BEFORE THE FEDERAL ELECTION COMMISSION 

IntheMatterof ) 

) 

Audit Division Recommendation ) Agenda Documents No. 11 -10, No. 11 -

Memorandum on the Georgia Federal ) 10-A and No. 11-10-B 

Elections Committee (A07-14) ) 

CERTIFICATION 

I, Shawn Woodhead Werth, recording secretary of the Federal Election Commission open 

meeting on March 03,2011 do hereby certify that the Commission took the following actions in 

the above-captioned matter: 

1. Failed by a vote of 2-4 to: 

Approve Agenda Document No. 11-10. 

Commissioners Bauerly and Walther voted affirmatively for the motion. Commissioners 

Hunter, McGahn II, Petersen and Weintraub dissented. 

2. Failed by a vote of 3-3 to: 

Approve the motion as reflected in Agenda Document No. 11-10-A -

Approve Finding 1 ("Misstatement of Financial Activity") in Agenda Document No. 

11-10, subject to appropriate changes pursuant to Directive 70, with the following 

modifications (and all necessary technical and conforming changes): 

a) Find that GFEC's payroll escrow account did not violate the Act or Coinmission 

regulations because the account was not an allocation account established pursuant 

to 11 CF.R 106.7 to pay for allocable activities, but rather was a pass-through 

escrow account established to accommodate GFEC's payroll vendor and used for 

non-allocable disbursements. Moreover, with respect to its tmly allocable payroll 

disbursements, GFEC transferred non-Federal fimds to its Federal operating 

account pursuant to Section 106.7(f) and reported those allocations on Schedule 
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Certification for Audit Division Recommendation Memorandum on the Georgia Federal 

Elections Comnuttee 

March 3,2011 

H4 before it transferred fimds from the Federal operating account to the payroll 

escrow account. Although the Coinmission amended the regulations in 1990 to 

require state party committees to pay for allocable expenses using either a Federal 

account or a separate allocation accoimt, those regulations do not apply here 

because GFEC's escrow account was not used to pay for allocable expenses, and 

the "functional equivalent" ofan allocation account is not a cognizable legal 

concept under the Act or Commission regulations. Additionally, the Commission 

determined not to pursue enforcement action against a committee &ced with the 

same problem caused by the same payroll vendor in an intemally generated matter 

in 2006. 

b) Find that GFEC is not required to fiirther amend its reports in relation to the 

transactions involving the payroll escrow account. 

Commissioners Hunter, McGahn II and Petersen voted affinnatively for the motion. 

Commissioners Bauerly, Walther and Weintraub dissented. 

3. Failed by a vote of 3-3 to: 

Approve the motion as set forth in Agenda Document No. 11-10-B -

Approve Finding 2 ("Payment of Federal Activity with Non-Federal Funds") in 

Agenda Document No. 11-10, subject to appropriate changes pursuant to Directive 70, 

with the following modifications (and all necessary technical and confoixning changes): 

Delete (1) the Summary paragraph captioned "Funding by the Non-Federal 

Account for Possible Federal Activity" (DFAR at 10); (2) the Facts and Analysis 

paragraphs captioned "Funding by the Non-Federal Account for Possible Federal 

Activity" (DFAR at 12); and (3) delete and/or modify tiie bullet points in tiie 

paragraph captioned "Interim Audit Report Recommendation and Committee 

Response" (DFAR at 12) relating to funding by the non-Federal Account for 

possible Federal activity; on the grounds that the Commission does not have 

jurisdiction to impose recordkeeping and documentation requirements on 

employee activity that a State party committee claims is solely non-Federal. 

Commissioners Hunter, McGahn II and Petersen voted afGrmatively for the motion. 

Commissioners Bauerly, Walther and Weintraub dissented. 

4. Decided by a vote of 6-0 to: 

Approve Agenda Document No. 11-10, subject to appropriate changes pursuant to 

Directive 70, with fhe following modifications (and all necessary technical and 

confonning changes): 

a) With respect to Finding 1 ("Misstatement of Financial Activity") -
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Certification for Audit Division Recommendation Memorandum on fhe Georgia Federal 

Elections Committee 

March 3,2011 

q>prove this finding with respect to the misstatement issues other than the 

payroll escrow account. Witii respect to amendments based on the payroll 

accounts issue, the Commission concludes that the GFEC is not required to 

further amend its reports in relation to fhe transactions involving the 

payroll escrow accoimt. 

b) With respect to Finding 2 (Tayment of Federal Activity with NonFederal Funds'^ - approve this finding as the issue of GFEC's failure to 

provide documentation of its payroll expenses reported as allocated on 

Schedules H4 (as described in the sections captioned '^Disclosure of 

Salaries and Related Expenses" on Pages 9 and 11). 

c) Approve Finding 3. 

Commissioners Bauerly, Hunter, McGahn n, Petersen, Walther and Weintraub voted 

affirmatively for the decision. 

Attest: 

~l%lUtCL'^.30ll Ml 

Date Shawn Woodhead Werfh 

Secretary and Clerk oftiie Commission