FEDERAL ELECTION COMMISSION

\\'A$HINC10N. 0 C 204b3

A83-12

July 28., 1983

MEMORANDUM

TO:

FROM:

SUBJECT:

FRED EILAND

PRESS OFFICE~~ 'J

BOB COSTA j /L--"

PUBLIC ISSUANCE OF FINAL AUDIT REPORT - FRIENDS OF J. T. QUIGG FOR CONGRESS

Attached please find a copy of the final audit report of

Friends of J. T. Quiao For Concress which ~as approved by the .!~ Commission on July 13; 1983.

-. Informational conies of the report have been received by

all parties involved ~nd the report may be released to the

r: public.

Attachment as 'statec

cc: FEe Library

RAD

.Public Recore \'

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FEDERAL ELECTION COMMISSION

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REPORT OF·THE AUDIT DIVISION

ON THE

FRIENDS OF J. T. QUIGG FOR CONGRESS

I. Background

A. Overview

This report is based on an audit of the Friends of J.

T. Quigg for Congress ("the Committee"), undertaker. by the Audit

Division of the Federal Election Commission in accordance with

the Commission's audit policy to determine whether there has been

compliance with the provisions of the Federal Election Campaign

Act of 1971, as amended ("the Act"). The a~dit ~a~ conducted

pursuant to Section 438(b) of Title 2 of th: Unitec States Code ~hich states, in part, that the Commission ~ay concuct audits and

field investigations of any political corn~i~tee required to file

a report under Section 434 of this title. ·?rior to conductinc

any audit under this section, the Commissic~ shall perform an·

internal review of reports filed by selected committees to determine if the reports filed by a particular corr~ittee meet the

threshold requirements for substantial co~?liance ~ith the kct.

The Committee registered with t~e Feoeral Election

Commission on September 28, 1981 and maintains its headquarters

in Oly~pia, WaEhington •

The audit covered the period Se?te~~er 21, 1981, throu9~ December 31, 1982. The Committee :eportec an opening

cash O~ hanc balance September 21, 1981 of $-0-; total receipts

for the perioc of $-3~8,520.50; total Cis~u:5ements for the period

of $346,3~~.60i ana a closing cash ba1a~ce on Dece=ber 31, 1962

of $2,170.00. _/

This report is based on docu~€~ts and wo~kins papers

supporting each of its factual statements. They for~ part of the

recorc UDon ~hich the Commission based its cecisicns on the

matters in this report and were available to Cc~~i~sioner5 ana

approp:iate staff for revie~.

l/ The closing cash balance on Decem~er 21, lSE2 is ~isstated

~y $1,994.30 due to ~ath errors du:in9 the preparation of

tr;e reports.
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B. Key Personnel

The Treasurers of the Committee curing the period of

the audit were Ms. Diane Tegelberg from September 21, 1981

through December 28, 1981 and February 18, 1982 to present: and

Mr. Pat Earley from December" 28, 1981 through February 18, 1982.

c. Scope

The audit included such tests as verification of total

reported receipts and disbursements and individual transactions;

review of required supporting documentation; analysis of Committee debts and obligations; and such other audit procedures as

deemed necessary under the circumstances.

II. Audit Findinos and Recommendations

A. Itemization of Expenditures

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Section 43~(b) (5) of Title 2, United States Coce states

that each report shall disclose the name and address of each person to whom an expenditure in an aggre~ate ~~ount or value in

excess of $200 ~ithin the calendar year is.made by the reporting co~~ittee to meet a committee oper~tinc ex~ense, tooether with

the cate, amount, ana purpose of such operating expenditure.

Sections l04.13(a) (1) and (2) of Title 11, Code of Federal Regulations require that each in-kind contribution shall be

reported as a receipt ana expenditure in accordance ~ith 11

C.F.R. lO~.3(a) ana (b).

The,review of expenditures m~de curing the aucit period

revealed that the Com~ittee cia not itemize or properly cisclose ~lO expenditures totalling $170,610.61. T~is represents 74t of

the total nUm~er of exnencitures reculrinc ite~ization and '9% of

the oollar value. ?pecific~lly, the probie~s noted are as follov-'s:

1) The Committee failed to ite~ize 339 expenditures

totalling S109,767.32. Expenditures totallins $103,~58.58

r~p~esented either multiple payments to th~ 5a~e payee during the

reporting period which ~ere reported as on~ pai~ent, or expenditures ~hich ~ere ma~e to cif!erent ~avees ane grouped tooether u~der a certain category (e.g. salaries, n~WEpapers, radio, postage, etc.). !n either case, t~e Cc~~ittee failec to p:ovide a sepa~ate i~E~:zation for ec:~ incivicual c:5~ursernent requiring

ite::-:zation.
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In addition, 4S expenditures totalling $6,308.74

were included, for the most part, on the S~~mary Page Total for

Operating Expenditures (line 17), however, no detail of the expendituI~s was provided on the appropriate schedules.

2) The Committee also failed to provide the requisite

information for 64 expenditures which were itemized on the appropriate schedules totalling $59,357.18. -In this case information

relating to the identification of the payee, the date, amount

and/or purpose of the expenditure was not provided.

3) Finally, the Committee failed to properly itemize

seven in-kind contributions totalling $1,486.11.

The Audit staff recommended in the interim audit

report that the Committee file a comprehensive amendment to

correctly itemize the expenditures and in-kind contributions as

noted above. On July 6, 1983, the Committee filed schedules

which materially complied with the recommencation set forth in

the interim audit report.

Recommendation

The Audit staff recommends no further .action with respect to

this matter.

B. Itemization of Contributions frc~ Political Committees

Section 434(b) (3) (B) of Title 2, United States Code

requires that each report disclose the identification of each

political comwittee ~hich makes a contribution to the reporting

committee, together with the date and amount of any such contribution.

The revie~ of contributions from oo1itical committees indica~ed that the Committee ai6 not ite~ize 12 contributions

from 11 political com~ittees totalling $~,OOO. The Committee's

bookkeeper explained, that the contributio~s were not itemized

due to an incorrect understancinc of the recuirement that all

contributions from political committees recuire itemization

regardless of amount or aggregate value. -

The Aucit staff recommended in t~e interim audit report

that the Co~~ittee :ile a comprehensive a~encment to itemize

these co~tributio~s. On July·6, 1963 the Co~mittee filed a

schedule ~hich mcterially co~pliec with the reco~~enaation set

fo:th in the interi~ audit report.
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'1'11£1 Audi t staff recommends no fur ther act ion ,,-'i th I espect to

this nldtter.

c. Disclosure of Debts and Oblications

Section l04.3(d} of Title 11, Gooe of Feceral Regulations states, in part, that each report shall oisclose the amount

and nature of outstanding debts owed by the reporting committee

on Schedule D. l/

Section l04.11(a) of Title 11, Code of Federal Regulations states that debts and obligations owed by a political committee which remain outstanding shall be contino~51y reported

until extinguished. Where such debts are settled for less than

their reported amount or value, the reporting committee shall

include a statement as to the circumstances anc conditions under

which the debt ~as extinguished and the ~~ount paie .

The review of the Committee's oe~ts ana oblications

indicated that the Committee dia not proviae all cf the requisite infor~ation (i.e., name, aeeress, purpose a~c/or amount) for 15~

of 184 debts ana obligations shown on Schecu1e "D" currently on

file at the Com~ission. Included in this imount are the follo~inc prob1eres: ..; ..

1) the Committee disclosed a cebt of $4,9~8 to the

candidate for expenses on the July Ouarte:ly report (1982), which

was not cisclosed in subsequent reports. Furthermore, no pa~~ent

~as mace on the debt and the amount incurred increased to S13,321.8~ at December 31, 1982;

2) the Com~ittee understateo the ~~ount of a oebt

owed to a vendor by $1,106.65;

hlso, the Cc~~ittee dia not prc\ice the necessary suppc r -: i n<; 5 c heeel e (s ) . f 0: a loan (s ) tot a11 i :; S2 I 00 C' \0-" h i c h "'''a 5

sho~n o~ the Detailed Summary Page on the Octo~er Quarterly Report for 1982. The Co~~ittee's recorcs a~€ ~~clear as to the

source of the loan anc a~ailable Com~ittee staff ~as unable to

identify t~e lenaer. To the extent possi~le, the hucit staff

verifiec that no repay~ent(s) ~as made on this loan.

~/ 7hE in~tructio:1s C~. the: reverse SlC~ of ~ch€-c~le liD" require

the disclosure 0: the na~e anc accre~S cf each i~civicua l/vencor E:JO~':1 a~ a c reo i tor or. Scr.€:c-..:1e D.
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The Committee has made payments en 162 of the 184 oebts

and obliqations which were shown on Schedul~s "D" durinQ the

audit p,·i· iod (22 ~'ere disclosed on the Year Ene 1982 Report. As

a result, the requisite information which ~as missing on Schedule

"0" wa~ (·i ther disclosed on Schedule "B" ~'hen payment of the debt ~as mace or has been disclosed on the schecules received in respons~ to the recommendation in Finding lI.~. of this report.

The Audit staff recommended in the interim audit report

that th~ Committee file amended debt scheoules to provide the

missing requisite information for the 22 debts currently shown on

the Year End 1982 Report on file at the Co~ission and provide

the appropriate supporting schedule for the $2,000 loan which ~h0WS the requisite information for the lender. The Audit staff

further recommended that the Committee disclose the accurate

am()unt of the debt which was determined by the Auci t staff to be

unc1erstated by $1,106.65.

On July 6, 1983, the Committee filec debt schedules

which materially complied ~ith the reco~me~oations set forth in

the i~t€rim audit report.

7he Aucit staff recommencs no furthe~-action ~ith respect to

this IT,2.tter.