Attachment as stated

cc: FEC Library

~lic Record

Informational copies of the report have been received

by all parties concerned and the report may be released

publicly as of July 14, 1982.

A8l-67

July 14, 1982

FEDERAL ELECTION COMMISSION

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MEMORANDUM

FRED EILAND

PRESS OF~IEZ '" .' l

BOB COST ~~~ PUBLIC I SUA~~: FINAL AUDIT REPORT - IDAHO DEMOCRATIC PARTY-FEDERAL ACCOUNT

Attached please find a copy of the final audit report of the Idaho Democratic Party-Federal Account which was '.

approved by the Commission on JUly 1, 1982 •

FROM:

SUBJECT:

TO:

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:Release Date 7/15/82

FEDERAL ELECTION COMMISSION

WASHINCTON, 0 C. 20463

REPORT OF THE AUDIT DIVISION

ON THE

IDAHO DEMOCRATIC PARTY-FEDERAL ACCOUNT

I. Background

A. Overview

This report'is based upon an audit of 'the Idaho

Democratic Party-Federal Account (lithe Committee"), undertaken 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 audit was conducted pursuant to Section 438(b) of Title 2 of

the united States Code which states, in part, that the Commission

may conduct audits and field investigations of any political committee required to file a report under Section 434 of this

title. Prior to conducting any audit under this section, 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 •

The Committee registered with the Comptroller General

of the United States on September 11, 1972. The Committee

maintains its headquarters in Boise, Idaho. The audit covered

the period from January 1, 1980 through December 31, 1980. The

Committee reported a beginning cash balance of $2,135.00, total

receipts of $70,226.09, total expenditures of $67,887.46, and an

ending cash balance of $4,473.63.

This audit report is based on documents and workpapers which support each of its factual statements. They form part of

the record upon which the Commission based its decisions on the

matters in the report and were available to the Commissioners and

appropriate staff for review.

B. Key Personnel

The Treasurer of the Committee during the period of the

audit was Ms. Lynda Clark from January 1, 1980 to March 24, 1980,

and Mr. John Caylor from March 24, 1980 to December 31, 1980.
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C. Scope

The audit included such tests as verification of total

reported receipts and expenditures and individual transactions,

review of required supporting documentation and analysis of

Committee debts and obligations, and such other audit procedures

as deemed necessary under the circumstances.

II. Audit Findings and Recommendations

A. Allocation of Administrative Expenses

Section 102.5(a) (1) of Title 11, Code of Federal

Regulations states, in part, that a political party committee

which finances political activity in connection with both federal

and non-federal elections shall either: (i) Establish a separate

federal account in a depository and such account shall be treated

as a separate federal political committee which shall comply with

the requirements of the Act, or (ii) Establish a political committee which shall receive only contributions sUbject to the

prohibitions and 'limitations of the Act, regardless of whether

such contributions are for use in connection with federal or nonfederal elections.

Section 106.l(e) of Title 11, Code of Federal

Regulations, states that Party committees and other political committees which have established Federal campaign committees

pursuant to 11 C.F.R. 102.5(a) shall allocate administrative

expenses on a reasonable basis between their federal and nonfederal accounts in proportion to the amount of funds expended on

federal and non-federal elections or on another reasonable b~sis.

The Committee established a separate account and

treated it as a separate federal political committee. However,

the Committee has not allocated administrative expenses between

its federal and non-federal accounts as required by 11 C.F.R.

106.l(e), rather, funds from the non-federal account were

expended to pay the administrative expenses for both federal and

non-federal accounts.

During the audit fieldwork, a determination of the

allocable amount for administrative expenses was calculated based

on the total amount of funds expended in connection with federal

elections by the Committee in proportion to the amount of funds

expended on federal and non-federal elections. using this

formula, the Audit staff determined that a reimbursement of

$1,237.28 from the Committee (federal account) to the operating

account (non-federal) of the Idaho Democratic Party was necessary

to comply with the requirements of 11 C.F.R. 106.l(e).
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It should be noted that the Committee made a transfer

of $1,000 to the aforementioned operating account on December 23,

1980 for no apparent reason. According to the individual who was

Treasurer of the Committee at the time this transfer was made,

the transfer occurred at a time when the Committee had no further

use for the funds due to the fact that it had made contributions

up to its limitations to all of the federal candidates in the

state of Idaho. On May 7, 1982 the Commission made a

determination that the amount of the transfer may be applied to

the calculated value ($1,237.28) of administrative expenses owed

to the non-federal account by the federal account.

On June 21, 1982, the Committee submitted a photocopy

of a cancelled check drawn on the Committee's federal account

which reimbursed the full calculated amount ($3,062.65) of

administrative expenses owed to the non-federal account for

calendar years 1980 ($1,237.28) and 1981 ($1,825.37). Further,

the treasurer provided a copy of the worksheet which calculated

the reimbursement amounts as evidence that the Committee has

instituted one of the Commission approved methods of allocating administrative expenses.

Recommendation

No further action is necessary on this matter.

B. Receipt of Funds From State Account

Section 44lb of Title 2, United States Code prohibits

any corporation or labor organization from making a contribution

in connection with an~ federal election. In addition, Section

102.5(a) (1) (i) of Title 11 of the Code of Federal Regulations

provides if a committee which finances political activity in

connection with activity in both federal and non-federal

elections establishes a separate federal account, all

disbursements in connection with federal activity shall be made

from this account and no transfers may be made to such federal

account from an account maintained for the purpose of financing activity in connection with non-federal elections.

On August 27, 1980 the federal account of the Committee

transferred $3,000 to a non-federal savings account maintained by the Idaho Democratic Party for use in non-federal elections. On

September 24, 1980, the $3,000 was transferred back to the

federal account. The non-federal savings-account contained funds

from corporate and labor union sources which, under Idaho state

law, are permissible for use in state election campaigns.