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MEMORANDUM

TO:

FROM:

SUBJECT:

FEDERAL ELECTION COMMISSION

WASHINGTON. 0 C 20463

A85-l9

April 3, 1987

FRED EILAND

CHIEF, PRESS OFFICER

ROBERT J. COSTA

ASSISTANT STAFF DI~~~ AUDIT DIVISION

PUBLIC ISSUANCE OF FINAL AUDIT REPORT - WEST VIRGINIA REPUBLICAN STATE EXECUTIVE COMMITTEE

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

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West Virginia Republican State Executive Committee which was

approved by the Commission on March 10, 1987.

Informational copies of the report have b~en received by all

C' parties involved and the report may be released to the public.

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Attachment as stated

CC: FEe Library

RAD /'"

Public Disclosure~

Office of General Counsel

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FEDERAL ELECTION COMMISSION

WA5HINCTON. D.C. 20463

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REPORT OF '!'BE AUDIT DIVISION

ON '!'BE

WEST VIRGINIA REPUBLICAN STATE EXECUTIVE COMMITTEE

I. Background

A. Overview

This report is based on an audit of the West Virginia Republican State Executive Committee ("the CommitteeW) undertaken

by the Audit Division of the Federal Election Commission in

accordance with the provisions of the Federal Election Campaign Act of 1971, as amended (Wthe ActW). The audit was conducted

pursuant to Section 438(b) of Title 2 of the United States Code

which states, in part, that the Commission may conduct audits and

field investigations of any political committee required to file

a repor~ under Section 434 of this title. Prior to conducting

any audit under this subsection, the Commission shall perform an

internal review of reports filed by selected committees to

determine if the reports filed by a particular committee meet the

threshold requirements for substantial compliance with the Act.

The Committee registered with the F.ederal Election

Commission on October 25, 1977 and maintains its headquarters in

Charleston, West Virginia.

The audit covered the period January 1, 1983 through December 31, 1984. The Committee reported an opening cash on

hand balance on January 1, 1983 of $3,173.027 total receipts for

the period of $371,705.47; total disbursements for the period of

$401,186.43 and a closing cash balance on December 31, 1984 of

$-0-. 1/

This report is based on documents and work papers supporting each of its factual statements. They form part of the

record upon which the Commission based its decisions on the

matters in the report and were available to the Commissioners and

appropriate'staff for review.

1/ The totals do not foot due to discrepancies within the

Committee's reported totals (see Finding II.A.3.) •
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B. Key Personnel

The Treasurers of the Committee during the period audited were:

Mr. Ronald Pearson

Mr. Thomas D. Winter

1/1/83 - 8/83

8/83 - present.

c. Scope

The audit included such tests as verification of total

reported receipts and disbursements1 review of required supporting documentation: analysis of Committee debts and

obligations: and such other audit procedures as deemed necessary under the circumstances.

II. Audit Findings and Recommendations

A. Misstatement of Financial Activity

Sections 434(b) (1), (2) and (4) of Title 2, United

States Code, require that a committee report the amount of cash

on hand at the beginning of each reporting period and the total

'q amount of all receipts and disbursements for the reporting period and the calendar year.

The Audit staff performed a reconciliation of Committee

bank accounts to reports filed for calendar years 1983 and 1984.

This reconciliation showed that the Committee's. cash on hand,

total receipts, and total disbursements for 1983 were materially

correct. However, the 1984 reports were misstated as shown

below:

1. Receipts

$29,548.20

12,000.00

801.98

404.79

( 1,250.00)

( 13.00) $ 41,491.97

Total receipts were understated by $41,491.97 as a

result of reporting errors in the following categories and

amounts:

Contributions from individuals

Contributions from political committees

Refunds/rebates

Interest income I~ter-account transfer reported Miscellaneous

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2. Disbursements

Total disbursements were overstated by $6,176.62 • This misstatement was the net result of the inclusion of interaccount transfers totaling $11,250.00 as operating expenditures and various errors in the amount(s) of unitemized expenditures resulting in an understatement of $5,073.38.

3 • Cash on Band

On several reports filed during 1984, the

Committee's ending cash on hand would have been negative if

calculated by adding receipts to beginning cash and then

sUbstracting disbursements. However, rather than disclose the

negative amount, the Committee disclosed an ending cash balance

of $-0-. Calculating the Committee's December 31, 1984 cash on

hand from the calendar year-to-date figures on their Year End

1984 disclosure report produces a negative $26,307.94.£/ using

the Committee's bank records the Audit staff determined that the

correct December 31, 1984 cash on hand figure was $21,413.55.

The difference between these two amounts, $47,721.49, is

explained as follows:

a. cash on hand at January 1, 1983 was

understated by $55.43 while other minor reporting errors produced

an overstatement of $2.53, and

b. due to the items noted in Sections 1. and 2.

above, cash on hand at December 31, 1984 was understated by • $47,668.59.

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In the Interim Report, the Audit staff recommended

that the Committee file amended reports for 1984 which reflects

the adjustments noted above.

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Recommendation

On June 16, 1986, the Committee filed a comprehensive amendment which materially complied with the recommendations.

Therefore, the Audit staff recommends no further action on this

matter.

2/ It should be noted that although the reported cash on hand

at 12/31/84 in the year-to-date column of the Committee's

disclosure report was $-0-, the cash on hand figure in the

-this period" column was $12,663.43. If the reports are

properly prepared, these two amounts will be the same •

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B. Itemization of Refunds, Rebates, and Other Receipts

Section 434(b) (3) (F) and (G) of Title 2, United States

code, require a political committee to report the identification

of each person who provides a refund, rebate, or other offset to

operating expenditures or any dividend, interest or other receipt aggregating in excess of $200 per calendar year, together with

the date and amount of such receipts.

The Audit staff reviewed the Committee's receipt records to determine whether all refunds/rebates and other

receipts were itemized as required. It was noted that 12 out of

14 itemizable refunds totaling $1,879.71 were not itemized. This

represents 85.71' of the total number and 42.37' of the total

dollar amount of refunds requiring itemization. In addition, the

Committee received a one time interest payment of $404.79 during

1984 which it failed to itemize on their disclosure reports.

In the Interim Report, the Audit staff recommended that

the Committee file amended reports for 1984 itemizing the items

noted above.

C'J Recommendation

On June 16, 1986, the Committee filed an amended report

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which complied with the recommendations. Therefore, the Audit . staff recommends no further action on this matter.

- C. Matters Referred to the Office of General Counsel

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Certain matters noted during the audit were referred to

Commission's Office of General Counsel.

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