Interim Audit Report of the 

Audit Division on the UtePAC 

(January 1, 2017 - December 31, 2018) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act.1  The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

About the Committee (p. 2) 

The UtePAC is a non-connected Political Action Committee with 

a non-contribution account. It is a non-qualified committee 

headquartered in Fort Duchesne, Utah. For more information, see 

the chart on the Committee Organization, p.2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals $ 22,337 

o Other Federal Receipts 303,574 

Total Receipts $ 325,911 

• Disbursements 

o Operating Expenditures $ 21,122 

o Other Disbursements 289,506 

Total Disbursements $ 310,628 

Findings and Recommendations (p. 3) 

• Misstatement of Financial Activity (Finding 1) 

• Increased Activity (Finding 2) 

• Cash Disbursements (Finding 3) 

• Recordkeeping for Disbursements (Finding 4) 

• Recordkeeping for Communications (Finding 5) 

• Disclosure of Disbursements (Finding 6) 

1 

 52 U.S.C. §30111(b). 
 

 

Interim Audit Report of the Audit 

Division on the UtePAC 

(January 1, 2017 - December 31, 2018) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Limitations 1 

 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 6 

Finding 2. Increased Activity 8 

Finding 3. Cash Disbursements 10 

Finding 4. Recordkeeping for Disbursements 12 

Finding 5. Recordkeeping for Communications 14 

Finding 6. Disclosure of Disbursements 16 
 

 

 

 

 

 

 

 

 

1 

Part I 

Background 

Authority for Audit 

This report is based on an audit of the UtePAC2 (UTEP), undertaken by the Audit Division of the 

Federal Election Commission (the Commission) in accordance with the Federal Election 

Campaign Act of 1971, as amended (the Act). The Audit Division conducted the audit pursuant 

to 52 U.S.C. §30111(b), which permits the Commission to conduct audits and field 

investigations of any political committee that is required to file a report under 52 U.S.C. §30104. 

Prior to conducting any audit under this subsection, the Commission must 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. 52 U.S.C. 

§30111(b). 

Scope of Audit 

Following Commission-approved procedures, the Audit staff evaluated various risk factors and 

as a result, this audit examined: 

1. the receipt of excessive contributions; 

2. the receipt of contributions from prohibited sources; 

3. the disclosure of contributions received; 

4. the disclosure of individual contributors’ occupation and name of employer; 

5. the disclosure of disbursements, debts and obligations; 

6. the consistency between reported figures and bank records; 

7. the completeness of records; and 

8. other committee operations necessary to the review. 

Limitations 

On September 30, 2016, UTEP’s former treasurer registered the American System Group, LLC 

(ASG) with the state of Utah. UTEP’s treasurer during the audit cycle entered into a contract with 

the Ute Tribe’s Business Committee to process UTEP activity, such as fundraising, advertising 

and bookkeeping, through ASG.3  

Based on documentation provided to the Audit staff, including bank statements, withdrawal slips, 

and email communications, it appears that $189,260 was deposited into ASG’s account from 

UTEP’s account. A review of the ASG bank statements provided by UTEP identified additional 

deposits totaling $115,555 in ASG’s bank account, for which there were no corresponding 

disbursements from UTEP’s bank accounts. The Audit staff requested UTEP provide 

2 UTEP has disclosed its name using slight variations on various documents. Whereas on the most recent FEC 

Form 1 Statement of Organization (Form 1), dated October 11, 2020, its name is UtePAC, a previous Form 1 

disclosed the name as The UTE PAC. In addition, reports filed with the Commission have disclosed the name as 

The UTE PAC, The Ute PAC and The Ute Pac. 3 The ASG account was not registered as an official committee depository, nor was ASG listed as a connected 

organization on UTEP’s Statement of Organization. In addition, the former treasurer advised the Audit staff 

during fieldwork that he was instructed, by his personal accountant and counsel, to conduct UTEP business 

through the ASG account. 
 

 

 

 

 

2 

documentation for the source of the $189,260 if it believed the funds in question were not from 

the UTEP bank account. The Audit staff also requested the source of ASG deposits totaling 

$115,555. As of this report, UTEP has not provided the requested documentation. 

Since UTEP’s funds were routed from its designated depository through ASG’s account before 

being disbursed for payment to UTEP’s vendors, and the composition of funds in ASG’s account 

is unknown, UTEP may have impermissibly commingled its funds with the personal funds of an 

individual. Political committees are forbidden from commingling their funds with the personal 

funds of an individual per 52 U.S.C. § 30102(b)(3); and 11 C.F.R. § 102.15. The Audit staff 

does not know whether the ASG account contained any personal funds of an individual. 
 

 

3 

Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration September 29, 2016 

• Audit Coverage January 1, 2017 - December 31, 2018 

Headquarters Fort Duchesne, Utah 

Bank Information 

• Bank Depositories One 

• Bank Accounts One Contribution; One Non-Contribution 

Treasurer 

• Treasurer When Audit Was Conducted Skyler Massy (3/26/20 - Present) 

Robert George Lucero (9/29/16 - 3/25/20) 

• Treasurer During Period Covered by Audit Robert George Lucero 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Treasurer 

Overview of Financial Activity 

(Audited Amounts) 

Cash on hand @ January 1, 2017 $ 298 

Receipts 

o Contributions from Individuals 22,337 

o Other Federal Receipts 303,574 

Total Receipts $ 325,911 

Disbursements 

o Operating Expenditures 21,122 

o Other Disbursements 289,506 

Total Disbursements $ 310,628 

Cash on hand @ December 31, 2018 $ 15,581 
 

 

 

4 

Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of UTEP’s reported financial activity with its bank 

records revealed a misstatement of receipts and disbursements, as well as beginning and 

ending cash for calendar year 2018. Specifically, UTEP understated receipts and 

disbursements by $209,332 and $198,202 respectively. UTEP overstated its beginning 

cash on hand by $15,422 and understated its ending cash on hand by $12,065. 

In response to the exit conference, UTEP corrected the misstated receipts, disbursements, 

beginning cash on hand and ending cash on hand for 2018 by filing Form 99’s 

(Miscellaneous Electronic Submission). The Audit staff recommends that UTEP provide 

any additional comments it deems relevant with respect to this matter. (For more detail, 

see p. 6.) 

Finding 2. Increased Activity 

During audit fieldwork, a comparison of UTEP’s bank activity with its original reports 

filed revealed that receipts were understated by $248,162 and disbursements were 

understated by $255,268 for calendar years 2017 and 2018. The Audit staff recommends 

that UTEP provide any additional comments it deems relevant to this matter. (For more 

detail, see p. 8.) 

Finding 3. Cash Disbursements 

During audit fieldwork, the Audit staff determined that UTEP made 43 cash 

disbursements and issued one check payable to cash totaling $131,300. The Act requires 

political committees to make all disbursements, except those from a petty cash fund, by 

check or similar draft drawn on a committee account. The Audit staff recommends that 

UTEP demonstrate compliance with the Act regarding cash disbursements, provide any 

relevant comments, and submit the missing disbursements documentation. (For more 

detail, see p. 10.) 

Finding 4. Recordkeeping for Disbursements 

During audit fieldwork, the Audit staff identified 17 disbursements totaling $18,640, 

from the contribution account, for which UTEP did not maintain adequate 

documentation. The Audit staff recommends that UTEP provide documentation to 

support the disbursements. (For more detail, see p. 12.) 

Finding 5. Recordkeeping for Communications 

During audit fieldwork, the Audit staff reviewed disbursements for communications to 

verify the accuracy of the information and proper classification of transactions disclosed 
 

 

 

 

5 

on UTEP’s disclosure reports. UTEP reported 15 disbursements totaling $52,764 on 

Schedules B (Itemized Disbursements), Line 21(b) (Other Federal Operating 

Expenditures) and Line 29 (Other Disbursements); and Schedule H4 (Disbursements for 

Allocated Federal/Non-Federal Activity) with purposes including, “advertising,” 

“printing,” “video crew expense,” “outdoor retailer advertising,” “printed materials” and 

“banners, posters, brochures.” An additional 18 disbursements totaling $17,058 were not 

reported. In response to the exit conference, UTEP provided some invoices but the 

documentation was insufficient to make a determination pertaining to the purpose for 

these disbursements and verification as to whether these were operating expenditures or 

allocable activity. The Audit staff recommends that UTEP provide the necessary 

information from which the 33 disbursements totaling $69,822 may be verified or 

explained. Such records should include copies of invoices and identification of the 

associated communications. (For more detail, see p. 14.) 

Finding 6. Disclosure of Disbursements 

During audit fieldwork, the Audit staff identified 25 disbursements totaling $94,998 that 

either lacked or had inaccurate disclosure information. In response to the exit 

conference, UTEP filed a Form 99 (Miscellaneous Electronic Submission) to include 

missing or correct information for all 25 disbursements totaling $94,998. The Audit staff 

recommends that UTEP provide any additional comments it deems relevant to this 

matter. (For more detail, see p. 16.) 
6 

Part IV 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of UTEP’s reported financial activity with its bank 

records revealed a misstatement of receipts and disbursements, as well as beginning and 

ending cash for calendar year 2018. Specifically, UTEP understated receipts and 

disbursements by $209,332 and $198,202 respectively. UTEP overstated its beginning 

cash on hand by $15,422 and understated its ending cash on hand by $12,065. 

In response to the exit conference, UTEP corrected the misstated receipts, disbursements, 

beginning cash on hand and ending cash on hand for 2018 by filing Form 99’s 

(Miscellaneous Electronic Submission). The Audit staff recommends that UTEP provide 

any additional comments it deems relevant with respect to this matter. 

Legal Standard 

Contents of Reports. Each report must disclose: 

• The amount of cash on hand at the beginning and end of the reporting period; 

• The total amount of receipts f or the reporting period and for the calendar year; 

• The total amount of disbursements for the reporting period and for the calendar 

year; and 

• Certain transactions that require itemization on Schedule A (Itemized Receipts) or 

Schedule B (Itemized Disbursements). 52 U.S.C. §30104 (b)(1),(2),(3),(4) and 

(5). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reconciled UTEP’s reported financial activity with 

its bank records for calendar years 2017 and 2018. The reconciliation determined that 

UTEP misstated receipts and disbursements for 2018, as well as beginning cash on hand 

and ending cash on hand for 2018. The following chart details the discrepancies between 

UTEP’s disclosure reports and bank activity. The succeeding paragraphs explain why the 

discrepancies occurred. 

2018 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash on hand @ 

January 1, 2018 

$ 17,410 $1,988 $15,422 

Overstated 

Receipts $3,334 $212,666 $209,332 

Understated 
 

 

 

 

 

7 

2018 Committee Activity 

Reported Bank Records Discrepancy 

Disbursements $871 $199,073 $198,202 

Understated 

Ending Cash on hand @ 

December 31, 2018 

$3,5164 $15,581 $12,065 

Understated 

The beginning cash on hand was overstated by $15,422 and the discrepancy resulted from 

prior period discrepancies. 

The misstatement of 2018 receipts resulted from the following differences: 

• Contributions from individuals not reported $5,950 

• Other federal receipts not reported 202,814 

• Receipts not supported by bank deposits (15) 

• Unexplained difference 583 

Net Understatement of Receipts $ 209,332 

The other federal receipts not reported, totaling $202,814, consisted primarily of receipts 

deposited into the non-contribution account from The Ute Indian Tribe (the Tribe), 

totaling $200,000. 

The misstatement of 2018 disbursements resulted from the following differences: 

• Federal operating expenditures not reported $ 9,856 

• Other disbursements not reported 188,346 

Understatement of Disbursements $198,202 

The other disbursements not reported, totaling $188,346, consisted of cash 

disbursements, meals, travel expenses, vehicle expenses, equipment purchases, purchase 

of items for research, printing/media/advertising costs, accounting services, 

staffing/payroll/media consulting services, internet services, telephone bills, office 

utilities, rent, shipping costs, bank and 3rd party service fees, office supplies, and 

registration fees for events. 

The $12,065 understatement of the ending cash on hand was a result of the reporting 

discrepancies described above. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with the UTEP representative during the exit 

conference and provided a schedule detailing the misstatement of financial activity. In 

response to the exit conference, the UTEP representative provided a written response 

stating that the former treasurer acted on his own accord even though the Tribe provided 

additional funds for the former treasurer to hire an administrative professional to assist 

4 

 The reported ending cash on hand does not equal reported beginning cash on hand plus reported receipts 

minus reported disbursements. This was due to a mathematical discrepancy in which the reported 

beginning cash on hand for 2018 did not equal the ending cash on hand reported for 2017. 
 

 

 

 

 

 

 

 

8 

with reporting and compliance. UTEP further stated the overwhelming problem is the 

former treasurer’s use and management of UTEP funds and indicated that it is taking 

steps to avoid the misuse of funds by any future treasurer.5 

 UTEP’s former treasurer 

stated in a letter to the Audit staff, included in UTEP’s written response, that he was the 

main employee; he tried to understand Commission software, guidelines and rules for 

reporting and found it difficult to balance the books and report properly; and that he 

“assumed [there were] fewer reporting requirements in the non-contribution account.” 

He further stated that Tribal Members were informed of all UTEP activities. 

UTEP subsequently filed Form 99’s (Miscellaneous Electronic Submission) to correct all 

of its misstated receipts, disbursements, beginning cash on hand and ending cash on hand 

for 2018. Since UTEP’s corrective action occurred after audit notification, the matter is 

included in this audit report. 

The Audit staff recommends that, within 30 calendar days of service of this report, UTEP 

provide any additional comments it deems relevant. 

Finding 2. Increased Activity 

Summary 

During audit fieldwork, a comparison of UTEP’s bank activity with its original reports 

filed revealed that receipts were understated by $248,162 and disbursements were 

understated by $255,268 for calendar years 2017 and 2018. The Audit staff recommends 

that UTEP provide any additional comments it deems relevant to this matter. 

Legal Standard 

A. Reporting Requirements. All political committees other than authorized 

committees of a candidate shall file either: 

• Quarterly reports. 52 U.S.C. § 30104(a)(4)(A); or 

• Monthly reports in all calendar years shall be filed no later than the 20th day after 

the last day of the month and shall be complete as of the last day of the month, 

except that, in lieu of filing the reports otherwise due in November and December 

of any year in which a regularly scheduled general election is held, a pre-general 

election report shall be filed in accordance with 52 U.S.C. § 30104(2)(A)(i), a 

post-general election report shall be filed in accordance with 52 U.S.C. § 

30104(2)(A)(ii), and a year-end report shall be filed no later than January 31 of 

the following calendar year. 52 U.S.C. § 30104(a)(4)(B) 

B. Contents of Reports. Each report must disclose: 

• The amount of cash on hand at the beginning and end of the reporting period; 

• The total amount of receipts f or the reporting period and for the calendar year; 

5 On January 4, 2020, UTEP hired an independent accounting firm to conduct an internal audit of the 

former treasurer’s management of UTEP activities after “growing concerns.” UTEP indicated that it 

learned of the Commission’s audit once its General Counsel began to take over UTEP’s operations 

following the former treasurer’s termination. UTEP further stated that its independent audit resulted in 

findings similar to those resulting from the Commission’s audit. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

9 

• The total amount of disbursements for the reporting period and for the calendar 

year; and 

• Certain transactions that require itemization on Schedule A (Itemized Receipts) or 

Schedule B (Itemized Disbursements). 52 U.S.C. § 30104 (b)(1),(2),(3),(4) and 

(5). 

Facts and Analysis 

A. Facts 

During audit fieldwork, in addition to examining UTEP’s most recently filed reports prior 

to audit notification, the Audit staff also compared UTEP’s originally filed reports with 

its bank records. The purpose of this additional reconciliation was to identify the degree 

to which UTEP misstated its original filings. 

The Audit staff calculated that UTEP understated its receipts by $248,162 and 

disbursements by $255,268 on the original reports filed over the two-year period ending 

on December 31, 2018. These figures include the $209,332 understatement of receipts 

and the $198,202 understatement of disbursements from 2018 discussed in Finding 1-

Misstatement of Financial Activity. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with the UTEP representative during the exit 

conference and provided a schedule detailing the understatement of receipts and 

disbursements on UTEP’s original reports. In response to the exit conference, UTEP’s 

written response stated that the former treasurer was responsible for all of the day-to-day 

operations of UTEP. UTEP asserts that the findings are due to the former treasurer’s use 

and management of UTEP funds, it is working with its General Counsel to correct the 

“numerous reporting errors... to the extent possible”6 and is taking steps to avoid the 

misuse of funds by any future treasurer. The former treasurer’s written response stated 

that the responsibility for the violation of FEC rules ultimately lies with the Tribe and not 

with him or his LLC.7 

 

The Audit staff recommends that, within 30 calendar days of service of this report, UTEP 

provide any comments it deems necessary with respect to this matter. 

6 On October 5, 2020, counsel for UTEP submitted a Request for Consideration of a Legal Question by the 

Commission (Request). UTEP asked that the Commission: 1) name UTEP’s former treasurer “as a 

Respondent” in the Commission’s audit of UTEP; 2) not “name” UTEP and its current treasurer in the 

audit; and 3) not impose any civil penalties against UTEP. UTEP was informed by the Office of General 

Counsel on October 22, 2020 that the questions raised in the Request were beyond the scope of the 

Commission’s policy on Requests for Legal Consideration, which was intended to provide a forum for 

committees to resolve legal questions related to corrective actions recommended by the Reports Analysis 

Division or the Audit Division. 7 The former treasurer’s LLC is the American System Group, LLC (ASG). ASG was retained by UTEP to 

serve as an independent contractor responsible for the formation, management, advertising and 

fundraising of UTEP. The contract with the former treasurer allowed UTEP funds to be deposited into 

and vendors to be paid out of ASG’s bank account. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10 

Finding 3. Cash Disbursements 

Summary 

During audit fieldwork, the Audit staff determined that UTEP made 43 cash 

disbursements and issued one check payable to cash totaling $131,300. The Act requires 

political committees to make all disbursements, except those from a petty cash fund, by 

check or similar draft drawn on a committee account. The Audit staff recommends that 

UTEP demonstrate compliance with the Act regarding cash disbursements, provide any 

relevant comments, and submit the missing disbursements documentation. 

Legal Standard 

A. Disbursement by Check. A political committee may only make expenditures in 

cash, not to exceed $100, from a petty cash fund. A written journal for such cash 

expenditures is to be maintained by the treasurer. All other disbursements shall be 

made by check or similar draft drawn on account(s) established at the campaign’s 

depository (ies). 52 U.S.C. §30102(h). 

B. Petty Cash Fund. A political committee may maintain a petty cash fund out of 

which it may make expenditures not in excess of $100 to any person per purchase per 

transactions. 

It is the duty of the treasurer to keep and maintain a written journal of all petty cash 

disbursements. The written journal shall include: 

• Name and address of every person to whom any disbursement is made; 

• Date; 

• Amount; 

• Purpose; and 

• If disbursement is made for a candidate, the journal shall include the name 

of that candidate and the office (including State and Congressional district) 

sought by such candidate. 11 CFR §102.11. 

C. Required Records for Disbursements. For each disbursement, the treasurer of a 

political committee must keep records on the: 

• Amount; 

• Date; 

• Name and address of the payee;8 

• Purpose (a brief description of why the disbursement was made); 

• If the disbursement was made on behalf of a candidate, the candidate’s name 

and office sought by the candidate; and 

• If the disbursement was in excess of $200, the records must include a receipt 

or an invoice from payee, or a cancelled check or share draft to the payee. If 

the disbursement was made by credit card, the record must include the 

8 The payee is usually the person providing the goods or services to the committee. In the case of travel 

advances, however, the payee is the person receiving the advance. 11 CFR §102.9(b)(2). 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11 

monthly statement or customer receipt and the cancelled check used to pay 

the credit card bill. 52 U.S.C. §30102(c) and 11 CFR §102.9(b). 

D. Preserving Records and Copies of Records. The treasurer of a political committee 

must preserve all records and copies of reports for 3 years after the report is filed. 52 

U.S.C. §30102(d). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff examined bank records and the disbursement 

database provided by UTEP and identified 43 transactions, totaling $135,600, involving 

cash disbursements. One transaction was a check payable to cash in the amount of $150; 

the remaining transactions consisted of cash withdrawals from UTEP’s contribution and 

non-contribution bank accounts. 

According to UTEP’s former treasurer, the cash disbursements were used to pay various 

individuals and vendors for salaries, telephone bills, office supplies, reimbursement of 

travel expenses, payroll, and printing or other advertising costs. The former treasurer 

stated that these expenses were campaign related. 

The Audit staff reviewed UTEP’s disbursement database to assess the nature of the cash 

disbursements and notes the following: 

• Other than bank statements and withdrawal slips disclosing the cash transactions, 

and statements from the former treasurer, UTEP presented no documentation, 

such as receipts, invoices, payroll documents or contemporaneous memoranda, 

etc., demonstrating the cash disbursements were in fact payments for bona fide 

campaign expenses.

9 

• 32 of the cash disbursements totaling $66,940 were not reported. UTEP filed 

Form 99’s in response to the audit to address the unreported cash disbursements. 

See Finding 1- Misstatement of Financial Activity. 

The Audit staff further notes that political committees may maintain a petty cash fund out 

of which they may make expenditures not in excess of $100 to any person, per purchase, 

and per transaction. The political committees must maintain a written journal of all petty 

cash disbursements per 11 C.F.R. §102.11. However, UTEP did not maintain a petty 

cash fund. UTEP confirmed that there was no use of a petty cash fund and a review of 

UTEP’s disbursement records did not yield any evidence to demonstrate that UTEP ever 

established or maintained a petty cash fund. UTEP stated the former treasurer claims he 

can no longer access the information to many of his accounts utilized to make purchases 

for UTEP. The Audit staff concludes the 43 cash disbursements, in excess of $100, 

totaling $131,300, are excessive cash disbursements. 

9 UTEP filed Form 99’s in response to the exit conference disclosing the payee as the former treasurer. See 

Finding 1 – Misstatement of Financial Activity and Finding 6 – Disclosure of Disbursements. UTEP 

also did not maintain an accounting of 16 of the cash disbursements, totaling $18,140, since they were 

not in the disbursement database. See Finding 4 – Recordkeeping for Disbursements. 
 

 

 

 

 

 

 

 

 

 

12 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with the UTEP representative during the exit 

conference and provided a schedule of cash disbursement transactions. In response to the 

exit conference, UTEP’s written response expressed that the former treasurer was 

responsible for “...complying with all FEC requirements for PACs...” and that the 

former treasurer “...represented to the Tribe that he was capable and experienced...” in 

this area. The UTEP representative expressed a willingness to provide the documentation 

but stated that he was having difficulty obtaining the documentation and that the former 

treasurer “kept few if any records regarding financial transactions as the Director and 

Treasurer of [UTEP].” UTEP has been working with the former treasurer to obtain 

control of the records and accounts, but stated he “has not been forthcoming with 

necessary information and records.” The UTEP representative also stated that the former 

treasurer’s “failure to produce records regarding [UTEP] disbursements” makes it 

“difficult to track his finances to determine the true purpose of many of his withdraws 

and expenditures.” UTEP stated the overwhelming problem is the former treasurer’s use 

and management of UTEP funds. UTEP added that it is taking steps to avoid the misuse 

of funds by any future treasurer. The written statement of UTEP’s former treasurer stated 

that the responsibility for the violation of FEC rules ultimately lies with the Tribe and not 

with him or his LLC. 

The Audit staff recommends that, within 30 calendar days of service of this report, 

UTEP: 

• Demonstrate it complied with the provisions of 52 U.S.C. §30102(h) regarding cash 

disbursements; 

• Provide any comments it deems relevant regarding the cash disbursements; and 

• Provide the missing disbursement documentation to demonstrate that the cash 

disbursements were for campaign activity. 

Finding 4. Recordkeeping for Disbursements 

Summary 

During audit fieldwork, the Audit staff identified 17 disbursements totaling $18,640, 

from the contribution account, for which UTEP did not maintain adequate 

documentation. The Audit staff recommends that UTEP provide documentation to 

support the disbursements. 

Legal Standard 

A. Required Records for Disbursements. For each disbursement, the treasurer of a 

political committee must keep records on the: 

• Amount; 

• Date; 

• Name and address of the payee;10 

10 The payee is usually the person providing the goods or services to the committee. In the case of travel 

advances, however, the payee is the person receiving the advance. 11 CFR §102.9(b)(2). 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13 

• Purpose (a brief description of why the disbursement was made - see below); and 

• If the disbursement was made on behalf of a candidate, the candidate’s name and 

the office sought by the candidate. 

• If the disbursement was in excess of $200, the records must include a receipt or 

invoice from the payee, or a cancelled check or share draft to the payee. If the 

disbursement was by credit card, the record must include the monthly statement 

or customer receipt and the cancelled check used to pay the credit card bill. 

52 U.S.C. §30102(c)(5) and 11 CFR §102.9(b). 

B. Preserving Records and Copies of Reports. The treasurer of a political committee 

must preserve all records and copies of reports for 3 years after the report is filed. 52 

U.S.C. §30102(d). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed disbursements from the contribution 

account and the non-contribution account and determined that UTEP did not maintain 

adequate documentation for 17 disbursements, totaling $18,64011, from the contribution 

account. Sixteen of these disbursements totaling $18,140 were for cash disbursements, 

and the remaining disbursement for $500 was a debit purchase. UTEP did not maintain 

receipts or invoices for these transactions. In addition, these transactions were not in 

UTEP’s disbursement database. The Audit staff used UTEP’s bank statements and 

withdrawal slips to identify the dates and amounts of the disbursements. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with the UTEP representative during the exit 

conference and provided a schedule of the disbursement transactions lacking adequate 

documentation. In response to the exit conference, UTEP provided copies of contracts, 

invoices, emails, billing statements, and receipts to adequately document some 

disbursements. These transactions are not included in the finding amount. The UTEP 

representative expressed a willingness to provide the documentation but stated that he 

was having difficulty obtaining the documentation and that the former treasurer “kept few 

if any records regarding financial transactions as the Director and Treasurer of [UTEP].” 

UTEP has been working with the former treasurer to obtain control of the records and 

accounts, but stated he “has not been forthcoming with necessary information and 

records.” The UTEP representative also stated that the former treasurer’s “failure to 

produce records regarding [UTEP] disbursements” makes it “difficult to track his 

finances to determine the true purpose of many of his withdrawals and expenditures.” 

UTEP stated the overwhelming problem is the former treasurer’s use and management of 

UTEP funds. UTEP added that it is taking steps to avoid the misuse of funds by any 

future treasurer. The written statement of UTEP’s former treasurer stated that the 

responsibility for the violation of FEC rules ultimately lies with the Tribe and not with 

him or his LLC. 

11 Eleven of the disbursements totaling $14,740 were not reported on Schedule B (Itemized Disbursements) 

and are included in Finding 1 – Misstatement of Financial Activity. 
 

 

 

 

 

 

 

 

 

 

14 

The Audit staff recommends that, within 30 calendar days of service of this report, UTEP 

provide documentation to support the disbursements totaling $18,640. 

Finding 5. Recordkeeping for Communications 

Summary 

During audit fieldwork, the Audit staff reviewed disbursements for communications to 

verify the accuracy of the information and proper classification of transactions disclosed 

on UTEP’s disclosure reports. UTEP reported 15 disbursements totaling $52,764 on 

Schedules B (Itemized Disbursements), Line 21(b) (Other Federal Operating 

Expenditures) and Line 29 (Other Disbursements); and Schedule H4 (Disbursements for 

Allocated Federal/Nonfederal Activity) with purposes including, “advertising,” 

“printing,” “video crew expense,” “outdoor retailer advertising,” “printed materials” and 

“banners, posters, brochures.” An additional 18 disbursements totaling $17,058 were not 

reported. In response to the exit conference, UTEP provided some invoices but the 

documentation was insufficient to make a determination pertaining to the purpose for 

these disbursements and verification as to whether these were operating expenditures or 

allocable activity. The Audit staff recommends that UTEP provide the necessary 

information from which the 33 disbursements totaling $69,822 may be verified or 

explained. Such records should include copies of invoices and identification of the 

associated communications. 

Legal Standard 

A. Formal Requirements Regarding Reports and Statements. Each political 

committee shall maintain records with respect to the matters required to be reported 

which shall provide in sufficient detail the necessary information and data from which 

the filed reports may be verified, explained, clarified, and checked for accuracy and 

completeness. 11 CFR §104.14(b)(1). 

B. Preserving Records and Copies of Reports. The treasurer of a political committee 

must preserve all records and copies of reports for 3 years after the report is filed. 

52 U.S.C. §30102(d). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed disbursements for communications to 

verify the accuracy of the information and proper classification of transactions disclosed 

on the reports. UTEP made 33 disbursements totaling $69,822 for which documentation 

was insufficient to make a determination pertaining to whether 15 of these disbursements 

totaling $52,764 were correctly reported on Schedule B, Line 21(b); Schedule B, Line 29 

and Schedule H4. The remaining 18 disbursements totaling $17,058 were not reported. 

UTEP filed Form 99’s in response to the audit to address the unreported disbursements. 

See Finding 1 – Misstatement of Financial Activity. 
15 

The Audit staff’s analysis resulted in the following: 

i. Disbursements – No Invoices or Copies of Communications Provided 

($66,577) 

Twenty-five disbursements totaling $66,577 were paid to nine vendors. Twelve 

of these disbursements, totaling $51,103, were disclosed on Schedule B, Line 29 

and Schedule H4 with purposes of “advertising,” “printing” and “video crew 

expense.” Thirteen disbursements totaling $15,474 were not reported. No 

invoices or associated communications were provided for these disbursements. 

Without sufficient detail, the Audit staff is unable to verify the reporting of these 

amounts or determine how the amounts should be reported. The Audit staff 

requested copies of the invoices and the associated communications for each of 

the disbursements. To date, these invoices and communications have not been 

provided. 

ii. Disbursements – Invoices Provided – No Copies of Communications 

Provided ($1,795) 

Six disbursements totaling $1,795 were paid to three vendors. One disbursement 

totaling $211 was disclosed on Schedule B, Line 29 with a purpose of 

“advertising.” Five disbursements totaling $1,584 were not reported. For these 

disbursements, UTEP provided invoices but did not provide information about the 

related communications. Without sufficient detail, the Audit staff is unable to 

verify the reporting of these amounts or determine how the amounts should be 

reported. The Audit staff requested copies of the associated communications. To 

date, these communications have not been provided. 

iii. Disbursements – No Invoices – Copies of Communications Provided ($1,450) 

Two disbursements totaling $1,450 were paid to two vendors. The disbursements 

were reported on Schedules B, Line 21(b) and Line 29 with purposes of 

“advertising” and “video crew expense,” respectively. For one of the 

disbursements totaling $1,165, UTEP provided a copy of a plan for TV ads but no 

invoice. For the other disbursement totaling $285, UTEP provided a copy of the 

social media video link and an invoice, but the invoice provided did not match the 

amount or date of the transaction. Without sufficient detail, the Audit staff is 

unable to verify the reporting of these amounts or determine how the amounts 

should be reported. The Audit staff requested copies of the invoices. To date, 

these invoices have not been provided. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with the UTEP representative during the exit 

conference and provided a schedule of the disbursements for which further records were 

necessary to verify the accuracy of UTEP’s reporting. In response to the exit conference, 

UTEP provided some invoices and payment receipts with corresponding media records 

such as photographs of banners. These transactions are not included in the finding 

amount. The UTEP representative also stated that he is committed to resolving the 

findings and has been working with the vendors and UTEP’s former treasurer to obtain 
 

 

 

 

 

 

 

 

16 

the requested records. The UTEP representative expressed a willingness to provide the 

documentation but stated that he was having difficulty obtaining the documentation and 

that the former treasurer “kept few if any records regarding financial transactions as the 

Director and Treasurer of [UTEP].” UTEP has been working with the former treasurer to 

obtain control of the records and accounts, but stated he “has not been forthcoming with 

necessary information and records.” The UTEP representative also stated that the former 

treasurer’s “failure to produce records regarding [UTEP] disbursements” makes it 

“difficult to track his finances to determine the true purpose of many of his withdrawals 

and expenditures.” UTEP stated the overwhelming problem is the former treasurer’s use 

and management of UTEP funds. UTEP added that it is taking steps to avoid the misuse 

of funds by any future treasurer. The written statement of UTEP’s former treasurer stated 

that the responsibility for the violation of FEC rules ultimately lies with the Tribe and not 

with him or his LLC. 

The Audit staff recommends that, within 30 calendar days of the service of this report, 

UTEP provide, in sufficient detail, documentation that allows for verification of proper 

reporting and determination of how to report the communication disbursements totaling 

$69,822. The documentation should include the invoices and associated 

communications. 

Finding 6. Disclosure of Disbursements 

Summary 

During audit fieldwork, the Audit staff identified 25 disbursements totaling $94,998 that 

either lacked or had inaccurate disclosure information. In response to the exit 

conference, UTEP filed a Form 99 (Miscellaneous Electronic Submission) to include 

missing or correct information for all 25 disbursements totaling $94,998. The Audit staff 

recommends that UTEP provide any additional comments it deems relevant to this 

matter. 

Legal Standard 

A. Reporting Other Disbursements. When other expenditures to the same person 

exceed $200 in a calendar year, the committee must report the: 

• The amount of the expenditures; 

• The date when the expenditures were made; 

• The name and address of the payee; and 

• The purpose of the expenditures. 52 U.S.C. §30104(b)(5)(A) and 11 CFR 

§104.3(b)(3)(i). 

B. Examples of Purpose. 

• Adequate Descriptions. Examples of adequate descriptions of “purpose” include 

the following: dinner expenses, media, salary, polling, travel, party fees, phone 

banks, travel expenses, travel expense reimbursement, catering costs, loan 

repayment, or contribution refund. 11 CFR §104.3(b)(3)(i)(B). 

• Inadequate Descriptions. The following descriptions do not meet the requirement 

for reporting “purpose”: advance, election-day expenses, other expenses, expense 
 

 

 

 

 

17 

reimbursement, miscellaneous, outside services, get-out-the-vote, and voter 

registration. 11 CFR §104.3(b)(3)(i)(B). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff identified 25 reported disbursements totaling 

$94,998 that either lacked or had inaccurate disclosure information. All of these 

disbursements were from the non-contribution account. These reporting errors consisted 

of the following: 

• Ten disbursements totaling $7,258 were missing a memo text12 stating they were 

disbursements from the non-contribution account; 

• Two disbursements totaling $1,124 were missing a memo text stating they were 

disbursements from the non-contribution account and were reported on Schedule 

H4 (Disbursements for Allocated Federal /Non-Federal Activity) instead of 

Schedule B (Itemized Disbursements), Line 29 (Other Disbursements); 

• Nine disbursements totaling $82,773 were reported with the incorrect payees and 

missing a memo text stating they were disbursements from the non-contribution 

account; 

• Four disbursements totaling $3,843 were reported with the incorrect payees, 

missing a memo text stating they were disbursements from the non-contribution 

account and were reported on Schedule H4 instead of Schedule B, Line 29. 

During audit fieldwork, the UTEP representative responded by sending a letter dated 

April 27, 2020 to the Acting Assistant Staff Director for Audit stating that “Mr. Lucero 

had a history of making incomplete and inaccurate filings with the FEC.” 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with the UTEP representative during the exit 

conference and provided a schedule of the disclosure transactions. In response to the exit 

conference, UTEP filed a Form 99 (Miscellaneous Electronic Submission) to include the 

missing or correct information and to correct the Schedules and line numbers for all 25 

disbursements totaling $94,998. Since UTEP’s corrective action occurred after audit 

notification, the matter is included in this audit report. UTEP stated the overwhelming 

problem is the former treasurer’s use and management of UTEP funds. UTEP added that 

it is taking steps to avoid the misuse of funds by any future treasurer. The written 

statement of UTEP’s former treasurer stated that the responsibility for the violation of 

FEC rules ultimately lies with the Tribe and not with him or his LLC. 

The Audit staff recommends that, within 30 calendar days of the service of this report, 

UTEP provide any additional comments it deems relevant to this matter. 

12 When itemizing transactions from the non-contribution account on Schedule B, political committees 

should identify these disbursements by entering “Non-Contribution Account” as a memo text or in the 

description field along with the required purpose of the disbursement.