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7TNl/120987

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FEDERAL ELECTION COMMISSION

WASHINGTON, 0 C 204&3

A87-17

December 9, 1987

MEMORANDUM

TO:

FROM:

"...

0" SUBJECT:

FRED EILAND

CHIEF, PRESS OFFICE

ASSISTANT

ROBERT J. COSTA

STAFF DIRE~~ ~- AUDIT DIVISION

PUBLIC ISSUANCE OF THE FINAL AUDIT REPORT -

CALIFORNIANS FOR A STRONG AMERICA POLITICAL

ACTION COMMITTEE

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_ Attached please find a copy of the above mentioned Final

Audit Report which was approved by the Commission on November 30,

1987.

Informational copies of the Final Audit Report have been

received by all parties involved and the Final Report rnai'

be released to the public.

Attachment as stated

cc: FEe Library

RAn

Office of General Counsel l Public Disclosure

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7TNl/I01587

FEDERAL ELECTION COMMISSION

WASHINGTON, 0 C 20463

A87-17

REPORT OF THE AUDIT DIVISION

ON THE

CALIFORNIANS POR A STRONG AMERICA

POLITICAL ACTION COMMITTEE

I. Background

A. Overview

This report is based on an audit of the Californians

for a Strong America Political Action Committee ("the

Committee"), undertaken by the Audit Division of the Federal

Election Commission in accordance with the Commission's audit

policy to determine whether there has been compliance with the

provisions of the Feder a1 Election Campai gn Act of 1971, as

amended ("the Act"). The audit was conducted pursuant to 2

U.S.C. § 438(b) which states, in p&rt, that the Commission may

conduct audits and field investigations of any political

committee required to file a report under Section 434 of this

title. Prior to conducting any audit under this section, 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 Federal Election

Commission on November 21, 1983. The Committee maintains its

headquarters in Los Angeles, California.

The audit covered the period January 1, 1985 through

December 31, 1986. The Committee reported an opening cash

balance on January 1, 1985 of $118.94i total receipts of

$57,702.50; total disbursements of $51,628.64 and a cash on hand

balance at October 15, 1986, of (488.20) .1/

This report is based on documents and working papers

supporting each of its factual statements. They form part of the

record uoon which the Commission based its decisions on the

matters 1n this report and were available to Commissioners and

appropriate staff for review.

The Committee did not file the 30 day post general nor the

year end reports for 1986.
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B. Key Personnel

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The Treasurer of the Committee during the period of

audit was Mr. Albert J. Cook.

C (l Scope

The audit included such tests as verification of total

reported receipts and disbursements and individual transactions:

review of required supporting documentationJ analysis of

Committee debts and obligations; and such other audit procedures

as deemed necessary under the circumstances.

II. Audit Findings and Recommendations

A. Non-Filing of Disclosure Reports

Sections 434 (a) (4) (A) (i) and (iii) of Title 2 of the

o United States Code state, in part, that all political committees

other than authorized committees of a candidate shall file a .." post-general election report in a calendar year in which a

regularly scheduled general election is held, which shall be

filed no later than the 30th day after the general election and

which shall be complete as of the 20th day after such general

election. In addition, a year-end report shall be filed no later

than January 31 of the following calendar year.

The Committee did not file the post-general election or

the year-end disclosure reports for 1986. Total receipts and

disbursements for these periods were $8,250 and $7,454.61,

respectively. A Committee representative delivered both

disclosure reports to the Audit staff requesting that they be

filed with the Commission. The reports were filed on May 26,

1987 .

The Custodian of the Records for the Committee gave no

reason for ~ot filing the reports.

In the interim audit report, the Audit Division

recommended that the Committee take no futher action with respect

to filing these reports, but were provided 30 days from receipt

of the report to make any additional comments concerning this

matter. To date, the Committee has not responded.

Recommendation

The Audit Division recommends no further action on this

matter .

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B.

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Misstatement of Financial Activity

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Sections 434 (b) (1) , (2) and (4) of Ti tle 2 of the Uni ted

States Code states, in part, that each report shall disclose the

amount of cash on hand at the beginning of the reporting period

and the total amount of all receipts and disbursements for the

reporting period and the calen6ar year.

The Audit staff performed reconciliations between the

Committee's bank account and disclosure reports for the calendar

years 1985 and 1986. There were no material discrepancies noted

for calendar year 1985. For calendar year 1986, the following

discrepancies were noted:

It was determined that the Committee had overreported

receipts by $6,681.00 on the 1986 October quarterly report. The

overreporting occured when the Committee included receipt

activity for the pre-general election report period on the prior

quarterly report and again on the pre-general election report.

In addition the Committee was provided with a list of other minor

adjustments which were necessary to correct misstatements of

financial activity.

The Custodian of the Records for the Committee stated

that the receipts were inadvertently included on both reports and

provided the audi~ staff with an amended October quarterly report

which corrected the overreporting of receipts. On May 26, 1987,

this amendment was filed with the Commission.

In the interim audit report, the Audit Division

recommended that the Committee take no further action on this

matter.

Recommendation

Since the Committee has amended its October quarterly

report, the Audit Division recommends no further action on

matter.

C. Matters Referred to the Office of General Counsel

Certain matters noted during the audit were referred to

the Commission' 5 Office of General Counsel~

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