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FEDERAL ELECTION COMMISSION

l\llj K SIIU Lr N.W.

W/\~.tINGI0N.U.(. 204(,4

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REPORT OF THE AUDIT DIVISION

ON THE

EYSTER FOR CONGRESS COI~ITTEE

I. Background

A. Overview

This report is based on an audit of the Eyster for

Congress 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 Federal Election

Campaign Act of 1971, as anlended ("the Act"). The audit was

conducted pursuant to Section 438(a) (8) of Title 2, of the

United States Code, which directs the Commission to make from

time to time audits and field investigations with respect to

reports and statements filed under the provisions of the Act.

The Committee registered with the Federal Election

Commission on March 11, 1976, in support of John C. Eyster,

a candidate for the office of United States Representative

from the 5th Congressional District of Alabama. The Committee

maintains its headquarters in Decatur, Alabama.

The audit covered the period from February 25, 1976,

the inception d~tc of the Committee, through July 14, 1976, the

final coverage date of the current report filed by the Committee

at the time of the audit. During the period the Committee reported

a beginning cash balance of $-0-, total receipts of $202,856.20,

total expenditures of $202,856.20, and a closing cash balance of

$-0-.

This audit report is ba~ed on documents and working

papers which support each of the factual statements. They form

part of the record upon ·,-lhich the Conunission based its decisic~lS

on the matters in the report and were avai1~ble to Commissioners

and ~ppropriate staff for review.

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B. Key Personnel

The principal officers of the Committee were O. z.

Gillespie, Chairman and J. A. Tucker, Treasurer during the

period covered by the audit.

C. Scope

The audit included such tests as verification of

reported receipts and expenditures and individual transactions;

review of required supporting documentation; analysis of

Committee debts and obligations; and, such other audit procedures as deemed necessary under the circumstances.

II. AUditor's Statement and Description of Findingn

It is the opinion of the Audit staff, based upon examination

of the reports and statements filed and the records presented,

that, except for the deficiencies noted below, the reports and

statements of the Eyster for Congress Committee fairly present

the financi.:ll activities of the Conunittee for the period covered

by the audit. Further, except as noted below, no material problems in complying with the Federal Election Campaign Act were

discovered during the course of the audit.

A. Preservation of Receipted Bills

Section 432(d) of Title 2 of the United States Code,

requires the treasurer of a political committee to obtain and

keep a receipted bill stating the particulars for every expenditure made in excess of $100 in amount, and for any such expenditure in a lesser amount, if the aggregate amount of such

expenditures to the s~m0 pQ~son during a calendar year exceeds

$100.

Part 102.9(c) (4) of the Commission's Regulations,

states that when a receipted bill is not available, the

treasurer may keep: (i) the cancelled check; and (ii) the

bill, invoice or other contemporaneous memorandum to support

the expenditure.

Our examination of the Committee's records revealed

that the Committee did not obtain ilnd keep supporting documenta- tio:~ :or 11 (26.8~) of 153 expenditures, each in excess of or

aggregating in e:.;ccss of $100. TheBe 41 expenditures totaled

$36,919.80, which represented 19.95:' of the dollar amount

($185,060.20) of expenditures requiring documentation. The

Committee submitted adequate documentation for the 41 expenditures

on February 14 and 17, 1978.

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nccommendation

The Audit staff recommends no further action be taken on

this matter.

B. Disclosure of Expenditures

Section 434(b) (9) of Title 2 of the United States Code,

requirf's a political committee to disclose the identification of

each It"rson to whom expenditures have been made by such conunittec

aggrt'l,,,ting in excess of $100 during the calendar year, together

with the amount, date and purpose of each such expenditure.

During the course of the audit, it was determined that

the Committee failed to itemize 22 (l4.38~) of 153 expenditures

aggrcgatinq in excess of $100. These 22 expenditures totaled

$2,847.57 «.lnd represented 1.54~ of thp dollar value of itemizablc

expendiLures which totaled $185,060.20. The Committee had no

explanation as to why these expcnditur(~:; were not itemized but

agreed to file an amendment itemizinq the 22 expenditures as

required. The amendments were filed by the Committee on March

30, 1978.

Recommendation

The Audit staff recommends no further action on this matter.

C. Disclosure of Contributor Information

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

requires a conunittee to disclose the ful1. name ilnd mailing address,

occupation and principal place of businclss of ~ilch person who has

made one or more contribution~j within the c~lendar year in an

aggrcyate amount in excess of $100, together with the amount and

date of such contributions.

Section 100.12 of the Commission's Regulations, in

part, defines "princip~l place of bu~incss" <'15 the full name

of the business and the city and state in \oJhich the contributor

is employed or conducts business.

During the course of the audit, it was determined that

there were 240 contributions which were required to be itemized

on the Conunittee's reports. Nost of the contributors itemized

on the reports disclosed only the Cit'l ~nd state for both the

contributor's mailing address and the principal place of business.

lIo\vcver, after we made adjustments for thos~ towns not rca~onabl~i

e>~pected to have a street address, the rc\·i~\·J rcvcilled:

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1) 128 (53.33%) of the 240 contributions did not

have the name of the employer as part of the principal place

of business.

2) 55 (22.92~) of the 240 contributions had an

incomplete mailing address (only city and state).

The Treasurer stated that the Committee had representatives in varioun conm\uni ties soliciting and receiving contributi.on~:;.

The Committee representatives turned in the proceeds to the Committee headquarters, but the required contributor information was

sometimes missinq. \vhen asked what methods the Committcl~ employed

to obtain this missinq information, the Treasurer stated it was

requested from the Committee representative who turnpt! in the

contribution. If thc~ representative did not have the contributor

information, no furtllcr means were employed to obtain the required

information. The Conunittee was advised to obtain the mi:3sing

contributor information and agreed to file an amendment disclosing the required information.

Subsequent to our fieldwork, the Committee filed an

amendment which disclosed the employer as part of the principal

place of business for 119 of the 128 (92.97~) contributors that

did not have a complete principal place of business. Although

the amendment disclosed a complete mailinq address for only two

(2) of the 55 (3.64~) contributors \vhich had incomplete mailing

addresses, the amending of the principal place of business for

the 119 contributions above resulted in a mailing address for

34 of the 55 (6l.82~) contributions which lacked a complete

mailing address.

Recommendation

Based on the Committee's efforts outlined above, the

Audit stdff recommends that the Commis~;ion determine that

the Committ(~c ha~~ usvd its best efforts to comply with

Section 434(b) (2) and that no further action be taken on

this n\iltter.

D. Other Matt0rs

It was dclt."'rmincd durinq the course of the audit

th~lt un ~<JqreCJatc ycar-to-<.1~ltc total \olas mi!:isinq for 117

('"uut :__ i!Hl~:i\.):~~~, \,..;hl"'rl"' tht~ c0ntributor h-Hl mad(~ il previous

con l r i btl t ion. 'l'h i S tn., t: tcr \~..l n discusf;(!d \oJ i th the Commit tee 'l'r't'l,~alrt~r \.;ho stt,tl.'d t h~lt t.hl~)-e was no !.');':'~:11 !iY~1t('m for the

,1CJ'Jrl.'q~\lion of contribtltion~;. He stated that he <.lid trace a

conlrluuttl)n rcvt~ivl.:d throuqh the recor,ls to insure that

(':-:cl~~uive contributiollB were not accepted (there were none). 1I{)\"'t~vl"'r, tl11."' llqqrt.'q,"lle tot.:lln were never rccordL"'u in the

Cummi t. Lt.'e'~; rl.'cord:;. \~e dltV i ~jcd the Cor.imi t tee tha t for future

ruferl'ne("' lhi:~ inf()r(~,.\tion ~,;hould be incl~l\.1cd on the Committee's

rt 'p()rt~~ Lo llh~ Cott\m i:;~; ion I bu t tha t no further action need be

li,}~('n in thi~~ ca!jc.

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• Candidat~/Ccmmittee:

CONGRESSIONAL AUDIa ~E?ORT

John Eyster I Eyster for Congress Committee

State:

District:

Location:

Alabama

5

Huntsville

Poli:;cal ?ar~J Affiliaticn: Democrat

Other Candida~as ~u~i:ad:

Major Opqcr.ant(s}: Ronnie Flippo {O}

John Eyster (D)

Jyles Machen (0)

Flippo

Eyster

Machen

Robert Potts (D)

Gene McLain (D)

Lynn Greer (D)

Potts

McLain

Greer

Votas Cas:: G~neral Eiec~ion - Flippo - Unopposed

Primar-J ~1 :c-:i en - Flippo

Eyster

Machen

25,343

22,456

17,059

Potts 14,553

McLain 11,679

Greer 5,283

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Total Receipts f~r ?~ricd:

Total Sx~enci~~r~s for ?~ricd:

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$202,856.20

$202,856.20

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