MEMORANDUM

TO:

FROM:

FEDERAL ELECTION COMMISSION

W,"5H'NCTON 0 C 204&3

September 17, 1991

FRED EILAND

CHIEF, PRESS OFFICE

ASSISTANT

ROBERT J. COSTA

STAFF D!RE~~ ~~­ AUDIT DIVISION

MJ000281

SUBJECT: PUBLIC ISSUANCE OF THE FINAL AUDIT REPORT

ON THE TAYLOR FOR CONGRESS COMMITTEE

Attached -please- -find a co-py --of -the--_Final__ Audi_t Re_po_rt Qn

The Taylor for Congress Committee which was approved by the

Commission on Septeaber 11, 1991.

Informational copies of the report have been received by all

parties involved and the report may be released to the public.

Attachment as stated

cc: ~ffice of General Counsel ~ffice of Public Disclosure

Reports Analysis Division

FEC Library
FEDERAL ELECTION COMMISSION

\VASHINCTON, 0 (. 204M

REPORT OF THE AUDIT DIVISION

ON THE

TAYLOR FOR CONGRESS COMMITTEE

85000458

A89-8

I. Background

A. Overview

This report is based on an audit of the Taylor for

Congress Committee ("the Committee"), undertaken by the Audit

Division of the Federal Election Commission in accordance 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,

-t-hat---theConuaission_Dlil-y __c_onduct__audl_ts __ and £_1 eld inv_estl9-8t_ij)DS 9t_

any political committee required to file a report under Section

434 of this title. Prior to conducting any audit under this

section, the Co..ission shall perfora an internal review of

reports filed by selected coaaittees to determine if tbe reports

filed by a particular coamittee meet the threshold requirements

for substantial coapliance with the Act.

The Committee registered with the u.s. House of

Representatives on July 11, 1988, and maintains its headquarters

in Knoxville, Tennessee. The audit covered the period July 11,

1988 through December 31, 1988. The Committee reported a cash

balance on July 8, 1988 of $-0-, total receipts of $395,553.90,

total expenditures of $380,874.70 and a cash balance on December

31, 1988 of $13,098.37.!1

The period covered by the audit included four elections.

In addition to the primary election held on August 4, 1988, a

special primary election was held on August 25, 1988 and a special

general election was held concurrently with the general election

on November 8, 1988. The special elections were held to fill the

remainder of the term of Representative John J. Duncan who died on

June 21, 1988.

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

!/ The reported totals do not foot.
2

matters in the report and were available to Commissioners and

appropriate staff for review.

B. Key Personnel

During the period covered by the audit, the Treasurer of

the Committee was James W. Parris.

c. .Scope

The audit included such tests as verification of total

reported receipts and expenditures 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 Findings and Recommendations

A. Misstatement of Financial Activity

Sections 434(b)(2) and (4) of Title 2 of the United

States Code state that each report shall disclose, for the

reporting period and calendar year, the total amount of all

receipts and disbursements.

The Audit staff performed a reconciliation of reported

financial activity to bank activity for the calendar year 1988.

The Committee overstated receipts by $1,418.42, understated

disbursements by $10,572.44, and overstated the cash balance at

December 31, 1988 by $7,573.19.~/

The overstatement of receipts resulted from the

followinq errors/omissions: contributions totalling $13,945 were

not reported, the total for unitemized contributions was

overstated by $4,901, contributions reportedly totalling $8,500

could not be associated with any deposit or contributor records

made available, and miscellaneous credit adjustments totalling

$874.42.

The understatement of disbursements resulted from the

following errors/omissions: disbursements totalling $23,914.09

were not reported (see Finding II.B.), disbursements totalling

$18,873.36 were reported twice, the total of disbursements for

which the wrong amount was reported equalled $5,376.79, and

miscellaneous math errors totalling $154.92.

At the Exit Conference, the Audit staff provided a

Committee representative with photocopies of the necessary

~/ Totals do not foot due to incorrect reporting of cash

balance (see footnote, page 1).
3

adjustments. A Committee representative indicated the Committee's

willingness to file amended reports to correct the public record.

The interim audit report recommended that the Committee

file amended reports to correct the misstatement and provide an

explanation as to why the $8,500 in reported contributions

described above could not be associated with a deposit or

contribution records.

In response to the interim report, the Committee filed a

comprehensive amendment for the audit period correcting the

misstatement. Regarding the 12 contributions totalling $8,500,

the candidate stated that the reported contributions were pledged

to the campaign however the actual contributions were either never

delivered or were delivered considerably after the time promised.

The comprehensive amendment also corrected the reporting of the

$8,500 in contributions.

Recommendation #1

The Audit staff recommends no further action on this matter.

B. Itemization of Disbursements

Sections 434(b}(4)(A} and (S){A) of Title 2 of the

United States Code state that each report shall disclose

expenditures made to meet candidate or committee operating

expenses; and the name and address of each person to whom an

expenditure in an aggregate amount or value in excess of $200

within the calendar year is made by the reporting committee to

meet a candidate or committee operating expense, together with the

date, amount, and purpose of each operating expenditure.

Sections 434(b)(4)(D) and (S){D) of Title 2 of the

United States Code state that each report shall disclose the

repayment of loans made or guaranteed by the candidate, and the

name and address of each person who receives a loan repayment from

the reporting committee during the reporting period, together with

the date and amount of such loan repayment.

In its review of disbursements, the Audit staff

identified $23,914.09 in unreported disbursements (see Finding

I.A.). Included in this amount were 12 disbursements totalling

$11,617.83, and a $10,000 loan repayment which are required to be

itemized on the Committee's reports.

At the Exit Conference, the Audit staff prOVided the

Committee with schedules detailing these disbursements. A

Committee representative indicated the Committee's willingness to

file amended reports to correct the public record.

In response to the interim audit report, the Committee

included, in a comprehensive amendment, an amended Schedule B
4

(Itemized Disbursements) which properly discloses the

disbursements noted above.

Recommendation 12

The Audit staff recommends no further action with regard to

this matter.

c. Itemization of Receipts

Section 434(b)(3)(A) of Title 2 of the United States

Code states that each report shall disclose the identification of

each person who makes a contribution to the reporting committee

during the reporting period, whose contribution or contributions

have an aggregate amount or value in excess of $200 within the

calendar year together with the date and amount of any such

contribution.

The Audit staff, in its review of contributions received

from individuals, found that of the $13,945 in contributions not

reported (see Finding II.A.), 2S contributions totalling $12,570

required itemization.

The Audit staff also identified 28 contributions,

totalling $19$20S J for which_th_e Committee's r_eparts contained---

incorrect contributor or contribution information.

At the Exit Conference, the Committee was provided with

schedules detailing the above described irre9ularities. A

Committee spokesperson indicated the Committee's willingness to

file amended reports to correct the public record.

In response to the interim audit report, the Committee

included, in a comprehensive amendment, an amended Schedule A

(Itemized Receipts) which properly discloses the contributions

noted above.

Recommendation 13

The Audit staff recommends no further action on this matter.

D. Other Matters

Other matters noted during the audit have been referred

to the Commission's Office of General Counsel.