FEDERAL ELECTION COMMISSION

WASHINGTON. DC. 204&3

June 26, 2000

MEMORANDUM

TO:

FROM:

SUBJECT:

RON M. HARRIS

PRESS OFFICER

PRESS OFFICE

ROBERTJ.COSTA

ASSISTANT STAFF DiRECTOR

AUDIT DIVISION

PUBLIC ISSUANCE OF THE FINAL AUDIT REPORT ON

BUILD POLITICAL ACTION COMMITTEE OF THE

NATIONAL ASSOCIATION OF HOME BUILDERS

Attached please find a copy ofthe final audit report and related documents on

Build Political Action Committee ofthe National Association ofI-fome Builders which

was approved by the Commission on June 16,2000.

Informational copies of the report have been received by all parties involved and

the report may be released to the public on June 26, 2000.

Attachment as stated

cc: Office of General Counsel

Office of Public Disclosure

Reports Analysis Division

FEC Library
TABLE OF CONTENTS

BUILD POLITICAL ACTION COMMITTEE OF THE

NATIONAL ASSOCIATION OF HOME BUILDERS

PAGE

Final Audit Report

Background

Transmittal to Committee

Chronology

5

7
A99-57

REPORT OF THE AUDIT DIVISION

ON THE

BUILD POLITICAL ACTION COMMITTEE OF THE

NATIONAL ASSOCIATION OFHOME BUILDERS

This report is based on an audit ofBuild Political Action Committee of

the National Association ofHome builders, undertaken by the Audit Division ofthe

Federal Election Commission in accordance with the provisions ofthe Federal Election

Campaign Act of 1971, as amended (the Act). The audit was conducted pursuant to

Section 438(b) ofTitle 2 ofthe United States Code which states, in part, that the

Commission may conduct audits and field investigations ofany political committee

required to file a report under Section 434 ofthis title. Prior to conducting any audit

under this subsection, the Commission shall perform an internal review ofreports filed

by selected committees to determine ifthe reports filed by a particular committee meet

the threshold requirements for substantial compliance with the Act.

I. BACKGROUND

A. AUDIT AUTHORITY

B. AUDIT COVERAGE

The audit covered the period January 1, 1997 through December 31,1998.

During this period, Build Political Action Committee (Build PAC) reported a beginning

cash balance of$140,918; total receipts of$2,129,335; total disbursements of

$2,147,481; and an ending cash balance of$133,891.'

C. COMMITTEE ORGANIZAnON

Build PAC registered with the United States General Accounting Office as

Builders Political Action Committee on April 14, 1972, and changed its name to Build

Political Action Committee on September 17, 1980. Build PAC maintains its

headquarters in Washington, D.C. The Treasurer during the audit period was Joseph

Barney, who continues to serve in that capacity.

Figures in this report have been rounded to the nearest dollar. These amounts do not foot as a

result ofunexplained adjustments made by Build PAC when carrying forward ending cash on hand

balances to subsequent reports.

Page 1 of7 Approved 06/16/2000
To manage its federal financial activity, Build PAC utilized one bank

account. From this account, Build PAC made approximately 800 disbursements. Federal

receipts were composed of contributions from individuals ($2,077, I06); receipts from

political committees ($1 1,133); offsets to operating expenditures ($29,593); and interest

income ($ 15,272).

D. AUDIT PROCEDURES

The audit included testing ofthe following general categories:

1.

2.

3.

The receipt of contributions or loans in excess ofthe statutory

limitations;

the receipt of contributions from prohibited sources, such as those

from corporations or labor organizations;

proper disclosure of contributions from individuals, political

committees and other entities, to include the itemization of

contributions when required, as well as, the completeness and

accuracy ofthe information disclosed (See Finding II.);

4. proper disclosure of disbursements including the itemization of

disbursements when required, as well as, the completeness and

accuracy ofthe information disclosed;

5. the accuracy oftotal reported receipts, disbursements, and cash

balances as compared to bank records;

6. adequate recordkeeping for committee transactions; and

7. other audit procedures that were deemed necessary in the situation.

Unless specifically discussed below, no material non-compliance was

detected. It should be noted that the Commission may pursue further any ofthe matters

discussed in this report in an enforcement action.

II. AUDIT FINDING AND RECOMMENDATION

ITEMIZATION OF OFFSETS TO OPERATING EXPENDITURES

Section 434(b)(3)(F) ofTitle 2 ofthe United States Code states, in part,

that each report shall disclose the identification ofeach person who provides a rebate,

refund, or other offset to operating expenditures to the reporting committee in an

Page 2 of7 Approved 06/16/2000
aggregate amount or value in excess of $200 within the calendar year, together with the

date and amount ofsuch receipt.

Section 431(11) ofTitle 2 ofthe United States Code defines the term

"person" to include an individual, partnership, committee, association, corporation, labor

organization, or any other organization or group of persons.

Section 431(13)(B) ofTitle 2 ofthe United States Code defines the term

"identification" to be, in the case of any person other than an individual, the full name

and address ofsuch person.

The Audit staff reviewed all offsets to operating expenditures received by

Build PAC and determined that it did not itemize, on Schedules A (Itemized Receipts) as

required, any ofthe twelve (12) offsets, totaling $29,593. Build PAC did, however,

report receiving the offsets on the Detailed Summary Pages of disclosure reports filed

during the audit period. All 12 ofthese offsets were reimbursements to Build PAC by the

National Association of Home Builders, Build PAC's connected organization, for bank

service charges and for fees debited from Build PAC's bank account for the processing of

contributions made utilizing credit cards.

At the exit conference, Build PAC'S representatives were informed ofthe

matter mentioned above and were provided with a schedule ofthe offsets requiring

itemization. The Audit staffrecommended that amended Schedules A be filed to correct

the public record. Shortly after the exit conference, Build PAC complied with the Audit

staffs recommendation by filing amended Schedules A which materially corrected the

public record.

Page 3 of 7 Approved 06/16/2000
Page 4 o£1 Approved 06/16/2000
FEDERAL ELECTION COMMISSION

WASHINCTON. D.C. 204[,]

June 20, 2000

Mr. Joseph Barney, Treasurer

Build Political Action Committee ofthe

National Association ofRome Builders

1201 15,h Street, NW

Washington, DC 20005

Dear Mr. Barney:

Attached please find the Report ofthe Audit Division on Build Political Action

Committee ofthe National Association ofRome Builders. The Commission approved the

report on June 16, 2000.

The Commission approved Final Audit Report will be placed on the public record

on June 26, 2000. Should you have any questions regarding the public release ofthc

report, please contact the Commission's Press Office at (202) 219-4155.

Any questions you have related to matters covered during the audit or in the report

should be directed to Tesfai Asmamaw or Alex Boniewicz ofthe Audit Division at (202)

694-1200 or toll free at (800) 424-9530.

Sincerely,

Robert J. Costa

Assistant StaffDirector

Audit Division

Attachment as stated

. Page 5 of7 Approved 06/16/2000
r.... : ..

Page 6 of7 Approved 06/16/2000
CHRONOLOGY

BUILD POLITICAL ACTION COMMITTEE OF THE

NATIONAL ASSOCIATION OF HOME BUILDERS

Audit Fieldwork

Exit Conference

Final Audit Report Approved

03/20/2000 - 0411912000

04/19/2000

06/1612000

Page 7 of7 Approved 06/16/2000