Federal Election Commission 

Agency Financial Report 

Fiscal Year 2016 
 

Federal Election Commission 

Agency Financial Report 

Fiscal Year 2016 

Federal Election Commission 

999 E St. NW 

Washington, D.C. 20463 

(202) 694-1000 

1-(800) 424-9530 

www.fec.gov 

Released November 30, 2016 
Table	of	Contents

Message from the Chairman i 

How to Use This Report iii 

SECTION I – Management’s Discussion and Analysis 1 

Section I.A: Mission and Organizational Structure 1 

Mission Statement 2 

Organizational Structure 2 

Section I.B: Performance Goals, Objectives and Results 6 

Strategic Goal 6 

Strategic Objectives 6 

Section I.C: Analysis of FEC Financial Statements and Stewardship Information 14

Section I.D: Analysis of FEC’s Systems, Controls and Legal Compliance 17

Section I.E: Limitations of the Financial Statements 23

SECTION II – Auditor’s Report and Financial Statements 24

Message from the Chief Financial Officer 24

OIG Transmittal Letter 26 

Independent Auditor’s Report 29

Financial Statements 53 

Notes to the Financial Statements 58

SECTION III – Other Information 77

Inspector General’s Statement on FEC Management and Performance Challenges 78

Improper Payments Information Act Reporting Details 85

APPENDIX – List of Acronyms 86
 

 

 

 

 

 

 

 

Message from the Chairman 

FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

OFFICE OF THE CHAIRMAN 

November 15, 2016 

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

(AFR) for Fiscal Year (FY) 2016. 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 Act). 

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 Commission took a number of steps during FY 2016 to make campaign finance disclosure 

information more readily available. During FY 2016, the FEC received 76,539 documents filed 

disclosing more than 83.4 million transactions. In an effort to decrease data processing time, 

increase the accuracy of data and reduce the overall costs of capturing campaign finance data 

from paper forms, the FEC has fully implemented a data capture process to convert paper-filed 

reports into structured, machine-readable data. During FY 2016, the Commission also continued 

efforts on an extensive redesign of the FEC website in order to improve the delivery of campaign 

finance data and information. The Commission, in partnership with 18F, a digital services delivery 

team within the General Services Administration, has been taking steps towards creating a new 

website design that is user-driven and meets the needs of the FEC's diverse audience. 

With respect to the agency's FY 2016 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 

present fairly the agency's fiscal position. 

The performance data described in the FEC's FY 2016 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. 

i
 

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

Commission looks forward to building on its achievements in FY 2016 in order to fulfill the 

mission of the agency in the most efficient manner possible. 

On behalf of the Commission, 

ii
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 A-136, revised, Financial Reporting Requirements, and covers activities from October 

1, 2015 through September 30, 2016. 

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 at 

http://www.fec.gov. To access this report, click on “About the FEC” and then “Plans, 

Performance and Budget.” 

The FY 2016 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 

forward-looking 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. 

iii
                                                            

   

 

 

 

 

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 Congress’s efforts to ensure that 

voters are fully informed of the sources of financial support for Federal candidates, political 

party committees, other political committees and other political actors. Public confidence in 

the political process depends not only on laws and regulations to ensure transparency, but also 

on the knowledge that those who disregard campaign finance law will face consequences. 

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 an Annual 

Performance Report (APR) pursuant to the Government Performance and Results Act of 

1993, as amended. The FEC will include its FY 2016 Annual Performance Report with its 

Congressional Budget Justification and will post it on the FEC website at 

http://www.fec.gov/pages/budget/budget.shtml in 2017. 

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). 

1

1
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 sixyear term, and two seats are subject to appointment every two years. The Chairmanship of the 

Commission rotates among the members, with no member serving as Chair more than once 

during his or her 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. 

Figure 1: FEC Organizational Chart 

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 

2
 

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. 

・ 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 review of campaign finance reports, 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). 

・ 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 Division; (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 supervises 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 

3
 

matter is transferred to the Litigation Division. The Litigation Division represents the 

Commission before the Federal district courts and courts of appeals 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 is responsible for complying with all financial 

management laws and standards, and all aspects of budget formulation, budget execution and 

procurement. 

Sources of Funds 

The FEC usually receives a single, one-year appropriation for Salaries and Operating 

Expenses each year. However, because the FEC’s lease expires September 30, 2017, the 

Agency received $5 million in two-year lease expiration funds in FY 2016. These funds are 

in addition to the $71.1 million in one-year funds for Salaries and Operating Expenses, which 

brings the total FY 2016 appropriation to $76.1 million. 

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

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

conferences. In an effort to keep the fees as low as possible, the agency has not fully exercised 

that authority. Rather, the Commission sets its registration fees at a level that covers only the 

costs incurred by the agency’s conference-management contractor, including 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 2016 

were $123,255. 

4
Figure 2 shows the Agency’s appropriations and obligations from FY 2012 to FY 2016. 

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

Personnel vs. Non-Personnel Costs 

Figure 3 represents the Commission’s FY 2016 obligations by personnel and non-personnel 

costs. Personnel costs, which are primarily composed of salaries and employee benefits, 

accounted for 66 percent of the FEC’s costs. The remaining 34 percent of the Commission’s 

costs was spent on non-personnel items, such as infrastructure and support, software and 

hardware, office rent, building security and other related costs. 

   

   

66.2% SALARIES

and BENEFITS

FACILITIES 8.6%

OCIO

INITIATIVES

18.8%

OTHER 6.4%

Figure 3: Fiscal Year 2016 by Major Category 

5
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 2016 APR. This report will be part of 

the FEC’s FY 2018 Congressional Budget Justification, which will be available at 

http://www.fec.gov/pages/budget/budget.shtml in 2017. 

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. 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 provides the public with campaign finance disclosure information necessary to make 

educated, informed decisions in the political process based on data concerning the sources and 

amounts of funds used to finance Federal elections. In order to ensure that this data is quickly 

available and fully accessible to the public, the Agency is committed to ensuring that 

information is easy to view, sort and download from the FEC website and that FEC staff have 

the tools and knowledge to help the public find and understand the campaign finance 

information relevant to their questions and needs. 

6
                                                            

 

The FEC’s e-filing system acts as the point of entry for submission of electronically filed 

campaign finance reports, providing faster access to reports and streamlining operations. 

Specifically, the 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 FEC’s offices in Washington, 

D.C.2

 The eFiling platform is a crucial component of the Commission’s campaign finance 

disclosure system. During the 2013-2014 election cycle, over 8,000 committees and other 

filers used the eFiling platform to file campaign finance disclosure reports. 

The Commission is currently redesigning its website, in part, to increase the public’s access to 

and understanding of the Agency’s extensive data offerings. In partnership with 18F, a data 

services delivery team within the General Services Administration (GSA), the FEC is 

developing a user-centered online platform to deliver campaign finance information to its 

diverse base of users. Once complete, the redesigned FEC website will better meet the needs 

of a wide audience, including individual citizens seeking information about the candidates, 

journalists and researchers who specialize in campaign finance issues and filers and other 

political participants seeking legal guidance and compliance information. The FEC provides 

the public with a wealth of complex information, including current and historical campaign 

finance data, detailed information regarding the requirements of campaign finance law and 

legal resources, such as advisory opinions issued by the Commission and information on 

closed enforcement matters. This multiyear 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. 

One of the FEC’s new disclosure offerings is a redesigned Campaign Finance Data site where 

users can easily search and view transaction-level campaign finance data dating back to the 

1970s and download customized search results. The FEC additionally provides campaign 

finance data though an application programming interface (API) to allow direct access to 

campaign finance information. The Commission continues to provide detailed and 

comprehensive campaign finance data through the Candidate and Committee Viewer and the 

Data Catalog. During Presidential election years, users can access through the Presidential 

Map the amount of funds raised on a state-by-state basis, contributions, cash-on-hand and the 

distribution of contributions by amount with a simple click at www.fec.gov. Users can also 

access lists of contributors by name, city and amounts of contributions within the first three 

digits of any zip code. Contribution and disbursement data are updated within one day of the 

FEC’s receipt of electronically filed disclosure reports. The Candidate and Committee 

2 The Commission’s mandatory electronic filing (“e-filing”) rules require any committee that receives contributions 

or makes expenditures in excess of $50,000 in a calendar year, or that has reason to expect to do so, to submit its 

reports electronically. Under the Act, these mandatory e-filing provisions apply to any political committee or other 

person required to file reports, statements or designations with the FEC, except for Senate candidate committees 

(and certain other persons who support Senate candidates only). 

7
Viewer, the House and Senate Map and the Data Catalog are updated nightly with all data that 

have been entered into the Commission's database. The agency also provides a Compliance 

Map to assist members of the public in their efforts to comply with campaign finance law. 

The Compliance Map lists all reporting dates and other significant information tied to each 

state’s election calendar, such as the time periods when special requirements for 

electioneering communications and Federal election activity apply. Like the interactive 

Disclosure Map of contribution information, the Compliance Map provides quick access to 

information on a state-by-state basis in an easy-to-use format. 

The level of availability and accessibility of campaign finance data serves as a measurement 

of success in improving the public’s access to information about how campaign funds are 

raised and spent. 

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

funds are raised and spent. 

Key Indicator: Enhanced availability of campaign finance data as measured by 

increased capabilities to retrieve and analyze data. 

FY 2011 

Actual 

FY 2012 

Actual 

FY 2013 

Actual 

FY 2014 

Actual 

FY 2015 

Actual 

FY 2016 

Target 

FY 2016 

Actual 

FY 2017 

Target 

FY 2018 

Target 

N/A N/A N/A 75% 86% 75% 81% 75% 75% 

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 

8
 

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. The FEC also 

operates Press and Congressional Affairs offices. 

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. 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 upto-date educational materials through the website. While the Commission continues to make 

available printed copies of its educational brochures and 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 an E-Learning section on its 

Educational Outreach web page and its own YouTube channel, which can be found at 

http://www.youtube .com/FECTube. The E-Learning page offers instructional videos and 

tutorials, as well as interactive presentations that enable users to obtain guidance tailored to 

their specific activities. The curriculum currently includes a variety of presentations about the 

Commission and campaign finance law. 

The Agency’s educational outreach program has been significantly enhanced with the 

addition of an online training service that enables political committees 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. 

9
 

Key Indicator: Percent of educational outreach programs (webinars, seminars, 

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2016 FY 2017 FY 2018 

N/A N/A N/A Develop

methods for 

surveying user 

satisfaction 

with webinars, 

publications 

and ELearning 

presentations. 

4.34 4.0 or 

higher on 

a 5.0 

scale 

4.53 4.0 or 

higher on 

a 5.0 

scale 

4.0 or 

higher 

on a 5.0 

scale 

Actual Actual Actual Actual Target Target Target 

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

educational outreach and information. 

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 law. 

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 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 

Act. 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 online through the Commission’s Enforcement Query System at 

http://eqs.sdrdc.com/eqs/searcheqs. 

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 

10

publications and E-Learning presentations) and events that achieve targeted 

satisfaction rating on user surveys. 

Actual Actual 
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 

administered by 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 Act 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 

FY 2011 

Actual 

FY 2012 

Actual 

FY 2013 

Actual 

FY 2014 

Actual 

FY 2015 

Actual 

FY 2016 

Target 

FY 2016 

Actual 

FY 2017 

Target 

FY 2018 

89% 70% 72% 28% 49% 75% 38% 75% 75%

Target 

Objective 3: Interpret the FECA and Related Statutes 

The Commission responds to questions from the public about how the Act applies to specific 

situations by issuing advisory opinions (AOs). In addition, 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 FEC has set as a performance goal to provide timely legal 

guidance to the public. 

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. 

11

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

 

 

     

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 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, the Act requires the Commission to respond 

within 20 days. On its own initiative, the Commission also makes available 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 courts 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 FECA authorizes the 

Commission to institute civil actions to enforce the FECA. 

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

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

FY 2011 

Actual 

FY 2012 

Actual 

FY 2013 

Actual 

FY 2014 

Actual 

FY 2015 

Actual 

FY 2016 

Target 

FY 2016 

Actual 

FY 2017 

Target 

FY 2018 

Target 

N/A N/A N/A 100%3 100%4 100% 100%5 100% 100% 

Objective 4: Foster a Culture of High Performance 

One of the management objectives from the FEC’s Strategic Plan, FY 2014-2019, Foster a 

Culture of High Performance, cuts across the organization and reflects the Agency’s strategic 

priorities for improving the efficiency and effectiveness of its workforce and management 

processes. The Commission understands that the success of its programs depends upon the 

skills and commitment of its staff. A focus for the Commission is to ensure 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 also participating in and contributing to the government-wide Records 

3 The Commission obtained extensions to consider ten advisory opinion requests in FY 2014; four of those 

extensions were attributable to the Federal government shutdown during October 2013. The Commission did not 

have any rulemakings during FY 2014 with statutory or court-ordered deadlines. 4 The Commission obtained extensions to consider two advisory opinion requests in FY 2015. The Commission did 

not have any rulemakings during FY 2015 with statutory or court-ordered deadlines. 5 The Commission obtained extensions to consider five advisory opinion requests in FY 2016. 

12
Management initiative. In compliance with the Federal Records Act, the FEC is updating its 

records management program. The updated program will increase efficiency and improve 

performance by eliminating paper and using electronic recordkeeping to the fullest extent 

possible. 

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

Key Indicator: Commission-required quarterly updates meet targeted performance 

goals. 

FY 2011 

Actual 

FY 2012 

Actual 

FY 2013 

Actual 

FY 2014 

Actual 

FY 2015 

Actual 

FY 2016 

Target 

FY 2016 

Actual 

FY 2017 

Target 

FY 2018 

Target 

N/A N/A N/A 73% 80% 65% 76% 65% 65% 

13
 

 

 

 

 

 

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

Information 

The FEC’s FY 2016 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 2016: 

Net Financial 

Condition FY 2016 FY 2015 Increase (Decrease) 

% 

Change 

Assets $23,755,737 $17,056,462 $ 6,699,276 39% 

Liabilities $ 7,104,541 $ 5,924,714 $ 1,179,826 20% 

Net Position $16,651,197 $11,131,748 $ 5,519,449 50% 

Net Cost $70,529,282 $68,213,709 $ 2,315,573 3% 

Budgetary Resources $77,650,460 $71,084,848 $ 6,565,612 9% 

Custodial Revenue $ 879,853 $ 778,019 $ 101,835 13% 

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 (e.g., 

cash) is available through the Department of Treasury accounts, from which the FEC is 

authorized to make expenditures (i.e., obligations) and payments. FBWT increased by 

approximately $4.7 million, or 37 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 decreased by approximately $50 thousand from FY 2015. 

Property and equipment consists of software, general-purpose equipment used by the agency 

and software development. In FY 2016, the FEC continued a series of upgrades to existing 

14
systems to support regulated reporting requirements. Net property and equipment increased by 

$2 million from FY 2015 to $6 million. Total liabilities increased by approximately 20 

percent, coinciding with the 37 percent increase in FBWT. 

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 did not experience significant fluctuation from FY 2015, as there was 

a three percent change from FY 2015 to FY 2016. 

Statement of Changes in Net Position 

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

the 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 increased by 50 percent, or approximately $5.5 

million. 

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 

increased by approximately $6.6 million, or nine percent, from FY 2015. This included a 

seven percent increase in obligations incurred. 

Statement of Custodial Activity 

The Statement of Custodial Activity (SCA) 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 SCA consist of collections on new assessments, prior year(s) receivables and 

Miscellaneous Receipts. In FY 2016, the total custodial revenue and collections increased by 

approximately $102 thousand, or 13 percent, from FY 2015. 

15
                                                            

           

     

The chart below displays the assessment history for the past 20 years6 . 

$0.65

$6.71

$0.74

FY 1996 FY 2016

FIGURE 4 ‐ FINES ASSESSED, BY FISCAL YEAR

(in Millions of Dollars)

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

16

6 

   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. 
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; 

Inspector General Act of 1978, as amended; 

Federal Managers’ Financial Integrity Act of 1982; 

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 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, on the basis of annual 

assessments, any material weaknesses that have been identified in connection with their 

internal and administrative controls. The reviews that took place during FY 2016 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 

17
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 Engagements, Reporting on Controls at a Service Organization (SSAE 16) 

reports received from its shared service providers. The results of management reviews 

provided an unmodified opinion that the FEC’s financial systems controls generally conform 

to the required principles and standards as per Section 4 of the FMFIA. 

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 

2016 was nearly 100 percent, with less than .02 percent of all invoices paid after the date 

required by the PPA. 

Improper Payments 

The Improper Payments Information Act of 2002 (IPIA), the Improper Payments Elimination 

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

Improvement Act of 2012 (IPERIA) and OMB guidance require agencies to identify those 

programs that are susceptible to significant erroneous payments, and determine an annual 

estimated amount of erroneous payments made in their operations. The FEC reviewed all of 

its programs and activities to identify those susceptible to significant erroneous payments. 

Approximately 66 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 2016 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. 

18
 

 

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 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 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 2016 

internal control review, the FEC reports no material weakness 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 FMFIA. 

Ch 

air 

19
                                                            

I.D.iii – Response to the Inspector General’s Statement on the Federal Election 

Commission’s Management and Performance Challenge7 

November 30, 2016 

The Federal Election Commission’s (“FEC”) Inspector General (“IG”) reports as a 

“noteworthy accomplishments for the agency” that the Human Capital Management is no 

longer a major management challenge. Management is pleased to note that the IG reports that 

“the agency has stabilized the leadership structure in the Office of Human Resources (OHR) 

by hiring a full-time Director who has been successful in increasing the staffing in the OHR to 

address the need for improved customer service.” 

In its Statement on the FEC’s Management and Performance Challenges (“Statement”), the 

Office of the Inspector General (“OIG”) identified three management and performance 

challenges for inclusion in the FEC’s Agency Financial Report for Fiscal Year 2016. 

Management’s response to each identified challenge appears below. 

I. Low Employee Morale 

The OIG engaged a consultant to report on the root causes of low employee morale at the 

FEC, and the consultant released its report on July 25, 2016. Management notes that neither 

the consultant nor the OIG sought a response to the consultant’s report from Management. In 

the three months since receiving the report, Management has begun the work necessary to 

find collaborative solutions to improve morale at the FEC and to identify concrete steps we 

can take to better the work environment. In light of the actions specifically described below, 

Management strenuously disagrees with the Statement’s characterization of communication 

from Management on this topic as “near silence” and its claim that Management has “yet to 

discuss a potential action plan or even a basic framework with the agency.” 

The Staff Director communicated Management’s intention to find collaborative solutions to 

improve morale at the FEC and to identify concrete steps that can be taken to better the work 

environment at the FEC to every FEC employee (which includes all OIG employees) by 

email. Moreover, action has begun on these efforts. Specifically, as a first step, Management 

has prioritized the establishment of a new communication portal to improve communication at 

the FEC, which was identified as one of the five major root causes of low morale. To best 

design that portal, the Information Division conducted an on-line survey of FEC employees to 

learn how they currently receive information and the types of information that are most valued 

by employees. The results of that survey became available in early November and are 

currently under review. Additionally, Office of Staff Director Management has begun a 

conversation with senior leaders and direct reports to the Staff Director about efforts to build 

20

7 

   Management consists of the agency’s senior managers, including the Staff Director, General Counsel and Chief 

Financial Officer. The Commissioners, who often hold diverse views, are aware of these findings and are 

monitoring management’s responses and working to ameliorate the concerns identified in this section. 
 

trust. Management and staff from several Offices and Divisions, including some of the largest 

organizational components, have also met to discuss the morale report. Management has also 

taken steps to consider morale issues in the Labor Management Forum with representatives of 

the National Treasury Employee Union. Management notes that it shares Chairman 

Petersen’s view reflected in recent public statements that employee morale is essential to 

fulfilling our mission responsibilities to the greatest extent of our ability. Management looks 

forward to continued support from the Commissioners as we work to find steps that can be 

taken to better the work environment. Management would welcome the constructive 

collaboration of the OIG in addressing the employee morale issues identified in the 

consultant’s report. 

II. Governance Framework 

Management agrees with the Statement that key leadership vacancies need to be filled. 

Unfortunately, the agency continues to experience a challenge in permanently filling these 

positions. Management remains committed to assisting the Commission in recruiting, 

screening and selecting applicants for these positions. During the past year, two key, 

longstanding leadership vacancies were permanently filled when the positions of Associate 

General Counsel for Policy and Associate General Counsel for Litigation were filled on a 

permanent basis. As the Statement notes elsewhere, another key position, the Director of 

Human Resources, has been successfully filled recently as well. While the hiring process is 

underway for other positions, it is important to note that nearly all of the vacant positions are 

filled on an acting basis by qualified, capable, and hardworking individuals. In fact, both 

recently hired Associate General Counsels were serving in those position on an acting basis 

previously. 

The Statement discusses one vacancy in particular, the Chief Information Security Officer. 

Rather than publicly discuss the status of a hiring process in which many applicants are 

participating, Management will note its agreement with the Statement that filling this position 

as expeditiously as prudently possible is important, and Management appreciates the 

Statement’s observation that Management is making progress on filling this position. Once 

the hiring process is successfully concluded, Management will announce that this position has 

been filled. 

The Statement also notes that one person is filling two major senior leadership positions, Staff 

Director and Chief Information Officer. Confronted with a vacancy in the Staff Director 

position, which had been held by several individuals over a relatively short period of time, 

and facing similar challenges to filling this position on a permanent basis, the Commission 

sought and received the approval of the U.S. Government Accountability Office an 

arrangement it desired of having the Chief Information Officer also serve as Staff Director. 

This arrangement has achieved stability in the highest ranking staff position at the agency 

since 2011, and stability in this most senior staff position had previously eluded the agency. 

Stability in the Staff Director position has been particularly valuable given the changes 

21
experienced in other senior management positions. As noted in the Management Response to 

the Fiscal Year 2015 in response to similar challenges, the Statement once again does not 

identify any specific projects or activities that have been negatively affected by one individual 

serving as Staff Director and Chief Information Officer. 

III. Information Technology Project Planning and Management 

Management's response to the Statements concerns in this regard are discussed in connection 

with the Independent Auditor's Report Finding and Recommendations on "Planning and 

Oversight of IT Projects," and are not repeated here. 

22
 

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. 

23
SECTION II – Auditor’s Report and Financial Statements 

Message from the Chief Financial Officer 

November 14, 2016 

I am pleased to present the Commission’s financial statements for Fiscal Year (FY) 2016. The 

financial statements are an integral part of the Agency Financial Report. The Commission 

received an unmodified (clean) opinion on its financial statements from the independent 

auditors. This marks the eighth consecutive year with no material weaknesses identified. This 

is the fifth consecutive year with no significant deficiencies reported for the Office of the 

Chief Financial Officer (OCFO). I appreciate and applaud the good work of OCFO staff who 

strived diligently throughout the fiscal year to achieve these results, maintaining a 

commitment to excellence. 

The agency continues to improve its information technology (IT) security controls. Although 

the auditors identified IT security controls as a significant deficiency for FY 2016, the agency 

is making progress in this area. The agency understands the importance of IT security and is 

committed to the timely implementation of the FY 2016 Financial Statement Audit Corrective 

Action Plan (CAP). Over the past year, the FEC has taken significant actions to improve the 

agency’s IT infrastructure generally and our IT security posture specifically. The agency has 

a robust plan and leadership support to continue IT enhancements in future years. The Agency 

has approved implementation of NIST standards based on the study completed last fiscal year 

and implemented a trusted internet connection during the last calendar year. 

During FY 2016, General Service Administration’s (GSA) 18F and the FEC have worked to 

develop the IT infrastructure necessary to support a 21st century digital services model. The 

agency holds 40 years’ worth of campaign finance data collected via an array of media, 

including letters, paper forms and electronically filed documents. We are working to make 

this data and our legal and compliance information more accessible to the public by 

developing application programming interfaces (API) and designing more user-friendly ways 

for the public to access complex information from the FEC website. Our campaign finance 

API, for example, has received 7.8 million user hits since it was released in July 2015. We are 

also completing work to move our campaign finance data and the systems that support it into 

a secure, scalable cloud environment. With a cloud-hosted system, we enjoy effectively 

limitless capacity but only pay for the capacity we use. Transitioning to a cloud environment 

allows us to continue to grow our database in the future, providing an agile, searchable system 

able to meet the public’s peak demand for services. 

24
   

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

improve operational 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, 

Gilbert Ford 

Acting Chief Financial Officer 

25
 

OIG Transmittal Letter 

FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

Office of Inspector General 

MEMORANDUM 

TO: The Commission 

FROM: Inspector General 

SUBJECT: Audit of the Federal Election Commission’s Fiscal Year 2016 Financial 

Statements 

DATE: November 15, 2016 

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

Independent Auditor’s Report issued by Leon Snead & Company (LSC), P.C. for the 

fiscal year ending September 30, 2016. The audit was performed under a contract with, 

and monitored by, the Office of Inspector General (OIG), in accordance with auditing 

standards generally accepted in the United States of America; the standards applicable to 

financial audits contained in Government Auditing Standards, issued by the Comptroller 

General of the United States; and applicable provisions of Office of Management and 

Budget (OMB) Bulletin No. 15-02, Audit Requirements for Federal Financial 

Statements. 

Opinion on the Financial Statements 

LSC audited the balance sheet of the Federal Election Commission (FEC) as of 

September 30, 2016, and the related statements of net cost, changes in net position, 

budgetary resources, and custodial activity (the financial statements) for the year then 

ended. The objective of the audit was to express an opinion on the fair presentation of 

those financial statements. In connection with the audit, LSC also considered the FEC’s 

internal control over financial reporting and tested the FEC’s compliance with certain 

provisions of applicable laws and regulations that could have a direct and material effect 

on its financial statements. The financial statements of the FEC as of September 30, 

2015, were also audited by LSC whose report dated November 16, 2015, expressed an 

unmodified opinion on those statements. 

In LSC’s opinion, the 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, 2016, in conformity with 

accounting principles generally accepted in the United States of America. 

26
 

Report on Internal Control 

In planning and performing the audit of the financial statements of the FEC, LSC considered 

the FEC’s internal control over financial reporting (internal control) as a basis for designing 

auditing procedures for the purpose of expressing their opinion on the financial statements, but 

not for the purpose of expressing an opinion on the effectiveness of the FEC’s internal control. 

Accordingly, LSC did not express an opinion on the effectiveness of the FEC’s internal control. 

Because of inherent limitations in internal controls, including the possibility of management 

override of controls, misstatements, losses, or noncompliance may nevertheless occur and not 

be detected. According to the American Institute of Certified Public Accountants: 

 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 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. 

 A material weakness is a deficiency, or a 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. 

LSC’s consideration of internal control was for the limited purpose described in the first 

paragraph in this section and would not necessarily identify all deficiencies in internal control 

that might be significant deficiencies or material weaknesses. LSC did not identify any 

deficiencies in internal control that LSC would consider to be material weaknesses, as defined 

above. However, LSC did identify a significant deficiency in internal controls related to 

Information Technology security. 

Report on Compliance with Laws and Regulations 

FEC management is responsible for complying with laws and regulations applicable to the 

agency. To obtain reasonable assurance about whether FEC’s financial statements are free 

of material misstatements, LSC performed tests of compliance with certain provisions of 

laws and regulations, noncompliance which could have a direct and material effect on the 

determination of financial statement amounts, and certain other laws and regulations 

specified in OMB Bulletin No. 15-02, Audit Requirements for Federal Financial Statements. 

LSC did not test compliance with all laws and regulations applicable to FEC. 

The results of LSC’s tests of compliance with laws and regulations described in the audit report 

disclosed no instance of noncompliance with laws and regulations that are required to be 

reported under U.S. generally accepted government auditing standards or OMB guidance. 

27
 

   

Audit Follow-up 

The independent auditor’s report contains recommendations to address deficiencies found by the 

auditors. Management was provided a draft copy of the audit report for comment and generally 

concurred with some of the findings and recommendations. In accordance with OMB Circular 

No. A-50, Audit Follow-up, revised, the FEC is to prepare a corrective action plan that will set 

forth the specific action planned to implement the agreed upon recommendations and the 

schedule for implementation. The Commission has designated the Chief Financial Officer to be 

the audit follow-up official for the financial statement audit. 

OIG Evaluation of Leon Snead & Company’s Audit Performance 

We reviewed LSC’s report and related documentation and made necessary inquiries of its 

representatives. Our review was not intended to enable the OIG to express, and we do 

not express an opinion on the FEC’s financial statements; nor do we provide conclusions about 

the effectiveness of internal control or conclusions on FEC’s compliance with laws and 

regulations. However, the OIG review disclosed no instances where LSC did not comply, in all 

material respects, with Government Auditing Standards. 

We appreciate the courtesies and cooperation extended to LSC and the OIG staff during the audit. 

If you should have any questions concerning this report, please contact my office at (202) 694-

1015. 

Lynne A. McFarland 

Inspector General 

Attachment 

cc: Alec Palmer, Staff Director/Chief Information Officer 

Lisa Stevenson, Acting General Counsel 

Gilbert A. Ford, Acting Chief Financial Officer 

28
 

Independent Auditor’s Report 

The following pages are intended to show the Independent Auditor’s Report 

29
Federal Election Commission 

Audit of Financial Statements 

As of and for the Years Ended 

September 30, 2016 and 2015 

Submitted By 

Leon Snead & Company, P.C. 

Certified Public Accountants & Management Consultants 
TABLE OF CONTENTS 

Page 

Independent Auditor’s Report..............................................................................................1 

Report on Internal Control...................................................................................................3 

Report on Compliance .......................................................................................................13 

Attachment 1, Status of Prior Year Recommendations .....................................................15 

Attachment 2, Agency’s Response to Report 

i 
 

 

 

 

 

 

 

LEON SNEAD Certified Public Accountants 

& COMPANY, P.C. & Management Consultants 

416 Hungerford Drive, Suite 400 

Rockville, Maryland 20850 

301-738-8190 

Fax: 301-738-8210 

leonsnead.companypc@erols.com 

Independent Auditor’s Report 

THE COMMISSION, FEDERAL ELECTION COMMISSION 

INSPECTOR GENERAL, FEDERAL ELECTION COMMISSION 

We have audited the accompanying financial statements of Federal Election Commission 

(FEC), which comprise the balance sheet as of September 30, 2016 and 2015, and the related 

statements of net cost, changes in net position, budgetary resources, and custodial activity for 

the years then ended. The objective of our audit was to express an opinion on the fair 

presentation of those financial statements. In connection with our audit, we also considered the 

FEC’s internal control over financial reporting, and tested the FEC’s compliance with certain 

provisions of applicable laws, regulations, and certain provisions of contracts. 

SUMMARY 

As stated in our opinion on the financial statements, we found that the FEC’s financial 

statements as of and for the years ended September 30, 2016 and 2015, are presented fairly, in 

all material respects, in conformity with accounting principles generally accepted in the United 

States of America. 

Our consideration of internal control would not necessarily disclose all deficiencies in internal 

control over financial reporting that might be material weaknesses under standards issued by 

the American Institute of Certified Public Accountants. Our testing of internal control 

identified no material weakness in internal controls over financial reporting. We continue to 

report a significant deficiency related to FEC’s Information Technology (IT) security program. 

However, FEC has made improvements to the program, and has corrective actions underway to 

address open audit recommendations. 

Our tests of compliance with certain provisions of laws, regulations, and significant provisions 

of contracts, disclosed no instance of noncompliance that is required to be reported under 

Government Auditing Standards and the Office of Management and Budget (OMB) audit 

bulletin. 

FEC officials provided their response to the draft report and noted concurrence with all 14 

report recommendations. FEC’s detailed responses can be found in Attachment 2 of this 

report. 

The following sections discuss in more detail our opinion on the FEC’s financial statements, 

our consideration of the FEC’s internal control over financial reporting, our tests of the FEC’s 
 

 

 

 

 

 

 

 

compliance with certain provisions of applicable laws and regulations, and management’s and 

our responsibilities. 

REPORT ON THE FINANCIAL STATEMENTS 

We have audited the accompanying financial statements of FEC, which comprise the balance 

sheets as of September 30, 2016 and 2015, and the related statements of net cost, statements of 

changes in net position, statements of budgetary resources, and custodial activity for the years 

then ended, and the related notes to the financial statements. 

Management’s Responsibility for the Financial Statements 

Management is responsible for the preparation and fair presentation of these financial 

statements in accordance with accounting principles generally accepted in the United States of 

America. Such responsibility includes 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 error or fraud. 

Auditor’s Responsibility 

Our responsibility is to express an opinion on the financial statements based on our audit. We 

conducted our audit in accordance with auditing standards generally accepted in the United 

States of America; standards applicable to financial statement audits contained in Government 

Auditing Standards (GAS), issued by the Comptroller General of the United States; and OMB 

Bulletin 15-02, Audit Requirements for Federal Financial Statements (the OMB audit bulletin). 

Those standards and the OMB audit bulletin require that we plan and perform the audit to 

obtain reasonable assurance about whether the financial statements are free from material 

misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and 

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

professional judgment, including the assessment of the risks of material misstatement of the 

financial statements, whether due to fraud or error. In making those risk assessments in a 

Federal agency, 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 opinions on the 

effectiveness of the FEC’s internal control or its compliance with laws, regulations, and 

significant provisions of contracts. An audit also includes evaluating the appropriateness of 

accounting policies used, and the reasonableness of significant accounting estimates made by 

management, as well as evaluating the overall presentation of the financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a 

basis for our audit opinion. 

Leon Snead & Company, P.C. 2 
 

 

 

 

 

 

 

 

Opinion on Financial Statements 

In our opinion, the financial statements referred to above present fairly, in all material respects, 

the financial position of FEC as of September 30, 2016 and 2015, and the related net cost, 

changes in net position, budgetary resources, and custodial activity for the years then ended in 

accordance with accounting principles generally accepted in the United States of America. 

OTHER MATTERS 

Required Supplementary Information 

Accounting principles generally accepted in the United States require that Management’s 

Discussion and Analysis (MDA) be presented to supplement the basic financial statements. 

Such information, although not a part of the basic financial statements, is required by the 

Federal Accounting Standards Advisory Board (FASAB) who considers it to be an essential 

part of financial reporting for placing the basic financial statements in an appropriate 

operational, economic, or historical context. We have applied certain limited procedures to the 

required supplementary information in accordance with auditing standards generally accepted 

in the United States of America, which consisted of inquiries of management about the 

methods of preparing the information and comparing the information for consistency with 

management’s responses to our inquiries, the basic financial statements, and other knowledge 

we obtained during our audit of the basic financial statements. We do not express an opinion 

or provide any assurance on the information because the limited procedures do not provide us 

with sufficient evidence to express an opinion or provide any assurance. 

Other Information 

Our audit was conducted for the purpose of forming an opinion on the basic financial 

statements taken as a whole. The performance measures and other accompanying information 

are presented for the purposes of additional analysis and are not required parts of the basic 

financial statements. Such information has not been subjected to the auditing procedures 

applied in the audit of the basic financial statements, and accordingly, we do not express an 

opinion or provide any assurance on it. 

OTHER AUDITOR REPORTING REQUIREMENTS 

Report on Internal Control 

In planning and performing our audit of the financial statements of FEC, as of and for the years 

ended, September 30, 2016 and 2015, in accordance with auditing standards generally accepted 

in the United States of America, we considered the FEC’s internal control over financial 

reporting (internal control) as a basis for 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. 

Accordingly, we do not express an opinion on the effectiveness of the FEC’s internal control. 

Leon Snead & Company, P.C. 3 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our consideration of internal control was for the limited purpose described in the preceding 

paragraph and was not designed to identify all deficiencies in internal control that might be 

material weaknesses or significant deficiencies. Therefore, material weaknesses or significant 

deficiencies may exist that were not identified. However, given these limitations, during our 

audit, we did not identify any deficiencies in internal control that we consider to be a material 

weakness. As discussed below, we identified a deficiency in internal control that we consider 

to be a significant deficiency. 

Because of inherent limitations in internal controls, including the possibility of management 

override of controls, misstatements, losses, or noncompliance may nevertheless occur and not 

be detected. 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 a 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. 

Findings and Recommendations 

1. FEC’s IT Security Program 

The FEC continues to make progress in addressing the vulnerabilities facing their IT 

security program. We reported in our FY 2015 audit report, the Commission voted during 

July 2015 to adopt the National Institute of Standards and Technology’s (NIST) Risk 

Management Framework (RMF) (best practices) IT security controls, and to provide 

funding to implement these critical control processes. As we stated in our prior audit 

report, these actions represent a significant step in eliminating the vulnerabilities identified 

in our, and the Office of the Inspector General (OIG) audit reports issued since 2009. FEC 

has contracted with a firm to assist the agency in implementing this project, as well as 

taking other actions during FY 2016. FEC’s current estimate for fully implementing NIST 

best practices is the end of FY 2017. 

As required by GAS, we conducted follow-up testing to determine whether FEC had 

implemented corrective actions to address the recommendations in prior financial statement 

audit reports. We found that FEC has made progress in addressing problems reported in 

prior years’ audits. Of the 11 open recommendations from FY 2015, one recommendation 

has been closed this FY, and FEC has corrective actions planned or ongoing for the 

remaining open recommendations. The following information discusses the open audit 

recommendations. 

a. Planning, and Oversight of IT Projects 

During our FY 2016 audit, we followed up to determine the actions taken by FEC 

officials to address the need for improved project planning and management. We 

Leon Snead & Company, P.C. 4 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

reviewed the FY 2016 Financial Statement Audit Corrective Action Plan (CAP) for 

this recommendation, and found that the plan showed the estimated completion date 

as “to be determined (TBD)”. 

We discussed this matter with the Office of the Chief Information Officer (OCIO) 

officials who provided us with a draft project planning policy document. From our 

review of this document, it appears that the policy has the potential to address the 

audit recommendation. However, in order to verify the sufficiency of the policy, the 

document must be finalized and project plans must be developed. 

Recommendations: 

1. Develop an Office of Chief Information Officer (OCIO) policy that requires all 

project managers to develop a detailed project plan for all OCIO projects that 

require multiple resources and/or has a timeframe of completion beyond 60 days. 

If OCIO determines a particular project meeting these stated requirements would 

not require a project plan, OCIO officials should document this decision and 

reasoning as part of their project planning documentation. (Revised) 

2. Develop an OCIO policy that details the necessary information required for the 

development of a project plan such as: 

a. identification of key tasks and/or steps; 

b. personnel responsible for completing the task and/or step; 

c. the timeframe for beginning and completing the task and/or step; 

d. any associated cost; 

e. resources required; and 

f. maintain documentation, as part of the project plan, to support the 

accomplishment of key plan tasks, issues that impacted the project, and the 

completion of the overall project. 

Agency’s Response: OCIO concurs that project planning is an important element 

in successful technological implementations. Project planning has evolved 

significantly over the past 5 years and as a result OCIO will support the new 

Agile development methodology that is consistent with GSA’s new technology 

engagement model as dictated by the President’s technology innovation agenda. 

The FEC is proactively leveraging the DHS Federal Network Resilience teams to 

augment the resources required to improve the IT Security Program management. 

Several of the recommendations require dedicated resources to consistently 

managing operations on an ongoing basis. 

Auditor’s Comments: While the OCIO concurred with recommendations 1 and 

2, no information was provided on how the agency planned to implement the 

recommendations. As a result the recommendations remain open. 

Leon Snead & Company, P.C. 5 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

b. Assessments and System Authorizations 

After completion of the NIST RMF project, FEC needs to ensure its general support 

system, and other major systems security controls are evaluated to determine the 

extent to which the controls were implemented correctly; operating as intended; and 

producing the desired outcome with respect to meeting security requirements detailed 

in each systems security plan. 

As we noted in prior audit reports, FEC has not followed FEC policy 58-2.4, 

Certification and Accreditation Policy, which establishes controls over the process of 

obtaining assurance that FEC’s major applications and general support system are 

capable of enforcing the security policies that govern their operations. 

FEC governance adopted NIST best practices, and obtained a contractor to assist the 

agency in developing and implementing a risk-based IT security program. The FEC 

currently estimates the project will be fully implemented in late FY 2017. OCIO 

officials advised us that after this project is fully implemented, the agency will 

authorize its updated systems. Assessments would be accomplished, as discussed in 

OMB policies, as part of an established continuous monitoring program. 

Recommendations: 

3. Promptly perform, after implementation of NIST best practice IT controls, an 

assessment and accreditation of the GSS. (Revised) 

Agency’s Response: OCIO concurs with the recommendation and is currently 

implementing this recommendation and is on schedule for July 2017 and within 

the approved budget. 

4. Strengthen FEC Policy 58-2.4 so that it provides additional guidance on what 

decision points determine when a new assessment and accreditation is required; 

and the specific documentation requirements that need to be maintained in order 

for the agency to track changes so it can make informed decisions on when major 

changes drive the need for a new assessment and/or updated accreditation. 

(Revised) 

Agency’s Response: OCIO concurs with the recommendation and as the agency 

implements the NIST Risk Management Framework (RMF), this policy will be 

reviewed and updated based on the results of the RMF and will include language 

of when systems need to be reviewed and assessed based on changes and other 

determining factors. 

Auditor’s Comments: Since OCIO concurred with recommendations 3 and 4, 

we have no additional comments. 

Leon Snead & Company, P.C. 6 
 

 

 

 

 

 

 

 

 

 

c. Recertification of Users’ Access Authorities 

FEC has not established a process that will provide supervisors with the necessary 

information to recertify user access authorities periodically. We first reported that 

FEC needed to develop a process to periodically review users’ access authorities in 

2009. While FEC officials agreed after our first report that such a control process 

was needed (and required by its own policies), limited progress has been made to 

implement this control process. 

Per the FEC’s CAP, it is currently estimated that this project, in conjunction with the 

NIST implementation project, would be implemented in late FY 2017. 

Recommendations: 

5. Implement procedures and processes to complete periodic reviews of user access 

authorities after the NIST best practices implementation project is completed. 

(Revised) 

Agency’s Response: OCIO concurs with the recommendation and will 

implement capabilities to allow for a review of user access authorities. FEC is 

participating in the DHS CDM program that will give us access to the tools and 

sensors, which would allow the agency to implement the recommendation made 

by the OIG. Phase 2 of the CDM project, will provide the agency with this 

capability that was awarded in July 2016. The implementation schedule is 

dictated by DHS as they work with the implementers to roll out the service to 

agencies in FY17. At the completion of the NIST contract the FEC will be 

implementing best practices that will improve IT policies and procedures. As part of 

the improvement, the review of user access authorities will be automated through the 

user of the DHS CDM tools following the new FEC IT policies and procedures. 

Subject to workload, staff and additional funding for equipment and licensing not 

provided by DHS CDM may extend the time required for implementation of the 

recommendation to several months after the completion the DHS tool deployment. 

6. Update FEC Policy 58-2.2 to require annual recertification of users’ access 

authorities by supervisory personnel who would have knowledge of the users’ 

requirements for accessing FEC information and information systems. Ensure 

that the policy contains sufficient operational details to enable an effective review 

and update process. (Revised) 

Agency’s Response: OCIO concurs with the recommendation. All OCIO 

policies and procedures will be reviewed in the coming year as we implement 

NIST best practices for Information and Information Systems. FEC Policy 58-2.2 

will be reviewed and updated as part of the NIST best practice implementation. 

The NIST project is on schedule for completion by July 2017 and within 

approved budget. 

Leon Snead & Company, P.C. 7 
 

 

 

 

 

 

 

 

 

 

Auditor’s Comments: Since OCIO concurred with recommendations 5 and 6, 

we have no additional comments. 

d. Continuity of Operations Plan (COOP) 

During our follow-up testing to determine whether the FEC had implemented 

recommendations dealing with testing a fully developed COOP plan, we noted that 

limited progress has been made on this issue. The CAP shows that the targeted 

implementation date for this recommendation is the second quarter FY 2017. The 

CAP notes that completion of the COOP is tied into the implementation of the NIST 

best practices project, which was recently awarded. The CAP further notes that “A 

contingency plan for all major and general support systems will be created. In 

addition, the COOP plan will be reviewed, updated and tested by the contractor.” 

FEC conducted a voluntary test of the COOP during September 23-24, 2015. The 

test simulated a local unavailability of the primary work site, with some designated 

COOP personnel working from their alternate work site. We reviewed the test plan, 

and related report for the September test. The following table shows what parts of 

the September test meets the federal testing requirements discussed below. 

Federal Continuity Directive No. 1, Appendix K Auditor’s Comments 

Annual testing of alert, notification, and activation procedures for 

continuity personnel and quarterly testing of such procedures for 

continuity personnel at agency headquarters. 

This requirement was partially 

met. 

Annual testing of plans for recovering vital records (both 

classified and unclassified), critical information systems, services, 

and data. 

This requirement was not met. 

Annual testing of primary and backup infrastructure systems and 

services (e.g., power, water, fuel) at alternate facilities. 

This requirement was not met. 

Annual testing and exercising of required physical security 

capabilities at alternate facilities. 

This requirement was not met. 

Testing and validating equipment to ensure the internal and This requirement was partially 

external interoperability and viability of communications systems, met. 

through monthly testing of the continuity communications 

capabilities outlined in Annex H (e.g., secure and non-secure 

voice and data communications). 

An annual opportunity for continuity personnel to demonstrate This requirement was partially 

their familiarity with continuity plans and procedures and to met. 

demonstrate the agency’s capability to continue its essential 

functions. 

An opportunity to demonstrate that backup data and records 

required supporting essential functions at alternate facilities or 

locations are sufficient, complete, and current. 

This requirement was not met. 

Recommendation: 

7. Ensure that sufficient resources are assigned to the task of periodically testing 

newly created system contingency plans. (Revised) 

Leon Snead & Company, P.C. 8 
 

 

 

 

 

 

 

 

 

 

 

 

 

Agency’s Response: OCIO concurs and the FEC is currently implementing 

NIST best practices, which include Business Continuity and Disaster Recovery 

Plan for each General Support Systems (GSS) and Major Applications (MA). 

Each system will be tested as part of the NIST guidelines. Going forward, FEC 

OCIO will improve its documentation of the COOP testing and test results. 

Through the utilization of two service providers who process and maintain FEC 

financial activity, the Commission has an effective COOP process for financial 

management and financial statement preparation and reporting. Both service 

providers’ COOP plans are evaluated annually as part of their respective systems 

audits. In 2016, the service providers’ COOP plans were reviewed and the auditors 

determined both providers have documented a comprehensive plan and set of 

procedures to ensure continuity of operations for information systems that support 

their respective operations should an unexpected interruption occur. The FEC 

considers the service providers COOP plans and the annual assessment of their plans 

as important internal controls over FEC financial reporting. 

Auditor’s Comments: Since OCIO concurred with the recommendation, we 

have no additional comments. 

e. USGCB and Other Configuration Management Requirements 

We have reported in prior audits that the FEC needed to adopt the United States 

Government Configuration Baseline (USGCB). As discussed in OMB guidance, the 

implementation of these standards is critical to strengthening an agency’s overall 

configuration management control process. Our tests showed that FEC has made 

progress in implementing USGCB requirements, and in other configuration 

management controls, such as implementing automated logging of changes, and 

implementing a strengthened configuration review board. FEC estimates USGCB 

configuration security settings and other configuration management controls will be 

fully implemented by the end of FY 2017. 

Recommendation: 

8. Implement USGCB baseline configuration standards for all workstations and 

require documentation by the CIO to approve and accept the risk of any deviation 

from these standards. 

Agency’s Response: OCIO concurs and all agency systems will be in compliance 

with USGCB standards by February 2017. 

Auditor’s Comments: Since OCIO concurred with the recommendation, we 

have no additional comments. 

f. Remediation of Vulnerabilities 

FEC has made improvements in its scanning program, including remediation of older 

vulnerabilities identified by these scans. FEC has also contracted with a vendor to 

Leon Snead & Company, P.C. 9 
 

 

 

develop a patching plan, and is working to fully implement a patch management 

program that meets IT security best practices. 

However, our testing of a sample of 18 critical and high vulnerabilities identified in a 

FEC January 2016 scanning report showed that many of these vulnerabilities had not 

yet been corrected, as of July 2016. OCIO officials advised us that they are working 

to resolve these vulnerabilities, and many would be addressed in the near future when 

“a new configuration is rolled out to the users”. OCIO officials agreed, however, that 

more needs to be done before there is a mature process for remediation of scanning 

vulnerabilities. 

Recommendation: 

9. Implement a comprehensive vulnerability scanning and remediation program. 

Strengthen controls to ensure that critical and high vulnerabilities identified 

through the vulnerability scanning are completed within 60 days of identification, 

or document an analysis and acceptance of risks for longer term remediation. 

Agency’s Response: OCIO concurs and recently implemented a FEC 

vulnerability management system identifies vulnerabilities across all FEC systems 

and provides a mechanism to document remediation and acceptance of risk. As 

part of the Patch Management contract, the contractor is developing a patching 

process aligned with NIST that will leverage the FEC vulnerability management 

system for identification and documentation of vulnerabilities. The patch 

management process is on track to be finalized September 2017. The final 

process may require additional patch management solutions to improve overall 

effectiveness and efficiency of patch management to all FEC IT assets. 

Auditor’s Comments: Since OCIO concurred with the recommendation, we 

have no additional comments. 

g. Mandiant Report Recommendations Remain Open 

In May 2012, the FEC was a victim of a network intrusion by an Advanced Persistent 

Threat (APT).1  The agency hired a contractor to analyze this serious intrusion on 

FEC’s IT systems, and to provide recommended solutions to eliminating any threat 

discovered. The contractor completed the analysis, and provided a report to FEC on 

October 5, 2012, and made recommendations to address the problems identified. 

1

According to NIST SP 800-39, an adversary that possesses sophisticated levels of expertise and significant resources which 

allow it to create opportunities to achieve its objectives by using multiple attack vectors (e.g., cyber, physical, and deception). 

These objectives typically include establishing and extending footholds within the information technology infrastructure of the 

targeted organizations for purposes of obtaining information, undermining or impeding critical aspects of a mission, program, 

or organization; or positioning itself to carry out these objectives in the future. The advanced persistent threat: (i) pursues its 

objectives repeatedly over an extended period of time; (ii) adapts to defenders’ efforts to resist it; and (iii) is determined to 

maintain the level of interaction needed to execute its objectives. The contractor also identified two additional systems that 

were infected, but were not shown as APT type threats. 

Leon Snead & Company, P.C. 10 
 

 

We followed-up, during our FY 2016 financial statement audit, on the seven 

recommendations that we considered open in the Mandiant report. We obtained 

information from OCIO officials on the status of FEC’s corrective actions on each of 

the seven recommendations. From our review, we determined that FEC had taken 

actions to address three of the seven, and had ongoing corrective actions for the 

remaining four. Three of the four recommendations were related to projects that were 

estimated to be completed prior to the end of FY 2016. One recommendation related 

to a contract with DHS to provide assistance concerning the implementation of a 

continuous diagnostics and monitoring program that will not be implemented until 

FY 2017. 

Recommendations: 

10. Complete the implementation of the contractor’s open recommendations 

contained in the October 2012 Threat Assessment Program report: 

a. Secure local administrator passwords by making them unique on every system 

or disabling the local administrator account from accessing systems over the 

network. 

Agency’s Response: OCIO concurs with Recommendation 10a and 

administrators now have Privilege (PR) accounts, which are unique to each 

administrator. 

b. Implement application “white listing” on domain controllers and other critical 

servers. 

Agency’s Response: OCIO concurs with Recommendation 10b and the 

agency is a member of the DHS CDM program. DHS made an award in July 

2016 for security tools and sensors. Application White Listing is one of the 

capabilities the agency will be able to implement in 2017 with DHS support. 

c. Implement two-factor authentication for the VPN and for webmail. 

Agency’s Response: OCIO concurs with Recommendation 10c and the FEC 

currently has two-factor authentication for VPN. Webmail dual factor will be 

implemented in April 2017. 

d. Remove “local administrator” level privileges from end-users. 

Agency’s Response: OCIO concurs with Recommendation 10d and by April 

2017, all local administrator privileges will be removed from user machines. 

Auditor’s Comments: Since OCIO concurred with recommendations 10a10d, we have no additional comments. 

Leon Snead & Company, P.C. 11 
 

 

 

 

 

 

 

2. Security Awareness Training for Contractors 

Security awareness training is a key aspect of the government’s and FEC’s IT security 

program, and is required by FEC’s standards, OMB regulations, and NIST best practices. 

As part of our IT control testing for the FY 2016 financial statement audit, we attempted to 

validate that FEC’s contractors who had access to the agency’s network, had received 

security awareness training as required. OCIO personnel provided us several incomplete 

listings of contractors currently working for FEC and having network access, as well as 

printouts that listed what contractors had received security awareness training. From our 

review of these documents, we found that a large number of contractor personnel had not 

received security awareness training. After receiving additional information on several 

occasions from OCFO officials, we determined that all but four contractors had 

documentation showing security awareness training had been taken. In addition, we could 

find no processes or controls that would remove network access for personnel or 

contractors that did not complete security awareness training. We determined that FEC 

needs to strengthen its controls and processes in this area so that documentation of onboard contractors is accurate and readily available for physical security purposes, and 

contractors who access FEC’s network receive required security awareness training, or 

network access be disabled until the training is obtained. 

FEC’s, Security Training Minimum Standards, provide that “Within one month of arrival, 

all authorized users of FEC information and information systems should receive instruction 

on IT Security Basics...All authorized users of FEC information and information systems 

should receive annual training to reinforce Rules of Behavior and Acceptable Use, receive 

updates on current threats and vulnerabilities, and changes in Federal legal and regulatory 

requirements...”. 

Recommendations: 

11. Work with the necessary divisions/offices to establish a process that ensures the agency 

is able to identify all on board contractors to address this security risk to the agency. 

Agency’s Response: OCIO concurs with Recommendation 11. The OCFO is working to 

inform the Contracting Officers Representatives (CORs) of their duties and responsibilities 

regarding contractor tracking in FY 17. This is in conjunction with the Office of Human 

Resources working with the CORs to establish on line Fingerprinting scheduling beginning 

in FY 17. The two measures taken together represent a process to assist the agency to 

identify all on board contractors and address the security risk to the agency. 

12. Establish controls and process similar to those used for FEC personnel to track 

contractor security awareness training. 

Agency’s Response: OCIO concurs with Recommendation 12 and now has in place 

the same system for contractors that we have for FEC personnel. 

13. Disable network access to contractors and personnel that do not complete security 

awareness training within a reasonable period after the required completion date. 

Leon Snead & Company, P.C. 12 
 

 

 

 

 

Agency’s Response: OCIO concurs with Recommendation 13 and now has in place 

the same system for contractors that we have for FEC personnel. 

14. Require those contractors who have not received security awareness training during FY 

2016 to take required courses within the next 30 days. 

Agency’s Response: OCIO concurs with Recommendation 14. 

Auditor’s Comments: Since OCIO concurred with recommendations 11-14, we have 

no additional comments. 

A summary of the status of prior year recommendations is included as Attachment 1. 

REPORT ON COMPLIANCE 

As part of obtaining reasonable assurance about whether the agency’s financial statements are 

free of material misstatement, we performed tests of its compliance with certain provisions of 

laws, regulations, and significant provisions of contracts, noncompliance with which could 

have a direct and material effect on the determination of financial statement amounts, and 

certain other laws and regulations. We limited our tests of compliance to these provisions and 

we did not test compliance with all laws and regulations applicable to the FEC. Providing an 

opinion on compliance with certain provisions of laws, regulations, and significant contract 

provisions was not an objective of our audit and, accordingly, we do not express such an 

opinion. 

In connection with our audit, we noted no instance of noncompliance that is required to be 

reported according to Government Auditing Standards and the OMB audit bulletin guidelines. 

No other matters came to our attention that caused us to believe that FEC failed to comply with 

applicable laws, regulations, or significant provisions of laws, regulations, and contracts that 

have a material effect on the financial statements insofar as they relate to accounting matters. 

Our audit was not directed primarily toward obtaining knowledge of such noncompliance. 

Accordingly, had we performed additional procedures, other matters may have come to our 

attention regarding the FEC’s noncompliance with applicable laws, regulations, or significant 

provisions of laws, regulations, and contracts insofar as they relate to accounting matters. 

Restricted Use Relating to Reports on Internal Control and Compliance 

The purpose of the communication included in the sections identified as “Report on Internal 

Control” and “Report on Compliance” is solely to describe the scope of our testing of internal 

control over financial reporting and compliance, and to describe any material weaknesses, 

significant deficiencies, or instances of noncompliance we noted as a result of that testing. Our 

objective was not to provide an opinion on the design or effectiveness of the FEC’s internal 

control over financial reporting or its compliance with laws, regulations, or provisions of 

contracts. The two sections of the report referred to above are integral parts of an audit 

performed in accordance with Government Auditing Standards in considering the FEC’s 

internal control over financial reporting and compliance. Accordingly, those sections of the 

report are not suitable for any other purpose. 

Leon Snead & Company, P.C. 13 
AGENCY’S RESPONSE 

The FEC’s response to the audit report, which has been summarized in the body of this report, 

is included in its entirety as Attachment 2. The FEC’s response was not subjected to the 

auditing procedures applied in the audit of the financial statements and, accordingly, we 

express no opinion on it. 

Leon Snead & Company, P.C. 

Rockville, MD 20850 

November 15, 2016 

Leon Snead & Company, P.C. 14 
 

 

 

 

 

 

 

 

 

 

 

 

Attachment 1 

Status of Prior Year Recommendations 

Recommendation Recommendation 

Status 

Complete the implementation of the open contractor’s recommendations contained in the 

October 2012 Threat Assessment Program report. Provide sufficient budgetary and 

personnel resources to this project to ensure that actions are properly accomplished. 

Open 

Complete the project relating to review of user access authorities, and ensure necessary 

budgetary and personnel resources are provided to complete this project. Open 

Reissue FEC Policy 58-2.2 to require annual recertification of users’ access authorities by 

supervisory personnel who would have knowledge of the users’ requirements for 

accessing FEC information and information systems. Ensure that the policy contains 

sufficient operational details to enable an effective review and update process. 

Open 

Implement USGCB baseline configuration standards for all workstations and require 

documentation by the CIO to approve and accept the risk of any deviation. Open 

Strengthen controls to ensure that vulnerabilities/weaknesses identified through the 

vulnerability scanning tests are completed within 60 days of identification, or document an 

analysis and acceptance of risks for longer term remediation. 

Open 

Perform within this fiscal year a new assessment and accreditation of the GSS using NIST 

SP 800-53 as the review criteria. Open 

Strengthen FEC Policy 58-2.4 so that it provides additional guidance on what decision 

points determine when a new assessment and accreditation is required; and the specific 

documentation requirements that need to be maintained in order for the agency to track 

changes so it can make informed decisions on when major changes drive the need for a 

new assessment and/or updated accreditation. 

Open 

Ensure that sufficient resources are assigned to the task of testing the COOP, a critical IT 

control process, in order to reduce risk to the FEC, and complete all required tests in a 

timely manner. Ensure that appropriate documentation is retained as required by FCD No. 

1 to support that FEC has met all applicable federal requirements. 

Open 

Develop a detailed Plan of Action and Milestone (POA&M) to ensure that required COOP 

testing and exercises are completed as soon as possible. Open 

Issue a FEC policy that requires project managers to prepare project plans that address 

FEC Directive 50 requirements for projects that are implemented to address audit 

recommendations. Require that the project plan includes information, such as: 

identification of key tasks and/or steps; personnel responsible for completing the task 

and/or step; the timeframe for beginning and completing the task and/or step; resources 

required; and that documentation be maintained, as part of the project plan, to support the 

accomplishment of key plan tasks, issues that impacted the project, and the completion of 

the overall project. 

Open 

Develop a time-phased corrective action plan to address the prompt implementation of 

Homeland Security Presidential Directive 23, and National Security Presidential Directive 

54, Cyber Security and Monitoring. 

Closed 

Leon Snead & Company, P.C. 15 
 

 

Attachment 2 

Agency Response to Draft Report 

FEDERAL ELECTION COMMISSION 

Washington, DC 20463 

The FEC concurs with the IT findings and recommendations identified in the audit report, and 

notes that the auditors recognized the progress made to remediate these conditions. We noted 

that all IT findings are solely related to the FEC’s general support system (GSS) rather than the

financial system of record, which is outsourced. The FEC continues to on the path remediate all 

findings. The OIG incorporated our detailed responses to each of the findings and 

recommendations into the body of the audit report. Our responses provide an overview of how 

we plan to remediate each of the findings. 

1. Develop an Office of Chief Information Officer (OCIO) policy that requires all 

project managers to develop a detailed project plan for all OCIO projects that 

require multiple resources and/or has a timeframe of completion beyond 60 

days. If OCIO determines a particular project meeting these stated requirements 

would not require a project plan, OCIO officials should document this decision 

and reasoning as part of their project planning documentation. (Revised) 

2. Develop an OCIO policy that details the necessary information required for the 

development of a project plan such as: 

a. identification of key tasks and/or steps; 

b. personnel responsible for completing the task and/or step; 

c. the timeframe for beginning and completing the task and/or step; 

d. any associated cost; 

e. resources required; and 

f. maintain documentation, as part of the project plan, to support the 

accomplishment of key plan tasks, issues that impacted the project, and the 

completion of the overall project. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 2 

Agency Response to Draft Report 

Agency Response: 

OCIO concurs that project planning is an important element in successful 

technological implementations. Project planning has evolved significantly over the 

past 5 years and as a result OCIO will support the new Agile development 

methodology that is consistent with GSA’s new technology engagement model as 

dictated by the President’s technology innovation agenda. The FEC is proactively 

leveraging the DHS Federal Network Resilience teams to augment the resources 

required to improve the IT Security Program management. Several of the 

recommendations require dedicated resources to consistently managing operations 

on an ongoing basis. 

3. Promptly perform, after implementation of NIST best practice IT controls, an 

assessment and accreditation of the GSS. (Revised) 

Agency Response: OCIO concurs with the recommendation and is currently 

implementing this recommendation and is on schedule for July 2017 and within 

the approved budget. 

4. Strengthen FEC Policy 58-2.4 so that it provides additional guidance on what 

decision points determine when a new assessment and accreditation is required; 

and the specific documentation requirements that need to be maintained in order 

for the agency to track changes so it can make informed decisions on when 

major changes drive the need for a new assessment and/or updated 

accreditation. (Revised) 

Agency Response: OCIO concurs with the recommendation and as the agency 

implements the NIST Risk Management Framework (RMF), this policy will be 

reviewed and updated based on the results of the RMF and will include 

language of when systems need to be reviewed and assessed based on changes 

and other determining factors. 

5. Implement procedures and processes to complete periodic reviews of user 

access authorities after the NIST best practices implementation project is 

completed. (Revised) 

Agency Response: OCIO concurs with the recommendation and will 

implement capabilities to allow for a review of user access authorities. FEC is 

participating in the DHS CDM program that will give us access to the tools and 

sensors, which would allow the agency to implement the recommendation made 

by the OIG. Phase 2 of the CDM project, will provide the agency with this 

capability that was awarded in July 2016. The implementation schedule is 

dictated by DHS as they work with the implementers to roll out the service to 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 2 

Agency Response to Draft Report 

agencies in FY17. At the completion of the NIST contract the FEC will be 

implementing best practices that will improve IT policies and procedures. As 

part of the improvement, the review of user access authorities will be automated 

through the user of the DHS CDM tools following the new FEC IT policies and 

procedures. Subject to workload, staff and additional funding for equipment and 

licensing not provided by DHS CDM may extend the time required for 

implementation of the recommendation to several months after the completion 

the DHS tool deployment. 

6. Update FEC Policy 58-2.2 to require annual recertification of users’ access 

authorities by supervisory personnel who would have knowledge of the users’

requirements for accessing FEC information and information systems. Ensure 

that the policy contains sufficient operational details to enable an effective 

review and update process. (Revised) 

Agency Response: OCIO concurs with the recommendation. All OCIO 

policies and procedures will be reviewed in the coming year as we implement 

NIST best practices for Information and Information Systems. FEC Policy 58-

2.2 will be reviewed and updated as part of the NIST best practice 

implementation. The NIST project is on schedule for completion by July 2017 

and within approved budget. Also see answer in #5 

7. Ensure that sufficient resources are assigned to the task of periodically testing 

newly created system contingency plans. (Revised) 

Agency Response: OCIO concurs and the FEC is currently implementing NIST 

best practices, which include Business Continuity and Disaster Recovery Plan for 

each General Support Systems (GSS) and Major Applications (MA). Each system 

will be tested as part of the NIST guidelines. Going forward, FEC OCIO will 

improve its documentation of the COOP testing and test results. As we embrace 

cloud.gov in 2017 we will greatly enhance COOP capabilities while reducing 

Operational and Maintenance expenses while improving these continuity 

capabilities. 

Through the utilization of two service providers who process and maintain FEC 

financial activity, the Commission has an effective COOP process for financial 

management and financial statement preparation and reporting. Both service 

providers’ COOP plans are evaluated annually as part of their respective systems 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 2 

Agency Response to Draft Report 

audits. In 2016, the service providers’ COOP plans were reviewed and the auditors

determined both providers have documented a comprehensive plan and set of 

procedures to ensure continuity of operations for information systems that support 

their respective operations should an unexpected interruption occur. The FEC 

considers the service providers COOP plans and the annual assessment of their 

plans as important internal controls over FEC financial reporting. 

8. Implement USGCB baseline configuration standards for all workstations and 

require documentation by the CIO to approve and accept the risk of any 

deviation from these standards. 

Agency Response: OCIO concurs and all agency systems will be in compliance 

with USGCB standards by February 2017. 

9. Implement a comprehensive vulnerability scanning and remediation program. 

Strengthen controls to ensure that vulnerabilities/ weaknesses identified through 

the vulnerability scanning are completed within 60 days of identification, or 

document an analysis and acceptance of risks for longer term remediation. 

Agency’s Response OCIO concurs and recently implemented a FEC vulnerability 

management system identifies vulnerabilities across all FEC systems and provides a 

mechanism to document remediation and acceptance of risk. As part of the Patch 

Management contract, the contractor is developing a patching process aligned with 

NIST that will leverage the FEC vulnerability management system for identification 

and documentation of vulnerabilities. The patch management process is on track to 

be finalized September 2017. The final process may require additional patch 

management solutions to improve overall effectiveness and efficiency of patch 

management to all FEC IT assets. 

10. Complete the implementation of the contractor’s open recommendations

contained in the October 2012 Threat Assessment Program report: 

a. Secure local administrator passwords by making them unique on every 

system or disabling the local administrator account from accessing systems 

over the network. 

Agency Response: OCIO concurs with Recommendation 10a and 

administrators now have Privilege (PR) accounts, which are unique to each 

administrator. 

b. Implement application “white listing” on domain controllers and other

critical servers. 
 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment 2 

Agency Response to Draft Report 

Agency Response: OCIO concurs with Recommendation 10b and the agency is 

a member of the DHS CDM program. DHS made an award in July 2016 for 

security tools and sensors. Application White Listing is one of the capabilities 

the agency will be able to implement in 2017 with DHS support. 

c. Implement two-factor authentication for the VPN and for webmail. 

Agency Response: OCIO concurs with Recommendation 10c and the FEC 

currently has two-factor authentication for VPN. Webmail dual factor will be 

implemented in April 2017. 

d. Remove “local administrator” level privileges from end-users. 

Agency Response: OCIO concurs with Recommendation 10d and by April 

2017, all local administrator privileges will be removed from user machines. 

11. Work with the necessary divisions/offices to establish a process that ensures the agency is 

able to identify all on board contractors to address this security risk to the agency. 

Agency Response: OCIO concurs with Recommendation 11. The OCFO is working to 

inform the Contracting Officers Representatives (CORs) of their duties and 

responsibilities regarding contractor tracking in FY 17. This is in conjunction with the 

Office of Human Resources working with the CORs to establish on line Fingerprinting 

scheduling beginning in FY 17. The two measures taken together represent a process to 

assist the agency to identify all on board contractors and address the security risk to the 

agency. 

12. Establish controls and process similar to those used for FEC personnel to track contractor 

security awareness training. 

Agency Response: OCIO concurs with Recommendation 12 and now has in place the 

same system for contractors that we have for FEC personnel. 

13. Disable network access to contractors and personnel that do not complete security 

awareness training within a reasonable period after the required completion date. 

Agency Response: OCIO concurs with Recommendation 13 and now has in place the 

same system for contractors that we have for FEC personnel. 
Attachment 2 

Agency Response to Draft Report 

14. Require those contractors who have not received security awareness training during FY 

2016 to take required courses within the next 30 days. 

Agency Response: OCIO concurs with Recommendation 14. 

Thank you for the opportunity to be able once again to work with the financial statement audit 

team, and with the OIG during the audit process. We look forward to working with everyone 

again for the Fiscal Year 2017 financial statement audit. 

. b F d Digitally signed by Gilbert Ford


GI1 e rt 0 r ON: cn=Gilbert Ford, o=OCFO,


ou=Budget o;v;s;on, 

email=gford@fec.gov, c=US 

Date: 2016.11 .10 17:11:29-05'00' 

Gilbert Ford, 


Acting Chief Financial Officer 

 Intragovernmental: 

 Fund balance with Treasury (Note 3) 

 Accounts receivable, net (Note 4) 

 Total Intragovernmental 

 

 

 Intragovernmental: 

 Accounts payable

 Employer contributions and payroll taxes payable 

 

 

 Other 

 

 

 Accounts payable 

 

 

 Commitments and contingencies (Note 7) 

 

 Cumulative results of operations 

 16,651,196.63 11,131,747.50 

 With the public:

Financial Statements 

BALANCE SHEET 

As of September 30, 2016 and 2015 

 Assets (Note 2) 

$ 17,614,242.04 

2016 

$ 12,900,515.87 

2015 

-

17,614,242.04 

3,020.38 

12,903,536.25 

Accounts receivable, net (Note 4) 

 General property and equipment, net (Note 5) 

Total Assets $ 23,755,737.23

102,004.72 

6,039,490.47 

$ 17,056,461.67 

152,502.74 

4,000,422.68 

Liabilities (Note 6) 

 $ 342,353.19 $ 131,193.00 

370,421.33 281,298.85 

Deferred rent 87,059.80 174,119.60 

 Custodial liability (Note 11) 102,004.72 152,502.74 

3,500.00 3,500.00 

 Total intragovernmental 905,339.04 742,614.19 

2,270,822.73 1,611,211.26 

 Accrued payroll and benefits 1,428,371.78 1,132,598.04 

Unfunded leave 2,500,007.05 2,438,290.68 

Total Liabilities 7,104,540.60 5,924,714.17 

Net Position 

 Unexpended appropriations 13,198,773.01 9,743,735.10 

3,452,423.62 1,388,012.40 

 Total Net Position 

 Total Liabilities and Net Position $ 23,755,737.23 $ 17,056,461.67 

The accompanying notes are an integral part of these statements. 

53
 

 

 

 

 

 

 

 

STATEMENT OF NET COST 

For The Years Ended September 30, 2016 and 2015 

Program Costs: 

Administering and Enforcing the FECA

 Gross costs 

Less: Earned revenues 

 Net program costs 

Net Cost of Operations (Note 9) 

$ 

$ 

2016 

70,529,281.64 

-

70,529,281.64 

70,529,281.64 

$ 

$ 

2015 

 68,218,355.00 

 (4,646.30)

 68,213,708.70 

 68,213,708.70 

The accompanying notes are an integral part of these statements. 

54
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

STATEMENT OF CHANGES IN NET POSITION 

For The Years Ended September 30, 2016 and 2015 

Cumulative Results of Operations 

 Beginning balance $ 

2016 

1,388,012.40 $ 

2015 

 1,096,811.99 

Budgetary Financing Sources

 Appropriations used 70,426,937.21 66,034,470.94 

Other Financing Resources (non-exchange) 

 Imputed financing 

 Total financing sources 

Net cost of operations 

Net change 

2,166,755.65 

72,593,692.86 

(70,529,281.64)

2,064,411.22 

 2,470,438.17 

68,504,909.11 

 (68,213,708.70)

 291,200.41 

 Cumulative Results of Operations $ 3,452,423.62 $ 1,388,012.40 

Unexpended Appropriations 

 Beginning balance $ 9,743,735.10 $ 9,022,381.37 

Budgetary Financing Sources

 Appropriations received 

 Other adjustments 

 Appropriations used 

Total Budgetary Financing Sources 

 Total Unexpended Appropriations 

76,119,000.00 

(2,237,024.88) 

(70,426,937.21)

3,455,037.91 

13,198,773.01 

67,500,000.00 

(744,175.33)

 (66,034,470.00)

 721,354.67 

 9,743,736.04 

Net Position $ 16,651,196.63 $ 11,131,748.44 

The accompanying notes are an integral part of these statements. 

55
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STATEMENT OF BUDGETARY RESOURCES 

For The Years Ended September 30, 2016 and 2015 

 2016 2015 

Budgetary Resources (Note 10) 

Unobligated balance brought forward, October 1 $ 3,679,467.16 $ 3,711,398.49 

Recoveries of prior year unpaid obligations 107,329.63 594,417.33 

Other changes in unobligated balance (2,237,024.88) (744,175.33) 

Unobligated balance from prior year budget authority, net 1,549,771.91 3,561,640.49 

Appropriations 76,119,000.00 67,500,000.00 

Spending authority from offsetting collections (18,311.70) 23,208.00 

Total Budgetary Resources $ 77,650,460.21 $ 71,084,848.49 

Status of Budgetary Resources 

Obligations incurred $ 71,812,449.18 $ 67,405,381.33 

Apportioned 4,503,396.29 269,661.55 

Unapportioned 1,334,614.74 3,409,805.61 

Total unobligated balance, end of year 5,838,011.03 3,679,467.16 

Total Budgetary Resources $ 77,650,460.21 $ 71,084,848.49 

Change in Obligated Balance 

Unpaid obligations, brought forward, October 1 $ 9,242,630.79 $ 8,415,148.07 

Obligations incurred 71,812,449.18 67,405,381.33 

Outlays (gross) (69,171,519.33) (65,983,481.28) 

Recoveries of prior year unpaid obligations (107,329.63) (594,417.33) 

Unpaid obligations, end of year 11,776,231.01 9,242,630.79 

Uncollected payments, Federal sources, brought forward Oct 1 (21,582.08) -

Change in uncollected payments, Federal sources 21,582.08 (21,582.08) 

Uncollected payments, Federal sources, end of year - (21,582.08) 

Obligated balance, start of year 9,264,212.87 8,393,565.99 

Obligated balance, end of year $ 11,776,231.01 $ 9,221,048.71 

Budget Authority and Outlays, Net 

Budget authority, gross $ 76,100,688.30 $ 67,523,208.00 

Actual offsetting collections (3,270.38) (1,625.92) 

Change in uncollected payments, Federal sources 21,582.08 (21,582.08) 

Budget authority, net 76,119,000.00 67,500,000.00 

Outlays, gross 69,171,519.33 65,983,481.28 

Actual offsetting collections (3,270.38) (1,625.92) 

Outlays, net $ 69,168,248.95 $ 65,981,855.36 

The accompanying notes are an integral part of these statements. 

56
STATEMENT OF CUSTODIAL ACTIVITY 

For The Years Ended September 30, 2016 and 2015 

2016 2015 

Revenue Activity 

Sources of cash collections 

Civil penalties $ 600,798.55 $ 476,211.53

 Administrative fines 131,361.74 204,302.23

 Miscellaneous receipts 198,190.85 96,986.95 

Total Cash Collections 930,351.14 777,500.71

 Accrual adjustments (50,498.02) 517.80 

Total Custodial Revenue (Note 11) $ 879,853.12 $ 778,018.51 

The accompanying notes are an integral part of these statements. 

57

Disposition of Collections 

Transferred to Treasury $ 930,351.14 $ 777,500.71

 Amount yet to be transferred (50,498.02) 517.80 

Total Disposition of Collections $ 879,853.12 $ 778,018.51 

Net Custodial Activity $ - $ -
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 be read with the understanding that they are for a component of the Federal 

Government, a sovereign entity. 

58
 

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 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. 

59
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 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, 2016, the FEC 

recognized approximately $ 2,166,756 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 12% decrease when compared to the $2,470,438 of imputed cost 

and related financing source recognized in Fiscal Year 2015. 

60
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 2016, 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 2016, 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 13.7% of basic pay for FY 2016. For both FERS-RAE and FERS-FRAE 

covered employees, the FEC made contributions of 11.9% of basic pay for FY 2016. 

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 2016. 

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 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. 

61
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, contains the criteria 

for recognition and disclosure of contingent liabilities. A contingency is recognized 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 where 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. 

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 

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 financed through the account providing the service and reimbursements are recognized as 

revenue when earned. 

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 

62
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. 

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. 

63
 

 

 

 

 

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, 2016 and September 30, 2015: 

2016 2015 

With the Public 

Accounts Receivable - Custodial 102,004.72 152,502.74 

Total non-entity assets 102,004.72 152,502.74 

Total entity assets 23,653,732.51 16,903,958.93 

Total Assets $ 23,755,737.23 $ 17,056,461.67 

64
Note 3 Fund Balance with Treasury 

Fund Balance with Treasury consisted of the following as of September 30, 2016 and September 30, 

2015: 

2016 2015 

Fund Balances 

Appropriated Funds $17,614,242.04 $ 12,900,515.87 

Total $ 17,614,242.04 $ 12,900,515.87 

2016 2015 

Status of Fund Balance with Treasury 

Unobligated Balance 

Available $ 4,503,396.29 $ 269,661.55 

Unavailable 1,334,614.74 3,409,805.61 

Obligated Balance not yet Disbursed 11,776,231.01 9,221,048.71 

Total $ 17,614,242.04 $ 12,900,515.87 

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. 

65
Note 4 - Accounts Receivables, Net 

All accounts receivable are with the public and consisted of the following as of September 

30, 2016 and September 30, 2015: 

2016 

Gross Accounts 

Receivable Allowance Net Accounts Receivable 

With the Public 

Fines and Penalties $ 247,553.75 $ 145,549.03 $ 102,004.72 

Total Non-Entity 247,553.75 145,549.03 102,004.72 

Total $ 247,553.75 $ 145,549.03 $ 102,004.72 

2015 

Gross Accounts 

Receivable Allowance Net Accounts Receivable 

Intragovernmental 

Intragovernmental $ 3,020.38 $ - $ 3,020.38 

Total Intragovernmental $ 3,020.38 $ - $ 3,020.38 

With the Public 

Fines and Penalties 293,766.75 141,264.01 152,502.74 

Total Non-Entity 293,766.75 141,264.01 152,502.74 

Total $ 296,787.13 $ 141,264.01 $ 155,523.12 

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.

66
 

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 2009, the estimated useful life of assets such as office furniture, office equipment, 

telecommunications equipment and audio/visual equipment is five years and the estimated 

useful life of information technology 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 costs 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 are capitalized as software in development until 

the development stage is completed 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, 2016 and 

September 30, 2015, respectively: 

67
2016 

Asset Class 

Service Life 

(years) 

Acquisition 

Value 

Accumulated 

Depreciation/Am 

ortization 

Net Book Value 

Software 3 $ 9,903,521.06 $ 8,409,991.97 $ 1,493,529.09 

Computers and peripherals 3 $ 3,067,115.95 $ 2,741,280.34 $ 325,835.61 

Furniture 5 $ 852,753.70 $ 852,753.70 $ -

Software-in-Development n/a $ 4,220,125.77 $ 4,220,125.77 

Total $ 18,043,516.48 $ 12,004,026.01 $ 6,039,490.47 

2015 

Asset Class 

Service Life 

(years) 

Acquisition 

Value 

Accumulated 

Depreciation/Am 

ortization 

Net Book Value 

Software 3 $ 9,806,591.06 $ 7,217,898.60 $ 2,588,692.46 

Computers and peripherals 3 $ 2,762,918.95 $ 2,582,852.18 $ 180,066.77

Furniture 5 $ 852,753.70 $ 852,753.70 $ -

Software-in-Development n/a $ 1,231,663.45 $ - $ 1,231,663.45

Total $ 14,653,927.16 $ 10,653,504.48 $ 4,000,422.68 

68
 

 

 

 

 

 

 

 

 

 

 

Note 6 - Liabilities Not Covered by Budgetary Resources 

Liabilities Not Covered by Budgetary Resources consisted of the following as of September 30, 2016 and 

September 30, 2015: 

Liabilities Not Covered by Budgetary Resources 2016 2015 

Intragovernmental

 Custodial Fines and Civil Penalties $ 102,004.72 $ 152,502.74 

 Deferred Rent 87,059.80 174,119.60 

Unfunded FECA Liability 

Total Intragovernmental 189,064.52 326,622.34 

Unfunded Annual Leave 2,500,007.05 2,438,290.68 

Contingent Liability - -

Actuarial FECA Liability - -

Total Liabilities Not Covered by Budgetary Resources 2,689,071.57 2,764,913.02 

Total Liabilities Covered by Budgetary Resources 4,415,469.03 3,159,801.15 

Total Liabilities $ 7,104,540.60 $ 5,924,714.17 

Beginning FY 2008, the FEC entered into a new lease agreement for its office building that provided a 

rent abatement of $870,598, which covers the equivalent of two 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. 

69
 

Note 7 Commitments and Contingencies 

As of September 30, 2016, in the opinion of FEC management and legal counsel, the FEC was 

not a party to any legal actions which were likely to result in a material liability. Accordingly, 

no provision for loss was included in the financial statements. 

As of September 30, 2015, the FEC had a lawsuit requesting attorneys’ fees and was unable to 

reasonably estimate the amount of the loss due to the lawsuit. 

70
Note 8 - Leases 

The FEC did not have any capital leases as of September 30, 2016 and September 30, 2015. The FEC has 

a commitment under an operating lease for its office space. Future payments due under the lease through 

September 30, 2017 are as follows: 

Future Operating Lease Payments 

2016 

Fiscal Year Lease Payment 

2017 6,130,121.81 

Total $ 6,130,121.81

Beginning in Fiscal Year 2018, the FEC will have a new commitment under a new operating lease for its 

office space. A schedule of estimated payments is provided below, including credits which are expected 

to be applied to FY 2018: 

Estimated Future Operating Lease 

2018 

Fiscal Year

2018

2019

2020

2021

2022

2023

 Lease Payment 

 954,661.55 

 5,169,156.18 

 5,220,393.90 

 5,273,168.76 

 5,327,526.86 

 5,383,515.70 

2024

2025

2026

2027

2028

2029

2030

2031

2032

 5,441,184.21 

 5,500,582.77 

 5,561,763.29 

 5,624,779.23 

 5,849,667.23 

 5,916,520.84 

 5,985,380.05 

 6,056,305.04 

 6,129,357.78 

Total $ 79,393,963.39 

71
Note 9 Statement of Net Cost 

The FEC’s costs are consolidated into one program, “Administering and Enforcing the FECA,” and 

consisted of the following as of September 30, 2016 and September 30, 2015, respectively: 

2016 2015

Intragovernmental: 

Intragovernmental gross costs $ 19,408,099.76 $ 18,895,980.23 

Less: Intragovernmental earned revenue - (4,646.30) 

Intragovernmental net costs 19,408,099.76 18,891,333.93 

Public: 

Gross costs with the public 51,121,181.88 49,322,374.77 

Net costs with the public 51,121,181.88 49,322,374.77 

Net cost of operations $ 70,529,281.64 $ 68,213,708.70

Costs incurred for goods and services provided by other Federal entities are reported in the full costs of 

the FEC’s program and are indentified as “intragovernmental.” The “intragovernmental earned revenue” 

is primarily attributed to the Deputy Inspector General servicing a Federal agency on a reimbursable basis 

pursuant to the Inspector General Act. All other costs are identified as “with the public.” 

72
Note 10 - Statement of Budgetary Resources 

The Statement of Budgetary Resources (SBR) compares budgetary resources with the status of those 

resources. For the year ended September 30, 2016, budgetary resources were $77,650,460.21 and net 

outlays were $69,168,248.95. For the year ended September 30, 2015, budgetary resources were 

$71,084,848.49 and net outlays were $65,981,855.36. 

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, 2016 and September 30, 2015, direct obligations incurred amounted to 

$71,812,449.18 and $67,400,735.03, respectively. For the years ended September 30, 2016 and 

September 30, 2015, reimbursable obligations incurred amounted to $0 and $4,646.30, 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 2016 actual budgetary execution information is scheduled for 

publication in February 2017, which will be available through OMB’s website at 

http://www.whitehouse.gov/omb. Accordingly, information required for such disclosure is not available 

at the time of publication of these financial statements. 

Balances reported in the FY 2015 SBR and the related President’s Budget reflected the following: 

Distributed 

Offsetting 

Receipts 

Budgetary

Resources 

Obligations

FY 2015 Incurred Net Outlays 

Statement of Budgetary Resources $ 71,084,848.49 $ 67,405,381.33 - $ 65,981,855.36 

Budget of the U.S. Government 68,000,000 67,000,000 - 66,000,000 

Difference $ 3,084,848.49 $ 405,381.33 $ - $ (18,144.64) 

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. The differences for 

obligations incurred and net outlays are due to rounding. 

73
 

 

 

 

Note 11 Custodial Revenues and Liability 

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 parties’ willingness 

and ability to pay: 

Custodial Revenue 2016 2015 

Fines, Penalties, and Other Miscellaneous Revenue $ 879,853.12 $ 778,018.51 

Custodial Liability 

Receivable for Fines and Penalties $ 247,553.75 $ 293,766.75 

Less: Allowance for Doubtful Accounts (145,549.03) (141,264.01) 

Total Custodial Liability $ 102,004.72 $ 152,502.74 

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 decrease of approximately $34,000 for FY 2016 and a net decrease of approximately $13,000 for 

FY 2015, respectively. The accrual adjustment for administrative fines is composed of a net decrease of 

approximately $17,000 in FY 2016 and a net increase of approximately $14,000 in FY 2015, respectively. 

74
 

Note 12 Undelivered Orders at the End of the Period 

Undelivered orders as of September 30, 2016 and September 30, 2015 totaled $7,360,762 and 

$6,082.830, respectively. 

75
Note 13 - Reconciliation of Net Cost of Operations to Budget 

The objective of this information is to provide an explanation of the differences between budgetary and 

financial (proprietary) accounting. This is accomplished by means of a reconciliation of budgetary 

obligations and non-budgetary resources available to the reporting entity with its net cost of operations. 

2016 2015

Resources used to finance activities 

Budgetary resources obligated 

Obligations incurred

Less: Recoveries and offsetting collections

Net obligations

Other resources

 Imputed financing from costs absorbed by others

 $ 71,812,449.18 

 (89,017.93) 

 71,723,431.25 

$ 67,405,381.33 

(617,625.33) 

 66,787,756.00 

Total resources used to finance activities

 2,166,755.65 

 73,890,186.90 

 2,470,438.17 

 69,258,194.17 

Resources used to finance items not part of the net cost of operations 

Change in budgetary resources obligated for goods, services, and 

benefits ordered but not yet provided

Resources that fund expenses recognized in prior periods

Resources that finance the acquisition of assets that do not affect net 

cost of operations

Total resources used to finance items not part of the net cost of 

operations

Total resources used to finance the net cost of operations

 1,296,494.04 

 87,059.80 

 3,389,589.32 

 4,773,143.16 

 69,117,043.74 

 753,285.06 

 87,059.80 

 1,240,428.01 

 2,080,772.87 

 67,177,421.30 

Components of the net cost of operations that will not require or 

generate resources in the current period 

Components requiring or generating resources in future periods

 Increase in annual leave liability

 Other

 61,716.37 

-

(106,988.61)

-

Total 61,716.37 (106,988.61) 

Components not requiring or generating resources

 Depreciation and amortization

Total

 1,350,521.53 

 1,350,521.53 

 1,143,276.01 

 1,143,276.01 

Total components of the net cost of operations that will not require or 

generate resources in the current period 1,412,237.90 1,036,287.40 

Net cost of operations $ 70,529,281.64 $ 68,213,708.70 

76
 

SECTION III – Other Information 

77
 

 

 

MEMORANDUM 

TO: The Commission 

FROM: Inspector General 

SUBJECT: Inspector General Statement on the Federal Election Commission’s Management 

and Performance Challenges 

DATE: October 19, 2016 

Inspector General’s Statement on FEC Management and Performance 

Challenges 

FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

Office of Inspector General 

Each year, the Inspector General (IG) is required to provide a summary and assessment of the 

most serious management and performance challenges facing the Federal Election Commission 

(FEC). The requirement is contained in the Reports Consolidation Act of 2000 (Public Law 106-

531), an amendment to the Chief Financial Officers Act of 1990. The attached document 

responds to the requirement and provides the annual statement on Commission challenges to be 

included in the Federal Election Commission Financial Audit Report (FAR) Fiscal Year (FY) 

2016. 

As a noteworthy accomplishment for the agency, the IG was able to remove Human Capital 

Management as a major management challenge for FY 2016. The IG has reported this area as a 

challenge for the agency since 2004. However, since the IG’s FY 2015 management challenges 

report was released, the agency has stabilized the leadership structure in the Office of Human 

Resources (OHR) by hiring a full-time Director who has been successful in increasing the 

staffing in the OHR to address the need for improved customer service. Although the IG 

believes that the OHR still has room for improvement in providing customer service to staff and 

in addressing reported weaknesses within their daily operations, the noted accomplishments are 

key factors in addressing the consistent operational challenges reported from past years. 

For FY 2016, the Office of Inspector General (OIG) has identified one new, and two continued 

management and performance challenges for inclusion in the FEC’s FAR: 

78
Low Employee Morale 

 Governance Framework 

Information Technology Project Planning and Management 

Low Employee Morale 

For the past five years, the FEC has consistently ranked low on the annual list of The Best Places 

to Work in the Federal Government based on the responses provided from FEC staff to the 

Federal Employee Viewpoint Survey, administrated by the Office of Personnel Management. 

As employee satisfaction has a direct impact on the agency’s ability to effectively achieve its 

mission, the OIG contracted with a consulting company to conduct a study to determine the root 

causes of the low employee morale at the FEC. The consultants released their report in July 

2016, and consistent with many staff complaints via OIG hotline submissions, annual risk 

assessments, and general discussions with FEC staff, the study identified the following five 

major root causes: 

 Commissioners 

o Tone and attitude perceived as poor 

o Many positions filled by acting managers 

 Management 

o Lack of trust 

o Top leaders seen as ineffective 

 Communication 

o Little information provided 

o Employees do not believe management 

 Accountability 

o Poor managers not accountable 

o Poor performing employees not accountable 

 Other 

o Perceived lack of diversity in management 

o Little career development 

Since the release of the report, Governance has yet to discuss a potential action plan or even a 

basic framework with the agency to address the root causes of low employee morale. The near 

silence of Governance and the Senior Leadership in this critical area further reinforces the 

perceptions and beliefs of the FEC staff causing low employee morale. The OIG believes that 

the ability to achieve the mission of the agency will be heavily impacted if Governance does not 

make sincere and concrete attempts to begin addressing the employee morale issues. 

Governance Framework 

 

Consistent with one of the root causes of low employee morale, the FEC continues to experience 

inefficiencies in the management structure with prolonged vacancies in key senior leadership 

79
                                                            

positions, causing ineffective management, and operating with one person fulfilling two major 

senior leader positions (Chief Information Officer and Staff Director). The FEC’s Chief 

Financial Officer; General Counsel; Deputy Staff Director for Management and Administration, 

and Deputy Chief Information Officer for Operations are all acting positions, and the Director of 

Accounting position is vacant. The previous acting Chief Financial Officer recently retired and 

the acting General Counsel resigned. Both of these positions have again been filled by staff in an 

acting capacity. The constant fluctuation or absence of leadership promotes poor stability and 

inconsistency in the leadership structure. 

Additionally, in September 2016, the FEC incurred a vacancy in the Chief Information Security 

Officer (CISO) position. Although this position has been vacant for only a short period of time, 

it is essential to note that the CISO position is a very critical position not only within the FEC, 

but also government-wide. On an agency level, the FEC is currently going through a significant 

transformation within its business structure in implementing the National Institute of Standards 

and Technology’s Information Technology (IT) security standards to establish an adequate riskbased information security program for the agency, which is the responsibility of a CSIO. The 

former CISO was heavily involved in the progress, oversight, and communication channels for 

implementing these standards. Management is making progress on filling this position as it has 

been advertised, interviews have been held and a selection is anticipated in the near future. 

The Government Accountability Office (GAO) released a report1

 in September 2016 identifying 

the need for agencies to have a sufficient cybersecurity workforce with the right skills and 

training. The report also noted that IT security is consistently an expanding government-wide 

high-risk area. During an OIG senior leader exit conference with the former CISO prior to his 

separation from the agency, the CISO noted that the agency’s IT security staff requires more 

resources than the current two established FTEs to sufficiently carryout all the inherent roles and 

responsibilities of a security office, which causes many delays with outstanding IT security 

projects. With the CISO being a high-priority position within the federal government, along with 

the other vacant senior leadership positions, the OIG encourages Governance to take the 

necessary steps to stabilize their leadership structure in promptly filling all open senior 

leadership positions. 

Information Technology Project Planning and Management 

IT Project Planning and Management was first reported as a management challenge in FY 2015. 

The FEC’s Office of Chief Information Officer (OCIO) continues to struggle with implementing 

IT projects efficiently, effectively, and in a timely manner due to a lack of adequate planning and 

management oversight. Since the FEC’s FY 2014 financial statement audit report, the OIG has 

recommended that OCIO management require a project plan for all OCIO projects that require 

multiple resources and/or have a timeframe of completion beyond 60 days. Management has not 

agreed to implement the recommendation, and continues to experience major delays in fully 

implementing projects such as a vulnerability remediation program, the agency’s Continuity of 

Operations Plan, and verification of user access authorities, all of which have been repeat 

findings in the agency’s annual financial statement audit report for several years. It is imperative 

1

 GAP-16-885T 

80
that the FEC has efficient and effective project planning and management processes to ensure the 

security and integrity of FEC data. 

The IG’s annual assessment of management and performance challenges is based on information 

derived from a combination of several sources, including OIG audit and inspection work, 

Commission reports, government-wide risks factors, and a general 

knowledge of the Commission’s programs and activities. The management and performance 

challenges are detailed in the attached report. The Reports Consolidation Act of 2000 permits 

agency comment on the IG’s statements. Agency comments, if any, are due November 15, 2016. 

Lynne A. McFarland 

Inspector General 

Attachment 

cc: Alec Palmer, Staff Director and Chief Information Officer 

Gilbert Ford, Acting Chief Financial Officer 

Lisa Stevenson, Acting General Counsel 

Edward Holder, Acting Deputy Staff Director for Management and 

 Administration 

Derrick Allen, Director of Human Resources 

 

81
                                                            

FEDERAL ELECTION COMMISSION (FEC) 

 MANAGEMENT AND PERFORMANCE CHALLENGES 

FY 2016 

I. Low Employee Morale 

Management Challenge: 

The established tone and culture from Governance and the Senior Leaders as a whole 

has a negative impact on employee morale and ultimately the success of the agency in 

effectively accomplishing its mission. 

Applicable Government Requirements/Best Practices2

 Not In Place: 

 GAO Standards For Internal Control in the Federal Government 

 OMB A-123 

 Control Environment 

o Management and employees should establish and maintain an 

environment throughout the organization that sets a positive and 

supportive attitude toward internal controls and conscientious 

management. 

o The organizational culture is also crucial within the standard. 

The culture should be defined by management’s leadership in 

setting values of integrity and ethical behavior...Management’s 

philosophy and operational style will set the tone within the 

organization. 

Critical Agency Impacts: 

 Negative tone and attitude by Commissioners negatively impacts the employees 

perception of their job 

 Employees do not feel valued, which impacts their work product and dedication 

to the job 

 Lack of trust in management and leadership direction 

 Ineffective leadership 

 No established accountability for managers from Governance 

 One person serving as both Staff Director and CIO 

 Many vacant senior leadership positions 

 Breakdowns in communication between senior leaders and employees 

2

 In instances where the FEC may be exempt from a government requirement or standard, the reference 

should be used as best practice to ensure adequate government business operations – applicable to all 

sections in this report. 

82
                                                            

 

 

 

  

II. Governance Framework 

Management Challenge: 

FEC lacks adequate structure and continued stability in key senior leadership positions 

that are accountable for the mission and objectives of the agency. 

Applicable Government Requirements/Best Practices Not In Place: 

 Statutory Requirement for General Counsel - 52 U.S.C. section 30106(f) 

 Clinger-Cohen Act of 1996 

 Privacy Act of 1974 

Critical Agency Impacts: 

A. Agency vacancies – The FEC has several senior leader positions that have been 

vacant for a year or more 

 General Counsel - position vacant since July 20133 

 Chief Financial Officer - position vacant since October 20124 

 Deputy Staff Director for Management and Administration - position 

vacant since August 20145 

 Chief Information Security Officer6 

 Failure to fill senior leader positions creates resource gaps. Critical 

management positions are vacant or filled with acting FTEs due to 

incumbents serving in vacant senior leader positions, including: 

 Director of Accounting 

 Budget Director 

 Deputy Chief Information Officer of Operations. 

B. Dual office holding – The CIO also serves as the permanent Staff Director. 

 Contributes to low employee morale7 

 Conflict of interest in agency reporting structure for staff 

 Poor IT project planning and management 

 Lack of management accountability 

 No significant progress in complying with the IT portions of the 

agency’s Privacy Program to comply with the Privacy Act 

 Major delays in IT project implementation 

 Failure to timely implement OIG recommendations in accordance with 

OMB Circular A-50 and Commission Directive 50 

 Outstanding OIG recommendations from the 2010 Follow-up 

Audit of Privacy and Data Protection released in March 2011 

 Outstanding OIG recommendations from the Inspection of the 

FEC’s Disaster Recovery Plan and Continuity of Operations 

Plans released in January 2013 

3

 The Associate General Counsel for Enforcement was assigned as Acting General Counsel in August 2015 

– September 2016 followed by the Deputy General Counsel for Law from September 2016 to present. 

4

 The FEC assigned the Director of Accounting as Acting CFO in October 2012- September 2016 and then 

the Budget Director in September 2016 to present. 5

 The FEC assigned the Deputy CIO of Operations as Acting Deputy Staff Director in August 2014. 

6

 Noted as a recent vacancy but a critical position that needs to be filled based on agency IT weaknesses 

and the high risk area government-wide.

7

See OIG report: Root Causes of Low Employee Morale Study 

83
 

                                                            

 

 

 

III. Information Technology Project Planning and Management 

Management Challenge: 

Management lacks the proper planning and oversight of IT projects that are critical 

to the fulfillment of the agency’s mission and are required to ensure the security 

and reliability of agency data. 

Applicable Government Requirements/Best Practices Not In Place: 

 Project Management Body of Knowledge Guidelines 

 OMB Memorandums: 

 M-10-25 Reforming the Federal Government’s Efforts to Manage 

Information Technology Projects8 

 M-12-27 Information Technology Baseline Management Policy. 

9 Critical Agency Impacts:

A. FEC is not in full compliance with the following: 

 Federal Continuity Directive 1, Federal Executive Branch 

National Continuity Program 

 OMB Memorandum M-08-22 Guidance on the Federal Desktop 

Core Configuration 

 Privacy Act 1974 

B. Project funding wasted or exceeding original planned budget10 

 2008 Agency-wide Personally Identifiable Information (PII) 

Review Assessment 

 Agency-wide COOP Project 

 User Access Review Authorities 

C. Continuous delays: 

 Adequate testing of agency COOP 

 Periodic user access authorities review 

 Assessment and Accreditation project11 

D. Weak Internal Controls: 

 Inability to certify that: 

 mission essential functions of the agency have the ability to 

operate in the event of a local disaster 

 unauthorized disclosure of PII or confidential information 

has not occurred 

 proper access authorities are provided to each employee 

8

 Updated by M-10-31, Immediate Review of Information Technology Projects. 9

 This section only includes information from those IT projects audited or reviewed by the OIG and that 

have been determined by the OIG to be most critical to the agency. 

10 User Access Review Project: The OCIO purchased applications software in 2009 and 2011 to 

implement this project, but both projects were terminated as management determined they did not meet the 

FEC’s business need. The FEC will soon be starting this project for yet a third time, with a scheduled 

completion date of April 2017, and purchasing new software tools. COOP Project: From FY 2008 to 

2010, the FEC spent $277,506 on contractors to develop plans for each division that were never updated 

and are now obsolete. 

11 Periodic evaluations of the agency’s systems to ensure the security of the information systems, in 

addition to documenting management’s approval that the systems are operable for a specific period of time 

based on the results of the evaluation. 

84
Improper Payments Information Act Reporting Details 

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

Elimination and Recovery Act of 2010, and Improper Payments Elimination and Recovery 

Improvement Act of 2012 requires agencies to review all programs and activities they administer 

and identify those which may be susceptible to significant erroneous payments. In FY 2016, the 

FEC performed a systematic review of its program and related activities to identify processes 

which may be susceptible to significant erroneous payments. Significant erroneous payments are 

defined as annual erroneous payments in the program exceeding both $10 million and 1.5 

percent or $100 million of total annual program payments. The risk assessment included the 

consideration of risk factors that are likely to contribute to significant improper payments. The 

risk assessment was performed for the FEC’s only program area which is to administer and 

enforce the Federal Election Campaign Act. 

Risk Assessment 

In FY 2016, the FEC considered risk factors as outlined in OMB Memorandum M-15-02, 

Appendix C to Circular No. A-123, Requirements for Effective Estimation and Remediation of 

Improper Payments which may significantly increase the risk of improper payments and 

determined that none are applicable to FEC’s operations. Based on the systematic review 

performed, the FEC concluded that none of its program activities are susceptible to significant 

improper payments at or above the threshold levels set by OMB. 

Recapture of Improper Payments Reporting 

The FEC has determined that the risk of improper payments is low; therefore, implementing a 

payment recapture audit program is not applicable to the agency. 

IPIA (as amended by IPERA) Reporting Details Agency Response 

Risk Assessment Reviewed as noted above. 

Statistical Sampling Not Applicable.* 

Corrective Actions Not Applicable.* 

Improper Payment Reporting Not Applicable.* 

Recapture of Improper Payments Reporting Not Applicable.* 

Accountability Not Applicable.* 

Agency information systems and other infrastructure Not Applicable.* 

Barriers Not Applicable.* 

*The FEC does not have programs or activities that are susceptible to significant 

improper payments. 

85
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 

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 

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 

OHR Office of Human Resources 

OMB Office of Management and Budget 

OPM Office of Personnel Management 

OSD Office of the Staff Director 

P&E Property and Equipment 

86
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 

SNC Statement of Net Cost 

SSAE Statements on Standards for Attestation Engagements 

TSP Thrift Savings Plan 

87