FEDERAL ELECTiC), CO\\\"SS'O~ AK004385

November 19, 1993

MEMOllANDUK

TO:

FROM:

FRED EILAND

CHIEF, PRESS OFFICE

ROBERT J. COSTA

ASSISTANT STAFF DIRE~~~ AUDIT DIVISION

SUBJECT: PUBLIC ISSUANCE OF THE FINAL AUDIT REPORT ON

NATIONAL FREEDOM POLITICAL ACTION COMMITTEE

_ At~a~hed please find a copy of the final audit report on

National P'reedoa Political Action- Coaaittee-- vMcll "._s

approved by the Commission on November 10, 1993.

Informational copies of the report have b.en received by

all parties involved and the report aay be rel••••d to the

public.

Attachment as stated

cc: Office of General Counsel

Office of Public Disclosure

Reports Analysis Division

FEe Library
FEDER-\L ELECTl()' (()'t'\~,ISS!()'

REPORT OF THE AUDIT DIVISION

ON

NATIONAL FREEDOM POLITICAL ACTION COMMITTEE

f1WOOS441

A91-48

I. Background

A. Overview

This report is based on an audit of National Freedoa

Political Action Coaaittee (the Coaaittee) undertaken by the Audit

D-ivis_i_on of the Federal Election Commission in accordance with the

provisi-ons of -the -teder-al-- Election- Caapa-ign---Act--of19-7--1-,--- asamended (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 Comaission aay conduct audits and field investigations of

any political co..ittee required to file a report under section

434 of this title. Prior to conducting any audit under this

section, the Co..ission shall perform an internal review of

reports filed by selected committees to determine if the reports

filed by a particular coamittee meet the threshold requirements

for substantial coapliance with the Act.

The Coamittee registered with the Federal Election

Co••ission on Septeaber 18, 1989, and maintains its headquarters

in Mountlake Terrace, Washington.

The audit covered the period March 28, 1989, the date of

the Committee's earliest financial activity through December 31,

1990. The Committee reported a beginning cash balance of $-0-;

total receipts of $73,238.02; total disbursements of $:3,099.91;

and an ending cash balance on ~e:embe~ 3:. 199C ~f S141.11.!1

This report is based ~~. dC:',l:ne:.-:'s 3::j ·.·.;orkpapers

supporting each of its fact~a: statemen s. They form par: ~~ the

record upon which the Commiss:cn based ts de~lsions on the

matters in this report and ~ere a~a2:3~ e t~ the Commissioners an~

appropriate staff fer review.

!/ The totals do not foot d~e p~ ~ath errors.
2

B. Key Personnel

During the period covered by the audit, the Treasurers ~ere: Mr. Rick woodrow from inception through December 10, 1989;

Ms. Tammy Hjort from December 11 t 1989 to September 4, 1990; Ms.

Darla Ouinn from September 5, 1990 to December 17, 1990; Ms.

Kimberly Lingle from December 18, 1990 through the end of the

audit period* The current Treasurer is Mr. Rick Woodrow.

c. Scope

The audit included such tests as verification of total

reported receipts and disbursements and individual transactions;

review of required supporting documentation; analysis of debts and

obligations; and such other audit procedures as deemed necessary

under the circumstances; however, because the Committee provided

incomplete disburseaent records for 1989 and 1990, the Audit

staff's review of disbursements and debts and obligations was

1 imi ted.

II. Audit Findings and Recommendations

A. Failure to File Disclosure Report

sections- 434(a)(1) and (4}{Bl of Title 2 of the United

States Code state, in relevant part, that the treasurer of a

political committee shall file reports of receipts and

disbursements in accordance with the provisions of the Act. All

political committees other than authorized committees of a

candidate shall file a year end report no later than January 31 of

the following calendar year.

The Committee did not file a disclosure report for the

period November 27, 1990 through December 31, 1990 (Year End

Report due to be filed on January 31, 1991). Based on bank

statements and other Committee records, the Audit staff identified

receipt activity, totaling $3,825.80, and disbursement activity,

totaling $4,036.84, which should have been reported during this

period. This matter was addressed in MUR 3324 which resulted in

an assessment of a civil penalty.

On September 11, 1991, the Committee ::led its 1990 Year

End Reporti an amendment was f:led en Oct'Jbe: :3, :99:. ~i:"?s'?

reports disclosed the above aC:l~::~.

The Audit staff recc~mends ~~ fJ~:he: a:t::~.
3

B. Misstatement of Financial Activit~

Sections 434{b}\2} and {4 of Title 2 cf the United

States Code state, in part, that each report should disclose the

total amount of all receipts and disbursements fer the reporting

period and calendar year.

A reconciliation of the bank activity to the Committee's

disclosure reports for 1989 and 1990 revealed a net underreporting

of receipts totaling $3,306.24 and a net underreporting of

disbursements totaling $3,612.01.

Subsequent to the beginning of the audit fieldwork E the

Committee submitted amended reports which materially corrected the

reporting deficiencies noted above.

Recommendation 12

The Audit staff recommends no further action on this matter.

c. Matters Referred to the Office of General Counsel

Certain matters noted during the course of the audit -- -were- refer red to the Commi s~ ion's 9ff i ce of General Counse 1.

Given the circumstances in this case, noin-teri.-ci-tidi-t- r-eport- was

issued.