Interim Audit Report of the 

Audit Division on the Mississippi 

Republican Party 

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. 

(January 1, 2015 - December 31, 2016) 

About the Committee (p. 2) 

The Mississippi Republican Party is a state party committee 

headquartered in Jackson, Mississippi. For more information, see 

the chart on the Committee Organization, p. 2. 

Financial Activity (pp. 2 and 3) 

• Receipts 

o Contributions from Individuals $ 740,807 

o Contributions from Political Party 

Committees and Other Political 55,950 

Committees 

o Transfers from Affiliated/Other 1,647,080 

Party Committees 2,686 

o Offsets to Operating Expenditures 98,202 

o Other Federal Receipts 

o Transfers from Non-Federal 172,635 

Account $ 2,717,360 

Total Receipts 

• Disbursements 

o Operating Expenditures $ 328,494 

o Allocated Federal/Non-Federal 

Expenditures 492,538 

o Transfers to Affiliated Committees 1,587,842 

o Federal Election Activity 2 96,857 

Total Disbursements $ 2,705,731 

Findings and Recommendations (p. 4) 

• Misstatement of Financial Activity (Finding 1) 

• Reporting of Debts and Obligations (Finding 2) 

• Reporting of Apparent Independent Expenditures (Finding 3) 

1 52 U.S.C. §30111(b). 
Interim Audit Report of the Audit 

Division on the 

Mississippi Republican Party 

(January 1, 2015 - December 31, 2016) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 4 

Part IV. Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 5 

Finding 2. Reporting of Debts and Obligations 6 

Finding 3. Reporting of Apparent Independent Expenditures 8 
 

 

 

 

 

1 

Part I 

Background 

Authority for Audit 

This report is based on an audit of the Mississippi Republican Party (MRP), undertaken 

by the Audit Division of the Federal Election Commission (the Commission) in 

accordance with the Federal Election Campaign Act of 1971, as amended (the Act). The 

Audit Division conducted the audit pursuant to 52 U.S.C. §30111(b), which permits the 

Commission to conduct audits and field investigations of any political committee that is 

required to file a report under 52 U.S.C. §30104. Prior to conducting any audit under this 

subsection, the Commission must perform an internal review of reports filed by selected 

committees to determine if the reports filed by a particular committee meet the threshold 

requirements for substantial compliance with the Act. 52 U.S.C. §30111(b). 

Scope of Audit 

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

factors and as a result, this audit examined: 

1. the receipt of excessive contributions; 

2. the receipt of contributions from prohibited sources; 

3. the disclosure of contributions received; 

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

5. the disclosure of disbursements, debts and obligations; 

6. the disclosure of expenses allocated between federal and non-federal accounts; 

7. the consistency between reported figures and bank records; 

8. the completeness of records; 

9. the disclosure of independent expenditures; and 

10. other committee operations necessary to the review. 
 

 

2 

Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration January 9, 1978 

• Audit Coverage January 1, 2015 – December 31, 2016 

Headquarters Jackson, Mississippi 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Three Federal; Three Non-federal 

Treasurer 

• Treasurer When Audit Was Conducted Lucien Smith (1/26/2018 - 1/30/2018) 

Paul V. Breazeale (1/31/2018 - present) 

• Treasurer During Period Covered by Audit Paul V. Breazeale (8/21/2012 - 7/19/16) 

Lucien Smith (7/20/2016 - 12/31/2016) 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Who Handled Accounting and Recordkeeping 

Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand @ January 1, 2015 $ 42,307 

Receipts 

o Contributions from Individuals 740,807 

o Contributions from Political Party and Other 

Committees 

55,950 

o Transfers from Affiliated and Other Political 

Committees 

1,647,080 

o Offsets to Operating Expenditures 2,686 

o Other Federal Receipts 98,202 

o Transfers from Non-Federal Account 172,635 

Total Receipts $ 2,717,360 

Disbursements 

o Operating Expenditures 328,494 

o Allocated Federal/Non-Federal Expenditures 492,538 
3 

o Transfers to Affiliated Committees 1,587,842 

o Federal Election Activity 296,857 

Total Disbursements $ 2,705,731 

Cash-on-hand @ December 31, 2016 $ 53,936 
 

 

 

 

 

 

 

 

 

 

 

 

 

4 

Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

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

records revealed a misstatement of receipts and disbursements for calendar year 2015. 

Specifically, MRP understated its receipts and disbursements by $10,606 and $14,808, 

respectively. The Audit staff recommends that MRP amend its disclosure reports or file 

a Form 99 (Miscellaneous Text Submission) to correct the misstatements. (For more 

detail, see p. 5.) 

Finding 2. Reporting of Debts and Obligations 

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

obligations owed to 10 vendors totaling $152,931. The Audit staff recommends, absent 

documentation demonstrating that these expenditures did not require reporting on 

Schedule D (Debts and Obligations), that MRP amend its reports or file a Form 99 to 

disclose these debts. (For more detail, see p. 6.) 

Finding 3. Reporting of Apparent Independent 

Expenditures 

During audit fieldwork, the Audit staff reviewed expenditures totaling $38,940, that MRP 

disclosed on Schedule B, Line 21(b) (Other Federal Operating Expenditures) and 

Schedule H4 (Disbursements for Allocated Federal /Non-Federal Activity), that appear to 

be apparent independent expenditures that contain express advocacy and should have 

been disclosed on Schedule E, Line 24 (Itemized Independent Expenditures). 

Additionally, MRP did not provide sufficient documentation, pertaining to dissemination 

dates, to verify whether 24/48-hour reports were required to be filed for the apparent 

independent expenditures totaling $38,940. 

If MRP believes that the apparent independent expenditures, totaling $38,940, did not 

require reporting as independent expenditures, the Audit staff recommends that MRP 

provide documentation to support its conclusion. Absent such documentation, the Audit 

staff recommends that MRP amend its reports to disclose these disbursements as 

independent expenditures on Schedule E and submit revised procedures for reporting 

independent expenditures. Lastly, the Audit staff recommends that MRP provide 

documentation to support the date of public dissemination for each communication to 

determine whether a filing of a 24/48-hour report was required. (For more detail, see p. 

8.) 
 

 

 

 

 

 

 

 

 

5 

Part IV 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

Summary 

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

records revealed a misstatement of receipts and disbursements for calendar year 2015. 

Specifically, MRP understated its receipts and disbursements by $10,606 and $14,808, 

respectively. The Audit staff recommends that MRP amend its disclosure reports or file a 

Form 99 (Miscellaneous Text Submission) to correct the misstatements. 

Legal Standard 

Contents of Federal Reports. Each report must disclose: 

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

• the total amount of receipts for the reporting period and for the calendar year; 

• the total amount of disbursements for the reporting period and for the calendar 

year; and 

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

Schedule B (Itemized Disbursements). 52 U.S.C. §30104(b)(1), (2), (3), (4), and 

(5). 

Facts and Analysis 

A. Facts 

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

its bank records for calendar years 2015 and 2016. The reconciliation identified that 

MRP misstated receipts and disbursements for 2015. The following chart details the 

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

paragraphs explain why the discrepancies occurred. 

2015 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance 

@ January 1, 2015 

$50,087 $42,307 $7,780 

Overstated 

Receipts $394,175 $404,781 $10,606 

Understated 

Disbursements $403,626 $418,434 $14,808 

Understated 

Ending Cash Balance 

@ December 31, 2015 

$28,6242 $28,654 $30 

Understated 

2 The reported ending cash balance does not equal reported beginning cash balance plus reported receipts 

minus reported disbursements. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6 

The reported 2015 beginning cash balance was over reported by $7,780 likely resulting 

from prior period discrepancies. 

The understatement of receipts resulted from the following: 

• Transfer from a Non-federal account not reported $7,830 

• In-kind contribution not reported as a receipt 2,868 

• Unexplained differences (92) 

Net Understatement of Receipts $10,606 

The understatement of disbursements resulted from the following: 

• Disbursements not reported $11,932 

• In-kind contribution not reported as a disbursement 2,868 

• Unexplained differences 8 

Understatement of Disbursements $14,808 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with MRP representatives during the exit 

conference and provided schedules detailing the misstatements. MRP representatives did 

not provide any comments. 

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

amend its disclosure reports or file a Form 993 to correct the misstatements noted above, 

and reconcile the cash balance on its most recent filed report to include these adjustments 

and correct any subsequent discrepancies. 

Finding 2. Reporting of Debts and Obligations 

Summary 

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

obligations owed to 10 vendors totaling $152,931. The Audit staff recommends, absent 

documentation demonstrating that these expenditures did not require reporting on 

Schedule D (Debts and Obligations), that MRP amend its reports or file a Form 99 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 

3 If the MRP 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. 
 

 

 

 

 

 

 

 

 

 

 

 

 

7 

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 MRP’s disbursements records and 

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

debts owed to ten vendors totaling $152,9314 that MRP failed to report on Schedule D 

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

with signs, stickers, printed membership/fundraising letters and cards, audio and video 

equipment, food and venue for events, financial services, national convention materials, 

transportation, compliance services, postage, and flower arrangements. MRP reported 

debt totaling $134,142 on Schedule D during the audit cycle. 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 1047 days. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter at the exit conference and provided MRP 

representatives schedules detailing the transactions requiring disclosure on Schedule D. 

MRP representatives inquired about the definition of debts and whether monthly 

recurring expenses would be considered debt if not paid within a specific timeframe or 

crossing reporting periods. The Audit staff noted that none of the errors were recurring 

expenses. In response to the exit conference, MRP provided no further comments. 

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

provide additional documents demonstrating that these transactions were not obligations 

which required reporting on Schedule D. Absent such documentation, the Audit staff 

recommends that MRP amend its reports or file a Form 995 to disclose these debts and 

obligations on Schedule D. 

4 Each debt in this amount was counted once even if it required disclosure over multiple periods. 5 If the committee 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. 
 

 

 

 

 

 

8 

Finding 3. Reporting of Apparent Independent 

Expenditures 

Summary 

During audit fieldwork, the Audit staff reviewed expenditures totaling $38,940, that MRP 

disclosed on Schedule B, Line 21(b) (Other Federal Operating Expenditures) and 

Schedule H4 (Disbursements for Allocated Federal /Non-Federal Activity), that appear to 

be apparent independent expenditures that contain express advocacy and should have 

been disclosed on Schedule E, Line 24 (Itemized Independent Expenditures). 

Additionally, MRP did not provide sufficient documentation, pertaining to dissemination 

dates, to verify whether 24/48-hour reports were required to be filed for the apparent 

independent expenditures totaling $38,940. 

If MRP believes that the apparent independent expenditures, totaling $38,940, did not 

require reporting as independent expenditures, the Audit staff recommends that MRP 

provide documentation to support its conclusion. Absent such documentation, the Audit 

staff recommends that MRP amend its reports to disclose these disbursements as 

independent expenditures on Schedule E and submit revised procedures for reporting 

independent expenditures. Lastly, the Audit staff recommends that MRP provide 

documentation to support the date of public dissemination for each communication to 

determine whether a filing of a 24/48-hour report was required. 

Legal Standard 

A. Definition of Independent Expenditures. An independent expenditure is an 

expenditure made for a communication expressly advocating the election or defeat of 

a clearly identified candidate that is not made in cooperation, consultation, or concert 

with, or at the request or suggestion of, a candidate, a candidate’s authorized 

committee, or their agents, or a political party or its agents. 

An independent expenditure is an expenditure made for a communication expressly 

advocating the election or defeat of a clearly identified candidate that is not made in 

cooperation, consultation, or concert with, or at the request or suggestion of, a 

candidate, a candidate’s authorized committee, or their agents, or a political party or 

its agents. 

A clearly identified candidate is one whose name, nickname, photograph or drawing 

appears, or whose identity is apparent through unambiguous reference, such as “your 

Congressman,” or through an unambiguous reference to his or her status as a 

candidate, such as “the Democratic presidential nominee” or “Republican candidate 

for Senate in this state.” 

Expressly advocating means any communication that: 

• Uses phrases such as “vote for the President” or “re-elect your Congressman” or 

communications of campaign slogan(s) or individual word(s), which in context 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9 

can have no other reasonable meaning than to urge election or defeat of one or 

more clearly identified candidates; or 

• When taken as a whole and with limited references to external events, such as 

proximity to the election, could be interpreted by a reasonable person only as 

advocating the election or defeat of one or more clearly identified candidates. 

11 CFR §§100.16(a), 100.17 and 100.22. 

B. Disclosure Requirements – General Guidelines. An independent expenditure shall 

be reported on Schedule E if, when added to other independent expenditures made to 

the same payee during the same calendar year, it exceeds $200. Independent 

expenditures made (i.e., publicly disseminated) prior to payment should be disclosed 

as memo entries on Schedule E and as a debt on Schedule D. Independent 

expenditures of $200 or less need not be itemized, though the committee must report 

the total of those expenditures on line (b) on Schedule E. 11 CFR §§104.3(b)(3)(vii), 

104.4(a) and 104.11. 

C. Last-Minute Independent Expenditure Reports (24-Hour Reports). Any 

independent expenditures aggregating $1,000 or more, with respect to any given 

election, and made after the 20th day but more than 24 hours before the day of an 

election, must be reported and the report must be received by the Commission within 

24 hours after the expenditure is made. A 24-hour report is required each time 

additional independent expenditures aggregate $1,000 or more. The 24-hour report 

must be filed on a Schedule E. The date that a communication is publicly disseminated 

serves as the date that the committee must use to determine whether the total amount of 

independent expenditures has, in the aggregate, reached or exceeded the threshold 

reporting amount of $1,000. 11 CFR §§104.4(f) and 104.5(g)(2). 

D. Independent Expenditure Reports (48-Hour Reports). Any independent 

expenditures aggregating $10,000 or more with respect to any given election, at any 

time during a calendar year, up to and including the 20th day before an election, must 

be disclosed within 48 hours each time the expenditures aggregate $10,000 or more. 

The 48-hour report must be filed on a Schedule E. The date that a communication is 

publicly disseminated serves as the date that the committee must use to determine 

whether the total amount of independent expenditures has, in the aggregate, reached 

or exceeded the threshold reporting amount of $10,000. The reports must be filed 

with the Commission within 48 hours after the expenditure is made. 

11 CFR §§104.4(f) and 104.5(g)(1). 

E. Formal Requirements Regarding Reports and Statements. Each political 

committee shall maintain records with respect to the matters required to be reported 

which shall provide in sufficient detail the necessary information and data from which 

the filed reports may be verified, explained, clarified, and checked for accuracy and 

completeness. 11 CFR §104.14(b)(1). 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10 

Facts and Analysis 

A. Reporting of Apparent Independent Expenditures 

1. Facts 

During audit fieldwork, the Audit staff reviewed disbursements to ensure proper 

reporting. The Audit staff noted that MRP did not disclose any independent 

expenditures on Schedule E, however, it made expenditures totaling $38,940 and 

disclosed them on Schedule B, Line 21(b), and Schedule H4. These expenditures 

were for eight fundraising mailers, which contained express advocacy. A 

breakdown analysis for these expenditures is as follows: 

a. Apparent Independent Expenditures Reported as Disbursements for 

Allocated Federal /Non-federal Activity (Associated Mailer and Invoice 

Provided under 11 CFR §100.22(a)) 

MRP made seven disbursements for three apparent independent expenditures 

totaling $16,547 for which it provided copies of the mailers with associated 

invoices and cancelled checks. The mailers contained the following phrases, 

“If we unite to support Donald Trump,” “Stop Hillary,” and “You can make a 

difference to support Donald Trump and to stop Hillary Clinton.” All of these 

communications contained language expressly advocating the election or 

defeat of a clearly identified candidate, as defined under 11 CFR §100.22(a). 

b. Apparent Independent Expenditures Reported as Operating 

Expenditures and Disbursements for Allocated Federal /Non-Federal 

(Associated Mailer and Invoice Provided under 11 CFR §100.22(b)) 

MRP made 12 disbursements for five mailers totaling $22,393, for which it 

provided copies of the mailers with associated invoices and cancelled checks. 

The mailers contained the following phrases, “...make sure that Donald 

Trump’s message of Making America Great Again can be delivered,” 

“Donald Trump on the other hand will nominate Supreme Court Justices who 

will protect the Constitution,” “...make sure Republicans in Mississippi turn 

out to vote and send Donald Trump to a landslide victory here,” “We must 

elect a Republican as the 45th President of the United States,” and “Here is the 

candidate I support as our 2016 Republican nominee for President.” Based on 

the definition of express advocacy under 11 CFR §100.22(b), the Audit staff 

believes that these mailers could only be interpreted by a reasonable person as 

advocating the election or defeat of a clearly identified candidate. 

2. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff presented MRP a schedule detailing these 

expenditures. MRP representatives did not have any comments. 

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

report, MRP provide documentation that apparent independent expenditures, 

totaling $38,940, did not require reporting as independent expenditures. Absent 
11 

such documentation, the Audit staff recommends that MRP amend its reports to 

disclose these disbursements as independent expenditures on Schedule E and 

submit procedures for reporting independent expenditures. 

B. Failure to File 24/48-Hour Reports for Apparent Independent Expenditures 

1. Facts 

In addition to not reporting any independent expenditures during the audit period, 

MRP did not file any 24 or 48-hour reports. Therefore, the apparent independent 

expenditures identified above, may also have required such filings. 

2. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed with the MRP representatives the 

requirements for filing 24/48-hour reports. MRP representatives did not provide 

any comments. 

Absent documentation that the apparent independent expenditures, totaling 

$38,940, did not require reporting as independent expenditures, the Audit staff 

recommends that, within 30 calendar days of service of this report, MRP provide 

documentation to support the date of public dissemination for each mailer to 

determine whether a 24/48-hour report was required.