Federal Election Commission

Agency Financial Report

Fiscal Year 2023 
Federal Election Commission

Agency Financial Report

Fiscal Year 2023 

Federal Election Commission

1050 First St. NE 

Washington, D.C. 20463 

(202) 694-1000 

1-(800) 424-9530 

www.fec.gov

Released November 15, 2023 
Contents

Message from the Chair 2

How to Use This Report 4

SECTION I – Management’s Discussion and Analysis 5

Section I.A: Mission and Organizational Structure 5

Mission Statement 6

Organizational Structure 6

Risk Identification and Mitigation 10

Section I.B: Performance Goals, Objectives and Results 14

Strategic Goal 14

Strategic Objectives 14

Section I.C: Analysis of FEC Financial Statements and Stewardship Information 22

Section I.D: Analysis of FEC’s Systems, Controls and Legal Compliance 25

Annual Assurance Statement on Internal Control 27

Section I.E: Limitations of the Financial Statements 28

Section I.F: Forward-Looking Information 29

SECTION II – Auditor’s Report and Financial Statements 30

Message from the Chief Financial Officer 30

OIG Transmittal Letter 31

Independent Auditor’s Report 33

Financial Statements 48

Notes to the Financial Statements 54

SECTION III – Other Information 79

Inspector General’s Statement on FEC Management and Performance Challenges 80

Management’s Response to the Office of Inspector General’s Statement on the Federal 

Election Commission’s Management and Performance Challenges 95

Payment Integrity 108

Reporting on Internal Control Assurances 109

Civil Monetary Penalties Adjustment for Inflation 110

APPENDIX 113

List of Acronyms 113
2 

Message from the Chair

FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 

OFFICE OF THE CHAIR 

November 15, 2023 

 

 

 

I am pleased to present the Federal Election Commission’s Agency Financial Report (AFR) for 

Fiscal Year (FY) 2023. To the best of my knowledge, the AFR reflects accurate and complete 

data with respect to the agency’s program performance and financial activities over the past year. 

It further demonstrates our continued commitment to administering the Federal Election 

Campaign Act of 1971, as amended. 

 

 

The Commission provides the public with accurate and accessible information about how 

candidates raise and spend funds to support their campaigns, civilly enforces the campaign finance 

laws, and encourages voluntary compliance through timely advice and educational outreach. 

The Commission continues to seek opportunities to make its systems and processes more efficient 

and effective, including efforts to redesign the FEC website and to migrate data to a cloud 

environment. These efforts have helped the Commission accommodate a steep rise in the number 

of financial transactions reported to the agency over the last several years. At the same time, the 

Commission has continued to prioritize improving the customer service it provides and ensuring 

that the campaign finance information within its jurisdiction is readily available to the public. 

 

With respect to the agency’s FY 2023 financial statements, the Commission received an 

unmodified opinion from its independent auditors. This unmodified opinion reflects the continued 
3 

commitment by the Commissioners and Commission staff to ensure that the agency’s financial 

statements fairly present the agency’s fiscal position. 

 

 

 

Management, which consists of senior managers including the Chief Financial Officer, Acting 

General Counsel and Staff Director, continue their efforts to respond to risks included in the 

agency Risk Profile (see Section I) and challenges identified by the Inspector General (see Section 

III). 

The efforts described in this report would have been impossible without the work and dedication 

of the agency’s staff, all of whom strive to fulfill the FEC’s mission in the most efficient manner 

possible. 

On behalf of the Commission, 

Dara Lindenbaum 

Chair 

 
4 

How to Use This Report

This Agency Financial Report presents financial information, as well as relevant performance 

information, on the Federal Election Commission’s operations. The report was prepared pursuant 

to the Accountability of Tax Dollars Act of 2002 and Office of Management and Budget (OMB) 

Circular A-136, revised, Financial Reporting Requirements, and covers activities from October 1, 

2022 through September 30, 2023. 

The FEC places a high importance on keeping the public informed of its activities. To learn more 

about the FEC and what the agency does to serve the American public, visit the FEC’s website 

https://www.fec.gov/about/reports-about-fec/strategy-budget-and-performance/. 

The FY 2023 Agency Financial Report is organized into three primary sections: 

Section I – Management’s Discussion and Analysis (MD&A) provides an overview of the FEC. It 

describes our mission, organizational structure and regulatory responsibilities. It also includes 

relevant performance information related to the FEC’s strategic goals and objectives to provide a 

forward-looking discussion of future challenges. 

Section II – Financial Information, including the Independent Auditor’s Report, detailing the 

FEC’s financial performance by 1) highlighting the agency’s financial position and audit results 

and 2) describing the FEC’s compliance with key legal and regulatory requirements. 

Section III – Other Information includes our Inspector General’s (IG) assessment of the FEC’s 

management challenges and the FEC’s response. 
5 

SECTION I – Management’s Discussion and Analysis

Section I.A: Mission and Organizational Structure

The Federal Election Commission is an independent regulatory agency responsible for 

administering, enforcing, defending and interpreting the Federal Election Campaign Act of 1971, 

as amended (FECA or the Act).1 Congress created the FEC to administer, enforce and formulate 

policy with respect to the FECA. The Act reflects a belief that democracy works best when voters 

can make informed decisions in the political process—decisions based in part on knowing the 

sources of financial support for Federal candidates, political party committees and other political 

committees. Public confidence in the political process also depends on the knowledge that 

participants in Federal elections follow clear and well-defined rules and face consequences for 

non-compliance. 

Under the Act, all Federal political committees, including the committees of Presidential, Senate 

and House candidates, must file reports of receipts and disbursements. The FEC makes disclosure 

reports, and the data contained in them, available to the public through the Commission’s internetbased public disclosure system on the Commission’s website, as well as in a public records office 

at the Commission's Washington, D.C. headquarters. The FEC also has exclusive responsibility 

for civil enforcement of the Act and has litigating authority independent of the Department of 

Justice in U.S. district court and the courts of appeals. Additionally, the Commission promulgates 

regulations implementing the Act and issues advisory opinions responding to inquiries regarding 

interpretation and application of the Act and the Commission’s regulations. 

Additionally, the Commission is responsible for administering the Federal public funding 

programs for presidential campaigns. This responsibility includes certifying and auditing all 

participating candidates and committees and enforcing the public funding laws. 

The FEC has chosen to produce an Agency Financial Report (AFR) and Annual Performance 

Report (APR) pursuant to the Government Performance and Results Act of 1993, as amended. The 

FEC will include its FY 2023 Annual Performance Report with its Congressional Budget 

Justification and will post it on the FEC website at https://www.fec.gov/about/reports-aboutfec/strategy-budget-and-performance/ in 2024. 

1 The Commission’s primary responsibilities pertain to the Federal Election Campaign Act of 1971, Public Law 92-225, 

86 Stat. 3 (1972) as amended (codified at 52 U.S.C. §§ 30101-30145) (formerly at 2 U.S.C. §§ 431-55) (the Act or the 

FECA). The Commission’s responsibilities for the Federal public funding programs are contained in the Presidential 

Election Campaign Fund Act, Public Law 92-178, 85 Stat. 562 (1971) (codified at 26 U.S.C. §§ 9001-13) and the 

Presidential Primary Matching Payment Account Act, Public Law 93-443, 88 Stat. 1297 (1974) (codified at 26 U.S.C. 

§§ 9031-42).
6 

Mission Statement

The FEC’s mission is to protect the integrity of the Federal campaign finance process by providing 

transparency and fairly enforcing and administering Federal campaign finance laws. 

Organizational Structure

To accomplish its legislative mandate, the FEC is directed by six Commissioners, who are 

appointed by the President with the advice and consent of the Senate. By law, no more than three 

Commissioners can be members of the same political party. Each member serves a six-year term, 

and two seats are subject to appointment every two years. Commissioners may serve beyond their 

six-year terms until new Commissioners are confirmed. The Chairmanship of the Commission 

rotates among the members, with no member serving as Chair more than once during his or her 

six-year term. The Commissioners are responsible for administering and enforcing the Act and 

meet regularly to formulate policy and to vote on significant legal and administrative matters. The 

Act requires the affirmative vote of four members of the Commission to approve official actions, 

thus requiring bipartisan decision-making. The FEC has its headquarters in Washington, D.C. and 

does not have any regional offices. 

As noted in Figure 1, the offices of the Staff Director, General Counsel, Chief Information Officer 

and Chief Financial Officer support the agency in accomplishing its mission. The Office of the 

Inspector General, established within the FEC in 1989 under the 1988 amendments to the Inspector 

General Act, is independent and reports both to the Commissioners and to Congress. The specific 

roles and responsibilities of each office are described in greater detail below.
7 

Figure 1: FEC Organizational Chart 

 Office of the Staff Director (OSD)

The Office of the Staff Director consists of four offices: 1) Management and Administration; 2) 

Compliance; 3) Communications; and 4) Equal Employment Opportunity. The Office of 

Management and Administration is responsible for the FEC’s strategic planning and performance 

and works with the Commission to ensure the agency’s mission is met efficiently. In addition, this 

office houses the Commission Secretary, the Office of Human Resources (OHR) and the 

Administrative Services Division (ASD). The primary responsibilities of the Office of Compliance 

are the processing and review of campaign finance reports and filing assistance, audits, 

administrative fines and alternative dispute resolution. The Office of Communications includes 

divisions charged with making campaign finance reports available to the public, encouraging 

voluntary compliance with the Act through educational outreach and training and ensuring 

effective communication with Congress, executive branch agencies, the media and researchers and 

the general public. The Equal Employment Opportunity Office administers and ensures 

compliance with applicable laws, regulations, policies and guidance that prohibit discrimination 

in the Federal workplace based on race, color, national origin, religion, age, disability, sex, 

pregnancy, genetic information or retaliation. The EEO Officer reports to the Staff Director on 

administrative issues but has direct reporting authority on all EEO matters. See 29 CFR 

1614.102(b). 
8 

 Office of General Counsel (OGC)

The Office of General Counsel consists of five organizational units: (1) the Deputy General 

Counsel - Administration; (2) the Deputy General Counsel - Law; (3) the Policy Division; (4) the 

Enforcement Division; and (5) the Litigation Division. The Deputy General Counsel - 

Administration directly supervises the Administrative Law Team, the Law Library and all OGC 

administrative functions. The Deputy General Counsel - Law has the primary responsibility for 

assisting the General Counsel in all of the substantive aspects of the General Counsel’s duties and 

shares in the management of all phases of OGC programs, as well as directly supervising the 

agency’s ethics program. The Policy Division drafts for Commission consideration advisory 

opinions and regulations interpreting the Federal campaign finance law and provides legal advice 

to the FEC’s compliance programs. The Enforcement Division recommends to the Commission 

appropriate action to take with respect to administrative complaints and apparent violations of the 

Act. Where authorized, the Enforcement Division investigates alleged violations and negotiates 

conciliation agreements, which may include civil penalties and other remedies. If an enforcement 

matter is not resolved during the administrative process, the Commission may authorize suit in 

district court, at which point the matter is transferred to the Litigation Division. The Litigation 

Division represents the Commission before the Federal district and appellate courts in all civil 

litigation involving campaign finance statutes. This Division assists the Department of Justice’s 

Office of the Solicitor General when the Commission’s FECA cases are before the Supreme Court.

 Office of the Chief Information Officer (OCIO)

The Office of the Chief Information Officer (OCIO) consists of four units: (1) Enterprise 

Architecture; (2) Operational Support; (3) Data Administration; and (4) IT Security. The OCIO 

provides secure, stable and robust technology solutions for Commission staff and the public. OCIO 

both develops and maintains the systems that serve as the public's primary source of information 

about campaign finance data and law. OCIO ensures agency employees have access to the tools 

and technology platforms that allow them to perform their day-to-day responsibilities 

administering and enforcing campaign finance law. In addition, OCIO provides a vision and leads 

the implementation of projects to ensure the FEC continues to modernize strategic systems in order 

to support the exponential growth in campaign finance transactions. 

 Office of the Chief Financial Officer (OCFO)

The Office of the Chief Financial Officer consists of three offices: (1) Budget; (2) Accounting; 

and (3) Procurement. The OCFO is responsible for complying with all financial management laws 

and standards, and all aspects of budget formulation, budget execution and procurement. 
9 

Sources of Funds

Figure 2 shows the agency’s appropriation and total obligations from FY 2019 to FY 2023. 

Figure 2: Summary of Funding (in millions of dollars)

The FEC also has the authority to collect fees from attendees of agency-sponsored educational 

conferences and webinars. The Commission may use those fees to defray the costs of conducting 

those programs. The Commission works with its conference-management contractor to set 

registration fees at a level that covers only the costs incurred, which may include meeting room 

rental and conference meals and compensation. All other conference-related expenses, such as 

materials and staff travel, are paid using appropriated funds. Registration fees for FY 2023 were 

$40,960. 

Personnel vs. Non-Personnel Costs

Figure 3 represents the Commission’s FY 2023 obligations by personnel and non-personnel costs. 

Personnel costs, which are primarily composed of salaries and employee benefits, accounted for 

68 percent of the FEC’s costs. The remaining 32 percent of the Commission’s costs was spent on 

non-personnel items, such as infrastructure and support, software and hardware, office rent, 

building security and other related costs. 

* December 22, 2018 through January 25, 2019 the FEC was shut down for 35 days.

$66

$68

$70

$72

$74

$76

$78

$80

$84

$82

FY 2019* FY 2020 FY 2021 FY 2022 FY 2023

in Millions

Appropriation

Total Obligations
10

Figure 3: Fiscal Year 2023 by Major Category

Risk Identification and Mitigation

In Fiscal Year (FY) 2017, the FEC formed a Senior Management Council (SMC) to manage 

internal control and Enterprise Risk Management (ERM) efforts in response to new requirements 

outlined in OMB Circular A-123. The SMC delivered to OMB an agency-wide Risk Profile to 

assist in the effective management of risk areas impacting FEC strategic, operational, reporting, 

and compliance objectives. In FY 2018, the SMC took further steps toward effective management 

of risk by updating Commission Directive 53 Implementation of OMB Circular A-123: Internal 

Control Program to comply with ERM requirements. In FY 2018, 2019, 2020, 2021, 2022 and 

2023 the SMC submitted an updated Risk Profile to OMB. 

As part of the annual Internal Control Review (ICR) process, program offices rated each risk from 

the Risk Profile, detailed how the risk affects their operations and identified mitigating activities 

in place to respond to the risk. The current Agency-wide Risk Profile is shown below and further 

discussion on risk is included in the remaining MD&A sections. 

Salaries & Benefits

68%

Other NonPersonnel 

Initiatives

23%

Facilities

7%

Other

2%
11

Federal Election Commission - FY 2023 ERM Risk Profile 

Identified Significant

Risk

Risk

Owner

Inherent 

Risk

Rating

Current Risk Response

Residual 

Risk

Rating Proposed Additional Action

Proposed 

Implementation/

Monitoring

Process

Budget Constraints

That Limit Hiring and 

IT Modernization 

Initiatives

Agency Very

High

Reduction: seeking additional 

funds and prioritizing available 

resources. Received additional 

funds in FY23. 

High

Continue to seek additional 

funding. Provision of additional 

funding is not in Management’s 

control 

OCFO and 

Congressional Affairs

Strategic Objectives Relating to Primary Mission Areas: Engage and Inform the Public About Campaign Finance Data; Promote Compliance with the

FECA and Related Statues; Interpret the FEC and Related Statutes2

Significant and 

Substantive 

Amendmentsto

FECA/Pending 

Judicial Opinions 

OGC Medium Acceptance: monitoring Medium Not in Management’s

control

OGC and 

Congressional 

Affairs

Absence of 

Quorum/Confirmation 

of Commissioners

OGC Medium Reduction: Directive 10 Medium Not in Management’s

control

OGC and 

Congressional 

Affairs

Significant Increase in

Federal Election 

Campaign Disclosure 

Activity

OSD Very

High

Reduction: infrastructure 

improvements. Moved to 

scalable cloud-based 

computing and continue 

development of new e- filing 

platform.

High

Advocate for more funding to 

invest in IT infrastructure, 

additional licenses, and FTEs to 

support 2024 election activity. 

OCIO Performance/ 

Monitoring Reports 

Changes to 

Government-wide 

Directives including 

Human Capital and 

Operating 

Requirements

SMC Medium Acceptance: monitoring Medium

Continue monitoring centralized

repository for new executive 

orders, directives, memorandums, 

and other guidance. 

Continuous updates to

policies and procedures.

OGC and OHR

2 Certain risks relating to Strategic Objectives are external risks out of Management’s control.
12

Identified Significant 

Risk

Risk 

Owner

Inherent 

Risk 

Rating

Current Risk Response

Residual 

Risk 

Rating

Proposed Additional Action

Proposed 

Implementation/

Monitoring 

Process

Disruptions to Agency

Operations

OGC/ OSD/ 

OCFO

Medium Acceptance: monitoring Medium

Not in Management’s control. 

Continuous updates to the Disaster 

Recovery Plan, COOP, and 

Shutdown Plan.

Monitored by 

Senior Management

Failure of Contractors

to Provide Required 

Deliverables

OCIO/ 

OCFO/

OSD/ CORs

High

Reduction: monitoring of 

contracts by Contracting 

Officer's Representatives 

(CORs) and review 

procurement process, including 

enhancements to objectives and 

requirements.

Medium

Consistent monitoring of contractor 

performance and implementation 

issues.

Monitored 

by 

CORs/Cos

Operational Objective: Manage Human Capital Efficiently and Effective

Multiple Acting

Positions, Including 

Key Positions

OHR Medium Acceptance: monitoring Medium

Continue to support hiring 

initiatives and streamline hiring 

process. Continuous monitoring of 

budget in order to fill positions 

when possible. Budget constraints 

are outside of Management’s

control.

Personnel and Finance 

Committees

Attrition and High 

Volume of 

Retirement Eligible

Employees 

OHR/

engagement 

coordinators Very High

Reduction: succession planning, 

employee engagement 

initiatives, and improved 

recruitment efforts, including 

expanding career ladder 

opportunities. OHR collecting 

and analyzing data on 

departures.

Very High

Encourage succession planning, 

cross-training, pooling support

services, and support employee 

engagement efforts. 

Increases in retirements and attrition 

expected to hinder these efforts. 

Retirement eligibility is outside of 

Management’s control.

Retirement

Eligibility Report 

and FEVS 
13

Identified Significant

Risk

Risk

Owner

Inherent 

Risk

Rating

Current Risk Response

Residual 

Risk

Rating Proposed Additional Action

Proposed 

Implementation/

Monitoring Process

Major Functions 

Performed by One 

Individual

OGC/ 

OSD/ 

OCFO

High Reduction: cross-training, 

documenting processes, and 

recruitment

High

Cross-train individualsto perform

major functions. Document 

procedures and processes. 

Increases in retirements and 

attrition expected to hinder these 

efforts.

Continuous monitoring of budget

in order to fill positions when

possible. Budget constraints are 

outside of Management’s

control.

Internal Controls

Operational Objective: Manage Information Security Risks

Data Protection and

Information Security 

Threats

OCIO Very High

Reduction: corrective actions 

and internal controls High

Continue to implement and 

enhance corrective actions, conduct 

training, and enhance internal 

controls. Reviewing and updating 

security policies.

Internal Controls and 

Monitoring

Assessments and

System Authorizations OCIO Medium

Reduction: corrective actions 

and internal controls Medium

Continue to implement corrective 

actions and enhance internal 

controls.

Corrective Action 

Plan/Internal Controls 

Compliance Objective: Manage Programs in Compliance with Applicable Law

Outdated Policies,

Procedures, and 

Commission Directives

OGC/ 

OSD/ 

OCFO

Medium

Reduction: implementing,

revising, and reviewing 

policies, procedures, and 

Directives.

Medium

Update policies, procedures, and 

Directivesin response to Covid, 

new or revised regulatory 

guidance, and changing operating 

procedures.

Monitor as part of 

Internal Control 

Review
14

Section I.B: Performance Goals, Objectives and Results

This section provides a summary of the results of the FEC’s key performance objectives, which 

are discussed in greater detail in the FEC’s FY 2023 APR.

3 This report will be part of the FEC’s 

FY 2025 Congressional Budget Justification, which will be available at 

https://www.fec.gov/about/reports-about-fec/strategy-budget-and-performance/ in 2024. 

Strategic Goal 

The strategic goal of the Federal Election Commission is to fairly, efficiently and effectively 

administer and enforce the Federal Election Campaign Act, promote compliance and engage and 

inform the public about campaign finance data and rules, while maintaining a workforce that 

delivers results.

Strategic Objectives 

The Act reflects a belief that democracy works best when voters can make informed decisions in 

the political process—decisions based in part on knowing the sources of financial support for 

Federal candidates, political party committees and other political committees. As a result, the

FEC’s first strategic objective is to inform the public about how Federal campaigns and

committees are financed. Public confidence in the political process also depends on the knowledge 

that participants in Federal elections follow clear and well-defined rules and face consequences 

for non-compliance. Thus, the FEC’s second strategic objective focuses on the Commission’s 

efforts to promote voluntary compliance through educational outreach and to enforce campaign 

finance laws effectively and fairly. The third strategic objective is to interpret the FECA and related 

statutes, providing timely guidance to the public regarding the requirements of the law. The 

Commission also understands that organizational performance is driven by employee performance 

and that the agency cannot successfully achieve its mission without a high-performing workforce 

that understands expectations and delivers results. Consequently, the FEC’s fourth strategic 

objective is to foster a culture of high performance in order to ensure that the agency accomplishes

its mission efficiently and effectively. 

Objective 1: Engage and Inform the Public about Campaign Finance Data

The FEC protects the integrity of federal campaigns by providing transparency and fairly enforcing 

and administering federal campaign finance laws. Full disclosure of the sources and amounts of 

campaign funds and fair enforcement of federal campaign finance laws allow the public to make 

informed decisions in the political process. Transparency requires that information is not only kept 

by the FEC, but also provided to the public in an easily accessible way. In order to make certain 

that campaign finance disclosure information is quickly available and easily accessible to the 

public, the agency has developed application programming interfaces (APIs) and other tools to 

3 The FEC has identified senior-level staff and key managers to serve as goal leaders for each area of the strategic and 

performance plans. In addition, each strategic activity in the Strategic Plan has been assigned one or more program managers,

who are responsible for the delivery and performance reporting of that activity. These managers serve as measure managers 

and data quality leads to ensure the completeness, consistency and accuracy of the reported data of their respective strategic 

activity. 
15

improve access to campaign finance data. The agency is also committed to providing excellent 

customer service to help the public find and understand campaign finance information. 

Performance measures and targets for assessing progress on this Strategic Objective include 

measures to ensure that data from campaign finance reports are quickly made available to the 

public and that the FEC pursues programs to make data more accessible to the public.

Performance Goal 1-1: Improve the public’s access to information about how campaign funds 

are raised and spent.

Key Indicator: Percent of reports processed within 30 days of receipt.

FY 2018

Actual

FY 2019

Actual

FY 2020 

Actual

FY 2021 

Actual

FY 2022 

Actual

FY 2023 

Target

FY 2023 

Actual

FY 2024 

Target

FY 2025 

Target

100% 94%4 98% 89%5 98% 95% 93%6 95% 95%

4 The agency’s ability to meet its target for this performance goal during FY 2019 was negatively impacted by the lapse in 

appropriations from December 22, 2018 to January 25, 2019. 5 The agency’s ability to meet its target for this performance goal during FY 2021 was negatively impacted by staff shortages 

and an unprecedented volume of filings received during the 2020 election cycle. 6 The agency’s ability to meet its target for this performance goal during FY 2023 was negatively impacted by staff shortages 

and the volume of filings received during the 2022 election cycle.
16

Objective 2: Promote Compliance with the FECA and Related Statutes

Helping the public understand its obligations under the Act is an essential component of voluntary 

compliance. The FEC places a significant emphasis on encouraging compliance. The FEC 

measures its progress in meeting this Objective through two performance measures, discussed 

separately below. The first measures the agency’s efforts to encourage voluntary compliance 

through educational outreach and information and the second measures the FEC’s efforts to seek 

adherence to FECA requirements through fair, effective and timely enforcement and compliance 

programs. 

Encourage voluntary compliance with FECA requirements through educational outreach and 

information.

Helping those subject to the Commission’s jurisdiction understand their obligations under federal 

campaign finance laws is an essential component of voluntary compliance. The FEC’s education 

and outreach programs provide information necessary for compliance with campaign finance laws 

and give the public the context necessary to interpret the campaign finance data filers disclose. 

Using the FEC’s toll-free line and public email accounts, staff in the Information Division, Reports 

Analysis Division, Congressional Affairs Office and Public Disclosure and Media Relations 

Division respond to thousands of inquiries each year regarding campaign finance data disclosed to 

the public and questions about how to comply with the campaign finance law and its reporting 

requirements. 

The Commission also encourages voluntary compliance by hosting interactive training programs 

for candidates, parties and political action committees. Online discussions of campaign finance 

topics, webinars and regional conferences address recent changes in the law and focus on 

fundraising, methods of candidate support and reporting regulations. The agency expects to resume 

its regional conferences in the 2025-26 election cycle. In the interim, committees will have the 

opportunity to attend in-person seminars at FEC headquarters this fall and a full slate of webinars 

throughout the remainder of this cycle. 

Another online training service enables political committees, reporters, students and other groups 

to schedule live, interactive online training sessions with FEC staff. This on-demand service 

allows the FEC to provide tailored, distance learning presentations and training to the public in a 

manner that significantly increase the availability of FEC staff to serve the public. The service 

also offers an efficient and effective way for alternative dispute resolution and other enforcement 

respondents to satisfy the terms of their agreements with the agency. 

In addition to these interactive training programs, the Commission provides a myriad of 

educational resources on its YouTube channel (FECTube) and website (FEC.gov). FECTube 

offers a wide range of instructional videos and tutorials—including curated playlists for 

candidates, parties, PACs and individual citizens—that enable users to obtain guidance tailored to 

their specific activities. Website visitors can access comprehensive guides written in plain 

language that summarize the rules for all types of committees, from registration to termination. 

Although these guides are also available in print, the FEC’s transition to web-based media has 

allowed the agency to reduce significantly its printing, storage and mailing costs while at the same 

time encouraging new and expanded ways of communicating with the public via the website. For 
17

example, visitors can sign up to receive email notifications any time website content that interests 

them is updated and when campaign finance reports are received by the agency.

The Commission’s website is also an important source of instantly accessible information about 

FECA, Commission regulations, and Commission proceedings. In addition to viewing campaign 

finance data, anyone with Internet access can use the website to track Commission rulemakings, 

search advisory opinions, audits, and closed enforcement matters, view campaign finance data, 

and find reporting dates. 

Seek adherence to FECA requirements through fair, effective and timely enforcement and 

compliance programs.

The FEC has formed strategies for ensuring that its enforcement and compliance programs are 

fair, effective and timely. The Commission’s statutory obligation is to administer, interpret and 

enforce the Federal Election Campaign Act, which serves the compelling governmental interest 

in deterring corruption and the appearance of corruption in financing elections. In doing so, the 

Commission remains mindful of the First Amendment’s guarantees of freedom of speech and 

association, and the practical implication of its actions on the political process.

The FEC has exclusive jurisdiction over civil enforcement of Federal campaign finance laws. It 

consults with the U.S. Department of Justice, as appropriate, on matters involving both civil and 

criminal enforcement of the Act. Commission enforcement actions, which are handled primarily 

by the Office of General Counsel (OGC), originate from a number of sources, including external 

complaints, referrals from other government agencies and matters generated by information 

ascertained by the Commission in the normal course of carrying out its supervisory 

responsibilities. Enforcement matters are handled by OGC pursuant to the requirements of the 

FECA. If the Commission cannot settle or conciliate a matter involving an alleged violation of the 

Act, the Commission may initiate civil litigation by filing and prosecuting a civil action in Federal 

district court to address the alleged violation. Closed enforcement matters are available via the 

FEC website.

To augment OGC’s traditional enforcement role, the Office of Compliance manages several 

programs that seek to remedy alleged violations of the Act and encourage voluntary compliance. 

These programs include: 1) the Alternative Dispute Resolution Program, 2) the Administrative 

Fine Program and 3) the Audit Program. The Commission’s Alternative Dispute Resolution 

Program is designed to resolve matters more swiftly by encouraging the settlement of less-complex 

enforcement matters with a streamlined process that focuses on remedial measures for candidates 

and political committees, such as training, internal audits and hiring compliance staff. Violations 

involving the late submission of, or failure to file, disclosure reports are subject to the 

Administrative Fine Program. This Program is administered by the Reports Analysis Division 

(RAD) and the Office of Administrative Review (OAR), which assess monetary penalties and 

handle challenges to the penalty assessments. The Audit Program conducts “for cause” audits in 

those cases where political committees have failed to meet the threshold requirements for 

demonstrating substantial compliance with the Act, and conducts mandatory audits under the 

public funding statutes. Commission-approved threshold requirements used by RAD and the Audit 

Division are available via the FEC website, subject to limited redactions. 
18

Performance Goal 2-1: Encourage voluntary compliance with FECA requirements through 

educational outreach and information. 

Key Indicator: Educational outreach programs and events achieve targeted satisfaction 

rating on user surveys.

FY 2018

Actual

FY 2019

Actual 

FY 2020

Actual 

FY 2021

Actual 

FY 2022

Actual 

FY 2023

Target

FY 2023

Actual

FY 2024

Target

FY 2025

Target

4.53 4.45 4.51 4.36 4.55 4.0 or 

higher on 

a 5.0 scale

4.49 4.0 or 

higher on a 

5.0 scale

4.0 or 

higher on a 

5.0 scale

Performance Goal 2-2: Seek adherence to FECA requirements through fair, effective and 

timely enforcement and compliance programs. 

Key Indicator: Of the enforcement matters resolved during the fiscal year, the 

percentage that was resolved within 15 months of the date of receipt.

FY 2018

Actual

FY 2019

Actual

FY 2020

Actual

FY 2021

Actual

FY 2022

Actual

FY 2023

Target

FY 2023

Actual

FY 2024

Target

FY 2025

Target

62% 56% 62% 34%7 22%8 50% 53% 50% 50%

Objective 3: Interpret the FECA and Related Statutes 

Commission initiatives, Congressional action, judicial decisions, petitions for rulemaking or other 

changes in campaign finance law may necessitate that the Commission update or adopt new 

regulations. Consequently, the FEC undertakes rulemakings either to write new Commission 

regulations or revise existing regulations. The Commission also provides guidance on how the Act 

applies to specific situations through the advisory opinion process and represents itself in most 

litigation before the federal district and appellate courts. The Commission’s three primary means 

for providing interpretive guidance for the Act and related statutes are discussed below. 

Regulations 

The Policy Division of OGC drafts various rulemaking documents, including Notices of Proposed 

Rulemaking (NPRMs), for Commission consideration. NPRMs provide an opportunity for the 

public to review proposed regulations, submit written comments to the Commission and, when 

appropriate, testify at public hearings at the FEC. The Commission considers the comments and 

testimony and deliberates publicly regarding the adoption of the final regulations and the 

7 The agency’s performance under this measure was negatively impacted by the lack of a quorum for most of FY 2020. 8 The agency’s performance under this measure was negatively impacted by the lack of a quorum for most of FY 2020.
19

corresponding Explanations and Justifications, which provide the rationale and basis for the new 

or revised regulations. 

Advisory Opinions 

Advisory opinions (AO) are official Commission responses to questions regarding the application 

of Federal campaign finance law to specific factual situations. The Act generally requires the 

Commission to respond to AO requests within 60 days. For AO requests from candidates in the 

two months leading up to an election, the Act requires the Commission to respond within 20 days. 

On its own initiative, the Commission also makes available an expedited process for handling 

certain time-sensitive requests that are not otherwise entitled to expedited processing under the 

Act. The Commission strives to issue these advisory opinions in 30 days. 

Defending Challenges to the Act

The Commission represents itself in most litigation before the federal district and appellate courts 

and before the Supreme Court with respect to cases involving publicly financed presidential 

candidates. It also has primary responsibility for defending the Act and Commission regulations 

against court challenges. In addition, the Act authorizes the Commission to institute civil actions 

to enforce the Act. 

Performance Goal 3-1: Provide timely legal guidance to the public.

Key Indicator: Percent of legal guidance provided within statutory and court-ordered 

deadlines.

FY 2018

Actual

FY 2019

Actual

FY 2020

Actual

FY 2021

Actual

FY 2022

Actual

FY 2023

Target

FY 2023

Actual

FY 2024

Target

FY 2025

Target

100%9 100%10 88%11 100%12 100%13 100% 100%14 100% 100%

9 The Commission obtained an extension to consider one advisory opinion request in FY 2018. 10 The Commission obtained extensions to consider six advisory opinion requests in FY 2019; two of those extensions were 

lengthened by the partial Federal government shutdown during the first and second quarters of FY 2019. 11 This corrects the figure in the 2020 Agency Financial Report, which indicated that 100% of legal guidance was provided 

within statutory and court-ordered deadlines. The Agency Financial Report did not take into account one rulemaking that 

the Commission approved after the statutory deadline, due to the lack of a Commission quorum for most of FY 2020. The 

Commission approved the rulemaking—which adjusted for inflation civil monetary penalties—in July 2020, when a quorum 

was briefly restored. 12 The Commission obtained extensions to consider five advisory opinion requests in FY 2021; one of those extensions was 

lengthened by the lack of a Commission quorum during the first quarter of FY 2021. 13 The Commission obtained extensions to consider eleven advisory opinion requests in FY 2022. 14 The Commission obtained extensions to consider four advisory opinion requests in FY 2023.
20

Objective 4: Foster a Culture of High Performance

One of the objectives from the FEC’s FY 2022-2026 Strategic Plan Foster a Culture of High 

Performance, cuts across the organization and reflects the agency’s strategic priorities for 

improving the efficiency and effectiveness of its workforce and management processes. The FEC’s 

primary measure of success in developing and maintaining a results-driven workforce is at the 

program level: a workforce that delivers results will meet the internal performance targets set by 

the Commission. 

The Commission understands that the success of its programs depends upon the skills and 

commitment of its staff. To ensure the agency can recruit and retain the best talent in support of 

its mission, the agency will work to increase strategic outreach and recruitment efforts and to 

provide a fair, impartial, inclusive and accessible work environment. The FEC is also committed 

to continuously improving the performance of staff in support of the agency’s mission objectives. 

To ensure staff development opportunities and trainings are provided fairly, effectively and 

strategically in support of mission objectives, the FEC will work to develop and implement an 

agency-wide training program.

In recent years, the FEC has been challenged to recruit and retain talent necessary to meet the 

agency’s workload and hiring goals. During FYs 2022 and 2023, the FEC identified additional 

strategic outreach platforms and partnerships to better ensure the agency’s hiring efforts reach out 

to diverse and highly talented potential employees. During FY 2024 the agency will assess the 

results of these efforts in helping the Commission continue to build its diverse and high performing 

workforce so that the most successful strategies can be fully implemented during FY 2025. In 

addition, the FEC has continued work to ensure staff retention by providing a fair, impartial, 

inclusive and accessible work environment. 

With budget constraints continuing to affect the amount of funds that can be allocated to training, 

the FEC continues to focus on ensuring that mandatory training requirements are met first, along 

with training required to support activities that are deemed to be mission critical. The agency 

additionally maintains a robust online training library and encourages employees to use these 

resources to improve their skills. During FYs 2024 and 2025, the FEC will begin work to develop 

competency models for mission critical occupations within the agency. Once implemented, these 

models will help to ensure that critical training needs are met and that the FEC can more efficiently 

and effectively direct training funds to the most critical training needs in support of the agency’s 

mission. In addition, these competency models will support the FEC’s efforts to recruit highly 

talented employees with the skills necessary to meet the agency’s mission objectives.

The FEC is undertaking several multi-year IT modernization projects to update the FEC’s systems 

and data to use cloud-native architecture, improve services provided to the public and better ensure 

the security of the FEC’s networks, systems and data. Modernization and refactoring of the 

agency’s legacy applications, systems and data pipeline will help the FEC streamline the 

processing of information provided to the public while at the same time improve the systems and 

tools used by agency staff to provide services to the public and ensure compliance with the 

campaign finance law.

In FY 2018, the FEC completed the migration of its website and one of its campaign finance 

databases from a physical datacenter to a cloud environment, allowing the agency to shut down 
21

one of its physical datacenters. This migration effort allowed the agency to reduce its physical 

datacenter footprint by 25 percent. 

During FY 2020, the FEC conducted a study of its remaining legacy systems to develop a cloud 

migration plan for these legacy applications and systems. The cloud migration plan developed 

during FY 2020 also included recommendations for migrating the FEC’s disaster recovery 

environment and the FEC’s primary campaign finance database to a cloud environment. 

During FY 2022, the FEC completed migrating legacy mission critical applications, systems and 

databases identified in the cloud migration plan. In FY 2023, the FEC has continued to migrate 

network and storage devices and shut down our physical, datacenter-based disaster recovery site. 

The agency is also focused on reducing the footprint of our physical data center-based production 

site and will continue these efforts. The FEC will also focus on implementing a disaster recovery 

strategy for its newly migrated cloud assets. 

In FY 2024, depending on available funding, the agency will begin to modernize and refactor the 

legacy systems that now reside in the cloud to adopt a cloud-native architecture. These projects 

may include modernizing the data pipeline to help improve the processing of data and the legacy 

applications used by the Commission for voting and document management. The FEC will also 

continue to build on the agency’s successes in reducing its reliance on physical data centers. 

In addition, the Commission’s records management program continues to make advancements. FY 

2024 will bring continued focus on updating the agency’s Records Management Program and 

training staff on the agency and governmentwide records schedules, policies and responsibilities. 

Performance Goal 4-1: Foster a workforce that delivers results.

Key Indicator: Commission-required quarterly updates meet targeted performance 

goals.

FY 2018

Actual

FY 2019

Actual

FY 2020

Actual

FY 2021

Actual

FY 2022

Actual

FY 2023

Target

FY 2023

Actual

FY 2024

Target

FY 2025

Target

73% 53%15 73%16 87%17 87%18 65% 67%19 65% 65%

15 The agency’s ability to meet its target for this performance goal during FY 2019 was negatively impacted by the lapse in 

appropriations from December 22, 2018 to January 25, 2019. 16 The agency’s performance under this measure was negatively impacted by the lack of a quorum for most of FY 2020. 17 The agency’s ability to meet its target for this performance goal during FY 2021 was negatively impacted by staff shortages 

and an unprecedented volume of filings received during the 2020 election cycle. 18 The agency’s ability to meet its target for this performance goal during FY 2022 was negatively impacted by the lack of a 

quorum for most of 2020 and staffing shortages during FY 2022. 19 The agency’s ability to meet its target for this performance goal during FY 2023 was negatively impacted by staff shortages 

and the volume of filings received during the 2022 election cycle.
22

Section I.C: Analysis of FEC Financial Statements and Stewardship Information 

The FEC’s FY 2023 financial statements and notes are presented in the required format in 

accordance with OMB Circular A-136, as revised, Financial Reporting Requirements. The FEC’s 

current-year financial statements and notes are presented in a comparative format in Section II of 

this report. 

The following table summarizes the significant changes in the FEC’s financial position during FY 

2023: 

Net Financial 

Condition FY 2023 FY 2022 Increase (Decrease)

% 

Change 

Assets $28,735,646 $29,142,534 ($406,888) -1%

Liabilities $15,005,185 $14,835,598 $169,587 1%

Net Position $13,730,461 $14,306,936 ($576,475) -4%

Net Cost $82,819,045 $76,616,416 $6,319,629 8%

Budgetary Resources $85,746,363 $81,666,693 $4,079,670 5%

Custodial Revenue $1,470,013 $2,670,910 ($1,200,897) -45%

The following is a brief description of the nature of each required financial statement and its 

relevance. The effects of some significant balances or conditions on the FEC’s operations are 

explained. 

Balance Sheet

The Balance Sheet presents the total amounts available for use by the FEC (assets) against the 

amounts owed (liabilities) and amounts that comprise the difference (Net Position). As a small 

independent agency, all of the FEC’s assets consist of Fund Balance with Treasury (FBWT), 

Property and Equipment (P&E) and Accounts Receivable. Fund Balance with Treasury (i.e., cash) 

is available through the Department of Treasury accounts, from which the FEC is authorized to 

make expenditures (i.e., obligations) and payments. FBWT increased by approximately $269 

thousand or 1 percent, from the prior year. 

Accounts Receivable primarily represent amounts due from the public for fines and penalties 

assessed by the FEC and referred to Treasury for collection, as deemed appropriate. In compliance 

with the Debt Collection Improvement Act of 1996 (DCIA), the OCFO takes into consideration the 

most appropriate approach to debt management. These amounts are not available for FEC 

operations and are sent to the U.S. Treasury as miscellaneous receipts. Net accounts receivable 

increased by approximately $300 thousand, or 42 percent, from the prior year.

Total assets decreased by $407 thousand from the prior year to $28.7 million. Total liabilities 

increased by approximately $170 thousand from the prior year to $15.0 Million. 
23

Statement of Net Cost

The Statement of Net Cost presents the annual cost of operating the FEC program. Gross costs are 

used to arrive at the total net cost of operations. The FEC’s total gross costs in administering the 

FECA experienced a 8% increase from the prior year.

Statement of Changes in Net Position

The Statement of Changes in Net Position presents in greater detail the net position section of the 

Balance Sheet, including Cumulative Results of Operations and Unexpended Appropriations. This 

statement identifies the activity that caused the net position to change during the reporting period. 

Total Net Position decreased by 4 percent, or approximately $576 thousand. 

Statement of Budgetary Resources

The Statement of Budgetary Resources provides information on the source and status of budgetary 

resources made available to the FEC during the reporting period. It presents the relationship 

between budget authority and budget outlays, as well as the reconciliation of obligations to total 

outlays. Total Budgetary Resources and Status of Budgetary Resources increased by 

approximately $4.1 million, or 5 percent, from the prior year.

Statement of Custodial Activity

The Statement of Custodial Activity represents an accounting of revenue and funds collected by 

the FEC that are owed to the U.S. Treasury’s general fund. These monies are not available for the 

FEC’s use. Collection and revenue activity primarily result from enforcement actions that come 

before the Commission during the fiscal year. Revenue and collections on the Statement of 

Custodial Activity consist of collections on new assessments, prior year(s) receivables and 

miscellaneous receipts. In FY 2023, the total custodial revenue and collections decreased by 

approximately $1.2 million from the prior year.
24

The chart below displays the assessment history for the past 20 years.20

Figure 4: Fines Assessed, by Fiscal Year (in millions of dollars)

20 One MUR resolved during 2006 yielded the largest civil penalty in agency history, which was $3.8 million paid by Federal 

Home Loan Mortgage Corporation (Freddie Mac) for prohibited corporate activity. This 2006 penalty is the primary reason 

for the largest Fines Assessed (approximately $6.71 million) in Figure 4. 

$2.91 

$6.71

$2.22 

FY 2003 FY 2023

FIGURE 4 - FINES ASSESSED, BY FISCAL YEAR

(in Millions of Dollars)
25

Section I.D: Analysis of FEC’s Systems, Controls and Legal Compliance 

I.D.i – FEC Integrated Internal Control Framework and Legal Compliance

The Commission is subject to numerous legislative and regulatory requirements that promote and 

support effective internal controls. The FEC complies with the following laws and regulations:

Annual Appropriation Law – establishes the FEC’s budget authority;

The Antideficiency Act of 1884, as amended;

Inspector General Act of 1978, as amended;

Federal Managers’ Financial Integrity Act of 1982;

Federal Civil Penalties Inflation Adjustment Act of 1990;

Government Performance and Results Act of 1993, as amended;

Federal Financial Management Improvement Act of 1996;

Clinger-Cohen Act of 1996;

Debt Collection Improvement Act of 1996, as amended; and

Chief Financial Officers Act, as amended by the Accountability of Tax Dollars Act of 2002

The proper stewardship of Federal resources is a fundamental responsibility of the FEC. These 

laws help the FEC improve the management of its programs and financial operations and assure 

that programs are managed in compliance with applicable law.

I.D.ii – Management Assurances 

The Federal Managers’ Financial Integrity Act of 1982 (FMFIA) is implemented by OMB 

Circular A-123, revised, Management’s Responsibility for Enterprise Risk Management and 

Internal Control, with applicable appendices. The FEC management is responsible for establishing 

and maintaining effective internal control and financial management systems that meet the 

objectives of the FMFIA and for performing a self-assessment under the guidance of its Directive 

53, Implementation of OMB Circular A-123, Internal Control Review. Directive 53 outlines the 

process and describes roles and responsibilities for conducting risk assessments and internal 

control reviews. 

Section 2 of the FMFIA requires Federal agencies to report, based on annual assessments, any 

material weaknesses that have been identified in connection with their internal and administrative 

controls. The reviews that took place during FY 2023 provide unqualified assurance that FEC 

systems and management controls comply with the requirements of the FMFIA.

Section 4 of the FMFIA requires that agencies annually provide assurance on programmatic 

internal controls and financial management systems, and effectiveness of internal control over 
26

financial reporting. The FEC evaluated its financial management systems in accordance with the 

FMFIA, OMB Circular A-123, as applicable, and reviewed the Statements on Standards for 

Attestation Engagements, Reporting on Controls at a Service Organization (SSAE 18) reports 

received from its shared service providers. The results of management reviews provided that the 

FEC’s financial systems controls generally conform to the required principles and standards as per 

Section 4 of the FMFIA. 

Enterprise Risk Management

In the current fiscal year, the FEC, led by the Senior Management Council (SMC), updated its 

Enterprise Risk Management (ERM) Risk Profile which captures enterprise level risks, as required 

by the revised OMB Circular A-123. The SMC identified a total of thirteen enterprise level risks 

the agency faces when seeking to achieve strategic, operational, and compliance objectives and 

rated these risk as being a medium or high inherent risk. The Risk Profile was delivered to the 

Office of the Inspector General (OIG) and OMB. The SMC looks forward to continuing to work 

closely with OIG to remediate any weaknesses which the OIG may deem to be at the level of a 

material weakness.

Prompt Payment Act 

The Prompt Payment Act (PPA) requires Federal agencies to make timely vendor payments and 

to pay interest penalties when payments are late. The FEC’s on-time payment rate for FY 2023 

was 0.21 percent of all invoices paid after the date required by the PPA. 

Improper Payments 

The Improper Payments Information Act (IPIA) of 2002, as amended by the Improper Payments 

Elimination and Recovery Act (IPERA) of 2010, Improper Payments Elimination and Recovery 

Improvement Act (IPERIA) of 2012, and the Payment Integrity Information Act (PIIA) of 2019 and 

OMB guidance require agencies to identify programs that are susceptible to significant improper 

payments and determine an annual estimated amount of improper payments made in their 

operations. The FEC reviewed all of its programs and activities to identify those susceptible to 

significant improper payments. Approximately 68 percent of the FEC’s obligations pertain to 

salaries and benefits, which represents a low risk for improper payments, based on established 

internal controls. The FEC also reviewed all of its FY 2023 non-personnel procurements, charge 

card, and payroll costs to verify their accuracy and completeness. Accordingly, the FEC is unaware 

of any improper payments. The FEC continues to monitor its payment and internal control process 

to ensure that the risk of improper payments remains low. 
27

Annual Assurance Statement on Internal Control 

FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 

Annual Assurance Statement on Internal Control

The Federal Election Commission (FEC) is responsible for managing risks and maintaining 

effective internal control to meet the objectives of Sections 2 and 4 of the Federal Managers’ 

Financial Integrity Act. The FEC conducted its assessment of risk and internal control in 

accordance with OMB Circular No. A-123, Management’s Responsibility for Enterprise Risk 

Management and Internal Control. Based on the results of the assessment, the Agency can provide 

reasonable assurance that internal control over operations, reporting, and compliance were 

operating effectively as of September 30, 2023. 

Dara Lindenbaum 

Chair 
28

Section I.E: Limitations of the Financial Statements 

The principal financial statements have been prepared to report the financial position and results 

of operations of the FEC pursuant to the requirements of 31 U.S.C. §3515(b). While the statements 

have been prepared from the books and records of the FEC in accordance with United States

generally accepted accounting principles (GAAP) for Federal entities and the formats prescribed 

by the OMB, the statements are in addition to the financial reports used to monitor and control 

budgetary resources which are prepared from the same books and records. 

The statements should be read with the realization that they are for a component of the U.S. 

Government, a sovereign entity. 
29

Section I.F: Forward-Looking Information 

Changes in the way political committees raise and spend funds have contributed to a stark increase 

in the number of transactions disclosed to the FEC. During the 2020 election cycle, filers reported 

more than 600 million financial transactions, which were reviewed by FEC staff and disclosed to 

the public on the FEC’s website. This is more than double the number of transactions reported in 

the previous election cycle, and a nearly 400% increase compared to 2016, the previous 

presidential election cycle. This ever-growing volume of campaign finance disclosure data must 

be received, processed, and made available to the public within the agency’s tight deadlines for 

public disclosure, and must be safeguarded to ensure the integrity and accessibility of the 

information. Aside from the substantial increase in the number of transactions reported to the FEC, 

the FEC website’s Application Programming Interface (API), which permits users to customize 

data searches making vast quantities of campaign finance data readily available, received over 407 

million hits during the 2020 election cycle and is expected to receive more in the 2024 cycle. With 

the steep rise in transactions reported every election cycle comes a heavier burden on the FEC’s 

API to quickly search across the FEC’s campaign finance database and display the data requested 

by the public. It is crucial for the agency to continue to implement new programs and modernize 

its systems to ensure the timely disclosure of this increasing volume of campaign finance data. 

The FEC continues to confront a heavy workload alongside relatively flat funding levels that have 

contributed to the reduced staffing levels the FEC has seen over the past several years. Over the 

past decade, the FEC has been able to meet its statutory mission primarily due to efficiencies 

gained by reassigning staff using details, maximizing operational efficiencies through 

reorganizations, and improving technology and processes, among other efficiencies. However, in 

recent years the FEC has begun to exhaust the benefits that can be gained through such efficiencies 

and has, in some situations, reduced performance targets in response to these reductions in staffing 

amid increasing campaign finance activity. The FEC intends to continue its efforts to maintain the 

current high performance of staff and the excellent service that they provide to the public. A critical 

part of this effort is promoting adequate staffing levels across the agency. 
30

SECTION II – Auditor’s Report and Financial Statements

Message from the Chief Financial Officer 

 

 

November 15, 2023 

 

 

I am pleased to present the Commission’s financial statements for Fiscal Year (FY) 2023. The 

financial statements are an integral part of the Agency Financial Report. For the fourteenth 

consecutive year, the Commission received an unmodified (clean) opinion on its financial 

statements from the independent auditor. Also, the agency made progress in improving its control 

environment by closing four previous year recommendations. 

 

During fiscal year 2023, FEC also worked to respond to management challenges and long-standing 

recommendations made by independent auditors. For instance, working through its Senior 

Management Council, the agency closed all but seven outstanding recommendations over year old 

made by the Office of Inspector General. The FEC also continues to review any inadequacies 

identified by independent auditors and will develop corrective action plans. 

 

The FEC also continues to seek opportunities to modernize and upgrade business systems to 

improve operational effectiveness and efficiency. We are confident that FEC employees’ 

commitment to the agency’s mission will provide an opportunity to build on the prior year’s 

financial management successes. The OCFO looks forward to another successful year. 

 

 

Sincerely, 

John Quinlan 

Chief Financial Officer 

 
Election Commission 

Office of the Inspector General 

MEMORAND M 

TO: The Commission 

THROUGH: Christopher Skinner / ~ Inspector General ~ 

FRO f: Shellie Purnell-Brown 

Senior Auditor 

RTE T: Transmittal of the Federal Election Commission's Fiscal Year 2023 

Financial Statement Audit Report 

DATE: No ember 14, 2023 

E CL: Independent Auditor's report on the FEC's FY 2023 Financial Statement1; 

Pursuant to the Chief Financ ial Officers Act of 1990, as amended this memor.mdwn 

transmits the Independent Auditor's Report issued by Brown & Company Certified Public 

Accountants and Management Consultants, PLLC (Brown & Company) for the fiscal year (FY) 

ending September 30, 2023. Enclosed you will find the Independent Auditor's final audit report 

on the FEC (i.e. , the "FEC" or "Commission") FY 2023 Financial Statements. The fi nal audit 

report is additionally included in Section TI of the FEC's FY 2023 Agency Financial Report. 

The audit was performed under a contract with, and monitored by, the OIG in accordance 

with generally accepted government auditing standards, the Comptroller General's Government 

Auditing Standards, and applicable provisions of Office of Management and Budget (0 MB) 

Bulletin o. 24-01, Audit Requirements for Federal Financial Statements. 

1n Brown & Company's opinion, the FEC financial statements present fairly, in all material 

respects, the financial position, net cost, changes in net position, and budgetary resources for the 

year ending September 30, 2023, in accordance with U.S. generally accepted accounting 

principles. 

Additionally, due to the Commission's position that it is legally exempt from the Federal 

Information Systems Management Act (F[SMA), the OIG requires an assessment of the agency's 

Information Technology (IT) systems security controls. Accordingly, the audit included an 

examination of the Commission's IT security controls in comparison to government-wide best 

1050 First Street NE Washington, DC 20463 I www.fec.gov/oig 

OIG Transmittal Letter 

31 
The OIG acknowledges that the independent auditors are only required to explicitly 

opine on internal controls that have a material impact on agency financial statement reporting. 

Brown & Company did not report any material weaknesses but did identify one significant 

deficiency I related lo the FE C's JT security internal controls. The two remaining prior year 

recommendations have been closed. Management was provided a draft copy of the audit report 

for review and comment. The official management response is included in Exhibit C. 

The OIG reviewed Brown & Company's report and related documentation and provided the 

required oversight throughout the course of the audit. Our re iew ensures the accuracy of the 

audit conclusions but may not express an opinion of the results. The OIG's review determined 

that Brown & Company complied with applicable required Go ernment Auditing Standards. 

We appreciate the collaboration and support from FEC staff and the professionalism that 

Brown & Company exercised throughout the wurse of the audit. lfyou have any questions 

concerning the enclosed report, please contact Ms. Shellie Purnell-Brown at (202) 694-1019. 

cc: John Quinlan, Chief Financial Officer 

Alec Palmer, Staff Director/Chief Information Officer 

Lisa Stevenson, Acting Genera.I Counsel 

James Gerber, Director of Budget 

Greg Baker, Deputy General Colmsel 

Dayna Brown, Acting Deputy Staff Director for Management and Administration 

1 Repeat finding from FY 2022 Financial Statement audit report. 

FEC OIG 2024-11-003 2 

32 
ELECTION COMJ.VIlSSION 

INDEPENDENT AUDITOR'S REPORT 

AND 

FINANCIAL STATEMENTS 

FOR THE YEARS ENDED 

SEPTEMBER 30, 2023 AND 2022 

Prepared By 

Brown & Company CPAs and Management Consultants, PLLC 

November 14, 2023 

111.:======Ctffi'i CP.RTffJt;o PUBJ,JC ACCOUNTANTS BROWN & AND COMPANY l\lANAGEMt: T ONS L-=- l'A'.-:-=' rS""", 7

Pl,..,,LC-,,- --_ -_ -_ -_ -_-_-_-_-_-.:..:!~ 

Independent Auditor’s Report 

33 
& COMPANY 

-EBTlFlEO f' BLl ACCO TSANDM1 

Inspector General 

Federal Election Commission 

Washington, D.C. 

In our audits of the fiscal years 2023 and 2022 financial statements of the Federal Election Commission 

(FEC), we found: 

• FEC' financial statemen as of and for the fi cal years ended September 30, 2023, and 2022, 

are presented fairly, in all material respects, in accordance with nited State of America ( .S.) 

generally accepted accounting principles; 

• no material weaknes es in internal control over financial reporting based on the limited 

procedures we performed; and 

• no reportable noncompliance with provisions of applicable laws, regulations, contracts, and 

grant agreements for fiscal year 2023. 

The following sections discu in more detail (I) our report on the financial statements, which includes 

required supplementary information (RSI) 1 and other information2 included with the financial 

statements; (2)ourreportonintemalcontroloverfinancial reporting; and (3)our report on compliance with 

laws, regulations, contracts, and grant agreement . 

l DEPE DE T AUDITOR'S REPORT 

TS, f'LLC 

Report 011 the Financial Statements 

Opinion 

In accordance with the provi ions of the Accountability of Tax Dollars Act of2002 (ATDA) (Pub. L. o. 

107-289), we have audited FEC's financial statements. FEC' financial tatements compri e the balance 

sheets as of September 30, 2023, and 2022; the related statements of net cost, change·s in net po it ion, 

budgetary resources, and statement of custodial activity for the fiscal years then ended; and the related 

notes to the financial statements. In our opinion, FEC's financial statements present fairly, in all material 

respects, FE C's financia l position as of September 30, 2023, and 2022, and its net costs of operations, 

changes in net position, budgeta.ry resources, and statement of custodial activity for the fisca l years 

then ended in accordance with U.S. generally accepted accounting principles. 

Basi.s for Opinion 

We conducted our audits in accordance with .S. generally accepted government auditing standards. Our 

responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit 

of the Fi.nancial Statements section of our report. We are required to be independent of FEC and to meet 

our other ethical responsibilities, in accorda.nce with the relevant ethical requirements relating to our audit. 

1 The RSI consis1s ofManogemen1's Discussion and Anal is and 1he Smtement of Budgetary Resources, which are included 

with 1he f,nanciaJ stalements. 

2 Othe.r infonna1ioo consists of information included 11~th the financial s1atements, oilier than 1he RSI financial section, and the 

auditor's report. 

6401 GOLDEN T£11ANGLE OIUVE, SUITE 310 • GREENBELT, llW 20770 

PHO E, 1240) 770-4900 • FAX, molt 773•2090 • mail(a brownco-cpas.com • www,browneo- epa ,com 

34 
 

believe that the aud.it evidence we have obtained i ufficient and appropriate to provide a basis for our 

audit opinion. 

Responsibilitv of Management for the Financial Statement 

FEC management i respon ible for (I) the preparation and fair presentation of these financial statements 

in accordance with U.S. generally accepted accounting principles; (2) preparing, mea uring, and presenting 

the RSI in accordance with U.S. generally accepted accounting principle ; (3) preparing and pre enting 

other information included in FEC's Agency Financial Report (AFR) and ensuring the consistency of that 

information with the aud.ited financial statements and the RSI; and (4) designing, implementing, and 

maintaining effective internal control relevant to the preparation and fair presentation of financial 

statements that are free from material misstatement, whether due to fraud or error. 

Auditor's Re ponsibility for the Audit of the Financial Statements 

Our objective are to obtain reasonable as urance about whether the financial statements as a whole are free 

from materia.l mi statement, whether due to fraud or error, and to i sue an auditor's report that includes our 

opinion. Reasonable as urance i a high level of a surance but is not absolute assurance and therefore i not 

a guarantee that an audit of the financial statements conducted in accordance with U.S. generally accepted 

government auditing standard will always detect a material misstatement or a mate.rial weakness when it 

exist . The risk of not detecting a mate.rial misstatement resulting from fraud is higher than for one resulting 

from error as fraud may involve collusion, forgery, intentional omis ions, misrepresentations, or the 

override of internal control. Misstatements, including omissions, are considered to be material if there is a 

substantial likelihood that, individually or in the aggregate, they would in.fluence the judgment made by a 

reasonable u er based on the financial statements. 

In performing an audit in ac.::ordance with .S. generally accepted government auditing standards, we: 

• Exercise profes ional judgment and maintain prof es ional skeptic ism throughout the audit. 

• Identify and as ess the risks of material mi statement of the financial statements, whether due to 

fraud or error, and design and perform audit procedures re ponsive lo those risks. Such procedures 

i.nclude examining, on a te I basi , evidence regarding the amounts and disclosures in the financial 

statements in order to obtain audit evidence that is sufficient and appropriate to provide a ba is for 

our opinion. 

• Obtain an understanding of internal control relevant to our audit oftbe finan<:ial statements in order 

to design audit procedures that are appropriate in the ci.rcumstances, but not for the purpose of 

expressing an opinion on the effectivenes of FEC's internal control over financial reporting. 

Accordingly, no such opinion is expres ed. 

• Evaluate the appropriateness of accounting policies u ed and tbe reasonableness of significant 

accounting est.imates made by managemen.t, as well as evaluate the overall presentation of the 

financial statements. 

• Perform other procedures we consider necessary in the circumstances. 

We are required to communicate with those charged with governance regarding, among other matters, the 

planned scope and timing of the audit, significant audit findings, and certain internal control- related maners 

that we identified during the financial statement audit. 

2 

===========================BROWN & COMPANY;;::;;;;;;;;;;:;;::;_:;::::::::::::::::::::::::::::::::::::::::::._., --------CERTlFIED PUBLIC ACCOUNTANT AND lANMlEhlENT OONSULTANT , PLL 

35 
 

equired Supplementary lnfonnation 

U.S. generally accepted accounting principles i sued by the Federal Accounting Standards Advisory Board 

(FASAB) require that the RSI be presented to upplement the financial statements. Such infonnation i the 

responsibil ity of management and, although not a part of the financial statements, is required by FASAB, 

wh.ich con iders it to be an essential part of financial reporting for placing the financial statement in 

appropriate operational, economic, or historical context. We have applied certain limited procedures to the 

RSI in accordance with U.S. generally accepted government auditing standards. These procedures consi led 

of inquiries of management about the methods of preparing the RSI and comparing the infonnation for 

consistency with management's responses to the auditor' inquiries, the financial statements, and other 

knowledge we obtained during the audit of the financial statements, in orderto report omission or material 

departures from FASAB guidelines if any, identified by these limited procedures. We did not audit and we 

do not express an opinion or provide any as urance on the RSI because the limited procedures we applied 

do not provide sufficient evidence to expre s an opinion or provide any assurance. 

Other lnfonnation 

FEC's other infonnation contains a wide range of infonnation, some of which i not directly related to the 

financial statements. This infonnation is presented for purposes of additional analysis and is not a requi.red 

part of the financial statements or the RSI. Management is re ponsible for the other infonnation included 

in FEC's AFR. The other information comprises a detailed statement of management assurances and othe.r 

infonnation a applicable but does not include the financial statements and our auditor' report thereon. 

Our opinion on the financial statements does not cover the other inforn1ation, and we do not express an 

opinion or any fonn of assurance thereon. 

In connection with our audit of the financial statements, our responsibility is to read the other information 

and con ider whether a material inconsistency exist between the other infonnation and the financial 

statements, or the other information otherwise appears to be materially misstated. If, ba ed on the work 

performed, we conclude that an uncorrected material mi statement of the other information exists, we are 

required to describe it in our report. 

Report on Internal ontrol oYer Financial Reporting 

In connection with our audits of FEC's financial statements we con idered FEC's internal control over 

financia l reporting, consistent with our auditor's responsibilities di cussed below. 

Results of Our Con ideration of Internal Control over Financial Reporting 

Our consideration of internal control was for the limited purpo e de cribed below, a.nd was not de igped to 

identify all deficiencies in internal control that might be material weaknesses or significant deficiencies1 or 

to expres an opinion on the effectiveness of FEC's internal control over financial reporting. Given tbese 

limitations, during our 2023 audit, we did not identify any deficiencies in internal control over financial 

reporting that we consider to be mate.rial weaknesse . However material weaknesses or igpificant 

deficiencies may exist that have not been identified. 

1 A deficiency in internal con1rol exis1s when 1he design or opera1ior1 of a conirol does not allow managemen1 or employee•, in 1be 

nonna.l course of performing lheir assignoo funcl.ions, 10 pre\lertt, or detec:t and correc1, missiatements on a timely basis. A mmerial 

weakness i a deficiency, or comb i na1ion of deficiencies, in internal co,urol ovedinancial reporting, ruch tha,t there is a re.asonable 

possibility ill.at a ma1e-rial m.is tatem 111 of the en1ity's financial sta1emenis will no1 be preven.ted, or detected and correc100, on a 

timely basis.. A signifk.ant deficiency is a deficiency, or a combination of deficiencies, in in1.ernal control over financial report,ng 

that is less severe th.an a ma1erial weakne~s, yet important enough IO meri1 anen1.ion by !hose charged with governance. 

3 

IE =====TEi~~~~Fc CERTIFIED PUBLl ACCO BROWN NTANT &COMPANY AND MANAGEIIIEN"l' ::::~~~~~~~~CTE CONSULTANT , PLL ::::=========:i► 

36 
 

uring our FY 2023 audit, we identified one finding (repeat) and two recommendations related to FEC's 

internal control over financial reporting which is considered to be significant deficiency. For more details 

see below and Exhibit A. 

• Finding# 2023-01 FEC eeds to Remediate High-Level and Medium Vulnerabilities. 

Basis for Results of Our Con ideration of Internal Control over Financial Reporting 

We performed our procedures related to FEC's internal control over financial reporting in accordanc•e with 

government auditing standards and O 1B guidance. 

Responsibilities of Management for Internal Control over Financial Reporting 

FEC management is responsible for designing. implementing, and maintaining effective internal control 

over financial reporting relevant to the preparation and fair pre entation of financial statements that are free 

from material misstatement, whether due to fraud or error. 

Auditor's Respon ibilities for Internal Control over Financial Reporting 

1n planning and performing our audit of FEC's financial statement as of and for the fiscal year ended 

September 30, 2023, in accordance with U.S. generally accepted government auditing standards, we 

considered FEC's internal control relevant to the financial statement audit in order to de ign audit 

procedure that are appropriate in the circumstance but not for the purpose of expres ing an opinion on 

the •effectiveness of FEC's internal control over financial reporting. Accordingly, we do not e.xpress an 

opinion on FEC's internal control over financ ial reporting. We are required to report all deficiencies that 

are considered to be significant deficiencies or material weaknesses. We did not consider all internal 

controls relevant 10 operating objectives, such as those controls relevant 10 preparing performance 

information and ensuring efficient operation . 

Definition and l.nherent Limitations oflnternal Control over Fi.nancial Reporti.ng 

An entity's internal control over financial reporting is a process effected by those charged with governance, 

management, and other personnel, the objectives of which are to provide reasonable as.surance that (I) 

tran actions are properly recorded, processed, and summari.zed to permit the preparation of fi nancial 

statements in accordance with .S. generally accepted accounting principles and asset are afeguarded 

against los from unauthorized ac<iui ition, use, or di.sposition and (2) transaction are executed in 

accordance with provisions of applicable laws including those governing the use of budget authority, 

regulations, contracts, and grant agreements, noncompliance with which could have a material effect on the 

financial statements. 

Because of its inherent limitations, internal control over financial reporting may not prevent, or detect and 

correct, mi statements due to fraud or error. 

Intended Purpose of Report on Internal Control over Financial Reporting 

The purpose of this report is solely to describe the scope of our consideration of FEC's internal control over 

financial reporting and the results of our procedures, and not to provide an opinion on the effectivene s of 

FEC's internal control over financial reporting. Thi report is an integral part of an audit performed in 

accordance with U.S. generally accepted government auditing standards in con idering internal c-0ntrol over 

financial reporting. Accordingly, this report on internal control over financial reporting is not suitable for 

any other purpose. 

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IE======:aliiFcffil5Ttffii:l~~ CERTIFIED BROWN & COMPANY;::;;::;::;:;:;:;;::;;;:::;:;;::;;::;;:;::;:::;::=============- P BLIC ACCOUNTANTS AND MANAClEIIIENT CONSULTANTS, PLLC ________ ,,..-

37 
on Compliance with Laws, Regulations, Contracts, and Grant Agreemmts 

In connection with our audits of FEC's financial statements, we tested compliance with selected provisions 

of applicable law , regulations, contract , and grant agreements con istent with our auditor' 

responsibilities di cussed below. 

Results of Our Te ts for Compliance with Laws, Regulations, Contract . and Grant Agreement 

Our tests for compliance with selected provisions of applicable laws, regulation , contracts, a.nd grant 

agreements di closed no instance of noncompliance for fiscal year 2023 that would be reportable under 

U.S. generally accepted government auditing standards. However the objective of our tests was not to 

provide an opinion on compliance with law , regulations, contracts, and grant agreements applicable to 

FEC. Accordingly, we do not express such an opinion. 

Basis for Result of Our Test for Compliance with Laws, Regulations, C.ontmcts. and Grant Agreements 

We performed our tests of compliance in accordance with U.S. general.ly accepted government aud.iting 

standard . Our respon ibilitie under those tandards are further described in the Auditor's Responsibilities 

for Tests of Compliance ection below. 

Responsibilities of Management for Compliance with Laws. Regulations, Contracts. and Grant Agreements 

FEC management i responsible for complying with law , regulations, contracts, and grant agreements 

applicable to FEC. 

Auditor's Responsibilities for Tests of Compliance with Laws, Regulations, Contract . and Grant 

Agreements 

Our respon ibility is to test compliance with selected provision of applicable laws, regulations, contracts, 

and grant agreement applicable to FEC that have a di.reel effect on the determination of material amounts 

and disclosures in FEC' financ ial statement , and to perfonn certain other limited procedures. 

Accordingly, we did not test compliance with all laws, regulations, contracts, and grant agreements 

applicable to FEC. We caution that noncompliance may occur and not be detected by these test . 

Intended Purpose of Report on Compliance with Laws. Regulations, Contracts. and Grant Agreements 

The purpose of this report i olely to describe the cope of our testing of compliance with selected 

provisions of applicable laws, regulations, contracts, and grant agreements, and the results of that testing 

and not to provide an opinion on compliance. This report is an integral part of an audit performed in 

accordance with U.S. generally accepted government auditing standards in considering compliance. 

Accordingly, this report on compliance with laws, regulations, contracts, and grant agreements is not 

suitable for any other purpose. 

Status or Prior Year's Finding.~ and Recommendations 

We have re iewed the statu of open recommendations from the FY 2022 Independent Auditor's Report, 

dated ovember 14, 2022, and all prior year recommendations were closed. Details of prior year 

recommendation is presented in Exhibit B. 

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BROWN & COMPANY~::;;:;:;:;:::;::::;::::;::::;:::;::::;:::;::::::::;::==============i" .. CERTIFIED P LI ACCOUNTANTS AND MANAflEMEN'T CON ULTANT PLLC ________ _, 

38 
's Response to the Auditor's Report 

Management ha presented a response to the findings identified in our report. anagement's respon e to 

the report is presented in Exhibit C. We did not audit FEC's re ponse and accord.ingly, we express no 

opinion on it. 

valuation of Management's Response to tbe Auditor's Report 

In response to the draft report, FEC pro ided it plans to addres the findings, and agreed with the 

recommendation to improve infonnation ystem ecurity controls. FEC comments a.re included in their 

entirety in Exhibit C. 

~.C,00,,,,_ 

' 

6 

IE ======:ai~~~~~~ CERTCFIED P UC ACCO BROWN NTANTS &COMPANY AND ~GEJ\IENT ;::;;:;;::;::::;:;;:::;;:::;:::;:;;:::;;::;:;;:::============= OONSULTANTS. PLLQ ________ ., 

--

39 
xhibit A - ignificant Deficiencies 

Effecti ene of Information System Controls O er Financial Reporting 

Findings and Recommendations 

IT Finding 2023-01: FEC eeds to Remediate High-Level and Medium Vulnerabilities (Repeat 

finding) 

Condition: 

Brown and Company examined the FEC Office ofChieflnfonnation Officer (OCIO) Vulnerability Report 

dated July 26, 2023, noting that high-level and medium-level vulnerabilities were not remedia.ted. 

The FEC OCIO Sy tern Security Plan (SSP) requires staff to remediate vulnerabilities within 30 days for 

critical-level risk, 45 days for high-level risk, and 90 days for medium-level risk. The FEC OCIO 

Vulnerability Report howed that 44 high-level (ranging from I 063 to 1913 days outstanding) and 9 

mediwn-level (ranging from 1321 to 6679 days outstanding) vulnerabilitie were not remediated timely as 

required by FEC OCIO SSP. See Table-I Vulnerability Table below. Specifically, high- level and mediumlevel vulnerabilities were not re olved for Linux Microsoft Windows 10 Microsoft Windows Server 2016, 

and Micro oft Windows Server 2012 operating systems. 

FEC OClO expressed that in cases where vulnerabilities are linked to outdated equipment and the Lotu 

ates legacy ystem , and OCIO has implemented compensating controls that mu t be maintain until the 

system is replaced. 

Table -1 Vulnerability Table 

Vulnerabilities Operating Systems Open Number of Days 

High-level Amazon Linux 2 28 1,913 

High-level Microsoft Windows 10 16 1,063 

Total High-level 44 

Medium-level Microsoft Windows I 0 6 1321 to6679 

Medium-level Microsoft Windows 2 1492 

Server2016 

Medium-level Microsoft Windows I 1815 

Server 2022 

rrotal Medium-level 9 

40 
· 

1ST SP 800-53, Revision 5.1, Sec11rity and .Privacy Controls for lllformation Systems a11d 

Organizotions: 

RA-5 VUL ERABILITY MONITORING AND SC4 ING 

a. Monitor and can for vulnerabilities in the ystem and hosted application.s 

[Assignment: organization-defined frequency and/or randomly in accordance with 

organization- defined process] and when new vul.nerabil.ities potential.ly affecting the 

system are identified and reported; 

b. Employ vulnerability monitoring tools and techniques that facilitate interoperability 

among tools and automate parts of the vulnerability management proce s by using 

standards for. 

I. Enwnerating platfonns, software flaws, and improper configurations; 

2. Formatting checklists and test procedures; and 

3. Measuring vulnerability impact; 

c. Analyze vulnerability scan reports and result from vulnerability monitoring; 

d. Remediate legitimate vulnerabilities [A signment: organ.ization-defined response 

times] in accordance with an organizational asses ment of risk; 

e. Share information obtained from the vul.nembility monitoring proce s and control 

assessments with [As ignment: organization-defined personnel or roles] to help 

eliminate s.imilar vulnerabilities in other system ; and 

f. Employ vulnerability monitoring tools that include the capability to readily update the 

vulnerabilities to be scaMed. 

SJ-2 FLAIV REMEDIATION 

g. Identify report, and correct system flaw ; 

h. Test software and firmware updates related to flaw remediation for effectivene sand 

potential side effects before installation.; 

1. Install security-relevant oftware and firmware updates within [As ignmenr: 

organization- defined time period] of the release of tl1 e updates; and 

J· Incorporate flaw remediation into the organizational configuration management 

process. 

FEC OCJO FECLAN System Security Pla11 (SSP): 

The FEC OClO FECLAN SSP requires staff to remediate vulnerabilities within 30 days for critical-level 

risk, 45 day for high-level risk, 90 day for medium-level risk, and 180-days for low-level ri k. 

8 

IE======~~ffiijF!riiiiiiffi~BROWN & COMPANY;::;;;;;;:;;;;;;;:;;::::;;;::;::;==============:.-. CERTIF1ED PUBLIC ACCO NTANT AND 1ANAGEIIIENT CON ULT.ANT PLLC ________ ., 

41 
FEC OCIO stated vulnerabilities are linked to outdated equipment and the Lotus ote legacy system. 

Applying the latest patches or transitioning to newer operating system may adversely impact the 

functionality of legacy applications leading to potential ystem failures. Also, FEC OCIO i not able to 

fu lly implement remediations due to budget and other resource constraints . 

.Elw:li. 

Legacy systems with security vulnerabilities are challenging and expensive to address. Often. vendors 

discontinue support which increased ecurity risks and co ts. The vulnerabil.ities in legacy system can be 

exploited by cybercriminals, leading to unauthorized access, data breaches, and ystem disruptions. 

Maintenance of the e systems become costlier over time. Specialized knowledge in older technologie i 

essential, making recmitment tough and possibly more expensive. Further, in an era of constrained budgets, 

the high costs of maintaining legacy systems could limit agencies' ability to modernize and develop new 

or replacement system . 

Rrrnmmrndation J· 

We recommend FEC OCIO develop a feasibility plan for replacing the Lotus otes legacy system, re lated 

outdated equipment and operating system . The fea ibility plan hould contain an analysi of potential 

benefit , co ts, risks, and other critical factors. 

Beremmcodatioo '2· 

We recommend FEC Senior Leaders prioritize funding and other resources needed to replace the Lotus 

ates legacy y tern, related outdated equipment and operating systems. 

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===========================BROWN & COMPANY;:;;;;;;;;;:;;;;;:;:;;;:;::;::;:;==============•• --------CERTIFU!D PUBLIC ACCOUNTANT AND t.lANAflEMENT O ' lill ,\,',TS, PLLC ________ , 

42 
hibit B - Status of Prior Year's Findings and Recommendation 

tatus of FY 2022 Prior Year's Audit Recommendations 

2022-01 We recommend FEC OCIO remediate critical-level and high-level 

vulnerabilities according to the FEC System Security Plan. 

2022-02 We recommend the FEC OCIO establish control to ensure user 

accounts are deactivated timely when employees separate from the agency. 

2022-03 We recommend the FEC OCIO document and maintain evidence that 

the controls for identifying and obtaining management's approval for de iations 

from its establi hed configuration setting for Windows IO devices are 

erfonned on a con i tent ba i . 

10 

tatus as of 

eptember 30, 

2023 

FY 2022 NFR is 

closed. It ha been 

uperseded by FY 

2023 NFR 2023-01. 

Clo ed 

Clo ed 

IE======~~~Ftijiiffi~BROWN & COMPANY;::;;;;;;;:;;;;:;::;;;;::;;;;:;;:;;;::============:. .. ERTIPIED PUBLIC ACCOUN ANTS AND MANAGEMENT CON ULTANTS, PLLC --------

43 
C - Management's Response to the Auditor' Report 

TIIE l<EDERAL ELI-: f!ON CO~IMISSIO 

Woshing1n11, D 2().l63 

NO\,cm bcr 14. 2023 

On. behalf of the Federal Election C mmission (FEC) Mona,emen~ I \>ould like 10 thirnk the FEC 

ffice of ltt.~r,e tor General 011d llro\\n and Compo n fo r their diligent work auditin$ the l'EC·s 

FY 2023 fi nancial statements. ·n ,e unmodifi ed opinion that •ou rendered is reHective of the hard 

\\ork ::ind cnntinucd pnx:L'.:ss impnn•emenb matlc b)· the FEC slafl: 

On BchalfofMan:1gcmcnt, 

<J°'4- Cr~ 

John Qui nl an 

hie f Financial m cer 

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44 
Find.ing 2023-01: FE eeds to Remediale High-Level and Medium ulnerabilitie 

(Repeat finding) 

R,rommendotion 1 • 

We recommend FEC OCTO develop :t feasibility plan for repl:tcing 1he Lotus Notes legacy sy. tem, 

related outdated equipment and opera1ing 1em . The fea ibiljcy plan should contain an analy i of 

potenri:il benefits, cost , nsk , and other critical fac tors. 

Resnu11nendalion 2· 

We recommend FEC enior Leader prioritize fun ding and 01her r ource needed 10 replace !he Lom • 

otes legacy ysrem. related 0U1da1ed equipmen1 and operating sys1ems. 

Management Response: 

____x_ a11agemen1 concur wi1h thi finding. ( ' ee 1·e ·pon e below.) 

Management does not concur with this finding. 

Signature_· ____________ A&c-P~ ____ _ Date: 1Q/'i/?02 3 

Title: ChieOnfornrntjon Officer 

l\la1_1.agemeut•~ Response: 

OCIO acknowledge the vulnerabilitie shown in the report e, isi and that rhey have yet 10 be remediated 

but should be as soon as po sible. OCJO has a plan to rernediare rnost of these in place now: howe\"er. 

budgetary con traints have prewuted OCJO from putting that plan into action. 111 the case of 

vuluerabiljties affecting legacy application SetYers, OCIO has put compea~ating controls into place " ·hen it 

cannot replace lh . erver. 0 IO al o recently u ed end-of-year rea llocated fun ling to purcha e new 

laptops to repl.,ce outdat.,d equipment opernting on older operating ystc:ms. 

pecifically. ill the ca e of the Lotu Note application with vulnerabililie , the e are mi ion-critical 

leg.icy applications. 'hould OCIO put remc:diations in plucc:, it may rc:ndc:r those applications unusable: and 

c,mse Commis ·ion.:rs and agency 1aff to b.: un::ibk to a ·complish their dmies and mi · -ion. lnstc:ad. 

OCIO's ec p • team ha put into place compens.1ting control using the rowdStrike Endpoint De tection 

and Re: ·ponse and McAlc:.: applications. Those .ipplications hdp prolccl the agcn y from cybcrsccurity 

intmsion . 

CJO has requested funding for the n:placcmenl solutions for the Lmus oles applica tions. An executive 

·ummary (atrnched) wa prepared for the Commi ion's IT Co11unittee 10 inform them of the eriou 

r1anire of the vulnerabiljties :mcl pre ent the ca e for funding the solution . The ummary comainecl an 

analysi of1 olential benefit . costs. ri ks, and other critical factor to con ider. The IT Comminee wa 

w1ab lc IO appro,·c the funding only bccau"c funding this project would have reduced the amount available 

to the F •C to pay for n menl contract and operation from it, appropriation. Be au e the FE mu. I fully 

fund its c-iment contracl':l, obligations and operations, the F C has not been able to fund brand new 

12 

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45 
project' ucb a this one. The project, however. cannot pro eed beyond market re earch unril 

tbc funding is available and approve I. OCIO continue Lo emphasize tha t fondillg tbc modcmization of the 

Loru otes Applicariom is important from an IT modernization tandpoint and ir is e sential to ensure the 

ecurity of the FEC' y tem . 

The F C included an appettl for funding the mod.:rniz·ilion of the Lotu~ otes Application · iu the FY 

2024 Congre sional Budget Ju tification and OCIO included a request for funding in its internal request 

for n:alloc~nion of FY _023 fnnds made to O "FO and the Finance Comminee. C'TO anticipate · it' 

inclusion in the agency' FY 20_5 budget reque I and i11 0 IO's FY 20_4 propo ed management plan. 

13 

IE======:=a~~~~~~BROWN & COMPANY;::;;:;;:::;;;;:;;;:;;;::::;;;;:;;:;;:;::;;::=============:.. KRTIFIED PUBLIC ACCOUN'I'ANTS AND .lltANAGE.MENT CONSULTANTS, PLLC _______ __,. 

46 
47

This page marks the end of the Independent Auditor’s Report
48

Financial Statements

BALANCE SHEETS

As Of September 30, 2023 and 2022

2023 2022

Assets:

Intragovernmental Assets:

Fund Balance With Treasury (Note 3) $ 24,116,788 $ 23,848,202 

Total Intragovernmental Assets 24,116,788 23,848,202 

 

Other Than Intragovernmental: 

Accounts Receivable, net (Note 4) 1,018,558 718,867 

Property, Plant and Equipment, net (Note 5) 3,600,300 4,575,465 

Total Other than Intragovernmental Assets 4,618,858 5,294,332 

Total Assets (Note 2) $ 28,735,646 $ 29,142,534 

Liabilities: (Note 6)

Intragovernmental Liabilities:

Accounts Payable 661,389 655,094 

Other Liabilities (Note 7) 7,248,255 7,305,733 

Total Intragovernmental Liabilities 7,909,644 7,960,827 

 

Other Than Intragovernmental:

Accounts Payable 1,103,340 942,762 

Federal Employees and Veterans Benefit Payable 3,546,868 3,633,171 

Other Liabilities (Note 7) 2,445,333 2,298,838 

Total Other than Intragovernmental Liabilities 7,095,541 6,874,771 

Total Liabilities $ 15,005,185 $ 14,835,598 

Net Position:

Unexpended Appropriations - All Other Funds 

(Consolidated Totals)

 

19,145,881 

 

19,252,312 

Cumulative Results of Operations - All Other Funds 

(Consolidated Totals)

 

(5,415,420) (4,945,376)

Total Net Position - All Other Funds 

(Consolidated Totals)

 

13,730,461 14,306,936

Total Net Position $ 13,730,461 $ 14,306,936 

Total Liabilities and Net Position $ 28,735,646 $ 29,142,534 

The accompanying notes are an integral part of these statements.
49

STATEMENTS OF NET COST

For The Fiscal Years Ended September 30, 2023 and 2022

2023 2022

Program Costs:

Gross Costs $ 82,936,045 $ 76,616,416 

Less: Earned Revenue 117,000 117,857 

Net Program Costs 82,819,045 76,498,559 

Net Cost of Operations $ 82,819,045 $ 76,498,559 

The accompanying notes are an integral part of these statements.
50

STATEMENT OF CHANGES IN NET POSITION

For The Fiscal Years Ended September 30, 2023 and 2022

FY 2023 (CY) 

All Other Funds 

(Consolidated 

Totals)

Consolidated 

Total

Unexpended Appropriations:

Beginning Balance $ 19,252,312 $ 19,252,312 

Appropriations received 81,674,000 81,674,000 

Other Adjustments (+/-) (3,016,578) (3,016,578)

Appropriations used (78,763,853) (78,763,853)

Net Change in Unexpended Appropriations (106,431) (106,431)

Total Unexpended Appropriations $ 19,145,881 $ 19,145,881 

Cumulative Results from Operations

Beginning Balances $ (4,945,375) $ (4,945,375)

 Corrections of errors (+/-) (184,607) (184,607)

Beginning balances, as adjusted (5,129,982) (5,129,982)

Appropriations used

 

78,763,853 78,763,853 

Imputed Financing (Note 10) 3,769,754 3,769,754 

Net Cost of Operations (82,819,045) (82,819,045)

Net Change in Cumulative Results of 

Operations (285,438) (285,438)

Cumulative Results of Operations (5,415,420) (5,415,420)

Net Position $ 13,730,461 $ 13,730,461 

The accompanying notes are an integral part of these statements.
51

STATEMENT OF CHANGES IN NET POSITION

For The Fiscal Years Ended September 30, 2023 and 2022

FY 2022 (PY)

All Other Funds 

(Consolidated 

Totals)

Consolidated 

Total

Unexpended Appropriations:

Beginning Balance $ 17,167,807 $ 17,167,807 

Appropriations received 74,500,000 74,500,000 

Other Adjustments (+/-) (1,255,530) (1,255,530)

Appropriations used (71,159,965) (71,159,965)

Net Change in Unexpended Appropriations 2,084,505 2,084,505 

Total Unexpended Appropriations $ 19,252,312 $ 19,252,312 

Cumulative Results from Operations

Beginning Balances $ (2,122,666) $ (2,122,666)

Beginning balances, as adjusted (2,122,666) (2,122,666)

Appropriations used

 

71,159,965 

 

71,159,965 

Transfers-in/out without reimbursement (+/-) 3,033 3,033 

Imputed Financing (Note 10) 2,512,852 2,512,852 

Net Cost of Operations (76,498,559) (76,498,559)

Net Change in Cumulative Results of Operations (2,822,709) (2,822,709)

Cumulative Results of Operations (4,945,375) (4,945,375)

Net Position $ 14,306,936 $ 14,306,936 

The accompanying notes are an integral part of these statements.
52

STATEMENTS OF BUDGETARY RESOURCES

For The Fiscal Years Ended September 30, 2023 and 2022

2023 2022

Budgetary Budgetary 

Budgetary resources:

Unobligated balance from prior year budget 

authority, net (discretionary and mandatory) (Note 

11) $ 3,955,363 $ 7,045,802 

Appropriations (discretionary and mandatory) 81,674,000 74,500,000 

Spending authority from offsetting collections 

(discretionary and mandatory) 117,000 120,890 

Total budgetary resources $ 85,746,363 $ 81,666,692 

Status of budgetary resources:

New obligations and upward adjustments (total) 

(Note 11) $ 81,589,729 $ 75,587,129

Unobligated balance, end of year:

Apportioned, unexpired account 598,461 455,375 

Unexpired unobligated balance, end of year 598,461 455,375 

Expired unobligated balance, end of year 3,558,173 5,624,189 

Unobligated balance, end of year (total) 4,156,634 6,079,564 

Total budgetary resources $ 85,746,363 $ 81,666,693 

Outlay, net:

Outlays, net (total) (discretionary and mandatory) $ 78,388,837 $ 71,351,706 

Agency outlays, net (discretionary and mandatory) $ 78,388,837 $ 71,351,706 

The accompanying notes are an integral part of these statements.
53

STATEMENTS OF CUSTODIAL ACTIVITY

For The Fiscal Years Ended September 30, 2023 and 2022

2023 2022 

Revenue Activity:

Sources of cash collections:

Civil penalties/Administrative 

Fines/Miscellaneous $ 1,769,705 $ 2,756,915 

Total Cash Collections 1,769,705 2,756,915 

Accrual Adjustments (299,692) (86,005)

Total Custodial Revenue () $ 1,470,013 $ 2,670,910 

Disposition of Collections:

Transferred to Others (by Recipient) $ 1,769,705 $ 2,756,915 

(Increase)/Decrease in Amounts Yet to be 

Transferred (+/-) (299,692) (86,005)

Total Disposition of Collections 1,470,013 2,670,910 

Net Custodial Activity $ - $ - 

The accompanying notes are an integral part of these statements.
54

Notes to the Financial Statements

Note 1 – Summary of Significant Accounting Policies 

Reporting Entity

The Federal Election Commission (FEC or Commission) was created in 1975 as an independent 

regulatory agency with exclusive responsibility for administering, enforcing, defending, and 

interpreting the Federal Election Campaign Act of 1971 (FECA), 2 U.S.C. 431 et seq., as amended 

(“the Act”). The Commission is also responsible for administering the public funding programs

(26 U.S.C. §§ 9001- 9039) for Presidential campaigns, which include certification and audits of 

all participating candidates and committees, and enforcement of public funding legislation.

The financial activity presented relates to the execution of the FEC’s Congressionally approved 

budget. Consistent with Federal Accounting Standards Advisory Board’s (FASAB) Statement of 

Federal Financial Accounting Concept No. 2, “Entity and Display,” the Presidential Election 

Campaign Fund is not a reporting entity of the FEC. Financial activity of the fund is budgeted, 

apportioned, recorded, reported and paid by the U.S. Department of Treasury (Treasury). The 

accounts of the Presidential Election Campaign Fund are therefore not included in the FEC’s 

financial statements.

Basis of Accounting and Presentation

As required by the Accountability of Tax Dollars Act of 2002, the accompanying financial 

statements present the financial position, net cost of operations, changes in net position, budgetary

resources and custodial activity of the FEC. While these financial statements have been 

prepared from the books and records of the FEC in accordance with U.S. generally accepted 

accounting principles (GAAP) for the Federal Government and in accordance with the form and

content for entity financial statements specified by the Office of Management and Budget (OMB)

in Circular A-136, as revised, Financial Reporting Requirements, as well as the accounting

policies of the FEC, the statements may differ from other financial reports submitted pursuant to 

OMB directives for the purpose of monitoring and controlling the use of the FEC’s budgetary

resources.

These financial statements reflect both accrual and budgetary accounting transactions. Under the 

accrual method of accounting, revenues are recognized when earned and expenses are recognized 

when a liability is incurred, without regard to receipt or payment of cash. Budgetary accounting is 

designed to recognize the obligation of funds according to legal requirements. Budgetary

accounting is essential for compliance with legal constraints and controls over the use of federal 

funds.

Throughout these financial statements, assets, liabilities, revenues, and costs have been classified 

according to the type of entity with which the transactions are associated. Intragovernmental assets

and liabilities are those resulting from transactions with other federal entities. Intragovernmental

earned revenues are collections or accruals of revenue from other federal entities and 

intragovernmental costs are payments or accruals to other federal entities. These statements should
55

be read with the understanding that they are for a component of the Federal Government, a 

sovereign entity.

Assets

Assets that an entity is authorized to use in its operations are termed entity assets, whereas assets 

that are held by an entity and are not available for the entity’s use are termed non-entity assets. 

Most of the FEC’s assets are entity assets and are available for use in carrying out the mission of 

the FEC as appropriated by Congress. The FEC also has non-entity assets which primarily 

consist of receivables from fines and penalties. These custodial collections are not available to 

the FEC to use in its operations and must be transferred to Treasury.

Fund Balance with Treasury

The FEC does not maintain cash in commercial bank accounts. Treasury processes cash receipts 

and disbursements. Fund Balance with Treasury consists of appropriated funds and custodial 

collections. With the exception of the custodial collections, these funds are available to pay current 

liabilities and finance authorized purchase commitments. Custodial collections, which are not 

available to finance FEC activities, are classified as non-entity assets.

Accounts Receivable

The FEC’s Accounts Receivable mainly represents amounts due from the public for fines and 

penalties assessed by the FEC and referred to Treasury for collection. The FEC establishes an 

allowance for the estimated loss on accounts receivable from the public that are deemed 

uncollectible accounts. This allowance is included in Accounts Receivable, net on the balance 

sheet. The allowance is a percentage of the overall receivable balance, based on the collection 

rate of past balances.

General Property and Equipment

General Property and Equipment (P&E) is reported at acquisition cost and consists of items that 

are used by the FEC to support its mission. Depreciation or amortization on these assets is 

calculated using the straight-line method with zero salvage value. Depreciation or amortization 

of an asset begins the day it is placed in service. Maintenance, repairs and minor renovations are 

expensed as incurred. Expenditures that materially increase the value, capacity or useful life of 

existing assets are capitalized. Refer to Note 5 General Property and Equipment, Net for additional 

details.

Liabilities

Liabilities represent amounts that are likely to be paid by the FEC as the result of transactions or 

events that have already occurred; however, no liabilities are paid by the FEC without an 

appropriation. Intragovernmental liabilities arise from transactions with other federal entities. 

Liabilities classified as not covered by budgetary resources are liabilities for which 

appropriations have not been enacted (e.g., annual leave benefits and actuarial liability under the 
56

Federal Employees Compensation Act), or those resulting from the agency’s custodial activities. 

The FEC has an intragovernmental liability to Treasury for fines, penalties and miscellaneous 

receipts which are due from the public but have not yet transferred. These funds may not be used 

to fund FEC operations.

Accounts Payable

Accounts Payable consists of liabilities to other entities or persons for amounts owed for goods 

and services received that have not yet been paid at the end of the fiscal year. Accounts Payable 

also consists of disbursements in-transit, which are payables that have been recorded by the FEC 

and are pending payment by Treasury. In addition to accounts payables recorded through normal 

business activities, unbilled payables are estimated based on historical data.

Accrued Payroll and Employer Contribution

Accrued payroll and benefits represent salaries, wages and benefits earned by employees, but not 

yet disbursed as of the statement date. Accrued payroll and Thrift Savings Plan contributions are 

not classified as intragovernmental. Employer contributions and payroll taxes payable are 

classified as intragovernmental.

Annual, Sick and Other Leave

Annual leave is recorded as a liability when it is earned by FEC employees; the liability is reduced

as leave is taken. On a quarterly basis, the balance in the accrued leave account is adjusted to 

reflect the current leave balances and pay rates. Accrued annual leave is paid from future funding

sources and is reflected as a liability not covered by budgetary resources. Sick leave and other 

types of non-vested leave are expensed as taken.

Federal Employee Benefits

A liability is recorded for estimated and actual future payments to be made for workers’ 

compensation pursuant to the Federal Employees Compensation Act. The liability consists of the 

net present value of estimated future payments calculated by the Department of Labor (DOL) 

and the actual unreimbursed cost paid by DOL for compensation paid to recipients under the 

Federal Employee’s Compensation Act. The future workers' compensation estimate is generated 

by DOL through an application of actuarial procedures developed to estimate the liability for the 

Federal Employee’s Compensation Act, which includes the expected liability for death, disability, 

medical and miscellaneous costs for approved compensation cases. The liability is calculated using 

historical benefit payment patterns related to a specific incurred period to estimate the total

payments related to that period. These projected annual benefits payments are discounted to 

present value.

Employee Retirement Plans

Each fiscal year, the Office of Personnel Management (OPM) estimates the Federal Government 

service cost for all covered employees. This estimate represents an annuity dollar amount which, 
57

if accumulated and invested each year of an employee’s career, would provide sufficient funding 

to pay for that employee’s future benefits. As the Federal Government’s estimated service cost 

exceeds the amount of contributions made by employer agencies and covered employees, this plan 

is not fully funded by the FEC and its employees. As of September 30, 2023, the FEC recognized 

approximately $3,769,754 as an imputed cost and related financing source, for the difference 

between the estimated service cost and the contributions made by the FEC and its employees. This 

represents a 50% increase when compared to the $2,512,852 of imputed cost and related financing 

source recognized in Fiscal Year 2022.

FEC employees participate in either the Civil Service Retirement System (CSRS) or the Federal 

Employees Retirement System (FERS), which became effective on January 1, 1987. For 

employees participating in CSRS, the FEC withheld 7% of base pay earnings and provided a 

matching contribution equal to the sum of the withholding. For employees covered by FERS, the 

FEC withheld .8% of base pay earnings and provided the agency contribution. The majority of 

FEC employees hired after December 31, 1983, are automatically covered by FERS.

Effective January 1, 2013, the Middle Class Tax Relief and Job Creation Act of 2012 created a 

new FERS retirement category, Revised Annuity Employees (RAE) for new federal employees 

hired in calendar year (CY) 2013 or thereafter. In FY 2023, the FERS-RAE employee contribution 

rate was 3.1%.

Effective January 1, 2014, the Bipartisan Budget Act of 2013 introduced a new FERS retirement 

category, Further Revised Annuity Employees (FRAE) for new federal employees hired in CY 

2014 and thereafter. In FY 2023, the FERS-FRAE employee contribution rate was 4.4%.

FERS contributions made by employer agencies and covered employees are comparable to the 

Federal Government’s estimated service costs. For FERS covered employees, the FEC made 

contributions of 18.4% of basic pay for FY 2023. For both FERS-RAE and FERS-FRAE 

covered employees, the FEC made contributions of 16.6% and 15.9% respectfully of basic pay for 

FY 2023.

Employees participating in FERS are covered under the Federal Insurance Contribution Act 

(FICA), for which the FEC contributed 6.2% to the Social Security Administration in FY 2023. 

Effective in FY 2012 FERS and CSRS – Offset employees were granted a 2% decrease in Social 

Security for tax year (CY) 2012 under the Temporary Payroll Tax Cut Continuation Act of 2011; 

and H.R. 3630, the Middle-Class Tax Relief and Job Creation Act of 2012. During FY 2013, 

employees contributed 4.2% to Social Security through December 31, 2012. Effective January 

1, 2013, the employee contribution rate is 6.2%.

Thrift Savings Plan

The Thrift Savings Plan (TSP) is a retirement savings and investment plan for employees covered 

by either CSRS or FERS. The TSP is administered by the Federal Retirement Thrift Investment 

Board on behalf of federal agencies. For employees belonging to FERS, the FEC automatically

contributes 1% of base pay to their account and matches contributions up to an additional 4%.

For employees belonging to CSRS, there is no governmental matching contribution.
58

The FEC does not report on its financial statements CSRS and FERS assets, accumulated plan 

benefits or unfunded liabilities, if any, which may be applicable to FEC employees. Reporting 

such amounts is the responsibility of the Office of Personnel Management. The portion of the 

current and estimated future outlays for CSRS and FERS not paid by the FEC is in accordance 

with Statement of Federal Financial Accounting Standards (SFFAS) No. 5, Accounting for 

Liabilities of the Federal Government, and is included in the FEC's financial statements as an 

imputed financing source.

Commitments and Contingencies

A contingency is an existing condition, situation or set of circumstances involving uncertainty as 

to possible gain or loss. The uncertainty will ultimately be resolved when one or more future 

events occur or fail to occur. SFFAS No. 5, as amended by SFFAS No. 12, Recognition of 

Contingent Liabilities Arising from Litigation, contains the criteria for recognition and disclosure 

of contingent liabilities. A contingency is recognized in the financial statements when a past event 

or exchange transaction has occurred, a future outflow or other sacrifice of resources is probable

and the future outflow or sacrifice of resources is measurable. A contingency is disclosed in the 

footnotes when any of the conditions for liability recognition are not met and the chance of the 

future confirming event or events occurring is more than remote but less than probable. In other 

words, contingent losses that are assessed as probable and measurable are accrued in the financial 

statements. Losses that are assessed to be at least reasonably possible are disclosed in the notes.

According to OMB Circular A-136, as revised, in addition to the contingent liabilities required 

by SFFAS No. 5, the following commitments should be disclosed: 1) an estimate of obligations 

related to cancelled appropriations for which the reporting entity has a contractual commitment 

for payment; and 2) amounts for contractual arrangements which may require future financial 

obligations. The FEC does not have commitments related to cancelled appropriations or amounts 

for contractual arrangements that would require future financial obligations.

Revenues and Other Financing Sources

Annual Appropriation

As a component of the Government-wide reporting entity, the FEC is subject to the Federal budget 

process, which involves appropriations that are provided annually and appropriations that are 

provided on a permanent basis. The financial transactions that are supported by budgetary 

resources, which include appropriations, are generally the same transactions reflected in agency 

and the Government-wide financial reports.

The FEC received all of its funding through an annual appropriation as provided by Congress. 

Additionally, the FEC received funding through reimbursement for services provided to other 

Federal agencies. Services performed for other Federal agencies under reimbursable agreements 

are financed through the account providing the service and reimbursements are recognized as 

revenue when earned.
59

The FEC’s budgetary resources reflect past congressional action and enable the entity to incur 

budgetary obligations, but they do not reflect assets to the Government as a whole. Budgetary 

obligations are legal obligations for goods, services, or amounts to be paid based on statutory 

provisions (e.g., Social Security benefits). After budgetary obligations are incurred, Treasury will 

make disbursements to liquidate the budgetary obligations and finance those disbursements in the 

same way it finances all disbursements, using some combination of receipts, other inflows, and 

borrowing from the public (if there is a budget deficit).

Imputed Financing Sources

In accordance with OMB Circular A-136, as revised, all expenses should be reported by agencies 

whether or not these expenses would be paid by the agency that incurs the expense. The amounts 

for certain expenses of the FEC, which will be paid by other federal agencies, are recorded in the 

Statement of Net Cost (SNC). A corresponding amount is recognized in the “Statement of Changes 

in Net Position” as an “Imputed Financing Source.” These imputed financing sources primarily 

represent unfunded pension costs of FEC employees, as described above.

Statement of Net Cost

Net cost of operations is the total of the FEC’s expenditures. The presentation of the statement is 

based on the FEC’s strategic plan, which presents one program that is based on the FEC’s 

mission and strategic goal. The program that reflects this strategic goal is to administer and enforce 

the Federal Election Campaign Act efficiently and effectively.

Net Position

Net position is the residual difference between asset and liabilities and consists of unexpended 

appropriations and cumulative results of operations. Unexpended appropriations include the 

portion of the FEC’s appropriations represented by undelivered orders and unobligated balances. 

Unobligated balances associated with appropriations that expire at the end of the fiscal year remain

available for obligation adjustments, but not for new obligations, until that account is cancelled,

five years after the appropriations expire. Cumulative results of operations represent the excess 

of financing sources over expenses since inception.

Statement of Custodial Activity

The Statement of Custodial Activity summarizes collections transferred or transferable to 

Treasury for miscellaneous receipts, fines and penalties assessed by the FEC. These amounts are 

not available for FEC operations, and accordingly, are reported as custodial revenue.

Use of Estimates

The preparation of the accompanying financial statements in accordance with GAAP requires 

management to make certain estimates and assumptions that directly affect the reported amounts 

of assets, liabilities, revenues and expenses. Actual results could differ from these estimates.
60

Classified Activities

Accounting standards require all reporting entities to disclose that accounting standards allow 

certain presentations and disclosures to be modified, if needed, to prevent the disclosure of 

classified information. The FEC has no classified activities. 

Reclassification

Certain fiscal year 2023 balances have been reclassified, retitled, or combined with other financial 

statement line items for consistency with the current year presentation. 
61

Note 2 Non-Entity Assets

Non–entity assets, which primarily represent amounts due to the FEC for fines and penalties on 

those that violated the requirements of the Federal Election Campaign Act, consisted of the 

following as of September 30, 2023, and September 30, 2022: 

2023 2022

With the Public

Accounts Receivable –

Custodial $ 1,018,588 $ 718,867

Total non-entity assets 1,018,588 718,867

Total entity assets 27,717,058 28,423,667

Total Assets $ 28,735,646 $ 29,142,534
62

Note 3 Fund Balance with Treasury 

Fund Balance with Treasury consisted of the following as of September 30, 2023 and September 

30, 2022: 

2023 2022

Fund Balances

Appropriated Funds $ 24,116,788 $ 23,848,202 

Total $ 24,116,788 $ 23,848,202 

2023 2022

Status of Fund Balance with Treasury

Unobligated Balance 

Available $ 598,461 455,375 

Unavailable 3,558,173 5,624,189 

Obligated Balance not yet Disbursed 19,960,153 17,768,638 

Total $ 24,116,788 $ 23,848,202 

Available unobligated balances represent amounts that are apportioned for obligation in the current 

fiscal year. Unavailable unobligated balances represent amounts that are not apportioned for 

obligation during the current fiscal year and expired appropriations that are no longer available to 

incur new obligations. Obligated balances not yet disbursed include amounts designated for 

payment of goods and services ordered but not received, or goods and services received but for 

which payment has not yet been made. 
63

Note 4 - Accounts Receivables, Net

Accounts receivable consist of the following as of September 30, 2023 and September 30, 2022:

2023

Gross Accounts 

Receivable Allowance Net Accounts Receivable

Intragovernmental

Intragovernmental $ - $ - $ -

Total Intragovernmental $ - $ - $ - 

With the Public

 Fines and Penalties $ 2,220,051 $ 1,201,493 $ 1,018,558 

 Total Non-Entity $ 2,220,051 $ 1,201,493 $ 1,018,558 

 Total $ 2,220,051 $ 1,201,493 $ 1,018,558 

2022

Gross Accounts 

Receivable Allowance Net Accounts Receivable

 Intragovernmental 

Intragovernmental $ - $ - $ -

 Total Intragovernmental $ - $ - $ - 

With the Public

 Fines and Penalties $ 1,820,212 $ 1,101,345 $ 718,867 

 Total Non-Entity $ 1,820,212 $ 1,101,345 $ 718,867 

 Total $ 1,820,212 $ 1,101,345 $ 718,867 

Non-Entity receivables consist of civil penalties and administrative fines assessed by the FEC 

through its enforcement processes or conciliation agreements reached with parties. The FEC has 

three offices that administer the penalties: the Office of General Counsel (OGC); the Office of 

Administrative Review (OAR); and the Office of Alternative Dispute Resolution (ADR). Each 

office has a distinct role in the enforcement and collection process. The allowance is based on 

the historical rate of collection and an overall assessment of the debtor’s willingness and ability 

to pay. Delinquent debts are referred to Treasury in accordance with the Debt Collection 

Improvement Act of 1996. The terms of the agreement between the FEC and the parties establish 

the conditions for collection. The “intragovernmental accounts receivable” is primarily attributed

to the Deputy Inspector General servicing a Federal agency on a reimbursable basis pursuant to 

the Inspector General Act.
64

Note 5 General Property and Equipment, Net 

General Property and Equipment (P&E) is reported at acquisition cost. The capitalization threshold 

is established at $25,000 and a useful life of two or more years. For bulk purchases, items are 

capitalized when the individual useful lives are at least two years and have an aggregate value of

$250,000 or more. Acquisitions of P&E that do not meet the capitalization criteria are recorded as 

operating expenses.

General P&E consists of items that are used by the FEC to support its mission. Depreciation or 

amortization on these assets is calculated using the straight-line method with no salvage value. 

Depreciation or amortization begins the day the asset is placed in service. Maintenance, repairs

and minor renovations are expensed as incurred. Expenditures that materially increase values, 

change capacities or extend useful lives are capitalized.

Effective FY 2017, the estimated useful life of assets such as office furniture and motor vehicles 

is five years. The estimated useful life of assets such as office equipment, IT equipment, IT 

software, telecommunications equipment, and audio/visual equipment is three years. 

The office building in which the FEC operates is leased through the General Services 

Administration (GSA) under an occupancy agreement, which manages the lease agreement 

between the Federal Government and the commercial leasing entity. The FEC is billed by GSA 

for the leased space based upon estimated lease payments made by GSA plus an administrative 

fee. The cost of the office building is not capitalized. The costs of any leasehold improvements, 

which are managed through GSA, are financed with FEC appropriated funds. Construction costs 

of $25,000 or more are accumulated as construction in progress until completion and then are 

transferred and capitalized as a leasehold improvement. Leasehold improvements are amortized 

over the lesser of five years or the remaining life of the lease term.

The internal use software development and acquisition cost capitalization threshold changed as 

a result of a new policy that was implemented in FY 2011. Internal use software development 

and acquisition costs of $250,000 or more are capitalized as software in development until the 

development stage is complete and the software is tested and accepted. At acceptance, costs of 

software in development are reclassified as internal use software costs and amortized using the 

straight-line method over an estimated useful life of three years. Purchased commercial software 

that does not meet the capitalization criteria is expensed. In addition, enhancements which do not 

add significant new capability or functionality are also expensed.

The general components of capitalized property and equipment, net of accumulated depreciation 

or amortization, consisted of the following as of September 30, 2023 and September 30, 2022, 

respectively:
65

2023 Software 

Computers

and 

peripherals

Leasehold 

Improvements

Software-inDevelopment Total 

Service Life 

(years) 3 3 5 n/a - 

Cost balance, 

beginning of the 

year $ 17,522,904 $ 2,898,979 $ 10,125,947 $ 3,054,514 $ 33,602,344 

Cost balance, 

end of year 17,522,904 2,898,979 10,125,947 3,054,514 33,602,344 

Accumulated 

depreciation

 

(17,267,698)

 

(2,608,399) (10,125,947) - (30,002,044)

Net Book Value $ 255,206 $ 290,580 $ - $ 3,054,514 $ 3,600,300 

2022 Software 

Computers 

and 

peripherals

Leasehold 

Improvements

Software-inDevelopment Total 

Service Life 

(years) 3 3 5 n/a - 

Cost balance, 

beginning of the 

year $ 16,997,141 $ 2,898,979 $ 10,125,947 $ 3,985,277 $ 34,007,344 

Capital 

Acquisitions

 

525,763 - - -

 

525,763 

Dispositions - - - (930,763) (930,763)

Cost balance, 

end of year 17,522,904 2,898,979 10,125,947 3,054,514 

 

33,602,344 

Accumulated 

depreciation (17,092,603) (2,410,614) (9,523,661) - (29,026,878)

Net Book Value $ 430,301 $ 488,365 $ 602,285 $ 3,054,514 $ 4,575,465 

 
66

Note 6 Liabilities Not Covered by Budgetary Resources 

Liabilities Not Covered by Budgetary Resources consisted of the following as of September 30, 

2023 and September 30, 2022: 

2023 2022

Intragovernmental:

 Custodial Fines and Civil Penalties $ 1,018,558 $ 534,260 

 Deferred Rent 5,465,474 6,061,708 

Total Intragovernmental 6,484,032 6,595,968 

With The Public:

 Unfunded Annual Leave $ 3,438,901 $ 3,532,395 

Contingent Liability 120,000 120,000 

Total Liabilities Not Covered by Budgetary Resources $ 10,042,933 $ 10,248,363 

Total Liabilities Covered by Budgetary Resources $ 4,962,252 $ 4,587,235 

Total Liabilities $ 15,005,185 $ 14,835,598 

Liabilities not covered by budgetary resources require future congressional action whereas 

liabilities covered by budgetary resources reflect prior congressional action. Regardless of when 

the congressional action occurs, when the liabilities are liquidated, Treasury will finance the 

liquidation in the same way that it finances all other disbursements, using some combination of 

receipts, other inflows, and borrowing from the public (if there is a budget deficit). Liabilities that 

do not require the use of budgetary resources are covered by monetary assets that are not budgetary 

resources to the entity. 

Beginning FY 2018, the FEC entered into a new lease agreement for its office building that provided a rent abatement of $8,943,504, which covers the equivalent of 22 months of rent. Consistent 

with generally accepted accounting principles, the FEC has recorded rent abatement as deferred 

rent, which is amortized over the life of the ten-year lease.
67

Note 7 Other Liabilities 

As of September 30, 2023, and September 30, 2022, respectively, components of amounts reported 

on the Balance Sheet as Other Intragovernmental Liabilities and Other Liabilities along with a 

categorization of current versus long-term. 

2023

Non-Current Current Total

Other Intragovernmental 

Liabilities:

Employer Contributions and 

Payroll Taxes Payable $ - $ 168,236 $ 168,236 

Benefit program contributions 

payable - 595,987 595,987 

Other Liabilities Without Related 

Budgetary Obligations - 5,465,474 5,465,474 

 1,018,558 -

 

1,018,558 

Total Other Intragovernmental 

Liabilities: $ 1,018,558 $ 6,229,697 $ 7,248,255 

Other Non-Federal Liabilities

Accrued Funded Payroll and 

Leave $ - $ 2,325,333.47 $ 2,325,333 

Contingent Liability - 120,000 120,000 

Total Other Non-Federal 

Liabilities $ - $ 2,445,333 $ 2,445,333 

Total Other Liabilities $ 1,018,558 $ 8,675,030 $ 9,693,588 
68

2022

Non-Current Current Total

Other Intragovernmental 

Liabilities:

Employer Contributions and 

Payroll Taxes Payable $ - $ 162,140 $ 162,140 

Benefit program contributions 

payable -

 

547,626 

 

547,626 

Other Liabilities Without Related 

Budgetary Obligations -

 

6,061,708 

 

6,061,708 

 534,260 

 

534,260 

Total Other Intragovernmental 

Liabilities: $ 534,260 $ 6,771,473 $ 7,305,733 

Other Non-Federal Liabilities

 Accrued Funded Payroll and 

Leave -

 

2,178,838 

 

2,178,838 

Contingent Liability - 120,000.00 120,000.00

Total Other Non-Federal 

Liabilities $ - $ 2,298,838 $ 2,298,838 

Total Other Liabilities $ 534,260 $ 9,070,311 $ 9,604,571 
69

Note 8 Commitments and Contingencies

As of September 30, 2023, in the opinion of FEC management and legal counsel, the FEC was 

party to actions which could result in losses that are at least probable. Furthermore, there are cases 

where amounts have not been accrued or disclosed because the amounts of the potential loss cannot 

be estimated, or the likelihood of an unfavorable outcome is considered remote. 

As of September 30, 2023, and September 30, 2022, respectively, the following table includes 

the status of Commitments and Contingencies. 

Contingent Loss Table

Accrued Liabilities

Estimated Range of Loss

Lower End Upper End

As of September 30, 2023

Legal Contingencies:

Probable $ 25,000 $ 25,000 $ 25,000

Reasonably Possible $ - $ - $ -

As of September 30, 2022

Legal Contingencies:

Probable $ 120,000 $ 120,000 $ 120,000 

Reasonably Possible $ - $ 34,483 $ 34,483
70

Note 9 Leases

The FEC did not have any capital leases as of September 30, 2023 or September 30, 2022. The 

FEC has a non-cancellable operating lease for its office space through November 30, 2032. 

As contained in the FEC’s Occupancy Agreement with the General Services Administration 

(GSA), as amended February 06, 2023, future payments under the operating lease are as follows: 

Future Payments Due for Non-Cancelable 

Operating Lease - Building 

2023

Fiscal Year Lease Payment 

2024 5,384,536

2025 5,445,247

2026 5,507,778

2027 5,572,186

2028 5,771,843

2029 5,866,837

2030 5,937,217

2031 6,009,708

2032 6,084,374

2033 945,751

Total $ 52,525,476

As per the terms of the lease agreement, the FEC was granted a total of $8,943,503, or 22 months, 

in free rent from the lessor. Per the FEC’s policy, the total free rent will be amortized as deferred 

rent over the life of the lease.

The table above represents the actual cash outlays for rent payments, as contained in the FEC’s 

Occupancy Agreement with GSA, and does not include the amortized Deferred Rent referenced 

above. 
71

Note 10 Inter-Entity Costs

The FEC recognizes certain inter-entity costs for goods and services that are received from other 

Federal entities at no cost or at a cost less than the full cost. Consistent with accounting standards, 

certain costs of the providing entity that are not fully reimbursed are recognized as imputed cost 

[in the Statement of Net Cost] and are offset by imputed revenue [in the Statement of Changes in 

Net Position]. Such imputed costs and revenues relate to employee benefits and claims to be settled 

by the Treasury Judgement Fund. The FEC recognizes as inter-entity costs the amount of accrued 

pension and post-retirement benefit expenses. However, unreimbursed costs of goods and services 

other than those identified above are not included in our financial statements for current 

employees. The assets and liabilities associated with such benefits are the responsibility of the 

administering agency, OPM. For the periods ended September 30, 2023 and 2022, respectively, 

inter-entity costs were as follows:

2023 2022

Office of Personnel Management $3,769,754 $2,512,852 

Total Imputed Financing Sources $3,769,754 $2,512,852 
72

Note 11 Statement of Budgetary Resources

The Statement of Budgetary Resources (SBR) compares budgetary resources with the status of 

those resources. For the year ended September 30, 2023, budgetary resources were $85,746,363 

and net outlays were $78,388,837. For the year ended September 30, 2022, budgetary resources 

were $81,666,692 and net outlays were $71,351,706. 

Apportionment Categories of Obligations Incurred

The FEC receives apportionments of its resources from OMB. Apportionments are for resources 

that can be obligated without restriction, other than to be in compliance with legislation for which 

the resources were made available.

For the years ended September 30, 2023 and September 30, 2022, direct obligations incurred 

amounted to $81,589,729 and $75,587,129, respectively. For the years ended September 30, 2023 

and September 30, 2022, reimbursable obligations incurred amounted to $117,000 and $117,857, 

respectively.

Comparison to the Budget of the United States Government

SFFAS No. 7, Accounting for Revenue and Other Financing Sources and Concepts for Reconciling 

Budgetary and Financial Accounting, requires an explanation of material differences between 

budgetary resources available, the status of those resources and outlays as presented in the 

Statement of Budgetary Resources to the related actual balances published in the Budget of the 

United States Government (Budget). The Budget that will include FY 2023 actual budgetary 

execution information is scheduled for publication in February 2024, which will be available 

through OMB’s website at http://www.whitehouse.gov/omb/budget. Accordingly, information 

required for such disclosure is not available at the time of publication of these financial statements. 

Balance reported in the FY 2022 SBR and related President’s Budget reflect the following: 

FY 2022 Budgetary 

Resources 

New Obligations 

& Upward 

Adjustments

 Net Outlays

Statement of Budgetary Resources $ 81,666,692 $ 75,587,129 $ 71,351,706 

Difference 1 - Expired Unobligated 

Balances (5,624,189)

Difference 2 - Rounding (+/-) (1,042,504) (1,587,129) (351,706)

Budget of the U.S. Government $ 75,000,000 $ 74,000,000 $ 71,000,000 

The difference between the Statement of Budgetary Resources and the Budget of the United States 

Government for budgetary resources is primarily due to expired unobligated balances and 

rounding. The differences for obligations incurred and net outlays are due to rounding. 
73

Net Adjustments to Unobligated Balance, Brought Forward, October 1

The Unobligated Balance Brought Forward from the prior fiscal year has been adjusted for 

recoveries of prior year paid and unpaid obligations and other changes such as canceled authority. 

The Adjustments to Unobligated Balance Brought Forward, October 1, as of September 30, 2023, 

and 2022, consisted of the following:

2023 2022

Unobligated Balance Brought Forward From Prior Year, 

October 1 $ 6,079,564 $ 6,306,990 

Recoveries of Prior Year Obligations 892,376 

 

1,994,342 

Other Changes in Unobligated Balances (3,016,577)

 

(1,255,530)

Unobligated Balance From Prior Year Budget 

Authority, Net $ 3,955,363 $ 7,045,802 
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Note 12 Custodial Revenues and Liability 

The FEC uses the accrual basis of accounting for the collections of fines, penalties and 

miscellaneous receipts. The FEC’s ability to collect fines and penalties is based on the responsible 

parties’ willingness and ability to pay: 

Custodial Revenue 2023 2022

Fines, Penalties, and Other Miscellaneous 

Revenue $1,470,013 $ 2,670,910 

Custodial Liability

Receivable for Fines and Penalties $ 2,220,051 $ 1,820,212 

Less: Allowance for Doubtful Accounts (1,201,493) (1,101,345)

Total Custodial Liability $ 1,018,558 $ 718,867

The Custodial Liability account represents the amount of custodial revenue pending transfer to 

Treasury. Accrual adjustments reflected on the Statement of Custodial Activity represent the 

difference between the FEC's opening and closing accounts receivable balances. Accounts 

receivable are the funds owed to the FEC (as a custodian) and ultimately to Treasury. The accrual 

adjustment for civil penalties is composed of a net decrease of approximately $159,152 for FY 

2023 and a net increase of approximately $1,620,253 for FY 2022, respectively. The accrual 

adjustment for administrative fines is composed of a net increase of approximately $303,238 in 

FY 2023 and a net decrease of approximately $1,532,688 in FY 2022, respectively. 
75

Note 13 Undelivered Orders at the End of the Period

For Fiscal Year 2023, Unpaid Undelivered orders were $14,997,902.44, of which $2,112,455.38 

were Federal and $12,885,447.06 were non-Federal. As of September 30, 2023, there were no 

Fiscal Year 2023 Paid Undelivered Orders.

For Fiscal Year 2022, Unpaid Undelivered orders were $13,181,403, of which $2,436,212 were 

Federal and $10,745,191 were non-Federal. As of September 30, 2022, there were no Fiscal Year 

2022 Paid Undelivered Orders.
76

Note 14 - Reconciliation of Net Operating Cost to Net Budgetary Outlays

Budgetary and financial accounting information differ. Budgetary accounting is used for planning 

and control purposes and relates to both the receipt and use of cash, as well as reporting the federal 

deficit. Financial accounting is intended to provide a picture of the government's financial 

operations and financial position, so it presents information on an accrual basis. The accrual basis 

includes information about costs arising from the consumption of assets and the incurrence of 

liabilities. The reconciliation of net outlays, presented on a budgetary basis, and the net cost, 

presented on an accrual basis, provides an explanation of the relationship between budgetary and 

financial accounting information. The reconciliation serves not only to identify costs paid for in 

the past and those that will be paid in the future, but also to assure integrity between budgetary and 

financial accounting. The analysis below illustrates this reconciliation by listing the key 

differences between net cost and net outlays. 
77

FY 2023 Reconciliation of Net Operating Cost & Net Bugetary Outlays 

Intragovernmental

With the 

Public Total

Net Cost $ 23,803,772 $ 59,015,273 $ 82,819,045 

Components of net cost not part of the 

budgetary outlays

 

(975,165)

 

(975,165)

Increase/(Decrease) in Assets:

(Increase)/Decrease in Liabilities:

Accounts payable 627,947 (156,664) 471,283 

Federal employee and veteran 

benefits payable -

 

52,792 

 

52,792 

Other Liabilities (62,868) (146,495) (209,363)

Financing Sources:

Imputed Cost (3,769,754) (3,769,754)

Total Components of net operating cost 

not part of the budgetary outlays

 

(3,204,675)

 

(1,225,533)

 

(4,430,208)

Total Net Outlays (Calculated Total) 

 

(3,204,675)

 

(1,225,533)

 

(4,430,208)

Budgetary Agency Outlays, net (SBR 4210)

Budgetary Agency Outlays, net $ 78,388,837 
78

FY 2022 Reconciliation of Net Operating Cost & Net Budgetary Outlays 

Intragovernmental

With the 

Public Total

Net Cost $ 20,703,947 $ 55,794,612 $ 76,498,559

Components of net cost not part 

of the budgetary outlays

Property, plant, and 

equipment depreciation 

expense

 

(3,176,435)

 

(3,176,435)

20,958 20,958 

Increase/(Decrease) in Assets:

(Increase)/Decrease in Liabilities:

Accounts payable 965,070 (45,702) 919,368 

Federal employee and 

veteran benefits payable

 

246,024 

 

246,024 

Other Liabilities (16,448) (219,436) (235,884)

Financing Sources:

Imputed Cost (2,512,852) (2,512,852)

Total Components of net operating 

cost not part of the budgetary outlays (1,564,229) (3,174,591) (4,738,820)

Components of the budget outlays that 

are not part of net operating cost

Acquisition of capital assets -

 

(405,000)

 

(405,000)

Financing Sources:

(3,033) (3,033)

Total Components of the budget 

outlays that are not part of net 

operating cost $ (3,033) $ (405,000) $ (408,033)

Total Net Outlays (Calculated 

Total) $ (1,567,263) $ (3,579,591) $ (5,146,853)

Budgetary Agency Outlays, net 

(SBR 4210)

Budgetary Agency Outlays, net $71,351,706 
79

SECTION III – Other Information
80

Inspector General’s Statement on FEC Management and Performance 

Challenges
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Management’s Response to the Office of Inspector General’s Statement on the 

Federal Election Commission’s Management and Performance Challenges21

November 13, 2023 

In its Statement on the FEC’s Management and Performance Challenges (“Statement”), the Office 

of the Inspector General (“OIG”) identified five overarching management and performance 

challenges for the FEC for Fiscal Year 2024. Management’s response to the OIG’s Statement is 

below. 

Challenge 1: Strategic Human Capital Management

An audit of the FEC’s Human Capital Management Program was performed by an independent 

public accounting firm and overseen by the FEC’s Office of the Inspector General between August 

8, 2022, and March 23, 2023. The overarching recommendation of the auditors was that the FEC 

develop a strategic human capital management (HCM) plan informed by the Office of Personnel 

Management (OPM) Human Capital Operating Plan and Human Capital Framework (HCF) 

guidance. Although Management shares the auditors' commitment to ensuring the FEC's Human 

Capital Management program supports the agency's success in meeting its mission and strategic 

objectives, Management does not agree with the specific recommendations of this audit, including 

the recommendation to develop a strategic HCM plan. 

Management already has plans and programs in place and under development that address relevant 

elements of the OPM's human capital framework. For example, Management performs informal 

and formal workforce assessments, skill gap analyses, and staffing planning on an ongoing basis. 

Succession planning is conducted at the FEC in a manner designed to meet the agency's size and 

recruiting challenges. Management currently maintains effective, decentralized training programs, 

with individual offices determining the necessary trainings for their highly specialized subjectmatter experts. Management already maintains consistency within a well-documented 

performance review system. 

The recommendations included in the audit focus primarily on how activities that address elements 

of the OPM's human capital framework should be documented by the FEC. For example, the 

auditors conclude that, 

"While the FEC has several documents that enumerate some of its human capital 

challenges and how it has worked around some of them as an organization, none of 

those documents single-handedly fulfills the criteria for a HCM plan." 

Management disagrees that creating a document that, “single-handedly fulfills the criteria for a 

HCM plan,” is a requirement for the agency. The requirement to develop and maintain a Human 

Capital Operating Plan does not apply to Non-CFO Act agencies, such as the FEC. In December 

2016, OPM issued new final regulations at 5 CFR part 250, subpart B, Strategic Human Capital 

Management. These regulations require, among other things, that federal agencies as defined at 31 

21 Management consists of the agency’s senior managers, including the Staff Director, Acting General Counsel and Chief 

Financial Officer. 
96

U.S.C. § 901(6) must develop a Human Capital Operating Plan (HCOP). Notably, the Explanation 

and Justification for the final rules explains that in response to comments from small agencies 

expressing concern regarding to whom the regulation applied, "OPM revised § 250.201, Coverage 

and Purpose, to explicitly state that Subpart B applies to agencies covered by sec. 901(6) of the 

Chief Financial Officers (CFO) Act of 1990 (Pub. L. 101-576), as well as 5 U.S.C. 1401." See 81 

Fed. Reg. 89,358 (December 12, 2016). Thus, the FEC, like all other Non-CFO Act agencies, is 

excluded from the Strategic Human Capital Management regulatory requirements in part 250, 

subpart B, including the Human Capital Framework (HCF) requirements in section 250.204 and 

Human Capital Operating Plan requirements in section 250.205. As such, the FEC has not 

implemented OPM's HCF, as described in 5 CFR § 250.204, nor has it developed an HCOP, as 

described in 5 CFR § 250.205. 

OPM specifically grants small agencies, like the FEC, greater flexibility in how to utilize their 

limited staff resources in creating and maintaining such documentation. Thus, FEC Management 

will consider the human capital challenges facing the agency and the staff and budgetary resources 

available to address these challenges to determine, in consultation with the Commission, whether 

the FEC's limited resources are best directed toward creating a Human Capital Operating Plan, 

strategic human capital plan or another similar document.

Declining Staffing Levels 

In recent years, the FEC has been challenged to recruit and retain talent necessary to meet the 

agency’s workload and hiring goals, in part as a result of the FEC’s relatively flat funding levels 

over this period. Indeed, between FY 2012 and FY 2022, the FEC’s overall staffing levels were 

reduced by over 17 percent. 

With nearly 70 percent of the agency’s annual obligations composed of expenses related to 

personnel, the agency’s ability to increase or even maintain FTE levels in a given year is 

disproportionately affected by increases in personnel costs, most notably required employee salary 

and benefits increases. The FEC’s appropriation increased by a total of only 4.8 percent between 

FY 2016 and FY 2022. Increases in overall personnel costs and unexpected expenses related to the 

COVID-19 pandemic placed further pressure on the FEC’s budget during FYs 2020 and 2021, and 

into FY 2022. These constraints only served to magnify longer-term staffing challenges for the 

agency. During this period the FEC has been able to meet its statutory mission primarily due to 

efficiencies gained by reassigning staff using details, maximizing operational efficiencies through 

reorganizations, and improving technology and processes, among other efficiencies. However, in 

recent years the FEC has begun to exhaust the benefits that can be gained through such efficiencies 

and has, in some situations, reduced performance targets in response to these reductions in staffing 

amid increasing campaign finance activity. 

The FEC’s ability to complete hiring plans and implement long-term human capital management 

strategies is also impeded by year-over-year funding uncertainty that results from lengthy periods 

under continuing resolutions and appropriation levels that have not kept up with inflation. For 

example, the agency’s current budget does not allow for backfilling all vacated positions, and as a 

result, vacancies are prioritized by leadership and approved for filling by the Personnel Committee 

on an ongoing basis. Hiring managers are advised to keep hiring documents as up-to-date as 

possible, evaluate what their office/division needs regarding staffing, establish relationships with 
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recruitment outlets, and move quickly if and when approval is received and it is determined that 

the agency has the funds to fill the position. However, without the ability to hire throughout the 

fiscal year as needed, managers can lose valuable time filling vacancies with interim internal 

appointments and other staffing remedies and may lose opportunities to hire permanently when 

staff is most needed. Moreover, long-term strategic staffing plans cannot easily be developed or 

implemented in an environment that does not allow for predictable hiring projections or for the 

achievement of targets identified in staffing plans. 

While the Commission considers many factors when weighing agency staffing decisions, funding 

constraints represent the most immediate cause of the FEC’s reduced staffing levels. Funding 

constraints affect the agency’s ability to hire in multiple ways. At the most basic level, with higher 

funding levels the FEC is able to bring on additional staff, and with consistently higher funding 

levels the FEC would be able to meet and maintain its staffing goal for FY 2024, which is 340 

FTE. However, with no funding increase in FY 2024 the agency would only strive to maintain 

staffing levels during the fiscal year or temporarily decrease staffing levels through attrition, and 

at continued flat funding through FY 2025 the agency could need to again plan for reduced staffing 

levels. 

General Staffing Issues

The OIG identified the intersection of telework policies and morale as a particular staffing concern. 

In February 2023, following a one-year pilot, the Commission established and approved a new 

Workplace Flexibilities Program for non-bargaining (NBU) employees. This program calls for 

NBU employees to be regularly scheduled to work at the official duty station three to six days per 

pay period, depending upon employees’ positions. Additionally, as the OIG notes, in October 2023 

the Federal Service Impasses Panel imposed a requirement that bargaining unit employees 

participating in regularly scheduled telework must work at the official duty station no less than 

three days per pay period under the permanent Workplace Flexibilities Program for bargaining 

unit (BU) employees, on par with the requirements under the pilot program. The new Workplace 

Flexibilities Programs for both NBU and BU employees provide expanded telework options for 

employees as compared to the agency’s pre-pandemic policies. 

One tool Management uses to understand how workplace changes impact employees is the Office 

of Personnel Management’s (OPM) Federal Employee Viewpoint Survey (FEVS). Management 

recently received preliminary data from the 2023 FEVS and is in the process of analyzing the data 

and preparing it for publication. Upon preliminary review, the FEC’s score on OPM’s Employee 

Engagement Index, which measures employees’ perceptions of senior leaders, supervisors, and the 

intrinsic work experience, held steady from 2022 to 2023 (74%). While the agency has yet to 

receive full data comparison reports for the 2022 FEVS, Management notes that it will continue 

to process the 2023 FEVS data and make information from the survey accessible for review by 

employees at all levels of the organization.

The agency has undertaken significant efforts to increase morale and employee satisfaction across 

the agency, including instituting an Employee Engagement Steering Committee, and supporting 

the implementation of the Diversity, Equity and Inclusion Council. The Engagement Steering 

Committee was established to help foster improved employee engagement across the agency. The 

Steering Committee, through the FEVS results and internal surveys, identifies key areas for 
98

improvement. Some of the areas that have been identified have been better and more frequent 

communication from Management to staff, more transparency in the hiring and budget processes, 

and suggested improvements with work/life balance issues. The Steering Committee also works 

with offices across the Agency to promote training and development opportunities to the FEC 

workforce and co-sponsors Public Service Recognition Week. The Diversity, Equity and Inclusion 

Council was established to promote diversity, equity and inclusion efforts across the agency. 

Through its efforts, the Council has put on numerous programs and trainings, organized the first 

ever Diversity, Equity and Inclusion Week, and have made several recommendations to help 

improve hiring, promotion, and retention throughout the agency. 

Commissioner Pay

As identified by the OIG, the FEC Commissioners are currently compensated at level IV of the 

Executive Schedule (EX) as specified in FECA. The full compensation for this level in 2023 is 

$183,500. However, the compensation for certain political appointees, including Members of the 

FEC, has been frozen. A pay freeze has been in effect since 2014, which set commissioner pay at 

2013 levels. A small adjustment was made in 2019, which set the frozen pay level at $158,500, 

or 1.9% more than the 2013 amount. EX salaries are uniform nationwide, while the General 

Schedule (GS) salaries include locality adjustments. The relatively high cost of living in the 

Washington, D.C. region means that salaries at the top of the GS scale applicable to FEC 

employees have outpaced frozen salaries on the EX scale. Thus, the pay freeze exacerbates a salary 

discrepancy where commissioners receive less compensation than FEC employees in Senior Level 

(SL) positions, and less compensation than some agency employees in the GS-14 and GS-15 

positions, including many of their direct reports. Under these circumstances, it may be difficult to 

find individuals willing to serve as FEC commissioners in the future, and recruitment will be 

limited to a smaller pool of potential commissioners due to this salary constraint. While FEC 

Management is not responsible for recruiting potential commissioners, the lack of quorum that 

could result from vacant commissioner seats would be a management challenge for the FEC. 

Salary Structure (Staff Director and General Counsel) 

Section 306 of FECA links salaries to Level IV and Level V of the Executive Schedule for the 

Staff Director and General Counsel. Both positions supervise personnel at the GS-15 and Senior 

Level pay scales, which often provide higher salaries than Levels IV and V of the Executive 

Schedule. The Commission has approved a Legislative Recommendation that proposes to remove 

the statutory references to the Executive Schedule and amend FECA to specify that the Staff 

Director and General Counsel would be compensated under the same schedule as the 

Commission’s other senior managers. This revision would remedy the current situation where the 

Commission’s top managers are compensated at a lower rate than many of their direct reports and 

will ensure that the Commission can retain highly qualified individuals to serve in those positions 

as well as enable it to remain competitive in the marketplace for Federal executives when vacancies 

arise.

Management continues to fully support the Commission’s ongoing efforts to change the salary 

structure for key leadership positions of Staff Director and General Counsel. Meanwhile, the 

Commission has implemented interim solutions for these positions that, very importantly, have 

allowed the Commission to maintain consistency and needed stability in its two most senior staff 

leadership positions. Moreover, the Commission has been able to continue to receive the services 
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of agency leaders who were selected for these positions after substantial experience working in 

positions of significant responsibility for the FEC. Instability in these positions has been the subject 

of prior management challenges identified by the OIG, and the Commission attributes the stability 

in these positions that has been achieved to the use of the interim solutions. 

Challenge 2: Growth of Election Contributions 

As illustrated in the OIG’s description of this management challenge, increases in the amount of 

money raised and spent in federal elections, and changes in the way political committees raise and 

report contributions, have resulted in a steep growth in the number of campaign finance 

transactions reported to the FEC each election cycle. Campaign finance disclosure data must be 

received, processed and made available to the public within tight deadlines for public disclosure, 

and it must be safeguarded to ensure the integrity and accessibility of the information. Each of 

these transactions represents a data element that must be received by the FEC, added to our 

database and disclosed and made searchable on the FEC website and via the FEC campaign finance 

Application Programming Interface (API). 

The FEC receives campaign finance reports, statements and other disclosure documents from more 

than 16,000 political committees and other filers. During the 2020 election cycle, these filers 

reported more than 600 million financial transactions, which were reviewed by FEC staff and 

disclosed to the public on the FEC’s website and through the agency’s API. This is more than 

double the number of transactions reported in the previous election cycle, and a nearly 400% 

increase compared to 2016, the last presidential election cycle. During the 2022 election cycle, 

these filers reported more than 590 million financial transactions, also which were reviewed by 

FEC staff and disclosed to the public on the FEC's website. This is a nearly 120 percent increase 

compared to 2018, the last nonpresidential election cycle. 

With the steep rise in transactions reported every election cycle comes a heavier burden on the 

FEC’s API to quickly search across the FEC’s campaign finance database and display the data 

requested by the public. The FEC’s API received over 407 million hits during 2020, the last 

presidential election cycle. During 2022, the last nonpresidential election cycle, the API received 

480 million hits. With the steep rise in transactions reported every election cycle comes a heavier 

burden on the FEC’s API to quickly search across the FEC’s campaign finance database and 

display the data requested by the public. Thus, the FEC is facing challenges in processing and 

reviewing historically high levels of campaign finance disclosure information, while satisfying an 

increased demand for customer service and data information requests from the public. 

In FY 2015 the FEC proactively launched a comprehensive, multi-year IT Modernization project 

in part in response to projected increases in campaign finance activity. The IT Modernization plan 

outlines reducing the agency’s physical data center footprint by migrating applications to a cloud 

environment, modernizing internal applications, modernizing the electronic filing platform, 

adopting open-source software solutions, and increasing the use of shared services. 

Budget and staffing constraints have limited the FEC’s progress, but the agency has accomplished 

several of the plan’s goals. As part of the FEC’s website redesign, the FEC redesigned its website 

and migrated both the website and the campaign finance database that supports it to a cloud 

environment. In addition to providing faster and easier access to campaign finance data hosted in 
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the cloud, this migration allowed the agency to shut down one of its physical data centers during 

FY 2018, realizing attendant costs associated with maintaining that data center. During FY 2020, 

the FEC made additional database enhancements to improve database performance and control 

costs of hosting and maintaining the database. 

During FY 2022, the FEC completed the initial migration of legacy applications to a cloud 

environment. As a result, the agency was able to further reduce its physical data center footprint 

during FY 2023. Planning is underway to modernize mission-critical internal applications to 

ensure they take advantage of all the cost-saving benefits of cloud-native technologies. The trends 

in campaign finance activity of increasing spending, increasing transactions and increasing API 

hits illustrate how crucial it is for the agency to continue to implement new programs and systems 

to ensure the timely disclosure of campaign finance data. The migration of campaign finance data 

to a cloud environment and modernization of applications migrated to the cloud during previous 

fiscal years are essential components of these efforts. Modernizing the applications and data 

pipelines will permit users to utilize all the advantages of the cloud, which will help the agency to 

efficiently, fairly and effectively achieve its mission objectives. Data pipelines are a set of 

automated methods and procedures that process raw data files received from filers into the primary 

campaign database for internal agency use and for public consumption on FEC.gov. They are 

essential to processing and reviewing campaign finance disclosure information in compliance with 

the statutory mandates as well as government-wide customer service initiatives. The data pipeline 

modernization initiative will enhance and streamline the infrastructure and processes that facilitate 

the flow of information received through the eFiling system to internal review applications, like 

RAD Modules, and other systems, then to agency’s public website. By modernizing the data 

pipeline, the FEC can avoid purchasing additional database licenses under the legacy database 

architecture and ensure that it can continue to effectively fulfill its disclosure mission. 

To continue to mitigate an anticipated steep rise in future costs from maintaining physical 

datacenters, the FEC will continue to pursue its IT modernization plan which requires investment 

now and over the next several years to continue cloud migration and realize improvements in its 

IT processes. The FEC will continue to strive to implement the recommendations of this study 

during FY 2024 by modernizing migrated legacy applications to ensure they take full advantage 

of cloud-native technology, with the goal of generating efficiencies in future years while 

maintaining high levels of service to the public. The FEC’s IT Modernization projects comprise 

a multi-year plan to migrate and modernize applications and data assets to a cloud environment in 

order to more effectively process transaction-level data, improve application performance and 

enhance security. The FEC is undertaking these projects primarily to ensure the agency can 

continue to receive, review and publicly disclose the increasing volume of campaign finance 

transactions that are reported.

Efforts to modernize the FEC’s eFiling system are also essential components of the agency’s 

efforts to ensure the timely disclosure of this increasing volume of campaign finance data. The 

FEC is currently working to upgrade its eFiling platform. In FY 2017, the Commission published 

a study of its current eFiling platform, including a survey of the existing functionality of the FEC’s 

free filing software and an in-depth investigation of needs expressed by filers. The FEC is relying 

on the recommendations of this study to improve its eFiling platform to support efforts to improve 
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ease of use for this software, make the software platform independent, and increase the 

consistency and accuracy of reporting. 

Once completed, the new eFiling software will be cloud hosted. The new eFiling platform is 

expected to improve data quality and data validation and provide users with inline feedback. The 

redesigned eFiling platform will improve ease of filing for users by allowing greater operating 

system flexibility when generating filings for submission to the Commission. In addition, the 

modernization efforts will provide for seamless integration with the data portion of the website 

and, therefore, more efficient use of the agency’s resources. The FEC will continue development 

work toward a phased public release of the new eFiling platform beginning in FY 2025. 

Challenge 3: Budget 

In its Statement, OIG describes how the FEC’s budget has not kept pace with inflation. Without 

an appropriate level of funding, the agency will be unable to fund several modernization projects 

and hire and retain staff needed to address the increased volume of campaign finance data, 

specifically, and increased FECA related activity, generally. Over the past several years, the FEC 

has advocated for increases to its budget in its annual submissions to Congress. For example, for 

FY 2024 the FEC requested a 4.46 percent increase in its appropriation. 

As the OIG recognizes, the FEC continues to confront a heavy workload alongside relatively flat 

funding levels that have contributed to the reduced staffing levels the FEC has seen over the past 

several years. Over the past decade, the FEC has been able to meet its statutory mission primarily 

due to efficiencies gained by reassigning staff using details, maximizing operational efficiencies 

through reorganizations, and improving technology and processes, among other 

efficiencies. However, in recent years the FEC has begun to exhaust the benefits that can be gained 

through such efficiencies and has, in some situations, reduced performance targets in response to 

these reductions in staffing amid increasing campaign finance activity. The FEC intends to 

continue its current efforts to maintain the current high performance of staff and the excellent 

service that they provide to the public. A critical part of this effort is obtaining adequate funding, 

promoting adequate staffing levels across the agency, and ensuring improvements in the agency’s 

salary structure to be able to compete and retain top talent in leadership positions. 

Challenge 4: Identifying and regulating unlawful foreign contributions 

Management has undertaken a number of actions over the last several years to prioritize 

enforcement of the foreign national prohibition. Along with cases that are statute-of-limitations 

imperiled when OGC receives them, foreign national prohibition cases are assigned to OGC staff 

attorneys before any other class of cases. OGC has also modified its Status of Enforcement reports 

to the Commission so that the Commission is provided with complete data on every foreign 

national prohibition case on a quarterly basis. Further, OGC has revised its procedures so that it 

may more efficiently track the progress of all foreign national prohibition matters through the 

enforcement process. OGC has also modified its case management software to make it easier to 

run reports for the Commission concerning all foreign national prohibition matters. 

Moreover, requirements for committee actions to prevent the receipt of foreign national, or other 

illegal, contributions are extensive. All committee treasurers are required by regulation to examine 

all contributions received for evidence of illegality. 11 C.F.R. 103.3(b). Contributions that present 
102

genuine questions as to whether they were made by foreign nationals, such as by coming from a 

foreign address or being drawn on a non-U.S. bank, may be, within ten days of receipt, either 

deposited in the campaign depository or returned to the contributor. If deposited, the treasurer 

shall make his or her best efforts to determine the legality of the contribution, including at least 

one written or oral request for evidence of legality. If the contribution cannot be determined to be 

legal, the treasurer shall refund the contribution within 30 days of receipt. 11 C.F.R. 103.3(b)(1). If 

the treasurer determines that the contribution did not appear to be made by a foreign national, but 

later discovers that it is illegal based on new evidence not available at the time of deposit, the 

treasurer shall refund the contribution within 30 days of discovering the illegality. 11 C.F.R. 

103.3(b)(2). Any contribution which appears to be illegal but is deposited in a campaign 

depository may not be used for any disbursements until the contribution has been determined to 

be legal, and the receiving committee must either establish a separate account for such 

contributions or maintain sufficient funds to make any required refunds. 11 C.F.R. 

103.3(b)(4). The treasurer must keep a written record noting the basis for the appearance of 

illegality of any such contribution, and if a committee’s disclosure report is due while resolution 

of a contribution’s legality is still pending, a statement to that effect must be included in the 

disclosure report. 11 C.F.R. 103.3(b)(5).

In another document, OIG has suggested additional requirements for disclosure to the Commission 

about suspected foreign national contributions. However, legal and practical concerns block 

immediate implementation of additional requirements for disclosure. Disclosure of additional 

information would require a legislative change, which of course is solely the purview of 

Congress. Specifics as to what must be reported to the Commission as part of disclosure reports 

are exhaustively described in 52 U.S.C. 30104. Moreover, given that all disclosure reports must 

be made available to the public, 52 U.S.C. 30111(a)(4), reporting of information such as 

contributors’ U.S. passport numbers, as suggested elsewhere by OIG, would potentially raise 

serious privacy concerns.

The Commission has approved two legislative recommendations to expand the foreign national 

prohibition to encompass a broader scope of activity. The first recommendation is that “Congress 

should revise FECA’s foreign national prohibition to prohibit knowingly helping or assisting a 

foreign national in violating the prohibition.” The second is that “Congress should revise FECA’s 

foreign national prohibition to include state and local ballot initiatives, referenda and any recall 

elections that are not already included in the prohibition.” These recommendations were part of 

the Legislative Recommendations approved by the Commission in December 2022. 

In its Statement, OIG recounts its recommendation that the FEC update and memorialize its 

practice concerning donors with foreign addresses to identify unlawful foreign contributions more 

effectively. That practice is already memorialized and regularly updated. The practice is based 

on a regulation, duly promulgated by the Commission, 11 C.F.R. § 110.20(a)(7), which provides 

a regulatory safe harbor for these situations. The practice is memorialized in the Reports Analysis 

Division’s Policies and Procedures, which are updated for every election cycle and approved by 

the Commission, and which are publicly available on FEC.gov, with certain redactions unrelated 

to this practice. 
103

Finally, Management notes that as of September 30, 2023, only four cases on OGC-Enforcement 

Division’s docket pertain to FECA’s foreign national prohibition, which is a marked reduction 

over recent years. 

Challenge 5: Cybersecurity

The federal government continues to issue numerous cybersecurity-related initiatives to defend 

against the escalation of cyber-attacks, the increased activity of ransomware compromises and the 

attacks to widespread use of software systems. In response to these ever-growing cybersecurity 

threats, the FEC continually works to improve its security posture to protect its information 

systems.

The Office of the Chief Information Officer secures the Commission’s IT infrastructure against 

the threats of data misuse, destruction and inappropriate disclosures, while ensuring continuity of 

operations in the event of a disaster. The Commission actively secures its IT infrastructure, 

including implementing cybersecurity directives from the Cybersecurity and Infrastructure 

Security Agency (CISA) of the Department of Homeland Security (DHS) as well as implementing 

mandatory security awareness training programs for its employees and contractors. In addition, 

the FEC continues to develop strategies and initiatives relating to risk assessments of operations, 

disaster recovery and continuity of operations in the event of a disaster. In 2021, the Commission 

completed work on the update of its Continuity of Operations Plan (COOP) as well as its Disaster 

Recovery Plan and held tabletop exercises in 2022 and 2023 to ensure that staff involved in the 

COOP are adequately trained. Currently, the staff is modifying the agency’s Disaster Recovery 

Plan to incorporate our cloud-based IT assets. 

As noted in the previous paragraph, DHS’s CISA regularly issues numerous cybersecurity 

directives with which federal agencies must comply by the stated deadlines. With only a small 

number of employees who are able to work on information security mandates and remediation 

measures, the Commission must rely on outside vendors to help meet these requirements. 

In 2018, the FEC—and all federal agencies—were directed to fund and implement a government-wide 

program to better safeguard information technology assets. (See DHS Binding Operational Directive 

18-02 (May 7, 2018); available at: https://www.cisa.gov/binding-operational-directive-18-02.) 

This direction was further made mandatory by OMB M-19-03, Strengthening the Cybersecurity of 

Federal Agencies by enhancing the High Value Asset Program, issued on December 10, 2018. That 

directive expanded the High Value Asset Program (HVA) to non-CFO agencies and therefore, applies 

to the FEC. DHS’s HVA program requires federal agencies to identify and submit lists of their high 

value assets to DHS, participate in DHS-led assessments, ensure timely remediation of identified 

vulnerabilities and report mitigation plans and progress. Within the agency’s austere budget climate, 

the FEC had made the difficult decision to defer funding for some high-priority security projects in 

favor of yet more pressing agency requirements. As a result, the agency was not in a position to execute 

some cybersecurity initiatives, such as HVA, on the timeline initially proposed. In FY2022, however, 

the agency contracted with a HVA vendor to help the agency comply with this mandate and has begun 

working on this program. 

The Commission continuously improves its security architecture. The Commission’s security 

operation, along with continuous diagnostics and mitigation, allows the agency to identify and 

remediate vulnerabilities. In partnership with DHS and other strategic partners, the FEC identifies, 
104

protects, detects, responds to and recovers from the impact of known and potential security threats. In 

recent years, the FEC has worked with DHS to complete a security architecture review, a risk 

vulnerability assessment, two threat hunts, and a remote penetration test. Of note, the penetration test 

performed on FEC.gov found no major vulnerabilities. Through the engagement with the DHS, the 

FEC has recently implemented various cybersecurity tools, including vulnerability scanning tools and 

mobile threat defense. These engagements with DHS enable the FEC to identify and address 

cybersecurity gaps and thus improve its overall security posture. The FEC also works with vendors to 

ensure security and performance in its internal network. For example, in 2022, it completed an Office 

365 Network Performance Assessment and plans to conduct an Office 365 Security Assessment later 

this year. 

The Commission also responds as quickly as possible to executive orders and DHS mandates. For 

example, OMB Memorandum M-23-13, “No TikTok on Government Devices” Implementation 

Guidance, was recently issued to prohibit the use of TikTok on government-owned devices due to 

potential security concerns. In response to this directive, the FEC has implemented various technical 

and administrative controls to ensure compliance, including updating the agency's Rules of Behavior 

and Acceptable Use Standards to explicitly prohibit the use of TikTok on any FEC computing 

resources. 

In 2022, the Commission renewed its general systems Authority to Operate (ATO) after a thorough 

review and audit conducted by the Department of the Interior. It also recently renewed the ATO for its 

legacy eFiling system. As of this writing, the FEC is in the process of renewing the ATO for FEC.gov 

and plans to seek an ATO for its cloud environment. 

The FEC recognizes that perfect security is not feasible; rather, it is a continuing process of detecting 

risks, making process improvements and hardening defenses. For that reason, the benchmark of the 

FEC’s approach to cybersecurity has always been practicability and continuous improvement. The 

FEC’s cybersecurity strategy, noted in the FEC IT Strategic Plan, outlines an approach of securing its 

infrastructure and preventing intrusions through a holistic cybersecurity program led by the Chief 

Information Security Officer (CISO). The strategy implements leading practices for a comprehensive 

cybersecurity from the National Institute for Standards and Technology’s (NIST) Cyber Security 

Framework (CSF) and industry best practices.

NIST Cyber Security Framework: The CSF functions provide a common language regarding 

cybersecurity issues that can help facilitate important discussions between different organizations and 

encourages effective collaboration and communication with FEC leadership and partner agencies and 

industries. The FEC’s cybersecurity strategy strives to mature the five functions of the NIST CSF: 

Identify: This function seeks to develop a deep understanding to manage cybersecurity risks to 

systems, assets, data and capabilities. The projects in this function are foundational for effective 

use of the framework. Understanding the business context, the resources that support critical 

functions and the related cybersecurity risks will enable the OCIO to focus and prioritize efforts. 

This action will be consistent with the organization’s risk management action plans and business 

objectives.

Protect: This function seeks to help the team develop and implement the appropriate safeguards to 

ensure delivery of critical infrastructure services. This function supports the ability to limit or 

contain the impact of a potential cybersecurity event.
105

Detect: This function seeks to develop and implement the appropriate activities to identify the 

occurrence of a cybersecurity event. This will enable the OCIO to timely discover a cybersecurity 

event.

Respond: This function seeks to develop and implement the appropriate activities to take action 

regarding a detected cybersecurity event. The respond function supports the ability to contain the 

impact of a potential cybersecurity event.

Recover: This function seeks to develop and implement the appropriate activities to maintain plans 

for resilience and to restore any capabilities or services that were impaired due to a cybersecurity 

event. The recover function supports timely recovery to normal operations to reduce the impact 

from a cybersecurity event.

Moreover, the goal of the Commission’s IT Strategic Plan is to define a robust, innovative and 

holistic security architecture that mitigates modern threats.

Through rigorous assessment and authorization methods, such as ATOs, and active participation 

in programs such as the DHS Continuous Diagnostics and Mitigation program, the OCIO will 

continue to improve its cybersecurity program and security architecture to safeguard FEC’s 

infrastructure, networks and applications against cyber threats and malicious activities.

Following NIST guidelines and considering the Commission’s own prioritization and resources, 

the first wave of projects primarily focuses on the “Protect” function to hinder threat actors from 

gaining access to the FEC’s IT assets and data. For example, one project includes strengthening 

perimeter defenses using software-defined perimeter (SDP) and protecting FEC users from 

inadvertently infecting their systems by using a robust end-point security solution. SDP will ensure 

that anyone attempting to access the FEC infrastructure is authenticated and authorized at the 

perimeter prior to being able to access any resources on the network. The FEC will continue to 

implement the most advanced endpoint security solution to combat security threats.

Robust Security Architecture

As a result of, and in support of, the RMF, the FEC’s Office of the Chief Information Officer 

(OCIO) continues to take steps to implement a robust security architecture. For example, in 

partnership with the Department of Homeland Security (DHS), the OCIO has collaborated with 

FEC stakeholders and technical experts to identify, protect, detect and respond to the impact of 

known and unknown threats, continuously assessing security controls and addressing residual and 

new risks. The FEC has also entered into an inter-agency agreement with DHS to participate in 

the Federal Continuous Diagnostics and Mitigation program. By partnering with DHS, the FEC 

is able to leverage that agency’s cybersecurity resources, which would be cost prohibitive for an 

agency of the FEC’s size to procure independently.

As identified in OIG’s description of this management challenge, the FEC has proactively pursued 

significant joint efforts with DHS over the past two years to better identify and remediate emerging 

threats to the FEC’s systems and networks. In addition, the FEC maintains ongoing information 

security efforts, including our security operation center participation in CISA’s Continuous 
106

Diagnostics and Mitigation (CDM) program, c and security controls to address identified 

cybersecurity gaps. These efforts help to ensure that identified risks are appropriately addressed 

and that its cybersecurity program and security architecture will continue to safeguard the agency’s 

infrastructure, networks, and applications against cyber threats and malicious activities. 

Continuous Monitoring and Mitigation

OCIO Security has worked with DHS to improve security capability by integrating with the 

Continuous Diagnostics and Mitigation (CDM) program. OCIO Security has also introduced the 

use of secure baselining standards, such as the use of Defense Information Systems Agency 

(DISA) Security Technical Implementation Guides (STIGs) and Benchmarks. System hardening 

and secure baselining practices are being expanded in OCIO teams. The OCIO security team has 

developed a privileged user account agreement and recently updated the password policy to add 

administrative controls to supplement the technical access controls. The addition of the new 

password policy and multi-factor authentication (MFA) has improved the security posture of 

authentication types within the FEC’s information systems. 

Cloud-First Initiative

The FEC has also adopted a cloud first initiative for security, accessibility and recoverability. The 

FEC has migrated targeted legacy applications and systems to the cloud. Leveraging cloud 

computing allows the Commission to take advantage of cloud service providers’ significant 

resources and expertise dedicated to maintaining the highest level of security. Hosting 

information, data and systems in the cloud will allow the FEC to better leverage government and 

industry best practices, such as DevSecOps, which improves our security posture by adding 

security mechanisms into the development and operation processes. Adopting a cloud first 

initiative will ultimately result in the consolidation and the modernization of all FEC’s application 

and systems. Moreover, in cloud architecture, the security controls are built into the native 

configuration. 

Operating applications in a cloud environment, however, requires specialized design, 

development, and security considerations to ensure both the security of the FEC’s systems and the 

integrity and accessibility of its data. In implementing cloud architecture, it is essential that the 

FEC takes a more comprehensive view of the risk to information systems, establishes a governance 

framework and remediates the vulnerabilities of critical infrastructure. OCIO anticipates that it 

will begin the process of seeking a third-party assessment of its cloud environment in order to seek 

an ATO in 2023, pending funding approval by the Commission. It is also necessary that staff 

possess the necessary skillset to administer the Commission’s cloud resources. Seeking the 

expertise to manage the FEC’s cybersecurity requirements in a cloud environment and the growing 

federal mandates is necessary.

Building a Cybersecurity Culture

At the same time, the FEC is working to build a cybersecurity culture among its employees. For 

this comprehensive cybersecurity strategy to be successful, the OCIO will partner with federal 

agencies and industry leaders to leverage best practices for our IT workforce. The first line of 

defense in maintaining the protection and integrity of the agency’s network is the ongoing 

education of employees about their role in identifying and preventing malicious activities. Efforts 

to build a cybersecurity culture include steps to educate staff about FEC IT security policies and 
107

to ensure staff awareness of potential cybersecurity threats, such as phishing scams. The FEC 

promotes this cybersecurity culture in part through annual, mandatory IT security trainings and 

through year-round communication and notices to staff from the CISO. This year, the FEC 

continued additional training for all staff to help staff recognize and avoid social engineering 

attempts.

Building Capacity in the Information Security Office

Beyond training its staff, the Commission also seeks to recruit and train talent with cybersecurity 

expertise. In April 2019, the FEC entered into a partnership with the Partnership for Public Service 

to participate in the Cybersecurity Talent Initiative. This selective, cross-sector program, which 

provides loan forgiveness to top bachelors and masters graduates around the United States in 

exchange for two-years’ service at a federal agency, addressed the immediate cybersecurity talent 

deficiency faced by the Commission. With a two-year limit on the fellowship expiring, and in the 

hopes of retaining employees with cybersecurity expertise, the Commission has recently created a 

permanent position to replace this fellowship position and hired a permanent cybersecurity 

specialist. This brought the total staffing level of the Security team up to three employees. The 

Commission’s CISO has recommended that the agency expand its cybersecurity staff further and 

create additional positions in order to address the heightened security risks. 
108

Payment Integrity

The Improper Payments Information Act (IPIA) of 2002, as amended by the Improper Payments 

Elimination and Recovery Act (IPERA) of 2010, Improper Payments Elimination and Recovery 

Improvement Act (IPERIA) of 2012, and the Payment Integrity Information Act (PIIA) of 2019 

requires agencies to review all programs and activities they administer and identify those which 

may be susceptible to significant improper payments. The FEC preforms risk assessments at least 

once every three years. The FEC does not have any programs or activities that are susceptible to 

significant improper payments and is only required to perform an improper payment risk

assessment. 

Risk Assessment

In FY 2021, the FEC performed a systematic review of its program and related activities to identify 

processes which may be susceptible to “significant improper payments.” “Significant improper 

payments” are defined as gross annual improper payments (i.e., the total amount of overpayments 

and underpayments) in the program exceeding (1) both 1.5 percent of program outlays and $10 

million or (2) $100 million. The review was performed for the FEC’s only program area which is 

to administer and enforce the Federal Election Campaign Act (FECA). For FY 2021, the FEC 

considered risk factors that may significantly increase the risk of improper payments as outlined 

in OMB Circular A-123, Appendix C, Transmittal of Appendix C to OMB Circular No. A-123,

Requirements for Payment Integrity Improvement. Based on the systematic review performed, the 

FEC concluded that it is not susceptible to these risk factors and none of its program activities are 

susceptible to significant improper payments at or above the threshold level set by OMB. Thus, 

the agency’s only program (FECA) is considered to be in Phase 1 and the program is not likely to 

make improper payment (IP) and unknown payments (UP) above or below the statutory threshold. 

Information about agency improper payment risk assessments, recoveries, and other agency-wide 

reporting requirements can be found at https://paymentaccuracy.gov.

Recapture of Improper Payments Reporting

The FEC has determined that the risk of improper payments is low; therefore, implementing a 

payment recovery audit program is not applicable to the agency. 

PIIA Requirements Agency Response

Improper Payment Risk Assessment

Reviewed as noted above. See also 

Section I.D.ii, Improper Payments

Statistical Sampling Not Applicable. *

Corrective Action Plan Not Applicable. *

Improper Payment and Unknown Payment Estimate Not Applicable. *

Recovery of Improper Payments Reporting Not Applicable. *

High Dollar Overpayment and High-Priority 

Program Report Not Applicable. *

*The FEC does not have programs or activities that are susceptible to significant improper 

payments.
109

Reporting on Internal Control Assurances

The FEC is responsible for establishing and maintaining effective internal control and financial 

management systems that meet the objectives of the Federal Managers’ Financial Integrity Act of 

1982 (FMFIA), as implemented by OMB Circular A-123, revised, Management’s Responsibility 

for Enterprise Risk Management and Internal Control. Internal control is an integral component 

of management to provide reasonable assurance that (1) programs operate effectively and 

efficiently, (2) financial reports are reliable, and (3) programs comply with applicable laws and 

regulations. The FEC conducted its evaluation of internal control in accordance with OMB 

Circular A-123. Based on the results of the Fiscal Year 2023 internal control review, the FEC 

reported no material weaknesses under the FMFIA and is able to provide an unqualified statement 

of assurance that the internal controls and financial management systems meet the objectives of 

the FMFIA.

The Annual Assurance Statement on Internal Control which was signed by the FEC Chair in 

accordance with OMB Circular A-123 and provided in “Section I.D: Analysis of FEC’s Systems, 

Controls and Legal Compliance” is supported by detailed assurances from each of the FEC’s 

assessable units.

The assessable units that participated in the internal control review process and provided 

assurances were as follows:

• Office of Communications

• Office of Compliance

• Office of Equal Employment Opportunity

• Office of Management and Administration

• Office of the Chief Financial Officer

• Office of the Chief Information Officer

• Office of the General Counsel

Detailed assurances from each of these assessable units were provided to support the single 

assurance statement signed by the FEC Chair.
110

Civil Monetary Penalties Adjustment for Inflation

The following is the FEC’s table of Civil Monetary Penalties Adjustment for Inflation for FY 2023. 

US Code

Statutory 

Authority; 

Public Law

Year of 

Enactment/

Adjustment 

Other Than 

Pursuant to 

IAA

Name/Descript

ion of Penalty

Latest Annual Inflation of 

Adjustment

Section in 

Title 11 of 

CFR for 

Penalty 

Update Detail

Current Penalty or 

Penalty Formula

52 U.S.C. 

30109(a)(5)

(A), (6)

Federal Election 

Campaign Act 

Amendments of 

1976, PL 94-

283 sec. 109 1976

Violations of 

FECA or 

chapters 95 or 

96 of title 26 of 

U S Code 

Civil Monetary Penalties Inflation 

Adjustments, 87 Fed. Reg. 80020 

(Dec. 29, 2022), 

https://sers.fec.gov/fosers/showpd

f.htm?docid=421178 111.24(a)(1) 23,494

52 U.S.C. 

30109(a)(5)

(B)

Federal Election 

Campaign Act 

Amendments of 

1976, PL 94-

283 sec. 109 1976

Knowing and 

willful 

violations of 

FECA or 

chapters 95 or 

96 of title 26 of 

U S Code

Civil Monetary Penalties Inflation 

Adjustments, 87 Fed. Reg. 80020 

(Dec. 29, 2022), 

https://sers.fec.gov/fosers/showpd

f.htm?docid=421179

111.24(a)(2)(i

) 50,120

52 U.S.C. 

30109(a)(5)

(B)

Bipartisan 

Campaign 

Reform Act of 

2002, PL 107-

155 sec. 312(a) 2002

Knowing and 

willful 

contributions 

in the name of 

another 

Civil Monetary Penalties Inflation 

Adjustments, 87 Fed. Reg. 80020 

(Dec. 29, 2022), 

https://sers.fec.gov/fosers/showpd

f.htm?docid=421180 

111.24(a)(2)(i

i) 82,188
111

52 U.S.C. 

30109(a)(12

)

Federal Election 

Campaign Act 

Amendments of 

1976, PL 94-

283 sec. 109 1980

Making public 

an 

investigation 

without 

consent

Civil Monetary Penalties Inflation 

Adjustments, 87 Fed. Reg. 80020 

(Dec. 29, 2022), 

https://sers.fec.gov/fosers/showpd

f.htm?docid=421181 111.24(b) 7,028

52 U.S.C. 

30109(a)(12

) 94-283 sec. 109 1980

Knowingly and 

willfully 

making public 

an 

investigation 

without 

consent

Civil Monetary Penalties Inflation 

Adjustments, 87 Fed. Reg. 80020 

(Dec. 29, 2022), 

https://sers.fec.gov/fosers/showpd

f.htm?docid=421182 111.24(b) 17,570

52 U.S.C. 

30109(a)(4)

(C)

Treasury and 

General 

Government 

Appropriations 

Act, 2000, PL 

106-58 sec. 640 2003

Late and NonFiled Reports

Civil Monetary Penalties Inflation 

Adjustments, 87 Fed. Reg. 80020 

(Dec. 29, 2022), 

https://sers.fec.gov/fosers/showpd

f.htm?docid=421183 111.43(a)

Penalty formula 

that accounts for (a) 

level of activity in 

late or non-filed 

report; and (b) if 

report was filed 

late, (i) the number 

of days late and (ii) 

the number of 

previous violations; 

or (c) if the report 

was not filed, the 

number of previous 

violations) 
112

52 U.S.C. 

30109(a)(4)

(C)

Treasury and 

General 

Government 

Appropriations 

Act, 2000, PL 

106-58 sec. 640 2003

Election 

Sensitive Late 

and Non-Filed 

Reports

Civil Monetary Penalties Inflation 

Adjustments, 87 Fed. Reg. 80020 

(Dec. 29, 2022), 

https://sers.fec.gov/fosers/showpd

f.htm?docid=421184 111.43(b)

Penalty formula 

that accounts for (a) 

level of activity in 

late or non-filed 

report; and (b) if 

report was filed 

late, (i) the number 

of days late and 

number of previous 

violations; or (c) if 

the report was not 

filed, the number of 

previous violations) 

52 U.S.C. 

30109(a)(4)

(C)

Treasury and 

General 

Government 

Appropriations 

Act, 2000, PL 

106-58 sec. 640 2000

Late or NonFiled Reports 

where 

Commission 

cannot 

calculate 

amount of 

activity

Civil Monetary Penalties Inflation 

Adjustments, 87 Fed. Reg. 80020 

(Dec. 29, 2022), 

https://sers.fec.gov/fosers/showpd

f.htm?docid=421185 111.43(c) 9,420

52 U.S.C. 

30109(a)(4)

(C)

Treasury and 

General 

Government 

Appropriations 

Act, 2000, PL 

106-58 sec. 640 2000

Late or NonFiled 48 hour 

notices

Civil Monetary Penalties Inflation 

Adjustments, 87 Fed. Reg. 80020 

(Dec. 29, 2022), 

https://sers.fec.gov/fosers/showpd

f.htm?docid=421186 111.44

Penalty formula is 

160+ (.10 x amount

of contribution(s) 

not timely 

reported), subject to 

a 25% increase for 

each prior violation
113

APPENDIX 

List of Acronyms

AFR Agency Financial Report

AO Advisory Opinion

APR Annual Performance Report

ASD Administrative Services Division

CFR Code of Federal Regulations

CSRS Civil Service Retirement System

CY Calendar Year

DCIA Debt Collection Improvement Act of 1996

DOL Department of Labor

EEO Equal Employment Opportunity

ERM Enterprise Risk Management

FAR Financial Audit Report

FASAB Federal Accounting Standards Advisory Board

FBWT Fund Balance with Treasury

FEC Federal Election Commission

FECA Federal Election Campaign Act

FERS Federal Employees' Retirement System

FMFIA Federal Managers' Financial Integrity Act

FRAE Further Revised Annuity Employees

FRDAA Fraud Reduction and Data Analytics Act

FY Fiscal Year

GAAP Generally Accepted Accounting Principles

GSA General Services Administration

IG Inspector General

IPERA Improper Payments Elimination and Recovery Act

IPERIA Improper Payments Elimination and Recovery Improvement Act

IPIA Improper Payments Information Act

MD&A Management's Discussion and Analysis

NPRM Notices of Proposed Rulemaking

NTEU National Treasury Employee Union

OAR Office of Administrative Review

OCFO Office of the Chief Financial Officer

OCIO Office of the Chief Information Officer

OGC Office of General Counsel

OHR Office of Human Resources
114

OMB Office of Management and Budget

OPM Office of Personnel Management

OSD Office of the Staff Director

PIIA Payment Integrity Information Act

P&E Property and Equipment

PPA Prompt Payment Act

RAD Reports Analysis Division

RAE Revised Annuity Employees

SBR Statement of Budgetary Resources

SCA Statement of Custodial Activity

SFFAS Statement of Federal Financial Accounting Standards

SMC Senior Management Council

SNC Statement of Net Cost

SSAE Statements on Standards for Attestation Engagements

TSP Thrift Savings Plan