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FLDERAI. ll.ECTION COl\'MISSION

It?r; K SIRIlI N.W

W"", tiNe ION,I)r" 104h \

REPORT OF THE AUDIT DIVISION

ON THE

DIFAZIO '76 FOR CONGRESS COMMITTEE

I . Background

A. Overview

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This report is hased upon an audit of the DiFazio '76

for Congress Committep {lithe Committee"}, undertaken by the I\udit

Division of the Feuerdl flection Commission in accordance \~ith

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 (lithe Act"). The audit was conducted

pursuant to Section 43B(a)(8) of Title 2 of the United States

tode which directs the Commission to make from time to time audits

cl nd fie 1dinvest i gat "i 0 ns wit h res pect tore po r t sand stat erne nt s

filed under the provisions of the Act.

The Committee registered with the Federal Election

Commission on August 5, 1976 as the principal campaign committe~

of Lucien P. DiFazio, Jr., candidate fo,'" election to the office

of U. S. Representative from the 1st District of Connecticut.

The Committee maintained its headquarters in Hartford, Connecticut.

The audit covered the period from July 10, 1976 through

December 31, 1976, the closing date of the last disclosure report

filed at the time of the' dudit. 11 During this period, the

COlliIII itteerep0 r ted abe 9i nIt i n9 ca-s h ba1aIl ceo f $- 0-, tot a1 r ece i pt s

of $24,196.73, total expenditures of S24,122.97, and a closing

cash balance of $73.76.

This audit report is based on documents and working

papers suppo,-.ti ng each of the factual statements. They form

par t 0 f the t" ecor d upo n \~ hi ch the C0 mm ission bas ed its dec i s ion s

on the matters in this report and were available to Commissioners

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.1_1 0n ~1 arc h 24, 1978, l hceomill ittc e f; 0' edthe i r Jan uar y 31,

1978 report disclosing activity for 1977 .
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B. Key Personnel

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The principal officers of the Committee during the

audit period were Mr. Charles Alfano, Chairman, and Mr. John

Celentano, Treasurer.

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. Auditor's Statement and Description of Findi~~

It is the opinion of the Audit staff, based upon examination

of the reports and statements filed and the records presented,

that, except for the deficiencies noted below, the reports and

statements of the DiFazio '76 for Congress Committee fairly

present the financial activities of the Committee for the period covered by the audit. Further, except as noted below, no material

problems in complying with the Federal Election Campaign Act

were discovered during the course of the audit.

A. Contribution Received in Excess of $1,000 Limitation

Section 441a(a)(1)(A) of Title 2 of the United States

Code states that no person shall make contributions to any candidate and his authorized political committees with respect

to any election for Federal office which, in the aggregate, exceed $1,000.

Our audit disclosed that the Committee received a

contribution of $1,225.00 from a political organization on

September 24, 1976. In a letter, dated October 8, 1976, the

Committee advised the Clerk of the U.S. House of Represcntat;v~s

t hat i t \'/ asunab1e to de t ermin e whethe r the pol; tic alor9an; z t ; 0 n

was permitted to contribute in excess of $1,000.00. This political organization is not a registered multicandidate committee which

would be permitted to contribute in excess of $1,000 to a candidatr

for Federal office under the provisions of Section 441a(a)(2){A}

of the Act.

~J e ,. ecommen dedthat the Com111 itte erefun d S22 5, rep r e - senting the amount in pxcess of the $1,000 contribution limit~tion,

and pr' 0 vide the CoIIImission \"1 i t h doc U111 ent (l t ion 0 f the refund . 0n ~1 arc h 6, 1978, the CoIIIIII itt cc f i 1ed its Aprill0, 1978 dis c los ur e

rep0 ,.. t s h0 \oJ i n9 the ref und 0 f $225•
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Recommendation

Since the Committee has reported the refund, and since the

Committee has assured the Audit staff that appropriate documentation will be provided upon rece~pt from its bank, no further

action is recommended.

B• I t em i za t i n o_f _[~J) end i t ur ~Jl9.g reg a tin g. i n Ex c es 0 f flOOd uri n9 the Cd 1end a rYe ar

Section 434(b)(9) of Title 2 of the United States Code

requires in part, that each report disclose the identification

of each person to whom expenditures have been made by such

committee or on behalf of such committee or candidate within the

calendar year in an aggregate amount or value in excess of $100,

along with the amount, date, and purpose of each such expenditure.

During the course of the audit, it was determined that

expenditures less than $100, but aggregating in excess of $100

within the calendar year, were not disclosed as required, apparently

as a result of a misinterpretation of the reporting requirements. lhis resulted in 33 of 108 itemizab1e expenditures (30.56%)

totaling $1,450.05 of a total of $22,501.26 (6.44%) not being itemized on the Committee's disclosure reports.

Upon our suggestion, the Committee filed an amcnded

report for 1976 disclosing the previously unitemized expenditures

as required. This amendmcnt was receivcd on March 3, 1978.

Recommendation

Since the Committee has filed the requested amendment, no

fur'ther act ion is recommended.

C• e ten t i 0 ~_--'2-f.._ uPl~ t~ tingOo c U'.11 en tat i 9..!!

Y0 r [ xpC'_1 d i t ur e r.,

Section 432(d) of Title 2 of the United States Code

requires the treasurer of a political committec to obtain and

to keep a receipted bill, stating the particulars for every expenditure in excess of S100 in amount, and for an expenditure in a lesser amount, if the ag~Jregatc amount of ~uch expenditures

to the same person excecd~ $100 during a calendar year. FurtherIII 0 r e, instea d 0 far e c c i p t (~ d bill, t he t rea sur e r III ay ke ep t he

can cell cd c h c k ( s) sh0 \oJ i u 9 payIIIen t ( s ) of t he bill ; and the l> ill ,

invoice or other contempOt~lllleous memorandum of the transact.ion

containing the same information as a receipted bill pursuant to

Sec t i 0 Il 1tl2 • 9 ( c ) (,1) 0 f the Comm iss ion's Reg u1(t t ion s pub 1ishedon

I\ugust 25, 1976.
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During the course of th~ audit, it was determined that

the Committee did not retain supporting documentation for 14 of

108 itemizable expenditures (12.96%) totaling $7,432.81 of a

total of $22,501.26 in itemizable expenditures {33.03%}, although

a cancelled check was available 'for every expenditure examined.

We recommended that the Committee obtain the necessary supporting documentation and submit it to the Audit Staff for

review or present evidence of their efforts to do so.

Recommendation

Since the Committee has provided three (3) of the requested documents, and has made at least two (2) attempts at obtaining the

remaining documentation, it is the opinion of the Audit ~ldff that

best efforts have been made. Therefore, no action is recommended

in this matter.

D. Other Matters

As of January 31, 1978, the Candidate and the Committee

had not filed a disclosure report for calendar year 1977. At the

suggestion of the Audit staff, the required reports were filed by the Candidate on March 21, 1978, and by the Committee on March 24,

1978.

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CONGRESSIONAL )JDIi ~:?ORT

Candidate/Committee: Lucien DiFazio / DiFazio '76 for Congress Committee - 6/9/78

State:

District:

Location:

Connecticut

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Hartford

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Political Party Af!~liaticn: Republican

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~-~~~ 101'\,# '-'I ~c~cr.e!1rl~'. ~. ':J I .... \.J I • William Cotter (D)

Cotter - 4/5/78

Votes Cast: G~ner31 ~'ec:ion - Cotter 128,479 DiFazio 94,108

?rima~1 ~lec~icn - None

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$24,196.73

$24,122.97

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