0B

1B

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.0

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. 

Final Audit Report of the 

Commission on 

Citizens for Waters 

(January 1, 2019 - December 31, 2020) 

About the Campaign (p. 2) 

Citizens for Waters is the principal campaign committee for 

Maxine Waters, Democratic candidate for the United States 

House of Representatives from the state of California, 43rd 

Congressional District, and is headquartered in Norwalk, 

California.2 For more information, see the Campaign 

Organization chart, p.2. 

Financial Activity (p. 2) 

 Receipts 

o Contributions from Individuals $ 616,178 

o Contributions from Political 

Committees 918,592 

o Offsets to Operating 

Expenditures 18,258 

o Other Receipts 573,000 

Total Receipts 0$ 2,126,028 B 

 Disbursements 

o Operating Expenditures $ 2,066,627 

o Contribution Refunds 8,397 

o Other Disbursements 108,628 

Total Disbursements 1$ 2,183,652 B 

Commission Findings (p. 3) 

 Misstatement of Financial Activity (Finding 1) 

 Receipt of Contributions in Excess of the Limit (Finding 2) 

 Cash Disbursements (Finding 3) 

1 52 U.S.C. §30111(b).

2 During the 2019 – 2020 audit period, Citizens for Waters was headquartered in Long Beach, CA. It filed 

an amended Statement of Organization on April 1, 2022, changing its address to Norwalk, CA. 
Final Audit Report of the 

Commission on 

Citizens for Waters 

(January 1, 2019 - December 31, 2020) 
 

Table of Contents 

Page 

Part I. Background 

 Authority for Audit 1 

1 

1 

Scope of Audit 

 Audit Hearing 

Part II. Overview of Campaign 

 Campaign Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Commission Findings 3 

Part IV. Commission Findings 

Finding 1. Misstatement of Financial Activity 5 

Finding 2. Receipt of Contributions in Excess of the Limit 9 

Finding 3. Cash Disbursements 12 
 

 

1 

Part I 

Background 

Authority for Audit

This report is based on an audit of the Citizens for Waters (CFW), 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 shall 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 evaluation of a daily cash analysis; 

6. the review of disbursements for personal use of funds; 

7. the review of political party contribution discrepancies; 

8. the consistency between reported figures and bank records; 

9. the completeness of records; and 

10. other committee operations necessary to the review. 

Audit Hearing 

CFW declined the opportunity for a hearing before the Commission on the matters presented in 

this report. 
 

 

 

2B

3B4B

2 

Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

 Date of Registration May 23, 1983 

 Audit Coverage January 1, 2019 - December 31, 2020 

Headquarters Norwalk, California 

Bank Information 

 Bank Depositories One 

 Bank Accounts One checking 

Treasurer 

 Treasurer When Audit Was Conducted David Gould 

 Treasurer During Period Covered by Audit David Gould 

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, 2019 $ 414,778 

Receipts 

o Contributions from Individuals 616,178 

o Contributions from Political Committees 918,592 

o Offsets to Operating Expenditures 18,258 

o Other Receipts 573,000 

2BTotal Receipts $ 2,126,028 

Disbursements 

o Operating Expenditures 2,066,627 

o Contribution Refunds 8,397 

o Other Disbursements 108,628 

3BTotal Disbursements $ 2,183,652 

4BCash on hand @ December 31, 2020 $ 357,154 
 

 

 

3 

Part III 

Summaries 

Commission Findings 

Finding 1. Misstatement of Financial Activity 

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

records revealed a misstatement of the beginning cash on hand, disbursements, and the 

ending cash on hand for calendar year 2019, as well as a misstatement of the beginning 

cash on hand, receipts, disbursements, and the ending cash on hand for calendar year 

2020. Specifically, for 2019, CFW understated the beginning cash on hand by $19,245, 

overstated disbursements by $19,643, and understated the ending cash on hand by 

$19,215. For 2020, CFW understated the beginning cash on hand, receipts, 

disbursements, and the ending cash on hand by $19,215, $262,391, $256,164, and 

$36,287, respectively. In response to the Interim Audit Report recommendation, the 

CFW representative stated that many of the misstatements were attributable to software 

technical issues, and that CFW was in the process of filing amendments to accurately 

reflect its financial activity. Subsequent to the February 7, 2023, due date of its response 

to the Interim Audit Report, CFW filed amended disclosure reports to address this 

finding.3

 The amended reports materially corrected its financial activity for 2019 and 

2020. 

The Commission approved a finding that CFW understated its reported beginning cash on 

hand balance by $19,197,4

 overstated disbursements by $19,691, and understated the 

ending cash on hand by $19,215 in calendar year 2019; and understated the beginning 

cash on hand, receipts, disbursements, and the ending cash on hand balance by $19,215, 

$262,391, $256,164, and $36,287, respectively, in calendar year 2020. 

(For more detail, see p. 5.) 

Finding 2. Receipt of Contributions in Excess of the Limit 

During audit fieldwork, the Audit staff reviewed contributions from individuals to 

determine if any exceeded the contribution limit. This review indicated that CFW 

received apparent excessive contributions totaling $19,000. These errors occurred as a 

result of CFW not resolving the excessive portion of contributions by obtaining signed 

reattribution letters from its contributors or issuing refunds of the excessive portion of 

contributions in a timely manner. In response to the Interim Audit Report 

recommendation, CFW provided copies of the front of refund checks issued totaling 

3

 CFW filed amended disclosure reports from March 3 through March 23, 2023, to address Finding 1, 

Misstatement of Financial Activity. Since these amendments were filed after the required due date, they 

were examined in full during the next phase of the audit process. 4

 In its response to the Interim Audit Report, CFW demonstrated that a $48 disbursement was a 2018 

disbursement negotiated in 2019. Therefore, the Audit staff reduced the 2019 bank beginning cash on 

hand balance and disbursements accordingly. 
 4 

$19,000, but did not provide cancelled checks to the contributors or an acceptable 

alternative. 

In response to the Draft Final Audit Report, CFW provided documentation to 

demonstrate that $8,400 of the $19,000 in refund checks issued for excessive 

contributions have been negotiated by the contributors. Additionally, CFW provided 

documentation that the remaining excessive amount totaling $10,900, was disgorged to 

the U.S. Treasury. As such, CFW resolved, albeit untimely, the excessive contributions. 

The Commission approved a finding that CFW received excessive contributions from 

individuals totaling $19,000. 

(For more detail, see p. 9.) 

Finding 3. Cash Disbursements 

During audit fieldwork, the Audit staff determined that CFW made three cash 

disbursements and issued one check payable to cash, which exceeded the cash 

disbursement limit by $7,000. 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, not to exceed $100. In response to the Interim Audit Report 

recommendation, the CFW representative stated that circumstances related to the 

COVID-19 pandemic made it difficult for canvassers to cash checks; therefore, CFW 

issued cash to its canvassers rather than checks. Further, the representative stated the 

campaign manager made best efforts to track all cash expenditures and was willing to 

make a declaration that the cash paid to canvassers furthered the canvassing program. 

In response to the Draft Final Audit Report, CFW provided a letter signed by its 

Campaign Manager stating that all cash was used for the canvassing program. CFW 

stated that it “made its best efforts to comply with the Federal Election Campaign Act 

during the COVID-19 pandemic while also navigating challenges presented to the 

canvass workers in cashing checks.” 

The Commission approved a finding that CFW made excessive cash disbursements 

totaling $7,000. 

(For more detail, see p. 12.) 
 

 

 

5 

Part IV 

Commission Findings 

Finding 1. Misstatement of Financial Activity 

Summary 

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

records revealed a misstatement of the beginning cash on hand, disbursements, and the 

ending cash on hand for calendar year 2019, as well as a misstatement of the beginning 

cash on hand, receipts, disbursements, and the ending cash on hand for calendar year 

2020. Specifically, for 2019, CFW understated the beginning cash on hand by $19,245, 

overstated disbursements by $19,643, and understated the ending cash on hand by 

$19,215. For 2020, CFW understated the beginning cash on hand, receipts, 

disbursements, and the ending cash on hand by $19,215, $262,391, $256,164, and 

$36,287, respectively. In response to the Interim Audit Report recommendation, the 

CFW representative stated that many of the misstatements were attributable to software 

technical issues, and that CFW was in the process of filing amendments to accurately 

reflect its financial activity. Subsequent to the February 7, 2023, due date of its response 

to the Interim Audit Report, CFW filed amended disclosure reports to address this 

finding.5

 The amended reports materially corrected its financial activity for 2019 and 

2020. 

The Commission approved a finding that CFW understated its reported beginning cash on 

hand balance by $19,197,6 overstated disbursements by $19,691, and understated the 

ending cash on hand by $19,215 in calendar year 2019; and understated the beginning 

cash on hand, receipts, disbursements, and the ending cash on hand balance by $19,215, 

$262,391, $256,164, and $36,287, respectively, in calendar year 2020. 

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 for the reporting period and for the election cycle; 

 The total amount of disbursements for the reporting period and for the election cycle; 

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). 

5 See Supra footnote 3. 6 See Supra footnote 4. 
 

 

 

 

 

 

5B 6B 7B

6 

Facts and Analysis 

A. Facts 

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

its bank records for calendars years 2019 and 2020. The reconciliation identified that 

CFW misstated the beginning cash on hand, disbursements, and the ending cash on hand 

for 2019, as well as the beginning cash on hand, receipts, disbursements, and the ending 

cash on hand for 2020. The following charts detail the discrepancies between CFW’s 

disclosure reports and its bank activity. The succeeding paragraphs explain why the 

discrepancies occurred. 

2019 Campaign Activity 

5BReported 6BBank Records 7BDiscrepancy 

Beginning Cash on hand @ 

January 1, 2019 

$395,533 $414,778 $19,245 

Understated 

Receipts $788,943 $775,747 $13,196 

Overstated 

Disbursements $585,307 $565,664 $19,643 

Overstated 

Ending Cash on hand @ 

December 31, 2019 

$605,6467 $624,861 $19,215 

Understated 

The beginning cash on hand was understated by $19,245 and the reporting discrepancy is 

unexplained, but likely resulted from prior period discrepancies. 

The overstatement of receipts resulted from the following: 

 Receipt reported that did not clear the bank ($13,000) 

 Unexplained differences (196) 

Overstatement of Receipts ($13,196) 

The overstatement of disbursements resulted from the following: 

 Disbursements reported that did not clear the bank $19,326 

 Unexplained differences 317 

Overstatement of Disbursements $19,643 

The $19,215 understatement of the ending cash on hand was a result of the reporting 

discrepancies described above, as well as overstating the ending cash on hand by $6,477 

on CFW’s 2019 July Quarterly Report. 

7 The reported 2019 ending cash on hand does not equal the 2019 beginning cash on hand plus reported 

receipts minus reported disbursements. This was due to a mathematical discrepancy on the 2019 July 

Quarterly Report in which the ending cash on hand was overstated by $6,477. 
 

 

 

 

 

 

 

 

5B 6B 7B

7 

2020 Campaign Activity 

5BReported 6BBank Records 7BDiscrepancy 

Beginning Cash on hand @ 

January 1, 2020 

$605,646 $624,861 $19,215 

Understated 

Receipts $1,087,889 $1,350,280 $262,391 

Understated 

Disbursements $1,361,823 $1,617,987 $256,164 

Understated 

Ending Cash on hand @ 

December 31, 2020 

$320,8678 $357,154 $36,287 

Understated 

The understatement of receipts resulted from the following: 

 Receipts not reported9 $262,248 

 Unexplained differences 143 

Understatement of Receipts $262,391 

The net understatement of disbursements resulted from the following: 

 Disbursements not reported10 $275,753 

 Disbursements reported, but not clearing the bank (18,875) 

 Unexplained differences (714) 

Net Understatement of Disbursements $256,164 

The $36,287 understatement of the ending cash on hand was a result of the reporting 

discrepancies described above, as well as a math errors of $10,845 relating to CFW’s 

reported ending cash on hand on its 2020 disclosure reports. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter during the exit conference with the CFW 

representatives and provided schedules detailing the misstatements of financial activity. 

During the exit conference, the CFW representatives stated that CFW’s failure to file 

activity for eight days of the 2020 Post General Report was a simple oversight, and the 

receipts and disbursements not filed during this period represented the majority of the 

2020 misstatement. The CFW representatives stated they may file a Form 99 to correct 

the misstatements. 

The CFW representatives did not provide a written exit conference response for this 

finding. 

8 The reported 2020 ending cash on hand does not equal the 2020 beginning cash on hand plus reported 

receipts minus reported disbursements. This was due to mathematical discrepancies on several 2020 

reports which understated the ending cash on hand by $10,845. 9 The majority of receipts and disbursements not reported were during the eight-day period from October 

15, 2020, through October 22, 2020. CFW inadvertently filed its 2020 30-Day Post-Election Report with 

the start date of October 23, 2020 instead of October 15, 2020 and therefore, did not report any receipts 

or disbursements during this period. 10 See supra footnote 9. 
 

 

8 

The Interim Audit Report recommended that CFW amend its disclosure reports or file a 

Form 9911 (Miscellaneous Electronic Submission) to correct the misstatements noted 

above. In addition, the Interim Audit Report recommended that CFW reconcile the cash 

on hand balance on its most recently filed report to include these adjustments and correct 

any subsequent discrepancies. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, the CFW representative stated 

that many of the misstatements were attributable to software technical issues, and that the 

issues were further exacerbated by the COVID-19 pandemic as technical issues continued 

to grow but company customer support was reduced. The CFW representative stated that 

CFW was in the process of filing amendments to accurately reflect its financial activities. 

Subsequent to the February 7, 2023, due date of its response to the Interim Audit Report, 

CFW filed amended disclosure reports to address this finding. Given that the 

amendments were filed late and to ensure the timely progression of the audit, they were 

to be reviewed in the next phase of the audit process. Absent the full review of the filed 

amended disclosure reports, CFW’s financial activity for 2019 and 2020 remained 

misstated. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that CFW filed amended reports after the 

Interim Audit Report due date, and that these amended reports would be reviewed in the 

next phase of the audit process. 

E. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, CFW stated that it filed amended disclosure 

reports which reflected the misstatements of financial activity discussed in the Draft Final 

Audit Report. The Audit staff’s review of the amended reports revealed that CFW had 

materially corrected its financial activity for 2019 and 2020 calendar years. 

Commission Conclusion 

On October 19, 2023, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that CFW 

understated its reported beginning cash on hand balance by $19,197,12 overstated 

disbursements by $19,691, and understated its ending cash on hand balance by $19,215 in 

calendar year 2019; and understated the beginning cash on hand, receipts, disbursements, 

and the ending cash on hand balance by $19,215, $262,391, $256,164, and $36,287, 

respectively, in calendar year 2020. 

The Commission approved the Audit staff’s recommendation. 

11 CFW was advised by the Audit staff that if it chose to file a Form 99, instead of amending its disclosure 

reports, the form must contain all pertinent information that is required on the schedule. 12 See Supra footnote 4. 
 9 

Finding 2. Receipt of Contributions in Excess of the Limit 

Summary 

During audit fieldwork, the Audit staff reviewed contributions from individuals to 

determine if any exceeded the contribution limit. This review indicated that CFW 

received apparent excessive contributions totaling $19,000. These errors occurred as a 

result of CFW not resolving the excessive portion of contributions by obtaining signed 

reattribution letters from its contributors or issuing refunds of the excessive portion of 

contributions in a timely manner. In response to the Interim Audit Report 

recommendation, CFW provided copies of the front of refund checks issued totaling 

$19,000, but did not provide cancelled checks to the contributors or an acceptable 

alternative. 

In response to the Draft Final Audit Report, CFW provided documentation to 

demonstrate that $8,400 of the $19,000 in refund checks issued for excessive 

contributions have been negotiated by the contributors. Additionally, CFW provided 

documentation that the remaining excessive amount totaling $10,900, was disgorged to 

the U.S. Treasury. As such, CFW resolved, albeit untimely, the excessive contributions. 

The Commission approved a finding that CFW received excessive contributions from 

individuals totaling $19,000. 

Legal Standard 

A. Authorized Committee Limits. For the 2020 election, an authorized committee may 

not receive more than a total of $2,800 per election from any one person or $5,000 

per election from a multicandidate political committee. 52 U.S.C. §§30116(a)(1)(A) 

and (a)(2)(A); 11 CFR §§110.1(a) and (b) and 110.9. 

B. Handling Contributions That Appear Excessive. If a committee receives a 

contribution that appears to be excessive, the committee must either: 

 Return the questionable check to the donor; or 

 Deposit the check into its federal account and: 

 Keep enough money in the account to cover all potential refunds; 

 Keep a written record explaining why the contribution may be illegal; 

 Include this explanation on Schedule A if the contribution has to be 

itemized before its legality is established; 

 Seek a reattribution or a redesignation of the excessive portion, following 

the instructions provided in the Commission regulations (see below for 

explanations of reattribution and redesignation); and 

 If the committee does not receive a proper reattribution or redesignation 

within 60 days after receiving the excessive contribution, refund the excessive 

portion to the donor. 11 CFR §§103.3(b)(3), (4) and (5) and 110.1(k)(3)(ii)(B). 

C. Joint Contributions. Any contribution made by more than one person (except for a 

contribution made by a partnership) must include the signature of each contributor on 

the check, money order, or other negotiable instrument or in a separate writing. A 
 

 

10 

joint contribution is attributed equally to each donor unless a statement indicates that 

the funds should be divided differently. 11 CFR §110.1(k)(1) and (2). 

D. Reattribution of Excessive Contributions. The Commission regulations permit 

committees to ask donors of excessive contributions (or contributions that exceed the 

committee’s net debts outstanding) whether they had intended their contribution to be 

a joint contribution from more than one person and whether they would like to 

reattribute the excess amount to the other contributor. The committee must inform 

the contributor that: 

 The reattribution must be signed by both contributors; 

 The reattribution must be received by the committee within 60 days after the 

committee received the original contribution; and 

 The contributor may instead request a refund of the excessive amount. 11 

CFR §110.1(k)(3). 

Within 60 days after receiving the excessive contribution, the committee must either 

receive the proper reattribution or refund the excessive portion to the donor. 11 CFR 

§§103.3(b)(3) and 110.1(k)(3)(ii)(B). Further, a political committee must retain 

written records concerning the reattribution in order for it to be effective. 11 CFR 

§110.1(l)(5). 

Notwithstanding the above, any excessive contribution that was made on a written 

instrument that is imprinted with the names of more than one individual may be 

attributed among the individuals listed unless instructed otherwise by the 

contributor(s). The committee must inform each contributor: 

 How the contribution was attributed; and 

 The contributor may instead request a refund of the excessive amount. 11 

CFR §110.1(k)(3)(B). 

Facts and Analysis 

A. Facts 

1. Facts 

During audit fieldwork, the Audit staff conducted a review of all contributions to 

identify apparent excessive contributions from individuals, as noted below. 

Excessive Contributions - 100% Review 

Excessive Contribution AmountF3F3F $19,000 

Total Amount of Excessive Contributions $19,000 
 11 

Reason for Excessive Contributions 

Contributions not resolved via signed 

reattribution letter or refund $19,000 

Total Amount of Excessive Contributions $19,000 

2. Additional Information 

CFW did not maintain a separate account for questionable contributions. However, 

CFW did maintain a sufficient balance in its bank account to make refunds of the 

apparent excessive contributions. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with the CFW representatives during the exit 

conference and provided a schedule of the apparent excessive contributions. During the 

exit conference, the CFW representatives stated that they would provide documentation 

related to these contributions. 

The CFW representatives did not provide a written exit conference response for this 

finding. 

The Interim Audit Report recommended that CFW: 

 Provide evidence demonstrating that the contributions in question were not 

excessive, or if excessive, were resolved in a timely manner. This evidence 

should have included documentation that was not made available to the Audit 

staff during the audit, including copies of solicitation cards completed by the 

contributors at the time of their contribution that clearly informed the 

contributors of the limitations or timely refunds or reattributions for excessive 

contributions. 

 Absent such demonstration, CFW should have reviewed its contributions to 

determine which are excessive and how each can be resolved, and/or offer a 

refund for any remaining excessive amounts. CFW must either provide evidence 

that the excessive contribution amounts were refunded or, for any excessive 

contributions for which CFW was unable to process a refund for any reason, 

provide evidence that the excessive contribution amounts were disgorged to the 

U.S. Treasury. For a reattribution, both the contributor and the individual to 

whom a contribution was reattributed must be notified. 

 If funds were not available to make the necessary refunds, CFW should have 

disclosed the contributions requiring refunds on Schedule D (Debts and 

Obligations) until funds become available to make such refunds. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, the CFW representative stated 

that CFW made best efforts to ensure contributions were within the contribution limits. 

Further, the CFW representative stated the excessive contributions totaling $19,000 were 

inadvertent, and CFW issued refunds as part of its Interim Audit Report response. CFW 
 

 

12 

provided copies of the front of the refund checks, totaling $19,000, but did not provide 

copies of the cancelled refund checks. The Draft Final Audit Report concluded that the 

apparent excessive contributions, totaling $19,000, have not been resolved. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that CFW provided copies of the front of the 

contribution refund checks, totaling $19,000, but did not provide copies of the cancelled 

refund checks. The Draft Final Audit Report concluded that the apparent excessive 

contributions, totaling $19,000, have not been resolved. 

E. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, CFW provided documentation to 

demonstrate that $8,400 of the $19,000 in refund checks issued for excessive 

contributions have been negotiated by the contributors. Additionally, CFW provided 

documentation that an additional $10,900 was disgorged to the U.S. Treasury. As such, 

CFW resolved, albeit untimely, the excessive contributions.13 

Commission Conclusion 

On October 19, 2023, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that CFW 

received excessive contributions from individuals totaling $19,000. 

The Commission approved the Audit staff’s recommendation. 

Finding 3. Cash Disbursements 

Summary 

During audit fieldwork, the Audit staff determined that CFW made three cash 

disbursements and issued one check payable to cash, which exceeded the cash 

disbursement limit by $7,000. 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, not to exceed $100. In response to the Interim Audit Report 

recommendation, the CFW representative stated that circumstances related to the 

COVID-19 pandemic made it difficult for canvassers to cash checks; therefore, CFW 

issued cash to its canvassers rather than checks. Further, the representative stated the 

campaign manager made best efforts to track all cash expenditures and was willing to 

make a declaration that the cash paid to canvassers furthered the canvassing program. 

In response to the Draft Final Audit Report, CFW provided a letter signed by its 

Campaign Manager stating that all cash was used for the canvassing program. CFW 

stated that it “made its best efforts to comply with the Federal Election Campaign Act 

13 The amount that CFW disgorged to the U.S. Treasury of $10,900, was $300 more than the remaining 

excessive contribution amount calculated by the Audit staff of $10,600. CFW included a $2,500 

contribution from an individual in its calculation, while only $2,200 of that $2,500 contribution was in 

excess of the limit. 
 

 

 

 

 

 

 

13 

during the COVID-19 pandemic while also navigating challenges presented to the 

canvass workers in cashing checks.” 

The Commission approved a finding that CFW made excessive cash disbursements 

totaling $7,000. 

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)(2). 

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;14 

 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 

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). 

14 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). 
 14 

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 CFW and identified four transactions, totaling $7,400, involving 

cash disbursements, each of which exceeded the $100 transaction limit for cash 

disbursements. One transaction was a check payable to “Cash” in the amount of $500; 

the remaining three transactions consisted of cash withdrawals from CFW’s bank 

account. 

CFW provided records for cash disbursements totaling $6,390. Records for cash 

disbursements totaling $1,010 were not provided. The cash disbursements were used to 

pay various individuals for Get Out the Vote (GOTV) activity. 

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

which they may make expenditures not to exceed $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, CFW did not maintain a petty cash 

fund. CFW confirmed that there was no petty cash fund and a review of CFW’s 

disbursement records did not yield any evidence to demonstrate that CFW established or 

maintained a petty cash fund. The Audit staff concludes that four cash disbursements, in 

excess of $100, totaling $7,000, were excessive cash disbursements. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with the CFW representatives during the exit 

conference and provided a schedule of the cash disbursements. During the exit 

conference, the CFW representatives stated that in hindsight, CFW should have written 

checks instead of making cash payments but mentioned that, due to the large number of 

individuals participating in the GOTV activity, it was easier to pay cash than to issue 

checks. The CFW representatives stated that they would provide comments related to 

this finding. 

The CFW representatives did not provide a written exit conference response for this 

finding. 

The Interim Audit Report recommended that CFW demonstrate its compliance with the 

Act regarding cash disbursements, submit the missing disbursement records, and provide 

any relevant comments. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, the CFW representative stated 

that CFW issued cash to its canvassers to pay for canvassing costs instead of checks 
 

 

15 

because, during the COVID-19 pandemic, check cashing stores and banks were closed or 

maintained limited hours, making it difficult for canvassers to cash checks. The CFW 

representative also stated that the Candidate’s constituents are “comprised of many lowwage and working-class communities who regularly work paycheck to paycheck and, in 

many instances, cash their checks immediately at check-cashing stores or directly from 

the banks”. 

The CFW representative further stated that the campaign manager made best efforts to 

track all cash expenditures, but she was unable to provide CFW with all disbursement 

records. According to CFW, the campaign manager would be willing to make a 

declaration that “the cash received was used to pay canvassers and in furtherance of the 

canvassing program.” 

The Interim Audit Report maintained that CFW has not demonstrated its compliance with 

the Act regarding cash disbursements, and that CFW has made excessive cash 

disbursements totaling $7,000. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that CFW had not demonstrated its 

compliance with the Act regarding cash disbursements, and that CFW has made 

excessive cash disbursements totaling $7,000. 

E. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, CFW provided a letter signed by the 

Campaign Manager stating that all cash was used for the canvassing program. CFW 

stated that it “made its best efforts to comply with the Federal Election Campaign Act 

during the COVID-19 pandemic while also navigating challenges presented to the 

canvass workers in cashing checks.” CFW stated that: 

The Office of General Counsel (“OGC”) asserts that the Committee failed to 

keep the required records to document cash payments. However, the 

Committee provided records for cash disbursements totaling $6,390. 

Although the Committee could not provide documentation for all cash 

payments, records for a substantial amount of the cash payments were 

provided which is materially distinguishable from the facts presented in the 

MUR referenced by the OGC. 

Further, CFW stated that it made only four cash payments and provided records for a 

substantial amount of the cash disbursements, whereas the committee referenced in the 

MUR engaged in a “pattern of making cash disbursements and intentionally falsifying 

and concealing its activity.” 

The Act specifies that “[n]o disbursements may be made (other than petty cash 

disbursements ...) ... except by check.”15 The Act further states that committees “may 

maintain a petty cash fund for disbursements not in excess of $100 to any person in 

15 52 U.S.C. § 30102(h)(1); see also 11 C.F.R. § 102.10. 
 16 

connection with a single purchase or transaction.”16 As such, CFW made excessive cash 

disbursements totaling $7,000. 

Commission Conclusion 

On October 19, 2023, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that CFW 

made excessive cash disbursements totaling $7,000. 

The Commission approved the Audit staff’s recommendation. 

16 52 U.S.C. § 30102(h)(2); see also 11 C.F.R. § 102.11.