November 12, 2020 

MEMORANDUM 

To: The Commission 

Through: Alec Palmer 

Staff Director 

By: Jonathan Fonseca 

Lead Auditor 

Erica Lee 

Audit Program Manager 

Dayna C. Brown 

Acting Assistant Staff Director 

Audit Division 

From: Patricia C. Orrock 

Chief Compliance Officer 

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Subject: Audit Division Recommendation Memorandum on the National Tooling & 

Machining Association (NTMA) Committee for a Strong Economy (A19-

10) 

Pursuant to Commission Directive No. 70 (FEC Directive on Processing Audit Reports), 

the Audit staff presented the Draft Final Audit Report (DFAR) to the National Tooling & 

Machining Association (NTMA) Committee for a Strong Economy on October 22, 2020 

(see attachment). NTMA did not request an audit hearing. 

This memorandum provides the Audit staff’s recommendation for each finding outlined in 

the DFAR. 

In response to the DFAR, the committee did not provide any additional comments. 
2 

Finding 1. Misstatement of Financial Activity- Increased Activity 

The Audit staff recommends that the Commission find that NTMA understated its 

receipts by $93,655 on the original reports filed over the two-year period ending in 

December 2018. 

Finding 2. Disclosure of Contributions Made to Federal Candidate 

Committees 

The Audit staff recommends that the Commission find that NTMA failed to 

correctly disclose contributions made to federal candidate committees totaling 

$52,887. 

The Office of General Counsel has reviewed this memorandum and concurs with the 

recommendations. 

If this memorandum is approved, the Proposed Final Audit Report will be prepared and 

circulated within 30 days of the Commission’s approval. 

Given the Commission’s lack of quorum to approve this Audit Division 

Recommendation Memorandum on a tally vote, the matter would be placed on an 

open session agenda in accordance with Directive No. 70, once a quorum is 

reestablished. 

Documents related to this audit report can be viewed in the Voting Ballot Matters folder. 

Should you have any questions, please contact Jonathan Fonseca or Erica Lee at 694-1200. 

Attachment: 

- Draft Final Audit Report of the Audit Division on the National Tooling & Machining 

Association (NTMA) Committee for a Strong Economy 

cc: Office of General Counsel 
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. 

1

 52 U.S.C. §30111(b). 

Draft Final Audit Report of the

Audit Division on the National 

Tooling & Machining Association 

(NTMA) Committee for a Strong 

Economy 

(January 1, 2017 - December 31, 2018) 

About the Committee (p. 2) 

The National Tooling & Machining Association (NTMA) 

Committee for a Strong Economy is a separate segregated fund - 

trade association. It qualified for multi-candidate status and is 

headquartered in Cleveland, Ohio. For more information, see the 

chart on the Committee Organization, p. 2. 

(p. 2) 

• Receipts 

o Contributions from Individuals $ 131,697 

o Refunds of Contributions Made to Federal 

Candidates and Other Political Committees 7,500 

o Offsets to Operating Expenditures 8 

Total Receipts $ 139,205 

• Disbursements 

o Operating Expenditures 22,889 

o Contributions to Federal 

Candidates/Committees and Other Political 

Committees 78,510 

Total Disbursements $ 101,399 

Financial Activity 

Findings and Recommendations (p. 3) 

• Misstatement of Financial Activity – Increased Activity 

(Finding 1) 

• Disclosure of Contributions Made to Federal Candidate 

Committees (Finding 2) 
Draft Final Audit Report of the 

Audit Division on the 

National Tooling & Machining 

Association (NTMA) Committee 

for a Strong Economy 

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

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding 1. Misstatement of Financial Activity- Increased Activity 4

Finding 2. Disclosure of Contributions Made to Federal Candidate 

Committees 

5 
1 

Part I 

Background 

Authority for Audit 

This report is based on an audit of the National Tooling & Machining Association 

(NTMA) Committee for a Strong Economy, 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 disclosure of individual contributors’ occupation and name of employer; 

2. the disclosure of disbursements made to federal candidate committees; 

3. the consistency between reported figures and bank records; 

4. the completeness of records; and 

5. other committee operations necessary to the review. 
2 

Part II 

Overview of Committee 

Committee Organization 

Overview of Financial Activity

(Audited Amounts) 

Important Dates 

• Date of Registration October 19, 1976 

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

Headquarters Cleveland, Ohio 

Bank Information 

• Bank Depositories One 

• Bank Accounts One checking account 

Treasurer 

• Treasurer When Audit Was Conducted Doug DeRose (02/27/20 - Present) 

Brigette Scebbi (07/12/19 - 02/26/20) 

• Treasurer During Period Covered by Audit Yvonne Halejko 

Management Information 

• Attended FEC Campaign Finance Seminar No 

• Who Handled Accounting and 

Recordkeeping Tasks 

Volunteer Staff 

Cash on hand @ January 1, 2017 $ 17,219 

Receipts 

o Contributions from Individuals 131,697 

o Refunds of Contributions Made to Federal 

Candidates and Other Political Committees 

7,500 

o Offsets to Operating Expenditures 8 

Total Receipts $ 139,205 

Disbursements 

o Operating Expenditures 22,889 

o Contributions to Federal 

Candidates/Committees and Other Political 

Committees 

78,510 

Total Disbursements $ 101,399 

Cash on hand @ December 31, 2018 $ 56,0172 

2

 Due to mathematical discrepancies, the amount of cash on hand at December 31, 2018 does not equal the 

beginning cash on hand plus receipts minus disbursements (difference of $992). 
3 

Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity – Increased 

Activity 

A comparison of NTMA’s bank records with its originally filed reports revealed that 

receipts were understated by $93,655 for calendar years 2017 and 2018. In response to 

the Interim Audit Report recommendation, NTMA stated they have no further comments. 

(For more detail, see p. 4.) 

Finding 2. Disclosure of Contributions Made to Federal 

Candidate Committees 

During audit fieldwork, the Audit staff determined that NTMA failed to properly disclose 

the required information for contributions made to federal candidate committees totaling 

$52,887. In response to the exit conference, NTMA filed amended disclosure reports that 

corrected the errors. In response to the Interim Audit Report recommendation, NTMA 

stated they have no further comments. (For more detail, see p. 5.) 
4 

Part IV 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity – Increased 

Activity 

Summary 

A comparison of NTMA’s bank records with its originally filed reports revealed that 

receipts were understated by $93,655 for calendar years 2017 and 2018. In response to 

the Interim Audit Report recommendation, NTMA stated they have no further comments. 

Legal Standard 

A. Reporting Requirements. All political committees other than authorized 

committees of a candidate shall file either: 

• Quarterly reports. 52 U.S.C. § 30104(a)(4)(A); or 

• Monthly reports in all calendar years shall be filed no later than the 20th day after 

the last day of the month and shall be complete as of the last day of the month, 

except that, in lieu of filing the reports otherwise due in November and December 

of any year in which a regularly scheduled general election is held, a pre-general 

election report shall be filed in accordance with 52 U.S.C. § 30104(a)(2)(A)(i), a 

post-general election report shall be filed in accordance with 52 U.S.C. § 

30104(a)(2)(A)(ii), and a year-end report shall be filed no later than January 31 of 

the following calendar year. 52 U.S.C. § 30104(a)(4)(B) 

B. Contents of Reports. Each report must disclose: 

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

• The total amount of receipts f or 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, in addition to examining NTMA’s most recent reports filed prior 

to audit notification, the Audit staff compared its originally filed reports with its bank 

records. The purpose of this additional reconciliation was to identify the degree to which 

NTMA had misstated its original filings. 

The Audit staff calculated that NTMA understated receipts by $93,655 on the original 

reports filed for the two-year period ending December 31, 2018. Most of the 

understatement was due to NTMA not reporting any receipts on its originally filed 
5 

reports covering calendar year 2017. NTMA subsequently amended its reports to 

materially disclose the receipts. 

B. Interim Audit Report & Audit Division Recommendation 

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

conference and provided the relevant schedule. In response to the exit conference, 

NTMA representatives commented that the understated receipts reported on the original 

disclosure reports were corrected on amended disclosure reports (other than $7,350 which 

was due to reporting voided checks incorrectly). As noted above and at the exit 

conference, the Audit staff compared NTMA’s original reports to its bank records to 

identify the degree to which NTMA misstated the activity disclosed on its original filings. 

NTMA underreported its receipts by $93,655 between the time the original reports were 

filed on or near their respective due dates and when the amendments were filed in 2017, 

2018 and 2019. 

The Interim Audit Report recommended that NTMA provide any additional comments it 

deemed relevant to this matter. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, NTMA stated they have no 

further comments. 

Summary 

During audit fieldwork, the Audit staff determined that NTMA failed to properly disclose 

the required information for contributions made to federal candidate committees totaling 

$52,887. In response to the exit conference, NTMA filed amended disclosure reports that 

corrected the errors. In response to the Interim Audit Report recommendation, NTMA 

stated they have no further comments. 

Finding 2. Disclosure of Contributions Made to Federal 

Candidate Committees 

Legal Standard 

Reporting Contributions to Candidate Committees. Contributions to candidates and 

political committees must be itemized, regardless of amount. This information includes: 

• The amount of the expenditures; 

• The date when the expenditures were made; 

• The name and address of the payee; 

• The purpose of the expenditures 52 U.S.C. § 30104(b)(5)(A) and 11 CFR 

§104.3(b)(3)(i); and 

• The candidate’s name and office sought (including the state and, if applicable, 

Congressional district) 11 CFR § 104.3(b)(3)(v). 
6 

Facts and Analysis 

A. Facts 

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

disclosure reports for proper reporting of contributions made to federal candidate 

committees. This review identified 51 contributions totaling $52,887 that were either 

incorrectly disclosed or missing the required disclosure information. The majority of 

these errors were the result of the candidate’s office sought, district or state not being 

disclosed. Additionally, in-kind contributions made to federal candidates were 

incorrectly disclosed as direct contributions. 

B. Interim Audit Report & Audit Division Recommendation 

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

and provided a schedule of the disclosure errors noted above. In response to the exit 

conference, NTMA filed amended reports that corrected the disclosure errors. NTMA 

also stated they have now hired an accounting firm to prepare and file disclosure reports 

and that a staff member attended the FEC regional conference in February 2020, to 

increase their knowledge of campaign finance law and reporting requirements. 

The Interim Audit Report recommended that NTMA provide any additional comments it 

deemed relevant to this matter. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, NTMA stated they have no 

further comments.