February 13, 1930

FRED EILAND

PRESS OFFICE

BOB COSTA ~~ JUDY HAWKINS)~_......,

PUBLIC ISSUANCE OF AUDIT REPORT - TEXAS REPUBLICAN CONGRESSIONAL CO~~ITTEE

FE"oERAl ElECTION COMMISSION

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cc: FEC Lj~rary

JY\D

"Public Hecords

AtLachment as stated

Informational copies of the report have been received

by the parties involved and this report may be released to

the public .

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

of the Texas Republican congressional Conunittee which was'

approved by the conunission on January 17, 1980.

SUBJECT:

FHO~1:

THROUGH:

MEMORANDUM

, TO:

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FEDERAL ELECTION COMMISSION

W;(t;\iiNthON. b C' io.l.,,\

A. Overview

'1'his report is based on documents and working

papcn; supporting each of its factual statements. They form

part of thl~ record upon which the Commission based its decisions

on the mattC'rs in the report and were available to Commissioners

and appropriate staff for review.

The audit .covered the period January 1, 1976 through

June 30, 1978, the final coverage date of the latest report filed

at the time of the audit. During this period the Committee

repor.lcu a beginning cash balance of $-0-, total receipts of

$122,667.53, total expenditures of $120,648.03 and a closing

cash balance of $2,019.49. .

I. Background

REPORT OF THE AUDIT DIVISION

ON THE

TEXAS REPUBLICAN CONGRESSIONAL COMMITTEE

This report is based on an audit of the Texas

Republican Congressional Committee (lithe Conunittee") ,

undertaken by the Audit Division of the Federal Election

Commission in accordance with the Commission's audit policy

to determine whether the n' has been compliance with the

provisions of the Federal Election Campaign Act of 1971, as

amended ("the Act"). Thc" audit was conducted pursuant to

Section 438(a) (8) of ~it1e 2 of the United States Code which

directs the Commission to make from time to ti~e audits and

field investigations with respect to reports al1d statements

,filed under the provisions of the Act. " ': :.,~ ::., ,.:-, ". '"

The Texas Republican Congressional Committee filed

its initial statement of organization with the Federal Election

Con~ission on April 6, 1976. The Committee maintains its

hea~quarters in Austin, Texas.

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Term 0: Office

1/1/76-10/17/77

10/18/77-6/30/78

. 9/30-10/17/77

10/18/77-6/16/78

6/17/78-6/30/78

1/1-9/13/76

11/10/76-9/30/77

9/14-11/10/76

Term of Office

Chairman

Treasurer

-2-

C. ~cope

The audit included such tests as verification of

total reported receipts and ex~enditures 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.

Ray Barnhart

Name

Name

St. John Garwood

Donald A. Flanagan

Priscilla Kirkwood

R. Doug Lewis

Polly Sowell

The principal officers of the Committee duriny the

period covered by the audit were as follows:

'-'Ray Hutchinson

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.~.~}~'I!lodation....f,~inistrative Expenses

Section 434(b) (2) of Title 2 United St~les Code states,

in part, that each report shall disclose tIlL' full name

.:1lllJ mai1inq address of each person who has milde one or more

contributions to or for such committee within the calendar year

i.n an aggreC).:1te amount or value in excess of $100, together with

the amount and date of such contributions.

Section l04.3(a) of Title 11 of the Code of Federal

Regulations states, in part, that each in-kind conlribution

shall be valued at the usual and normal charge on the daLu

received and reported if in excess of $100 on the approprial~

schedule of receipts and expenditures, identified as to its

nature and listed as an "in-kind contribution".

Section 106.1(e) of Title 11 of the Code of Federal

Regulations states, in part, that party committees which

have estab1ish(~d Federal campaign committees pursuant to

Section 102.6 shall allocate administrative expenses on a

re.:1sonable basis between their Federal and non-Federal accounts

in proportion to the amount of funds expended on Feder.:11 and

non-Federal elections, or on another reasonable basis.

The COITunittee registered with the Commission as an affiliate

of 'the Rep~)lic.:1n Party of Texas, to conduct the. party's activities

on behCl1 f of Federal candidates. 've found thil t, except for s.:11aries,

administrative expenses were paid by the State Republican Executive

Committee (registered) and the Republican P~rty of Texas (nonregistered) .

Based on the Audit staff's recon~endation, the Committee

submitted a letter on October 24, 1979 detailing its method of

allocatinq a'dministra tive expenses. The administrative expenses

were paid by the State Republican Executive Committee of Texas

(reqistered committee) for the period from January 1, 1976 through

November 22, 1976. Administrative expenses for the period from

November 23, 1976 through December 31, 1976, and for calendar years

1977 and 1978, were paid by the Republican Party of Texas (nonregistered). The letter also acted as an amendment to the

Con~ittee's reports disclosing the receipt of the following

in-kind contributions which represent the federal portion of the

Committee's administrative expenses:

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.!/ 'rhe allocateu expenses were based on actual time and services

spent on federal activity which represented a reasonable

cxpense allocation bctween the federal and state accounts.

Commi t tee of f icials have considered staff time administerin,:.!

the account, including depositing and \Ii'riting checks, postincj

theso to accounts and submitting FEC reports. They also

added supplies, usc of office machines and space.

The Audit staff furthl'r recommends that administrative

expenses continue to be allocated on a reasonable basis and

that the Comrd ttC'e reimburse the account paying its share of

administrative expenses on a timely basis.

Thc Audit staff has determined that the committee's method

of a110c<1 ting its adminisll',ltive expenses is ,a reason<1b1e method !I

and therefore recommends th,lt the committee's disclosure of an

in-kind contribution from l h(~ State Republican Executive

Committee of Texas and the' Ih'pub1ican Party of Texas be allowed

since neither Committee h.:l:; accepted any prohibited corporate

or labor union contribution:;.

Recommelld"tion

Durin~J the period of time covered by the audit, neither the

State Republican Executive Committee nor the Republican Party

of Texau accepted contribulions from corporations or labor unions.

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State Republican Executive $2,370.00

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Rcpub1ican Party of Texas 11/23/76-12/31/76 150.00

HI'publ lC<1n Party of Texas 1/1/77-12/31/77 1,970.00

HI'pllb 1lcan Party of Texas 1/1/78-6/30/78 870.97

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