Interim Audit Report of the 

Audit Division on the National 

Council of Farmer Cooperatives 

Co-op/PAC 

(January 1, 2009 - December 31, 2010) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political conunittee that 

is required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a conmiittee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act.* The audit 

determines whether the 

committee complied 

with the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Future Action 

The Conmiission may 

initiate an enforcement 

action, at a later time, 

with respect to any of 

the matters discussed in 

this report. 

About the Conimittee (p. 2) 

The National Council of Farmer Cooperatives Co-op/PAC (NCFC) is 

a non-connected, qualified, multi-candidate Political Action 

Committee and is headquartered in Washington, D.C. For more 

information, see chart on Committee Organization, p 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals 

o Contributions from other 

Political Committees 

o Other Receipts 

Total Receipts 

• Disbursements 

o Contributions to Political 

Committees 

o Other Disbursements 

Total Disbursements 

$ 64,195 

46,000 

6,352 

$ 116^47 

$ 128,500 

421 

$ 128,921 

Findings and Recommendations (p. 3) 

• Misstatement of Financial Activity (Finding 1) 

• Disclosure of Occupation/Name of Employer (Finding 2) 

• Disclosure of Contributions to Candidate Committees (Finding 3) 

' 2U.S.C. §438(b). 
Interim Audit Report of the 

Audit Division on the 

National Council of Farmer 

Cooperatives Co-op/PAC 

(January 1, 2009 - December 31, 2010) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Part II. Overview of Committee 

Conunittee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 4 

Finding 2. Disclosure of Occupation/Name of Employer 6 

Finding 3. Disclosure of Contributions to Candidate Committees 7 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the National Council of Farmer Cooperatives Coop/PAC, undertaken by the Audit Division of the Federal Election Conmiission (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 field investigations of any 

political conunittee that is required to file a report under 2 U.S.C. §434. Prior to 

conducting any audit under this subsection, the Commission must perform an internal 

review of reports filed by selected committees to determine if the reports filed by a 

particular conmiittee meet the threshold requirements for substantial compliance with the 

Act. 2 U.S.C. §438(b). 

Scope of Audit 

Following Commission-approved procedures, the Audit staff evaluated various risk 

factors and as a result, this audit examined: 

1. the disclosure of individual contributors' occupation and name of employer; 

2. the disclosure of disbursements; 

3. the consistency between reported figures and bank records; 

4. the completeness of records; and 

5. other committee operations necessary to the review. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration September 24,1976 

• Audit Coverage January 1,2009 - December 31,2010 

Headquarters Washington, DC 

Bank Information 

• Bank Depositories One 

• Bank Accounts One Checking 

Treasurer 

• Treasurer When Audit Was Conducted Kelsey Swango 

• Treasurer During Period Covered by Audit Randall Jones 9/20/06-3/25/09 

Jill Thomson 3/26/09-8/23/11 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand @ January 1,2009 $ 44,630 

Receipts 

o Contributions from Individuals 64.195 

o Contributions from Other Political 

Conimittees 46,000 

o Other Receipts 6,352 

Total Receipts $ 116,547 

Disbursements 

o Contributions to Political Committees 128,500 

o Other Disbursements 421 

Total Disbursements $ 128,921 

Cash-on-hand @ December 31,2010 $ 32,256 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of NCFC's reported figures with its bank records 

indicated that in 2009 receipts and disbursements were understated by $10,770 and $805, 

respectively, and ending cash was overstated by $5,133. In 2010, beginning cash was 

overstated by $13,OCX) and disbursements by $6,500. The Audit staff recommends that 

NCFC file amended disclosure reports to correct the misstatements. 

(For more detail, see p. 4.) 

Finding 2. Disclosure of Occupation/Name of Employer 

During audit fieldwork, a review of itemized contributions from individuals indicated that 

57 percent of the contributions failed to include adequate disclosure for occupation and 

name of employer. The Audit staff found that the required infonnation was available for 

89 percent of the itemized contributions in NCFC's records. The Audit staff recommends 

that the NCFC file amended reports to include the missing information. 

(For more detail, see p. 6.) 

Finding 3. Disclosure of Contributions to Candidate 

Committees 

During audit fieldwork, a review of disbursements identified 80 percent of contributions 

to federal candidates that failed to include required disclosure information such as office 

sought, state and district, or disclosed incorrect candidate information. The Audit staff 

recommends that NCFC file amended reports to include the missing or corrected 

information. 

(For more detail, see p. 7.) 
Part IV 

Findings and Recommendations 

I Finding 1. Miggtatement of Financial Activity J 

Summary 

During audit fieldwork, a comparison of NCFC's reported figures with its bank records 

indicated that in 2009 receipts and disbursements were understated by $10,770 and $805, 

respectively, and ending cash was overstated by $5,133. In 2010, beginning cash was 

overstated by $13,OCX) and disbursements by $6,500. The Audit staff reconunends that 

NCFC file amended disclosure reports to correct the misstatements. 

Legal Standard 

Contents of Reports. Each report must disclose: 

• the amount of cash-on-hand at the beginning and end of the reporting period; 

• the total amount of receipts for the reporting period and for the calendar year; 

• the total amount of disbursements for the reporting period and for the calendar 

year; and 

• certain transactions that require itemization on Schedule A (Itemized Receipts) or 

Schedule B (Itemized Disbursements). 2 U.S.C. §434(b)(l), (2), (3), (4) and (5). 

Facts and Analjrsis 

A. Facts 

During audit fieldwork, the Audit staff reconciled NCFC's reported financial activity 

with its bank records for calendar years 2009 and 2010. The following charts outline the 

discrepancies for the receipts, disbursements and ending cash balances for 2009 and 

2010. Succeeding paragraphs address the reasons for the misstatements, if known. 

2009 Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance 

©January 1,2009 

$44,630 $44,630 $0 

Receipts $43,485 $54,255 $10,770 

Understated 

Disbursements $60,887 $61,692 $805 

Understated 

Ending Cash Balance 

©December 31,2009 

$42,326^ 37,193 $5,133 

Overstated 

^ This column does not total due to numerous discrepancies throughout 2(X)9 between amounts reported for 

ending cash and the beginning cash in the subsequent period. 
In 2009. NCFC understated receipts by $10,770 as a result of failing to report any of its 

July receipts. 

The understatement of disbursements was due to the following: 

• Disbursements supported by check/debit, not reported 

• December 2009 disbursement, reported June 2010 

• Disbursements reported, not supported by check/debit 

• Disbursement incorrectly reported 

Net Understatement of Disbursements 

$ 5,601 

1,500 

(3,500) 

(2.796) 

S 805 

The beginning cash balance for 2010 was overstated by $13,000 for the same reasons and 

because NCFC reported an increase in the beginning cash balance of $7,877 ($50,193 -

$42,326) at January 1,2010. The difference in the 2009 ending cash and the 2010 

beginning cash illustrates NCFC's failure to consistently report beginning cash balances 

that agreed with ending cash balances from the previous period.^ 

2010 Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance 

@ January 1,2010 

$50,193 $37,193 $13,000 

Overstated 

Receipts $61,292 $62,292 $1,000 

Understated 

Disbursements $73,728 $67,228 $6,500 

Overstated 

Ending Cash Balance 

@ December 31, 2010 

$32,257'* 32,257 $0 

The overstatement of disbursements was due to the following: 

• Disbursements supported by check/debit, not reported 

• December 2009 disbursement, reported June 2010 

• Disbursements reported not supported by check/debit 

Net Overstatement of Disbursements 

$ 3,000 

(1.500) 

(8.000) 

$ (6.500) 

B. Interim Audit Report & Audit Division Recommendation 

At the end of audit fieldwork, the Audit staff discussed this matter with the NCFC 

representatives at the exit conference. The NCFC representatives acknowledged the 

discrepancies in the reports and indicated that corrective amendments would be filed. 

^ NCFC failed to carry over the correct ending cash balance to the subsequent report for all but one of its 

reports filed between May 2009 and Year End 2010. This problem was questioned by the Reports Analysis 

Division in 19 Requests for Additional Information sent to NCFC covering the audit period. 

^ This column does not total due to numerous discrepancies throughout 2010 between amounts reported for 

ending cash and the subsequent period's beginning cash, these numbers do not foot. 
The Audit staff recommends that, within 30 calendar days of receipt of this report, NCFC 

amend its reports to correct the misstatements noted above. 

I Finding 2. Disclosure of Occupation/Name of Employer | 

Summary 

During audit fieldwork, a review of itemized contributions from individuals indicated that 

57 percent of contributions failed to include adequate disclosure for occupation and name 

of employer. The Audit staff found that the required information was available for 89 

percent of the itemized contributions in NCFC's records. The Audit staff recommends 

that the NCFC file amended reports to include the missing information. 

Legal standard 

A. Required Information for Contributions from Individuals. For each itemized 

contribution from an individual, the committee must provide the following 

information: 

• the contributor's full name and address (including zip code); 

• the contributor's occupation and the name of his or her employer; 

• the date of receipt (the date the committee received the contribution); 

• the amount of the contribution; and 

• the calendar year-to-date total of all contributions from the same individual. 

2 U.S.C. § 434(b)(3)(A) and 11 CFR §§ 100.12 and 104.3(a)(4)(i). 

B. Best Efforts Ensure Compliance. When the treasurer of a political committee 

shows that the conmiittee used best efforts (see below) to obtain, maintain, and submit 

the information required by the Act, the conunittee's reports and records will be 

considered in compliance with the Act. 2 U.S.C. § 432(i) and 11 CFR § 104.7(a). 

C. Definition of Best Efforts. The treasurer and the committee will be considered to 

have used "best efforts" if the committee satisfied all of the following criteria. 

• All written solicitations for contributions included: 

o a clear request for the contributor's full name, mailing address, occupation, 

and name of employer; and 

o the statement that such reporting is required by Federal law. 

o Note: The request and statement must appear in a clear and conspicuous 

manner on any response material included in a solicitation. 

• Within 30 days of receipt of the contribution, the treasurer made at least one 

effort to obtain the missing information, in either a written request or a 

documented oral request. 

• The treasurer reported any contributor infonnation that, although not initially 

provided by the contributor, was obtained in a follow-up communication or was 

contained in the committee's records or in prior reports that the committee filed 

during the same two-year election cycle. 11 CFR § 104.7(b). 
Facts and Analjrsis 

A. Facts 

During audit fieldwork, a review of NCFC's itemized contributions from individuals for 

disclosure of occupation and name of employer indicated that the committee failed to 

disclose the required information for 57 percent of contributions itemized. In a review of 

NCFC's records, the Audit staff noted that NCFC had the required mformation for 89 

percent of the itemized contributions reviewed. NCFC simply failed to include in its 

reports the information it had in its possession. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to NCFC representatives at the exit conference. The 

treasurer stated that NCFC would, using the contributor information already obtained, 

amend the reports to disclose occupation and name of employer. 

The Audit staff reconunends that, within 30 calendar days of receipt of this report, NCFC 

file amended reports to disclose the occupation and name of employer for contributions 

from individuals. 

Finding 3. Disclosure of Contributions to Candidate 

Committees 

Summary 

Diuring audit fieldwork, a review of disbursements identified 80 percent of contributions 

to federal candidates that failed to include required disclosure information such as office 

sought, state and district or disclosed incorrect candidate information. The Audit staff 

reconunends that NCFC file amended reports to include the missing or correct 

information. 

Legal Standard 

Reporting Contributions to Candidate Committees. When operating expenditures to 

the same person exceed $200 in a calendar year, the committee must report the: 

• amount of the expenditures; 

• date when the expenditures were made; 

• name and address of the payee; 

• purpose (see below) of the expenditures (2 U.S.C. § 434(b)(5)(A) and 11 CFR 

§§ 104.3(b)(3)(i)); and 

• candidate's name and office sought (including the state and, if applicable. 

Congressional district) (11 CFR §§104.3(b)(3)(v)). 
Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed the committee's contributions to 

candidate committees. The review indicated that NCFC failed to correctly disclose 

candidate information such as state, office sought and, if applicable, congressional district 

for 80 percent of the contributions. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to NCFC representatives at the exit conference. The 

treasurer stated that NCFC would amend its reports to properly disclose candidate 

information for each contribution. 

The Audit staff recommends that, within 30 calendar days of receipt of this report, NCFC 

file amended reports to properly disclose the candidate information, such as office 

sought, candidate state, and, if applicable, congressional district for its contributions to 

candidate committees.