FEDERAL ELECTION COMMISSION

RL872/l20887

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MEMORANDUM

WASHINGTON. 0 C. 204&3 A87-7

December 8, 1987

TO:

FROM:

SUBJECT:

FRED EILAND

CHIEF,~ PRESS OFFICE1!P

ROBERT J. COSTA

ASS ISTANT STAFF 01 RE OR

AUDIT DIVIS ION

PUBLIC ISSUANCE OF FINAL AUDIT REPORTKENNEDY FOR CONGRESS

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Attached please find a copy of the final audit report of the

Kennedy for Congress which was approved by the Commission on

November 24, 1987.

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: FEC Library

~liC Disclosur/

Office of General Counsel
RL87'2/l11787 ..

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FEDERAL ELECTION COMMISSION

WA5HINCTON. D.C. 20463

A87-7

REPORT OF THE AtDIT DIVISION

ON

UNNEDY FOR CONGRESS

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I. Background

A. Overview

This report is based on an audit of Kennedy for

Congress (Wthe CommitteeW), 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 (Wthe

ActW). The audit was conducted pursuant to Section 438(b) of

Title 2 of the United States Code which states, in part, that the

0' Commission may conduct audits and field investigations of any political committee required to file a report under Section 434 ~I of this title. Prior to conducting any audit under this section,

the Commission shall perform an internal review of reports filed

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- selected committees to determine if the reports filed a

particular committee meet the threshold requirements for

substantial compliance with the Act.

The Committee registered with the Clerk of the House of

Representatives on Mareh 20, 1986. The C~~ittee maintains its

headquarters in Sea Girt, New Jersey. The aud it covered the

period from January 1, 1986 through December 31, 1986, the

closing date for the latest report filed at the time of the

audit. The Committee reported a cash balance on January 1, 1986

of -O-~ total receipts of $198,250.88~ total expenditures of

$197,796.88f and a cash balance on December 31, 1986 of $454.00.

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 covered by the audit was Mr. Cornelius Daniel III •

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The audit included such tests as verification of total

reported receipts and expenditures and individual transactions,

review of required supPorting documentation, and other au~it

procedures as deemed necessary under the circumstances. An

analysis of Committee debts and obligations was not conducted due ~o the lack of supporting documentation maintained by the Cammi~tee.

II. Audit Pindings and Recommendations

A. Itemization of Contributions Received from Individuals

Section C3C (b) (3) (A) of Title 2 of the United States

Code requires that each report disclose the identification of

each individual who makes a contribution to the reporting Committee during the reporting period, whose contributions have

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

calendar year, ~ogether with the date and amount of such

contribution.

• c. Scope

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<v Identification, in the case of an individual, is

defined in 2 U.S.C. 5 431(13) (A) as the name, mailing address and ~he occupation of such individual, as well as the name of his or

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her employer.

Contributions received from individuals were reviewed -- by the Audit staff to determine if the reports filed by the

o Canmittee met the disclosure requirements of the Act. In the

case of 10 contributions, totaling $4,300, required itemizations

were not included on the Committee's disclosure reports. This

amount represents approximately 16\ of the dollar value of the

C' contributions received from individuals which require

C!" itemi zation. In all cases, the amount of the contribution

exceeded $200.00.

A second matter involving the itemization of

contributions was noted by the Audit staff. For those

contributions received from individuals/persons which were

itemized by the Committee on its reports, 31\ of the entries

lacked adequate occupation and name of employer information for

the contributor, while in 33\ of the cases, the aggregate year- to-date total of contributions received was omitted. The Audit

staff prOVided the Committee with schedules listing the

discrepancies noted above at the exit conference.

On August 17, 1987 the Commi ttee submi tted a

comprehensive amendment which materially corrected the

deficiencies noted above •

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Recommendation

The Audit ataff recommends that no further action be taken

on this Finding.

B. Itemization of Contributions Received from Political

Committees/Organizations

Section 434(b) (3) (8) of Title 2 of the United States

Code requires that each report disclose the identification of

each political committee which makes a contribution to the

reporting committee during the reporting period, together with

the date and amount of any such contribution.

The Audit staff's review of contributions received

revealed that the Committee failed to itemize on its disclosure

reports 14 contributions, totaling $3,162. This represents approximately 12' of the dollar value of the contributions

received from political committees. Most of the contributions ...? were in amounts of less than $200.00.

The Committee stated that amendments would be filed to

correct the discrepancies. The Audit staff provided the

IN Canmi ttee wi th information relative to the 14 contri butions

"r requiring itemi zation at the exit conference.

• On August 17, 1987, the Committee submitted a

comprehensive amendment which materially corrected the .- deficiencies noted above.

o Recommendation

The Audit staff recommends that no further action be taken

on this Finding.

c. Misstatement of Financial Activity

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

States Code states, in part. that each report shall disclose the

total amount of receipts and disbursements, respectively, for the

reporti ng period and calendar year.

During the audit, it was noted that the Committee

overstated its receipts by ($9,375.75)1/ and its expenditures by

($9,105.10.)

1/ Bracketed figures represent overstatements and are

considered negative amounts •

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• The overstatement of receipts is attributed to

overreported loans in the amount of ($20,810), unreported and

incorrectly reported contributions from political committees

totaling $3,162, unreP.Qrted contributions from individuals

totaling $11,816.25 17 and math discrepancies in the amount of

($3,544) •

The overstatement of expenditures was caused by checks

totaling ($7,850.00) being voided after expenditures had been

reported, with no reversal on subsequent reports (see Attachment

I), disbursements totaling ($1,450.00) (see Attachment II) being overreported, unreported disbursements and bank charges totaling $4,691.30, and math discrepancies and unexplained differences of

($4,496.40).

The auditors provided schedules detailing all

improperly reported items to the Committee at the conclusion of

the audit fieldwork.

On August 17, 1987 the Committee submitted a

comprehensive amendment which materially corrected the

deficiencies noted above.

Recommendation

The Audit staff recommends that no further action be taken

this Finding.

Section 432(c) (5) of Title 2 of the United States Code

requires that Committees keep an account of the name and address

of every person to whom a disbursement is made.

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D. Fai 1ute to Mai ntai nand Disclose

Disbursement Information

Section 434(b) (5) (A) of Title 2 of the United States

Code requires that each report disclose the name and address of

each person to whom an expenditure in an aggregate amount or

value in excess of $200 wi thi n the calendar year is made,

together with the date, amount, and purpose of such operating expendi ture.

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This figure could not definitely be determined to be

contributions from individuals. The Committee did not

maintain sufficient individual contribution records to allow

the auditors to precisely identify the contributors.

However, the Committee bank records indicate that the funds

were, indeed, received and deposited into the committee's

checking account. The funds appeared to be from

indi viduals.
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During the audit, it was notea that the Committee haa

no adaress on file for 71 aisbursements totaling $60,977.18. It

vas further notea that the Committ•• aia not properly aisclos.

126 itemlzea expenaiture. totaling $78,768. Th. vast majority of

these (110) were lacking complete aaares. of the payee. The

remainaer were inaaequate aescriptions of purpo.e.

On August 17, 1987, the Committee submitt.a a li.t of

.daresses which materially correctea the deficiencies notea

above.

Recommendation

'!'he AUl!i t .taff recommenas that no further action be taken

on this Finding.

III. Matters Referrea to the Office of General Counsel.

Other matters have been referrea to the Office of General

Counsel.

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• voltea Check••eportea ana

.ot .ever.ea on 8ub.e~.nt ••port.

Attach.ent I

Page 1 of 1

Pa". Check I Dat. a.ount - 1. CervlnD. Y 102 12/2'/86 •650.00

2. 'I'dBoro

Printing 150 5/11/86 150.00

3. Boro Bu. 1/

CClDp8ny 256 9/29/86 3110.00

... 'I'he Register 370 10/24/86 725.00

-.() 5. 'I'he Asbury Park Press 379 10/29/86 1513.00

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6. 'I'he Register 380 10/29/86 "02.00

N

,. L. Shapiro 389 11/04/86 1300.00

• 'I'otal $78S0.00

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"" 4/ Check was returned for non-sufficient funds.

c 5/ Stop payment was issued on this check.

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Attachment II

pale 1 of 1

Dl.bursementa Reportea Incorrectly

Aaount Aaount

JI.".e Check t. Reportea Of Check Difference

1. Willla P.

NcGulre 122 4/25/86 , 800.00 , 500.00 $ (300.00)

2. (LI.tea Oft

report .. ca.h) none 4/25/86 100.00 - 0 - (100.00)

3. lUlli_

McGuire 129 5/09/86 800.00 200.00 (600.00)

«- Willi_

McGuire 130 5/14/86 800.00 700.00 (100.00)

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William

0- McGuire 144 6/05/86 250.00 150.00 (100.00)

I~ Listea as

;r William

.McGUire on

Report none 5/20/86 250.00 - 0 - (250.00)

'lotals $3000.00 $1550.00 $ (1450.00)

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