Draft Final Audit Report of the 

Audit Division on the 

Democratic Executive 

Committee of Florida 

January 1, 2007 - December 31, 2008 

FinanciaipLCtivity (p. 2) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(tiie Act). The 

Commission generally 

conducts such audits 

when a committee ^^^ ^ 

appears not to hav^^t-^^l^l 

tiie tiu-eshold "^^^ 

requirements for 

substantial complian 

witii tiie^tMtoeaudiFlf^J 

detgmMes'wTime^^ ^li^j _ _ _ 

co^|e e compliSi^kl "^^/Jotal Difflrsements' 

the Imitations, 

prohibil^^sand 

disclosure^Filquirements 

of the Act. 

About the Committee (p. 2) 

The Democratic Executiy^ipfmmittee of Florida is a state party 

committee headquarter^lljdr Tallahassee, Florida. For more 

information, see thgp^ft'OS^e Committee Organization, p. 2. 

ihs ^^^ndividuals 

^^^^Jrom Othei^^^pal Committees 

"^^^^^glg Affiliate^^0er Party 

ees 

l&om Non^'i^deral Account 

Disbursements 

i|}^$^Pperat£ig^,Expenditures 

d^Mederal Elel^.tion Activity 

o OtherJ^isbursements 

$ 1,381,039 

379,860 

20,465,884 

2,037,583 

516,180 

$ 24,780,546 

$ 12,999,529 

11,409,932 

288,438 

$ 24,697,899 

Future Actiolttm|Sf 

The Commission majn^^^^ 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

^Findings and Recommendations (p. 3) 

Excessive Coordinated Party Expenditures (Finding 1) 

Failure to Itemize Coordinated Party Expenditures (Finding 2) 

Allocation of Expenditures (Finding 3) 

Misstatement of Financial Activity - Levin Fund (Finding 4) 

Disclosure of Disbursements (Finding 5) 

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

Audit Division on the 

Democratic Executive 

Committee of Florida 

January 1, 2007 - Da^mber 31, 2008 
Table of Contents 

Part I. Background 

Authority for Audit 

Scope of Audit 

Part II. Overview of Committee 

Committee Organization 

Overview of Financial Activity 

Part III. Summaries 

Findings and Recommendations 

Page 

\T;'!S::%J. 

Part IV. Findings and Recominiendatidns 

Finding 1. Excessive Coordui|^d Party Expi^)p|^ep>^'' 

Finding 2. Failure to ItemizlB^^drd[inated Parip^^enditures 

Finding 3. Allocation of Expei|p^|^ 

Finding 4. Misstatement of Finl^ial'^A^j^ - Levm^J| 

Finding5. DisclosureipfDisburseSents 

5 

8 

9 

14 

15 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the Democratic Executive Committee of Florida 

(DECF), undertaken by the Audit Division of the Federal Election Commission (the 

Commission) in accordance with the Federal Election Campaign Act of 1971, as 

amended (the Act). The Audit Division conducted the audiU)ursuant to 2 U.S.C. 

§438(b), which permits the Commission to conduct audits^and^field investigations of any 

political committee that is required to file a report uni^jf^J'^S.C. §434. Prior to 

conducting any audit under this subsection, the Conun^si^^^ust perform an intemal 

review of reports filed by selected committees tode^^m s^nhine^i^th : e reports filed by a 

particular committee meet the threshold require%i|nts for subs 

Act. 2 U.S.C. §438(b). ^^'^^ 

tial compliance with the 

Scope of Audit 

Following Commission-approvedprocedures, tKe!%idit^K evaluated 

factors and as a result, this audil^mnined: 

1. the receipt of excessive contnb^t$£[§^and loans; 

2. the receipt of contributions fi:o^j|rohib^^;.sourcesr^; 

3. the disclosure of individual contribiitors^ 

4. the disclosure ogaisbursements, deptsvand oDiigaiions; 

5 flno Aicn^nc•l^re^i€^vr^f^c^^a^^nnate^A nf>fwp>f^nVV&iri< the disclosure^^xpen'! 

6. the consistendy>between r! 

7. the completenes'S^^iirecori 

^srisk 

ion md^ane of employer; 

^non-federal accounts; 

s; 

e^review. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration April 19,, ^ 

• Audit Coverage Januaii1|i||l07 - December 31,2008 

Headquarters Jl^iEdlaMssee, ¥lp^da 

Bank Information 

• Bank Depositories *'^4 

• Bank Accounts "^i3bFedeKfl^d Two NoPfiieral 

Treasurer "^^SSfesw 

• Treasurer When Audit Was CondiSftd'^^Ji^ ^AlmaGMMez 

• Treasurer During Period Covered byi^udit ^ ^SudyPark^i^k.. 

Management Inforn(alSon"""'^if'^-4. ••^3,, 

• Attended FEC C'ini^aign FinarTce SeminafH^0 ;if^s 

• Who Handled Accounting an(j|^i, ^\ 

Record|:eepingjrasks ""^^^it^S^^j*-. 

%aid Staff 

Ove^|ew^r FinTancial Activity 

(Au%ted Amounts) 

Cash-on-hand @ 

o Contributions firom^diytfSs 

From Other Political l^cl^ittees 

o From Affiliated/Other Party Committees 

o Transfers fi'om Non-federal Account 

o All Other Receipts 

Total Receipts 

o Operating Expenditures 

o Federal Election Activity 

o Other Disbursements 

Total Disbursements 

Cash-on-hand @ December 31,2008 

$ 203,156 

1,381,039 

379,860 

20,465,884 

2,037,583 

516,180 

$ 24,780,546 

12,999,529 

11,409,932 

288,438 

$ 24.697,899 

$ 285,803 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Excessive Coordinated Party Expenditures 

During fieldwork, the Audit staff calculated that DECF apj^ars to have exceeded the 

2008 coordinated party expenditures limit on behalf of a^i| ^ candidate ($60,000) I 

$35,108. Our review identified two media ads ($82,^Q^^d two direct mail pieces 

($12,708) that appear to represent coordinated par^xjpSmfiJiures. 

In response to the Interim Audit Report recommiplation, DEG^^vided statements and 

documents to demonstrate why the expendi^es^hould not be coni^ered excessive 

coordinated party expenditures. DECF suWi^d documentation for\1|[j||lirect mail 

pieces to support its claim that sufficient voluMepr activit^.Mpccurred andj|h.^expenses 

qualified for the volunteer materials exemptionMt|^er^^t''coordinated p^t^ 

expenditures. In light of the lac^^lfrity in recen^J^jlTregarding the aniSimt of 

volunteer involvement needed to^^pli^^rthe volunt^eigiiaterials exemption, the 

expenses were not counted toward^^e cbo^inated partjf^penditure limit. Regarding 

tiie two media ads ($82,400), DECFli%,not^3lmfiLiastrate ttif&iey were granted 

-i^^t^.-... ^m L exceeded its 

$60,000). (For more 

Finding^^Faillite^^^ Coordinated Party 

Ex]^»imi|K 

Dij^prieldwork, %1^^dit sl^^jdentified'IS^expenditures, totaling $207,665, that were 

not it^ized on Sche^^sSF (IteMi|e4 Coordinated Party Expenditures). The 

expendit^^were made o^|phalf 611)^^ congressional candidates. Subsequent to the 

start of audiMjeldwork UI.>1] , DEpK filed amended reports that substantially disclosed the 

expenditures iudlquestion as 5b%dinated party expenditures on Schedules F. 

In response to the Ihierim^udit Report recommendation, DECF made no additional 

comments on this matt^^pECF has corrected the public record with respect to these 

transactions. (For more detail, see p. 8) 

Finding 3. Allocation of Expenditures 

During fieldwork, the Audit staffs review of disbursements made fi'om the federal and 

non-federal accounts identified an apparent non-federal overfunding of allocable activity 

in tiie amount of $107,536. 

DECF materially complied with the Interim Audit Report recommendation. DECF either 

accepted the Audit staffs position or provided documentation demonstrating that lesser 
allocation was required for all non-federal expenditures in question, except for rent 

payments. DECF's response reduced the potential non-federal overfunding of allocable 

activity to $84,364. (For more detail, see p. 9) 

Finding 4. Misstatement of Financial Activity - Levin 

Fund 

Throughout the audit period, DECF disclosed $6,438 as cash-on-hand for the Levin Fund 

account. However, DECF's Levin Fund account closed in November 2006. In response 

to the Interim Audit Report recommendation, DECF filed aig^amended report that 

corrected the overstatement of cash-on-hand. (For more dcim^ see p. 14) 

Finding 5. Disclosure of Disbursements 

During audit fieldwork, the Audit staff calculated ^^disbiirsWent entries, totaling 

$9,554,713, contained inadequate or incorre^^^osure info^itipn. In response to the 

Interim Audit Report recommendation, DE^wied amended rqp^Mjiat materially 

corrected the disclosure errors. (For mor< 
Part IV 

Findings and Recommendations 

I Finding 1. Excessive Coordinated Party Expenditures 

Summary 

During fieldwork, the Audit staff calculated that DECF appears to have exceeded the 

2008 coordinated party expenditures limit on behalf of a Hjpiuse candidate ($60,000) by 

$35,108. A review identified two media ads ($82,400) ann^o direct mail pieces 

($12,708) that appear to represent coordinated party ^^hditures 

In response to the Interim Audit Report recommendisition, DE^^provided statements and 

documents to demonstrate why the expendituu^^i&ould not be''e|%sidered excessive 

coordinated party expenditures. DECF subtf^tticl documentation%lMie direct mail 

pieces to support its claim that sufficient vohinteer activity occurredlind|^e expenses 

qualified for the volunteer materials exemptioi^lind were/Ubt coordinatM^arty 

expenditures. In light of the lacl^.^f clarity in recer|t\ai^4i^^'^S^<^iiig the ^|unt of 

volunteer involvement needed tC^li'fy for the vofimti^lr materials exemptiOU, the 

expenses were not counted towardilmtete^^^nated p^^^^j^penditure Umit. Regarding 

tiie two media ads ($82,400), DECF^d%'i^^|gnsU-ate^t jhey were granted 

additional spending mit^ority beyondi^.O,OOO^^^result, 1^'^^ exceeded its 

coordinated party ex^ncif%es limitati%)y $22^^^g2,40'^$60,000). 

Legal Standard 

A. Coordinated P^i|^|xpe^^.ures. Natr^l^party committees and state party 

Su^^chases }^inated pai^texpenditures. They are subject to the are 

fbUS^^^les: 

• uji^^^amount speni^^'coordina^ed party expenditures" is limited by statutory 

fol^tl^s that are based on the^i^ost of Living Adjustment (COLA) and the voting 

age population. 

• Party cdlmiittees a^v^ermitted to coordinate the spending with the candidate 

committees^^i;.^ 

• The parties md^^^e these expenditures only in connection with the general 

election. 

• The party committees—^not the candidates—are responsible for reporting these 

expenditures. 

• If the party committee exceeds the limits on coordinated party expenditures, the 

excess amount is considered an in-kind contribution, subject to the contribution 

limits. 2 U.S.C. §441a(d) and 11 CFR §§109.30 and 109.32. 

B. Assignment of Coordinated Party Expenditure Limit. A political party may 

assign its authority to make coordinated party expenditures to another political party 
committee. Such an assignment must be made in writing, state the amount of the 

authority assigned, and be received by the assignee before any coordinated party 

expenditure is made pursuant to the assignment. The poiiticai party committee that is 

assigned authority to make coordinated party expenditures must maintain the written 

assignment for at least three years. 11 CFR §§104.14 and 109.33(a) and (c). 

C. Volunteer Activity. The payment by a state committee of a political party of the costs 

of campaign materials (such as pins, bumper stickers, handbills, brochures, posters, party 

tabloids or newsletters, and yard signs) used by such committee in connection with 

volunteer activities on behalf of any nominee(s) of such par^iis not a contribution, 

provided that the following conditions are met: 

1. Such payment is not for cost incurred in connec^^withi^^ broadcasting. 

newspaper, magazine, bill board, direct mail, oi^fsunilar typeti;f;|eneral public 

communication or political advertising. Th^^Sdirect mail nle^s>^y mailing(s) by a 

conunercial vendor or any mailing(s) madep%^ commercial lists^"^ 

2. The portion of the cost of such material^|)cable to Federal Candidas must be paid 

from contributions subject to the limitations ^'^rphibr|i^%,of the Aci^^^. 

3. Such payment is not made fi-o^^t^ontributions^^j^apl^y the donor tot^spent on 

behalf of a particular candidate 'f#jF^deral office. 

4. Such materials are distributed b%ydli^ers and not^b^^i^mmercial or for-profit 

operations. ^ 

5. If made by a politiigsi^^mmittee such)'4>aymelt|fshf||l be rei^gged by the political 

conunittee as a disbuS^e^in accor(^%e wi^|iMEi|$ 

to specific candi^i^n committee report^:^ 

fKjGiMiw.: but need not be allocated 

6. The exemption^^Mt applic^^te to cam^li||^materials purchased by the national party 

committees. 11 CF^^|).q.87 (|f^)^, (c), (d)fi|). and (g) and 11 CFR §100.147 (a), (b). 

(c).(d)?(?|p|)^,... ^ 

FacjCsTand Analiriis. 

A. Fa^ ^ Ig^ 

The coordihiEit^d expenditu^e|limit for'^me 2008 election cycle for a U.S. House of 

Representatr^l|^didate ii^e state of Florida was $42,100. DECF provided 

documentation ^m^tfae DQ^M showing that it authorized DECF to spend $17,900 of its 

g^^o, a candidate for the U.S. House of Representatives. limit on behalf of /mne; 

Therefore, DECF's ^^lifil[ed spending limit for tiiis candidate was $60,000. 

The Audit staff identified four disbursements, totaling $95,108, on behalf of Annette 

Taddeo. Two disbursements ($82,400) were for media ads. The remaining two 

disbursements ($12,708) were for direct mail pieces. DECF disclosed the cost of one 

media ad and both mail pieces as federal election activity on line 30b of its disclosure 

reports. The cost of the remaining media ad was disclosed as an operating expenditure on 

line 21b. 
One of the two media ads discussed the candidate's position on health care. The other ad 

discussed the opponent's voting record on health care and taxes. The disclaimer for each 

ad stated, "Paid for by the Florida Democratic Party and Taddeo for Congress, Approved 

by Annette Taddeo." 

Regarding the direct mail pieces, a vendor located in Virginia processed and mailed the 

two direct mail pieces (one in English, the other in Spanish). The file for this vendor 

included an email communication fi-om a vendor representative to a representative of 

DECF requesting approval of the direct mail piece. The email also copied the Taddeo 

campaign. 

B. Int.HTMA„d,tReport&A«dltDMs,o„RecoTM^t.o„ 

At the exit conference, the Audit staff provided D^^^^^^itatives with a schedule of 

the apparent excessive coordinated expenditur^^Mrespons^^ECF stated they believed 

they were authorized to spend an additional^^pSo because In^KCC had reported 

spending only $1,754 in coordinated camp^^^xpenditures on b^^^£f candidate 

Taddeo. DECF also stated that the combi^^^^l spent on Taddeo "S^^ss than the 

$84,200 available^. They believe tiiat tiie D^^n d D^^coordinat^^^chieve tiiis 

and that the remaining authority^^d have been^|^^^^[ to DECF. D^ ^ also 

stated that the Taddeo mail piec^^^^ented exe^^^pivity. 

The Interim Audit Report recommeMbd 

coordinated spendingj^hjby providii^evidenl 

• It received^^^^^^ending a^orii\ 

excess o!^^60,00^raLitation; 

ate that it did not exceed its 

prior to spending in 

Ivement watlrrcspect to the direct mail pieces. 

Absent 

$35^^9 

re^lSeceived. 

^^epori recommended DECF obtain a refund of 

rom Tad^^brX^^ess and provide evidence of the 

C. Committee Responsl^mnterif^^dit Report 

In respon^^^e Interim ^^t Report, DECF stated that the audit report correctly states 

that DECF r^^ftd coordin^l expenditures of $95,108 on behalf of Annette Taddeo.^ 

DECF acknowlM]^. that j^pF paid for two media ads, totaling $82,400, on behalf of 

the candidate andl^^m^^maldng these expenditures; the DCCC assigned $17,900 of 

its coordinated expenai^^^mit to DECF. DECF also submitted a letter; dated 

September 22,2011, firom the DCCC to explain the coordinated expenditure authority. 

The letter states, "[t]he DCCC's current records show a transfer (of) $17,900 in 

coordinated expenditure authority in connection with this election to the Florida 

Democratic Party on October 29,2008. While we can locate no further records of other 

transfers of authority to your committee in connection with this election, we did support 

^ DECF had a coordinated expenditure spending limit of $42,100 and the National Party Conimittee also 

had a coordinated expenditure spending limit of $42,100. 

^ Disclosure reports subject to this audit did not disclose any coordinated expenditures for Annette Taddeo. 

(See Finding 2) 
Ms. Taddeo's candidacy - both before and after the date of the above transfer - and we 

know of no reason why any requested or needed transfer of authority would have been 

withheld at the time." 

Regarding the two mail pieces, DECF stated that the mail pieces were actually prepared 

with substantial volunteer participation and, therefore, meet the volunteer materials 

exemption and should not be considered coordinated party expenditures. DECF also 

provided a copy of a photo which it believes demonstrates volunteer participation. In 

light of the lack of clarity in recent audits regarding the amount of volunteer involvement 

needed to qualify for the volunteer materials exemption, the^xpenses were not counted 

towards the coordinated party expenditure limit. .^3^ 

In response to the Interim Audit Report, neither DE^pn^^|pCCC could locate a 

record authorizing additional spending authorh^^^^J^lnoted in^ejegal standards above, 

11 CFR § 109.33(a) requires that an assignme|i|ltSust be made in^^ting, state the amount 

of the authority assigned, and be received^b^Me assignee before a^y^pordinated party 

expenditure is made pursuant to the assigiilr^t. In similar cases, the^mmission has 

rejected assignments of spending authority afi^^g fact^^^sent evide£^(^Qf additional 

spending authority from tiie DCQg, DECF's co6rd^jt^|^pending limit w^^60,000 

and DECF exceeded its coordin^l^xpendiUu-e liii^§h§n by $22,400 ($82,400 [media 

ad expenditures] - $60,000 [DECfS^^inated spencTingvlimit]). 

Finding 2. Failure to It^mlzel^ordinat^(a>Party 

Expenditures^^ 

Summary 

During fiel^^vQA, the''Apl;it| 

not itemizeiSoniSGhedule'^'dtEi^^ 

itures, totaling $207,665, that were 

Party Expenditures). The 

expenditures in question^as;)cpordiha^.d party expenditures on Schedules F. 

In response ti^e Interim A^^it Report recommendation, DECF made no additional 

comments on tMsrmatter. D!^ F has corrected the public record with respect to these 

transactions. 

Legal Standard 

Reporting Coordinated Party Expenditures. Each political committee shall report the 

full name of each person who receives any expenditure from the reporting committee 

during the reporting period in connection with an expenditure under 11 CFR Part 109, 

Subpart D (2 USC 441a(d)), together with the date, amount and purpose of any such 

expenditure as well as the name of, and office sought by the candidate on whose behalf 

tiie expendittire is made. 11 CFR §104.3 (b)(l)(viii). 

* Final Audit Report on Missouri Democratic State Committee, MUR 5274. Final Audit Report on the 

California Republican State Committee, MUR S246. 
Facts and Analsrsis 

A. Facts 

The Audit staff identified 64 expenditures, totaling $207,665, that were not itemized on 

Schedules F as coordinated party expenditures. The expenditures were made on behalf of 

six congressional candidates and included payments for staff salaries, direct mail, cell 

phones and media ads. Subsequent to the start of audit fieldwork, DECF filed amended 

reports that substantially disclosed the expenditures in question as coordinated party 

expenditures on Schedule F. 

B. Interim Audit Report & Audit Division Recommi^Adation 

This matter was presented at the exit conference. Ii^ie^KiD|e, DECF stated that it believes 

two of the disbursements, totaling $12,708, wq^olthteer hs|iHngs (Taddeo mail pieces 

discussed in Finding 1) and thus would not^^F^be reported^^^hedules F. The 

Interim Audit Report recommended DEC^^ide any additionaMn^jmation or 

comments that it considers relevant to thi^ 

C. Committee Response to Interim Audit Repoctv^^i^ 

In response, DECF did not have<^^^litional cornM^^ on this matter. As explained in 

Finding 1, there is a lack of claritwregar^iug the amomifrof volunteer involvement 

needed to qualify for the volunteer npteriHk^ixemption.^'^ result, expenses for two 

direct mail pieces totalmg. $12,708 wl^^not classified as ci^rlinated party expenditures. 

Therefore, the amoitf^^^^enditureslliltiprevioiM^^Semized Schedules F is 

$194,957 ($207,,, |;i^$12,76|)kDECF hmcoliected ffieaWic record witii respect to 

these transactions 

FindilS ixpendttures 

i Summary 

During^^work, the Ai^^taff"s^^ew of disbursements made from the federal and 

non-feder^^ccounts ide^^^ an app^nt non-federal overfunding of allocable activity 

in tiie amoS^f $107,536.'' ^ 

DECF materiall^^^he^^^ib the Interim Audit Report recommendation. DECF either 

accepted the Audit^^^^s'ition or provided documentation demonstrating that lesser 

allocation was required^r all non-federal expenditures in question, except for rent 

payments. DECF's response reduced the potential non-federal overfunding of allocable 

activity to $84,364. 

Legal standard 

A. Paying for Allocable Expenses. The Commission regulations offer party 

committees two ways to pay for allocable, shared federal/non-federal expenses. 

• They may pay the entire amount of the shared expense from the federal account 

and transfer fimds from the non-federal account to the federal account to cover the 

non-federal share of that expense; or 
10 

• They may establish a separate, federal allocation account into which the 

committee deposits funds from both its federal and non-federal accounts solely 

for the purpose of paying the allocable expenses. 11 CFR § 106.7(b). 

B. Transfers. Generally, a political committee may not transfer funds from its nonfederal account to its federal account, except when tiie committee follows specific rules 

for paying for shared federal/non-federal election activity. 11 CFR §§102.5(a)(l)(i) and 

106.7(f). 

C. Reporting Allocable Expenses. A state, district or local^epmmittee that allocates 

federal/non-federal expenses must report each disbursenf^lf makes from its federal 

account (or separate allocation account) to pay for a shs^edv^federal/non-federal expense. 

Committees report these kinds of disbursements on|S'e)iediUji^;H4 (Disbursements for 

Allocated Federal/Non-federal Activity). 11 C?R,§fib4.17(8)^k 

committees 

ve is an 

D. Allocation Required for Generic VofebDrives. State and loci 

must allocate all of their costs for generic v8ti^.drives. A generic vofli§ 

activity that urges the general public: 

• to register to vote; ^ 

• to vote; or 

• to support candidates of a i^irticil^^arty or caMMates who are associated with a 

particular issue, without mentioning^^^^ific canailate. 11 CFR § 106.7(c)(5). 

inistrativl:^ Gen^c^l^er Drive Costs. State and local 

generic voter drive 

E. Allocation R^fdr.-.,^^ „ 

party committee^^m allocl^heir adnunis^ftVe ex] 

costs dependent up^^ich felE^al office^^^ar on the ballot for the election year. 

The minimum percen^g^f fe^^^fimds wd^ijd^be at least: 

• .^^S'^^lBMdf botlffi^fitleli^ a Senate candidate appear on the 

^^.^^8 percent if'i^^identi^^andidate out not a Senate candidate appears on the 

•|ballot; ^feh, "^^^^ 

• 2T^percent if a Senat^candidat^;but no Presidential candidate appears on the 

baii%d, m 

• 15 percentnf neither l^residential nor a Senate candidate appears on the ballot. 

11 CFR p§fe:7(d)(^d (3). 

F. Allocation of Costs^bfFederal Election Activity. Expenditures for public 

communications as defined in 11 CFR 100.26 by state party committees that refer to a 

clearly identified candidate for Federal office and that promote, support, attack, or oppose 

any such candidate for Federal office must not be allocated. Only federal funds may be 

used. llCFR§300.33(c). 

G. Allocation Ratio for Shared Fundraising Expenses. If a committee raises both 

federal and non-federal funds through the same fundraising program or event, it must 

allocate the direct cost of the fundraising event based upon tiie ratio of funds received by 

the federal account to the total amount raised for the event. 11 CFR § 106.7(c)(4). 
11 

H. Salaries and Wages. Committees must keep a monthly log of the percentage of time 

each employee spends in connection with a Federal election. Employees who spend 25 

percent or less of their compensated time in a given month on Federal election activity or 

on activities in connection with a Federal election must either be paid only from the 

Federal account or have their salaries allocated as an administrative cost. 11 CFR 

§ 106.7(d)(1). 

Facts and Analsrsis 

A. Facts 

The Audit staff calculated the non-federal share of ^jj^^^^^es required to be disclosed 

on Schedules H4 and compared that to the amount^^^^^from the non-federal 

account. It calculated that the non-federal porti^^^^arei^^tay was $2,222,695. 

However, the non-federal account transferred ^P^2,955, resi^^gjjn an overfunding of 

$20,260. , 

In addition to the above, the following expenHS^ges wer^^id directlyl^^the nonfederal account but appear to represent 100 percent k-iiji.il^tivity or allo^^^ activity. 

lat include^^^ture of President Bush and 

gh tl^^g^es and a caption stating, 

iSameT^^letcback^lnf the mailer stated, "Send 

An absentee chase ballot (S3.7 

Vice President Cheney witii a 

"We Can't A^^More Of ' 

the Repub^^^^^^^ge - Y5^an Mali^^^ger^e Vote Democratic 

followed^^^ampl^^lot listin^^^^^oci^^pbminee for President and 

Vice Presil^ Congre^)nal Distri^^ and 4, StaE^Senator District 3, State 

Representati^^igtric|s^||jd 9, Coii^^JCommissioner, City Commissioner and 

email bj^een the Leon County Chair and DECF 

IWCF ex^^^^v^ in connection with a federal election, 

pie baJ^^ould have been paid with federal funds. 

I^count overpaid $3,745. 

.l^^i^^mjervil^ 

Li^^^^l^lthat till 

ased on ve. 

li A.s a result, the^l%-fede 

An ^^ce for $17^^, with ii!l'description, "Consulting Fee for Creole 

Tran^^^/Haitian American G.O.T.V." Support for this disbursement was not 

availabll^^evie^^^Kowever, if the activity represents a public communication 

that named^^^^^entified federal candidate, the cost would have to be paid 

with 100 perc^^^^ral funds. If the cost represented get-out-the-vote activity, it 

could have been paid with a combination of federal and Levin funds. However, 

DECF did not maintain a Levin fund; therefore, only federal funds could be used. 

The only way that the cost could have been permissibly paid with 100 percent 

non-federal funds was if the activity named only non-federal candidates and did 

not represent a get-out-the-vote effort. 

The Audit staff could not determine if this payment was wholly non-federal, 

allocable or wholly federal. Until more information is provided, it is assumed that 

the cost potentially should have been paid entirely by the federal account. As a 
12 

result, the non-federal account may have overpaid its share by as much as 

$17,240. 

The total amount of rent paid for DECF's headquarters during the audit period 

was $212,313. According to DECF, tiie building is occupied by DECF, tiie State 

House Caucus and the State Senate Caucus (Caucus). With the exception of one 

month (January 2007), DECF paid half of the monthly rent directly from the nonfederal account and half from the federal account. Rent payments from the 

federal account were disclosed on Schedules H4 and allocated 28 percent federal 

and 72 percent non-federal. Thus, the non-federaljg^ount paid 86 percent of the 

rent for DECF headquarters. As a result, the nonCjp^al account overpaid its 

share of rent by $28,482 ($181,347 - $152,^p^ 

DECF was not able to produce monthl^^^fimHogs ^^.^^ployees documenting 

their time spent on federal and non-fe'di^afactivities. iMddition, the records 

supplied by three individuals did i^ipt^st to working 25 percent or less of their 

time on federal activity for all the p^pjeriods in which their Ma^es were 

allocated between federal and non-fedelraDactivi^^Absent recordslto. demonstrate 

the activity engaged in b^^^^employees i£[|[uptipii, $23,172 was c'dtisidered to 

potentially be a non-allo6ai|l^^xpense that should have been paid entirely by the 

federal account. * ' 

Ten fundraisingvprograms and-events were'iX^VLewed^for^e proper allocation of 

expenses biej^'isi^f^eral and noM|ederii.l^accOi^^ of each fundraising 

program ^ol^nt in wl^ch DECF^gbU'leM botStlS^l and non-federal fimds 

was allocatiaibased on'-tne funds rece'iyed method. One event, the 2008 Jefferson 

Jackson Dinne^aGpoum(^«for the am'ount of overfundmg identified. The 

<^pi$MMonJof feSill^SlWceiy^ tolf^rfederal fimds received as calculated 

Ipf DECFi^^,8 pCTe®J.federarf0^^p^erc^t non-federal. Per tiie Audit staff's 

calculation, ttl^taounl^iigjnds recdi^i^ was 16 percent federal and 84 percent 

ion-federal, l^l^reyiewlndicated that the non-federal account overpaid its share 

o^he fundraising'cpst by $r4|63,7. 

^ W 

In summary,'t^^udit staff flltculated that the non-federal account potentially 

overfimded its sSal^of exp4jSittires by $107,536 ($20,260 + $3,745 + $17,240 + 

$28,482 + $23,17i*#14';63iWB. Interim Audit Report & Audit Division Recommendation 

This matter was discussed at the exit conference. In response, DECF stated that the cost 

of the absentee chase ballot ($3,745) and the consulting fee for Creole 

Translators/Haitian American G.O.T.V. ($17,240) represent non-federal activity. DECF 

did not provide any documentation supporting its position. 

With respect to the rent allocation and the Caucus, DECF stated that the Caucus is 

"considered an autonomous project of the state party ... they do not have a separate legal 

entity. Therefore, they did not sign the lease." DECF further stated that the Caucus 
13 

employees are on the payroll of the state party, so they would technically qualify as 

employees of the party. 

The exit conference response did not address the lack of time records and allocation of 

fundraising expenses. 

The Audit staff has reviewed DECF's response and offers the following: 

Absentee Chase Ballot - DECF did not provide any documentation supporting its 

position that the mailer represented 100 percent non-fede^^&tivity. Tlie mailer clearly 

identified a candidate for federal office. The email bet^^^fe Leon County Chair and 

DECF makes clear that the DECF expenditure was ijc^^^gction with a federal election. 

Therefore, the cost of the absentee chase ballot sh^Qna^^n paid with federal funds. 

Consulting Fee for Creole Translators/Hainan .-Vmerican ^^^V . - DECF did not 

provide any documentation supporting its^^^Eon that the activi^^^lOO percent nonfederal. As previously stated, until more u^^^tion is provided, it i^ftesumed that the 

cost should have been paid entirely by the fe^pl^accounif 

Rent Payments - A state party ^^^^tee may eit^^^ administrative costs, including 

rent, from its federal account, or ^^^^^^^expens^^^een its federal and nonfederal accounts, (11 CFR § 106.7(^^p.^^te|ExplaniS^^d Justification for section 

106.7(c), the Commi^^gjrecognizes tmt state^^^^mim^^^ngage in multiple nonfederal activities,^^^p^^^ission ^^mi^^p^^^adm^strative costs underlying 

a state party con^^^'s a^offi^s shoulo^^^ea^^^efore, the rent payments in 

question should hl^^en alldffled on a 28l^rcent federal and 72 percent non-federal 

basis. 

C. Commil^e Response t^pteriml^^udit Report 

In response i^^Jnterim ^^^gt Report, DECF conceded that DECF's non-federal 

account overfU^^^s sha^Hctivity in the amount of $43,469 ($20,260 [Initial 

Overfunding] + $^^^^Mtee Chase Ballot] + $4,827 [Consulting Fee for Creole 

Translators/Haitian i^^^m G.O.T.V. - 28%] + $14,637 [Fundraising]). DECF states 

that the federal account reimbursed the non-federal account accordingly^. 

DECF's position demonstrates that the documentation provided verified that the 

consulting fee paid for the Creole Translators/Haitian American G.O.T.V. represented a 

shared activity that should have been allocated based on the administtative ratio of 28% 

federal and 72% non-federal. 

^ DECF's September 2011 bank statement verified the transfer of $43,469 from the federal account to the 

non-federal account. 
14 

DECF also provided documentation demonstrating that the salary payments in question 

were for eniployees that did not spend in excess of 25 percent of their time on Federal 

election activity or on activities in connection with a Federal election in a given month. 

DECF disagrees that a portion of the headquarters rent requires allocation. DECF states 

that the Florida State Caucus and Senate Committees serve as the campaign arm of the 

Democratic legislators for both the Florida State House and Senate. DECF contends that 

due to state law, the state party was required to serve as fiscal agent for both the House 

and Senate Democratic Caucus Committees. Each Caucus Committee is responsible for 

raising its own funds and administering its own budget, e^^shed in consultation with 

DECF, which can only be utilized for state elections to^^^^da House and Florida 

Senate. Although each staff member for each Cauci^^^^ittee is an employee of 

DECF, they are employed in consultation with lea^^^^^mjrespective Caucus. 

DECF furtiier states that, as a matter of law^^^pECA and CoiH^ssion regulations do 

not consider a caucus committee as a part^^^^^ittee. Furthermi^^^ngress, during its 

2002 amendments, amended the FECA to ^^fically cover caucus co^muttees 

separately in certain circumstances. In additi^^^CF s|^^ that none^^e provisions 

added to the FECA or the Commi^ion's regula^^j^c^^'^^^e ordinary adinmistrative 

expenses of a caucus committee'^ 

Afrer reviewing DECF's response Int^^^udit Rcpif^the expenditure for the 

Creole Translators/H^anAmerican^^.T.V^^e<^ expense under 

the definition of ^^^^^^gble at t^Kpe i^^^^^^e. Creole Translators 

activity qualifie^^^ontac^^^registe^^^^p^d '^^|ing" them in the act of 

voting. Therefor^^^xpend^^e was fo^^^V activity and should have been paid 

with 100% Federal It ^^ojnaintaii^^iat the rent payments for the DECF 

headqi^^^^tr^^part o^^^^^^B^ co«i« t^^|quire allocation per 11 CFR § 106.7(c). 

Ba^^n DECF's r^^^e, m^wlit stafn^plculated the apparent non-federal 

ovei^mding of alloca^^^ivi^^^4,364. DECF's response materially complies with 

the Int^^^Audit Repor^pomm^^^on. 

Finding 

Fund 

ent of Financial Activity - Levin 

Summary 

Throughout the audit period, DECF disclosed $6,438 as cash-on-hand for the Levin Fund 

account. However, DECF's Levin Fund account closed in November 2006. In response 

to the Interim Audit Report recommendation, DECF filed an amended report that 

corrected the overstatement of cash-on-hand. 
15 

Legal Standard 

Contents of Levin Reports. Each report must disclose: 

• The amount of cash-on-hand for Levin funds at the beginning and end of the 

reporting period; 

• The total amount of Levin fund receipts and disbursements (including allocation 

transfers) for the reporting period and for the calendar year; and 

• Certain transactions that require itemization on Schedule L-A (Itemized Receipts of 

Levin Funds) or Schedule L-B (Itemized Disbursements of Levin Funds). 

11 CFR §300.36 (b)(2)(B). 

Facts and Analjrsis 

A. Facts A 

Disclosure reports filed by DECF indicateda^pfbalance in tfii.^^dn fund account of 

$6,438. DECF disclosed this cash balanc^^pughout the audit pe^^k However, Levin 

fund bank records indicate that the accoun^%s.closed on November^^2006. Other 

than the cash-on-hand balance, DECF did nol^^lose an^pvin fund re^i;^ or 

disbursements. ^^fe^^P ^ 

B. Interim Audit Report & AudiMiMsTon RecommiPdation 

This matter was discussed with DE@Flrepresentatives at th^xit conference. DECF 

representatives mad&,na\Cpmment onws matterlSl^tiie Interim^Audit Report, the Audit 

staff recommendediilt^DEiiR amend its^most redent<ireiiort to correct the overstatement 

of Levin fund cash! 

C. Committee Rl to IntMm Audit Riport 

In respon1si;1lb'^theLMerihiti\u^iMei^^ an amended report that corrected the 

oveEStatement^^a&h-on-hspi<^ ^^S^AS.. 

I Fin%i^g 5. Dis^ij^sur^ibj^pisbursements 

Summary 

During audit filM^rk, the ^^i t staff calculated that disbursement entries, totaling 

$9,554,713, contained inadlip or incorrect disclosure information. In response to the 

Interim Audit Repori^i^mihen^ DECF filed amended reports that materially 

corrected the disclosure%Frors. 

Legal Standard 

A. Reporting Operating Expenditures. When operating expenditures to the same 

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

• amount; 

• date when the expenditures were made; 

• name and address of the payee; and 
16 

• purpose (a brief description of why the disbursement was made—see below). 

2 U.S.C. §434(b)(5)(A) and 11 CFR §104.3(b)(3)(i). 

B. Examples of Purpose. Adequate Descriptions. Examples of adequate descriptions 

of "purpose" include the following: dinner expenses, media, salary, polling, travel, party 

fees, phone banks, travel expenses, travel expense reimbursement, catering costs, loan 

repayment, or contribution refimd. 11 CFR §104.3(b)(3)(i)(B). 

Inadequate Descriptions. The following descriptions do not meet the requirement for 

reporting **purpose": advance, election-day expenses, oth^^^enses, expense 

reimbursement, miscellaneous, outside services, get-oig^^^te, and voter registration. 

11 CFR §104.3(b)(3)(i)(B) and Commission Policy St^^feit at 

www.fec.gov/law/policy/purposeofdisbursement/ir^puali^ 

Facts and Analsrsis 

A. Facts 

The reported purpose of the disbursement, wbepsonsid^^ith the id^||^of the 

disbursement recipient, must clea^ly^specify wh^m^^sbidrsement was maO^^The Audit 

staff reviewed disbursements itemi^dyby DECF fo^pl^^r disclosure on botii a sample 

and 100 percent basis. These revi^^'fliult^ in errorl|^taling $9,554,713. This amount 

is comprised of projected errors tou^g $1«^^)^5 frorSl^^^sample review and 

$7,846,318 in errors from.the separatevieyiew dSn^Ucted on^^OO percent basis.^ The 

disclosure errors idelitifi.e.d?iii^each revie%were.^imila^. w 

From the 100 perclb^i^view, i^e than $7'^^^00 of the disclosure errors was for 

campaign materials t^^^r t^^^t part, (l^^scribed Senator Obama's position on 

issues,J2)ri^|^ared S^^i^p^^^d^Sen^^i^cCain's position on issues or (3) were 

forje|^Pi&^^^elep^^^alls a^c^ejdbyiJ^bama for America. The majority of 

error|^n the review%£^for1^||^uate or iE^lrect purposes disclosed. 

Examples^ incorrect puAses included: 

• Tnree?mail pieces tnafdescribed Senator McCain's position on an issue were 

disclO^^s either "i^&entee/Early Vote Mail" or "Direct Mail/Early Vote." 

mail piec^^d not^^^iss obtaining an absentee ballot or voting early. 

• A mail piece!^^^^[ vote Obama and provided polling locations, voting and 

ride informatioiffi^ disclosed as "Generic Literature." 

The 

Examples of inadequate purposes included: 

• Payments for automated phone banks by Senator Obama or on behalf of Senator 

Obama that asked for your vote or provided information on polling locations were 

disclosed as "Telephone Calls" or "Generic Telephone Calls." 

^ The error amount was projected using a Monetary Unit Sample with a 9S percent confidence level plus 

the results of a 100 percent review of items not in the sample population. The sample estimate could be 

as low as $1,350,377 or as high as $2,066,413. 
17 

• Payments for mail pieces that described Senator Obama's position on issues. 

Senator McCain's position on issues or the positions of both candidates were 

disclosed as Literature, Generic Mail, or Direct Mail. 

B. Interim Audit Report & Audit Division Recommendation 

This matter was discussed at the exit conference. In response, DECF representatives 

stated they would review this issue. The Interim Audit Report recommended that DECF 

amend its reports to correct the disclosure errors. 

C. Committee Response to Interim Audit Report 

In response, DECF filed amended reports that materiall)|^^cted the inadequate and/or 

incorrect disclosure information.