FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

July 28, 2011 

MEMORANDUM 

To: 

Through: 

From: 

The Commission 

Alec Palmer 

Acting Staff Director 

Patricia Carmona 

Chief Compliance Officer 

Thomas Hintermister 

Acting Assistant Staff Directo 

Audit Division 

Thomas Nurthen t/^ 

Audit Manager \ j 

By: 

Subject: 

Terry O'Brien / 

Lead Auditor 

Audit Division Recommendation Memorandum on the Ohio Republican 

Party State Central & Executive Committee (A09-14) 

Pursuant to Commission Directive No. 70 (FEC Durective on Processing Audit Reports), 

the Audit staff's recommendation is presented below and the finding is discussed in the 

attached Draft Final Audit Report. The Office of General Counsel has reviewed this 

memorandum and concurs with the recommendation. 

Reporting of Debts and Obligations 

The Audit staff recommends that the Commission find that the Ohio Republican 

Party State Central & Executive Committee failed to disclose debts and obligations for 

calendar years 2007 and 2008. 

The Committee did not request an audit hearing. 

If this memorandum is approved, a Proposed Final Audit Report will be prepared within 

30 days of the Commission's vote. 
Should an objection be received. Directive No. 70 states that the Audit Division 

Recommendation Memorandum will be placed on the next regularly scheduled open 

session agenda. 

Documents related to this audit report can be viewed in the Voting Ballot Matters folder. 

Should you have any questions, please contact Terry O'Brien or Tom Nurthen at 694-

1200. 

Attachments: 

- Draft Final Audit Report of the Audit Division on the Ohio Republican Party State 

Central & Executive Committee 

cc: Office of General Counsel 
Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have mj 

the threshold 

requurements for 

substantial compliance 

with the A.: ' TTT;-.: .V.t 

determines v. - • .-. 

cciiiiiiritlcc compliec 

tli^- liiiiil:-''>-:.s, 

prohibiti.->. ..1 

disclosurereqip:-.- :ents 

of the Act. 

Draft Final Audit Report of the 

Audit Division on the Ohio 

Republican Party State Central & 

Executive Committee 

(January 1, 2007 - December 31, 2008) 

About the Committee ip. ^ 

The Ohio Republican Party ^ ;Central & Executive Conimittee 

is a state party committee Ismxi.y^. • :.-red in Columbus, Ohio. For 

more information, see the«:.art (v. !. Committee Organization, 

P-2. <Vv^ 

Financial«^tivit3^-: 2) 

• Receipts 

o Contributions lip:: Individuals 

( ontributions frc-1 Pt .itical 

("t! I. • i" jes ^ 

o flLo,;- - iin: VffilL. • 

o Trl^sfereiiiv: VM-S \-deral 

AcdF -.T 

o Offsi- - Other Refeipts 

Total Rec&its 

JDisbursemi^ 

Expenditures 

Is of Contributions 

Independent Expenditures 

'oordinated Expenditures 

Federal Election Activity 

o Other Disbursements 

Total Disbursements 

$ 3,058,229 

1,666,512 

11,851,559 

2,385,909 

1,310,775 

$ 20,272,984 

$ 5,304,397 

1,747,000 

50,000 

13,003 

10,710,668 

1,345,414 

$ 19,170,482 

Future Action?^ 

VThe Commission may 

uiitiate an enforcement 

action, at a later time, 

with respect to the matter 

discussed in this report. 

Finding and Recommendation (p. 3) 

• Reporting of Debts and Obligations 

2 U.S.C. §438(b). 
Draft Final Report of the Audit 

Division on the 

Ohio Republican Party State 

Central & Executive Committee 

(January 1, 2007 - Deceiiibtw 31, 2008) 

^ 
Table of Contents 

Page 

Part I. Background I 

Authority for Audit 1 

Scope of Audit 1 | 

Part II. Overview of Conmiittee ^ 

Committee Organization ^ 2 

Overview of Financial Activity 2 

Part III. Summary - O 

Finding and Recommendation ^ 3 

V 

4 

Part IV. Finding and Recommendation \ 

Reporting of Debts and Obligations 

r 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the Ohio Republican Party State Central & Executive 

Committee (ORP), undertaken by the Audit Division of the Federal Election Commission 

(the Commission) in accordance with the Federal Election Campaign Act of 1971, as 

amended (the Act). The Audit Division conducted the audit pursuant to 2 U.S.C. 

§438(b), which permits the Commission to conduct audits and f.^in •. vestigations of any 

political committee that is required to file a report under 2 U.§|Pr§43'^. Prior to 

conducting any audit under this subsection, the Commissi '- nerform an intemal 

review of reports filed by selected committees to determ^ ±M.\: . ..-j'orts filed by a 

particular committee meet the threshold requirements fo^ibs .. . ; [-Viance with the 

Act. 2 U.S.C. §438(b). ^' ^ 

Scope of Audit . 

Following Commission approved procedures, the \-1! = > Ux eWluated varies risk 

factors and as a result, this audit examined: 

1. The disclosure of individual contS*'* -s' occupatio * lame of employer. 

2. The disclosure of disbursements, c. •-• - ^::i: t:bligations. 

3. The disclosure of expenses allocateJb.'".--. " i K-i'i-ial ana i«s»ii-iederal accounts. 

4. The consistency between reported figu|^s .iiul ILII:!/... i-ds. 

5. The completeness ofi.M i'-. 

6. Other committee c$. • .si:.» *:..-cessary to%e reviewf 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration October 5,1982 

• Audit Coverage January 1,2007 :;^|li^ber 31,2008 

Headquarters Columbus. Ohaisiiis^ 

Banl( intormation 

• Bank Depositories Two 

• Bank Accounts 10 FftrfilliJ^x Non-*»^;^ml 

ireasurer 

• Treasurer When Audit Was Conducted 

• Treasurer During Period Covered by Audit 

Management intormation j ^ 

• Attended FEC Campaign Finance SemikM^ 

• Who Handled Accounting and Recordkee^i \ \V.:u'>*." ^ 

Tasks 

^ jlM• I 'aul January 23, T present 

Ms S. • Mrown January 28, ^999 - January 

23. 20( •» k 

^Overview of Financial Activity 

(Audited Amounts) 

Cash on h ^ @ Janusir\ 1. i0O7 $ 172.248 

Receipts 

o Contribu":ni - •":om Indivi-: ^ 3,058,229 

o Contributioi - Politica' ('t)mmittees 1,666,512 

o Transfers from )^111 i.i'es j 11,851,559 

o Transfers from N<Ml u-d^-i Accounts 2,385,909 

o Offsets/Other Receipt^ 1,310,775 

Total Receipts ^ $ 20,272,984 

Disbursements 

o Operating Expenditures 5,304,397 

o Refunds of Contributions 1,747,000 

o Independent Expenditures 50,000 

o Coordinated Expenditures 13,003 

o Federal Election Activity 10,710,668 

o Other Disbursements 1,345,414 

Total Disbursements $ 19,170,482 

Cash on hand @ December 31,2008 $ 1,274,750 
Part III 

Summary 

Finding and Recommendation 

Reporting of Dehts and Ohligations 

Audit fieldwork identified debts to five vendors that ORP failed to report. The debts 

totaled $1,195,892. In response to the Interim Audit Report recoil^iendation, ORP 

amended its reports to disclose these debts. (For more detail p. 4) 

4 

4r 
Part IV 

Finding and Recommendation 

I Reporting of Dehts and Ohligations 

Summary 

Audit fieldwork identified debts to five vendors that ORP failed to report. The debts 

totaled $1,195,892. In response to the Interim Audit Report reconiniendation, ORP 

amended its reports to disclose these debts. 

Legal Standard A 

A. Continuous Reporting Required. A political comimee IIIIINI disclose the amount 

and nature of outstanding debts and obligations unti! iriu-^ebts .\w. v'! iguished. 2 

U.S.C §434(b)(8) and 11 CFR §§ 104.3(d) andl04^(a). * 

B. Separate Schedules. A political committee ."i'e^p^ate scheduleN ini debts 

owed by and to the committee with a statement ex^'. .iV- -- ilieWcumstanc^and 

conditions under which each debt and obligation was :•.. •. - ed or extmguished. 11 CFR 

§104.11(a). 

C. Itemizing Debts and Obligations. % ^ 

• Once it has been outstanding 60 d%s fro • " . II.IK- IIU IIIU-II, a debt of $500 or 

less must be repc.-i.-i! t\. the next re.-'ul.fly schi-ilii!t-il report. 

• A debt exceCiViig •:: -b e discl(^ed in the feport that covers the date on 

whichthe^#i» w.-inc i ..i . llCFRllo : 11(b). 

Facts and Analysis ^ 

4' 

A. FaffsDisglt^-"-.- reports file-: ••> ()RP.! ^^the audit period did not disclose any debts owed. 

Althouj.. ()KP paid the ii. i ity ofmvoices timely, it carried outstanding balances with 

five vendo: > • M were not i! -.'losed as debts. During audit fieldwork, a review of vendor 

invoices and i .M-!;M'er file- t-entified debts totaline $1,195,892 that should have been 

disclosed on Sdi.-i! .'c> r^^ebts and Obligations). The vendors consistently invoiced 

ORP for the balancv-^ ilSom e of the undisclosed debts were outstanding prior to the 

begmning of the aud^period. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff mformed ORP representatives of this matter at the exit conference and 

provided schedules detailing the undisclosed debts for each reporting period for the 

audited cycle. ORP representatives indicated that amended reports would be filed. 

^ Each debt in this amount was counted once. In order for ORP to correctly file amended reports, the 

schedule provided included the amount of each debt required to be reported for each reporting period. 
hi the Interim Audit Report, the Audit staff recommended that ORP amend its reports to 

disclose the debts and obligations addressed above. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report, ORP filed amended reports disclosing the debts 

and obligations. 

i 

V 

r