effectively administer

and enforce the Federal Election Campaign Act, promote compliance and engage and inform the public

about campaign finance data and rules, while maintaining a workforce that delivers results.

Strategic Objectives 

The Act reflects a belief that democracy works best when voters can make informed decisions in the

political process—decisions based in part on knowing the sources of financial support for Federal 

candidates, political party committees and other political committees. As a result, the FEC’s first 

strategic objective is to inform the public about how Federal campaigns and committees are financed. 

Public confidence in the political process also depends on the knowledge that participants in Federal 

elections follow clear and well-defined rules and face consequences for non-compliance. Thus, the

FEC’s second strategic objective focuses on the Commission’s efforts to promote voluntary compliance

through educational outreach and to enforce campaign finance laws effectively and fairly. The third 

strategic objective is to interpret the FECA and related statutes, providing timely guidance to the public

regarding the requirements of the law. The Commission also understands that organizational 

performance is driven by employee performance and that the agency cannot successfully achieve its 

mission without a high-performing workforce that understands expectations and delivers results. 

Consequently, the FEC’s fourth strategic objective is to foster a culture of high performance in order to 

ensure that the agency accomplishes its mission efficiently and effectively. 

Objective 1: Engage and Inform the Public about Campaign Finance Data 

The FEC’s eFiling system acts as the point of entry for submission of electronically filed campaign 

finance reports, providing faster access to reports and streamlining operations. This system provides for 

public disclosure of electronically filed reports, via the FEC website, within minutes of being filed.

When a committee files a financial disclosure report on paper, the Commission ensures that a copy is 

available for public inspection within 48 hours of receipt, both electronically on the website and at the 

2 The FEC has identified senior-level staff and key managers to serve as goal leaders for each area of the strategic and

performance plans. In addition, each strategic activity in the Strategic Plan has been assigned one or more program managers,

who are responsible for the delivery and performance reporting of that activity. These managers serve as measure managers

and data quality leads to ensure the completeness, consistency and accuracy of the reported data of their respective strategic

activity. 
15

FEC’s offices in Washington, D.C. The FEC is committed to providing timely and transparent campaign 

finance disclosure to the public and delivering data in accessible and easy-to-use formats. 

The number of financial transactions reported to the FEC has nearly doubled each election cycle for the 

past several election cycles, resulting in a steep rise in the number of transactions that must be received, 

processed and made available to the public. This increase in reported activity places a strain on staff, 

systems and databases. For example, the number of financial transactions received during October 2020 

alone was more than what was received during the entire 2016 election cycle. Each transaction must be 

received and processed by the FEC and made available to the public on the FEC website. This 

transaction-level data is also used by the FEC internally and supports much of the FEC’s mission-related 

work. 

The FEC is taking steps to ensure it can continue to meet the agency’s disclosure mission in future years 

even as the amount of reported activity continues to rise. As political committees active in federal 

elections continue to develop new methods for raising funds, the volume of transactions reported can 

change significantly. During FY 2022, as projections for the volume of campaign finance transactions 

become available for the election cycle, the FEC will establish a baseline for the performance of the 

campaign finance application programming interface (API) and campaign finance database. The agency 

will use this baseline to develop future plans to improve the agency’s capacity to process campaign 

finance data.

The Commission is also improving and refining its website through iterative development, ensuring the 

FEC continues to provide an effective, user-centered online platform to deliver campaign finance 

information to its diverse base of users. This effort will ensure that the FEC provides full and meaningful 

campaign finance data and information in a manner that meets the public’s increasing expectations for 

data customization and ease of use.

Performance measures and targets for assessing progress on this Strategic Objective include measures 

to ensure that data from campaign finance reports are quickly made available to the public and that the 

FEC pursues programs to make data more accessible to the public.
16

Performance Goal 1-1: Improve the public’s access to information about how campaign funds are 

raised and spent.

Key Indicator: Percent of reports processed within 30 days of receipt.

FY 2016

Actual

FY 2017

Actual

FY 2018

Actual

FY 2019 

Actual

FY 2020

Actual

FY 2021

Target

FY 2021

Actual

FY 

20222 

Target

FY 2023

Target

100% 96% 100% 94%3 98% 95% 89%4 95% 95%

Objective 2: Promote Compliance with the FECA and Related Statutes

Helping the public understand its obligations under the Act is an essential component of voluntary 

compliance. The FEC places a significant emphasis on encouraging compliance through its Information 

Division, Reports Analysis Division (RAD), Press Office and Office of Congressional, Legislative and 

Intergovernmental Affairs. The FEC measures its progress in meeting this Objective through two 

performance measures: one that measures the agency’s efforts to encourage voluntary compliance 

through educational outreach and information and another that measures the FEC’s efforts to seek 

adherence to FECA requirements through fair, effective and timely enforcement and compliance 

programs. Progress against these measures is detailed in the charts below.

Encourage voluntary compliance with FECA requirements through educational outreach and 

information.

The FEC’s education and outreach programs provide information necessary for compliance with 

campaign finance law and give the public the context necessary to interpret the campaign finance data 

filers disclose. The FEC maintains a toll-free line and public email accounts to respond to inquiries 

regarding campaign finance data disclosed to the public and questions about how to comply with 

campaign finance law and its reporting requirements. 

One way the Commission encourages voluntary compliance is by hosting conferences across the 

country, where Commissioners and staff explain how the Act applies to candidates, parties and political 

action committees. These conferences address recent changes in the law and focus on fundraising, 

methods of candidate support and reporting regulations.

The FEC also devotes considerable resources to ensuring that staff can provide distance learning 

opportunities to the general public. The Commission’s website is one of the most important sources of 

instantly accessible information about the Act, Commission regulations, and Commission proceedings. 

3 The agency’s ability to meet its target for this performance goal during FY 2019 was negatively impacted by the lapse in 

appropriations from December 22, 2018 to January 25, 2019.

4

 The agency’s ability to meet its target for this performance goal during FY 2021 was negatively impacted by staff shortages 

and an unprecedented volume of filings received during the 2020 election cycle.
17

In addition to viewing campaign finance data, anyone with internet access can use the website to track 

Commission rulemakings, search advisory opinions, audits and closed enforcement matters, view 

campaign finance data, and find reporting dates. The Commission places a high emphasis on providing 

educational materials about campaign finance law and its requirements. Toward this end, the FEC has 

moved its focus away from the printing and manual distribution of its educational materials and instead 

looked for ways to leverage available technologies to create and disseminate dynamic and up-to-date 

educational materials through the website. While the Commission continues to offer printed copies of 

its educational publications, transitioning to primarily web-based media has allowed the agency to 

reduce significantly its printing and mailing costs and use of resources while at the same time 

encouraging new and expanded ways of communicating with the public via the website.

As part of this broad effort to improve its internet communications and better serve the educational 

needs of the public, the Commission maintains its own YouTube channel, which can be found at 

https://www.youtube.com/FECTube. The YouTube channel offers a variety of instructional videos and 

tutorials that enable users to obtain guidance tailored to their specific activities. 

The agency’s educational outreach program has been significantly enhanced with the addition of an 

online training service that enables political committees, reporters, students and other groups to schedule 

live, interactive online training sessions with FEC staff. This on-demand service allows the FEC to 

provide tailored, distance learning presentations and training to the public in a manner that will 

significantly increase the availability of FEC staff to serve the public. The service also offers an efficient 

and effective way for alternative dispute resolution and other enforcement respondents to satisfy the 

terms of their agreements with the agency.

In addition, the Reports Analysis Division (RAD) established and implemented the RAD Education

Program (the Program) to provide an informal, education-based means for resolving compliance issues. 

The goal of the program is to educate political committees on disclosure and compliance requirements 

to ensure future compliance with the Federal Election Campaign Act and Commission regulations. The 

Program provides eligible committees with an opportunity to participate in tailored training focused on 

the issues identified during the review of the committees’ reports and cited in Requests for Additional 

Information sent during the election cycle, in lieu of a referral for an audit. Further, committees that are 

not otherwise eligible for an audit referral, but that meet certain criteria, are invited to participate in the 

Program in order to prevent future compliance issues.
18

Performance Goal 2-1: Encourage voluntary compliance with FECA requirements through 

educational outreach and information.

Key Indicator: Educational outreach programs and events achieve targeted satisfaction 

rating on user surveys.

FY 2016

Actual

FY 2017

Actual

FY 2018

Actual

FY 2019

Actual

FY 

2020

Actual

FY 2021

Target

FY 2021 

Actual

FY 2022

Target

FY 2023 

Target

4.53 4.43 4.53 4.45 4.51 4.0 or higher 

on a 5.0 scale

4.36 4.0 or 

higher on a 

5.0 scale

4.0 or 

higher on a 

5.0 scale

Seek adherence to FECA requirements through fair, effective and timely enforcement and 

compliance programs.

The FEC has formed strategies for ensuring that its enforcement and compliance programs are fair, 

effective and timely. The Commission’s statutory obligation is to administer, interpret and enforce the 

Federal Election Campaign Act, which serves the compelling governmental interest in deterring 

corruption and the appearance of corruption in financing elections. In doing so, the Commission remains 

mindful of the First Amendment’s guarantees of freedom of speech and association, and the practical 

implication of its actions on the political process.

The FEC has exclusive jurisdiction over civil enforcement of Federal campaign finance laws. It consults 

with the U.S. Department of Justice, as appropriate, on matters involving both civil and criminal 

enforcement of the Act. Commission enforcement actions, which are handled primarily by the Office of 

General Counsel (OGC), originate from a number of sources, including external complaints, referrals 

from other government agencies and matters generated by information ascertained by the Commission 

in the normal course of carrying out its supervisory responsibilities. Enforcement matters are handled 

by OGC pursuant to the requirements of the FECA. If the Commission cannot settle or conciliate a 

matter involving an alleged violation of the Act, the Commission may initiate civil litigation by filing 

and prosecuting a civil action in Federal district court to address the alleged violation. Closed 

enforcement matters are available via the FEC website.

To augment OGC’s traditional enforcement role, the Office of Compliance manages several programs 

that seek to remedy alleged violations of the Act and encourage voluntary compliance. These programs 

include: 1) the Alternative Dispute Resolution Program, 2) the Administrative Fine Program and 3) the 

Audit Program. The Commission’s Alternative Dispute Resolution Program is designed to resolve 

matters more swiftly by encouraging the settlement of less-complex enforcement matters with a 

streamlined process that focuses on remedial measures for candidates and political committees, such as 

training, internal audits and hiring compliance staff. Violations involving the late submission of, or 

failure to file, disclosure reports are subject to the Administrative Fine Program. This Program is 
19

administered by the Reports Analysis Division (RAD) and the Office of Administrative Review (OAR), 

which assess monetary penalties and handle challenges to the penalty assessments. The Audit Program 

conducts “for cause” audits under the FECA in those cases where political committees have failed to 

meet the threshold requirements for demonstrating substantial compliance with the Act and conducts 

mandatory audits under the public funding statutes. Subject to limited redactions, threshold 

requirements approved by the Commission and used by RAD and the Audit Division are public. 

Performance Goal 2-2: Seek adherence to FECA requirements through fair, effective and timely 

enforcement and compliance programs.

Key Indicator: Of the enforcement matters resolved during the fiscal year, the 

percentage that was resolved within 15 months of the date of receipt.

FY 2016 

Actual

FY 2017

Actual

FY 2018

Actual

FY 2019

Actual

FY 2020

Actual

FY 2021

Target

FY 2021

Actual

FY 2022

Target

FY 2023

Target

38% 68% 62% 56% 62% 50% 34%5 50% 50%

Objective 3: Interpret the FECA and Related Statutes

Commission initiatives, Congressional action, judicial decisions, petitions for rulemaking or other 

changes in campaign finance law may necessitate that the Commission update or adopt new regulations. 

Consequently, the FEC undertakes rulemakings either to write new Commission regulations or revise 

existing regulations. The Commission also provides guidance on how the Act applies to specific 

situations through the advisory opinion process and represents itself in most litigation before the Federal 

district court and the courts of appeals. The Commission’s three primary means for providing 

interpretive guidance for the Act and related statutes are discussed below.

Regulations

The Policy Division of OGC drafts various rulemaking documents, including Notices of Proposed 

Rulemaking (NPRMs), for Commission consideration. NPRMs provide an opportunity for the public to 

review proposed regulations, submit written comments to the Commission and, when appropriate, 

testify at public hearings at the FEC. The Commission considers the comments and testimony and 

deliberates publicly regarding the adoption of the final regulations and the corresponding Explanations 

and Justifications, which provide the rationale and basis for the new or revised regulations.

Advisory Opinions

Advisory opinions (AO) are official Commission responses to questions regarding the application of 

Federal campaign finance law to specific factual situations. The Act generally requires the Commission

to respond to AO requests within 60 days. For AO requests from candidates in the two months leading 

up to an election that present a specific transaction or activity related to that election, the Act requires 

the Commission to respond within 20 days. On its own initiative, the Commission also makes available 

5

 The agency’s performance under this measure was negatively impacted by the lack of a quorum for most of FY 2020.
20

an expedited process for handling certain time-sensitive requests that are not otherwise entitled to 

expedited processing under the Act. The Commission strives to issue these advisory opinions in 30 days.

Defending Challenges to the Act

The Commission represents itself in most litigation before the Federal district court and courts of appeals 

and before the Supreme Court with respect to cases involving publicly financed Presidential candidates. 

It also has primary responsibility for defending the Act and Commission regulations against court 

challenges. In addition, the Act authorizes the Commission to institute civil actions to enforce the Act. 

Performance Goal 3-1: Provide timely legal guidance to the public.

Key Indicator: Percent of legal guidance provided within statutory and courtordered deadlines.

FY 2016

Actual

FY 2017

Actual

FY 2018

Actual

FY 2019

Actual

FY 2020 

Actual

FY 2021

Target

FY 2021

Actual

FY 

2022

Target

FY 2023

Target

100%6

100%7 100%8 100%9 88%10 100% 100%11 100% 100%

6 The Commission obtained extensions to consider six advisory opinion requests in FY 2016.

7 The Commission obtained extensions to consider seven advisory opinion requests in FY 2017.

8 The Commission obtained an extension to consider one advisory opinion request in FY 2018.

9

 The Commission obtained extensions to consider six advisory opinion requests in FY 2019; two of those extensions were 

lengthened by the partial Federal government shutdown during the first and second quarters of FY 2019.

10 This corrects the figure in the 2020 Agency Financial Report, which indicated that 100% of legal guidance was provided 

within statutory and court-ordered deadlines. The Agency Financial Report did not take into account one rulemaking that the 

Commission approved after the statutory deadline, due to the lack of a Commission quorum for most of FY 2020. The 

Commission approved the rulemaking—which adjusted for inflation civil monetary penalties—in July 2020, when a quorum 

was briefly restored. 

11 The Commission obtained extensions to consider five advisory opinion requests in FY 2021; one of those extensions was 

lengthened by the lack of a Commission quorum during the first quarter of FY 2021.
21

Objective 4: Foster a Culture of High Performance

The Commission understands that the success of its programs depends upon the skills and 

commitment of its staff. The Commission isfocused on ensuring that staff training needs are assessed 

and met at every level of the agency and that agency leaders receive training necessary to help 

manage and maintain a fully engage and productive workforce. 

The FEC is undertaking a multi-year IT modernization project to reduce overall costs to maintain 

the FEC’s systems and data, improve services provided to the public and better ensure the security 

of the FEC’s networks, systems and data. Ongoing improvements to the eFiling system will provide 

an opportunity to migrate the eFiling datacenter to a cloud environment, reducing costs for the 

support and maintenance of the legacy eFiling physical datacenter. Migrating additional assets, 

including legacy applications used by FEC staff to perform their mission, to a cloud environment 

will result in improved efficiency and effectiveness of these systems and applications and help 

control the long-term costs of maintaining these systems and applications.

In FY 2018, the FEC completed the migration of its website and one of its campaign finance 

databases from a physical datacenter to a cloud environment, allowing the agency to shut down one 

of its physical datacenters. This migration effort allowed the agency to reduce its physical datacenter 

footprint by 25 percent. During FY 2020, the FEC conducted a study of its remaining legacy systems 

to develop a cloud migration plan for these legacy applications and systems. The cloud migration 

plan developed during FY 2020 also included recommendations for migrating the FEC’s disaster 

recovery environment to a cloud environment and for migrating the FEC’s primary campaign finance 

database. The FEC began implementation of the study’s recommendations in FY 2021 and has 

completed the migration of its primary campaign finance database. It has also set a performance 

target to complete the migration of the legacy applications identified in the cloud migration plan 

during FY 2023 and start refactoring (or modernizing) the legacy system and processes to take 

advantage of cloud-native architecture. Migrating these legacy applications from physical 

datacenters to a cloud environment will reduce future costs for hosting these applications and lower 

costs for maintaining legacy systems in the FEC’s physical datacenters over time.

In addition, the Commission’s records management program continues to make advancements. 

Fiscal year 2022 will bring continued focus on updating the agency’s Records Management Program 

and training staff on the agency and governmentwide records schedules, policies and responsibilities.
22

Performance Goal 4-1: Foster a workforce that delivers results.

Key Indicator: Commission-required quarterly updates meet targeted performance 

goals.

FY 2016

Actual

FY 2017 

Actual

FY 2018

Actual

FY 2019

Actual

FY 2020

Actual

FY 2021

Target

FY 2021

Actual

FY 2022

Target

FY 2023

Target

76% 85% 73% 53%12 73%13 65% 87%14 65% 65%

12 The agency’s ability to meet its target for this performance goal during FY 2019 was negatively impacted by the lapse in 

appropriations from December 22, 2018 to January 25, 2019.

13 The agency’s performance under this measure was negatively impacted by the lack of a quorum for most of FY 2020.

14 The agency’s ability to meet its target for this performance goal during FY 2021 was negatively impacted by staff

shortages and an unprecedented volume of filings received during the 2020 election cycle.
23

Section I.C: Analysis of FEC Financial Statements and Stewardship Information 

The FEC’s FY 2021 financial statements and notes are presented in the required format in 

accordance with OMB Circular A-136, as revised, Financial Reporting Requirements. The FEC’s 

current-year financial statements and notes are presented in a comparative format in Section II of 

this report. 

The following table summarizes the significant changes in the FEC’s financial position during FY 

2021: 

Net Financial 

Condition FY 2021 FY 2020

Increase 

(Decrease)

% 

Change

Assets $30,745,200 $36,566,339 ($5,821,139) -16%

Liabilities $15,700,060 $16,039,162 ($339,102) -2%

Net Position $15,045,141 $20,527,177 ($5,482,036) -27%

Net Cost $77,960,050 $79,914,532 ($1,954,482) -2%

Budgetary Resources $78,363,771 $79,061,462 ($697,691) -1%

Custodial Revenue $1,590,976 $760,511 $830,465 109%

The following is a brief description of the nature of each required financial statement and its 

relevance. The effects of some significant balances or conditions on the FEC’s operations are 

explained. 

Balance Sheet

The Balance Sheet presents the total amounts available for use by the FEC (assets) against the 

amounts owed (liabilities) and amounts that comprise the difference (Net Position). As a small 

independent agency, all of the FEC’s assets consist of Fund Balance with Treasury (FBWT), Property 

and Equipment (P&E) and Accounts Receivable. Fund Balance with Treasury (i.e., cash) is available 

through the Department of Treasury accounts, from which the FEC is authorized to make 

expenditures (i.e., obligations) and payments. FBWT decreased by approximately $1.48 million, or 

6 percent, from the prior year. 

Accounts Receivable primarily represent amounts due from the public for fines and penalties 

assessed by the FEC and referred to Treasury for collection, as deemed appropriate. In compliance 

with the Debt Collection Improvement Act of 1996 (DCIA), the OCFO takes into consideration the 

most appropriate approach to debt management. These amounts are not available for FEC operations 

and are sent to the U.S. Treasury as miscellaneous receipts. Net accounts receivable increased by 

approximately $280 thousand dollars, or 79%, from the prior year.

Total assets decreased by $5.8 million from the prior year to $30.7 million. In FY 2021, the agency 

removed from the asset accounts approximately $3.8 million in assets no longer in service. Total 

liabilities decreased by approximately $340 thousand.

Statement of Changes in Net Position

The Statement of Changes in Net Position presents in greater detail the net position section of the 
24

Balance Sheet, including Cumulative Results of Operations and Unexpended Appropriations. This 

statement identifies the activity that caused the net position to change during the reporting period. 

Total Net Position decreased by 27 percent, or approximately $5.5 million. 

Statement of Net Cost

The Statement of Net Cost presents the annual cost of operating the FEC program. Gross costs are 

used to arrive at the total net cost of operations. The FEC’s total gross costs in administering the 

FECA experienced a 3% fluctuation from the prior year.

Statement of Budgetary Resources

The Statement of Budgetary Resources provides information on the source and status of budgetary 

resources made available to the FEC during the reporting period. It presents the relationship between 

budget authority and budget outlays, as well as the reconciliation of obligations to total outlays. Total 

Budgetary Resources and Status of Budgetary Resources decreased by approximately $700 thousand 

dollars, or 1 percent, from the prior year.

Statement of Custodial Activity

The Statement of Custodial Activity represents an accounting of revenue and funds collected by the 

FEC that are owed to the U.S. Treasury’s general fund. These monies are not available for the FEC’s 

use. Collection and revenue activity primarily result from enforcement actions that come before the 

Commission during the fiscal year. Revenue and collections on the Statement of Custodial Activity 

consist of collections on new assessments, prior year(s) receivables and miscellaneous receipts. In 

FY 2021, the total custodial revenue and collections increased by approximately $830 thousand 

dollars from the prior year. Historically, fine and penalty revenue increases the year after a 

presidential election year. In addition, Commission quorum was restored in the first quarter of FY 

2021.
25

The chart below displays the assessment history for the past 20 years.15

$1.22 

$6.71

$1.90 

FY 2001 FY 2021

FIGURE 4 - FINES ASSESSED, BY FISCAL YEAR

(in Millions of Dollars)

Figure 4: Fines Assessed, by Fiscal Year (in millions of dollars) 

Financial impact, if significant, of the coronavirus disease 2019 (COVID-19) 

The FY 2021 financial impact of the coronavirus disease 2019 (COVID-19) on the Federal Election 

Commission was not significant. Approximately $10,000 was spent on COVID-19 personal 

protective equipment (PPE), supplies, equipment, signage, and mitigation countermeasures. These 

expenditures were made with FY 2021 appropriated funds allocated to the Administrative Services 

Division (ASD) within the scope of their normal budgetary purchasing authorities as outlined in the 

agency’s Management Plan. Expenditures were made either with the ASD Government Purchase 

Card or through the GSA Advantage Supply Ordering Mechanism under the supplies and materials 

Budget Object Class Code 26. COVID-19 spending only utilized approximately 18% of the ASD’s

supplies and materials budget for FY 2021. In FY 2020, COVID-19 spending was approximately 

$20,000 and utilized approximately 23% of the ASD’s supplies and materials budget for FY 2020. 

15 One MUR resolved during 2006 yielded the largest civil penalty in agency history, which was $3.8 million paid by

Federal Home Loan Mortgage Corporation (Freddie Mac) for prohibited corporate activity. This 2006 penalty is the

primary reason for the largest Fines Assessed (approximately $6.71 million) in Figure 4.
26

Section I.D: Analysis of FEC’s Systems, Controls and Legal Compliance 

I.D.i – FEC Integrated Internal Control Framework and Legal Compliance 

The Commission is subject to numerous legislative and regulatory requirements that promote and 

support effective internal controls. The FEC complies with the following laws and regulations: 

Annual Appropriation Law – establishes the FEC’s budget authority;

The Antideficiency Act of 1884, as amended; 

Inspector General Act of 1978, as amended; 

Federal Managers’ Financial Integrity Act of 1982;

Federal Civil Penalties Inflation Adjustment Act of 1990; 

Government Performance and Results Act of 1993, as amended; 

Federal Financial Management Improvement Act of 1996; 

Clinger-Cohen Act of 1996; 

Debt Collection Improvement Act of 1996, as amended; and 

Chief Financial Officers Act, as amended by the Accountability of Tax Dollars Act of 2002 

The proper stewardship of Federal resources is a fundamental responsibility of the FEC. These laws 

help the FEC improve the management of its programs and financial operations and assure that 

programs are managed in compliance with applicable law.

I.D.ii – Management Assurances 

The Federal Managers’ Financial Integrity Act of 1982 (FMFIA) is implemented by OMB Circular 

A-123, revised, Management’s Responsibility for Enterprise Risk Management and Internal Control,

with applicable appendices. The FEC management is responsible for establishing and maintaining 

effective internal control and financial management systems that meet the objectives of the FMFIA

and for performing a self-assessment under the guidance of its Directive 53, Implementation of OMB 

Circular A-123, Internal Control Review. Directive 53 outlines the process and describes roles and 

responsibilities for conducting risk assessments and internal control reviews. 

Section 2 of the FMFIA requires Federal agencies to report, based on annual assessments, any 

material weaknesses that have been identified in connection with their internal and administrative 

controls. The reviews that took place during FY 2021 provide unqualified assurance that FEC 

systems and management controls comply with the requirements of the FMFIA.

Section 4 of the FMFIA requires that agencies annually provide assurance on programmatic internal 

controls and financial management systems, and effectiveness of internal control over financial 

reporting. The FEC evaluated its financial management systems in accordance with the FMFIA, 

OMB Circular A-123, as applicable, and reviewed the Statements on Standards for Attestation 
27

Engagements, Reporting on Controls at a Service Organization (SSAE 18) reports received from its 

shared service providers. The results of management reviews provided that the FEC’s financial 

systems controls generally conform to the required principles and standards as per Section 4 of the 

FMFIA.

Enterprise Risk Management

In the current fiscal year, the FEC, led by the Senior Management Council (SMC), updated its 

Enterprise Risk Management (ERM) Risk Profile which captures enterprise level risks, as required 

by the revised OMB Circular A-123. The SMC identified a total of thirteen enterprise level risks the 

agency faces when seeking to achieve strategic, operational, and compliance objectives and rated 

these risk as being a medium or high inherent risk. The Risk Profile was delivered to the Office of 

the Inspector General (OIG) and OMB. The SMC looks forward to continuing to work closely with 

OIG to remediate any weaknesses which the OIG may deem to be at the level of a material weakness.

Prompt Payment Act 

The Prompt Payment Act (PPA) requires Federal agencies to make timely vendor payments and to 

pay interest penalties when payments are late. The FEC’s on-time payment rate for FY 2021 was 

nearly 100 percent, with less than 0.13 percent of all invoices paid after the date required by the PPA. 

Improper Payments 

The Improper Payments Information Act (IPIA) of 2002, as amended by the Improper Payments 

Elimination and Recovery Act (IPERA) of 2010, Improper Payments Elimination and Recovery

Improvement Act (IPERIA) of 2012, and the Payment Integrity Information Act (PIIA) of 2019 and 

OMB guidance require agencies to identify programs that are susceptible to significant improper

payments and determine an annual estimated amount of improper payments made in their operations. 

The FEC reviewed all of its programs and activities to identify those susceptible to significant 

improper payments. Approximately 73 percent of the FEC’s obligations pertain to salaries and 

benefits, which represents a low risk for improper payments, based on established internal controls. 

The FEC also reviewed all of its FY 2021 non-personnel procurements, charge card, and payroll 

costs to verify their accuracy and completeness. Accordingly, the FEC is unaware of any improper 

payments. The FEC continues to monitor its payment and internal control process to ensure that the 

risk of improper payments remains low.
28

Annual Assurance Statement on Internal Control 

FEDERAL ELECTION COMMISSION

Washington, DC 20463

Annual Assurance Statement on Internal Control

The Federal Election Commission (FEC) is responsible for managing risks and 

maintaining effective internal control to meet the objectives of Sections 2 and 4 of the 

Federal Managers’ Financial Integrity Act. The FEC conducted its assessment of risk 

and internal control in accordance with OMB Circular No. A-123, Management’s 

Responsibility for Enterprise Risk Management and Internal Control. Based on the 

results of the assessment, the Agency can provide reasonable assurance that internal 

control over operations, reporting, and compliance were operating effectively as of 

September 30, 2021. 

Shana M. Broussard 

Chair 
29

Section I.E: Limitations of the Financial Statements 

The principal financial statements have been prepared to report the financial position and results of 

operations of the FEC pursuant to the requirements of 31 U.S.C. §3515(b). While the statements 

have been prepared from the books and records of the FEC in accordance with United States

generally accepted accounting principles (GAAP) for Federal entities and the formats prescribed by 

the OMB, the statements are in addition to the financial reports used to monitor and control budgetary 

resources which are prepared from the same books and records.

The statements should be read with the realization that they are for a component of the U.S. 

Government, a sovereign entity.
30

SECTION II – Auditor’s Report and Financial Statements

Message from the Chief Financial Officer

November 15, 2021 

I am pleased to present the Commission’s financial statements for Fiscal Year (FY) 2021. The 

financial statements are an integral part of the Agency Financial Report. For the thirteenth 

consecutive year, the Commission received an unmodified (clean) opinion on its financial statements 

from the independent auditor with no material weaknesses. In addition, I am pleased to report that 

this year the auditor’s report did not include any significant deficiencies or findings. This is a 

significant achievement made possible by OCFO and all FEC staff who strived diligently throughout 

the fiscal year to achieve these results and maintain a commitment to excellence.

During fiscal year 2021, FEC also worked through a challenging budget environment to make

considerable progress improving internal controls and agency operations. These efforts include 

strengthening FEC’s annual review of internal controls and maturing FEC’s risk identification and 

mitigation processes. In addition, I am pleased to see the continued progress in reducing outstanding 

recommendations made by the Office of the Inspector General (OIG). Working through the FEC’s 

Senior Management Council and the OIG, the agency resolved an additional seven outstanding 

recommendations from October 2020. Combined with prior year efforts, FEC has resolved 36 

recommendations since August of 2018. We look forward to continuing to work with the OIG to 

improve agency operations and further reduce outstanding recommendations. 

The FEC also continues to seek opportunities to modernize and upgrade business systems to improve 

operational effectiveness and efficiency. We are confident that FEC employees’ commitment to the 

agency’s mission will provide an opportunity to build on the prior year’s financial management 

successes. The OCFO looks forward to another successful year.

Sincerely, 

John Quinlan 

Chief Financial Officer 
1050 First Street NE Washington, DC 20463 | www.fec.gov/oig

MEMORANDUM

TO: The Commission

FROM: Christopher Skinner

SUBJECT: Transmittal of the Federal Election Commission’s Fiscal Year 2021 Financial

Statement Audit Report

DATE: November 12, 2021

Pursuant to the Chief Financial Officers Act of 1990, as amended, this memorandum transmits the 

Independent Auditor’s Report issued by Brown & Company Certified Public Accountants and 

Management Consultants, PLLC (Brown & Company) for the fiscal year (FY) ending 

September 30, 2021. Enclosed you will find the Independent Auditor’s final audit report on the FEC 

(i.e., the “FEC” or “Commission”) FY 2021 Financial Statements. The final audit report is 

additionally included in Section II of the FEC’s FY 2021 Agency Financial Report

The audit was performed under a contract with, and monitored by, the OIG in accordance with 

generally accepted government auditing standards, the Comptroller General’s Government Auditing 

Standards, and applicable provisions of Office of Management and Budget (OMB) Bulletin No. 21-

04, Audit Requirements for Federal Financial Statements. 

In Brown & Company’s opinion, the FEC financial statements present fairly, in all material respects, 

the financial position, net cost, changes in net position, budgetary resources, and custodial activity of 

the FEC as of, and for the year ending, September 30, 2021, in conformance with accounting 

principles generally accepted in the United States of America. 

Additionally, due to the Commission’s position that it is legally exempt from the Federal Information 

Systems Management Act (FISMA), the OIG requires an assessment of the agency’s Information 

Technology (IT) systems security controls. Accordingly, the audit included an examination of the 

Commission’s IT security in comparison to government- wide best practices. The OIG acknowledges 

that the independent auditors are only required to explicitly opine on internal controls that have a 

material impact on agency financial statement reporting.

Brown & Company did not report any material weaknesses or significant deficiencies with the 

Commission’s internal controls. There were six open recommendations from prior year audits to 

address deficiencies related to IT security controls. However, two of the six prior year 

recommendations have been closed. Accordingly, there are currently four open recommendations. 

Management was provided a draft copy of the audit report for review and comment. Since there were 
FEC OIG 2021-11-015

no current year findings and recommendations, an official management response to the report was not 

required. 

The OIG reviewed Brown & Company’s report and related documentation and provided the required 

oversight throughout the course of the audit. Our review ensures the accuracy of the audit 

conclusions but may not express an opinion of the audit’s results. The OIG’s review determines that 

Brown & Company complied with applicable required Government Auditing Standards.

We appreciate the collaboration and support from FEC staff and the professionalism that Brown & 

Company exercised throughout the course of the audit. If you have any questions concerning the 

enclosed report, please contact Ms. Shellie Purnell-Brown at (202) 694-1019. 

Thank you.

cc: John Quinlan, Chief Financial Officer

Alec Palmer, Staff Director/Chief Information Officer

Lisa Stevenson, Acting General Counsel

Gilbert A. Ford, Director of Budget

Greg Baker, Deputy General Counsel

Katie Higginbothom, Deputy Staff Director for Management and Administration
FEDERAL ELECTION COMMISSION

INDEPENDENT AUDITOR’S REPORT

AND

FINANCIAL STATEMENTS

FOR THE YEARS ENDED

SEPTEMBER 30, 2021 AND 2020

Prepared By

Brown & Company CPAs and Management Consultants, PLLC

November 12, 2021
INDEPENDENT AUDITOR’S REPORT 

Inspector General

Federal Election Commission

Washington, D.C.

In our audits of the fiscal years 2021 and 2020 financial statements of the Federal Election 

Commission (FEC), we found:

• FEC’sfinancial statements as of and for the fiscal years ended September 30, 2021, and 2020,

are presented fairly, in all material respects, in accordance with U.S. generally accepted

accounting principles;

• no material weaknesses in internal control over financial reporting based on the limited

procedures we performed; and

• no reportable noncompliance for fiscal year 2021 with provisions of applicable laws,

regulations, contracts, and grant agreements we tested.

The following sections discuss in more detail (1) our report on the financial statements, which includes 

requiredsupplementary information(RSI) andotherinformationincluded withthefinancialstatements;

(2) our report on internal control over financial reporting; and (3) our report on compliance with laws,

regulations, contracts, and grant agreements.

Report on the Financial Statements

In accordance with the provisions of the Accountability of Tax Dollars Act of 2002 (ATDA) (Pub. L. No. 

107-289),we have audited FEC’sfinancial statements. FEC’s financialstatements comprise the balance

sheets as of September 30, 2021, and 2020; the related statements of net cost, changes in net position,

budgetary resources, and custodial activity for the fiscal yearsthen ended; and the relatednotes to the

financial statements.

We conducted our audits in accordance with U.S. generally accepted government auditing standards and 

the provisions of OMB Bulletin No. 21-04, Audit Requirements for Federal Financial Statements. We

believe that the audit evidence we obtained is sufficient and appropriate to provide a basis for our audit

opinions.

Management’sResponsibility

FEC management is responsible for (1) the preparation and fair presentation of these financial statements

in accordance with U.S. generally accepted accounting principles; (2) preparing, measuring, and presenting

the RSI in accordance with U.S. generally accepted accounting principles; (3) preparing and presenting

other information included in documents containing the audited financial statements and auditor’s report,

and ensuring the consistency of that information with the audited financial statements and the RSI; and (4)

maintaining effective internal control over financial reporting, including the design, implementation, and

maintenance of internal control relevant to the preparation and fair presentation offinancial statements that

are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility

Our responsibility isto express an opinion on these financial statements based on our audits. U.S. generally

accepted government auditing standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free from material misstatement. We are also

responsible for applying certain limited procedures to RSI and other information includedwith the financial

statements.

An audit offinancial statements involves performing proceduresto obtain audit evidence about the amounts

and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,

including the auditor’s assessment ofthe risks of material misstatement ofthe financial statements, whether

due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to

the entity’s preparation and fair presentation of the financial statements in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit offinancial

statements also involves evaluating the appropriateness of the accounting policies used and the

reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overall 

presentation of the financial statements. Our audits also included performing such other procedures as we

considered necessary in the circumstances.

Opinion on Financial Statements

In our opinion, FEC’s financial statements present fairly, in all material respects, FEC’s financial position

as of September 30, 2021, and 2020, and its net cost of operations, changes in net position, budgetary

resources, and custodial activity for the fiscal years then ended in accordance with U.S. generally accepted

accounting principles.

Other Matters

Required Supplementary Information

U.S. generally accepted accounting principles issued by the Federal Accounting Standards 

Advisory Board (FASAB) require that the RSI be presented to supplement the financial 

statements. Although the RSI is not a part of the financial statements, FASAB considers this 

information to be an essential part of financial reporting for placing the financial statements in

appropriate operational, economic, or historical context. We have applied certain limited 

procedures to the RSI in accordance with U.S. generally accepted government auditing 

standards, which consisted of inquiries of management about the methods of preparing the RSI 

and comparing the information for consistency with management’s responses to the auditor's 

inquiries, the financial statements, and other knowledge we obtained during the audit of the 

financial statements, in order to report omissions or material departures from FASAB 

guidelines, if any, identified by these limited procedures. We did not audit and we do not 

express an opinion or provide any assurance on the RSI because the limited procedures we

applied do not provide sufficient evidence to express an opinion or provide any assurance.
Other Information

FEC’s other information contains a wide range of information, some of which is not directly

related to the financial statements. This information is presented for purposes of additional

analysis and is not a required part of the financial statements or the RSI. We read the other 

information included with the financial statements in order to identify material inconsistencies,

if any, with the audited financial statements. Our audit was conducted for the purpose of

forming an opinion on FEC’s financial statements. We did not audit and do not express an

opinion or provide any assurance on the other information.

Report on Internal Control over Financial Reporting

In connection with our audits of the FEC’s financial statements, we considered the FEC’s internal

control over financial reporting, consistent with our auditor’s responsibility discussed below. We

performed our procedures related to the FEC’s internal control over financial reporting in accordance

with U.S. generally accepted government auditing standards.

Management’s Responsibility

FEC management is responsible for maintaining effective internal control over financial reporting,

including the design, implementation, and maintenance of internal control relevant to the preparation 

and fair presentation of financial statements that are free from material misstatement, whether due to

fraud or error.

Auditor’s Responsibility

In planning and performing our audit of FEC’s financial statements as of and for the year ended

September 30, 2021, in accordance with U.S. generally accepted government auditing standards, we

considered the FEC’s internal control over financial reporting as a basisfor designing audit procedures

that are appropriate in the circumstances for the purpose of expressing our opinion on the financial

statements, but not for the purpose of expressing an opinion on the effectiveness of the FEC’s internal

control over financial reporting. Accordingly, we do not express an opinion on the FEC’s internal

control over financial reporting. We are required to report all deficiencies that are considered to be

significant deficiencies or material weaknesses. We did not consider all internal controls relevant to

operating objectives, such as those controls relevant to preparing performance information and

ensuring efficient operations.

A deficiency in internal control exists when the design or operation of a control does not allow 

management or employees, in the normal course of performing their assigned functions, to prevent, 

or detect and correct, misstatements on a timely basis. A material weakness is a deficiency or 

combination of deficiencies in internal control, such that there is a reasonable possibility that a 

material misstatement of the entity’s financial statements will not be prevented, or detected and 

corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, 

in internal control that is less severe than a material weakness, yet important enough to merit attention 

by those charged with governance.
Definition and Inherent Limitations of Internal Control over Financial Reporting

An entity’s internal control over financial reporting is a process effected by those charged with

governance, management, and other personnel, the objectives of which are to provide reasonable

assurance that (1) transactions are properly recorded, processed, and summarized to permit the

preparation of financial statements in accordance with U.S. generally accepted accounting principles,

and assets are safeguarded against loss from unauthorized acquisition, use, or disposition, and (2)

transactions are executed in accordance with provisions of applicable laws, including those governing

the use of budget authority, regulations, contracts, and grant agreements, noncompliance with which

could have a material effect on the financial statements.

Because of itsinherent limitations, internal control over financial reporting may not prevent, or detect

and correct, misstatements due to fraud or error.

Results of Our Consideration of Internal Control over Financial Reporting

Our consideration of internal control was for the limited purpose described above, and was not

designed to identify all deficiencies in internal control that might be material weaknesses and

significant deficiencies or to express an opinion on the effectiveness of the FEC’s internal control over

financial reporting. Given these limitations, during our audit, we did not identify any deficiencies in

internal control over financial reporting that we consider to be material weaknesses. However,

material weaknesses may exist that have not been identified.

Intended Purpose of Report on Internal Control over Financial Reporting

The purpose of this report is solely to describe the scope of our consideration of the FEC’s internal

control over financial reporting and the results of our procedures, and not to provide an opinion on the

effectiveness of the FEC’s internal control over financial reporting. This report is an integral part of

an audit performed in accordance with U.S. generally accepted government auditing standards in

considering internal control over financial reporting. Accordingly, this report on internal control over

financial reporting is not suitable for any other purpose.

Report on Compliance with Laws, Regulations, Contracts, and Grant Agreements

In connection with our audits of FEC’s financial statements, we tested compliance with selected

provisions of applicable laws, regulations, contracts, and grant agreements consistent with our

auditor’s responsibility discussed below. We caution that noncompliance may occur and not be

detected by these tests. We performed our tests of compliance in accordance with U.S. generally

accepted government auditing standards.

Management’s Responsibility

FEC management isresponsible for complying with laws, regulations, contracts, and grant agreements

applicable to the FEC.
Auditor’s Responsibility

Our responsibility is to test compliance with selected provisions of applicable laws, regulations,

contracts, and grant agreements applicable to FEC that have a direct effect on the determination of

material amounts and disclosures in FEC’s financial statements, and perform certain other limited

procedures. Accordingly, we did not test compliance with all laws, regulations, contracts, and grant

agreements applicable to FEC.

Results of Our Testsfor Compliance with Laws, Regulations, Contracts, and Grant Agreements

Our tests for compliance with selected provisions of applicable laws, regulations, contracts, and grant

agreements disclosed no instances of noncompliance for fiscal year 2021 that would be reportable

under U.S. generally accepted government auditing standards. However, the objective of our tests was

not to provide an opinion on compliance with laws, regulations, contracts, and grant agreements 

applicable to FEC. Accordingly, we do not express such an opinion.

Intended Purpose of Report on Compliance with Laws, Regulations, Contracts, and Grant Agreements

The purpose of this report is solely to describe the scope of our testing of compliance with selected

provisions of applicable laws, regulations, contracts, and grant agreements, and the results of that

testing, and not to provide an opinion on compliance. This report is an integral part of an audit

performed in accordance with U.S. generally accepted government auditing standards in considering

compliance. Accordingly, this report on compliance with laws, regulations, contracts, and grant

agreements is notsuitable for any other purpose.

Status of Prior Year’s Findings and Recommendations

We have reviewed the status of open recommendations from the FY 2020 Independent Auditor’s 

Report, dated November 16, 2020. There are four open recommendations from the prior financial 

statement audit report. The status of prior year recommendations is presented in Exhibit A. 

Greenbelt, Maryland 

November 12, 2021
Exhibit A – Status of Prior Year’s Findings and Recommendations 

Status of FY 2020 Prior Year’s Audit Recommendations

2020-01 We recommend the FEC OCIO in conjunction with the direct managers 

perform and document periodic user access reviews for FEC systems according 

to the agency’s system security plan.

Open

2020-02: We recommend that the FEC OCIO fully implement STIG baseline 

configuration standards for Windows devices. Closed

2020-03: We recommend the FEC OCIO utilize lessons learned from the

COVID- 19 pandemic to determine if any revisions are need to the Continuity

of Operation Plan, and schedule periodic testing.

Open

2020-04: We recommend that the FEC develop system- specific contingency 

plans, as appropriate for the agency risk level. (Repeat Recommendation) Open

2020-05: We recommend the FEC OCIO implement an effective procedure to

enforce compliance with the security awareness training policy to ensure all

system users complete security training in accordance with the FEC Security 

Training and Awareness Policy. 

Open

2020-06: We recommend that the FEC Chief Information Officer improve the 

plan of action and milestones report for the information system to include: -

Resources required to correct a control deficiency. -Critical path milestones that 

affect the overall schedule for implementing the corrective actions are needed 

to resolve the control deficiency. -Plan for prompt resolution and internal control 

testing to validate the correction of the control deficiency.

Closed

Status as of 

September 30, 

2021
40

This page marks the end of the Independent Auditor’s Report
41

Financial Statements

BALANCE SHEET

As of September 30, 2021 and 2020 (in dollars)

2021 2020

Assets: (Note 2)

 Intragovernmental:

 Fund Balance With Treasury (Note 3) $ 21,955,438 $ 23,431,710 

 Total Intragovernmental Assets 21,955,438 23,431,710 

 Other Than Intragovernmental:

 Accounts Receivable, net (Note 4) 632,862 352,810 

 General Property, Plant and Equipment, Net (Note 5) 8,156,901 12,781,818 

 Total Other Than Intragovernmental Assets: 8,789,763 13,134,628

Total Assets $ 30,745,201 $ 36,566,338 

Liabilities: (Notes 6 and 7)

 Intragovernmental:

 Accounts Payable $ 8,229,498 $ 8,925,616 

 Other Liabilities (Note 7) 614,905 489,781 

 Total Intragovernmental Liabilities 8,844,403 9,415,397 

 Other Than Intragovernmental:

 Accounts Payable 897,060 1,037,120 

 Federal employee benefits payable 3,879,195 3,631,605 

 Advances from others and deferred revenue - 70,155 

 Other Liabilities (Note 7) 2,079,402 1,884,885 

 Total Other Than Intragovernmental Liabilities 6,855,657 6,623,765 

Total Liabilities $ 15,700,060 $ 16,039,162 

Net Position:

 Unexpended Appropriations - All Other Funds 

 (Consolidated Totals) $ 17,167,807 $ 18,546,408 

 Cumulative Results of Operations - All Other Funds

 (Consolidated Totals) (2,122,666) 1,980,769 

 Total Net Position - All Other Funds 

 (Consolidated Totals) 15,045,141 20,527,177 

 Total Net Position $ 15,045,141 $ 20,527,177 

Total Liabilities and Net Position $ 30,745,201 $ 36,566,338 

The accompanying notes are an integral part of these statements.
42

STATEMENT OF NET COST

For The Years Ended September 30, 2021 and 2020 (in dollars)

2021 2020

Program Costs:

Administering and Enforcing the FECA

 Gross Costs (Note 15) $ 77,960,050 $ 80,027,415

 Less: Earned Revenue - 112,883 

 Net Program Costs 77,960,050 79,914,532

Net Cost of Operations $ 77,960,050 $ 79,914,532

The accompanying notes are an integral part of these statements.
43

STATEMENT OF CHANGES IN NET POSITION

For The Years Ended September 30, 2021 and 2020 (in dollars)

FY 2021 (CY)

All Other Funds 

(Consolidated 

Totals)

Consolidated 

Total

Unexpended Appropriations:

 Beginning Balance $ 18,546,408 $ 18,546,408 

 Appropriations received 71,497,000 71,497,000 

 Other adjustments (1,435,166) (1,435,166)

 Appropriations used (71,440,435) (71,440,435)

 Change in Unexpended Appropriations (1,378,601) (1,378,601)

Total Unexpended Appropriations $ 17,167,807 $ 17,167,807 

Cumulative Results from Operations:

 Beginning Balances $ 1,711,213 $ 1,711,213 

 Correction of error – roll forward adjustment 269,556 269,556 

 Beginning balance, as adjusted 1,980,769 1,980,769 

 Appropriations used 71,440,435 71,440,435 

 Imputed financing (Note 10) 2,416,180 2,416,180 

 Total Financing Sources 73,856,615 73,856,615 

 Net Cost of Operations 77,960,050 77,960,050 

 Net Change (4,103,435) (4,103,435)

 Cumulative Results of Operations (2,122,666) (2,122,666)

 Net Position $ 15,045,141 $ 15,045,141 

The accompanying notes are an integral part of these statements.
44

STATEMENT OF CHANGES IN NET POSITION

For The Years Ended September 30, 2021 and 2020 (in dollars)

FY 2020 (PY)

All Other Funds 

(Consolidated 

Totals)

Consolidated 

Total

Unexpended Appropriations:

 Beginning Balance $ 22,479,219 $ 22,479,219 

 Appropriations received 71,497,000 71,497,000 

 Appropriations transferred-in/out (476,424) (476,424)

 Appropriations used (74,953,387) (74,953,387)

 Change in Unexpended Appropriations (3,932,812) (3,932,812)

 Total Unexpended Appropriations $ 18,546,408 $ 18,546,408 

Cumulative Results from Operations:

 Beginning Balances $ 4,682,706 $ 4,682,706 

 Beginning balance, as adjusted 4,682,706 4,682,706 

 Appropriations used 74,953,387 74,953,387 

 Imputed financing (Note 10) 2,259,208 2,259,208 

 Total Financing Sources 77,212,595 77,212,595

 Net Cost of Operations 79,914,532 79,914,532

 Net Change (2,701,937) (2,701,937)

 Cumulative Results of Operations 1,980,769 1,980,769 

 Net Position $ 20,527,177 $ 20,527,177 

The accompanying notes are an integral part of these statements.
45

STATEMENT OF BUDGETARY RESOURCES

For The Years Ended September 30, 2021 and 2020 (in dollars)

2021 2020

Budgetary Budgetary 

BUDGETARY RESOURCES

 Unobligated balance from prior year budget authority, net 

 (discretionary and mandatory) (Note 11)

$ 6,866,771 $ 7,439,271 

 Appropriations (discretionary and mandatory) 71,497,000 71,497,000 

 Spending authority from offsetting collections 

 (discretionary and mandatory) - 125,191 

Total budgetary resources (Note 12) $ 78,363,771 $ 79,061,462 

STATUS OF BUDGETARY RESOURCES

 New obligations and upward adjustments (total) (Note 12) $ 72,056,781 $ 72,007,887 

 Unobligated balance, end of year:

 Apportioned, unexpired account 217,964 374,272 

 Unexpired unobligated balance, end of year 217,964 374,272 

 Expired unobligated balance, end of year 6,089,026 6,679,303 

 Unobligated balance, end of year (total) 6,306,990 7,053,575 

Total budgetary resources $ 78,363,771 $ 79,061,462 

OUTLAYS, NET

 Outlays, net (discretionary and mandatory) $ 71,538,106 $ 73,753,039 

 Distributed offsetting receipts (-) - -

Agency outlays, net (discretionary and mandatory) 

(Note 12,15) $ 71,538,106 $ 73,753,039 

The accompanying notes are an integral part of these statements.
46

STATEMENT OF CUSTODIAL ACTIVITY

For The Years Ended September 30, 2021 and 2020

2021 2020 

Revenue Activity

 Sources of cash collections

 Civil penalties $ 930,748 $ 831,658 

 Administrative fines 324,919 136,799 

 Miscellaneous receipts 55,257 22,404 

 Total cash collections 1,310,924 990,861 

 Accrual adjustments 280,052 (230,350)

 Total custodial revenue (Note 13) $ 1,590,976 $ 760,511 

Disposition of Collections

 Transferred to Treasury $ 1,474,574 $ 990,861 

 Amount yet to be transferred 116,402 (230,350)

 Total disposition of collections 1,590,976 760,511 

 Net custodial activity $ - $ -

The accompanying notes are an integral part of these statements.
47

Notes to the Financial Statements

Note 1 – Summary of Significant Accounting Policies 

Reporting Entity

The Federal Election Commission (FEC or Commission) was created in 1975 as an independent 

regulatory agency with exclusive responsibility for administering, enforcing, defending, and 

interpreting the Federal Election Campaign Act of 1971 (FECA), 2 U.S.C. 431 et seq., as amended 

(“the Act”). The Commission is also responsible for administering the public funding programs (26

U.S.C. §§ 9001- 9039) for Presidential campaigns, which include certification and audits of all 

participating candidates and committees, and enforcement of public funding legislation.

The financial activity presented relates to the execution of the FEC’s Congressionally approved 

budget. Consistent with Federal Accounting Standards Advisory Board’s (FASAB) Statement of 

Federal Financial Accounting Concept No. 2, “Entity and Display,” the Presidential Election 

Campaign Fund is not a reporting entity of the FEC. Financial activity of the fund is budgeted, 

apportioned, recorded, reported, and paid by the U.S. Department of Treasury (Treasury). The 

accounts of the Presidential Election Campaign Fund are therefore not included in the FEC’s 

financial statements.

Basis of Accounting and Presentation

As required by the Accountability of Tax Dollars Act of 2002, the accompanying financial statements 

present the financial position, net cost of operations, changes in net position, budgetary resources,

and custodial activity of the FEC. While these financial statements have been prepared from the

books and records of the FEC in accordance with U.S. generally accepted accounting principles 

(GAAP) for the Federal Government and in accordance with the form and content for entity financial

statements specified by the Office of Management and Budget (OMB) in Circular A-136, as revised, 

Financial Reporting Requirements, as well as the accounting policies of the FEC, the statements

may differ from other financial reports submitted pursuant to OMB directives for the purpose of 

monitoring and controlling the use of the FEC’s budgetary resources.

These financial statements reflect both accrual and budgetary accounting transactions. Under the 

accrual method of accounting, revenues are recognized when earned and expenses are recognized

when a liability is incurred, without regard to receipt or payment of cash. Budgetary accounting is

designed to recognize the obligation of funds according to legal requirements. Budgetary accounting

is essential for compliance with legal constraints and controls over the use of federal funds.

Throughout these financial statements, assets, liabilities, revenues, and costs have been classified 

according to the type of entity with which the transactions are associated. Intragovernmental assets

and liabilities are those resulting from transactions with other federal entities. Intragovernmental

earned revenues are collections or accruals of revenue from other federal entities and 

intragovernmental costs are payments or accruals to other federal entities. These statements should
48

be read with the understanding that they are for a component of the Federal Government, a sovereign 

entity.

Assets 

Assets that an entity is authorized to use in its operations are termed entity assets, whereas assets 

that are held by an entity and are not available for the entity’s use are termed non-entity assets. Most 

of the FEC’s assets are entity assets and are available for use in carrying out the mission of the FEC 

as appropriated by Congress. The FEC also has non-entity assets which primarily consist of 

receivables from fines and penalties. These custodial collections are not available to the FEC to 

use in its operations and must be transferred to Treasury. 

Fund Balance with Treasury 

The FEC does not maintain cash in commercial bank accounts. Treasury processes cash receipts and 

disbursements. Fund Balance with Treasury consists of appropriated funds and custodial collections. 

With the exception of the custodial collections, these funds are available to pay current liabilities 

and finance authorized purchase commitments. Custodial collections, which are not available to 

finance FEC activities, are classified as non-entity assets. 

Accounts Receivable 

The FEC’s Accounts Receivable mainly represents amounts due from the public for fines and 

penalties assessed by the FEC and referred to Treasury for collection. The FEC establishes an 

allowance for the estimated loss on accounts receivable from the public that are deemed uncollectible 

accounts. This allowance is included in Accounts Receivable, net on the balance sheet. The 

allowance is a percentage of the overall receivable balance, based on the collection rate of past 

balances. 

General Property and Equipment 

General Property and Equipment (P&E) is reported at acquisition cost and consists of items that are 

used by the FEC to support its mission. Depreciation or amortization on these assets is calculated 

using the straight-line method with zero salvage value. Depreciation or amortization of an asset 

begins the day it is placed in service. Maintenance, repairs, and minor renovations are expensed as

incurred. Expenditures that materially increase the value, capacity or useful life of existing assets are 

capitalized. Refer to Note 5 General Property and Equipment, Net for additional details.

Liabilities 

Liabilities represent amounts that are likely to be paid by the FEC as the result of transactions or 

events that have already occurred; however, no liabilities are paid by the FEC without an 

appropriation. Intragovernmental liabilities arise from transactions with other federal entities. 

Liabilities classified as not covered by budgetary resources are liabilities for which appropriations 

have not been enacted (e.g., annual leave benefits and actuarial liability under the Federal Employees 
49

Compensation Act), or those resulting from the agency’s custodial activities. The FEC has an

intragovernmental liability to Treasury for fines, penalties and miscellaneous receipts which are

due from the public but have not yet transferred. These funds may not be used to fund FEC 

operations.

Accounts Payable 

Accounts Payable consists of liabilities to other entities or persons for amounts owed for goods and 

services received that have not yet been paid at the end of the fiscal year. Accounts Payable also 

consists of disbursements in-transit, which are payables that have been recorded by the FEC and are 

pending payment by Treasury. In addition to accounts payables recorded through normal business 

activities, unbilled payables are estimated based on historical data. 

Accrued Payroll and Employer Contribution 

Accrued payroll and benefits represent salaries, wages and benefits earned by employees, but not yet 

disbursed as of the statement date. Accrued payroll and Thrift Savings Plan contributions are not 

classified as intragovernmental. Employer contributions and payroll taxes payable are classified as 

intragovernmental. 

Annual, Sick and Other Leave 

Annual leave is recorded as a liability when it is earned by FEC employees; the liability is reduced 

as leave is taken. On a quarterly basis, the balance in the accrued leave account is adjusted to reflect 

the current leave balances and pay rates. Accrued annual leave is paid from future funding sources 

and is reflected as a liability not covered by budgetary resources. Sick leave and other types of 

non-vested leave are expensed as taken. 

Federal Employee Benefits 

A liability is recorded for estimated and actual future payments to be made for workers’ 

compensation pursuant to the Federal Employees Compensation Act. The liability consists of the net 

present value of estimated future payments calculated by the Department of Labor (DOL) and 

the actual unreimbursed cost paid by DOL for compensation paid to recipients under the Federal 

Employee’s Compensation Act. The future workers' compensation estimate is generated by DOL 

through an application of actuarial procedures developed to estimate the liability for the Federal 

Employee’s Compensation Act, which includes the expected liability for death, disability, medical 

and miscellaneous costs for approved compensation cases. The liability is calculated using historical 

benefit payment patterns related to a specific incurred period to estimate the total payments related 

to that period. These projected annual benefits payments are discounted to present value. 

Employee Retirement Plans 

Each fiscal year, the Office of Personnel Management (OPM) estimates the Federal Government 

service cost for all covered employees. This estimate represents an annuity dollar amount which, if 
50

accumulated and invested each year of an employee’s career, would provide sufficient funding to 

pay for that employee’s future benefits. As the Federal Government’s estimated service cost exceeds 

the amount of contributions made by employer agencies and covered employees, this plan is not fully 

funded by the FEC and its employees. As of September 30, 2021, the FEC recognized approximately 

$2,416,180 as an imputed cost and related financing source, for the difference between the estimated 

service cost and the contributions made by the FEC and its employees. This represents a 7% increase 

when compared to the $ 2,259,208 of imputed cost and related financing source recognized in Fiscal 

Year 2020.

FEC employees participate in either the Civil Service Retirement System (CSRS) or the Federal 

Employees Retirement System (FERS), which became effective on January 1, 1987. For employees 

participating in CSRS, the FEC withheld 7% of base pay earnings and provided a matching 

contribution equal to the sum of the withholding. For employees covered by FERS, the FEC withheld 

.8% of base pay earnings and provided the agency contribution. The majority of FEC employees 

hired after December 31, 1983, are automatically covered by FERS.

Effective January 1, 2013, the Middle Class Tax Relief and Job Creation Act of 2012 created a new

FERS retirement category, Revised Annuity Employees (RAE) for new federal employees hired in 

calendar year (CY) 2013 or thereafter. In FY 2021, the FERS-RAE employee contribution rate was 

3.1%.

Effective January 1, 2014, the Bipartisan Budget Act of 2013 introduced a new FERS retirement 

category, Further Revised Annuity Employees (FRAE) for new federal employees hired in CY

2014 and thereafter. In FY 2021, the FERS-FRAE employee contribution rate was 4.4%.

FERS contributions made by employer agencies and covered employees are comparable to the 

Federal Government’s estimated service costs. For FERS covered employees, the FEC made 

contributions of 18.5% of basic pay for FY 2021. For both FERS-RAE and FERS-FRAE 

covered employees, the FEC made contributions of 19% and 19.2% respectfully of basic pay for FY 

2021.

Employees participating in FERS are covered under the Federal Insurance Contribution Act (FICA),

for which the FEC contributed 6.2% to the Social Security Administration in FY 2021. Effective in 

FY 2012 FERS and CSRS – Offset employees were granted a 2% decrease in Social Security for tax 

year (CY) 2012 under the Temporary Payroll Tax Cut Continuation Act of 2011; and H.R. 3630, the 

Middle Class Tax Relief and Job Creation Act of 2012. During FY 2013, employees contributed

4.2% to Social Security through December 31, 2012. Effective January 1, 2013 the employee 

contribution rate is 6.2%.

Thrift Savings Plan

The Thrift Savings Plan (TSP) is a retirement savings and investment plan for employees covered 

by either CSRS or FERS. The TSP is administered by the Federal Retirement Thrift Investment 

Board on behalf of federal agencies. For employees belonging to FERS, the FEC automatically
51

contributes 1% of base pay to their account and matches contributions up to an additional 4%.

For employees belonging to CSRS, there is no governmental matching contribution.

The FEC does not report on its financial statements CSRS and FERS assets, accumulated plan 

benefits or unfunded liabilities, if any, which may be applicable to FEC employees. Reporting such

amounts is the responsibility of the Office of Personnel Management. The portion of the current and 

estimated future outlays for CSRS and FERS not paid by the FEC is in accordance with Statement 

of Federal Financial Accounting Standards (SFFAS) No. 5, Accounting for Liabilities of the Federal 

Government, and is included in the FEC's financial statements as an imputed financing source.

Commitments and Contingencies

A contingency is an existing condition, situation or set of circumstances involving uncertainty as to

possible gain or loss. The uncertainty will ultimately be resolved when one or more future events

occur or fail to occur. SFFAS No. 5, as amended by SFFAS No. 12, Recognition of Contingent 

Liabilities Arising from Litigation, contains the criteria for recognition and disclosure of contingent 

liabilities. A contingency is recognized in the financial statements when a past event or exchange 

transaction has occurred, a future outflow or other sacrifice of resources is probable and the future

outflow or sacrifice of resources is measurable. A contingency is disclosed in the footnotes when

any of the conditions for liability recognition are not met and the chance of the future confirming 

event or events occurring is more than remote but less than probable. In other words, contingent 

losses that are assessed as probable and measurable are accrued in the financial statements. Losses 

that are assessed to be at least reasonably possible are disclosed in the notes.

According to OMB Circular A-136, as revised, in addition to the contingent liabilities required by 

SFFAS No. 5, the following commitments should be disclosed: 1) an estimate of obligations related

to cancelled appropriations for which the reporting entity has a contractual commitment for payment; 

and 2) amounts for contractual arrangements which may require future financial obligations. The 

FEC does not have commitments related to cancelled appropriations or amounts for contractual 

arrangements that would require future financial obligations.

Revenues and Other Financing Sources

Annual Appropriation

As a component of the Government-wide reporting entity, the FEC is subject to the Federal budget 

process, which involves appropriations that are provided annually and appropriations that are 

provided on a permanent basis. The financial transactions that are supported by budgetary resources, 

which include appropriations, are generally the same transactions reflected in agency and the 

Government-wide financial reports.

The FEC received all of its funding through an annual appropriation as provided by Congress. 

Additionally, the FEC received funding through reimbursement for services provided to other 

Federal agencies. Services performed for other Federal agencies under reimbursable agreements are
52

financed through the account providing the service and reimbursements are recognized as revenue 

when earned.

The FEC’s budgetary resources reflect past congressional action and enable the entity to incur 

budgetary obligations, but they do not reflect assets to the Government as a whole. Budgetary 

obligations are legal obligations for goods, services, or amounts to be paid based on statutory 

provisions (e.g., Social Security benefits). After budgetary obligations are incurred, Treasury will 

make disbursements to liquidate the budgetary obligations and finance those disbursements in the 

same way it finances all disbursements, using some combination of receipts, other inflows, and 

borrowing from the public (if there is a budget deficit).

Imputed Financing Sources

In accordance with OMB Circular A-136, as revised, all expenses should be reported by agencies 

whether or not these expenses would be paid by the agency that incurs the expense. The amounts for

certain expenses of the FEC, which will be paid by other federal agencies, are recorded in the 

Statement of Net Cost (SNC). A corresponding amount is recognized in the “Statement of Changes 

in Net Position” as an “Imputed Financing Source.” These imputed financing sources primarily 

represent unfunded pension costs of FEC employees, as described above.

Statement of Net Cost

Net cost of operations is the total of the FEC’s expenditures. The presentation of the statement is 

based on the FEC’s strategic plan, which presents one program that is based on the FEC’s 

mission and strategic goal. The program that reflects this strategic goal is to administer and enforce 

the Federal Election Campaign Act efficiently and effectively.

Net Position

Net position is the residual difference between asset and liabilities and consists of unexpended 

appropriations and cumulative results of operations. Unexpended appropriations include the portion

of the FEC’s appropriations represented by undelivered orders and unobligated balances. 

Unobligated balances associated with appropriations that expire at the end of the fiscal year remain

available for obligation adjustments, but not for new obligations, until that account is cancelled, five

years after the appropriations expire. Cumulative results of operations represent the excess of 

financing sources over expenses since inception.

Statement of Custodial Activity

The Statement of Custodial Activity summarizes collections transferred or transferable to Treasury 

for miscellaneous receipts, fines and penalties assessed by the FEC. These amounts are not available 

for FEC operations, and accordingly, are reported as custodial revenue.
53

Use of Estimates

The preparation of the accompanying financial statements in accordance with GAAP requires 

management to make certain estimates and assumptions that directly affect the reported amounts of 

assets, liabilities, revenues, and expenses. Actual results could differ from these estimates.

Classified Activities

Accounting standards require all reporting entities to disclose that accounting standards allow 

certain presentations and disclosures to be modified, if needed, to prevent the disclosure of classified 

information. The FEC has no classified activities. 
54

Note 2 Non-Entity Assets

Non–entity assets, which primarily represent amounts due to the FEC for fines and penalties on 

those that violated the requirements of the Federal Election Campaign Act, consisted of the 

following as of September 30, 2021 and September 30, 2020:

 

2021 2020

With the Public

Accounts Receivable - Custodial $ 632,862 $ 352,810 

Total non-entity assets 632,862 352,810 

Total entity assets 30,112,339 36,213,528 

Total Assets $ 30,745,201 $ 36,566,338 
55

Note 3 Fund Balance with Treasury

Fund Balance with Treasury consisted of the following as of September 30, 2021 and September 30, 

2020:

2021 2020

Fund Balances

Appropriated Funds $ 21,955,438 $ 23,431,710 

Total $ 21,955,438 $ 23,431,710 

2021 2020

Status of Fund Balance with Treasury

Unobligated Balance 

Available $ 217,964 $ 374,272 

Unavailable 6,089,026 6,679,303 

Obligated Balance not yet Disbursed 15,648,448 16,378,135 

Total $ 21,955,438 $ 23,431,710 

Available unobligated balances represent amounts that are apportioned for obligation in the current 

fiscal year. Unavailable unobligated balances represent amounts that are not apportioned for 

obligation during the current fiscal year and expired appropriations that are no longer available to 

incur new obligations. Obligated balances not yet disbursed include amounts designated for payment 

of goods and services ordered but not received, or goods and services received but for which payment 

has not yet been made.
56

Note 4 - Accounts Receivables, Net

Accounts receivable consist of the following as of September 30, 2021 and September 30, 2020:

2021

Gross Accounts 

Receivable Allowance Net Accounts Receivable

Intragovernmental

Intragovernmental $ - $ - $ -

Total Intragovernmental $ - $ - $ -

With the Public

Fines and Penalties $ 1,088,802 $ 455,940 $ 632,862 

Total Non-Entity $ 1,088,802 $ 455,940 $ 632,862 

Total $ 1,088,802 $ 455,940 $ 632,862 

2020

Gross Accounts 

Receivable Allowance Net Accounts Receivable

Intragovernmental

Intragovernmental $ - $ - $ -

Total Intragovernmental $ - $ - $ -

With the Public

Fines and Penalties $ 528,125 $ 175,315 $ 352,810 

Total Non-Entity $ 528,125 $ 175,315 $ 352,810 

Total $ 528,125 $ 175,315 $ 352,810 

Non-Entity receivables consist of civil penalties and administrative fines assessed by the FEC 

through its enforcement processes or conciliation agreements reached with parties. The FEC has 

three offices that administer the penalties: the Office of General Counsel (OGC); the Office of 

Administrative Review (OAR); and the Office of Alternative Dispute Resolution (ADR). Each office

has a distinct role in the enforcement and collection process. The allowance is based on the

historical rate of collection and an overall assessment of the debtor’s willingness and ability to pay.

Delinquent debts are referred to Treasury in accordance with the Debt Collection Improvement Act 

of 1996. The terms of the agreement between the FEC and the parties establish the conditions for 

collection. The “intragovernmental accounts receivable” is primarily attributed to the Deputy 

Inspector General servicing a Federal agency on a reimbursable basis pursuant to the Inspector

General Act.
57

Note 5 General Property and Equipment, Net 

General Property and Equipment (P&E) is reported at acquisition cost. The capitalization threshold 

is established at $25,000 and a useful life of two or more years. For bulk purchases, items are 

capitalized when the individual useful lives are at least two years and have an aggregate value of

$250,000 or more. Acquisitions of P&E that do not meet the capitalization criteria are recorded as 

operating expenses.

General P&E consists of items that are used by the FEC to support its mission. Depreciation or 

amortization on these assets is calculated using the straight-line method with no salvage value. 

Depreciation or amortization begins the day the asset is placed in service. Maintenance, repairs, and 

minor renovations are expensed as incurred. Expenditures that materially increase values, change 

capacities, or extend useful lives are capitalized.

Effective FY 2017, the estimated useful life of assets such as office furniture and motor vehicles is

five years. The estimated useful life of assets such as office equipment, IT equipment, IT software, 

telecommunications equipment, and audio/visual equipment is three years. 

The office building in which the FEC operates is leased through the General Services Administration 

(GSA) under an occupancy agreement, which manages the lease agreement between the Federal

Government and the commercial leasing entity. The FEC is billed by GSA for the leased space based

upon estimated lease payments made by GSA plus an administrative fee. The cost of the office

building is not capitalized. The costs of any leasehold improvements, which are managed through 

GSA, are financed with FEC appropriated funds. Construction costs of $25,000 or more are

accumulated as construction in progress until completion and then are transferred and capitalized as 

a leasehold improvement. Leasehold improvements are amortized over the lesser of five years or the 

remaining life of the lease term.

The internal use software development and acquisition cost capitalization threshold changed as a

result of a new policy that was implemented in FY 2011. Internal use software development and

acquisition costs of $250,000 or more are capitalized as software in development until the

development stage is complete and the software is tested and accepted. At acceptance, costs of 

software in development are reclassified as internal use software costs and amortized using the 

straight-line method over an estimated useful life of three years. Purchased commercial software that

does not meet the capitalization criteria is expensed. In addition, enhancements which do not add 

significant new capability or functionality are also expensed.

The general components of capitalized property and equipment, net of accumulated depreciation or

amortization, consisted of the following as of September 30, 2021 and September 30, 2020, 

respectively:
58

2021

Asset Class 

Service 

Life 

(years)

Acquisition 

Value

Accumulated 

Depreciation/ 

Amortization 

Net Book 

Value

Software 3 $ 16,997,141 $ 16,397,902 $ 599,239 

Computers and 

peripherals 3  2,898,979 2,215,259 683,720 

Furniture 5 - - -

Leasehold Improvements 5 10,125,947 7,237,282 2,888,665 

Software-in-Development n/a 3,985,277 - 3,985,277 

Total $ 34,007,344 $ 25,850,443 $ 8,156,901 

2020

Asset Class 

Service 

Life 

(years)

Acquisition 

Value

Accumulated 

Depreciation/ 

Amortization 

Net Book 

Value

Software 3 $ 19,935,722 $ 17,683,340 $ 2,252,382 

Computers and 

peripherals 3  3,328,407 2,449,332 879,075 

Furniture 5 - - -

Leasehold Improvements 5 10,125,947 4,950,903 5,175,044 

Software-in-Development n/a 4,475,317 - 4,475,317 

Total $ 37,865,393 $ 25,083,575 $ 12,781,818 
59

Note 6 Liabilities Not Covered by Budgetary Resources 

Liabilities Not Covered by Budgetary Resources consisted of the following as of September 30, 2021 

and September 30, 2020:

2021 2020

Intragovernmental:

 Custodial Fines and Civil Penalties $ 469,213 $ 352,810 

 Deferred Rent 6,657,942 7,254,175 

Total Intragovernmental 7,127,155 7,606,985 

With The Public:

 Unfunded Annual Leave $ 3,785,275 $ 3,546,642 

 Liabilities for Advances and Prepayments - 70,155 

 Actuarial FECA Liability - 232 

Total Liabilities Not Covered by Budgetary 

Resources $ 10,912,430 $ 11,153,859 

Total Liabilities Covered by Budgetary Resources $ 4,787,630 $ 4,815,148 

Total Liabilities Not Requiring Budgetary Resources $ - $ 70,155 

Total Liabilities $ 15,700,060 $ 16,039,162 

Liabilities not covered by budgetary resources require future congressional action whereas liabilities 

covered by budgetary resources reflect prior congressional action. Regardless of when the 

congressional action occurs, when the liabilities are liquidated, Treasury will finance the liquidation 

in the same way that it finances all other disbursements, using some combination of receipts, other 

inflows, and borrowing from the public (if there is a budget deficit). Liabilities that do not require 

the use of budgetary resources are covered by monetary assets that are not budgetary resources to 

the entity.

Beginning FY 2018, the FEC entered into a new lease agreement for its office building that provided 

a rent abatement of $8,943,504, which covers the equivalent of 22 months of rent. Consistent with 

generally accepted accounting principles, the FEC has recorded rent abatement as deferred rent, 

which is amortized over the life of the ten-year lease.

The FEC accrued a liability related to the Federal Employees’ Compensation Act as of September 

30, 2020.

Liabilities for Advances and Prepayments consist of unearned revenue from registration fees 

collected for the Regional Campaign Finance Conferences. As part of its program to encourage 

voluntary compliance with the Federal Election Campaign Act, the Federal Election Commission 

hosts educational conferences throughout the country. The FEC received additional reimbursable 

authority for FY 2020 conferences. 
60

Note 7 Other Liabilities 

As of September 30, 2021 and September 30, 2020, respectively, components of amounts reported 

on the Balance Sheet as Other Intragovernmental Liabilities and Other Than Intragovernmental 

Liabilities along with a categorization of current versus long-term. Custodial Liabilities for FY 2021 

are composed of fines and penalties in the amount of $632,862 and transfers in the amount of 

($163,649).

2021

Non-Current Current Total

Other Intragovernmental Liabilities:

 Employer Contributions and Payroll 

 Taxes Payable $ - $ 145,692 $ 145,692

 Custodial Liability 320,525 148,688 469,213 

Total Other Intragovernmental 

Liabilities: $ 320,525 $ 294,380 $ 614,905

Other Than Intragovernmental 

Liabilities

 Accrued Funded Payroll and Leave - 2,079,402 2,079,402

Total Other than Intragovernmental 

Liabilities $ - $ 2,079,402 $ 2,079,402

Total Other Liabilities $ 320,525 $ 2,373,782 $ 2,694,307

2020

Non-Current Current Total

Other Intragovernmental Liabilities:

 Employer Contributions and Payroll 

 Taxes Payable $ - $ 136,970 $ 136,970

 Custodial Liability 159,207 193,604 352,811 

Total Other Intragovernmental 

Liabilities: $ 159,207 $ 330,574 $ 489,781

Other Non-Federal Liabilities

 Accrued Funded Payroll and Leave - 1,884,885 1,884,885 

Total Other Non-Federal Liabilities $ - $ 1,884,885 $ 1,884,885 

Total Other Liabilities $ 159,207 $ 2,215,459 $ 2,374,666
61

Note 8 Commitments and Contingencies

As of September 30, 2021, in the opinion of FEC management and legal counsel, the FEC was not

party to any legal action which results in a probable, measurable future outflow of resources that 

requires recognition in the financial statements. However, the FEC was party to legal action which 

could result in losses that are at least reasonably possibly. Furthermore, there are cases where 

amounts have not been accrued or disclosed because the amounts of the potential loss cannot be 

estimated, or the likelihood of an unfavorable outcome is considered remote.

For comparative purposes, the following table includes the status of Commitments and 

Contingencies as of September 30, 2021 and September 30, 2020, respectively.

Contingent Loss Table

Accrued Liabilities

Estimated Range of Loss

Lower End Upper End

As of September 30, 2021

Legal Contingencies:

Probable $ - $ - $ -

Reasonably Possible $ - $ 34,483 $ 34,483

As of September 30, 2020

Legal Contingencies:

Probable $ - $ 500 $ 500

Reasonably Possible $ - $ 34,483 $ 34,483
62

Note 9 Leases

The FEC did not have any capital leases as of September 30, 2021 or September 30, 2020. The FEC 

has a non-cancellable operating lease for its office space through November 30, 2032.

As contained in the FEC’s Occupancy Agreement with the General Services Administration (GSA), 

as amended July 30, 2019, future payments under the operating lease are as follows:

Future Payments Due for Non-Cancelable 

Operating Lease - Building 

2021

Fiscal Year Lease Payment 

2022 5,215,071 

2023 5,270,698 

2024 5,327,993 

2025 5,387,007 

2026 5,447,791 

2027 5,510,399 

2028 5,708,203 

2029 5,801,287 

2030 5,869,701 

2031 5,940,166 

2032 6,012,746 

2033 933,755 

Total $ 62,424,817 

As per the terms of the lease agreement, the FEC was granted a total of $8,943,504, or 22 months, 

in free rent from the lessor. Per the FEC’s policy, the total free rent will be amortized as deferred 

rent over the life of the lease.

The table above represents the actual cash outlays for rent payments, as contained in the FEC’s 

Occupancy Agreement with GSA, and does not include the amortized Deferred Rent referenced 

above.
63

Note 10 Inter-Entity Costs 

The FEC recognizes certain inter-entity costs for goods and services that are received from other 

Federal entities at no cost or at a cost less than the full cost. Consistent with accounting standards, 

certain costs of the providing entity that are not fully reimbursed are recognized as imputed cost [in 

the Statement of Net Cost] and are offset by imputed revenue [in the Statement of Changes in Net 

Position]. Such imputed costs and revenues relate to employee benefits and claims to be settled by 

the Treasury Judgement Fund. The FEC recognizes as inter-entity costs the amount of accrued 

pension and post-retirement benefit expenses. However, unreimbursed costs of goods and services 

other than those identified above are not included in our financial statements for current 

employees. The assets and liabilities associated with such benefits are the responsibility of the 

administering agency, OPM. For the periods ended September 30, 2021 and 2020, respectively, interentity costs were as follows: 

2021 2020

Office of Personnel Management $ 2,416,180 $ 2,259,208

Total Imputed Financing Sources $ 2,416,180 $ 2,259,208
64

Note 11 Net Adjustments to Unobligated Balance, Brought Forward, October 1

The Unobligated Balance Brought Forward from the prior fiscal year has been adjusted for recoveries 

of prior year paid and unpaid obligations and other changes such as canceled authority. The 

Adjustments to Unobligated Balance Brought Forward, October 1, as of September 30, 2021, and 

2020, consisted of the following:

2021 2020

Unobligated Balance Brought Forward From Prior Year, 

October 1 $ 7,053,575 $ 6,319,082 

Recoveries of Prior Year Obligations 1,248,362 1,596,614 

Other Changes in Unobligated Balances (1,435,166) (476,425)

Unobligated Balance From Prior Year Budget 

Authority, Net $ 6,866,771 $ 7,439,271 
65

Note 12 Explanation of Differences between the Statement of Budgetary Resources and the 

Budget of the U.S. Government

The Statement of Budgetary Resources (SBR) compares budgetary resources with the status of those 

resources. For the year ended September 30, 2021, budgetary resources were $78,363,771 and net 

outlays were $71,538,106. For the year ended September 30, 2020, budgetary resources were 

$79,061,462 and net outlays were $73,753,039. 

Apportionment Categories of Obligations Incurred 

The FEC receives apportionments of its resources from OMB. Apportionments are for resources that 

can be obligated without restriction, other than to be in compliance with legislation for which the 

resources were made available. 

For the years ended September 30, 2021 and September 30, 2020, direct obligations incurred 

amounted to $72,056,781 and $71,882,696, respectively. For the years ended September 30, 2021 

and September 30, 2020, reimbursable obligations incurred amounted to $0 and $125,191, 

respectively. 

Comparison to the Budget of the United States Government 

SFFAS No. 7, Accounting for Revenue and Other Financing Sources and Concepts for Reconciling 

Budgetary and Financial Accounting, requires an explanation of material differences between 

budgetary resources available, the status of those resources and outlays as presented in the Statement 

of Budgetary Resources to the related actual balances published in the Budget of the United States 

Government (Budget). The Budget that will include FY 2021 actual budgetary execution information 

is scheduled for publication in February 2022, which will be available through OMB’s website at 

http://www.whitehouse.gov/omb/budget. Accordingly, information required for such disclosure is 

not available at the time of publication of these financial statements. 

Balance reported in the FY 2020 SBR and related President’s Budget reflect the following:

FY 2020 Budgetary 

Resources

New 

Obligations & 

Upward 

Adjustments

Distributed 

Offsetting 

Receipts

Net Outlays

Statement of 

Budgetary Resources $ 79,061,462 $ 71,882,696 $ - $ 73,753,039 

Budget of the U.S. 

Government 71,000,000 71,000,000 - 74,000,000 

Difference $ 8,061,462 $ 882,696 $ - $ (246,961)

The difference between the Statement of Budgetary Resources and the Budget of the United States 

Government for budgetary resources is primarily due to expired unobligated balances and rounding. 

The differences for obligations incurred and net outlays are due to rounding.
Note 13 Custodial Activity 

The FEC uses the accrual basis of accounting for the collections of fines, penalties, and 

miscellaneous receipts. The FEC’s ability to collect fines and penalties is based on the responsible 

party’s willingness and ability to pay: 

66

2021 2020

Custodial Revenue

Fines, Penalties, and Other Miscellaneous Revenue $ 1,590,976 $ 760,511

Custodial Liability

Receivable for Fines and Penalties $ 1,088,802 $ 528,126

Less: Allowance for Doubtful Accounts (455,940) (175,315)

Total Custodial Liability $ 632,862 $ 352,810

The Custodial Liability account represents the amount of custodial revenue pending transfer to 

Treasury. Accrual adjustments reflected on the Statement of Custodial Activity represent the 

difference between the FEC's opening and closing accounts receivable balances. Accounts receivable 

are the funds owed to the FEC (as a custodian) and ultimately to Treasury. The accrual adjustment 

for civil penalties is composed of a net increase of approximately $132,000 for FY 2021 and a net 

decrease of approximately $306,000 for FY 2020, respectively. The accrual adjustment for 

administrative fines is composed of a net increase of approximately $63,000 in FY 2021 and a net 

increase of approximately $316,000 in FY 2020, respectively.
67

Note 14 Undelivered Orders at the End of the Period

For Fiscal Year 2021, Unpaid Undelivered orders were $11,630,337, of which $2,162,612 were 

Federal and $9,467,725 were non-Federal. As of September 30, 2021, there were no Fiscal Year 

2021 Paid Undelivered Orders.

For Fiscal Year 2020, Unpaid Undelivered orders were $12,420,553, of which $2,388,787 were 

Federal and $ 10,031,766 were non-Federal. As of September 30, 2020, there were no Fiscal Year 

2020 Paid Undelivered Orders.
68

Note 15 Reconciliation of Net Operating Cost to Net Budgetary Outlays

Budgetary and financial accounting information differ. Budgetary accounting is used for planning 

and control purposes and relates to both the receipt and use of cash, as well as reporting the federal 

deficit. Financial accounting is intended to provide a picture of the government's financial operations 

and financial position, so it presents information on an accrual basis. The accrual basis includes 

information about costs arising from the consumption of assets and the incurrence of liabilities. The 

reconciliation of net outlays, presented on a budgetary basis, and the net cost, presented on an accrual 

basis, provides an explanation of the relationship between budgetary and financial accounting 

information. The reconciliation serves not only to identify costs paid for in the past and those that 

will be paid in the future, but also to assure integrity between budgetary and financial accounting. 

The analysis below illustrates this reconciliation by listing the key differences between net cost and 

net outlays. 
69

2021 (CY)

Intragovernmental With the 

Public 

Total FY 

2021

Net Operating Cost (SNC) $ 77,960,050 $ - $ 77,960,050 

Components of Net Operating Cost Not 

Part of the Budgetary Outlays

 Property, plant, and equipment 

 depreciation - (4,617,559) (4,617,559)

 (Increase)/Decrease in Liabilities not 

 affecting Budget Outlays:

 Accounts payable 167,618 210,215 377,833 

 Salaries and benefits (76,455) (203,706) (280,161)

 Other liabilities (Unfunded leave, 

 unfunded FECA, actuarial FECA) 596,234 (238,401) 357,833 

 Other financing sources

 Federal employee retirement benefit costs (2,416,180) - (2,416,180)

 Transfers out (in) without reimbursement 269,556 - 269,556 

Total Components of Net Operating Cost 

Not Part of the Budget Outlays (1,459,227) (4,849,451) (6,308,678)

Components of the Budget Outlays That 

Are Not Part of Net Operating Cost 

 Acquisition of capital assets - (7,359) (7,359)

 Other - 57,743 57,743 

Total Components of the Budgetary 

Outlays That Are Not Part of Net 

Operating Cost - 50,384 50,384 

Other Temporary Timing Differences - (163,649) (163,649)

Net Outlays $ 76,500,822 $ (4,962,716) $ 71,538,106 

Related Amounts on the Statement of 

Budgetary Resources

 Outlays, net (SBR) 71,538,106 

Agency Outlays, Net (SBR) $ 71,538,106 
70

2020 (PY)

Intragovernmental With the 

Public 

Total FY 

2020 

Net Operating Cost (SNC) $ 79,914,532 $ - $ 79,914,532

Components of Net Operating Cost Not 

Part of the Budgetary Outlays

Property, plant, and equipment 

depreciation 

 

-

 

(5,743,370)

 

(5,743,370)

Property, plant, and equipment disposal 

& reevaluation - (46,728) (46,728)

(Increase)/Decrease in Liabilities not 

affecting Budget Outlays:

Accounts payable (972,866) 312,562 (660,304)

Salaries and benefits (141,851) (398,192) (540,043)

Other liabilities (Unfunded leave, 

unfunded FECA, actuarial FECA)

 

596,294 

 

(426,491)

 

169,803 

Other financing sources

Federal employee retirement benefit 

costs 

 

(2,259,208)

 

-

 

(2,259,208)

Total Components of Net Operating 

Cost Not Part of the Budget Outlays

 

(2,777,631)

 

(6,302,219)

 

(9,079,850)

Components of the Budget Outlays That 

Are Not Part of Net Operating Cost 

Acquisition of capital assets 352,760 2,565,597 2,918,357

Total Components of the Budgetary 

Outlays That Are Not Part of Net 

Operating Cost 

 

352,760 

 

2,565,597

 

2,918,357

Other Temporary Timing Differences - - -

Net Outlays $ 77,489,661 $ (3,736,622)) $ 73,753,039 

Related Amounts on the Statement of 

Budgetary Resources

Outlays, net (SBR) 73,753,039

Agency Outlays, Net (SBR) $ 73,753,039 
71 

SECTION III – Other Information
Management and 

Performance Challenges 

Facing the FEC for FY 2022

October 26, 2021
1050 First Street NE Washington, DC 20463 | www.fec.gov/oig

MEMORANDUM

TO: The Commission

FROM: Christopher Skinner

SUBJECT: Inspector General (IG) Statement Summarizing the Management and 

Performance Challenges Facing the Federal Election Commission (FEC) for 

FY 2022

DATE: November 9, 2021 

In accordance with the Reports Consolidation Act of 2000, the Federal Election Commission

(i.e., the “FEC” or “Commission”) Office of Inspector General (OIG) identifies the most 

serious management and performance challenges facing the Commission and provides a brief 

assessment of the Commission’s progress in addressing those challenges.1 By statute this 

report is required to be included in the FEC’s Agency Financial Report. 

The Government Performance and Results Modernization Act of 2010 defines major

management challenges as programs or management functions that are vulnerable to waste,

fraud, abuse and mismanagement and where a failure to perform well could seriously affect 

the ability of the FEC to achieve its mission objectives. Each challenge is related to the 

FEC’s mission and reflects continuing vulnerabilities and emerging issues. The FEC OIG 

identified the top management and performance challenges facing the Commission as the 

following:

1. Growth of campaign spending 

2. Identifying and regulating unlawful foreign contributions

3. Coronavirus (COVID-19) pandemic 

4. Senior leadership salary structure

5. Cybersecurity

Further attention to the management challenges identified in this report will improve the 

Commission’s ability to execute its mission. The FEC OIG encourages the Commission to 

continue to focus on addressing the management challenges discussed herein. We hope that 

1 The Reports Consolidation Act of 2000 permits agency comment on the IG’s statements. Accordingly, we 

provided senior management a draft of our statement for comment on October 26, 2021. 
FEC OIG 2022-11-014

this report, accompanied by the oversight work we perform throughout the year, assists the 

Commission in its efforts to improve the effectiveness and efficiency of its programs and 

operations. 

We appreciate the Commission’s collaboration throughout the year in addressing the 

management challenges process. Please contact me if you have any concerns regarding the 

identified challenges.

cc: Alec Palmer, Staff Director and Chief Information Officer

John Quinlan, Chief Financial Officer 

Lisa Stevenson, Acting General Counsel
Table of Contents

Introduction and Approach............................................................................................................................ 1 

Management and Performance Challenge: Growth of campaign spending .................................................. 2 

Management and Performance Challenge: Identifying and regulating unlawful foreign contributions...... 4 

Management and Performance Challenge: COVID-19 pandemic ................................................................ 5 

Management and Performance Challenge: Senior leadership salary structure ............................................. 6 

Management and Performance Challenge: Cybersecurity ............................................................................ 7 

FY 2021 Management Challenges not Included in FY 2022 Report ............................................................ 8 

Appendix: Hotline Poster.............................................................................................................................9

Appendix: Management Response..............................................................................................................10
Management and Performance Challenges Facing the FEC in FY 2022 1 

Introduction and Approach

Why do we publish this report?

In accordance with the Reports Consolidation Act of 2000, the Federal Election Commission 

(i.e., the “FEC” or “Commission”) Office of Inspector General (OIG) identifies the most serious 

management and performance challenges facing the Commission and provides a brief 

assessment of the Commission’s progress in addressing those challenges. By statute this report 

is required to be included in the FEC’s Agency Financial Report. 

What are management challenges?

The Government Performance and Results Modernization Act of 2010 identifies major 

management challenges as programs or management functions that are vulnerable to waste, 

fraud, abuse and mismanagement and where a failure to perform well could seriously affect the 

ability of the FEC to achieve its mission objectives. Each challenge area is related to the FEC’s 

mission and reflects continuing vulnerabilities and emerging issues. The FEC OIG identified the 

top management and performance challenges facing the Commission as the following: 

• Growth of campaign spending 

• Identifying and regulating unlawful foreign contributions 

• Coronavirus (COVID-19) pandemic 

• Senior leadership salary structure

• Cybersecurity

How did we identify these challenges?

We identified the Commission’s major management and performance challenges by recognizing 

and assessing key themes from OIG audits, special reviews, hotline complaints, investigations, 

and an internal risk assessment, as well as reports published by external oversight bodies, such as 

the Office of Personnel Management (OPM) and the Government Accountability Office (GAO). 

Additionally, we reviewed previous management challenge reports to determine if those 

challenges remain significant for this submission. Finally, we considered publicly available 

information and internal Commission records. As a result, we identified five key management 

and performance challenges, which are detailed herein. 
Management and Performance Challenges Facing the FEC in FY 2022 2

Management and Performance Challenge: Growth of campaign spending 

The FEC was established nearly fifty years ago to provide oversight of federal campaign 

finance. Since then, federal campaign fundraising and spending have increased dramatically, 

particularly after the U.S. Supreme Court’s decision in Citizens United v. FEC in 2010. Indeed, 

total spending on federal election campaigns has increased from $1.6 billion in 1998 to 

approximately $14.5 billion in the 2020 election cycle. 

Figure: Total expenditures per election cycle reported to the FEC by all filers. The totals in this figure 

represent aggregate expenditures by all filers, including campaigns, party committees, and political 

action committees (PACs), obtained from FEC filings.

The total number of transactions subject to FEC regulation and oversight have also dramatically

increased, especially in recent years. Transactions include mandatory filings and consist of financial 

reports filed with the FEC and include summary financial information and itemized details of receipts 

(including contributions), disbursements (including expenditures) and other financial activity. 

Indeed, as detailed further in the figure below: 

• Between 1980 and 2002, the total number of transactions subject to FEC regulation and 

oversight increased from approximately 602,000 to nearly three million per election cycle. 

• In the 2018 election cycle, the FEC handled nearly 270 million transactions.

• That number exceed 616 million transactions in the 2020 election cycle.

$0 

$2 

$4 

$6 

$8 

$10 

$12 

$14 

$16 

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

BILLIONS

Annual U.S. Election Spending
Management and Performance Challenges Facing the FEC in FY 2022 3 

FEC Total Transactions (1980 - 2002)

3.0M

0.0M

0.5M

1.0M

1.5M

2.0M

2.5M

3.0M

3.5M

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002

1980 - 2002

Between 1980 and 2002, the total 

number of transactions subject to FEC 

regulation and oversight increased 

from approximately 602,000 to nearly 

three million per election cycle. 

3M

616 M

0 M

100 M

200 M

300 M

400 M

500 M

600 M

700 M

2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Continued: 2002 - 2020

Actual Projection

By 2018, the FEC handled nearly 

270 million transactions in that 

cycle and that number exceeded 

616 million in the 2020 cycle. 
Management and Performance Challenges Facing the FEC in FY 2022 4

Despite dramatic increases in campaign expenditures and the number of transactions subject 

to FEC regulation and oversight, the Commission’s budget has remained largely static and has 

even faced recent reductions. Indeed, since 2008, the FEC’s budget has increased by an average 

of only 0.61% per year. Those increases have not kept up with inflation, which has averaged 

approximately 1.8% per year since 2008. 

Figure: Annual congressional budget appropriations to the FEC, as reported in Congressional budget 

justifications.

In addition, the nature of federal campaigns has evolved in recent years. Online fundraising, 

the influence of dark money, and potential foreign electoral influence will continue to place 

further strain on the FEC’s ability to provide oversight of federal campaigns. As such, absent 

additional resources, the FEC faces challenges in successfully regulating campaign finance with 

its current funding. 

Management and Performance Challenge: Identifying and 

regulating unlawful foreign contributions 

Identifying and regulating unlawful foreign campaign contributions pose a significant 

challenge to the FEC. As campaign expenditures and the number of transactions subject to FEC 

regulation and oversight increase, potential contributions by foreign nationals also increase, 

which demands greater scrutiny by agency regulators. However, a recent OIG report found that 

the FEC’s practice of relying on filers’ self-certifications concerning potential foreign 

contributions poses a national security risk and provides insufficient oversight of possible illegal 

foreign donations. Indeed, numerous recent cases highlight the risk of unlawful foreign 

influence in U.S. elections. 

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

MILLIONS

FEC Annual Appropriations: 2008 - 2021
Management and Performance Challenges Facing the FEC in FY 2022 5

The Federal Election Campaign Act of 1971, related statutes and implementing regulations 

prohibit direct and indirect contributions to candidates, political committees, and inaugural 

committees by foreign nationals. As noted above, campaign expenditures and transactions 

subject to FEC regulation and oversight have dramatically increased in recent years. However, 

as previously noted, the FEC’s budget has remained static, if not reduced, over the same period. 

Since 2008, the FEC’s budget has increased by an average of only 0.61% per year. The 

increased demand on the agency without additional funding to provide resources to the FEC 

poses a challenge for the agency to identify and regulate unlawful foreign contributions. 

Moreover, recent cases demonstrate that the risk of foreign electoral influence is real and not 

hypothetical. For example, a matter that came before the Commission in 2016 and was decided 

in October 2021 involved a consultant for a super PAC that supported a presidential candidate. 

The consultant allegedly solicited a $2 million contribution from representatives of a foreign 

national. The Commission ultimately reached a settlement with the super PAC. Numerous other 

reported cases further illustrate the risk. 

Notwithstanding these risks, a recent investigative report by the OIG found that the FEC’s 

current practices provide limited oversight of potential foreign contributions. Specifically, the 

OIG investigation found that the FEC identifies many potential foreign national donations based 

on the reported addresses of donors, but generally defers to a committee’s self-certification that it 

verified the U.S. citizenship of those donors. However, that practice does not appear to be 

memorialized in policy and relies heavily on the good faith and due diligence of filers. 

Accordingly, the OIG recently recommended that the FEC update and memorialize its 

practice concerning donors with foreign addresses to identify unlawful foreign donations more 

effectively. However, we recognize that the FEC’s resources are significantly constrained as 

detailed above. As such, identifying and regulating foreign contributions will likely continue to 

challenge the FEC.

Management and Performance Challenge: COVID-19 pandemic 

The ongoing COVID-19 pandemic poses many management and performance challenges to 

the Commission. Most notably, it has forced the FEC, and many other agencies, to operate in a 

remote status since March 2020. Fortunately, much of the Commission’s business is being

accomplished remotely. 

Recently, the President signed Executive Order 14043 on September 9, 2021, requiring

executive branch federal employees to become fully vaccinated by November 22, 2021, unless 

they are eligible for a legal exception due to a medical condition or because of a sincerely held 

religious belief. In addition, employees must provide documentation of their vaccination or in 

support of their requested legal exception. 

Uncertainty remains regarding how the post-pandemic work environment will look for the 

FEC. Concerns include potential employee turnover once the FEC removes the evacuation order 

and returns to the office. Hybrid work and flexibility appear to be permanent expectations for the 

new workplace. However, as federal office returns accelerate, some employees may want to 

pursue different options. Employees may seek other remote employment options, resign, or 
Management and Performance Challenges Facing the FEC in FY 2022 6

retire, if eligible. Accordingly, the transition back to the office may result in significant 

employee turnover which could directly impact the agency’s human capital resources. 

Management was forced to react to the COVID-19 pandemic and as a result, established a 

COVID management team to address and act on pandemic-related concerns and resulting 

legislation. A few of those actions include but are not limited to: 

• Establishing flexible work schedules and waiving core working hour requirements 

• Purchasing and implementing video communication tools

• Providing video conferencing trainings and telework security best practice tips

• Communicating a weekly compilation of guidance and information to assist FEC staff 

while the agency is under mandatory telework 

• Establishing a Phased re-opening quick reference guide and training for FEC staff 

members which includes a self-check for COVID form, FEC contact tracing log, and 

protective personal equipment for staff members entering the office

• Mandating face masks in common areas, limiting the number of people in the 

building, and establishing enhanced cleaning protocols 

• Tracking the operating status of approximately 25 public school districts in DC, 

Maryland, and Virginia

• Requiring employees to complete a vaccination certification form and provide proof 

of vaccination by October 22, 2021 

• Authorizing a short-term 60-day extension of the agency’s evacuation order which 

was scheduled to expire on September 12, 2021 

We identify this as a continued challenge facing the Commission in FY 2022 due to the 

volatility of the situation and encourage the agency to be proactive in its response strategy in 

FY 2022 to mitigate potential impacts to personnel and mission requirements. 

Management and Performance Challenge: Senior leadership salary structure 

Currently, the senior leadership roles of the Staff Director and CIO are occupied by the same 

individual and have been since August 2011. Information technology is ever-evolving, which 

affects all government agencies and without a fully dedicated CIO to focus on technological 

issues to ensure resources are properly allocated and adequate processes are in place for the 

protection and safeguards of the agency, the agency will remain at risk. 

Similarly, the Deputy General Counsel for Law is concurrently serving as the Acting General 

Counsel and has been doing so since September 2016. This has potential to put the agency at 

risk and inhibit the agency to effectively and efficiently meet its mission requirements, as robust 

internal dialogue and diversity of opinion are essential to ensuring the agency considers 

competing legal theories and courses of action. 
Management and Performance Challenges Facing the FEC in FY 2022 7

On April 1, 2019, the Committee on House Administration of the U.S. House of 

Representatives posed a number of questions to the FEC Commissioners about agency 

operations, including if the Commission agreed with concerns that the CIO and Staff Director 

should have a full-time dedicated person for each position. The Commissioners agreed with this 

concern and added that the salary limit placed on the Staff Director by the Federal Election 

Campaign Act of 1971, as amended (FECA) is capped at Level IV of the Executive Schedule. 

This statutory requirement provides that the Staff Director supervises personnel at the GS-15 and 

Senior Level pay scales, whom often have higher salaries than the Staff Director. Once the 

Commission promoted the CIO to the Staff Director, the Commission allowed him to continue to 

serve as the CIO and be compensated at that level rather than take a pay cut. 

The Committee on House Administration of the U.S. House of Representatives similarly 

inquired as to why the position of General Counsel had not been permanently filled. In response, 

the Commission identified that the FECA requires the General Counsel to be paid at Level V of 

the Executive Schedule and that this limitation can make it difficult to attract and retain good 

talent. Similar to the Staff Director position, the General Counsel supervises personnel at the 

GS-15 and Senior Level pay scales, which often provide higher salaries than level V of the 

Executive Schedule. 

Management previously reported that the Commission adopted legislative recommendations 

in 2018, 2017, 2016, 2015, 2014, 2013 and 2011 that urged Congress to remove the statutory 

references to the Executive Schedule in FECA with respect to the FEC Staff Director and 

General Counsel Positions. The removal of that reference would ensure the two positions be 

compensated under the same schedule as the Commission’s other senior managers. 

As of September 30, 2021, the agency is actively recruiting for the General Counsel position. 

The FEC posted an announcement on USA Jobs with an opening application date of 

September 30, 2021 and a closing date of October 22, 2021. 

Filling the CIO and General Counsel Positions with full-time incumbents would help ensure 

the FEC is effectively and efficiently supporting its overall mission objectives. Assigning acting 

personnel to two essential leadership positions is not a viable long-term solution. Based on the 

foregoing, we encourage the agency to hire or appoint someone to carry out the agency CIO and 

General Counsel duties on a full-time basis. 

Management and Performance Challenge: Cybersecurity

Protecting data, systems, and networks from threats remains a top challenge. The FEC was 

established to protect the integrity of federal campaign finance by providing transparency and 

enforcing and administering federal campaign finance laws. In doing so, the FEC discloses 

campaign finance data to the public and as a result, encounters large volumes of webpage traffic 

from stakeholders and members of the public. In efforts to streamline transparency initiatives 

and improve business processes, the Commission is more technology reliant today, as is society; 

as such, it is imperative that the Commission continue to prioritize cybersecurity. 

Cybersecurity encompasses attempts from criminals and adversaries to obtain sensitive 

information linked to government networks, personal identifiable information, intellectual 
Management and Performance Challenges Facing the FEC in FY 2022 8

property and other sensitive data. Cyber threats may arise from phishing, ransomware or other 

malware attacks and can infiltrate any level within an organization. 

 

Since October 2020, the Commission engaged with the Department of Homeland Security 

(DHS) to improve its overall security posture: The Cybersecurity and Infrastructure Security 

Agency, an operational component under DHS, conducted a Remote Penetration Test on the 

FEC website.

It is essential that the Commission continue to maintain the integrity and availability of its 

information as it looks to modernize its systems, which include moving towards a cloud 

environment. In large part, the agency has been reactive to cybersecurity concerns and we 

encourage the Commission to be proactive in establishing a cybersecurity framework and 

strengthen internal controls to mitigate external threats from entering the FEC’s network. 

Conclusion

The OIG presents these challenges as ongoing issues facing the FEC in FY 2022. The 

challenges serve as impending barriers to promote efficiency and effectiveness in the 

management of FEC operations and procedures. The OIG remains dedicated to independent 

oversight to ensure accountability of the mission of the FEC. 

FY 2021 Management Challenges Not Included in FY 2022 Report

Management Challenge: Lack of quorum

A significant management and performance challenge in FY 2021 resulted from the 

resignation of a commissioner, which left the FEC without a four-member quorum. The 

Commission is required to be composed of six commissioners, appointed by the President, with 

no more than three members affiliated with the same political party.1 Furthermore, 52 U.S.C. § 

30106 requires the affirmative vote of four members to act on certain matters. 

The Commission regained its quorum on December 9, 2020, when the U.S. Senate confirmed 

three nominees to the FEC, restoring the agency’s ability to conduct official business, and 

bringing the panel to its full slate of six commissioners for the first time since 2017. 

Accordingly, that resolved this management and performance challenge.

1 See 52 U.S.C. § 30106. 
Appendix: Hotline Poster
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Management’s Response to the Office of Inspector General’s Statement on 

the Federal Election Commission’s Management and Performance 

Challenges 16

November 8, 2021

In its Statement on the FEC’s Management and Performance Challenges (“Statement”), the Office 

of the Inspector General (“OIG”) identified five overarching management and performance 

challenges for inclusion in the FEC’s Agency Financial Report for Fiscal Year 2021. 

Management’s response to the OIG’s Statement is below.

Challenge 1: Growth of Campaign Spending

As illustrated in the OIG’s description of this management challenge, increases in the amount of 

money raised and spent in federal elections, and changes in the way political committees raise and 

report contributions, have resulted in explosive growth in the number of campaign finance 

transactions reported to the FEC each election cycle. Each of these transactions represents a data 

element that must be received by the FEC, added to our database and disclosed and made 

searchable on the FEC website and via the FEC campaign finance API. 

The FEC receives campaign finance reports, statements and other disclosure documents from more 

than 16,000 political committees and other filers. During the 2020 election cycle, these filers 

reported more than 600 million financial transactions, which were reviewed by FEC staff and 

disclosed to the public on the FEC’s website. This is more than double the number of transactions 

reported in the previous election cycle, and a nearly 400% increase compared to 2016, the last 

presidential election cycle. 

Aside from the substantial increase in the number of transactions reported to the FEC, the FEC 

website’s Application Programming Interface (API), which permits users to customize data 

searches making vast quantities of campaign finance data readily available, received over 407 

million hits during the 2020 election cycle. With the steep rise in transactions reported every 

election cycle comes a heavier burden on the FEC’s API to quickly search across the FEC’s 

campaign finance database and display the data requested by the public. 

In large part in response to projected increases in campaign finance activity, in FY 2015 the FEC 

proactively launched a comprehensive, multi-year IT Modernization project. Since this project was 

launched, the Commission has requested and received as part of its annual budget funds to support 

this crucial effort. As part of the IT Modernization project, the FEC redesigned its website and 

migrated both the website and the campaign finance database that supports it to a cloud 

environment. In addition to providing faster and easier access to campaign finance data hosted in 

the cloud, this migration allowed the agency to shut down one of its physical data centers during 

FY 2018, realizing attendant costs associated with maintaining that data center. During FY 2020 

and 2021, the FEC made additional database enhancements to improve database performance and 

control costs of hosting and maintaining the database.

16 Management consists of the agency’s senior managers, including the Staff Director, General Counsel, and Chief

Financial Officer.
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To continue to mitigate an anticipated steep rise in future costs from maintaining physical 

datacenters, the FEC is pursuing an IT modernization plan which requires investment now and 

over the next several years to continue cloud migration and realize improvements in its IT 

processes. During 2020, the FEC conducted a study to determine how best to migrate other 

appropriate systems and databases to the cloud, allowing the agency to realize greater efficiency 

and performance in future years. As of November 2021, the FEC has migrated databases and 

several legacy applications to the cloud. The FEC will continue to strive to implement the 

recommendations of this study during FY 2023, with the goal of generating efficiencies in future 

years while maintaining high levels of service to the public. Migrating these legacy applications 

from physical datacenters to a cloud environment will slow the rising costs for hosting these 

applications and for maintaining legacy systems in the FEC’s physical datacenters over time as the 

volume of our data holdings continues to climb. Although the escalation in the volume of 

transactions means and increase in the cost for cloud hosting, the cost of maintaining outdated 

legacy systems that are not built to handle the increasing volume of transactions makes continued 

investment in IT modernization a critical priority.

In addition, the FEC is currently working to upgrade the agency’s eFiling platform. In FY 2017, 

the Commission published a study of its current eFiling platform, including a survey of the existing 

functionality of the FEC’s free filing software and an in-depth investigation of needs expressed by 

filers. The FEC is relying on the recommendations of this study to improve its eFiling platform to 

allow greater operating system flexibility for users when generating filings for submission to the 

Commission, and to increase the consistency and accuracy of reporting. The FEC’s new eFiling 

platform is expected to improve the process for validating filings prior to acceptance and generate 

modern file outputs that will provide for more flexibility in accessing data. The FEC had expected 

to begin the implementation phase of this project during FY 2020. However, COVID-19 related 

delays in onboarding new staff and contractors subsequently hampered the FEC’s efforts to 

complete the development phase of the eFiling platform during FY 2020. In late FY 2021, we 

awarded a contract to a new vendor to provide an assessment of the previous eFiling platform 

modernization work and to continue development. We now expect to have a working prototype 

during FY 2022, and to begin to begin partial implementation of the new eFiling platform. 

Campaign finance reports filed on paper remain the most costly filings for the FEC because they 

must be manually received and processed by FEC staff. The Commission has also taken steps to 

reduce this burden on the agency. Most notably, in 2000 the Commission began requesting through 

Legislative Recommendations that the Act be amended to make the FEC the point of entry for 

Senate filings. This amendment, which became law in September 2018, had the effect of subjecting 

Senate filers to the FEC’s mandatory electronic filing rules, which require committees to file 

electronically if they receive contributions or make expenditures in excess of $50,000 in a calendar 

year or expect to do so. In 2018 and 2021, the Commission recommended legislative changes to 

require reports of electioneering communications to be filed electronically with the Commission, 

rather than on paper, and to increase and index for inflation certain registration and reporting 

thresholds. If enacted, each of these recommendations would have an effect of further reducing 

the number of paper filings received by the FEC.17

17 The Commission lacked the necessary quorum of Commissioners to approve Legislative Recommendations in 2019

and 2020.
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Challenge 2: Identifying and regulating unlawful foreign contributions

Management has undertaken a number of actions over the last several years to prioritize 

enforcement of the foreign national prohibition. Along with cases that are statute-of-limitations 

imperiled when OGC receives them, foreign national prohibition cases are assigned to OGC staff 

attorneys before any other class of cases. OGC has also modified its Status of Enforcement reports 

to the Commission so that the Commission is provided with complete data on every foreign 

national prohibition case on a quarterly basis. Further, OGC has revised its procedures so that it 

may more efficiently track the progress of all foreign national prohibition matters through the 

enforcement process. OGC has also modified its case management software to make it easier to 

run reports for the Commission concerning all foreign national prohibition matters. 

Moreover, requirements for committee actions to prevent the receipt of foreign national, or other 

illegal, contributions are extensive. All committee treasurers are required by regulation to examine 

all contributions received for evidence of illegality. 11 C.F.R. 103.3(b). Contributions that present 

genuine questions as to whether they were made by foreign nationals, such as by coming from a 

foreign address or being drawn on a non-U.S. bank, may be, within ten days of receipt, either 

deposited in the campaign depository or returned to the contributor. If deposited, the treasurer 

shall make his or her best efforts to determine the legality of the contribution, including at least 

one written or oral request for evidence of legality. If the contribution cannot be determined to be 

legal, the treasurer shall refund the contribution within 30 days of receipt. 11 C.F.R. 103.3(b)(1). If 

the treasurer determines that the contribution did not appear to be made by a foreign national, but 

later discovers that it is illegal based on new evidence not available at the time of deposit, the 

treasurer shall refund the contribution within 30 days of discovering the illegality. 11 C.F.R. 

103.3(b)(2). Any contribution which appears to be illegal but is deposited in a campaign 

depository may not be used for any disbursements until the contribution has been determined to 

be legal, and the receiving committee must either establish a separate account for such 

contributions or maintain sufficient funds to make any required refunds. 11 C.F.R. 

103.3(b)(4). The treasurer must keep a written record noting the basis for the appearance of 

illegality of any such contribution, and if a committee’s disclosure report is due while resolution 

of a contribution’s legality is still pending, a statement to that effect must be included in the 

disclosure report. 11 C.F.R. 103.3(b)(5).

In another document, OIG has suggested additional requirements for disclosure to the Commission 

about suspected foreign national contributions. However, legal and practical concerns block 

immediate implementation of additional requirements for disclosure. Disclosure of additional 

information would very likely require a legislative change, which of course is solely the purview 

of Congress. Specifics as to what must be reported to the Commission as part of disclosure reports 

are exhaustively described in 52 U.S.C. 30104. Moreover, given that all disclosure reports must 

be made available to the public, 52 U.S.C. 30111(a)(4), reporting of information such as 

contributors’ U.S. passport numbers, as suggested elsewhere by OIG, would potentially raise 

serious privacy concerns.

In its Statement, OIG recounts its recent recommendation that the FEC update and memorialize its 

practice concerning donors with foreign addresses to identify unlawful foreign contributions more 

effectively. That practice is already memorialized and regularly updated. The practice is based 

on a regulation, duly promulgated by the Commission, 11 C.F.R. § 110.20(a)(7), which provides 
87

a regulatory safe harbor for these situations. The practice is memorialized in the Reports Analysis 

Division’s Policies and Procedures, which are updated for every election cycle and approved by 

the Commission, and which are publicly available on FEC.gov, with certain redactions unrelated 

to this practice. Management will consider updating this practice, including as part of its regularly 

scheduled review and approval of Policies and Procedures.

Challenge 3: COVID-19 Pandemic

Management continues to prioritize the safety of all FEC staff. On January 20, 2021, the President 

issued Executive Order 13991, “Protecting the Federal Workforce and Requiring Mask-Wearing,” 

instructing agencies to immediately require masks and physical distancing measures in all Federal 

buildings consistent with current U.S. Centers for Disease Control and Prevention (CDC) 

guidance. On January 24, 2021, the Office of Management and Budget (OMB) issued M-21-15, 

COVID-19 Safe Federal Workplace: Agency Model Safety Principles, to assist Federal agencies 

in developing tailored COVID-19 workplace safety plans. Consistent with the requirements of EO 

13991 and OMB M-21-15, the FEC’s COVID-19 management team developed a workplace safety 

plan to provide minimum mandatory safety guidance for the agency. The COVID-19 management 

team has also developed a phased re-opening quick reference guide and training for FEC staff 

members, which includes a self-check for COVID form, FEC contact tracing log and protective 

personal equipment for staff members entering the office. 

On September 9, 2021, the President issued Executive Order 14043, “Requiring Coronavirus 

Disease 2019 Vaccination for Federal Employees,” instructing agencies to implement a program 

requiring COVID-19 vaccination for all Federal employees, with exceptions only as required by 

law. The same day, the President also issued Executive Order 14042, “Ensuring Adequate COVID 

Safety Protocols for Federal Contractors.” Consistent with the requirements of EO 14043 and 

guidance from the Safer Federal Workforce Task Force, the FEC’s COVID-19 management team 

has provided information and guidance regarding the COVID-19 vaccination requirement for 

Federal employees working with the FEC and begun implementing this requirement through 

collecting the requisite vaccination status information and documentation from employees. The 

COVID-19 management team has provided guidance and assistance to the Procurement Office to 

support implementation of the requirements of EO 14042. 

Throughout the year, Management has maintained continuous communication with staff to 

promote staff safety and provide support. For example, the COVID-19 management team sends a 

weekly update email every Friday to alert staff to upcoming events, new guidance and general 

reminders, including information about how to become vaccinated and special leave provisions 

for employees when they are receiving the vaccine or recovering from vaccine side effects. The 

weekly update has been well received by staff and managers. Senior Management and the 

Commission have also been holding virtual meet and greet sessions for new FEC staff. Senior 

Leaders are regularly holding division meetings to check on staff and hear any concerns they may 

raise. The COVID-19 management team also continues to hold briefings with the Commission to 

keep them abreast of the situation and ensure they are aware of any changes to the building 

operating status and impacts to our employees. Members of the COVID-19 management team also 

participate in government-wide groups, including OMB small agency group, OPM CHCO/HR 

Director group, General Counsel Exchange, and the CIO/CISO council. 
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The FEC’s offices remain closed under an evacuation order. All employees continue to work 

remotely, except in limited circumstances where work must be completed in the FEC’s offices, 

and the agency has purchased video communication tools to facilitate meetings and collaboration 

during this time. Management continues to closely monitor the situation and is pleased to report 

that nearly all FEC functions have been seamlessly transitioned to the telework environment and 

that agency performance goals are continuing to be met. While the FEC’s offices have been closed 

under an evacuation order, Management has waived core working hour requirements and provided 

for additional work hour flexibilities. As the agency continues to plan for a return to the office, 

Management has consistently engaged managers and staff, including through staff surveys 

regarding the future of work, to learn more about employee’s scheduling and work/life balance 

needs. Management will continue to reach out to staff as it considers what scheduling flexibilities 

and telework programs will best meet the needs of employees and the agency as employees begin 

to return to the office. 

Challenge 4: Senior leadership salary structure

Management fully supports the Commission’s ongoing efforts to fill vacant leadership positions 

and to ensure senior leadership roles are filled by separate individuals. The Commission 

specifically addressed this issue in response to questions posed by the Committee on House 

Administration. In its May 1, 2019, response, the Commission stated: 

All of the Commissioners agree that the Commission should have separate individuals 

filling the senior leadership roles of Staff Director and CIO. As is true of the General 

Counsel position, the salary limit placed on the Staff Director by the FECA (Level IV of 

the Executive Schedule) means that the Staff Director supervises personnel whose 

positions, on the GS-15 and Senior Level pay scales, often provide higher salaries than 

the statutory salary for the Staff Director. The Commission has long recommended that 

Congress de-link the Staff Director’s salary from the Executive Schedule. 

When the Commission promoted our CIO to Staff Director, we allowed him to continue 

to serve as CIO and be compensated at that level rather than absorb a substantial pay cut 

in order to accept the promotion. This has allowed the Commission to maintain 

consistency in its most senior staff leadership.18

Because of the challenges in maintaining consistent senior leadership, the Commission 

unanimously adopted a Legislative Recommendation in 2021, 2018, 2017, 2016, 2015, 2014, 2013 

and 2011 that urges Congress to address this situation. Specifically, the Commission recommends 

that Congress remove the statutory bar on the FEC’s participation in the Senior Executive Service 

(SES) Program and remove the statutory references to the Executive Schedule in FECA with 

respect to the General Counsel and Staff Director, so that those two positions would be 

compensated under the same schedule as the Commission’s other senior managers. This revision 

would remedy the current situation where the Commission’s top managers are compensated at a 

lower rate than many of their direct reports, and would ensure that the Commission can retain 

highly qualified individuals to serve in those positions as well as enable it to remain competitive 

18 https://www.fec.gov/about/committee-on-house-administration-april-2019-questions/
89

in the marketplace for Federal executives when filing the current vacancy or when further 

vacancies arise.

Challenge 5: Cybersecurity

The FEC developed a comprehensive cybersecurity program led by the Chief Information Security 

Officer (CISO) to protect critical infrastructure from the cyber threats. The FEC’s overarching 

strategy to protect the security and privacy of its systems and network begins with the adoption of 

the National Institute of Standards and Technology (NIST) Risk Management Framework and 

NIST IT security control “best practices.” NIST Special Publication 800-37 Rev. 2 – Risk 

Management Framework for Information Systems and Organizations,” identifies seven steps 

essential to the successful execution of the risk management framework (RMF):

• Prepare to execute the RMF from an organization- and a system-level perspective by 

establishing a context and priorities for managing security and privacy risk. 

• Categorize the system and the information processed, stored, and transmitted by the 

system based on an analysis of the impact of loss.

• Select an initial set of controls for the system and tailor the controls as needed to reduce 

risk to an acceptable level based on an assessment of risk. 

• Implement the controls and describe how the controls are employed within the system 

and its environment of operation. 

• Assess the controls to determine if the controls are implemented correctly, operating as 

intended, and producing the desired outcomes with respect to satisfying the security and 

privacy requirements. 

• Authorize the system or common controls based on a determination that the risk to 

organizational operations and assets, individuals, other organizations, and the Nation is 

acceptable. 

• Monitor the system and the associated controls on an ongoing basis to include 

assessing control effectiveness, documenting changes to the system and environment of 

operation, conducting risk assessments and impact analyses, and reporting the security

and privacy posture of the system. 

The FEC currently employs this continuous monitoring and ongoing authorization approach to 

assess the risk to systems and networks and allow the authorizing official to determine whether 

that risk is acceptable. Three of the FEC’s major systems follow the formal Authority to Operate 

(ATO) process: the General Support System, the FEC website and the FEC’s eFiling system.

Robust Security Architecture

As a result of, and in support of, the RMF, the FEC’s Office of the Chief Information Officer 

(OCIO) continues to take steps to implement a robust security architecture. For example, in 

partnership with the Department of Homeland Security (DHS), the OCIO has collaborated with 

FEC stakeholders and technical experts to identify, protect, detect and respond to the impact of 

known and unknown threats, continuously assessing security controls and addressing residual and 

new risks. 

As identified in OIG’s description of this management challenge, the FEC has proactively pursued 

three significant joint efforts with DHS over the past two years to better identify and remediate 
90

emerging threats to the FEC’s systems and networks. In addition, the FEC maintains ongoing 

information security efforts, including our security operation center and the applications for 

continuous diagnostics and mitigation, and implementing security controls to address identified 

cybersecurity gaps. These efforts help to ensure that identified risks are appropriately addressed 

and that its cybersecurity program and security architecture will continue to safeguard the agency’s 

infrastructure, networks, and applications against cyber threats and malicious activities. 

Continuous Monitoring and Mitigation

OCIO Security has worked with DHS to improve security capability by integrating the Continuous 

Diagnostics and Mitigation (CDM) program. OCIO Security has also introduced the use of secure 

baselining standards, such as the use of DISA STIGS and Benchmarks. System hardening and 

secure baselining practices are being expanded in OCIO teams. The OCIO security team has 

developed a privileged user account agreement and user access review and a new password policy 

to add administrative controls to supplement the technical access controls. The addition of the new 

password policy and multi-factor authentication (MFA) has improved the security posture of 

authentication types within the FEC’s information systems. 

Cloud-First Initiative

The FEC has also adopted a cloud first initiative for security, accessibility and recoverability. 

Hosting systems and data in a cloud environment allows the FEC to utilize our cloud service 

providers’ significant resources that are dedicated to maintaining the highest level of security. In 

addition, by utilizing the cloud service providers’ robust disaster recovery solutions, the FEC 

eliminates the need to maintain physical disaster recovery sites, which are costly to maintain and 

secure. The FEC has already completed the migration of its largest database, the campaign finance 

database, and its website to a cloud environment. The FEC’s website, revamped in May 2017, uses 

FedRAMP Authorized cloud services, which provides a standardized approach to security 

assessment, authorization, and continuous monitoring for cloud products and services. 

Building a Cybersecurity Culture

At the same time, the FEC is working to build a cybersecurity culture among its employees. The 

first line of defense in maintaining the protection and integrity of the agency’s network is the 

ongoing education of employees about their role in identifying and preventing malicious actors—

internal or external—from compromising the FEC’s systems and networks. Efforts to build a 

cybersecurity culture include steps to educate staff about FEC IT security policies and to ensure 

staff awareness of potential cybersecurity threats, such as phishing scams. The FEC promotes this 

cybersecurity culture in part through annual, mandatory IT security trainings and through yearround communication and notices to staff from the CISO. This year, the FEC implemented 

additional trainings for all staff to help staff recognize and avoid social engineering attempts.

Building Capacity in the Information Security Office

The FEC has also taken steps to build capacity in its Information Security Office. In April 2019, 

the FEC entered into a partnership with the Partnership for Public Service to participate in the 

Cybersecurity Talent Initiative. This selective, cross-sector program, which provides loan 

forgiveness to top bachelors and masters graduates around the United States in exchange for at 

least two-years’ service at a Federal agency, addresses the immediate cybersecurity talent 

deficiency faced by Federal government agencies by attracting service-minded individuals to 
91

government who might not otherwise have applied. During FY2020, the FEC completed the 

selection process and brought on board an individual for a two-year cybersecurity fellowship. In 

the past two years, FEC actively participated in the CTI program, attended the CTI's leadership 

panel discussions, and encouraged the cybersecurity analyst from the CTI program to actively 

participate in CTI training activities as well as training outside of CTI. The cybersecurity analyst 

we brought onboard has significantly improved their cybersecurity knowledge and has done an 

excellent job supporting FEC's security operation.
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Payment Integrity Information Reporting

The Improper Payments Information Act (IPIA) of 2002, as amended by the Improper Payments 

Elimination and Recovery Act (IPERA) of 2010, Improper Payments Elimination and Recovery 

Improvement Act (IPERIA) of 2012, and the Payment Integrity Information Act (PIIA) of 2019 

requires agencies to review all programs and activities they administer and identify those which 

may be susceptible to significant improper payments. The FEC does not have any programs or 

activities that are susceptible to significant improper payments and is only required to perform an 

improper payment risk assessment.

Risk Assessment

In FY 2021, the FEC performed a systematic review of its program and related activities to identify 

processes which may be susceptible to “significant improper payments.” “Significant improper 

payments” are defined as gross annual improper payments (i.e., the total amount of overpayments 

and underpayments) in the program exceeding (1) both 1.5 percent of program outlays and $10 

million or (2) $100 million. The review was performed for the FEC’s only program area which is 

to administer and enforce the Federal Election Campaign Act (FECA). For FY 2021, the FEC 

considered risk factors that may significantly increase the risk of improper payments as outlined 

in OMB Circular A-123, Appendix C, Transmittal of Appendix C to OMB Circular No. A-123,

Requirements for Payment Integrity Improvement. Based on the systematic review performed, the 

FEC concluded that it is not susceptible to these risk factors and none of its program activities are 

susceptible to significant improper payments at or above the threshold level set by OMB. Thus, 

the agency’s only program (FECA) is considered to be in Phase 1.

Information about agency improper payment risk assessments, recoveries, and other agency-wide 

reporting requirements can be found at https://paymentaccuracy.gov.

Recovery of Improper Payments Reporting

The FEC has determined that the risk of improper payments is low; therefore, implementing a 

payment recovery audit program is not applicable to the agency.

PIIA Requirements Agency Response

Improper Payment Risk Assessment

Reviewed as noted above. See also 

Section I.D.ii, Improper Payments

Statistical Sampling Not Applicable.*

Corrective Action Plan Not Applicable.*

Improper Payment and Unknown Payment Estimate Not Applicable.*

Recovery of Improper Payments Reporting Not Applicable.*

High Dollar Overpayment and High-Priority Program 

Report Not Applicable.*

*The FEC does not have programs or activities that are susceptible to significant improper 

payments.
93

Reporting on Internal Control Assurances

The FEC is responsible for establishing and maintaining effective internal control and financial 

management systems that meet the objectives of the Federal Managers’ Financial Integrity Act of 

1982 (FMFIA), as implemented by OMB Circular A-123, revised, Management’s Responsibility 

for Enterprise Risk Management and Internal Control. Internal control is an integral component 

of management to provide reasonable assurance that (1) programs operate effectively and 

efficiently, (2) financial reports are reliable, and (3) programs comply with applicable laws and 

regulations. The FEC conducted its evaluation of internal control in accordance with OMB 

Circular A-123. Based on the results of the Fiscal Year 2021 internal control review, the FEC 

reported no material weaknesses under the FMFIA and is able to provide an unqualified statement 

of assurance that the internal controls and financial management systems meet the objectives of 

the FMFIA.

The Annual Assurance Statement on Internal Control which was signed by the FEC Chair in 

accordance with OMB Circular A-123 and provided in “Section I.D: Analysis of FEC’s Systems, 

Controls and Legal Compliance” is supported by detailed assurances from each of the FEC’s 

assessable units.

The assessable units that participated in the internal control review process and provided 

assurances were as follows:

• Office of Communications

• Office of Compliance

• Office of Equal Employment Opportunity

• Office of Management and Administration

• Office of the Chief Financial Officer

• Office of the Chief Information Officer

• Office of the General Counsel

Detailed assurances from each of these assessable units were provided to support the single 

assurance statement signed by the FEC Chair.
94

Civil Monetary Penalties Adjustment for Inflation

The following is the FEC’s table of Civil Monetary Penalties Adjustment for Inflation for FY 2021.

US Code

Statutory 

Authority; Public 

Law

Year of 

Enactment/

Adjustment 

Other Than 

Pursuant to 

IAA

Name/Description 

of Penalty

Latest Annual Inflation of 

Adjustment

Section in 

Title 11 of 

CFR for 

Penalty 

Update Detail

Current Penalty or 

Penalty Formula

52 U.S.C. 

30109(a)(5)(A), 

(6)

Federal Election 

Campaign Act 

Amendments of 

1976, PL 94-283 

sec. 109 1976

Violations of 

FECA or chapters 

95 or 96 of title 26 

of U S Code

Civil Monetary Penalties 

Annual Inflation 

Adjustments, 83 Fed. Reg. 

66593 (Dec. 27, 2018), 

https://sers.fec.gov/fosers/s

howpdf.htm?docid=401529. 111.24(a)(1) 20,528

52 U.S.C. 

30109(a)(5)(B)

Federal Election 

Campaign Act 

Amendments of 

1976, PL 94-283 

sec. 109 1976

Knowing and 

willful violations of 

FECA or chapters 

95 or 96 of title 26 

of U S Code

Civil Monetary Penalties 

Annual Inflation 

Adjustments, 83 Fed. Reg. 

66593 (Dec. 27, 2018), 

https://sers.fec.gov/fosers/s

howpdf.htm?docid=401529. 

111.24(a)(2)(i

) 43,792

52 U.S.C. 

30109(a)(5)(B)

Bipartisan 

Campaign Reform 

Act of 2002, PL 

107-155 sec. 312(a) 2002

Knowing and 

willful 

contributions in the 

name of another

Civil Monetary Penalties 

Annual Inflation 

Adjustments, 83 Fed. Reg. 

66593 (Dec. 27, 2018), 

https://sers.fec.gov/fosers/s

howpdf.htm?docid=401529. 

111.24(a)(2)(i

i) 71,812

52 U.S.C. 

30109(a)(12)

Federal Election 

Campaign Act 

Amendments of 

1976, PL 94-283 

sec. 109 1980

Making public an 

investigation 

without consent

Civil Monetary Penalties 

Annual Inflation 

Adjustments, 83 Fed. Reg. 

66593 (Dec. 27, 2018), 

https://sers.fec.gov/fosers/s

howpdf.htm?docid=401529. 111.24(b) 6,141
95

US Code

Statutory 

Authority; Public 

Law

Year of 

Enactment/

Adjustment 

Other Than 

Pursuant to 

IAA

Name/Description 

of Penalty

Latest Annual Inflation of 

Adjustment

Section in 

Title 11 of 

CFR for 

Penalty 

Update Detail

Current Penalty or 

Penalty Formula

52 U.S.C. 

30109(a)(12) 94-283 sec. 109 1980

Knowingly and 

willfully making 

public an 

investigation 

without consent

Civil Monetary Penalties 

Annual Inflation 

Adjustments, 83 Fed. Reg. 

66593 (Dec. 27, 2018), 

https://sers.fec.gov/fosers/s

howpdf.htm?docid=401529. 111.24(b) 15,352

52 U.S.C. 

30109(a)(4)(C)

Treasury and 

General 

Government 

Appropriations 

Act, 2000, PL 106-

58 sec. 640 2003

Late and NonFiled Reports

Civil Monetary Penalties 

Annual Inflation 

Adjustments, 83 Fed. Reg. 

66593 (Dec. 27, 2018), 

https://sers.fec.gov/fosers/s

howpdf.htm?docid=401529. 111.43(a)

Penalty formula that 

accounts for (a) level 

of activity in late or 

non-filed report; and 

(b) if report was filed 

late, (i) the number of 

days late and (ii) the 

number of previous 

violations; or (c) if 

the report was not 

filed, the number of 

previous violations. 

52 U.S.C. 

30109(a)(4)(C)

Treasury and 

General 

Government 

Appropriations 

Act, 2000, PL 106-

58 sec. 640 2003

Election Sensitive 

Late and Non-Filed 

Reports

Civil Monetary Penalties 

Annual Inflation 

Adjustments, 83 Fed. Reg. 

66593 (Dec. 27, 2018), 

https://sers.fec.gov/fosers/s

howpdf.htm?docid=401529. 111.43(b)

Penalty formula that 

accounts for (a) level 

of activity in late or 

non-filed report; and 

(b) if report was filed 

late, (i) the number of 

days late and number 

of previous 

violations; or (c) if 

the report was not 

filed, the number of 

previous violations. 
96

US Code

Statutory 

Authority; Public 

Law

Year of 

Enactment/

Adjustment 

Other Than 

Pursuant to 

IAA

Name/Description 

of Penalty

Latest Annual Inflation of 

Adjustment

Section in 

Title 11 of 

CFR for 

Penalty 

Update Detail

Current Penalty or 

Penalty Formula

52 U.S.C. 

30109(a)(4)(C)

Treasury and 

General 

Government 

Appropriations 

Act, 2000, PL 106-

58 sec. 640 2000

Late or Non-Filed 

Reports where 

Commission 

cannot calculate 

amount of activity

Civil Monetary Penalties 

Annual Inflation 

Adjustments, 83 Fed. Reg. 

66593 (Dec. 27, 2018), 

https://sers.fec.gov/fosers/s

howpdf.htm?docid=401529. 111.43(c) 8,231

52 U.S.C. 

30109(a)(4)(C)

Treasury and 

General 

Government 

Appropriations 

Act, 2000, PL 106-

58 sec. 640 2000

Late or Non-Filed 

48-hour notices

Civil Monetary Penalties 

Annual Inflation 

Adjustments, 83 Fed. Reg. 

66593 (Dec. 27, 2018), 

https://sers.fec.gov/fosers/s

howpdf.htm?docid=401529. 111.44

Penalty formula is 

151+ (.10 x amount 

of contribution(s) not 

timely reported), 

subject to a 25% 

increase for each 

prior violation
97

APPENDIX 

List of Acronyms

AFR Agency Financial Report 

AO Advisory Opinion 

APR Annual Performance Report 

ASD Administrative Services Division 

CFR Code of Federal Regulations 

CSRS Civil Service Retirement System 

CY Calendar Year 

DCIA Debt Collection Improvement Act of 1996 

DOL Department of Labor 

EEO Equal Employment Opportunity 

ERM Enterprise Risk Management 

FAR Financial Audit Report 

FASAB Federal Accounting Standards Advisory Board 

FBWT Fund Balance with Treasury 

FEC Federal Election Commission 

FECA Federal Election Campaign Act 

FERS Federal Employees' Retirement System 

FMFIA Federal Managers' Financial Integrity Act 

FRAE Further Revised Annuity Employees 

FRDAA Fraud Reduction and Data Analytics Act 

FY Fiscal Year 

GAAP Generally Accepted Accounting Principles 

GSA General Services Administration 

IG Inspector General 

IPERA Improper Payments Elimination and Recovery Act 

IPERIA Improper Payments Elimination and Recovery Improvement Act 

IPIA Improper Payments Information Act 

MD&A Management's Discussion and Analysis 

NPRM Notices of Proposed Rulemaking 

NTEU National Treasury Employee Union 

OAR Office of Administrative Review 

OCFO Office of the Chief Financial Officer 

OCIO Office of the Chief Information Officer 

OGC Office of General Counsel 
98

OHR Office of Human Resources 

OMB Office of Management and Budget 

OPM Office of Personnel Management 

OSD Office of the Staff Director 

PIIA Payment Integrity Information Act 

P&E Property and Equipment 

PPA Prompt Payment Act 

RAD Reports Analysis Division 

RAE Revised Annuity Employees 

SBR Statement of Budgetary Resources 

SCA Statement of Custodial Activity 

SFFAS Statement of Federal Financial Accounting Standards 

SMC Senior Management Council 

SNC Statement of Net Cost 

SSAE Statements on Standards for Attestation Engagements 

TSP Thrift Savings Plan