19002697

FEDERAL ELECTION COMMISSION

August "\..,

It. I ,

MEMOPJ\..NDUM

TO: FRED S. EILAND

PRESS OFFICER

FROM: ROBERT J. COSTA D"I/5J,C"T/~'"'i ASSISTANT STAFF tYC~ AUDIT DIVISION

SUBJECT: PUBLIC ISSUANCE OF THE FINAL AUDIT REPORT

ON FRIENDS OF SAM BEARD FOR THE U.S. SENATE

Attached please find a copy of the Final Audit Report on

Friends of Sam Beard for u.s. Senate, which was approved by the

Commission on August 22, 1991.

Informational copies of the report have been received by all

-pat'ties- involved and the repor_t may_ be released t_o t_h_e_pu_bli_c.

Attachment as stated

cc: Office of General Counsel

Office of Public Disclosure

Reports Analysis Division

FEC Library
FEDERAL ELECTION COMMISSION

\VASHtNC TON 0 C ~04bl

REPORT OF THE AUDIT DIVISION

ON

FRIENDS OF SAM BEARD FOR THE U.S. SENATE

BS002688

I. Background

A. Overview

This report is based on an audit of Friends of Sam Beard

for the u.S. Senate (the Committee), undertaken by the Audit

Division of the Federal Election Commission in accordance with the

provisions of the Federal Election Campaign Act of 19;1 as amended

(the Act). The audit was conducted pursuant to Section 438(b) of

Title 2 of the United States Code which states, in part, that the

Commission may conduct audits and field investigations of any

political committee required to file a report under Section 434 of

this title. Prior to conducting any audit under this section, the

Commission shall perform an internal review of reports filed by

selected committees- to determine if the reports filed b_y a

particular committee meet the threshold requirements for

substantial compliance with the Act.

The Committee registered with the u.s. Senate on April

13, 1987 as the Sam Beard for u.s. Senate Exploratory Committee.

On July 28, 1987, the Committee registered as the principal

campai9n committee of Samuel S. Beard, Democratic candidate for

the u.s. Senate from the state of Delaware. The Committee

maintains its headquarters in New Castle, Delaware.

The audit covered the period from January 1, 1987

through December 31, 1988, the closing date for the latest report

filed at the time of the audit. The Committee reported a cash

balance on January 1, 1987 of $0; total receipts for the period of

$1,397,650.58; total disbursements for the period of

$1,353,323.04; and a closing cash balance on December 31, 1988 of

$44,327.54.

This report is based on documents and workpapers which

support each of its factual statements. They form part of the

record upon which the Commission based its decisions on the

matters in the report and were available to the Commissioners and

appropriate staff for review.

B. Key Personnel

The Treasurer of the Committee during the period

covered by the audit was Mr. Howard Simon.
2

c. Scope

The audit included such tests as verification of

total reported receipts and disbursements and individual

transactions; review of required supporting documentation;

analyses of Committee debts and obligations; and such other audit

procedures as deemed necessary under the circumstances.

II. Audit FindinQs and Recommendations

A. Misstatements of Financial Activity

Section 434(b)(1), (2) and (4) of Title 2 of the United

states Code requires a committee to report the amount of cash on

hand at the beginning of each reporting period and the total sum

of all receipts and disbursements for the reporting period and

calendar year.

In addition, Section 434(b)(S) of Title 2 of the United

Sates Code requires a committee to report the name and address of

each person to whom an expenditure in an aggregate amount or value

in excess of $200 within a calendar year is made to meet a

committee operating expense, together with the date, amount and

purpose of such operating expenditure; and of each person who

receives a loan repayment from the reporting committee during the

t_eporting p~~iod t~9_~~her with the date and amount of such loan

repayment. - - -- - -

The Audit staff's reconciliation of the Committee's 1988

reported activity to its bank activity revealed the following misstatements:

1. Beginning Balance

The reported beqinning balance as of January 1,

1988 was overstated by a net amount of $935.10. The difference is

the result of minor errors and omissions on the Committee's

disclosure report covering the period 1/1/87 through 12/31/87.

2. Receipts

For the period January 1, 1988 to December 31,

1988, the Committee's receipts were overstated by $62,487.91. The

components of the misstatement are as follows:

1988 Receipts as Reported

Contribution Reattributions

Reported as Receipts

Unexplained Difference

Adjusted 1988 Receipts

$1,045,333.48

($61,072.00)

(1,415.91) (62,487.91)

S 982,845.57
3

3. Disbursements

ror the period January 1, 1988 to December 31,

1988, the Committee's reported disbu~sements were overstated by a

net amount of $19,206.74. The components of this misstatement are

as follows:

1988 Disbursements as

Reported

contribution Reattributions

Reported as Refunds

unreported Disbursements

unreported Loan Repayments

Reported Check Later Voided

Unexplained Difference

Adjusted 1988 Disbursements

($61,012.00)

1,038.86

37,192.64

(20.00)

3,053.76

$1,118,542.71

(19,206.14)

$1.099.335.97

4. Endin9_B~~ance_

The reported ending balance at Dec.aber 31, 1988

was overstated by $44,216.27, resulting fro. the a18state..nts

detailed above. The correct ending balance at 12/31/88 vas $111.21.~/

Committee officials stated that they would file the

appropriate amendaents to correct the aisstateaents. Copies of

schedules detailing the explained differences were provided to the

Committee at the exit conference.

In the interim audit report the Audit staff recommended that

the Co••ittee file a comprehensive amendment for calendar year

1988 correcting reported receipts, disbursements and cash on hand

and properly itemizing the unreported disbursements noted above.

In response to the interim report, the Committee filed such an

amendment.

~/ The Committee's disclosure report for the period 1/1/89 - 6/30/89 shows a beginning balance of $8,176.23. This is a

reduction of $36,151.31 and is described by the Committee

as an approximate cash balance resulting from an internal

audit. No amended reports to explain the adjustment are

included.
4

.ecoaaendatlon 11

The Audit staff recommends no further action with regard to

this matter.

B. Other Matters

Other matters noted during the' audit have been referred

to the Co.mission's Office of General Counsel.