.' .

fEDERAL ELECTION COMMISSION

\l\'ASHINC10,,- 0 C ~b)

1\85-12

REPORT OF THE AUDIT DIVISION

ON THE

ATKINS FOR CONGRESS COMMITTEE

I. Background

A. Overview

•

This report is based on an audit of the Atkins for

Congress Committee (-the Committee W), 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 (-the Act-). The audit was conducted pursuant to Section

438(b) of Title 2 of the United States Code which .tates, in

part, 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 reaistered with the Clerk of the Bouse of

kepresentatives on February 10, 1984. The Committee maintained

its headauarters in Concord, Massachusetts. The audit covere~

the period from February 10, 1984, the inception date of the

Committee, through December 31, 1984, the closing date for the

latest report filed at the time of the audit. The Committee

reoorted a cash balance on February 10, 1984 of $-0-, tot&l

receiDts of $8S8,660.23J total exoenditures of $860,444.27; and £

cash balance on December 31, 1984" of $4,683~38. 1/

This audit report is based on aocuments and work papers which support each of its factual statements. They torm 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.

B. ~ey Personnel

The Treasurer of the Committee during the perio~

covered by the audit was Ms. Patricia McGovern.

•

!/ The reported totals do not calculate correctly due to

mathematical errors•
•

-.,..

, ..

•

,...

•

-2-

c. Scope

The audit included such tests as verification of total

reported receipts and expenditures and individual tran••ctions,

review 01 required supporting documentation, analysi8 of

Committee debts and obligations, and such other audit procedures •• aeemed necessary under the circumstances.

II. Audit Findings and Recommendations

A. omission of Disclosure Information - Loans

Section 431(8)(A) (i) of Title 2, United States Code

states, in part, that the term ·contribution" includes any gift, sUDscription, loan, advance, or deposit of money or anything of

value made by any person for the purpose of influencing any

election for Federal office.

Section 434(b)(3) (E) of Title 2, United States Code

states that each report shall disclose the identification of each

person who makes a loan to the reporting committee during the

leporting period, together with the identification of any

enaorser or 9uarantor of such loan, and date and amount or value

ot auch loan.

The Committee failed to disclose 82 auarantors of

$75,000 bank loan obtained by the Candiaate on" behalf of the

Committee. Tne amount guaranteed 1n each case did not exceed

Sl,OOO.

The Audit staff recommended that the Committee amend

its reports to disclose the guarantors of the $15,000 loan.

On &eptember 26, 1985, the Committee submitted L

comprehenslve amendment which disclosed the auarantors of the

loa:.. .

I\ecommendation

~he Audit staff recommends no further action on this matter.

B. Misstatement of Financial Activity

Section 434(b)(2) of Title 2, United States Code

.tates, in part, that each report shall disclose the total amount

ot all receipts for the reporting period and the calenaar year •
•

•

•

-3-

During the audit, it val noted that the Committee

understated itl receipts by $14,232.33 (net) fOf the period Pebrulry 10, 1984 through December 31, 1984. The understatement

wal caused by the Committee'. failure to report contributions

from individuals, interest .arned, contributions In-kind, and

tranlfer. from political/other commltt.... Contributor checks

returned by the bank for inaufficient funds and ••th ~i.crepencles allo contributed to the understatement.

The auditofs provided 8chedule. detailing all

unreported and improperly reported items to Committee officials

et the conclusion of the audit fieldwork.

In the interim report, it va. recommended that the

Committee amend its reports to ~i.close accurately its financial

actiVity.

On September 26, 1985, the Commlttee 8ubmitted a

comprehensive amendment which di8closed its financial activity as

required.

Mecommendation

The Audit staff recommends no further action on this matter.

c. Itemization of Contributions from Political Committees

Under 2 D.S.C. S 434(b)(3)(B), each report shall

disclose the identification of each political committee which ~akes a contribution to the reporting committee during the

reDorting period, t0gether with the date and amount of any such

contribution.

In addition, 11 C.F.R. S 104.3(a)(4) (li) requires ~isclosure of the identification of all committees (including political committees and committees which do not qualify as

political committees under the Act).

The Committee'. contribution records were reviewed to ~etermine whether all contributions from committees were itemized

on the Committee'. disclosure reports. It was noted that 15

contributions from committees totaling $4,175.00 (7S' of the

dollar amount of contributions from committees) were not reported

a8 required. Of these, 12 contributions were itemized as

contributions from the indivi~ual. vho signed the checka or from

the candidate whose campaign committee made the contribution.

The Committee fallea to report the remaining three contributions.

A .che~ule of the discrepancies noted above was given to the

Committee at the conclusion of the au~lt fieldwork •
•

•

-4-

The Audit ataff recommended that the Committee amend

ita reports to itemize the 15 contributions from committees.

On September 26, 1985, the Committee aubmltted a

comprehensive amendment which properly itemized the contributions

froID committees.

Recommendation

The Audit staff recommends no further action on this matter.

D. Reporting of Debts and Obligations

Section 434(b) (8) of Title 2, United States Code

requires each report filed by the treasurer of a political committee to disclose the amount and nature of outstanding debts

and obligations owed by the committee.

Section 104.11(a) of Title 11, Code of Federal

Regulations states, in part, that debts and obligations shall be

continuously reported until extinguished. In addition, 11 C.F.R.

5 l04.l1(b) states, in part, that debts of $500 or less shall be

reported no later than 60 days after the obligation is incurred.

Debts in excess of $SOO shall be reported at the time of the

transaction.

During the audit, it was noted that the Committee did

not properly report seven debts totaling $24,771.29. These debts

(greater than $500 each) were not reported when incurred but were

properly disclosed on all subsequent reports.

In addition, seventeen other debts, totalin~

$13,479.2&, were disclosed when incurred and eontinously reported

on a~l subsequent debt schedules, however final payments on these

17 oebts were not reflectea on the debts and obligations schedules of the respective aisclosure reports. It should be

noted that the final payments were properly reported on the

itemized disbursements 8chedules (Schedule B).

The Committee vas a~vi.ed of the reporting requirements for debts and obligations. Further, a schedule of the debts was

given to the Committee at the conclusion of the audit fieldwork •
,.

•

""

•

•

-5-

Recommendation

Although in certain instances the aforementioned

tran.actlons were either not reported in a timely manner or not

reflected on the proper reporting 8chedule, in view of the fact

that all transactions were eventually reported and adequate aupporting documentation maintllned, it is the recommendation of

the Audit staff that no further action is necessary.

E. Matter Referred to the Office of General Counsel

A matter noted During the audit was referred to the

Commission's Office of General Counsel.