Interim Audit Report of the 

Audit Division on 

Steve Daines for Montana 

(January 1, 2019 - December 31, 2020) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act. 1 The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

About the Campaign (p. 2) 

Steve Daines for Montana is the principal campaign committee 

for Steve Daines, Republican candidate for the United States 

Senate from the state of Montana, and is headquartered in Helena, 

Montana. For more information, see the Campaign Organization 

Chart, p. 2. 

Financial Activity (p. 2) 

• Receipts

o Contributions from Individuals $ 27,131,569 

o Contributions from Political

Committees 3,304,667 

o Transfers from Authorized

Committees 1,371,488 

o Other Receipts 71,802 

Total Receipts $ 31,879,526 

• Disbursements

o Operating Expenditures $ 29,508,162 

o Transfers to Authorized

Committees 7,754 

o Contribution Refunds to

Individuals 498,117 

o Contribution Refunds to

Political Committees 34,003 

o Other Disbursements 3,173,883 

Total Disbursements $ 33,221,919 

Findings and Recommendations (p. 3) 

• Receipt of Contributions in Excess of the Limit (Finding 1)

• Disclosure of Debts and Obligations (Finding 2)

• Disclosure of Receipts (Finding 3)

1 

 52 U.S.C. §30111(b). 
 

 

Interim Audit Report of the 

Audit Division on 

Steve Daines for Montana 

(January 1, 2019 - December 31, 2020) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Part II. Overview of Campaign 

Campaign Organization 2 

Overview of Financial Activity 3 

Part III. Summaries 

Findings and Recommendations 4 

Part IV. Findings and Recommendations 

Finding 1. Receipt of Contributions in Excess of the Limit 5 

Finding 2. Disclosure of Debts and Obligations 9 

Finding 3. Disclosure of Receipts 10 
1 

Part I 

Background 

Authority for Audit 

This report is based on an audit of Steve Daines for Montana (SDFM), undertaken by the Audit 

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

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

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

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

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

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

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

§30111(b). 

Scope of Audit 

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

as a result, this audit examined: 

1. the receipt of excessive contributions; 

2. the receipt of contributions from prohibited sources; 

3. the disclosure of contributions received; 

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

5. the disclosure of debts and obligations; 

6. the consistency between reported figures and bank records; 

7. the completeness of records; and 

8. other committee operations necessary to the review. 
 

2 

Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

• Date of Registration November 12, 2010 

• Audit Coverage January 1, 2019 – December 31, 2020 

Headquarters Helena, Montana 

Bank Information 

• Bank Depositories Three 

• Bank Accounts Three checking, One money market, One 

CD 

Treasurer 

• Treasurer When Audit Was Conducted Lorna Kuney 

• Treasurer During Period Covered by Audit Lorna Kuney 

Management Information 

• Attended FEC Campaign Finance Seminar No 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 
3 

Overview of Financial Activity 

(Audited Amounts) 

Cash on hand @ January 1, 2019 $ 1,450,176 

Receipts 

o Contributions from Individuals 27,131,569 

o Contributions from Political Committees 3,304,667 

o Transfers from Authorized Committees 1,371,488 

o Other Receipts 71,802 

Total Receipts $ 31,879,526 

Disbursements 

o Operating Expenditures 29,508,162 

o Transfers to Authorized Committees 7,754 

o Contribution Refunds to Individuals 498,117 

o Contribution Refunds to Political Committees 34,003 

o Other Disbursements 3,173,883 

Total Disbursements $ 33,221,919 

Cash on hand @ December 31, 2020 $ 107,783 
 

 

 

 

 

 

 

 

4 

Part III 

Summaries 

Findings and Recommendations 

Finding 1. Receipt of Contributions in Excess of the Limit 

During audit fieldwork, the Audit staff reviewed contributions from individuals to 

determine if any exceeded the contribution limit. This review indicated that SDFM 

received apparent excessive contributions totaling $501,804. These errors occurred as a 

result of SDFM not resolving the excessive portions of contributions by requesting and 

receiving signed reattribution letters from its contributors, issuing refunds for the 

excessive portion of contributions in a timely manner, or ensuring that issued refunds 

were resolved in a timely manner. The Audit staff recommends that SDFM provide 

documentation demonstrating that the contributions were not excessive, or if excessive, 

that the contributions were resolved in a timely manner. Absent such a demonstration, 

SDFM should obtain a signed reattribution letter from the contributors, refund any 

remaining excessive amounts, or disgorge any refunds it has been unable to process to the 

U.S. Treasury. 

(For more detail, see p. 5) 

Finding 2. Disclosure of Debts and Obligations 

During audit fieldwork, the Audit staff noted that SDFM failed to disclose debts and 

obligations to five vendors totaling $373,967. The Audit staff recommends that, absent 

documentation demonstrating that these expenditures did not require reporting on 

Schedule D (Debts and Obligations), SDFM amend its disclosure reports or file a Form 

99 (Miscellaneous Electronic Submission) to disclose these debts. 

(For more detail, see p. 9) 

Finding 3. Disclosure of Receipts 

During audit fieldwork, the Audit staff reviewed receipts to verify the accuracy of the 

information disclosed on SDFM’s reports. The review indicated that SDFM did not 

correctly disclose contributions from individuals and political committees, totaling 

$568,804 and $39,000, respectively, on Schedule A (Itemized Receipts). In addition, the 

Audit staff determined that SDFM received a total of $1,409,254 in net proceeds from 

joint fundraising activity from 22 joint fundraising committees. However, SDFM did not 

itemize or correctly disclose transfers and memo entries totaling $843,231 on Schedule 

A, as required. Finally, the Audit staff determined that SDFM received a total of $9,400 

in net proceeds through one conduit. The conduit was itemized on Line 12 (Transfers 

from Other Authorized Committees) instead of disclosed as a memo entry, and the 

original contributors totaling $9,400 were not itemized. The Audit staff recommends that 

SDFM amend its disclosure reports or file a Form 99 (Miscellaneous Electronic 

Submission) to correctly disclose these receipts. 

(For more detail, see p. 10) 
5 

Part IV 

Findings and Recommendations 

Finding 1. Receipt of Contributions in Excess of the Limit 

Summary 

During audit fieldwork, the Audit staff reviewed contributions from individuals to 

determine if any exceeded the contribution limit. This review indicated that SDFM 

received apparent excessive contributions totaling $501,804. These errors occurred as a 

result of SDFM not resolving the excessive portions of contributions by requesting and 

receiving signed reattribution letters from its contributors, issuing refunds for the 

excessive portion of contributions in a timely manner, or ensuring that issued refunds 

were resolved in a timely manner. The Audit staff recommends that SDFM provide 

documentation demonstrating that the contributions were not excessive, or if excessive, 

that the contributions were resolved in a timely manner. Absent such a demonstration, 

SDFM should obtain a signed reattribution letter from the contributors, refund any 

remaining excessive amounts, or disgorge any refunds it has been unable to process to the 

U.S. Treasury. 

Legal Standard 

A. Authorized Committee Limits. For the 2020 election, an authorized committee may 

not receive more than a total of $2,800 per election from any one person or $5,000 

per election from a multicandidate political committee. 52 U.S.C. §§30116(a)(1)(A) 

and (a)(2)(A); 11 CFR §§110.1(a) and (b) and 110.9. 

B. Handling Contributions That Appear Excessive. If a committee receives a 

contribution that appears to be excessive, the committee must either: 

• Return the questionable check to the donor; or 

• Deposit the check into its federal account and: 

• Keep enough money in the account to cover all potential refunds; 

• Keep a written record explaining why the contribution may be illegal; 

• Include this explanation on Schedule A if the contribution has to be itemized 

before its legality is established; 

• Seek a reattribution or a redesignation of the excessive portion, following the 

instructions provided in the Commission regulations (see below for 

explanations of reattribution and redesignation); and 

• If the committee does not receive a proper reattribution or redesignation 

within 60 days after receiving the excessive contribution, refund the excessive 

portion to the donor. 11 CFR §§103.3(b)(3), (4) and (5) and 110.1(k)(3)(ii) 

(B). 

C. Joint Contributions. Any contribution made by more than one person (except for a 

contribution made by a partnership) must include the signature of each contributor on 

the check, money order, or other negotiable instrument or in a separate writing. A 
 

6 

joint contribution is attributed equally to each donor unless a statement indicates that 

the funds should be divided differently. 11 CFR §110.1(k)(1) and (2). 

D. Reattribution of Excessive Contributions. The Commission regulations permit 

committees to ask donors of excessive contributions (or contributions that exceed the 

committee’s net debts outstanding) whether they had intended their contribution to be 

a joint contribution from more than one person and whether they would like to 

reattribute the excess amount to the other contributor. The committee must inform 

the contributor that: 

• The reattribution must be signed by both contributors; 

• The reattribution must be received by the committee within 60 days after the 

committee received the original contribution; and 

• The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(k)(3). 

Within 60 days after receiving the excessive contribution, the committee must either 

receive the proper reattribution or refund the excessive portion to the donor. 11 CFR 

§§103.3(b) (3) and 110.1(k)(3)(ii)(B). Further, a political committee must retain 

written records concerning the reattribution in order for it to be effective. 11 CFR 

§110.1(l)(5). 

Notwithstanding the above, any excessive contribution that was made on a written 

instrument that is imprinted with the names of more than one individual may be 

attributed among the individuals listed unless instructed otherwise by the 

contributor(s). The committee must inform each contributor: 

• How the contribution was attributed; and 

• The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(k)(3)(ii)(B). 

E. Redesignation of Excessive Contributions. When an authorized candidate 

committee receives an excessive contribution (or a contribution that exceeds the 

committee’s net debts outstanding), the committee may ask the contributor to 

redesignate the excess portion of the contribution for use in another election. The 

committee must inform the contributor that: 

• The redesignation must be signed by the contributor; 

• The redesignation must be received by the committee within 60 days after the 

committee received the original contribution; and 

• The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(b)(5). 

Within 60 days after receiving the excessive contribution, the committee must either 

receive the proper redesignation or refund the excessive portion to the donor. 11 CFR 

§§103.3(b) (3) and 110.1(b) (5) (ii) (A). Further, a political committee must retain 

written records concerning the redesignation in order for it to be effective. 11 CFR 

§110.1(l)(5). 
 

7 

When an individual makes an excessive contribution to a candidate’s authorized 

committee, the campaign may presumptively redesignate the excessive portion to the 

general election if the contribution: 

• Is made before that candidate’s primary election; 

• Is not designated in writing for a particular election; 

• Would be excessive if treated as a primary election contribution; and 

• As redesignated, does not cause the contributor to exceed any other contribution 

limit. 11 CFR §110.1(b)(5)(ii)(B)(1)-(4). 

The committee is required to notify the contributor of the redesignation within 60 

days of the treasurer’s receipt of the contribution and must offer the contributor the 

option to receive a refund instead. 

Facts and Analysis 

A. Facts 

1. Facts 

The Audit staff utilized sample testing and a review of other contributions not 

included in the sample population to identify apparent excessive contributions from 

individuals, as noted below. 

Excessive Contributions - Testing Method 

Sample Projection Amount 2 $291,803 

100% Review of High Dollar Contributions $157,651 

100% Review of Contributions Received Through 

Joint Fundraisers $52,350 

Total Amount of Excessive Contributions $501,804 

Reason for Excessive Contributions 

Contributions not resolved via signed reattribution 

letter or refund $501,804 

Total Amount of Excessive Contributions $501,804 

2. Additional Information 

The errors were primarily a result of SDFM not resolving the excessive portions of 

contributions made on single/joint account checks, credit card, or through a joint 

fundraiser by requesting signed reattribution letters or a refund. SDFM did issue 

some refunds, however, some of the refunds were not cashed by the contributors. 

The total amount of refunds issued, but not cashed, is $60,327. 

2 

 The sample error amount ($291,803) was projected using a Monetary Unit Sample with a 95 percent 

confidence level. The sample estimate could be as low as $143,260 or as high as $583,597. 
 

 

 

 

 

 

 

 

8 

SDFM did not maintain a separate account for questionable contributions. Based on 

its cash on hand at the end of the audit period, it appears that SDFM did not maintain 

sufficient funds to refund the apparent excessive contributions. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with SDFM representatives at the exit conference 

and provided a schedule of the apparent excessive contributions. SDFM representatives 

questioned the use of sampling in the audit, and the Audit staff explained that the Audit 

Division has used statistical sampling for many years and that it is a widely used tool in 

accounting and auditing. The Audit staff then walked SDFM representatives through 

each excessive contribution, at their request. 

In response to the exit conference, SDFM representatives stated that they object to the 

use of sampling to project errors. The Audit staff notes that the use of statistical 

sampling has been approved by the Commission for use in Title 52 audits for over 30 

years. 

SDFM representatives also contend that contributions, for which it issued a refund but the 

refund check was not cashed by the contributor, should be treated as a separate category 

from contributions that were never refunded. The Audit staff acknowledges that SDFM 

issued refund checks, which were not cashed, for excessive contributions; however, these 

checks should have been re-issued, or the excessive amounts disgorged to the U.S. 

Treasury so that the amount of the excessive contribution did not remain in SDFM’s bank 

accounts. 

SDFM representatives also objected to the inclusion of a contribution that they stated was 

not actually excessive. SDFM’s database records and its disclosure reports show the 

receipt of three contributions on the same date from a single contributor, one in the 

amount of $5,600, and two in the amount of $2,800 each. The $5,600 contribution was 

refunded timely via a credit card chargeback, so SDFM does not believe this contributor 

made excessive contributions. However, the Audit staff reviewed the credit card records 

provided by SDFM and found three contributions from this same contributor all on the 

same date, each for $5,600, for a total of $16,800. There was one chargeback that 

refunded one of the $5,600 contributions in a timely manner. SDFM may designate one 

of the remaining two $5,600 contributions as $2,800 for the primary election and 

presumptively redesignate $2,800 to the general election. However, the final $5,600 

contribution remains excessive and must be refunded. 

The Audit staff recommends that, within 30 calendar days of service of this report, 

SDFM: 

• Provide evidence demonstrating that the contributions, totaling $501,804, were 

not excessive, or if excessive, were resolved in a timely manner. This evidence 

should include documentation that was not previously made available to the 

Audit staff, including copies of receipt of authorization from its contributors for 

reattribution; or timely refunds (copies of the front and back of each negotiated 

refund check). 
 

9 

• Absent such demonstration, SDFM should obtain a signed authorization letter 

from the contributor, refund any remaining excessive amounts, or disgorge any 

refunds, which were not cashed by the contributors, to the U.S. Treasury. SDFM 

must provide evidence of such refunds or disgorgement (copies of front and back 

of negotiated checks). 

• If funds are not available to make such refunds, SDFM should report the 

excessive contributions as debts owed on Schedule D (Debts and Obligations) 

until funds become available to make the refunds. 

Finding 2. Disclosure of Debts and Obligations 

Summary 

During audit fieldwork, the Audit staff noted that SDFM failed to disclose debts and 

obligations to five vendors totaling $373,967. The Audit staff recommends that, absent 

documentation demonstrating that these expenditures did not require reporting on 

Schedule D (Debts and Obligations), SDFM amend its disclosure reports or file a Form 

99 (Miscellaneous Electronic Submission) to disclose these debts. 

Legal Standard 

A. Continuous Reporting Required. A political committee must disclose the amount 

and nature of outstanding debts and obligations until those debts are extinguished. 52 

U.S.C. §30104(b)(8) and 11 CFR §§104.3(d) and 104.11(a). 

B. Separate Schedules. A political committee must file separate schedules for debts 

owed by the committee and debts owed to the committee, together with a statement 

explaining the circumstances and conditions under which each debt and obligation 

was incurred or extinguished. 11 CFR §104.11(a). 

C. Itemizing Debts and Obligations. 

• A debt of $500 or less must be reported once it has been outstanding 60 days from 

the date incurred (the date of the transaction); the committee reports it on the next 

regularly scheduled report. 

• A debt exceeding $500 must be disclosed in the report that covers the date on 

which the debt was incurred. 11 CFR §104.11(b). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed SDFM’s disbursement records and 

disclosure reports for proper reporting of debts and obligations. This review identified 

debts owed to five vendors totaling $373,9673 that SDFM failed to report on Schedule D 

during the audit period. Based on a review of the records, these vendors provided 

advertising, fundraising, direct mail, website and listing services, shipping, event 

catering, and consulting services. SDFM reported debt totaling $758,664 on Schedule D 

3 

 Each debt was counted only once, even if it was required to be disclosed over multiple periods. 
 

10 

during the audit period. The Audit staff calculated the debts owed to the vendors based 

on the invoice date and the subsequent payment date. Debts were outstanding for periods 

ranging from 13 to 108 days. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with SDFM representatives at the exit conference 

and provided a schedule detailing those transactions requiring disclosure on Schedule D. 

The SDFM representatives had no comments at that time. 

In response to the exit conference, SDFM provided additional documentation for $23,907 

of the outstanding debt showing that the invoices were provided at a later date than the 

invoice date. As a result, this amount was deducted from the overall undisclosed debt 

balance discussed at the exit conference and is not included in this finding. SDFM did 

not provide comments on the remaining undisclosed debts. 

The Audit staff recommends that, within 30 calendar days of service of this report, 

SDFM provide additional documentation demonstrating that the transactions totaling 

$373,967 were not obligations which required reporting on Schedule D. Absent such 

documentation, the Audit staff recommends that SDFM amend its disclosure reports or 

file a Form 99 (Miscellaneous Electronic Submission)4

 to disclose these debts and 

obligations. 

Finding 3. Disclosure of Receipts 

Summary 

During audit fieldwork, the Audit staff reviewed receipts to verify the accuracy of the 

information disclosed on SDFM’s reports. The review indicated that SDFM did not 

correctly disclose contributions from individuals and political committees, totaling 

$568,804 and $39,000, respectively on Schedule A (Itemized Receipts). In addition, the 

Audit staff determined that SDFM received a total of $1,409,254 in net proceeds from 

joint fundraising activity from 22 joint fundraising committees. However, SDFM did not 

itemize or correctly disclose transfers and memo entries totaling $843,231 on Schedule 

A, as required. Finally, the Audit staff determined that SDFM received a total of $9,400 

in net proceeds through one conduit. The conduit was itemized on Line 12 (Transfers 

from Other Authorized Committees) instead of disclosed as a memo entry, and the 

original contributors totaling $9,400 were not itemized. The Audit staff recommends that 

SDFM amend its disclosure reports or file a Form 99 (Miscellaneous Electronic 

Submission) to correctly disclose these receipts. 

Legal Standard 

A. Itemization Required for Contributions from Individuals. An authorized 

candidate committee must itemize any contribution from an individual if it exceeds 

$200 per election cycle, either by itself or when combined with other contributions 

from the same contributor. 52 U.S.C. §30104(b)(3)(A). (Authorized) 

4 

 If SDFM chooses to file a Form 99 instead of amending its disclosure reports, the form must contain all 

pertinent information that is required on each schedule. 
 

11 

B. Election Cycle. The election cycle begins on the first day following the date of the 

previous general election and ends on the date of the next general election. If 

contributions and expenditures are designated for another election cycle, then the 

election cycle begins when the first contribution is received or expenditure is made. 

11 CFR §100.3(b). 

C. Required Information for Contributions from Individuals. For each itemized 

contribution from an individual, the committee must provide the following 

information: 

• The contributor’s full name and address (including zip code); 

• The contributor’s occupation and the name of his or her employer; 

• The date of receipt (the date the committee received the contribution); 

• The amount of the contribution; and 

• The calendar year-to-date (Unauthorized) election cycle-to-date (Authorized) total 

of all contributions from the same individual. 11 CFR §§100.12 and 104.3(a)(4) 

and 52 U.S.C. §30104(b)(3)(A). 

D. Best Efforts Ensures Compliance. When the treasurer of a political committee 

shows that the committee used best efforts (see below) to obtain, maintain, and 

submit the information required by the Act, the committee’s reports and records will 

be considered in compliance with the Act. 52 U.S.C. §30102(i). 

E. Definition of Best Efforts. The treasurer and the committee will be considered to 

have used “best efforts” if the committee satisfied all of the following criteria: 

• All written solicitations for contributions included: 

 A clear request for the contributor's full name, mailing address, 

occupation, and name of employer; and 

 The statement that such reporting is required by Federal law. 

• Within 30 days after the receipt of the contribution, the treasurer made at least one 

effort to obtain the missing information, in either a written request or a 

documented oral request. 

• The treasurer reported any contributor information that, although not initially 

provided by the contributor, was obtained in a follow-up communication or was 

contained in the committee’s records or in prior reports that the committee filed 

during the same two-year election cycle. 11 CFR §104.7(b). 

F. Itemization of Contributions from Joint Fundraising Efforts. After the joint 

fundraising representative distributes the net proceeds, each participating political 

committee reports its share as a transfer-in from the joint fundraising representative 

and itemizes the transfer on a separate schedule A for that Line. Using the records 

received from the joint fundraising representative, a participating committee also 

must itemize its share of gross receipts as contributions from the original donors on a 

memo entry Schedule A to the extent required under 11 CFR §104.3(a). 
 

12 

When itemizing gross contributions, the participant must report the date of receipt as 

the day the joint fundraising representative received the contribution. 11 CFR 

§102.17(c)(3)(iii) and (c)(8)(i)(B). 

Facts and Analysis 

A. Disclosure of Receipts 

1. Facts 

The Audit staff utilized sample testing and a review of other contributions not 

included in the sample population to identify contributions from individuals, totaling 

$568,804, and political committees, totaling $39,000, which were not correctly 

disclosed on Schedule A of SDFM’s disclosure reports. These reporting errors 

consisted of the following. 

Disclosure of Contributions - Testing Method 

Sample Projection Amount5 $535,012 

100% Review of High Dollar Contributions from 

Individuals $33,792 

100% Review of Contributions from Political 

Committees $39,000 

Total Error Amount $607,804 

5 

 The sample error amount ($535,012) was projected using a Monetary Unit Sample with a 95 percent 

confidence level. The sample estimate could be as low as $273,748 or as high as $970,100. 
13 

The types of errors discovered in the sample review include incorrect disclosure of 

receipt date, name, and/or disclosure without a partnership attribution. 

Disclosure Errors for Individuals 

Type of Review 100% 

Contributions Disclosed without Partnership Attribution $19,600 

Contributions Disclosed with Incorrect Receipt Date $5,600 

Contributions Disclosed with Incorrect Amount $5,592 

Contributions Disclosed with Incorrect Name $3,000 

Total Error Amount $33,792 

Disclosure Errors for PACs6 

Type of Review 100% 

Contributions Disclosed without an Address $27,000 

Contributions Disclosed with Incorrect Name $16,000 

Contributions Disclosed with an Incorrect Election Designation $1,000 

Total Error Amount $39,000 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the disclosure errors at the exit conference and provided 

schedules detailing the incorrectly disclosed contributions. SDFM representatives 

inquired, and the Audit staff confirmed the method for determining date errors, and 

that contemporaneous documentation would be sufficient to show the date of the 

contribution receipt. 

In response to the exit conference, SDFM stated that the date reported was correct 

for two contributions. The Audit staff accepted SDFM’s explanation, and those 

contributions are not included in the error amounts within the report. Additionally, 

6 

 This group of errors and their respective dollar value exceed total errors ($39,000) because one 

contribution totaling $5,000 had multiple disclosure errors. Each contribution was only counted once 

toward the total error amounts, even if there were multiple errors. 
 

14 

SDFM representatives stated that they object to the use of sampling to project errors. 

The Audit staff notes that the use of statistical sampling has been approved by the 

Commission for use in Title 52 audits for over 30 years. Finally, SDFM indicated 

that it would amend disclosure reports to correct the errors. 

The Audit staff recommends that, within 30 calendar days of service of this report, 

SDFM amend its disclosure reports or file a Form 99 (Miscellaneous Electronic 

Submission)4

 to correctly disclose these contributions. 

B. Disclosure of Joint Fundraising Transfers and Memo Entries 

1. Facts 

During audit fieldwork, the Audit staff determined that SDFM received a total of 

$1,409,254 in net proceeds from joint fundraising activity from 22 joint fundraising 

committees. However, SDFM did not itemize or correctly disclose transfers and 

memo entries totaling $843,231 on Schedules A (Itemized Receipts). These 

reporting errors consisted of the following. 

Disclosure Errors7 

Type of Review 100% 

Transfers Disclosed on Schedule A – Missing Address $84,110 

Transfers Disclosed on Schedule A – Incorrect Receipt Date $78,941 

Transfers Disclosed on Schedule A – Incorrect Amount $111 

Memo Entries Not Itemized $306,585 

Memo Entries Disclosed on Schedule A - Incorrect Receipt 

Date $345,034 

Memo Entries Disclosed on Schedule A – Apparent Duplicate 

Entries $22,250 

Memo Entries Disclosed on Schedule A – Incorrect Address $5,100 

Memo Entries Disclosed on Schedule A – Incorrect or 

Missing Name $3,200 

7 

 These groups of errors and their respective dollar value exceed total errors ($843,231) because three 

contributions, totaling $5,100, had multiple disclosure errors. Each contribution was only counted once 

toward the total error amounts, even if there were multiple errors. 
15 

Disclosure Errors7 

Memo Entries Disclosed on Schedule A – Incorrect Election 

Designation $2,400 

Memo Entries Disclosed on Schedule A – Incorrect 

Aggregate Total $600 

Total Error Amount $843,231 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with SDFM representatives at the exit 

conference and provided schedules detailing the missing and incorrectly disclosed 

contributions. SDFM representatives did not directly comment on these errors in 

response to the exit conference. 

The Audit staff recommends that, within 30 calendar days of service of this report, 

SDFM amend its disclosure reports or file a Form 99 (Miscellaneous Electronic 

Submission)4

 to correctly disclose the joint fundraising transfers and memo entries. 

C. Disclosure of Contribution from a Conduit 

1. Facts 

During audit fieldwork, the Audit staff determined that SDFM received a total of 

$9,400 in net proceeds through one conduit. The conduit was itemized on Line 12 

(Transfers from Other Authorized Committees), however, the original contributors 

totaling $9,400 were not itemized. This resulted in a total of $18,800 of incorrectly 

disclosed contributions. These reporting errors consisted of the following. 

Disclosure Errors 

Type of Review 100% 

Conduit Incorrectly Itemized on Line 12 $9,400 

Contributors not Itemized $9,400 

Total Error Amount $18,800 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with SDFM representatives at the exit 

conference and provided schedules detailing the missing and incorrectly disclosed 

contributions. SDFM representatives did not directly comment on these errors in 

response to the exit conference. 
16 

The Audit staff recommends that, within 30 calendar days of service of this report, 

SDFM amend its disclosure reports or file a Form 99 (Miscellaneous Electronic 

Submission)4 to itemize the required contributions and report the conduit as a memo 

entry.