Technology and Performance Audit 

and Management Review of the 

Federal Election Commission 

Volume I – Final Report 

January 29, 1999 

Prepared by PricewaterhouseCoopers LLP 

1616 North Fort Myer Drive 

Arlington, Virginia 22209 

This report in its entirety is posted on the Internet at 

www.gao.gov/special.pubs/publist.htm 
Management Review of the Federal Election Commission 

Table of Contents 

Executive Summary ..........................................................................................ES-1 

1.0 Introduction .............................................................................................1-1 

1.1 Project Overview................................................................................................1-1 

1.2 Project Scope .....................................................................................................1-2 

1.3 Methodology......................................................................................................1-3 

1.4 Organization of the Report .................................................................................1-4 

2.0 Profile of the Federal Election Commission ..............................................2-1 

2.1 Administering the FECA Through Four Programs .................................................2-3 

2.1.1 Disclosure...................................................................................................2-3 

2.1.2 Compliance.................................................................................................2-6 

2.1.3 Presidential Public Funding .........................................................................2-7 

2.1.4 Election Administration................................................................................2-8 

2.2 Organizational Structure and Resource Allocation...............................................2-8 

2.2.1 Disclosure Program ...................................................................................2-10 

2.2.2 Compliance Program.................................................................................2-11 

2.2.3 Public Financing........................................................................................2-12 

2.2.4 Election Administration..............................................................................2-12 

2.2.5 Commission and Administration (Institutional Maintenance).......................2-13 

2.3 Institutional Context .........................................................................................2-15 

2.3.1 Department of Justice ................................................................................2-16 

2.3.2 Department of the Treasury .......................................................................2-17 

2.3.3 Federal Communications Commission .......................................................2-17 

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3.0 FEC Organizational Assessment................................................................3-1 

3.1 Customer Satisfaction Survey ..............................................................................3-1 

3.2 External Stakeholder Perspectives .......................................................................3-4 

3.2.1 Disclosure...................................................................................................3-5 

3.2.2 Compliance.................................................................................................3-6 

3.3 Internal Organizational Review...........................................................................3-7 

3.3.1 External Environment.................................................................................3-10 

3.3.2 Mission and Vision....................................................................................3-11 

3.3.3 Business Objectives...................................................................................3-12 

3.3.4 Strategies...................................................................................................3-15 

3.3.5 Organizational Structure............................................................................3-18 

3.3.6 Leadership.................................................................................................3-21 

3.3.7 Organizational Culture ..............................................................................3-23 

3.3.8 Management Processes..............................................................................3-26 

3.3.8.1 Organizational Planning, Budgeting, and Management..........................3-26 

3.3.8.2 Financial and Cost Management.........................................................3-27 

3.3.9 Business Processes.....................................................................................3-29 

3.3.10 Information Technology .........................................................................3-29 

3.3.11 Human Resources..................................................................................3-35 

3.3.11.1 Personnel Office Organization Structure and Role ...............................3-35 

3.3.11.2 Recruitment and Selection..................................................................3-36 

3.3.11.3 Retention ...........................................................................................3-37 

3.3.11.4 Training and Development .................................................................3-38 

3.3.11.5 Performance Management ..................................................................3-39 

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3.3.11.6 Compensation....................................................................................3-40 

3.3.11.8 Labor-Management Relations .............................................................3-42 

3.3.11.10 Equal Opportunity Program.............................................................3-43 

4.0 Program Process Assessment ....................................................................4-1 

4.1 Analytical Approach...........................................................................................4-3 

4.2 Disclosure Findings and Improvement Opportunities ..........................................4-5 

4.2.1 Disclosure Division......................................................................................4-6 

4.2.1.1 Public Records Branch .........................................................................4-7 

4.2.1.2 Processing Branch ..............................................................................4-11 

4.2.2 Data Systems Division ...............................................................................4-16 

4.2.3 Reports Analysis Division ..........................................................................4-19 

4.2.4 Organizational Structure............................................................................4-24 

4.2.5 Hardcopy Disclosure Process and Filing Standards.....................................4-25 

4.2.6 Electronic Filing and Disclosure Forms.......................................................4-30 

4.2.7 Senate Point-of-Entry .................................................................................4-36 

4.2.8 Disclosure Database..................................................................................4-37 

4.2.9 Management Planning...............................................................................4-38 

4.3 Findings and Improvement Opportunities for the Compliance Program..............4-39 

4.3.1 Reports Analysis Division, Compliance Activities .......................................4-40 

4.3.1.1 RFAIs .................................................................................................4-43 

4.3.1.2 Audit Point Assessment Review...........................................................4-44 

4.3.2 Audit Division, Title 2 Audits for Cause......................................................4-47 

4.3.2.1 Commission Vote and Notification of Committee................................4-48 

4.3.2.2 Preaudit Process .................................................................................4-49 

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4.3.2.3 Fieldwork...........................................................................................4-50 

4.3.2.4 Postaudit Report Processing ................................................................4-50 

4.3.3 Office of the General Counsel....................................................................4-59 

4.3.3.1 Overview of the Enforcement Process.................................................4-61 

4.3.3.2 Overall Case Disposition ....................................................................4-66 

4.3.3.3 Enforcement Priority System ...............................................................4-70 

4.3.3.4 Allocation of OGC Enforcement Resources .........................................4-75 

4.3.3.5 Internal Referrals................................................................................4-77 

4.3.3.6 Management Information Systems.......................................................4-79 

4.4 Presidential Public Funding Findings.................................................................4-80 

4.4.1 Certification of Public Funding...................................................................4-81 

4.4.2 Title 26 Audits...........................................................................................4-83 

4.5 Election Administration.....................................................................................4-86 

5.0 Summary of Recommendations ................................................................5-1 

6.0 FEC Comments .........................................................................................6-1 

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Executive Summary 

For more than 200 years, a defining principle of American politics has been 

the use of an open, fair, and informed process to elect our Nation’s leaders. 

While many governmental and public interest organizations share in the 

responsibility to maintain this principle, 27 years ago the Congress passed 

the Federal Election Campaign Act (FECA) and two years later created a 

central role for the Federal Election Commission (FEC). The FEC, especially 

in its early years, appeared as a strong force in overseeing the Federal 

election system. However, with an increasingly complex and controversial 

campaign finance system, FEC effectiveness in accomplishing its statutory 

responsibilities is being questioned. 

As the agency charged with administering and enforcing the FECA, the FEC 

has four major statutory responsibilities: 

  Provide disclosure of campaign finance information 

  Ensure that candidates, political committees, and political parties 

comply with the limitations, prohibitions, and disclosure requirements 

of the FECA 

  Administer the certification of public funding for Presidential elections 

and ensure that all related expenditures comply with the FECA 

  Serve as a clearinghouse for information on election administration 

Project Scope. The Treasury and General Government Appropriations Act 

of 1998 (Public Law 10561) mandated that the General Accounting Office 

(GAO) contract for an independent technological and performance audit of 

the FEC on behalf of the Senate and House Appropriations and House 

Oversight Committees. In consultation with these committees, the GAO 

issued a statement of work on May 6, 1998, to conduct an evaluation of the 

FEC. The statement of work required an impartial assessment of the 

following areas: 

1. The overall effectiveness of FEC in meeting its statutory responsibilities 

2. The appropriateness and effectiveness of the FEC organizational 

structure, systems, and performance measures for accomplishing its 

mission 

3. The adequacy of the FEC human resource programs for obtaining and 

maintaining adequate staff expertise and organizational capacity 

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4. The adequacy of the FEC strategic information resources management 

plan as a tool to increase FEC efficiency and effectiveness through the 

use of data-processing systems 

5. The adequacy and completeness of internal management and financial 

control systems to efficiently and effectively serve FEC management 

needs, as well as the reliability of information provided by these systems 

6. Regulated customer satisfaction with the products and services provided 

by the FEC 

Overview of Findings 

Today, the FEC finds itself in an electioneering environment vastly different 

from the one 25 ago when it was created. Where once campaigns were 

characterized by “volunteers” and “contributions,” the current election 

process has evolved into a high-velocity system of complex transactions 

and litigious recourse, punctuated by the actions of a few participants 

engaging in behavior designed to push the limits of the traditional 

campaign finance system. 

The FEC is basically a competently managed organization with a skilled 

and motivated staff, although it has shortcomings. The ability of the FEC to 

adapt to the changing election environment, however, has been hindered 

by the FECA statute itself, escalating campaign finance disclosure and 

compliance workloads, and an organizational culture that has attempted 

incremental change in a deadline-driven environment stretched by limited 

resources. As a result, notable strengths and weaknesses characterize the 

Commission. These are its general strengths: 

  The FEC has a strong organizational focus on facilitating voluntary 

compliance within the filing community to create an accurate public 

record of campaign finances. 

  The filing community is generally satisfied with the products and 

services provided by the FEC. 

  Productivity has increased in the processing, review, and dissemination 

of campaign finance transactions in the face of increasing workloads. 

  Confidentiality of potential and existing compliance matters is 

maintained throughout the report review, referral, audit, and 

enforcement processes. 

  Disclosure and compliance activities are executed without partisan 

bias. 

However, FEC operations have these shortcomings: 

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  Campaign finance report disclosure and review activities rely on an 

antiquated paper-based and manual transaction coding, entry, 

verification, and clarification processes. 

  FEC organizational units operate in a compartmentalized and 

autonomous manner that leads to diminished communication, 

collaboration, and innovation. 

  Because of limited staff resources and increasing case complexity, 

current volumes of enforcement cases appear to exceed FEC disposition 

capacity. 

  Absence of a descriptive offense categorization approach to monitor 

and analyze compliance violations and closed enforcement matters 

limits Commissioner, policy maker, and public awareness of emerging 

FECA offense trends and how the FEC has allocated resources to 

respond to these changes. (Other Federal law enforcement agencies 

have developed these categorization profiles to track offender changes 

and readjust enforcement strategies.) 

Assessment Findings for Six Specific Study Topics 

1. With its current level of resources and escalating workloads, the FEC 

accomplishes its disclosure responsibilities, but struggles to meet its 

compliance mission. The agency operates in a fair, impartial manner, 

maintaining strict confidentiality and a low tolerance for errors. It discloses 

campaign finance activity in a manner that effectively furthers the intent of 

the FECA. The FEC operates in an electoral environment where the vast 

majority of participants comply with the spirit and letter of the law. Against 

this background, however, the FEC applies its compliance and enforcement 

tools in a somewhat disjointed manner. Efficiency and productivity remain 

secondary considerations behind confidentiality, impartiality, and mistake 

avoidance. 

The organization places a premium on facilitating voluntary compliance, 

and the regulated community values the products and services designed 

and employed by the FEC to enhance this voluntary compliance. The 

Commission’s disclosure of the sources of campaign funds provides the 

electorate with opportunities to make informed choices. The process is 

highly customer focused and produces timely products; however, the FEC 

processes to review and disclose reported information involve many 

inefficient activities related to data coding, entry, and transaction 

clarification. More intelligible and useful information at less cost could be 

provided if the FEC made a number of enhancements to its filing, 

disclosure, and reports analysis processes. 

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The FEC compliance program seeks to ensure compliance with FECA 

prohibitions and limitations on the sources and amounts of funds and 

disclosure requirements. Unlike the disclosure program, the compliance 

program is not a unified process with predictable workflows. Because of 

limited staff resources and increasing case complexity, current volumes of 

enforcement cases appear to exceed FEC disposition capacity. 

The Commission’s Enforcement Priority System (EPS) is a system for 

prioritizing enforcement matters in the face of limited staff resources. The 

EPS is a reasonable triage approach and operates without evident partisan 

bias. EPS allows the FEC to exercise prosecutorial judgment while providing 

sufficient structure to differentiate among cases for Commissioner 

disposition. Improvements to strengthen the accountability of the caseactivation process and an increase in enforcement resources to expand the 

number of cases activated for disposition would enhance compliance 

effectiveness. 

Exhibit ES1 summarizes the FEC disclosure and compliance programs 

along the assessment criteria of mission achievement, results orientation, 

fairness, and efficiency. 

Exhibit ES1 

FEC Disclosure and Compliance Program Assessment Summary 

Mission Achievement. Do the core FEC programs further the letter and intent of the law? 

Yes, with qualification. 

Disclosure Compliance 

  Disclosure deadlines routinely met 

  Disclosure enhances enforcement of 

FECA 

  Accurate public record of campaign 

finances ensured by reviewing and 

clarifying transactions 

  Disclosure database provides 

electorate with detailed campaign 

receipt, but not expenditure, 

information with which to make 

informed choices 

  FEC seeks to enforce full FECA 

spectrum 

  FEC internal referrals yield more cases 

of “reporting” noncompliance, while 

external complaints yield more cases 

of “finance” noncompliance 

  1,179 cases closed (1/1/949/30/98) 

3⁄4 2% Suit authorization (29) 

3⁄4 22% Conciliation (262) 

3⁄4 1% Probable Cause To Believe* (13) 

3⁄4 12% Reason To Believe* (140) 

3⁄4 3% No Reason To Believe (36) 

3⁄4 33% Low-priority dismissal (388) 

3⁄4 23% Staleness dismissal (273) 

3⁄4 3% Other dismissal (37) 

*With No Further Action taken. 

Note: Percentages do not add to 100 percent because of rounding. In 1995, the FEC 

found one case with No Probable Cause To Believe with No Further Action taken. That 

case is not shown in the details above. 

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Results Orientation. Does the FEC produce strategic outcomes that add value to the 

Federal election system? Yes, with qualification. 

Disclosure Compliance 

  High customer satisfaction with 

products and services 

  High value associated with public 

information 

  Reporting of campaign finance 

transactions are a significant part of 

the election process 

  Focus on facilitating regulated 

community voluntary compliance to 

create an accurate public record of 

campaign finances 

  Uncertainty as to whether FEC selects 

the right cases to respond to emerging 

compliance offense trends 

Fairness. Are FEC programs conducted in an impartial, ethical, and independent 

manner? Unqualified yes. 

Disclosure Compliance 

  No partisan bias apparent in 

document processing, coding, entry, 

or reports analysis 

  No partisan bias evident in release of 

public records or information 

  No partisan bias evident in reports 

analysis leading to internal audit or 

enforcement referrals 

  High level of confidentiality 

maintained 

  No partisan bias apparent in the 

Enforcement Priority System 

  FEC staff generally perceived by filers 

and those who practice before the 

FEC as independent and nonpartisan 

  High ethical standards espoused 

throughout organization 

Efficiency. Does the FEC use its resources to achieve consistent performance in 

conducting its business? Yes, with qualification. 

Disclosure Compliance 

  33% of total FEC FY 1998 FTEs 

  Productivity varies with odd and even 

election cycle years 

  Productivity has increased for reports 

processing and Requests for 

Additional Information (RFAIs) 

  Manual paper-based coding and data 

entry disclosure processes cause 

inefficiencies related to time, 

accuracy, cost, and compliance 

  Technology is improving productivity 

  31% of total FEC FY 1998 FTEs 

  29% of Audit resources 

  50% of Office of the General Counsel 

resources consumed by enforcement 

cases 

3⁄4 50% of monthly pending cases 

activated for disposition 

3⁄4 Decreasing case closure times 

  17% of Office of the General Counsel 

resources consumed by litigation 

2. The FEC employs effective systems to establish performance objectives, 

measure results, and allocate resources to accomplish its key functions. 

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However, the current FEC organizational structure limits the degree of 

communication and the efficient achievement of some of its business 

objectives. To measure its success in meeting its mission, the FEC develops 

annual performance plans with many specific measures for each of its four 

core programs. The agency maintains automated and manual systems to 

track actual results against planned accomplishments to adjust resources as 

necessary and to estimate budgetary needs. While the Office of the General 

Counsel currently tracks case status and enforcement resources manually, it 

is implementing a case management system to automate data collection 

and reporting. 

Many FEC organizational units operate in a compartmentalized and 

autonomous manner. These “stovepipes” appear to have led to the 

following problems: 

  An uneven understanding throughout the organization of how each unit 

performs its functions and the decision-making processes behind 

workflows 

  Multiple handoffs between units that result in redundancies, rework, 

and extra concurrence processes 

  Diminished sharing of “lessons learned” and “best practices” 

throughout the organization 

The FEC needs to take steps to increase collaboration and communication 

among its work groups. Greater use of existing and new multidisciplinary 

teams to address reoccurring business problems will facilitate efforts to 

streamline work processes to better manage growing workloads. Until most 

campaign finance reports are filed electronically, however, limited 

opportunities exist to further streamline FEC disclosure and reports review 

operations. The Commission should continue efforts to streamline 

compliance functions by examining ways to reduce the number of handoffs 

among compliance offices and the levels of review within the Office of the 

General Counsel. 

3. FEC human resource practices support the maintenance of a strong 

institutional knowledge of the FECA. But in so doing, FEC staff have 

developed norms on the “ways things get done” that limit the ability to 

change. FEC staff members are dedicated to the FECA and believe that they 

are making a difference. Overall, human resource recruitment, selection, 

and retention procedures are standardized and consistently used throughout 

the agency. Most senior managers feel that they are recruiting qualified 

candidates. However, there are a number of organizational culture issues 

that stem from long-tenured staff that discourage innovation and limit 

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needed organizational communication. Because many of the senior staff 

have been with the FEC for almost 20 years and may retire in the near 

future, the Commission needs to begin taking a more strategic and 

proactive approach to managing its workforce to maintain its organizational 

capacity. 

4. Since 1996, the FEC has made substantial progress in enhancing and 

upgrading its computing capabilities, but much remains to be done. A 

strong reliance on its information systems strategic plan helps the FEC 

maintain a disciplined approach on technology deployment. Deploying 

improved information systems remains critical to the future effectiveness 

and efficiency of the FEC. The FEC pursues opportunities to employ 

technologies that increase disclosure and compliance program 

effectiveness. Program process efficiencies have been achieved by the 

following means: 

  The migration to a client/server information technology environment 

with document-imaging and group-messaging capabilities 

  The implementation of a limited electronic filing system to automate 

manual data entry and as the first step toward improving internal 

document receipt and review processes 

  The transfer of the point-of-entry for House candidate committee filings 

to the FEC 

  The ongoing implementation of an automated case management system 

in the Office of the General Counsel 

Despite these accomplishments, important issues remain that must be 

addressed, such as the coordination and redesign of business processes 

based on new computer technologies, implementing methods to increase 

use of electronic filing techniques, and replacement of antiquated software 

used for the disclosure database system. Significant improvements in FEC 

effectiveness will require that these opportunities be addressed. 

5. The FEC maintains a comprehensive management information system 

that reliably captures detailed program performance and financial 

information used for formulating budget justifications. This information is 

used by the FEC Finance Committee and senior staff to formulate budget 

justifications. The FEC effectively monitors its budget and allocation of FTEs 

and nonpersonnel resources, and its accounting and financial reporting 

systems appear to adhere to Federal financial reporting standards. FEC 

performance and financial information is comprehensive and has been in 

place for years, but it could be applied to a broader range of management 

planning and decision making throughout the organization. 

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6. On balance, the surveyed filing community is quite satisfied with the 

products and services provided by the FEC. While the level of usage of 

products and services varies, the degree of satisfaction is consistently 

positive. A telephone survey of 353 randomly selected filers was used to 

assess satisfaction, and those surveyed filers generally perceived the 

Commission to be fair and nonpartisan. On a scale from 1 to 10, where 1 

means poor and 10 means excellent, surveyed filers gave the FEC an 

average rating of 8 on how well it was doing its job. Moreover, anecdotal 

interviews with other FEC stakeholders and practitioners agree that the FEC 

staff act in an impartial and independent manner and that the Commission’s 

disclosure program adds value to the Federal election system. On the other 

hand, as some would expect, public interest advocates and legal 

practitioners engaged in adversarial actions with the FEC expressed 

dissatisfaction for a variety of reasons with the way the Commission selects, 

pursues, and disposes of compliance matters. 

Growing Workload and Resource Issues 

Workload for the FEC has been escalating over the years. For example, 

during the 1996 election cycle with a Presidential election, candidate and 

committee disbursements exceeded $2.7 billion, up dramatically from the 

$1 billion election cycles in the late 1980’s. During FY 1997 through FY 

1998, the FEC coded and entered roughly 1.9 million transactions, 

compared with 800,000 transactions entered during the FY 19901991 

period. Approximately 90,000 reports filed by more than 8,000 committees 

have been reviewed during the 1996 election cycle to date. To clarify 

reported transactions, more than 17,000 first and second Requests for 

Additional Information were sent to committees during this same period, an 

increase of five percent over the 1994 election cycle. The Reports Analysis 

Division referred 200 potential audits after the 1996 election cycle, 

compared with roughly 100 referrals each made after the 1994 and 1992 

cycles. While the total number of enforcement cases pending at the end of 

FY 1998 declined to 195 from a level of 263 at the end of FY 1997, the 

complexity of those cases increased as measured by the monthly average 

number of respondents per pending case, which increased from 7 in FY 

1997 to 11.5 at the end of FY 1998. As the number of respondents 

increases per case, each investigative step in the enforcement process 

consumes an increasing amount of resources to move the case forward. 

Current and future workloads require increased productivity in the FEC 

disclosure and compliance programs. The Congress increased the FEC FY 

1999 appropriation by $4.85 million over its FY 1998 level of $31.65 

million (an increase of 15.3 percent). It also authorized a personnel ceiling 

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Management Review of the Federal Election Commission 

of 347 full-time equivalents (FTEs), an increase of 34 FTEs (10.8 percent) 

over the FY 1998 authorization of 313 FTEs. As shown in Exhibit ES2, FEC 

FTE levels for FY 1999 have recovered from the effects of its FY 1995 

appropriation recision, with an overall increase of 10 percent. The 

Commission will be assigning its new FTE resources to its Audit, Data 

Systems, and General Counsel activities. 

Exhibit ES2 

FEC FTEs for FY 1995–FY 1999 

FEC 

Division/Office 

1995 1996 1997 1998 1999* % Change ‘95− 

1998 1999 

Commissioners 19.1 16.3 15.6 15.2 20.0 -20% 5% 

Staff Director 26.1 25.8 24.0 23.4 24.0 -10% -8% 

Administration 19.2 20.0 19.5 18.5 21.0 -4% 9% 

Audit 31.3 37.3 33.6 31.8 42.0 2% 34% 

Information 13.5 12.7 12.9 12.2 13.0 -10% -4% 

General Counsel 104.3 95.3 92.8 99.4 115.0 -5% 10% 

Clearinghouse 6.0 5.2 4.8 4.8 5.0 -20% -17% 

Data Systems** 35.0 36.9 38.0 40.6 47.5 16% 36% 

Public Disclosure 14.6 14.6 12.5 13.5 14.0 -8% -4% 

Reports Analysis 41.9 40.4 39.0 39.6 42.0 -5% 0% 

Inspector General 3.8 4.0 4.0 3.7 4.0 -3% 5% 

TOTAL 314.8 308.5 296.7 302.7 347.5 -4% 10% 

Source: FEC FY 1999 and FY 2000 Budget Request Justification, FEC FY 1999 Management 

Plan. 

* FY 1999 shows authorized FTEs allocated according to FEC FY 1999 Management Plan. All 

other years are actual. 

**Includes Automated Data Processing and Electronic Filing System initiatives of 6.2 FTEs in 

1996 and 1997, 10 FTEs in 1998, and 8.5 FTEs in 1999. 

The FEC faces an increasing and volatile workload with the year 2000 

election cycle, which features a nonincumbent Presidential election. 

Increased FTE and automated data processing initiative resources should 

facilitate improved FEC FY 1999 program performance. Depending on the 

number of Presidential candidate committees, the size of the enforcement 

caseload, and the Commission desire to increase case-activation rates, 

additional compliance resources in FY 2000 may be warranted above 

normal inflation-adjusted levels. FY 2000 appropriations should be 

conditioned on the agency’s continued progress in implementing 

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Management Review of the Federal Election Commission 

opportunities to increase productivity in its disclosure and compliance 

programs. 

To date, through incremental changes to management practices and 

beginning automation of business processes, the FEC has increased the 

productivity of its disclosure, audit, and enforcement activities in the face of 

escalating workloads. Future opportunities for improving efficiency need to 

focus on the FEC disclosure and compliance programs. The statutory 

construct of the Presidential public funding system and the minimal 

resources associated with the Office of Election Administration makes these 

programs a lower priority for improvement efforts. 

As discussed in Section 3, FEC Organizational Assessment, and Section 4, 

Program Process Assessment, a number of short- and long-term changes 

could be made by the FEC to increase operational productivity to make it a 

high-performance organization. 

Recommended Actions 

While the study identified 33 opportunities for improvement to increase 

overall FEC performance, Section 5, Summary of Recommendations, 

identifies the 21 changes that will yield the greatest benefit. These changes 

range from incremental short-term activities that could be conducted 

entirely by the FEC to significant and long-term changes that would require 

Congressional action. A summary of these improvement actions that would 

increase FEC efficiency and effectiveness follow. 

The Congress and the FEC need to initiate actions that will eventually allow 

the FEC to shift some resources from its disclosure activities to its 

compliance programs by the following means: 

  Develop a comprehensive, mandatory electronic data filing system for 

the major filers in conjunction with a significant business process 

reengineering throughout the FEC 

  Redesign disclosure processes (using industry standard software) and 

realign organizational units to improve processing time, accuracy, and 

cost 

  Monitor compliance with the FECA through a computer-based 

exception reporting system to verify transaction accuracy, content, and 

disclosure thresholds 

Unless the paper-based, manual disclosure processes are changed to a 

mandatory and fully functional electronic filing system, the current wellregarded FEC disclosure function faces deterioration under the rapidly 

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Management Review of the Federal Election Commission 

increasing volume of campaign finance transactions expected in future 

election cycles. 

Because of case complexity and the increasing number of respondents, 

important enforcement actions may not be activated in the future or may be 

dismissed for lack of resources. Increasing the number of enforcement 

personnel will increase case activation and closure rates. However, 

consideration of further increases in enforcement staff levels should be 

linked with implementation of steps to increase compliance and 

enforcement productivity in the following ways: 

  Move nondeliberate and straightforward reporting violations such as 

failure to meet reporting deadlines away from the enforcement process 

and into an administrative fine system which will allow enforcement 

resources to focus on more significant violations 

  Establish workload and performance standards for all compliance 

matters to better allocate and manage available resources 

  Aggregate data about compliance matters by descriptive offense 

category to better coordinate screening criteria and prioritize 

compliance resources for the strategic outcomes desired by the 

Commissioners 

  Reassess the roles and responsibilities of the Office of the General 

Counsel to reduce staff time consumed in repetitive legal reviews of 

enforcement matters and to harmonize the reports review and auditscreening referral criteria to expedite case activation 

Finally, the FEC needs to renew itself by conducting a broad range of 

organizational development activities to strengthen leadership and 

accountability, to enhance human resource management, and to nurture 

increased communication and collaboration throughout the organization. 

Conclusion 

While the FEC has accomplished much in its 25-year history, its future 

success will require that it aggressively pursue both incremental and 

significant changes in organization, work processes, technology, and 

management practice. 

The threat of the increasing volume and volatility of workload for the FEC is 

real and near. Failure to change will lessen the FEC capacity to meet its 

basic FECA requirements, while at the same time it will require everincreasing staff resources to meet those minimal requirements. 

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There is now a window of opportunity to renew the organization with the 

recent appointment of three new Commissioners, the need to appoint a 

permanent Staff Director and recruit a new Director of Personnel, and 

heightened attention to improving the Federal election process. 

Change will not be easy, but it will be necessary if the FEC is to meet the 

difficult challenges it faces. Change will have to come from both inside and 

outside the FEC. This study has identified many steps that the FEC can take 

on its own to streamline operations, enhance management practices, and 

redesign business processes to leverage technology initiatives. However, 

several actions such as the authorization for mandatory electronic filing, the 

establishment of an administrative fine system, and the institution of a 

single point-of-entry for all registered committees will require Congressional 

action. Without these authorizations, it will be difficult for the FEC to 

capitalize on the many opportunities identified. 

Agency Comments 

A draft of this report was provided the FEC on January 15, 1999, for review 

and comment. Their comments on the report are presented in full in 

Section 6, FEC Comments. As the Commission stated: 

We take the recommendations seriously, and in the coming 

months, we will study them and try to find ways to 

implement those that will enable us to serve the public 

better and to more effectively carry out our mission of 

administering and enforcing the Federal election laws. 

While the recommendations are helpful, in some cases they 

are not sufficiently specific to be implemented without 

further definition and exploration. As a first step in 

responding to the report, therefore, we will seek, where 

appropriate, to undertake cost/benefit analyses and to define 

the specifics of the recommendations in the report. 

In addition, their comments reiterated the FEC accomplishments identified 

in the report, endorsed the overarching themes of the recommendations, 

and recognized the influence of outside factors on FEC operations and the 

public’s perception of the value that the FEC adds to the election process. 

This report in its entirety is posted on the Internet at 

www.gao.gov/special.pubs/publist.htm 

Page ES12 PricewaterhouseCoopers LLP 
1.0 

Introduction 
Management Review of the Federal Election Commission 

1.0 Introduction 

The Federal Election Campaign Act (FECA) regulates the financing of 

elections for Federal office. It limits the sources and amounts of funds used 

to support candidates for Federal office, requires disclosure of campaign 

finance transactions, and provides for the public funding of Presidential 

primary and general elections. As the agency charged with administering 

and enforcing the FECA, the Federal Election Commission has four core 

statutory responsibilities: 

  Provide disclosure of campaign finance information 

  Ensure that candidates, political committees, and political parties 

comply with the limitations, prohibitions, and disclosure requirements 

of the FECA 

  Administer the certification of public funding for Presidential elections 

and ensure that all related expenditures comply with the FECA 

  Serve as a clearinghouse for information on election administration 

1.1 Project Overview 

The Treasury and General Government Appropriations Act of 1998 (Public 

Law 10561) mandated that the General Accounting Office (GAO) contract 

for an independent technological and performance audit of the FEC of 

behalf of the Senate and House Appropriations and House Oversight 

Committees. In consultation with those committees, the GAO issued a 

statement of work on May 6, 1998, to conduct an evaluation of the FEC. 

The statement of work required an impartial assessment of the following 

areas: 

  The overall effectiveness of FEC in meeting its statutory responsibilities 

  The appropriateness and effectiveness of the FEC organizational 

structure, systems, and performance measures for accomplishing its 

mission1 

  The adequacy of the FEC human resource programs for obtaining and 

maintaining adequate staff expertise and organizational capacity 

1

 The FEC Office of the Inspector General was excluded from the assessment because the 

Inspector General Act provides that only the General Accounting Office or another 

Inspector General can conduct an evaluation of an Office of the Inspector General. 

PricewaterhouseCoopers LLP Page 11 
Management Review of the Federal Election Commission 

  The adequacy of the FEC strategic information resources management 

plan as a tool to increase FEC efficiency and effectiveness through the 

use of data-processing systems 

  The adequacy and completeness of internal management and financial 

control systems to efficiently and effectively serve the FEC management 

needs and the reliability of information provided by these systems 

  Regulated customer satisfaction with the products and services provided 

by the FEC 

The GAO contracted with PricewaterhouseCoopers LLP (PwC) to perform 

this assessment. The assessment began on June 16, 1998, and the project 

closure conference was held with FEC management on January 13, 1999. 

1.2 Project Scope 

The assessment identifies opportunities for enhancing FEC ability to achieve 

its statutory mission and program functions through improvements in its 

organizational structure, management systems, and business processes. 

As instructed by the Congress, the statutory composition of the 

Commissioners was not subject to review, nor was there to be an attempt to 

address unsettled areas of the law that influence the degree to which the 

FEC regulates campaign finance activities. 

Throughout the assessment process, four criteria provided the foundation 

for observations and recommendations: 

  Mission Achievement. Do the FEC core programs further the letter and 

intent of the law? 

  Results Orientation. Does the FEC produce strategic outcomes that add 

value to the Federal election system? 

  Fairness. Are FEC programs conducted in an impartial, ethical, and 

independent manner? 

  Efficiency. Does the FEC use its resources to achieve consistent 

performance in conducting its business? 

The evaluation sought to identify institutional causes and relationships that 

impede optimum organizational performance. Primary attention was 

focused on opportunities for improvement that could be initiated by the 

Commission itself; nonetheless, impediments to performance arising from 

legislative and regulatory provisions have been noted. Recommendations 

requiring legislative action have been suggested in areas where changes to 

Page 12 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

the law would significantly enhance FEC ability to meet one of the 

assessment criteria. 

1.3 Methodology 

The approach to this technology and performance audit and management 

review followed two parallel tracks. First, the FEC organizational 

orientation, strategy, and operations were examined to present a composite 

picture of the institution. This broad view provided a context in which to 

view the interdependencies among FEC objectives, organizational structure, 

leadership, and culture. Observations and recommendations have been 

drawn from in-depth interviews with FEC staff, process-mapping sessions, 

and the review of internal documentation. Second, the performance of the 

four FEC core programs was reviewed against the four assessment criteria. 

Potential opportunities for improvements were then defined. Key 

management systems related to finance, human resources, and information 

technology were evaluated to identify improved opportunities in those 

areas. 

On July 7, 1998, GAO was presented with a detailed work plan and project 

milestones contained in a four-phase approach: 

Phase I: Assessment of the Current FEC Environment 

Phase II: Analysis of Issues and Opportunities 

Phase III: Prioritization of Opportunities for Improved Organizational 

Processes, Structure, and Strategy 

Phase IV: Development of Recommendations and Improvement 

Strategy 

Overall organizational diagnostics and program performance issue 

identification were carried out through a PwC project team comprising the 

following five review groups: 

  Organizational Planning and Management 

  Financial and Cost Management 

  Information Systems Management 

  Human Resources Management 

  Customer Satisfaction Survey Research 

The project team gathered information in a variety of ways to make its 

findings and to support opportunities for improvement. Specifically, it 

PricewaterhouseCoopers LLP Page 13 
Management Review of the Federal Election Commission 

  Reviewed documentation regarding the FEC budget justification, 

strategic and performance plans, management plans, Congressional 

testimony, and appropriations for fiscal years 1994 through 2000. 

  Reviewed historic articles and contemporary academic literature on the 

FEC and State election administrations. 

  Reviewed and analyzed data from FEC internal management systems for 

capturing inputs, tracking outputs, and assigning personnel and 

nonpersonnel resources. 

  Graphically mapped business processes to document and analyze 

process inputs, outputs, transformation activities, cycle times, quality 

control, and resource consumption. 

  Convened FEC staff focus groups and interviewed staff across all 

administrative and programmatic functions to assess organizational 

characteristics, human resource policies, and program activities. 

  Interviewed former and current FEC Commissioners and senior staff to 

assess organizational characteristics and program performance. 

  Interviewed external stakeholders such as interest groups and legal 

practitioners. 

  Conducted a Customer Satisfaction Survey to evaluate FEC effectiveness 

in providing information to the filing community, as well as its ability to 

facilitate the process of campaign finance disclosure. 

Interviews and data collection took place during the late summer and fall of 

1998. The team focused on then current FEC activities, processes, systems, 

policies, and staff. As in all dynamic organizations, the FEC has been 

conducting its business and making changes throughout the assessment 

period. Unless otherwise noted, all data is current as of the end of FY 1998 

(September 30, 1998). 

1.4 Organization of the Report 

This report is provided in two volumes. Volume I provides the Executive 

Summary and the narrative discussion to support the findings and 

improvement opportunities that the study team concluded are possible for 

the FEC. Volume II contains details of the assessment that support Volume I. 

Volume II, with its detailed business process flow maps and tabulations of 

the regulated community satisfaction survey, is intended for use primarily 

by the FEC as reference material for guiding process and management 

system changes. 

Page 14 PricewaterhouseCoopers LLP 
 

 

Management Review of the Federal Election Commission 

Volume I is divided into five sections. Section 1 is this Introduction, which 

serves to describe the charter of the study team and to detail the project 

scope and methodology by which it was conducted. Section 2, Profile of 

the Federal Election Commission, provides a brief historical context in 

which the FEC has operated, along with a description of its current 

organization, programs, and relationships to other Federal agencies. 

In Section 3, FEC Organizational Assessment, the reader will find an 

analysis, from three different perspectives, of the capability and outcomes 

of FEC program activities. First, by means of a statistical sample, the report 

looks through the eyes of the filing community and describes, in general 

terms, how it relates to the FEC. Second, the section describes how those 

who practice before or influence FEC processes believe it is meeting their 

requirements. The basis for this analysis was a number of interviews 

conducted with legal practitioners and public interest groups. The third 

view is from the findings of the study team, using a comprehensive model 

of organization performance that looks externally to the environment in 

which the FEC operates and focuses internally on how the FEC plans its 

strategies, manages its resources, and conducts its operations. That analysis 

leads to a number of opportunities that the FEC could consider to improve 

its performance. 

Section 4, Program Process Assessment, looks in depth at the four core 

processes conducted by the FEC from a business systems perspective and 

again, as in Section 3, provides a number of findings and improvement 

opportunities. 

Section 5, Summary of Recommendations, provides additional analysis of 

all the improvement opportunities, taken as a whole, that the study team 

believes would increase FEC performance. 

Section 6, FEC Comments, is the FEC response to the January 15, 1999, 

draft report. 

1.5 Disclosure of Potential Conflict of Interest 

During the proposal process, Price Waterhouse LLP disclosed that it was a 

subcontractor to a software firm in the development of the Office of the 

General Counsel case management system and that the Price Waterhouse 

Partners had registered a Political Action Committee with the FEC. 

Subsequently, following the merger with Coopers and Lybrand LLP, 

PricewaterhouseCoopers LLP disclosed that Coopers and Lybrand LLP had 

been a party in a Matter Under Review with the FEC that had since been 

closed. 

PricewaterhouseCoopers LLP Page 15 
2.0 

Profile of the Federal Election 

Commission 
Management Review of the Federal Election Commission 

2.0 Profile of the Federal Election Commission 

In 1974, the Congress created the Federal Election Commission (FEC) to 

administer and enforce the Federal Election Campaign Act (FECA). FECA 

represented the statutory evolution of a series of early 20th century laws 

designed to govern the financing of elections for Federal offices. Many of 

these early attempts to specify permissible and impermissible sources of 

campaign funds were enacted in response to publicly perceived egregious 

behavior by contributors to Federal campaigns. 

The Tillman Act of 1907, for example, prohibited corporations and national 

banks from contributing corporate treasury funds to Federal campaigns. In 

1925, the Federal Corrupt Practices Act imposed new contributor disclosure 

requirements and placed a ceiling on candidate expenditures. Emergency 

legislation enacted during World War II prohibited union participation in 

Federal campaigns. In 1947, the Taft-Hartley Act prohibited labor unions 

and corporations from making contributions and expenditures in Federal 

elections. Between 1948 and 1972, the Supreme Court defined the 

constitutional parameters of these laws.2

 Likewise, during this period, the 

U.S. Department of Justice prosecuted instances of noncompliance with 

these acts. 

The Federal Election Campaign Act of 1971 codified the intent of these 

early laws as defined by Supreme Court decisions. Generally, the 1971 

FECA required full reporting of campaign contributions and expenditures, 

limited spending on advertisements, and capped spending from a 

candidate’s personal funds. These latter two provisions were overturned by 

the Supreme Court in 1976. The 1971 law created separate segregated 

funds  the mechanism whereby corporation employees and labor union 

members could voluntarily contribute funds to an affiliated entity 

(commonly known as a Political Action Committee) that could in turn make 

contributions to Federal campaign committees. The Revenue Act of 1971 

initiated the system whereby individual Federal income-tax filers could 

designate a portion of their taxes to finance Presidential campaigns in the 

general election. 

However, the 1971 FECA did not establish a uniform institutional 

framework to administer and enforce the statutes. The original Act 

authorized the Comptroller General of the United States, the Clerk of the 

U.S. House of Representatives, and the Secretary of the Senate to monitor 

2

Pipefitters Local 562 v. United States, 407 U.S. 385 (1972); United States v. Auto Workers, 

352 U.S. 567 (1957); United States v. C.I.O. , 335 U.S. 106 (1948). 

PricewaterhouseCoopers LLP Page 21 
Management Review of the Federal Election Commission 

candidate compliance with the law. These three statutory officials were 

authorized to refer violations of the law to the Department of Justice for 

enforcement actions. For example, following the 1972 elections, 7,100 

violations were referred to the Department of Justice, but few cases, in fact, 

were prosecuted.3 

In response to public reaction against the abuses that occurred in the 1972 

Presidential election, the Congress enacted comprehensive amendments to 

the 1971 FECA. In addition to enlarging the scope of permissible and 

impermissible thresholds for campaign contributions and expenditures,4

 the 

1974 FECA created an institutional body to implement the provisions of the 

law. This independent body was the Federal Election Commission (FEC). 

As contemplated under the 1974 FECA statute, the President, the Speaker of 

the House, and the President pro tempore of the Senate would each appoint 

two of the six voting members of the FEC. The statute allowed the Clerk of 

the House and the Secretary of the Senate, or their designees, to serve as 

nonvoting, ex officio Commissioners. Under the Supreme Court’s 1976 

decision in Buckley v. Valeo, this appointment scheme was held in 

violation of the Constitution’s appointment provisions. As a result, 

beginning in March 1976, the Commission could no longer exercise its 

executive powers. The agency resumed full activity when, under the 1976 

amendments to the FECA, the Commission was reconstituted and the 

President appointed six Commissioners who were confirmed by the Senate. 

During the following 23 years, FEC history has been defined by the course 

of external events, amendments to the FECA, judicial decisions, and the 

issuance of numerous rules and advisory opinions. Exhibit 21 provides a 

representation of the key milestones that mark the history of the Federal 

Election Commission. Throughout its life, the Commission has generally 

worked with a low profile, but it has become an integral part of the 

American political process as the agency that has made the routine 

reporting of campaign finance transactions an essential part of all Federal 

elections. 

3

Comptroller General of the United States, “Report of the Office of Federal Elections of the 

General Accounting Office in Administering the Federal Election Campaign Act of 1971” 

(February 1975). 

4

 Key provisions limiting campaign and independent expenditures were subsequently 

overturned by the 1976 Supreme Court decision in Buckley v. Valeo. 

Page 22 PricewaterhouseCoopers LLP 
2.1 Administering the FECA Through Four Programs 

The FEC administers and enforces the FECA through the four core programs 

of disclosure, compliance, Presidential public funding, and election 

administration. 

2.1.1 Disclosure 

 

Management Review of the Federal Election Commission 

Disclosure involves receiving reports of campaign finance transactions by 

candidates and political committees involved in elections for Federal office 

and promulgating them as a part of the public record. As a “sunshine” 

statute, the FECA reflects the Congressional belief that the public has the 

right to know which persons and organizations make contributions to 

candidates and political committees. Given access to this information, the 

public can make more informed decisions when exercising the right to 

vote. In addition to informing the electorate, campaign finance disclosure 

supports the enforcement process. Using the self-reported information 

available on the public record, FEC coordinates a combination of internally 

generated reviews and externally filed complaints, along with investigatory 

and legal tools, to enforce the law. 

The critical input that begins the disclosure process is the filing of a 

campaign finance report by a committee or individual. These reports 

disclose information on the transactions that filers make within specific 

reporting timeframes. During an election cycle, candidate, party, and other 

political committees file reports covering predetermined reporting periods 

ranging from six months to two days before an election. These reports are 

made available for public inspection within 48 hours of receipt by the FEC. 

Aggregating the information from each report into an understandable 

composite of the sources and amounts of campaign finance funds is an 

ongoing process that continues during, and after, an election. 

Reports can be viewed either at the FEC or through the FEC Internet Web 

site, www.fec.gov. In order to make information more accessible, the FEC 

constantly updates searchable disclosure databases with summary 

campaign finance data and itemized contributions that have been extracted 

from the reports. On-line computer access to a committee’s financial data is 

also available to residents of certain states through the State Access Program 

or to individual subscribers of the FEC Direct Access Programs. In addition 

to Direct and State Access Programs, these data are also available on the 

Internet. In addition, the FEC publishes, or makes available, a number of 

monitoring and compliance proceedings (such as the following) for public 

review to provide accountability and transparency in its deliberative 

processes: 

PricewaterhouseCoopers LLP Page 23 
Management Review of the Federal Election Commission 

Exhibit 21 

Federal Election Commission 

Legend 1971−1975 1976−1980 1981−1985 

Public 

Laws 

1971 Federal Election Campaign Act (FECA) 

P.L. 92225 

1971 Revenue Act, P.L. 92178 

1974 FECA, P.L. 93443 

-Created independent FEC 

-Presidential Public Funding 

-Candidate limits on 

contributions and expenditures 

1976 FECA Amendments P.L. 94283 

1979 FECA Amendments P.L. 96187 

1981 Last FEC Authorization (P.L. 93253) 

1976 Buckley v. Valeo 1981 CA Medical Assoc. v. FEC 

1982 FEC v. National Right to Work 

Committee 

1985 NCPAC v. FEC 

Court 

Decisions 

FEC 

Rule-making, 

Advisory 

Opinions 

1975 SunPac 1976 Allocation of State political party 

expenditures for Federal and other 

elections 

1977 First FEC regulations promulgated 

covering disclosure, limits, and 

prohibitions 

1979 FECA amendments extended AO 

process to any person asking about 

their own future conduct 

1980 FEC recognizes Anderson third-party 

Federal funding 

FEC 

Programs 

1976 First certification of Presidential 

matching funds 

1979 Title 2 random audits prohibited 

1979 Financial Control and Compliance 

Manuals for publicly funded 

Presidential primary and general 

election campaigns 

1979 Outside study reviews audit 

procedures 

1979 Sampling plan used for matching fund 

review and certification developed 

1980 Educational outreach program 

initiated 

1980 “ Master Plan” for handling 1980 

Presidential election 

1980 Extended Pass III itemized contributor 

coding 

FEC 

Organization 

1975 Appointment of first Independent 

Commissioners 

1975 First Staff Director and General 

Counsel appointed 

1976 Amendments reconstituted FEC to 

comply with Buckley decision 

1977 Memorandum of understanding with 

Department of Justice 

1977 Second General Counsel appointed 

1978 Organization of FEC union 

1979 Third General Counsel appointed 

1980 RIF in Audit Division 

1980 Second Staff Director appointed 

1983 Third Staff Director appointed 

1984−1992 Use of GAO staff for 

Presidential Matching Fund Program 

cycles 

1985−1986 FEC moves to PEPCO building 

Page 24 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

Key Events 

1986−1990 1991−1995 1996−2000 Legend 

1989 Ethics Reform Act 1991 Treasury Presidential Election 1996−1999 Appropriation earmarks to 

–Personal use of campaign funds Campaign set-aside regulations 

1993 Presidential check off increased to 

$3.00 

1994 National Voter Registration Act 

1995 Appropriations recision of $3.5 

million 

upgrade computer support 

1996 House point-of-entry changed to FEC 

1996 Term limits for Commissioners 

enacted into law 

Public 

Laws 

1986 FEC v. MCFL 

1987 FEC v. Furgatch 

1990 Faucher v. FEC 

1994 FEC v. NRA Political Victory Fund 

1995 FEC v. Survival Education Fund 

1995 U.S. Chamber of Commerce v. FEC 

1996 FEC v. CAN 

1996 FEC v. Williams 

1996 Maine Right to Life v. FEC 

1996 FEC v. GOPAC 

1997 FEC v. Colorado Republicans 

1997 Minnesota Citizens for Concerned Life 

v. FEC 

1997 Clifton v. FEC 

1998 Right to Life of Duchess County v. 

FEC 

Court 

Decisions 

1986 Common Cause petitions for rulemaking on soft money. FEC declined. 

Court ordered FEC to enact 

regulations. Result: Allocation 

regulations. 

1991 Regulation changes easing state-bystate spending limits impacts on audit 

process 

1993 NonFederal-to-Federal candidate 

transfers barred by FEC regulations 

1994 Implementation of National Voter 

Registration Act of 1993 

1995 Personal use of campaign funds regs. 

1995 MCFL rules (corporate/labor 

communications; independent 

expenditures by nonprofits) 

FEC 

Rule-making, 

Advisory 

Opinions 

1985−1986 Creation of Direct Access and 

State Access Programs 

1988 First use of on-site computing 

equipment by auditors 

1992 Check off public service 

advertisements 

1992 Audit procedures changed to 

streamline and strengthen audits of 

Presidential campaigns 

1993 FEC Imaging System begun 

1993 Enforcement Priority System initiated 

1994 FEC FAXLINE initiated 

1995 Voluntary Electronic Filing program 

launched 

1996 FEC began receiving House reports 

directly 

1996 Soft Money 

–Issue Advocacy Investigations 

1996 Web site launched 

1998 Imaged campaign reports extended to 

Web site 

FEC 

Programs 

1986 Gramm-Rudman impacted disclosur

database 

1987 Fourth General Counsel appointed 

1989 Creation of the Office of Inspector 

General 

e 1993 Ex officio Commissioners ruled 1996 Move to PC environment 

unconstitutional 1997 Audit Division fully equipped w/ 

1995 (November) Lack of full complement portable computing capability 

of Commissioners 

–caused cases to be closed for lack of 

4-vote majority 

1995 House Appropriations Survey and 

Investigations Management Review 

1998 Migration from legacy word 

processing to Lotus Notes 

1998 Staff Director vacancy 

1998 Full complement of Commissioners 

(First time since 1995) 

FEC 

Organization 

PricewaterhouseCoopers LLP Page 25 
Management Review of the Federal Election Commission 

 Requests for Additional Information (RFAIs) sent to committees to seek 

clarification or amendment to submitted reports 

 Advisory Opinions (AOs) that provide interpretation of legal issues 

around specific fact patterns 

 Closed Matters Under Review (MURs) and litigation cases 

 Audit reports of Presidential publicly funded committees and closed “for 

cause” audits 

 Written transcripts of Commission hearings 

 Agenda documents 

 Minutes of meetings 

 Comments on rule-makings 

 Sunshine Act and Federal Register notices 

2.1.2 Compliance 

Compliance involves the review and assessment of transactions to ensure 

that filers abide by the appropriate limitations, prohibitions, and disclosure 

requirements of the FECA. Compliance also involves oversight of individual 

contributors, corporations, labor unions, and “issue” groups that, although 

they may not fit within the universe of filers, can be involved in violations 

of the FECA. The FEC has exclusive jurisdiction over civil enforcement of 

the FECA and engages in civil enforcement proceedings to resolve instances 

of noncompliance. Enforcement cases are generated through complaints 

filed by the public, referrals from other Federal and State agencies, and the 

FEC’s own monitoring procedures. Each of these paths can lead to the 

opening of a Matter Under Review (MUR). 

If transactions reported on a disclosure form appear to be inaccurate or 

inconsistent with FEC standards, the committee is sent a Request for 

Additional Information (RFAI). A committee has 15 days to respond to the 

request to clarify the public record and amend its report, as appropriate. 

Committees that systematically fail to file timely and accurate reports or 

engage in transactions that appear to violate FECA limitations and 

prohibitions may be subject to enforcement action or a “for cause” 

comprehensive audit review. 

Externally generated cases based on formal, written complaints achieve 

MUR status only if they satisfy specific criteria for a proper complaint. The 

accused violator has certain rights, including the right to respond to the 

complaint. If the Commission finds that there is “reason to believe” that a 

respondent has committed a violation, a letter of notification is sent and 

Page 26 PricewaterhouseCoopers LLP 
 

 

Management Review of the Federal Election Commission 

FEC initiates an investigation. During the course of an investigation, the 

Commission has the authority to subpoena any information necessary to 

determine “probable cause to believe” that a violation has occurred. Before 

and after a finding of “probable cause to believe,” the Commission engages 

in a conciliation process in which the respondent has an opportunity to 

admit to a violation and agree to a civil penalty. If conciliation efforts fail, 

the Commission may file suit in District Court. All enforcement matters 

remain confidential until the Commission closes the case and releases the 

information to the public. All compliance and enforcement actions must be 

approved by an affirmative vote of four Commissioners. 

2.1.3 Presidential Public Funding 

Presidential Public Funding is the system for financing Presidential 

primaries, general elections, and national party conventions. Every 

Presidential election since 1976 has been financed with public funds. 

Congress designed the program to correct the campaign finance abuses 

perceived in the 1972 Presidential electoral process. Congress designed a 

program that combines public funding with limitations on contributions and 

expenditures. The program has three parts: 

  Matching funds for primary candidates 

  Grants to sponsor political parties’ Presidential nominating conventions 

  Grants for the general election campaigns of major party nominees and 

partial funding for qualified minor and new party candidates 

Based on statutory criteria, the Commission determines which candidates 

and committees are eligible for public funds, and in what amounts. The 

U.S. Treasury then makes the necessary payments. Later the FEC audits all 

the committees that received public funds to ensure that they used the 

funds in accordance with the FECA, public funding statutes, and FEC 

regulations. Based on the Commission’s audit findings, Presidential 

committees may have to make repayments to the U.S. Treasury. 

The public funding program is exclusively funded by the dollars that 

taxpayers designate for the Presidential Election Campaign Fund on their 

Federal income tax forms. Because of declining taxpayer designations, 

inflation, and an impending shortfall in the Fund, the Congress increased 

the checkoff amount from $1 to $3 in August, 1993. This change, however, 

did not index the checkoff amount to inflation. Since payments to qualified 

Presidential candidates will continue to increase with inflation, based on a 

statutory formula, a shortfall at some future point remains probable. Should 

a shortfall occur, current law requires the Treasury Department to allocate 

PricewaterhouseCoopers LLP Page 27 
Management Review of the Federal Election Commission 

funds, giving first priority to the conventions, second priority to the general 

election, and third priority to the primaries. 

2.1.4 Election Administration 

The Office of Election Administration serves as a central exchange for the 

compilation and dissemination of information and research on issues 

related to the administration of Federal elections. This office issued 

voluntary performance and test standards that States and voting systems 

vendors can use to improve the accuracy, integrity, and reliability of 

computer-based systems. The Office also helped States implement the 

National Voter Registration Act (NVRA) of 1993, which Congress enacted 

to facilitate and increase voter registration by providing opportunities to 

register at a number of State agencies, using a number of registration 

methods. 

2.2 Organizational Structure and Resource Allocation 

FEC is an independent Federal agency established by the Congress as a 

Commission. Six Commissioners, appointed by the President and confirmed 

by the Senate, are responsible for administering and enforcing the FECA. 

No more than three Commissioners may represent the same political party. 

The Commissioners serve full-time and usually meet twice a week. On 

Tuesdays, they meet in closed session to consider compliance and other 

matters that, by law, must remain confidential. On Thursdays, the 

Commissioners convene in open session to formulate policy through 

advisory opinions or regulations and to vote on administrative matters. 

Exhibit 22 is a high-level organization chart depicting the basic structure 

of the FEC, along with full-time equivalent (FTE) staffing levels as of 

September 25, 1998. Volume II, Appendix A of this report provides a 

detailed organization chart with all suborganizations, staff titles, and grades. 

Page 28 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

Exhibit 22 

Federal Election Commission Organization Chart and Full-Time Equivalent 

(FTE) Staffing Authorization 

Commissioner 

Offices 

General Counsel 

(7) 

Staff Director 

(7) 

Inspector 

General 

(4) 

Public 

Financing, Ethics, 

and Special 

Projects (19) 

Enforcement 

(50) 

Policy 

(14) 

Litigation 

(15) 

Library 

(2) 

Data Systems 

(44) 

Disclosure 

(13) 

Information 

(11) 

Report Analysis 

(41) 

Audit 

(30) 

Election 

Administration 

(5) 

Commission 

Secretary 

(5) 

Personnel 

(4) 

Equal

 Employment 

Opportunity

(1) 

Planning and 

Management 

(2) 

Administration 

(19) 

Press Office 

(5) 

(14) 

Commission Totals 

Permanent...313 

Temporary...8 

Source: FEC Staffing Report September 25, 1998. 

PricewaterhouseCoopers LLP Page 29 
Management Review of the Federal Election Commission 

Under the Commissioners, the organization is separated into two primary 

offices: the Office of the Staff Director (OSD) and the Office of the General 

Counsel (OGC), each headed by a statutory officer.5

 Subordinate offices to 

the General Counsel are titled Associate General Counsels, and each 

supports one or more of the four core FEC programs. Subordinate 

organizations to the Staff Director are, in most cases, called “offices” for 

staff support activities and “divisions” for line activities that are involved in 

one or more of the four core programs. Programmatic elements under the 

Office of the Staff Director include the Disclosure Division (Disclosure), 

Data Systems Division (DSD), Information Division, the Press Office, 

Reports Analysis Division (RAD), Audit Division (Audit), and the Office of 

Election Administration. 

2.2.1 Disclosure Program 

The Disclosure Division, the Data Systems Division, and the Reports 

Analysis Division are primarily responsible for creating an accurate public 

record of campaign finance transactions. The Information Division provides 

technical assistance to candidates, committees, and others (through the use 

of the Internet, letters, and phone conversations) on the FECA, FEC 

regulations, Advisory Opinions, and court decisions. The Press Office issues 

notifications of Commission actions, releases statistics on campaign finance 

activity, and responds to all inquiries from representatives of the media. 

The Disclosure Division is involved at the beginning and the end of the 

disclosure process. The Disclosure Division Processing Branch handles the 

processing of committee submissions when they first arrive at FEC. 

Processing scans all hardcopy reports to convert paper into images and 

microfilm. The Disclosure Division Public Records Office assists the public 

to locate and understand disclosure data and responds to information 

requests related to campaign finance. 

The Data Systems Division includes support staff to assist with information 

technology and programming, as well as functional staff to code and enter 

data for the disclosure database. The Coding staff receive the hardcopy 

disclosure reports from the Processing Branch and extract certain 

information to update an election cycle disclosure database that maintains 

aggregated raw data. After coding is complete, Data Entry staff input the 

data that populate the disclosure database and generate 25 categorical 

indexes that make the data easier to analyze. Crucial to disclosure, the DSD 

5

There is also a statutorily established Office of the Inspector General with four FTEs 

reporting to the Commissioners, but this Office was not subject to review by the study team. 

Page 210 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

coding and data entry process creates the indexes that are necessary to 

search for and retrieve imaged campaign finance reports. 

The Reports Analysis Division plays a role in both of disclosure and 

compliance programs. RAD analysts review each disclosure report to 

determine compliance with the law and to assist committees as necessary 

to voluntarily submit accurate information for the public record. RAD 

analysts assess filed reports based on timeliness, accuracy, and disclosure 

content. If an analyst discovers problems with the reported information or 

finds that certain information is omitted or requires clarification, a Request 

for Additional Information (RFAI) is sent to the committee to request 

clarifying information as an amendment to the original report. These letters, 

as well as any committee responses, are then made part of the public 

record. 

The Information Division promotes voluntary compliance with the election 

laws by providing technical assistance in understanding and interpreting 

FECA to candidates, committees, and others involved in elections through 

the FEC Web site, phone conversations, publications, and conferences. To 

encourage committees to seek guidance, requesters may remain 

anonymous when making inquiries of the Information Division. 

The Press Office serves as a liaison to the media. Its mission is to 

disseminate, explain, and interpret-in-context often complex and legalistic 

information, typically statistical, to the media so that they can impart that 

information to the public. 

2.2.2 Compliance Program 

The FEC compliance program encourages voluntary compliance through a 

combination of mandatory public disclosure activities coupled with the 

deterrent effect of audit and enforcement actions as a means to discourage 

nonwillful violations, as well as willful disregard, of FECA reporting 

requirements, limitations, and prohibitions relating to campaign finance 

activities. The Office of the General Counsel is responsible for carrying out 

compliance functions, with direct support from the Audit, RAD, and Data 

Systems Divisions. 

Subordinate elements of the Office of the General Counsel include four 

Associate General Counsels (AGCs) plus a Library. The AGC for 

Enforcement manages and conducts the enforcement process for referrals 

from RAD, as well as from externally generated complaints. 

PricewaterhouseCoopers LLP Page 211 
 

 

Management Review of the Federal Election Commission 

The AGC for Public Financing, Ethics, and Special Projects (PFESP) 

manages and conducts the enforcement process for Title 26 Presidential 

publicly funded committees and audit-related matters referred from the 

Audit Division. PFESP is also responsible for the review of legal issues 

arising in the Presidential public funding certification process, Title 2 audits 

“for cause,” committee proposed debt settlements, FEC initiated 

administrative terminations, and administers the FEC Ethics in Government 

Act program and completes special projects assigned by the General 

Counsel. The AGC for Policy is responsible for administrative law reviews, 

the rule-making process, and the issuance of Advisory Opinions. The AGC 

for Litigation represents the FEC in litigating matters in Federal court.

 2.2.3 Public Financing 

Under the public financing program, the FEC certifies the eligibility of 

Presidential candidates and committees for Federal payments and ensures 

that all public funds are accounted for and expended in compliance with 

the Presidential Election Campaign Funding Act and the Primary Matching 

Payment Act, as well as the FECA. 

The Audit Division is involved with determining compliance with campaign 

finance limits and guidelines. Audit staff are primarily involved with two 

different types of audits: Title 2 audits “for cause” and Title 26 Presidential 

audits. Title 2 audits are initiated in response to referrals from RAD that 

have been approved by the Commission. Title 26 audits are required for all 

Presidential and campaign committees that receive public funding. These 

audits are a statutorily mandated priority for the Audit Division. The Audit 

Division is also responsible for the qualification of Presidential candidates 

and certification of matching funds and grants. In this capacity, the Audit 

Division is primarily responsible for administering the Presidential public 

funding program. 

2.2.4 Election Administration 

The Office of Election Administration is a small unit under the Staff Director 

that is entirely responsible for all issues relating to election administration. 

Its activities are independent from campaign finance disclosure or 

compliance functions. Through the Office of Election Administration, the 

FEC carries out its statutory responsibilities under the National Voter 

Registration Act and provides information and technical assistance to assist 

State and local election officials. Election Administration programs fall into 

three broad categories: 

Page 212 PricewaterhouseCoopers LLP 
 

Management Review of the Federal Election Commission 

  Conduct research, both contract and in-house 

  Provide information by participating in meetings of State and local 

election officials, briefing foreign visitors, and maintaining a library of 

election information 

  Monitor Federal legislation that affects the administration of elections 

2.2.5 Commission and Administration (Institutional Maintenance) 

In addition to the four core programs, the management and administration 

function supports the day-to-day operations of the FEC. For example, the 

Office of the Staff Director and its associated staff offices provide necessary, 

but indirect, support that is not included by the FEC in the resource 

allocation to its four core programs, but is nonetheless critical to the 

maintenance of the FEC as an ongoing institution. 

Exhibit 23 depicts how the Commission employed its staff across the four 

core programs plus Commission policy administration and ADP projects 

during FY 1998. 

Exhibit 23 

FY 1998 Program Full-Time Equivalent (FTE) Usage 

FEC Division/Office Promote 

Disclosure 

Obtain 

Compliance 

Public 

Financing 

Election 

Admin. 

ADP/EF 

Projects* 

FEC Policy 

and Admin. TOTAL 

Commissioners 15.2 15.2 

Staff Director 18.7 18.7 

Administration 18.5 18.5 

Audit 9.3 23.0 32.3 

Information 12.2 12.2 

General Counsel 15.5 66.0 11.0 6.0 98.5 

Data Systems 16.3 0.8 0.2 10.0 11.9 39.2 

Public Disclosure 13.5 13.5 

Reports Analysis 38.1 2.6 40.7 

Inspector General 3.7 3.7 

Press Office 4.7 4.7 

Elections Administration 4.8 4.8 

TOTAL 100.3 78.7 34.2 4.8 10.0 74.0 302.0 

* Since 1995, the FEC has been implementing the following information systems initiatives based on its five-year Computerization 

Strategies and Performance Plan: design, development, and implementation of an Electronic Filing System for automatically placing 

campaign finance report transactions into the disclosure database; migration to a client/server operating environment; 

development of a World Wide Web site; implementation of a document and case management system. 

Source: FEC FY 2000 Budget Request Justification, November 16, 1998. 

PricewaterhouseCoopers LLP Page 213 
76 

78 80 82 84 86 88 90 92 94 96 98 

Exhibit 25 

FEC Appropriations History, 1976−1999 

$M 

40 

35 

30 

25 

20 

15 

10 

5 

0 

Year 

Actual funding 

Funding adjusted for inflation 

76 78 80 82 84 86 88 90 92 94 96 98 

00 

Management Review of the Federal Election Commission 

Exhibit 24 provides a summary overview of FEC staffing, and Exhibit 25 

identifies the appropriations levels from 1976 through 1999. During this 

period, staffing levels have been driven by funding availability and 

statutorily mandated personnel ceilings. 

Exhibit 24 

FEC Staffing History, 1976−1999 

FTE 

0 

50 

100 

150 

200 

250 

300 

350 

400 

full-time equivalents 

Year 

Source: FEC budget submissions 

Source: FEC budget submissions 

Page 214 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

2.3 Institutional Context 

The FECA contains two types of provisions: (1) campaign-financing statutes 

that regulate the sources and amounts of funds permissible in Federal 

elections and (2) campaign-reporting statutes that require disclosure by 

Federal candidates and political committees of the sources and recipients of 

campaign funds. 

Most reporting violations of the FECA and Presidential public financing 

provisions are handled as civil actions by the FEC. A violation is prosecuted 

criminally only if it is a “knowing and willful” violation of a core 

prohibition of the FECA, if it involves a substantial sum of money, and if it 

resulted in the reporting of false campaign information to the FEC.6 Federal 

campaign-financing violations are subject to three types of penalties: 

  Civil proceedings and penalties by the FEC (2 U.S.C. Section 437g(a)) 

  Criminal prosecution as FECA misdemeanors (2 U.S.C. Section 437g(d)) 

  Criminal prosecution as felonies under Title 18 or Title 26 (18 U.S.C. 

Sections 371 and 1001, or 26 U.S.C. Sections 9012 and 9042) 

The FECA created the independent FEC as the exclusive agent to administer 

and enforce the disclosure and compliance provisions. However, three 

other Federal agencies share regulatory responsibilities with the FEC and 

play the following key roles in the administration of the Federal election 

system: 

  The Department of Justice (DOJ) receives referrals from the FEC to 

prosecute criminal violation of the FECA. DOJ also refers matters to the 

FEC when appropriate. 

  The Department of the Treasury disburses public funds to Presidential 

candidates certified by the FEC as meeting statutory eligibility 

requirements. In addition, the Internal Revenue Service reviews FEC 

regulations for consistency with U.S. tax codes, interprets which 

political activities result in taxable income, and determines whether an 

organization’s “political” activity is consistent with its claimed status 

under tax laws. 

6

 The 1976 FECA amendments transferred nine criminal statutes related to campaign 

financing from the criminal code to the FECA. The 1979 FECA amendments reaffirmed the 

principle that technical and unaggravated FECA violations should be handled civilly. DOJ 

prosecutes only those FECA violations that are committed with aggravated intent and that 

involve substantial sums of money. 

PricewaterhouseCoopers LLP Page 215 
Management Review of the Federal Election Commission 

  The Federal Communications Commission monitors broadcaster 

compliance in providing Federal candidates reasonable access to 

purchase broadcast time at the lowest unit rate charged. 

2.3.1 Department of Justice 

The FEC enforces most FECA reporting violations by civil penalties or 

injunctive relief, but these remedies must either be agreed to by a 

respondent or be imposed by a court. The Department of Justice (DOJ) 

enforces only those reporting violations that accompany aggravated 

violations of FECA core campaign financing prohibitions. Six core 

provisions with underlying theories of election law enforcement frame the 

FECA: 

  Limits on contributions from persons or groups 

  No contributions from corporations and unions 

  No contributions from Federal contractors 

  No contributions from foreign nationals 

  No disguised contributions 

  No avoidance of FECA disclosure requirements 

Under the FECA, the Commission can refer matters to the Department of 

Justice only when it has found “probable cause to believe” that a knowing 

and willful violation has taken place. Eighteen cases have been referred to 

the DOJ Public Integrity Section during the past six years.7 

In 1977, the FEC and the DOJ entered into a Memorandum of 

Understanding (MOU) relating to their respective law enforcement 

jurisdictions and responsibilities. In general, the MOU acknowledges 

Congress’ intent to centralize civil enforcement of the FECA with the FEC 

for handling nonwillful or unaggravated violations, as well as knowing and 

willful violations that do not warrant DOJ prosecution. For knowing and 

willful violations that are significant and substantial, the MOU recognizes 

that such violations should be referred by the FEC for DOJ prosecutive 

review. Where the FEC establishes probable cause to believe that the 

violation was knowing and willful, the MOU requires the FEC to refer the 

matter to DOJ. The MOU also establishes that information obtained by the 

DOJ indicating a probable violation of the Title 2 FECA provisions will be 

7

The Department of Justice initiates most of its actions based on information from sources 

other than the FEC. 

Page 216 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

shared with the FEC. If DOJ determines that evidence of a probable 

violation amounts to a significant and substantial knowing and willful 

violation, DOJ will continue its prosecutive review and continue to inform 

the FEC of the course of its investigation. 

While the content of the MOU has not changed, in practice the DOJ 

Election Crimes Branch and the FEC Office of the General Counsel have 

established an effective working relationship to share investigative 

information to the extent provided by law. Recently, in settling criminal 

violations through plea agreements, DOJ has been proposing “global 

settlements” that allow the Commission to levy civil penalties on FECA 

violators. 

2.3.2 Department of the Treasury 

Under the Presidential public funding system, the FEC determines whether 

candidates have met certain eligibility criteria for the primary election 

matching fund payments. Once the FEC determines that a Presidential 

candidate committee has met the matching fund threshold, it certifies to the 

Department of the Treasury the amount due to the candidate. During the 

primary election period, the FEC makes monthly certifications to Treasury. 

In addition, candidates nominated by their parties for the general election 

receive one-time general election block grants from Treasury. 

2.3.3 Federal Communications Commission 

Under Section 315 of the Federal Communications Act, as amended, 

broadcasters are required to sell advertising time to political candidates at 

the “lowest unit charge” of the station for the period of 45 days preceding a 

primary election and of 60 days preceding a general or special election. 

Congress intended the lowest-unit-charge requirement to ensure that 

candidates are treated as favorably as the station’s most favored commercial 

advertisers during the preelection period. Broadcasters are also obligated to 

give Federal candidates “reasonable access” to the medium. All candidates 

must be given the same “equal opportunities” as their opponents to 

purchase broadcast time. The Federal Communications Commission (FCC) 

rules prescribe the business practices to implement these statutory 

requirements. During the course of an election cycle, the FCC is called on 

by broadcasters, candidates, and political parties to mediate disputes 

regarding the interpretation and application of these provisions. 

PricewaterhouseCoopers LLP Page 217 
3.0 

FEC Organizational Assessment 
 

Management Review of the Federal Election Commission 

3.0 FEC Organizational Assessment 

Assessment of the FEC organization was taken from three perspectives: (1) 

from those who are required by FECA to file reports, (2) from a small 

sample of individuals who work to influence FEC policy and direction, and 

(3) through the use of a comprehensive analytic model employed by PwC 

in evaluating complex organizations. 

3.1 Customer Satisfaction Survey 

The Federal Election Commission Customer Satisfaction Survey was 

designed to evaluate, from the perspective of the filing community, FEC 

effectiveness in providing information and facilitating disclosure of 

campaign finance information. The questionnaire focused on specific FEC 

products, services, and processes. It was administered by telephone to 353 

randomly selected Congressional candidate committees, political party 

committees, and PACs that filed reports with the FEC during the 19971998 

Federal election cycle. These committees were selected from a list of all 

committees registered with the FEC. The PricewaterhouseCoopers Survey 

Research Center in Bethesda, Maryland, conducted the interviews during 

August and September 1998. Each committee was notified of the survey 

through a front-page article in the FEC August 1998 issue of The Record. 

Volume II, Appendix B of this report contains the complete survey with 

discussion and tabulations of the responses to the 51 questions. The 

distribution of the sample by committee type and amount of spending is 

also identified. 

Survey Highlights. The survey finds that, overall, the filing community is 

quite satisfied with the products and services provided by the FEC. While 

the level of usage of products and services varies, the degree of satisfaction 

is consistently positive. Moreover, filers generally perceive the Commission 

to be fair and nonpartisan. Specifically, on a scale from 1 to 10, where 1 

means poor and 10 means excellent, the surveyed filers gave the FEC an 

average rating of 8. Sixty percent of filers rated the FEC as an 8 or higher. 

Exhibit 31 provides the results of questions related to the surveyed filers’ 

perceptions of the FEC. 

PricewaterhouseCoopers LLP Page 3-1 
 

Management Review of the Federal Election Commission 

Exhibit 31 

Percentage of Filers Who Agree or Disagree That... 

(Questions 39 – 43, n=353) 

Agree 

Strongly 

Agree 

Somewhat 

Disagree 

Somewhat 

Disagree 

Strongly 

Don’t 

Know 

FEC staff are 

courteous. 71.7% 22.7% 2.0%  3.4% 

FEC staff demonstrate 

a sincere interest in 

solving my election 

law problems. 

61.5% 29.5% 4.2% 2.0% 2.8% 

FEC staff operate in 

an independent, 

nonpartisan manner. 

56.4% 25.8% 4.2% 2.3% 10.5% 

FEC conducts business 

during hours that are 

convenient to me. 

55.0% 30.6% 8.5% 3.7% 2.0% 

FEC as an institution 

fairly applies 

compliance laws. 

38.0% 31.2% 6.5% 5.7% 17.0% 

Note: Percentages do not add to 100 percent because some responses were categorized as “neutral”. 

In general, filers perceive the FEC to be fair and nonpartisan. However, 

large committees and political parties are more likely to disagree that the 

FEC fairly applies compliance laws (21 percent each) than committees as a 

whole (12 percent), but in either case, this is a small percentage. 

Importance of Various Services. Exhibit 32 depicts the importance of FEC 

services in helping filers comply with Federal election law. Among the 

various services mentioned, the Reports Analysis Division (RAD) staff and 

Campaign Guides are deemed either “somewhat” or “very” important by 9 

out of 10 filers (93 percent and 92 percent, respectively). Noteworthy is the 

fact that more than half of surveyed filers reported that they never used the 

automated Faxline (54 percent), the Public Records Office (52 percent), or 

FEC conferences and workshops (60 percent). 

Page 32 PricewaterhouseCoopers LLP 
 

 

Management Review of the Federal Election Commission 

Exhibit 32 

How important are each of the following services in helping you comply 

with Federal election law? 

(Questions 31–38) 

Very 

Important 

Somewhat 

Important 

Not very 

Important 

Not at all 

important 

Sample 

Size* 

RAD Staff 65% 28% 5% 1% 298 

Public Affairs Specialist 54% 34% 5% 3% 217 

Campaign Guides 53% 39% 6% 2% 302 

Conferences 41% 35% 17% 6% 140 

Public Records Office 37% 42% 11% 6% 170 

Web Site 36% 46% 9% 8% 180 

Automated Faxline 35% 39% 18% 8% 161 

The Record 20% 57% 17% 6% 322 

*Based on the number of filers who report having used the service. 

Note: Percentages may not add up to 100 percent because some responses were recorded 

as “neutral” or “do not know”. 

Reporting Forms and Instructions. Eighty-three percent of surveyed filers 

believe that the instructions included with reporting forms were either 

“somewhat” or “very” clear. Only 7 percent said that they require a “great 

deal” of assistance in filing their FEC reporting forms, and a quarter (25 

percent) said that they did not need any assistance at all. 

Reports Analysis Division (RAD) Staff. Nearly three-quarters of all surveyed 

filers have contacted their assigned RAD staff member since January 1, 

1997. Nine out of 10 committees spending over $500,000 report that they 

contacted RAD staff, while only 60 percent of the committees spending less 

than or equal to $50,000 

reported that they contacted 

their RAD staff member. On 

average, filers contact RAD staff 

once per reporting period. 

Exhibit 33 depicts the surveyed 

filers’ assessment of the RAD 

staff. 

Exhibit 33 

Percentage of Filers Who Say That 

RAD Staff Always... 

Answer in a timely manner 86% 

Answer questions accurately 80% 

Are available to respond to requests 67% 

PricewaterhouseCoopers LLP Page 3-3 
Management Review of the Federal Election Commission 

Two-thirds (66 percent) of all surveyed filers reported that they received a 

Request for Additional Information (RFAI) since January 1, 1997; however, 

less than one-half (49 percent) of PACs report receiving one. Of those who 

received RFAIs, four out of five (82 percent) believed that the content of the 

request was either “somewhat” or “very” clear. 

Enforcement Staff. Only 14 percent of the sampled filers have ever had any 

interaction with the FEC enforcement staff. Of these filers, nearly threequarters (73 percent) agreed that the FEC enforcement staff operated in an 

independent, nonpartisan manner. Four out of five (80 percent) said that the 

written communications from the enforcement staff were either “very” or 

“somewhat” clear. 

Phone Calls to the FEC. Half (51 percent) of all surveyed filers have called 

the FEC for reasons other than to discuss their reports, and on average, filers 

make two calls to the FEC during a reporting period. Exhibit 34 identifies 

the reasons for calls to the FEC. 

When asked the reason for their most 

recent call, more than one-half say to 

“obtain information on campaign 

finance laws and FEC regulations.” 

Of those surveyed filers who have 

called the FEC, nearly all (96 

percent) agreed that the FEC staff 

person answered their question 

accurately. Nine out of 10 (92 

percent) of the filers reported that their question was answered within 24 

hours of the call. 

Exhibit 34 

Percentage of Filers Who Have Called To... 

Obtain information on laws and regulations 78% 

Order forms or publications 53% 

Obtain public records about candidates or committees 25% 

Obtain information on voting laws and election statistics 11% 

Obtain other information 17% 

3.2 External Stakeholder Perspectives 

Structured interviews were conducted with 15 individuals that use FEC 

disclosure information, provide legal counsel or accounting advisory 

services to political committees, or have provided testimony to the 

Congress in the past on the conduct of the Federal election process or the 

FEC. Steps were taken to provide balance, recognizing that many of these 

individuals and groups had deeply held positions on FEC activities. Some of 

these individuals were formerly associated with the FEC. Others engage in 

public interest advocacy or represent parties in enforcement actions. It 

should be noted that legal practitioners who were interviewed, by the 

nature of their work, engage in adversarial relationships with the FEC and 

therefore may have expressed views that reflected vested interests. These 

observations are anecdotal in nature and do not represent a statistically 

Page 34 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

random sample. These 15 individuals were asked their assessment of the 

FEC performance in executing its four core programs and to provide a 

description of how those who practice before, or seek to influence, FEC 

programs believe it is meeting FECA requirements. 

Regardless of the interviewee’s political orientation or organizational 

affiliation, five common themes were expressed: 

  All respondents felt that the FEC adds value to the Federal election 

system through its public disclosure role. 

  Respondents believed that the FEC staff act in a nonpartisan and 

independent manner. 

  Interviewees opined that the FEC takes too long in completing most 

compliance activities  from enforcement initiation and disposition to 

completing audits. 

  Some external stakeholders perceive that the FEC treats the filing 

community as a monolithic entity and that it fails to understand or 

appreciate the disparate characteristics of election participants 

  The organization is “tired” and needs renewal. 

3.2.1 Disclosure 

When queried about what the agency does well, all interviewees responded 

that the FEC public records, disclosure, informational services, and 

campaign guides were valued products and services. Specifically, a 

significant number of the respondents were in agreement on the following 

points: 

  While its limitations are recognized, the disclosure database was 

deemed useful and informative, but it contains gaps in information that, 

if filled, would enhance the intelligibility of campaign finance 

transactions. 

  Users of the data commended the FEC for moving forward with 

electronic filing, but noted its limited functionality. 

  FEC disclosure information, when compared to the totality of political 

spending that is not regulated or reported, has become less meaningful 

with the advent of emerging political communication activities. 

PricewaterhouseCoopers LLP Page 3-5 
Management Review of the Federal Election Commission 

Other comments offered by a small percentage of the interviewees: 

  Reporting transactions on a calendar year basis makes it difficult to 

determine election cycle campaign finance activity. 

  Aggregate data indexed in the disclosure database sometimes do not 

match with actual transactions as reported on filing forms because of 

data entry errors or the way specific contribution data are reported. 

  Although the FEC Web site is a significant improvement, it does not 

incorporate all FEC forms and publications, and questions about the 

timeliness of posted information were raised. 

  The lack of categorization and indexing of disbursement transactions 

makes it difficult to obtain a complete picture of how the flow of funds 

and purchases support campaign activities. 

3.2.2 Compliance 

Eight legal practitioners who represent the spectrum of respondents before 

the FEC were interviewed. All expressed the opinion that compliance 

processes took long periods to reach resolution. Many practitioners noted 

the inherent delays in timeframes built into the FECA. These practitioners 

acknowledged as well that some respondents actively sought to drag cases 

out. Most respondents expressed exasperation with the enforcement 

complaint notification and Reason To Believe process. For example, once 

notified that a complaint had been received and a respondent had 

submitted a rebuttal to the complainant filing, many months can pass. This 

silence, they claimed, is then suddenly broken when a respondent receives 

a Reason to Believe finding with 15 days to respond. 

Most felt that the current FEC compliance practices did not create a strong 

deterrent effect. They noted that the dismissal of a large number of cases for 

staleness has, on one hand, encouraged respondents to engage in delaying 

tactics and, on the other, left the FEC open to criticism for concentrating 

resources on high-profile cases that rested on unsettled areas of the law. As 

an enforcement philosophy, practitioners recognized that the FEC seeks to 

enforce the entire spectrum of FECA, and most felt this was appropriate. 

Some perceived a high level of compliance within the filing community. 

For an agency that encourages voluntary compliance, several interviewees 

opined that settling a case with the FEC was difficult. They believed that 

conciliation negotiations failed to reach closure because the Commission 

insisted on respondents admitting wrongdoing under legal theories that 

counsel could not recommend to their clients to accept. All attorneys who 

had represented sua sponte cases (where a regulated entity voluntarily 

Page 36 PricewaterhouseCoopers LLP 
 

Management Review of the Federal Election Commission 

admits to a violation) stated that they would never recommend this course 

of action again to a client. They noted that the FEC provides no incentive 

for voluntarily disclosing violations and treats instances of sua sponte filings 

no differently in shaping conciliation agreements or levying civil penalties 

than the disposition of referrals or external complaints. Several legal 

practitioners opined that the failure to enter into settlements earlier in cases 

and to enter into consent-like orders has made respondents act more 

litigious than they would otherwise act. 

A consistent legal theme shared by most practitioners was the FEC use of 

the compliance process to set policy. Those attorneys who represent the 

filing community suggested that the FEC should focus on settled areas of the 

law. They suggested that enforcing and litigating unsettled areas of the 

FECA misused FEC limited compliance resources. On the other hand, 

several public interest advocates thought that the FEC was not aggressive 

enough in pursuing compliance actions to affect unsettled areas of the law. 

In general, legal practitioners felt that the FEC should first make policy 

through rule making or proactive issuance of advisory opinions that address 

emerging issues and trends in the filing community. 

3.3 Internal Organizational Review 

Organizational problems seldom develop overnight. They typically result 

from an organization’s inability to adapt effectively to a series of 

environmental changes over time. Such is the case with the Federal Election 

Commission. The FEC enabling statute, the Federal Election Campaign Act 

(FECA), circumscribes the organization’s behavior. Written into law by the 

Congress more than 20 years ago (when the conduct of Federal elections 

was significantly different from that of today), the statute’s early 

construction created an organization with limited ability to adapt to a 

changing environment. 

Organizations are complex systems with many interdependencies; to 

ensure that an entire organization is explored, PwC conducts organizational 

assessments based on a Model of Organizational Performance. The model 

views a complex organization from the perspective of 11 interrelated 

components that together represent the whole of the enterprise. This 

approach yields a description of how the organization uses its internal 

capacity to respond to its external environment and deliver desired results. 

As shown in Exhibit 35, the model reflects characterizations of the FEC as 

a whole. It is not intended to provide an in-depth analysis of specific 

organizational units or discrete business processes. These subjects are 

presented in Section 4, Program Process Assessment. 

PricewaterhouseCoopers LLP Page 3-7 
 

Management Review of the Federal Election Commission 

The model identifies organizationwide issues that require attention if 

performance is to improve. Within each dimension of an organization, 

there are questions that assess the organization’s state. In general, highperforming public-sector organizations exhibit common attributes: 

  They operate with a strategic plan to address the question of how they 

can add value to their customers. 

  They solve problems systematically to increase program effectiveness. 

  They experiment with new approaches to increase process efficiencies. 

  They learn from their own experiences to improve continuously. 

  They learn from the experiences and best practices of others to leverage 

innovations. 

  They transfer knowledge throughout the organization to create a 

learning environment. 

  They focus on external customer results to measure program outcomes. 

Page 38 PricewaterhouseCoopers LLP 
a

c

t

e

o

Management Review of the Federal Ele 

Organization Assessment 

Exhibit 3−5 

Model of Organizational Performance* 

External 

Environment 

•Changing election 

environment 

•Adaptability 

hindered by the 

FECA 

•Subject to strict 

scrutiny by 

Congress, the 

Judiciary, and 

adversarial legal 

practitioners 

•Gradual judicial 

erosion of FECA 

scope lessens 

relevance of FEC 

programs 

Mission/Vision 

•Facilitate “sunshine” 

disclosure of campaign 

finance transactions 

•Enforce “ core” FECA 

provisions 

•Means rather than ends 

define the purpose of this 

organization 

Business Objectives 

•Execute 4 programs: 

disclosure, compliance, 

public financing, election 

administration 

•Weak execution linkage 

among programs 

•Emphasis on process 

throughput to measure 

performance 

Strategies

•Enhance voluntary 

compliance through 

disclosure 

•Strong customer focus to 

facilitate disclosure and 

compliance 

•Strong adherence to fairness 

and confidentiality 

•Little leveraging of 3rd-party intermediaries to enhance 

programs 

Organization 

Structure 

•Compartmentalized

functional stovepipes 

•Hierarchical reporting

relationships 

•High managerial ratios to

staff 

Leadership 

•Diffused Commissioner 

leadership 

•Poor communication leads to 

lack of FEC direction 

•Strong technical capabilities; 

inconsistent managerial 

abilities 

Organization 

Culture 

•Informal, familial environment 

dedicated to FECA 

•Dogmatically nonpartisan, 

committed to confidentiality 

•Insular and defensive 

“ us” versus “them” 

organizational lenses 

•Risk-averse and ambivalent 

to change 

Management 

Process 

•Maintains comprehensive 

Management Information 

System 

•Different areas determine the 

strategic and tactical 

direction of the FEC 

•Limited input from internal 

and external customers at 

planning stages 

•Disjointed systems to track 

organizational performance 

•Budget formulation, 

execution, and resource 

allocation sufficiently 

monitored 

•Weak procurement and 

contracting control structure 

Business Processes 

•Formalized roles and 

responsibilities exist 

•Manually driven and pa

process with numerous and reviews 

•Loose linkage between and compliance process

p 

h 

d

e 

Information Techno

•Strong adherence to IT 

strategic plan 

•Progress made in enhan

computerization capabi

•Uneven responsiveness 

customer requirements 

l 

l 

Human Resources 

•Personnel policies stan

across program offices 

•Longstanding tenure for

managers 

•Limited opportunity for 

mobility 

•Lack of organizationwi training 

•Consistent labor-manag relations 

d

u 

d 

e 

Infrastructure 

•Appropriate facilities, 

does not facilitate flow 

b 

*Copyright PricewaterhouseCoopers LLP 

PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

3.3.1 External Environment 

Today’s FEC finds itself in an electioneering environment vastly different 

from that of the early 1970’s when FECA was enacted.8

 Where once 

campaigns were characterized by “volunteers” and “contributions,” the 

current election process has evolved into a high-velocity system of complex 

transactions and litigious recourse, punctuated by the actions of a few 

participants engaging in behavior designed to push the limits of the 

traditional campaign finance system. 

Although established as an independent commission, the FEC environment 

is driven by legislative and judicial branch oversight. Its mission is 

bounded by the FECA, and it shares statutory responsibilities with the 

Departments of Justice and the Treasury in enforcing and administering the 

Act. The Federal judiciary defines the scope of its reach through evolving 

interpretations of the constitutional boundaries of political communication 

and activities. The Commission’s foremost filing community consists of both 

legislative and executive branch candidates and Federal officeholders, a 

situation that finds the FEC in the unique position of regulating those same 

officeholders that define the level and use of its organizational resources.

 The FEC is an organization that has many unique features: 

  The President nominates the agency’s six Commissioners, no more than 

three of whom can come from any one party, subject to confirmation by 

the U.S. Senate to six-year staggered terms. 

  The Commission submits an annual budget concurrently to the Office of 

Management and Budget and to the Congress. 

  FEC disclosure forms and proposed rules are subject to Congressional 

review and approval or disapproval. 

  The Commission can be sued in Federal court for failing to act on 

compliance cases, in addition to being sued when it dismisses 

compliance matters. 

While the FECA sought to enhance public confidence and participation in 

the electoral process, the public appears to have become increasingly 

cynical and disengaged.9

 Voting participation, for example, has been 

steadily decreasing for several election cycles. The gradual judicial erosion 

8

Since the original 1971 Act, FECA has been amended in 1974, 1976, and 1979. 

9

Some have suggested that the FEC disclosure processes have made information available for 

others to use to expose abuses, and it is the abuses that are feeding the public’s cynicism. 

Page 310 PricewaterhouseCoopers LLP 
 

Management Review of the Federal Election Commission 

of the FECA’s initial scope  the limits and prohibitions on contributions 

and comprehensiveness of campaign finance reporting  is moving an 

increasing amount of campaign finance activity outside the Commission’s 

purview. As illustrated in Exhibit 36, increasingly unsettled areas of the 

law pose future challenges for the Commission in determining the 

relevance of FECA-reported campaign contributions in election outcomes. 

Exhibit 36 

FECA and Non-FECA Disbursements in Federal Elections 

(1990-1998, as of November 28, 1998) 

Expenditures (Millions) 1989-90 1991-92 1993-94 1995-96 1997-98 

Total Subject to FECA* 1,115.4 1,886.3 1,493.3 2,279.6 1,589.9 

Non-Federal Reported** NA 165.0 214.4 458.5 360.8 

Issue Advocacy*** 142.5 295.0 

Totals 1,115.4 2,051.3 1,707.7 2,880.6 2,245.7 

Source: FEC Federal election statistics for FECA expenditures and Non-Federal reported 

contributions, as of November 28, 1998. 

* Includes House, Senate, Political Party, Non-party, Presidential Convention, Presidential 

Primary and General, Independent Expenditures and Communication Costs disbursements 

subject to FECA prohibitions, limitations and reporting requirements. 

** Includes Non-Federal expenditures reported by National, State and Local political party 

committees and Non-Party committees. 

*** The University of Pennsylvania Annenberg Public Policy Center estimates that for the 

1995-96 election cycle, $135 million to $150 million was expended for issue advocacy and 

that for the 1997-98 election cycle, $260 to $330 million was expended for issue advertising. 

Exhibit 3-6 figures represent mid-point estimates. Annenberg cost figures are drawn from press 

accounts and self-reporting by groups. 

3.3.2 Mission and Vision 

As envisioned in its enabling statute, the FEC operates as a “sunshine” 

body. Its mission is to facilitate the public disclosure of campaign finance 

transactions to establish citizen confidence in the transparency and 

accountability of the sources of Federal election funds. One of the 

compelling interests behind disclosure is that it is a tool to enhance the 

enforcement of the prohibitions and limitations found in the FECA. 

As the Commission stated in its FY 1998–2003 Government Performance 

and Results Act (GRPA) Strategic Plan: 

The ultimate mission of the FEC is to assure that the 

campaign finance process is fully disclosed and that the 

rules are effectively and fairly enforced, fostering the 

electorate’s faith in the ultimate integrity of the nation’s 

political process. 

PricewaterhouseCoopers LLP Page 311 
3.3.3 Business Objectives 

Management Review of the Federal Election Commission 

FECA drives the Commission’s mission. The organization exhibits a strong 

commitment to adhering to the letter of the law. Viewed from this 

perspective, the FEC has translated its disclosure, compliance, Presidential 

public funding, and election administration into a mission of protecting the 

statute from further erosion. FEC success is measured in terms of processing 

campaign finance transaction inputs into public record outputs, not in terms 

of strategically oriented actions that enhance overall voluntary compliance 

with the law. For example, the FEC could aggregate pending compliance 

matters and enforcement case offense categories to understand emerging 

law enforcement trends and then communicate this analysis to policy 

makers and election participants to inform them about how the 

Commission strategically allocates its resources. 

FEC business objectives are primarily process, not results, oriented. The FEC 

defines its objectives by linking process performance with outcome results. 

As stated in its FY 1999 Performance Plan: 

If we are successful in meeting our performance targets for 

timely review and processing of reports, if we meet our 

targets for resolving enforcement actions in a timely manner, 

and if we are successful in informing and educating the 

public about campaign finance, we believe this will help 

ensure the outcomes desired: public confidence in the 

Commission's ability to fairly and effectively apply 

campaign finance rules and to promote disclosure, thereby 

enabling the electorate to make informed choices in the 

electoral process.10 

As represented in the FY 1999 Performance Plan, four programmatic 

objectives set the goals for organization wide performance, as shown in 

Exhibit 37. 

10 FEC FY 1999 Performance Plan Pursuant to GPRA and OMB A11. Submitted to 

OMB/Congress November 21, 1997. Revised February 12, 1998, in accordance with OMB 

Agreement. 

Page 312 PricewaterhouseCoopers LLP 
 

Management Review of the Federal Election Commission 

Exhibit 37 

FEC FY 1999 Program Performance Objectives 

Program Objective and Desired Outcome 

Disclosure Promote Disclosure and Provide Information 

“To meet the desired outcome so that the public can make informed 

choices in the electoral process dues to full disclosure of the sources of 

candidates funding for campaigns.” 

Compliance Obtain Compliance and Enforcement 

“ Outcomes desired are the perception by the filing community that 

disclosure reports must be accurately and timely filed; that there are real 

consequences for non-compliance with the FECA; and that the FEC will 

impartially and speedily enforce the FECA.” 

Public Administer Public Financing 

Financing “ Desired outcomes are that the public funding program is implemented so 

that the availability of Federal funds does not become an issue in the 

campaign; so that qualified Presidential candidates receive entitled funds 

expeditiously; so that monies are correctly spent on qualified campaign 

expenditures and are fully accounted for; and so that the public is assured 

that the FECA has been impartially enforced in a timely manner.” 

Office of Administer Office of Election Administration 

Election 

Administration “ Desired outcomes are that the state and local election officials charged 

with administering federal elections are able to hold fair elections 

efficiently with public confidence in the integrity of the results; to enable 

elections administrators to comply with the voting Accessibility and 

National Voter Registration Act statutes. The FEC is required by the NVRA 

to report to the Congress on the impact of the law after each election.” 

Source: FEC FY 1999 Performance Plan Pursuant to GPRA and OMB A11. 

Process output metrics measure the achievement of performance of each 

program. Typically, the performance measures reflect deadline-driven tasks, 

either required under the FECA or through internal directive. Although not 

reflected in the FY 1999 Performance Plan, each metric captures a discrete 

output generated by a separate organizational unit. The four FEC program 

objectives are tracked by 35 Performance Plan measures. Exhibit 38 shows 

the number of FY 1999 measures by program and provides examples. 

PricewaterhouseCoopers LLP Page 313 
 

 

Management Review of the Federal Election Commission 

Exhibit 38 

FEC FY 1999 Program Performance Measures 

Program Performance 

Measures Illustrative Examples 

Disclosure 14 metrics  Meet 48-hour deadline for making reports available for public 

review of 99% of reports filed at FEC 

 Code and enter itemized data from disclosure reports filed, 95% 

complete within 45 days from date of receipt 

 Review 60% of all quarterly reports filed within 90 days of receipt 

(75% within 120 days) 

 Prepare RFAIs for 100% of all Committees’ reports reviewed that 

require them, 60% within 90 days of receipt 

Compliance 13 metrics  Refer a total of 60 Committees for potential enforcement actions in 

FY 1999 

 Complete review of 438(b) audit reports within 6-8 weeks on 

average 

 EPS performance targets: Process and close 225 cases in FY 1999, 

35%-40% with substantive FEC action 

 Maintain average monthly case load of 275–290 cases during FY 

1999 

 Maintain a minimum performance level of monthly average ratio 

of 30% active to 70% inactive cases 

Public 

Financing 

6 metrics  With goal of completing title 26 audits within 2 years of the 

general election, complete remaining 1996 audits and initiate 

2000 audits of 1517 primary candidates, 4 major party 

convention audits, and 3 general election audits 

 Produce report to Congress on the 1996 matching fund process 

within 21⁄2 years of 1996 general election 

Election 

Administration 

2 metrics  Conduct research into election administration issues and respond 

to 100% of an estimated 7,500 requests for information with one 

week. 

Source: FEC FY 1999 Performance Plan Pursuant to GPRA and OMB A11. 

In the aggregate, the metrics reflect an emphasis on process throughput to 

reflect the enforcement and administration of the FECA. While the 

Government Performance Results Acts looks toward a more balanced 

representation of efficiency, effectiveness, and results, it is difficult to 

conceive of and implement a system to measure public confidence in the 

political process that would be perceived as value-neutral. As the FEC fairly 

observed in its FY 1999 Performance Plan, “It is difficult to define and 

measure public faith in the political and campaign finance system. It is also 

difficult to measure the impact of the FEC on the public’s confidence in the 

political process.” Cognizant of this difficulty in defining results, FEC staff 

Page 314 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

responsible for strategic planning have considered undertaking a public 

survey to establish a baseline measure of public awareness and attitudes 

about the Commission and the campaign finance system. 

The performance targets established in the FEC FY 1999 Performance Plan 

form the basis of the FY 1999 Budget Request Justification. These are 

measures requested by the Congress to assess FEC performance. In general, 

historical process throughputs are associated with historical FTE 

requirements. Variations in either output volumes or levels of FTE are seen 

as affecting the attainment of process timeliness or volume measures. 

Improvement Opportunity 3−1: The FEC should conduct surveys of the 

regulated community after an election cycle to measure changes in filer 

satisfaction with the products and services provided by the FEC against the 

baseline findings provided in this study. Conducting a consistent survey 

will enhance the FEC measurement of program performance from the 

perspective of the filing community and enable the organization to develop 

new services to meet the ever-changing demands of filers. The FEC should 

open up its performance planning process to design new factors of success 

as represented by the filing community and other election stakeholders. 

Implementation of a consistent customer feedback survey will also allow 

the FEC to discontinue services that have diminishing value to the public or 

filing community, thereby serving as another means to focus and deploy 

FEC resources to best advantage. 

3.3.4 Strategies 

The Federal campaign finance system is predicated on a close relationship 

between disclosure and compliance. Unlike many other regulatory 

programs such as tax compliance, the public release and scrutiny of 

campaign finance information by name enhances overall compliance. 

Participants in the electoral process have a self-interest in making sure 

that other election participants are following the rules of the system. The 

FEC consciously leverages this intent. Through the public issuance of 

images of campaign reports and the aggregation of finance transactions in 

publicly accessible databases, geographically dispersed political 

committees and the media provide a nationwide monitoring function for 

compliance. 

The FEC attempts to maximize its information dissemination and disclosure 

activities through the following means: 

  Increasing voluntary compliance with permissible sources and amounts 

of funds and reporting requirements 

PricewaterhouseCoopers LLP Page 315 
Management Review of the Federal Election Commission 

  Enhancing FECA enforcement by receiving third-party complaints for 

instances of apparent violation 

  Using the reach of the media to create an incentive for candidates to 

voluntarily adhere to the law whenever instances of apparent 

noncompliance are alleged 

Overall, the FEC exhibits a strong customer focus as a way to encourage 

voluntary compliance by the filing community. To place campaign finance 

transactions on the public record, the FEC accepts virtually any submission 

of disclosure filing, including nonstandard forms and handwritten 

transcriptions. This commendable effort to get any and all transaction data 

publicly disclosed causes significant inefficiencies in the disclosure and 

reports review process. To this point, the FEC has consciously chosen not to 

be heavyhanded with filers by insisting on standard report submissions as a 

strategy to obtain as much disclosure compliance as possible. 

To enhance voluntary compliance, the Commission also emphasizes the 

dissemination of information to assist the filing community in filing reports 

accurately and timely. Examples include: 

  Production of guides and brochures to assist committees in filing 

accurate and timely reports 

  Provision of a toll-free phone number to provide the filing community 

an anonymous forum to answer questions, clarify transactions, and 

assist in completing reports 

  Use of an Internet Web site and a fax line for obtaining report forms and 

transaction information 

  Assignment of a reports analyst to each committee to provide guidance 

and answer questions regarding reporting and permissible activities 

The FEC has successfully fostered many strategic initiatives in its disclosure 

and compliance programs to increase its productivity. In the disclosure 

program, the FEC has 

  Developed both State Access and Direct Access programs to allow 

computer-based disclosure at State election agencies or by individual 

subscription, 

  Deployed an imaging system for reviewing campaign finance reports, 

  Created an Internet Web site containing campaign finance summary 

data, 

  Implemented the first phases of an electronic filing system, and 

Page 316 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

  Expanded the research capability of imaged reports on its Web site. 

In its compliance program, the FEC has implemented the following 

initiatives: 

  Conducted more discovery through informal means to eliminate formal 

steps and speed cases 

  Established the Enforcement Priority System to focus limited 

enforcement resources on serious cases and accelerate the disposition 

of Matters under Review 

  Harmonized compliance and enforcement thresholds to reduce 

unnecessary referrals and to tailor its civil penalty policy to address 

specific compliance matters 

For many years, the FEC has proposed numerous program strategies that 

have been incorporated into its annual submission of legislative changes to 

the Congress. For the most part, the agency has not received authorization 

to proceed with many of its strategic initiatives. 

Improvement Opportunity 3−2: To increase the strategic allocation of 

compliance resources, the FEC should compile an annual descriptive 

offense profile of compliance matters to better inform Commissioners, 

policy makers, and the public of emerging law enforcement trends. 

Compliance matters are currently tracked through the reports analysis 

process, the audit process, and the enforcement process, based on internal 

screening and referral criteria. These compliance process units are fully 

aware of the types of compliance issues arising, yet they measure outcomes 

based on volumes and confidential screening criteria. The result is that 

while FEC staff understand the FECA compliance issue underlying each 

matter, no overall composite is created to provide a larger picture of offense 

characteristics. 

The FEC represents that it seeks to enforce the full spectrum of the FECA. 

Creating an offense categorization profile would better inform 

Commissioners, policy makers, and the public of emerging or changing 

noncompliance patterns. For Commissioners, this information would help 

them strategically decide on the proportional allocation of compliance 

resources. For policy makers and the public, it would better communicate 

the law enforcement challenges faced by the FEC and where the FEC chose 

to commit its compliance resources. 

As an example, the Bureau of Justice Statistics and the United States 

Sentencing Commission both compile, aggregate, and annually report 

descriptive profiles of Federal criminal cases. The FEC should consult with 

PricewaterhouseCoopers LLP Page 317 
 

Management Review of the Federal Election Commission 

these agencies to learn how they distill multi-issue and complex law 

enforcement matters into informative and understandable composites that 

help guide the allocation of Federal criminal law enforcement resources 

and outcomes. 

What might an FEC profile look like? It could be a graphic representation 

comparing the offense characteristics of internal referrals and external 

complaints against closed enforcement cases. As a hypothetical example, 

the Reports Analysis Division made 15 referrals to the Office of the General 

Counsel (OGC) during 1998. The OGC also received another 17 internal 

referrals and 79 external complaints during 1998 (as of September 30, 

1998). As a whole, the FEC compliance-related inventory during 1998 

might have a hypothetical breakdown of 35 percent non-filer or late filer 

cases, 20 percent instances of excessive contributions, 5 percent 

contributions made in the name of another, 10 percent instances of 

independent expenditures that appear coordinated, and 30 percent 

contributions from corporations or unions. 

To undertake this project, the FEC will require outside assistance in 

designing an appropriate offense categorization consistent with other 

Federal law enforcement agencies. Consideration should be given to the 

case profiles with pending and closed matters, beginning with the 1994 

election cycle. Although this category exceeds 1,000 cases, it would 

provide the FEC with a robust baseline from which to assess the distribution 

of compliance matters by offense category.

 3.3.5 Organizational Structure 

The FEC is organized along its two major functions of disclosure and 

compliance. The Presidential public financing and election administration 

programs are nestled below these two core functions. Generally speaking, 

processes that support the disclosure function (and to a lesser extent, those 

compliance activities engaged in by the Audit Division) fall under the 

purview of the Office of the Staff Director. Enforcement, litigation, and 

administrative law compliance processes are under the direction of the 

Office of the General Counsel. It is unusual for functional subunits to 

specialize according to types of regulated filers. One exception is the 

Reports Analysis Division, where two branches review reports segmented 

by Authorized Committees and Non-Party/Party Committees. 

The FEC organizational structure has remained static to such a degree that 

today the organizational units operate in a compartmentalized and 

autonomous manner. As described in Section 4, Program Process 

Assessment, functional process requirements define the boundaries of each 

Page 318 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

organizational unit. Best characterized as functional “stovepipes,” 

compartmentalization has led to the following results: 

  An uneven understanding throughout the organization of how each unit 

performs its functions and the decision-making processes behind 

workflows 

  Multiple handoffs between units that result in redundancies, rework, 

and extra concurrences 

  Diminished sharing of “lessons learned” and “best practices” 

throughout the organization 

The agency’s current structural orientation reduces the efficient and 

effective achievement of its business objectives. As documented by many 

FEC process maps, multiple paper handoffs and levels of review exist within 

and between organizational units.11 Disclosure and compliance functions 

are perceived as disparate business processes. Each unit undertakes its 

discrete process and then hands off the result to the next unit to begin its 

activity. Each unit then reviews the referring unit’s work product for 

accuracy or to confirm its findings. Limited interaction between units 

occurs on a staff level without supervisory approval. As a result, staff focus 

on their specific work processes and are not encouraged to take ownership 

of problem definition or resolution outside their limited areas of 

responsibility. 

To better coordinate compliance workflows, the FEC has made two 

important changes to increase divisional communication and consultation. 

The Office of the General Counsel created the Public Financing, Ethics, and 

Special Projects section to manage, among other things, Title 26 

Presidential public funding and Title 2 audit for cause matters referred from 

the Audit Division. The Reports Analysis Division formed a Compliance 

Branch to triage reporting compliance violations for potential referral to the 

Office of the General Counsel. The FEC notes that these structural changes 

have helped mesh compliance thresholds and have resulted in earlier 

consultation on legal issues. Interviews with staff and process-mapping 

sessions suggest that increased coordination, consultation and 

communication would improve these compliance process linkages. 

The Commission has attempted to break down structural barriers by using 

cross-divisional and multidisciplinary problem-solving teams. The 

development of computerization initiatives has involved task forces and 

steering committees with representatives from Commissioner, program, and 

11 See Volume II, Appendix C. 

PricewaterhouseCoopers LLP Page 319 
Management Review of the Federal Election Commission 

technology support offices and divisions. After each election cycle, 

compliance thresholds incorporated in the report analysis process are 

collaboratively reviewed by the Reports Analysis and Audit Divisions and 

by the Office of the General Counsel to assess trends and impacts on 

workload. After a Presidential election, Audit Division and General Counsel 

staff work together to revise Presidential public funding regulations to 

account for new problems. 

Hierarchical reporting relationships determine the information flows 

within the FEC. Communication and decision making travel up a chain of 

command to either the Staff Director or General Counsel. Unit supervisors 

review staff work products. Decision-making requests are communicated 

through written memoranda with signatures at each step of concurrence. 

FEC units seldom view each other as internal customers. The review 

uncovered numerous instances of one unit identifying a process 

improvement that another unit could implement to enhance coordination. 

But the issue remains unresolved because of a parochial attitude of “that’s 

their problem, not mine.” 

On average, there are four employees per position identified as “manager” 

within the FEC. This contrasts with the proportion of supervisory positions 

relative to the total government workforce of 1 to 7.6. But given the small 

size of the agency and the incidence of many FEC offices containing only 

one or two employees with supervisory rank, the ratio must be viewed with 

caution when compared to the overall government workforce. 

Improvement Opportunity 3−3: The FEC should continue to increase the 

collaboration and communication among existing work groups. Initial 

steps include creating more cross-functional task forces to address 

organizational issues by holding frequent management meetings among 

offices to share problems, suggest initiatives and best practices with their 

peers, and learn from one another. For example, communications between 

the Data Systems Division and the rest of the organization has been a 

recent concern at the agency. The FEC should consider forming a user 

group of representatives from the different divisions who are knowledgeable 

regarding their divisions’ technology needs. This group could meet with the 

Data Systems Division staff and managers to discuss and prioritize needs 

and to assist in implementing technology-based solutions. 

The Staff Director should convene regularly scheduled meetings to increase 

cross-divisional communication and collaboration. Meeting agendas should 

incorporate reviews of MIS performance data and assess changing 

workloads and patterns to leverage group ideas to resolve bottlenecks. 

Page 320 PricewaterhouseCoopers LLP 
3.3.6 Leadership 

 

 

Management Review of the Federal Election Commission 

The FECA appears to have deliberately created diffused leadership roles 

among the Commissioners and statutory officers, making it difficult for the 

organization to speak with one voice or provide clear direction to the FEC. 

By statute, the Commissioner chairmanship rotates every year, and the 

designated chairman has limited authority to set the agency’s agenda. 

Commissioners typically act independently, instead of as a body, in 

managing the agency. Many times, no action is taken on a subject because 

no four members can reach agreement on an appropriate course of action. 

In interviews, many staff expressed a feeling that all their hard work and 

effort had gone for naught and that their work is not worth the effort when 

the Commissioners fail to reach closure. 

At a lower level of leadership, there are concerns within the organization 

about the use of inappropriate management techniques. It was widely 

reported that many managers are still following “old school” 

methodologies, featuring a “policing” approach to management. Some of 

this was seen as being driven from the top, again at the Commission level, 

and trickling down. A story was relayed in which a report went before the 

Commission and feedback from one of the Commissioners focused on the 

grammatical correctness of the report, rather than the content. 

Within divisions, some managers operate in a team environment, involving 

lower-level supervisors in the decision-making process, while others 

operate more independently. Similarly, some of the divisions, or sections 

within divisions, have staff meetings. There appears to be a correlation 

between intradivisional communications and morale. In divisions where 

staff said that their managers communicate well with them, such as the 

Data Systems Division Training Section, the OGC Policy Section, and the 

Audit Division, employees reported having high morale. In other divisions 

where management communication was rated poorly, there was low 

morale. In other branches of Data Systems Development, for example, there 

are no supervisory level meetings. As a result, little sharing of work happens 

between sections, and poor working relationships exist among some 

supervisors. 

Agencywide, there is a communications problem. Though staff interviews 

suggested that communications have been improving  for example, Audit 

and OGC have much better relations and share more information with each 

other than they previously had  both intradivisional and interdivisional 

communications are lacking. The fact that there are few meetings at the 

PricewaterhouseCoopers LLP Page 321 
Management Review of the Federal Election Commission 

senior staff level has resulted in miscommunications and uneven execution 

of program and process innovations. 

Long-tenured senior staff maintain a strong institutional memory of the 

FEC. With only two exceptions, the 14 most senior staff have been with 

agency for 15 years or more, and many have been in their same jobs for 

more than 10 years. Six of the 14 positions have been with the FEC for 

more than 20 years. 

Senior staff command a deep knowledge of the FECA. In fact, most roots of 

why the FEC undertakes an activity or process are grounded in the senior 

staff’s interpretation of FECA requirements. They have developed an 

understanding of the “ways things get done,” which has been inculcated as 

a set of organizational values: 

  A focus on voluntary compliance 

  The impartial identification of information and resolution of instances of 

noncompliance 

  The absolute confidentiality of information about Matters Under Review 

  A low tolerance for errors to protect against harming political 

reputations because of inadvertent mistakes 

  The need to clarify the law 

Staff interviews and focus groups suggest that the employees do not 

perceive effective leadership within the organization. Leadership styles 

among senior managers vary considerably. Based on interviews, several 

managers were seen as lacking a vision for the FEC, their work, and the 

people they manage. Interviews suggested that the primary managerial 

dimension, when exhibited, is task oriented, i.e., a manager explains what 

each follower is to do, as well as when, where, and how tasks are to be 

accomplished. This does not promote individual growth and ownership of 

problem resolution. 

Improvement Opportunity 3−4: The Commissioners should empower the 

Staff Director to be the change agent responsible for improving overall 

organizational performance. The Commission now has the opportunity to 

select a permanent Staff Director who can 

  Motivate and foster teamwork, 

  Nurture staff creativity and initiative, 

  Reward ownership of problems and opportunities, 

  Build trust with Commissioners and staff, and 

Page 322 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

  Maintain consistent and explicit decision making. 

The Staff Director must share the Commissioners’ vision and expectations 

for a changed FEC. Focusing on results, not procedures, should be the basis 

of the Staff Director’s skill set. The Staff Director should be charged with 

creating a long-term vision for the FEC organization that integrates FECwide opportunities for the business process reengineering that will result 

from the continued execution of the information systems strategic plan. 

Moreover, the Staff Director should recommend an implementation strategy 

and an allocation of the resources necessary to act on the improvement 

opportunities identified in this study. 

Improvement Opportunity 3−5: The Commissioners should establish 

annual performance objectives for the Staff Director and the General 

Counsel. To establish and maintain organizational accountability, the 

Commissioners should consider creating performance targets based on 

business process outputs and policy objectives for the programs and 

functions conducted under the Offices of the Staff Director and the General 

Counsel. Commissioners need to communicate desired organizational 

achievements to both statutory officers and delegate the authority to the 

Staff Director and General Counsel to execute tasks for the success of the 

entire organization. 

The Commissioners can use the FY 1999 Performance Plan as a baseline for 

measuring the Staff Director and General Counsel performance. In addition, 

as the OGC case management system comes on-line, the Commissioners 

will be able to identify additional performance metrics to assess OGC 

managed workflows. 

3.3.7 Organizational Culture 

FEC staff are dedicated to the FECA and believe that they are making a 

difference. Staff are committed and proud that they uphold the law in a 

dogmatically nonpartisan manner. 

A siege mentality best defines the organizational culture. FEC staff 

behaviors reflect defensiveness from enduring external criticism, battle 

fatigue from constant adversarial conflict, and an instinctive mistrust that 

the filing community is opportunistically gaming the system. The 

organization views the world from an “us” versus “them” perception. This 

attitude has contributed to an inward focus on the part of the FEC. From 

another perspective, some staff thought that the increasing pressure from 

the outside was bringing more unity and cohesiveness to the agency. 

PricewaterhouseCoopers LLP Page 323 
 

Management Review of the Federal Election Commission 

The agency overall demonstrates a climate of informality. There are no 

standards or guidelines for communications within the FEC, although most 

follow the formal chain of command. Interdivision communications are not 

channeled through agencywide staff or management meetings. Because a 

large number of employees have been at the agency for a long time, many 

informal networks exist among staff from different offices. 

The small size of the FEC also promotes the internal focus of the FEC. The 

agency was described as a “family” by many employees and seen as 

nurturing. Many employees said that the FEC is friendly and that people are 

cooperative. Almost everyone respects other staff members, likes working 

with most people in the organization, and said that the other employees 

were hard working and competent. Virtually all expressed commitment to 

the overall agency mission and believed that the FEC provided a valuable 

service to the American public. 

As shown in Exhibit 39, an analysis of exit interviews with departing FEC 

staff confirms that most would recommend the FEC as a place to work. 

The low turnover rate at the senior 

management level is seen as limiting 

the organization’s ability to adopt new 

ideas and innovations. A number of

employees expressed concern that 

initiatives to improve efficiencies or to 

experiment with new services were 

generally disregarded or ignored 

because they were outside the 

“accepted” ways of doing business at 

the FEC. This ambivalence to change 

was seen as a stumbling block by many 

staff members who felt that there were 

a number of improvements that could 

be made in their daily work patterns. 

Exhibit 39 

Exit Interview Analysis (1992-1998) 

Would you recommend the FEC as a place 

to work? 

Office Yes 

Yes, 

with 

reservations 

No 

OGC 7 11 4 

Audit 6 6 0 

RAD 6 16 2 

Disclosure 4 2 2 

Other 4 3 0 

OVERALL 27 38 8 

Source: FEC Director of Personnel. Interns have been counted in this 

analysis. 

Improvement Opportunity 3−6: The 

FEC should develop a revised performance appraisal process for managers. 

To increase the degree of feedback given to managers on their leadership 

styles, the FEC should initiate a pilot project to use a multi-rater system of 

manager evaluations. Known as a 360-degree review or upward feedback, 

the process simply provides an opportunity for staff to respond 

anonymously on a survey instrument to a series of questions related to the 

management styles of those individuals who have managerial responsibility 

for their work. The purpose is to ensure that FEC senior staff have put into 

Page 324 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

practice those behaviors desired and expected by the Commissioners. The 

following statements are examples of types of constructive feedback: 

  Collaboration, rather than competition, is strongly encouraged. 

  Meetings and discussions are conducted in a way that built trust and 

respect. 

  Constructive feedback is provided in a timely manner. 

  Innovative approaches and ideas are sought and valued. 

The Director of Personnel should be charged with developing and 

administering a pilot upward feedback survey by the end of FY 1999. 

Improvement Opportunity 3−7: The FEC should create a more open and 

proactive problem-solving environment for doing business. To better 

prepare the FEC to meet ever-changing challenges, conscious and 

concerted effort by senior staff must be dedicated to inculcating a new way 

of doing business throughout the Commission. Change initiatives need to 

be perceived as part of the new fabric of the FEC, not as an institutional 

challenge to be resisted. The Commission has attempted a number of 

change projects, most notably the Total Quality Management (TQM) effort 

initiated by the Office of the General Counsel in 1992 and 1993. With 

involvement by staff, this effort designed and implemented the Enforcement 

Priority System that has effectively helped the OGC manage its caseload. 

Unfortunately, the TQM effort bogged down when confronted with issues 

pertaining to the cultural issues and norms related to the way things got 

done in OGC at that time. To overcome this difficulty, change must involve 

staff at all stages. 

Becoming proactive means that the organization should anticipate future 

events to be able to solve problems and to take advantage of new 

opportunities at the earliest possible time. The FEC should also become an 

organization that is learning continually from both failures and from 

successes. The staff must take more risks in innovating to meet changing 

conditions, and the agency needs mechanisms to help employees learn as 

they work. 

The benefits of becoming a proactive, continually improving organization 

are many. The FEC could reduce the sense of entitlement among staff and 

move toward being an agency where new ideas are encouraged and 

individual abilities are utilized to their fullest. An emphasis on proactive 

behavior would reward innovations by employees that are now 

discouraged. Morale would be strengthened as employees see that their 

ideas are welcomed and implemented within the organization. 

PricewaterhouseCoopers LLP Page 325 
3.3.8 Management Processes 

3.3.8.1 Organizational Planning, Budgeting, and Management 

Management Review of the Federal Election Commission 

The current framework for planning and performance measurement has led 

to a diffusion of responsibility, accountability, and ownership across the 

organization. The current planning process solicits individual office and 

division input, but it does not effectively integrate needs across the whole of 

the organization. The process is organized and managed by the Office of 

Planning and Management (OPM), which reviews an office’s previous 

year’s performance and establishes a proposed budget based on staffing, 

workload volumes, and election cycles. This proposed consolidated 

management plan is then returned to the offices and divisions for comment. 

Once OPM receives comments or changes, a modified FEC plan and 

budget are developed and submitted to the Commissioner-level Finance 

Committee. This process has three shortcomings identified by participants: 

  New projects and initiatives are often initiated without the phase-out or 

removal of ongoing projects 

  Planning is considered in relation to each office without discussion and 

integration among other involved offices 

  A lack of clarity exists among initiatives and organizationwide 

objectives 

The FEC operates a Management Information System (MIS) developed and 

maintained by the Office of Planning and Management. Compared with 

other Federal agencies, the FEC MIS tracks more measures over longer time 

periods and represents a reliable system for capturing and reporting FEC 

data. Moreover, the system captures many more process inputs and outputs 

than reflected in the 35 FY program performance measures incorporated in 

its FY 1999 Performance Plan. MIS data also generate resource utilization 

ratio analysis reports to indicate efficiency information. Costs are tracked by 

detailed MIS reports. Personnel hours associated with unit functions are 

captured and translated into a running FTE count. The MIS monthly report 

data includes the following information: 

  Year-to-date budget execution by object class 

  Running Full-Time Equivalent (FTE) staffing report by pay period and 

month 

  Summary MIS data that report disclosure and compliance statistics 

  Cumulative graphic summaries of transactions entered, number of 

reports reviewed, and case dispositions 

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Management Review of the Federal Election Commission 

The MIS system is automated and integrated for organizational units under 

the Office of Staff Director. Performance and financial information from the 

OGC is manually entered into the automated system, but this process will 

change when the case management system, now under development, 

comes on-line. How data are assembled and processed is left up to each 

office and division. This has led in some instances to inconsistent reporting 

metrics throughout the organization that makes reconciliation between MIS 

information and divisional tracking systems difficult. 

The MIS provides comprehensive performance data, but it does not appear 

to be widely used by program mangers. Interviews suggest that some 

managers did not find the information reported from the MIS useful for their 

purposes. As a result, several units have designed their own internal 

tracking systems tailored to specific process flows. 

3.3.8.2 Financial and Cost Management 

The FEC is a concurrent submission agency. As mandated by the FECA, the 

Commission submits simultaneous budget requests to the President and to 

the Congress. OMB reviews the FEC submission for adherence to the 

Administration’s overall proposed budget. Although the FEC budget is 

initially subject to OMB modification, the Commission has the right to 

disagree with the OMB review and present its own request to the Congress. 

After FEC appropriations have been enacted, OPM prepares an annual 

management plan to guide the execution of the budget. The FEC reliably 

monitors its budget and the allocation of FTE and nonpersonnel resources 

to each operating unit. OPM tracks the number of the staff in each month 

to ensure adherence to statutory FTE ceilings. On a monthly basis, OPM 

generates and distributes a report with all obligations and expenditures to 

date. Based on input from managers, OPM periodically proposes changes 

to the management plan to reallocate funds among programs as needed, 

consistent with statutory requirements. The Finance Committee approves all 

proposed reallocations. 

The FEC maintains an integrated financial system that appears to adhere to 

Standard General Ledger reporting requirements and conform to the 

provisions of the Federal Managers’ Financial Management and Integrity 

Act and OMB Circulars A123 and A127. 

The FEC appears to have adhered to Congressional appropriations report 

language instructions and category B “earmarks.” During the March 5, 

1998, Subcommittee on Government Management, Information, and 

Technology hearing on the oversight of the FEC, a concern was raised by 

PricewaterhouseCoopers LLP Page 327 
Management Review of the Federal Election Commission 

the Subcommittee that the FEC had ignored an FY 1995 Appropriations 

earmark regarding computer modernization. Language in the FY 1995 

Appropriations Conference Report stated: 

The conferees support the FEC’s efforts to modernize its 

operations through computerization but are unable to 

earmark funds for the purpose at this time. The conferees 

have taken this step without prejudice and on the basis any 

such earmark might undermine the FEC’s ability to carry out 

its statutory responsibilities in the upcoming fiscal year. 

Within available funds, the conferees urge the FEC to move 

as expeditiously as possible with their plans to modernize 

operations through computerization. The conferees 

encourage the FEC to develop options that will provide for 

the electronic filing of reports. 

Four months after the beginning of FY 1995, the Congress agreed to rescind 

$1.4 million from the then current FEC FY 1995 budget. The conferees 

noted that they expected the FEC to fulfill its commitment to spend not less 

than $972,000 on computerization. The conferees also directed the FEC to 

complete information system strategic plans, including both requirements 

and cost-benefit analyses on internal ADP modernization efforts and 

electronic filing. During FY 1995, FEC budget execution reports indicate 

that it obligated and expended more than $1 million towards ADP 

modernization and electronic filing. 

During the subsequent three fiscal years, the Congress has enacted 

appropriations earmarks directed toward computerization modernization 

and electronic filing. Exhibit 310 compares the appropriations earmark 

with FEC Data System Division budgeted and actual expenditures related to 

electronic filing, ADP modernization, point-of-entry and case management 

projects for the Fiscal 

Years 1996–1998. Exhibit 310 

Earmarks for ADP Modernization 

An additional $1.3 

million earmark was 

included in FY 1998 for 

enforcement and 

litigation document 

management and 

control operations in 

the Office of the 

General Counsel. As of 

FY 1996 FY 1997 FY 1998 

Appropriati

Category 

ons Earmark $1,500* $2,500* $2,500* 

DSD Budgeted Obligations $1,903 $2,666 $2,932 

DSD Actual Expenditures $1,913 $2,803 $2,684 

Difference Earmark & Actual $413 $303 $184 

Source: FEC FY 1996–1998 Management Plans, Data Systems Division 

responses to PwC data request. 

*Amounts are shown in $000s. 

Page 328 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

September 30, 1998, the OGC had obligated $601,000 of this amount 

toward compliance-related document management. The FEC intends to 

obligate the remaining portion of these funds in its FY 1999 Management 

Plan for enforcement document imaging and indexing. 

The FEC financial management processes related to procurement, 

accounts payable, and payroll are inefficient and pose internal control 

weaknesses. The procurement process is paper-intensive and requires 

redundant data entry. The lack of procurement system integration results in 

increased workload and time to process procurements. The lack of written 

procurement and contracting policies and procedures and the 

decentralization of procurement duties throughout the organization 

represent potential internal control weaknesses related to the purchase of 

goods and services. The FEC is presently implementing the SACONS 

software procurement package that should automate most of the 

procurement process and reduce time spent with the procurement and 

accounts payable processes. The FEC anticipates outsourcing its payroll 

function to the National Finance Center during FY 2000. 

3.3.9 Business Processes 

Section 4, Program Process Assessment, presents a comprehensive 

discussion of the FEC four core programs and associated business 

processes. 

3.3.10 Information Technology 

As a result of FY 1996 through FY 1998 appropriations earmarks, the FEC 

has made substantial progress in enhancing and upgrading its computing 

capabilities. A strong reliance on its information systems strategic plan 

helps the FEC maintain a disciplined approach on technology deployment. 

Deploying improved information systems remains critical to the future 

productivity of the FEC. The FEC pursues opportunities like the following to 

employ technologies that increase disclosure and compliance program 

effectiveness: 

  The migration to a desktop-computing environment with documentimaging and group-messaging capabilities 

  The implementation of a limited electronic filing system to automate 

manual data entry, the first step toward improving internal document 

receipt and review processes (recently, FEC awarded two contracts to 

vendors to integrate EFS compatibility into its existing campaign 

committee software through the 2000 election cycle) 

PricewaterhouseCoopers LLP Page 329 
Management Review of the Federal Election Commission 

  The transfer of point-of-entry for House candidate committee filings to 

the FEC 

  The ongoing implementation of an automated case management system 

in the Office of the General Counsel 

Despite these accomplishments, important issues remain that must be 

addressed, such as the coordination and redesign of business processes 

based on new computer technologies, implementing methods to increase 

use of electronic filing techniques, and replacement of antiquated software 

used for the disclosure database system. Significant improvements in FEC 

efficiency and effectiveness will require that these opportunities be 

addressed. 

The Data Systems Division (DSD) has contracted with American 

Management Systems (AMS) twice in the last four years to assemble FECwide information technology requirements and to review the five-year ADP 

Strategic Plan. The AMS study 

  Made specific recommendations for automating existing business 

processes; however, the reengineering of Commissionwide and 

divisional business processes was beyond the scope of the analysis. 

  Examined the Commission’s business processes from a functional 

perspective, not a division-specific perspective. For example, the 

analysis identified the requirement of electronic forms generation, but 

not the particular content of these forms for each FEC division. 

  Provided a cost-benefit analysis identifying specific advantages and 

disadvantages of requirements and specifying a recommended 

technology. 

DSD has essentially developed project implementation strategies responsive 

to Congressional earmarks to implement the plan as recommended by 

AMS. In fact, interviews with program offices suggested that DSD staff are 

currently so focused on, and completely occupied with, implementation of 

the Strategic Plan that there are few resources to respond to user needs that 

are not covered in the plan. Part of this perception appears attributable to 

poor communication between DSD and program and administrative users 

and the DSD requirements to implement automated data-processing 

initiatives as directed by the Congress without slippage. 

The DSD Strategic Plan budget itemizes major program initiatives, such as 

point-of-entry filing, the Electronic Filing System (EFS), the Case 

Management System (CMS), and the ADP modernization. DSD also 

develops a base budget that reflects maintenance and ongoing support 

Page 330 PricewaterhouseCoopers LLP 
 

Management Review of the Federal Election Commission 

costs. The base budget lists future ADP hardware and software upgrades 

and system enhancements for CMS and EFS as maintenance. DSD estimates 

project costs based on present product and labor costs and future variability 

in prices. DSD staff expect the future market prices of products to decrease 

and labor costs to increase. Since 70 percent of the DSD budget covers 

personnel costs, resource allocation among DSD activities becomes critical 

to its budget development. Exhibit 311 illustrates how DSD allocated its 

staffing resources in FY 1998.

In the past two years, 

DSD has rapidly 

upgraded FEC computing 

capabilities. It has 

completed the transition 

from dumb terminals to 

PCs and the migration 

from terminal emulation 

on the VAX computers to 

standardized Windowsbased PC platforms and a 

client-server environment. 

These transition and 

migration strategies 

adhere to the overall Strategic Plan. 

Exhibit 311 

Data Systems Division FY 1998 

Allocation of Resources 

Program Activities Hours FTEs 

Disclosure 4,863 2.8 

Coding and Entry 23,673 13.5 

ADP and Electronic Filing Initiatives 17,630 10.0 

Operations 20,150 11.4 

Other Program Support 2,613 1.5 

DSD Total Personnel Allocation 68,929 39.2 

Source: FEC 1998 MIS data 

The VAX computers currently employ DB1032 database software. DSD 

used DB1032 to develop the disclosure database and the Accounting, 

Payroll, and Personnel systems. To integrate these different functions, 

DB1032 uses single database schemas that can be linked with each other. 

The new PCs must run in terminal emulation mode every time users need to 

access the disclosure database or one of the other program DB1032 

databases. DB1032 runs primarily in terminal emulation mode on the DEC 

4100s, which no longer represents an industry standard. The current ADP 

Modernization Strategic Plan does not include replacement of the DB1032 

software; however, DSD intends to evaluate database options within the 

next two years to replace the legacy systems over the next three to five 

years. DSD plans to migrate to a client-server environment, outsource 

Payroll and Personnel to the National Finance Center, and keep Accounting 

within FEC. 

The disclosure database represents a group of linked databases, each of 

which spans a two-year election cycle. Various FEC divisions use numerous 

databases that link to information in the disclosure database. The 

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Management Review of the Federal Election Commission 

application processes define their data requirements from these databases 

and the disclosure database. As a result, DSD does not create redundant 

databases. DSD replicates the disclosure database shell every two years at 

the start of the election cycle, which facilitates rapid access to current data. 

DSD outsources disclosure-related computer operations for data storage on 

the disclosure database. This outsourcing ensures availability of information 

through continuous server operations, allows DSD to contract for specific 

levels of system availability, and eliminates the need for additional staff 

during peak times. This contractor also provides sites located in Virginia 

and California and wide area network support to link all sites to the 

disclosure database. 

FEC has a number of legacy systems that run in terminal emulation mode, 

forcing new state-of-the-art software and hardware to operate in this 

mode. FEC staff find these systems difficult to use and slow to access and 

process information. The database management system DB1032, which is 

mission-critical software for the FEC, is no longer commonly used. As a 

result, there is little depth, either in the FEC or in the marketplace, in this 

old technology. As business processes change, required technical changes 

may not be possible with these legacy systems. 

Improvement Opportunity 3−8: FEC should accelerate the migration away 

from DB 1032. Developing a transition strategy to bring in state-of-the-art 

database technologies will help DSD reduce or eliminate its vulnerability to 

legacy system failures and improve its ability to support user requirements 

in the near future. This will also help increase user productivity and 

satisfaction. 

DSD has completed the review and implemented conversion of more than 

98 percent of the FEC software applications to ensure year 2000 (Y2K) 

compliance. DSD continues to evaluate all existing systems and expects to 

resolve the remaining Y2K issues by early 1999. Most disclosure-related 

systems rely on the DB1032 software that does not have an embedded year 

2000 time code. DSD expects to replace the DB1032 software over a fiveyear period and does not intend to make any other major software changes 

before then. The Personnel and Payroll systems will not be Y2K-compliant 

until March 1999. DSD anticipates that FEC will outsource these two 

systems to the National Finance Center (NFC) in October 1999. DSD 

expects to make both systems Y2K-compliant by March 1999 to ensure 

against possible delays in the transition to the NFC. DSD is also replacing 

all existing office automation and electronic mail software with 

Windows 95 and Lotus Notes. In addition, DSD has ensured that all new 

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Management Review of the Federal Election Commission 

hardware and software purchased by FEC within the past two years are 

Y2K-compliant. 

Case Management System. DSD is currently developing the Case 

Management System (CMS) based on a standard core component from 

commercial off-the-shelf (COTS) software that it will customize for each 

unique customer requirement. DSD identified the need for a case 

management system during discussions with OGC and included it in the 

AMS 1995 ADP Modernization Report. A steering committee, which 

includes executive assistants, the General Counsel, and the Staff Director, 

has taken an active role in defining the user requirements. The evaluation 

and source selection teams included representatives from each major OGC 

branch and an executive assistant to represent the Commissioners. DSD 

expects a high acceptance level for the case management software. End 

users have participated in the CMS project, and they feel satisfied with the 

approach. The CMS will replace a manual tracking system and most standalone applications now used by the various OGC offices. 

DSD Training and Support Group staff and OGC representatives comanage 

the case management initiative. DSD is currently testing the CMS and 

expects to have it deployed by yearend. 

Training and Development. The Training and Support group consists of four 

full-time instructors, two help desk staff, and a manager. The help desk staff 

receive, categorize, and redirect to the appropriate organization all 

incoming technical support requests. The training staff develop course 

materials and delivers instruction on all products at FEC. 

The four full-time instructors offer classes in Windows 95, Word, and Excel 

and some specialized classes. Even though users can take internal or 

external training, DSD promotes internal training because it is less 

expensive. 

DSD works with contractors to customize its training programs and to 

coordinate training rollout with technology rollout (e.g., Computer 

Consultants Corporation for Lotus Notes, NT). DSD also offers classes and 

one-on-one training to DB1032 users. Participants describe the training staff 

as effective, responsive, and helpful. 

DSD uses a call-tracking software that allows it to monitor user calls and to 

facilitate rapid response. While the call-tracking software tracks “mean time 

to respond,” it does not monitor “ mean time to repair.” A database also 

generates reports that indicate the staff name, the machine number, and the 

PricewaterhouseCoopers LLP Page 333 
Management Review of the Federal Election Commission 

type of call. DSD also maintains a database to review past problems and 

solutions. 

Internal FEC users perceive that their business process requirements are 

not being met by DSD system developmental approaches. Program 

personnel have expressed concerns that program process requirements are 

not being fully satisfied by the current ADP initiatives. An example often 

cited is the electronic filing impacts on the reports analysis process. In 

addition, DSD is perceived to be slow or nonresponsive to user requests. 

For example, the Audit Division sought to use Microsoft Access to assist its 

audit functions, but DSD capacity to support this effort was not 

forthcoming. FEC acquired the SACONS software package in April 1998, 

but did not install it until December 1998. Because of DSD inability to 

provide installation support, the Administrative Division had to wait six 

months to install the software. 

Improvement Opportunity 3−9: DSD should routinely conduct an internal 

FEC staff survey to assess user satisfaction. Expressed user frustration with 

DSD appears to be attributable to poor communication and collaboration 

among DSD and program offices. To increase understanding of merging 

FEC staff needs and user satisfaction with DSD development and training 

activities, a simple Lotus Notes-based user survey could be designed and 

transmitted throughout the organization every six months. This practice is 

becoming common in organizations that increasingly rely on information 

technology to support their mission and activities. Many Federal agency 

information system offices would have a template from which DSD could 

tailor its questions. 

Future business process reengineering analysis will be required for the FEC 

to take full advantage of electronic filing and other ADP initiatives. 

Business process reengineering entails the fundamental rethinking of the 

way that current process activities are conducted to achieve business 

objectives. To date, consistent with the ADP strategic plan, the FEC is 

moving down the path to automate existing paper-based activities. Despite 

initial skepticism, the FEC has demonstrated that it can implement 

information system projects on time and on budget. 

Improvement Opportunity 3−10: FY 2000 is the time for the FEC to begin 

to lay the framework for significant business process reengineering efforts. 

Future and ongoing ADP initiatives should incorporate a business process 

reengineering effort led by the program offices, not DSD. For example, as 

noted by AMS in its five-year Strategic Plan, the Reports Analysis Division 

requires a business process reengineering study to help document and 

improve these processes for increased functionality and flexibility. 

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Management Review of the Federal Election Commission 

This study provides the FEC with the critical first steps in undertaking a 

business process reengineering effort  the creation of organizationwide 

business process maps to document the “as-is” environment.12 These 

graphic representations of process flows identify each discrete step that 

leads to a process output. The object of future reengineering efforts should 

be to identify where the use of technology or changes in program 

requirements would decrease cost and time while increasing quality at the 

source. Until electronic filing becomes significantly more used (or 

mandated by the Congress), limited opportunities exist to reengineer the 

disclosure and reports review processes. Significant time, energy, and 

resources will be required to successfully reengineer the FEC disclosure 

activities related to transaction entry, review, and verification. 

3.3.11 Human Resources 

3.3.11.1 Personnel Office Organization Structure and Role 

The FEC is an Excepted Service agency that comprises 311 permanent 

positions and eight temporary positions (as of September 25, 1998). As an 

Excepted Service agency, the FEC is exempt from some civil service 

regulations. Notably, Excepted Service organizations have more leeway in 

hiring individuals and in terminating their employment. 

The Office of Personnel comprises five positions: the Director, a Labor 

Relations Officer, a Personnel Officer, a Personnel Assistant, and a Clerk. Its 

mission is to serve all of the FEC human resource needs, from recruiting and 

hiring applicants to processing employee retirements and conducting exit 

interviews. In addition, a one-person Equal Employment Opportunity 

Office handles EEO complaints and other special programs. Though 

separate offices that both report directly to the Staff Director, the EEO 

Director and Personnel Director work collaboratively to ensure that 

workforce needs are met. 

Overall, personnel policies and procedures are standardized across 

divisions and offices, and processes are executed primarily at the division 

level. The policies are in general compliance with accepted practices, as 

the agency looks to the Office of Personnel Management guidance and has 

adopted most governmentwide personnel practices. 

The Office of Personnel role within the agency can largely be described as 

human resource administration and support. Because of the manner in 

which many of the processes are executed, the Personnel Office role is 

12 See Volume II, Appendix C. 

PricewaterhouseCoopers LLP Page 335 
Management Review of the Federal Election Commission 

normally that of processing the paperwork and performing a quality 

assurance role. 

3.3.11.2 Recruitment and Selection 

Recruitment and selection activities are routinely conducted using the 

appropriate position description (PD) for the candidate under consideration. 

In general, however, most PDs were out-of-date and general in scope. 

While informative for laying the groundwork for a particular position, it 

may be beneficial to revise PDs to more accurately reflect the specific 

duties; responsibilities; and knowledge, skills, and abilities needed for 

success within a particular role within the FEC. 

The Office of the General Counsel uses a formal law school recruiting 

program to target various schools for interested applicants. OGC sections 

send senior staff and managers to these law schools to collect resumes and 

conduct preliminary interviews with students. Follow-up interviews are 

then conducted back at the FEC with qualified candidates, after which a 

hire/no-hire decision is made. 

The selection process is standardized and consistently utilized throughout 

the agency. It begins when a division manager informs the Office of 

Personnel of an opening. The Office of Personnel posts the vacancy 

announcement and does an initial screening of candidates for the basic 

standards for the position. The remaining applicants are then routed to the 

appropriate division for evaluation and interviews. Interviews are often 

conducted utilizing a panel of three interviewers (required by union 

contract for internal applicants, although most use this process for external 

candidates as well). The interviewers serving on the panel are usually 

supervisors and senior staff from that division. 

The current interview process was born out of a collaborative effort 

between the FEC and the National Treasury Employees Union. It uses a Job 

Element Crediting Plan that allows interviewers to assign numerical points 

to applicants based upon four major categories: Job Elements; Performance 

Appraisal Ratings; Cash/Bonus Awards; and Experience, Education, and 

Training. Based upon their cumulative ratings from the four sections, a bestqualified list of candidates is sent to the selecting official (usually the line 

manager or Associate General Counsel), who then interviews the top three 

candidates and makes a final selection decision. 

To complete the selection process, the hiring manager gets approval from 

the Staff Director or General Counsel to hire the applicant and then makes 

an offer. However, to hire a GS14-or-above staff member, the Staff 

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Management Review of the Federal Election Commission 

Director must also gain approval by the Commissioners before an offer can 

be made. 

Most division managers feel that they are finding qualified candidates for 

open positions. In OGC, for example, team leaders felt that the quality of 

experienced attorneys who were applying for positions was very high. To 

support this statement is anecdotal evidence that OGC typically receives 

more than 80 applications for every open position. The extreme end of this 

spectrum was evident in 1993, when for five attorney openings within all of 

OGC, it received approximately 2,200 applications. 

In addition to experienced hires, OGC management felt that the law school 

recruiting program brought in a number of good, solidly performing law 

clerks. On the downside, as with all Federal agencies, the FEC often loses 

high-potential recruits to law firms or agencies with higher profiles and 

higher starting salaries. 

Managers in the Audit Division, on the other hand, feel that they are 

having problems getting good candidates. The managers cite a poor 

showing in recent hiring efforts as evidence that they cannot find qualified 

people with the required skills. This is best shown by two recent vacancies 

that have remained open because of a lack of qualified candidates. They 

attributed this problem to the comparatively low grade levels for 

journeyman auditors at the FEC and the lack of advancement potential. 

Though the Data System Division Director did not feel that he was having 

any problems recruiting at the current time, other subordinate staff are 

anticipating upcoming problems in recruiting staff for the high-technology 

sections within the division. One employee who had served on recruiting 

panels for the division said that the division had been lucky in getting its 

current staff, but saw the impending issue as a direct result of the FEC not 

offering the salaries or advancement potential needed to attract highly 

qualified recruits. The Development Section was seen as particularly 

vulnerable because staff have a high workload and require specialized skills 

that are in high demand across the information technology industry. 

3.3.11.3 Retention 

The rate of overall separation at the FEC in calendar year 1997 was nearly 

12 percent, which is consistent with its four-year average (1994–1997). The 

Reports Analysis Division (RAD) has historically had much higher turnover 

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Management Review of the Federal Election Commission 

than other divisions, with an average rate of separation for the past four 

years in the 30 percent range.13 

FEC agencywide attrition rate appears to be in line with the average 

numbers for the Federal Government. By way of comparison, the average 

rate of separation governmentwide was 10.39 percent, while the rate 

averaged roughly14 percent for independent Federal agencies. 

For most of the highly specialized professions such as attorney or auditor, 

the agency has not had much trouble in retaining staff. Many cite the 

quality of life (i.e., work-life balance) and other government benefits (e.g., 

work hours, retirement, holidays) as major contributors to why they remain 

with the FEC. 

3.3.11.4 Training and Development 

Training and development are largely handled by each division, whose 

managers are responsible for allocating their training budgets and 

identifying training needs and appropriate opportunities for staff. 

Exhibit 312 provides an analysis of exit interviews with departing FEC staff 

that suggests that staff felt that they received adequate training and 

development opportunities while with the FEC. 

Training, other than computer-related 

courses, is largely provided by outside 

vendors. Some common suppliers include 

the U.S. Department of Agriculture 

(USDA) Graduate School and the National 

Institute for Trial Advocacy (NITA). Some 

staff members are required to take a 

certain amount of training as part of their 

professional standards. For example, 

auditors are required to attend 80 hours of 

training every two years, and attorneys are 

required to take a minimum amount of 

training as dictated by the State bar where 

they are licensed to practice. 

Exhibit 312 

Exit Interview Analysis 

(1992−1998) 

Did you have adequate training and 

development opportunities? 

Office Yes No % Yes 

OGC 15 8 65% 

 7 4 64% 

R

Audit

AD 16 6 73% 

Disclosure 8 0 100% 

Other 4 2 67% 

OVERALL 50 20 71% 

Source: FEC Director of Personnel. Interns have 

been counted in this analysis 

13The high turnover in RAD is due to many factors, one of which is the relatively low salary 

levels for well-educated people. Recent efforts to speed the career ladder of a GS-5/7/9 to a 

competitive GS-11 have helped. Promotion beyond GS-11 is extremely slow. Other 

notable factors include the nature of the work, which has been described as “repetitive” 

and “lacking challenge,” especially after a few years. 

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Management Review of the Federal Election Commission 

No formal training curriculum exists within the FEC. Few standard learning 

opportunities are offered within the agency, including computer training 

(provided by DSD) for every new hire and an FEC orientation session 

(provided by the Office of Personnel) that is held once a significant number 

of new employees come on board. Some divisions, such as OGC, RAD, 

and Information, have structured orientation programs to introduce their 

new employees to the workplace and to facilitate on-the-job training. These 

programs are run separately from one another and have no relation to any 

of the other programs offered. 

RAD undertakes a mentoring approach that seems to be worth further study 

and possible adoption by the rest of the FEC. RAD uses a formal mentoring 

system in which senior analysts are identified and called upon to help guide 

and teach new staff. Several RAD employees mentioned that they found it 

difficult to learn the work when they first started and that having a mentor 

to ask questions and learn from helped them during their development. 

As there is no formal training curriculum for staff members, so also no 

consistent program exists by which managers and supervisors can learn 

management skills. The most often cited method for learning these skills 

was on the job. The FEC, however, is in the process of sending managers to 

an Office of Personnel Management (OPM) management course at the rate 

of two per year. There used to be a management skills training course 

offered in-house through the Personnel Office, but it has not been 

conducted for several years now. 

3.3.11.5 Performance Management 

Performance appraisal forms are standardized and can be tailored for the 

different positions throughout the FEC, depending upon the critical 

elements of a position. Staff members are rated on a five-point scale (where 

1 is low and 5 is high) on both the quantity and the quality of their work; 

these ratings are generally determined one year after the employee’s start 

date and annually thereafter. There are a few exceptions, most notably in 

RAD, where analysts are given formal ratings six months and one year after 

their start date, then annually after that. 

The agency utilizes a top-down approach to conducting performance 

appraisals. This approach consists of first-line supervisors completing the 

staff members’ appraisals and discussing the ratings with the division 

manager or Associate General Counsel before presenting the ratings to the 

employee. 

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Management Review of the Federal Election Commission 

In most cases, supervisors try to resolve any potential problems in an 

informal manner before beginning the performance appraisal process. 

Upon receiving a low rating, employees are dealt with in different modes, 

depending upon the rating. An employee with a 1 rating, receives an 

official notice of his or her rating, is required to develop a plan to correct 

undesirable behavior, and is put on 60-day probation, after which time a 

determination on termination is made. An employee who receives a rating 

of 2 does not receive the standard annual within-grade pay increase. (These 

two adverse ratings are used infrequently.) 

The performance appraisal forms appear adequate for assessing employee 

performance. While not overly sophisticated, they allow for tailoring to the 

position under review and cover the most important aspects of the position. 

As with most performance appraisal instruments, the quality of the review is 

dependent upon the honesty of the reviewer and the honest participation of 

the staff member being reviewed. 

One way in which the performance appraisal instruments could be 

improved would be to tie the critical elements of these instruments to the 

performance strategies and goals of the organization. This approach would 

provide a direct link between individual performance and organizational 

goal attainment. Currently, this link either does not exist or is not obvious, 

and the end result is a performance appraisal instrument that rates less 

essential performance requirements and tasks. 

Managers and supervisors give staff high scores. In 1997, the average 

performance appraisal score agencywide for bargaining unit employees was 

4.51 (out of a perfect score of 5). The historical trend has been for the 

average agencywide score to increase, from 4.36 in 1992 to the current 

4.51. 

This high average score feeds into, and in turn becomes fed by, a sense of 

entitlement among the employees within the FEC. As one manager relayed, 

“... employees feel that if they just do their job, they should get a rating of 

5.” This puts pressure on management to over-rate employees to avoid 

grievances, and these continually high ratings lead the employees to feel 

that a score less than a perfect 5 is unacceptable. 

3.3.11.6 Compensation 

The FEC is an Excepted Service agency, but follows the standard General 

Schedule and OPM guidelines for classification and compensation 

purposes. The Commissioners, Staff Director, and General Counsel are 

statutory officers and have their pay set by statute. The FEC does not have 

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Management Review of the Federal Election Commission 

Senior Executive Service (SES) authority so those at the highest nonstatutory 

rank are paid according to the Senior Level (SL) pay guidelines. More than 

38 percent of the staff are at a GS level of 13 or above. Exhibit 313 groups 

GS levels by FEC office and division. 

Exhibit 313 

FEC 1998 General Schedule Levels by Office and Division 

Office GS 3−7 GS 8−12 GS−13 GS−14 GS−15 Senior 

Level Statutory TOTAL 

OGC 11 28 13 32 12 4 1 101 

Audit* 2 11 14 3 1 0 0 31 

RAD 21 14 3 1 1 0 0 40 

Data 14 22 2 4 1 0 0 43 

Disclosure 10 2 1 0 1 0 0 14 

Information 1 9 0 1 1 0 0 12 

Admin 7 8 1 2 0 0 0 18 

OSD 5 8 5 4 4 1 1 28 

Commission 0 2 3 0 5 0 5 15 

OIG 0 1 2 0 1 0 0 4 

TOTAL 71 105 44 47 27 5 7 306 

Percentages 23.2% 34.3% 14.4% 15.4% 8.8% 1.6% 2.3% 100.0% 

Source: FEC Staffing Report, May 22, 1998. 

*

com

 auditors are promoted to a GS13 level only temporarily and returned to a GS12 level after the 

pletion of Title 26 Presidential audits. The Division currently has 6 permanent GS13 positions with 

one vacancy. 

Because of the small size of FEC, opportunities for promotion are limited. 

The degree to which promotion opportunities existed for individuals who 

have separated from the FEC is reflected in Exhibit 314. 

Improvement Opportunity 3−11: FEC should explore alternatives to the 

Federal General Classification System to provide new classification and 

compensation flexibility. The Federal Office of Personnel Management has 

developed a series of analyses on alternative pay strategies that illustrate 

several “broadbanding”14 approaches: 

14Broadbanding is a pay-and-classification approach that combines two or more grades into 

broad pay bands. The term “banding” is also applied to the notion of grouping jobs 

horizontally  specific position classification series may be consolidated into broader job 

“families.” 

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Management Review of the Federal Election Commission 

Exhibit 314 

Exit Interview Analysis 

(1992−1998) 

Did you feel there were reasonable 

promotion opportunities within the 

FEC? 

  Broadbanding approaches that consolidate 

pay grades, simplify and streamline 

classification procedures, and facilitate job 

mobility 

  Skill- or competency-based compensation 

schemes that recognize employees for the 

depth, breadth, and types of skills that they 

obtain and apply in their work (This 

requires organizations to shift from 

managing jobs to managing people and skill 

sets) 

  Performance-based approaches that use the 

level of an employee’s performance to 

determine compensation increases 

(Performance-based systems work best in 

organizations that have strong and 

successful performance measurement

 systems) 

Office Yes No % Yes 

OGC 11 11 50% 

Audit 6 4 60% 

RAD 8 14 36% 

Disclosure 4 3 57% 

Other 4 3 57% 

OVERALL 33 35 49% 

Source: FEC Director of Personnel. Interns have 

been counted in this analysis 

3.3.11.8 Labor-Management Relations 

The employees of the FEC are represented by the National Treasury 

Employees’ Union (NTEU). Seventy-nine staff members pay dues to the 

union out of the 201 bargaining unit employees covered under the contract 

(as of September 30, 1998). The union was organized in 1978, and in 

recent years, OGC attorneys have often held leadership posts. 

Soon after the union was formed, management established a specialized 

labor relations function in the Personnel Office. The former Personnel 

Director had an extensive labor relations background, and there is now a 

full-time Labor Relations Officer as part of the Personnel staff. The Officer’s 

primary role is to work with the union on behalf of the Commissioners and 

the Staff Director and to handle employee relations (e.g., disciplinary 

actions) in coordination with line managers. 

When the union first started at the FEC, relations were reported by both 

sides to be acrimonious. The union went into a period of decline, began to 

revive in 1991-1992, and then drew markedly increased interest during the 

attempted 1993 OGC implementation of the Total Quality Management 

(TQM) initiative. Management and the union blame each other for TQM 

program failure, and the conflict has left some bad feelings on both sides. 

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Management Review of the Federal Election Commission 

Overall, the state of labor-management relations has been described as 

“generally good” over the past few years by people on both the 

management and labor sides of the organization. 

In December 1995, the NTEU and FEC settled on a agencywide positionclassification grievance that brought an award to all bargaining unit 

employees within the FEC. Despite this agreement, union membership has 

remained stable, with some recent growth in membership. 

Current union issues include providing measures to protect the health and 

safety of employees during building construction, flextime and flexiplace 

arrangements, and the size of annual bonuses. Office space allocation is 

also noted as a perennial issue. The number of grievances has fluctuated 

from a high of nine in 1989 to zero in 1997. While averaging about 3.5 per 

year for the past 11 years, there have only been four in the past three years. 

3.3.11.10 Equal Opportunity Program 

The Equal Employment Opportunity (EEO) Office is a one person office that 

reports directly to the Staff Director. The Director of EEO and Special 

Programs administers all EEO activities for the organization, as well as 

special programs such as workshops for employees on financial 

management, and identifies conferences sponsored by minority groups that 

may be of interest to FEC staff. 

Until March 1994, the EEO Director was a part-time function held by an 

employee with other duties. The current EEO Director was hired to fill the 

position in 1994. The Director has instituted a voluntary Early Intervention 

Program (EIP) aimed at proactively defusing situations before they become 

formal grievances. The EIP process starts when an employee comes to 

either the EEO Director or the Personnel Director to express an interest in 

filing a complaint. The employee is given the option of utilizing a form of 

Alternative Dispute Resolution (ADR) process in which the EEO or 

Personnel Director tries to informally resolve the problem between the 

parties. 

Since 1988, there have only been eight formal EEO complaints. Both the 

EEO Director and the former Personnel Director noted success in 

proactively solving problems (through the EIP) that would have otherwise 

found an outlet in a formal EEO or union grievance. In addition, they 

believe that this program has helped increase employee morale and job 

satisfaction. 

PricewaterhouseCoopers LLP Page 343 
4.0 

Program Process Assessment 
Management Review of the Federal Election Commission 

4.0 Program Process Assessment 

This section analyzes FEC performance across its four core programs of 

campaign finance disclosure, campaign finance compliance, Presidential 

public funding, and election administration. These programs provide 

credibility for the Federal election system by 

  Educating and informing the electorate to make informed choices about 

candidates based on their financial backing, 

  Creating transparency in the election process to ensure the public that 

fair and impartial elections are taking place, 

  Establishing accountability among all election participants by requiring 

adherence to the collective rules for election financing, and 

  Providing a deterrent against willful violations. 

Understanding the current workload of the FEC helps to establish a context 

for the findings and improvement opportunities throughout the four 

programs. Exhibit 41, FEC 1996 Election Cycle Process Pipeline, depicts 

the fundamental processes that exist between the disclosure and 

compliance programs. The exhibit recognizes that, at the highest level, a 

singular, synchronous workflow represents the majority of work that occurs 

throughout the FEC and its core programs. This workflow can be 

categorized into the following five high-level business processes: 

  Collect reports 

  Disclose transactions 

  Review and assess transactions (for adherence to FECA limitations and 

prohibitions) 

  Identify noncompliant activity 

  Resolve noncompliant activity 

Within each process, the approximate volumes of work have been 

illustrated, using data from the 1996 Federal election cycle.15 

Beginning with the funnel that indicates Collect Reports, more than 8,000 

committees filed in excess of 82,000 reports during the 1996 election cycle. 

15 Source: FEC Management Information System. Complete data representing the 1998 

election cycle will not be available until committees file their end-of-the-year reports on 

January 31, 1999. 

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Management Review of the Federal Election Commission 

Together, these reports contained more than 1.9 million campaign finance 

transactions. During the 24-month election period, the Reports Analysis 

Division reviewed 72,000 reports to assess mathematical, content, and 

disclosure accuracy (backlogged 1996 cycle reports were also reviewed 

during the 1998 election cycle). More than 17,000 first and second 

Requests for Additional Information (RFAIs) were sent to clarify problems 

identified in the reports. 

Exhibit 41 

FEC 1996 Election Cycle Process Pipeline 

Source: MIS data 

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Management Review of the Federal Election Commission 

Based on internal thresholds, the Reports Analysis Division referred the 

activities of 200 committees to the Audit Division as potential audit “for 

cause” actions and the activities of 70 committees to the Office of the 

General Counsel for enforcement action. In addition, the Audit Division 

initiated a total of 18 audits of the publicly funded Presidential committees, 

growing out of the 1996 Presidential primary and general elections. 

During the 1996 cycle, more than 300 external complaints were filed 

against individuals, organizations, and political committees alleging 

violations of the FECA. With these complaints added to pending cases at 

the beginning of the election cycle and the 70 referrals from the Reports 

Analysis Division, the enforcement docket grew to 566 cases. From this 

case inventory, 260 cases were “activated” or assigned to enforcement 

attorneys to recommend appropriate disposition to the Commissioners. 

Three hundred and six cases were held in “inactive” status, pending the 

availability of enforcement staff to work on them. From the inactive case 

pool, 206 cases were dismissed with no action taken. In sum, the 

Commissioners closed 440 enforcement matters through 

  213 dismissals, 

  17 findings of “no reason to believe,” 

  78 findings of “reason to believe” with no further action taken, 

  8 findings of “probable cause to believe” with no further action taken, 

  111 conciliation agreements, and 

  13 authorizations of legal suit. 

The Commissioners authorized the Audit Division to initiate Title 2 audits 

for seven authorized committees and eight unauthorized committees,16 

based on activities related to the 1996 election cycle. While a total of 15 

for-cause audits were conducted, the Reports Analysis Division produced 

200 referrals for consideration of for-cause audits. 

4.1 Analytical Approach 

The study team’s approach to understanding and analyzing each of the core 

programs was through the combination of process mapping and interviews. 

Process mapping involves breaking down the flow of work throughout an 

16An authorized committee, or candidate committee, is a Federal candidate’s designated 

committee to manage his or her campaign and keep track of all campaign financing. An 

unauthorized committee, or noncandidate committee, is an organized political group (e.g., 

party committee) that is formed for a particular interest and often makes contributions to 

any Federal candidate who supports its interests. 

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Management Review of the Federal Election Commission 

organization and identifying the connections between specific activities and 

resources and is used to 

  Explain how work flows throughout an organization; 

  Determine problems/issues related to efficiency, productivity, 

performance, and communication; 

  Identify key metrics on performance, timeliness, volumes, and quality, 

as well as the resources associated with particular processes; and 

  Distinguish value-added from non-value-added work.17 

This method of analysis was intentionally applied across FEC in order to 

create a comprehensive set of process maps. In most cases, the process 

maps represented the first time that FEC staff and managers had thoroughly 

examined and documented how they conduct their business. Moreover, 

these maps allowed the study team to look throughout the entire 

organization to identify where FEC could potentially improve quality, 

reduce cycle times, improve productivity, and effectively use technology. 

The team adapted certain industry-accepted standards for sound business 

processes as the basis for analyzing FEC processes and determining 

potential improvement opportunities. Using these standards as general 

assessment criteria, the team scrutinized the four core programs to establish 

the extent to which FEC processes do the following: 

  Eliminate unnecessary handoffs and non-value-added work 

  Build in quality at the source, mistake-proof process activities, and 

standardize on best practices 

  Apply automation and appropriate technologies to eliminate 

organizational barriers to effective process performance 

  Organize around outcomes to produce what the customer wants 

  Rely on multiskilled workers to reinforce complementary skills and 

mutual accountability 

  Use systems to provide immediate feedback to management and staff 

about what is happening in a process 

17The terminology “value-added” and “non-value-added” is used to describe activities within 

a process. A value-added activity generally refers to work that enhances a product, service, 

or outcome for a customer and includes such things as original research or data analysis. A 

non-value-added activity often involves work that will have no impact on the customer and 

wastes time and resources. Non-value-added activities include redundant reviews, logging, 

sorting, and queues that increase cycle time, as well as rework. 

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4.2 Disclosure Findings and Improvement Opportunities 

Management Review of the Federal Election Commission 

  Reduce batching and preparation activities to identify quality problems 

faster and to lower potential rework costs, improve productivity and 

flexibility, and enhance workload balancing 

  Maintain linkages between processes that have effective, wellestablished controls to prevent work slippage, bottlenecks, or poor 

decision making 

  Nurture a continuous improvement capability and mindset 

The maps help piece together pictures that depict how information, 

documents, and resources flow through currently independent and often 

isolated processes at the FEC. Of particular importance, many 

organizational strengths, weaknesses, opportunities, and barriers were 

identified and discussed during the course of the process mapping. A major 

challenge in improving performance is the use of this information to solve 

the critical FEC business issues. 

Maps of all significant FEC processes are included as Appendix C in 

Volume II of this report. The remainder of this section includes findings and 

opportunities for improvement to the four core programs. 

Objective: “ With regard to the Disclosure Program, the FEC seeks to 

 Review and process the financial reports filed by political committees – and the data 

taken from those reports – accurately and timely 

 Make the reports and data readily accessible to the public, the media and the filing 

community 

 Educate the public, the media and the filing community about the legal requirements 

pertaining to disclosure, contribution limits and prohibitions, and the public financing of 

Presidential elections – the core elements of the Federal Election Campaign Finance 

Law.” 

Source: FEC FY 2000 Budget Request Justification, November 16, 1998. 

The Federal Election Campaign Act of 1971 requires detailed campaign 

finance reports on contributions and expenditures from candidates for 

Federal office and their supporting political committees, as well as from 

individuals and committees making expenditures on behalf of, or in 

opposition to, a candidate. The following campaign finance disclosure 

documents are required by the FECA: 

  Statement of Candidacy and Designation of Principal Campaign 

Committee 

  Statement of Organization of Political Committee 

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Management Review of the Federal Election Commission 

  Candidate Authorization of a Political Committee 

  Reports of Receipts and Expenditures 

  Statements of Independent Expenditures 

  Communication Costs by Corporations, Labor Organizations, 

Membership Organizations, and Trade Associations 

  Debt Settlement Statements 

  Presidential Financial Disclosure Reports submitted by Presidential 

candidates as required by the Ethics in Government Act 

Deadlines for filing vary, based on the particular document. Some reports 

are filed on a quarterly, others on a monthly, and a few on a 

pre/postelection basis with the FEC. The timeline depicted in Exhibit 42 

provides an example of the reporting schedule for 1998. After the reports 

are filed, the law requires that the FEC make them available to the public 

within 48 hours. 

The disclosure program involves three FEC divisions: 

Disclosure, Data Systems, and Reports Analysis. The 

disclosure program focuses on facilitating voluntary 

compliance within the filing community to create an 

accurate public record of campaign finances. The FEC 

routinely meets disclosure deadlines, disseminates 

campaign finance information to the public within the 

48-hour time period, and issues timely responses to 

public requests for information and data analysis. No 

partisan bias in document processing, coding, data 

entry, and reports analysis or in the creation and 

release of the public record is apparent. 

The following subsections pertain to findings and 

improvement opportunities within the individual FEC 

units that serve disclosure functions. 

Exhibit 4-2 

1998 Reporting Schedule 

Date Report 

1/31/98 Yearend 

2/20/98 Monthly 

3/20/98 Monthly 

4/15/98 Quarterly 

4/20/98 Monthly 

5/20/98 Monthly 

6/20/98 Monthly 

7/15/98 Quarterly 

7/20/98 Monthly 

8/20/98 Monthly 

9/20/98 Monthly 

10/15/98 Quarterly 

10/20/98 Monthly 

10/22/98 Pre-General 

12/3/98 Post-General 

12/31/98 Yearend 

(Close the Books) 

1/31/99 Yearend 

4.2.1 Disclosure Division 

The primary objective of the Disclosure Division is to 

make public, within 48 hours, required campaign 

finance information and to assist the public with 

access to campaign finance information. The 

Disclosure Division is divided into the Public Records 

Branch and the Processing Branch and consists of a 

total of 13 FTEs. The Processing Branch handles the 

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Management Review of the Federal Election Commission 

back office activities involved with campaign finance report processing 

(such as imaging, filming, and copying large volumes of campaign finance 

reports, agency documents, and internal documents). The Public Records 

Branch is a storefront operation where FEC staff primarily assist the public 

with locating and understanding disclosure data. Exhibit 43 provides 

current FTE allocations. 

Exhibit 43 

FEC Disclosure Division 

(FTEs) 

Processing Branch 

(4) 

Public Records Branch 

(7) 

Asst. Staff Director 

(2) 

Source: FEC Staffing Report September 25, 1998 

4.2.1.1 Public Records Branch 

The Public Records Branch is responsible for placing documents on the 

public record, responding to information/research requests from the public 

(including other Federal agencies), developing publications,18 participating 

in the State Relations Program,19 and other various administrative processes. 

The Public Records Branch resembles a library of documents that include 

receipts and expenditures filed by Federal committees and candidates. All 

campaign finance disclosure reports and statements filed since 1972 are 

available for public viewing and copying. In addition, various requirements 

of the law direct FEC to publish lists and to cross-index certain reports and 

statements. As a result, the Public Records Branch supplements the 

financial disclosure reports with a series of indexes. Designed to make mass 

18The publications produced by the Disclosure Division are the Federal Election series, 

Combined Federal/State Disclosure and Election Directory, Campaign Finance Law: A 

Summary of State Campaign Finance Laws, PACronyms, and the brochure, “Your Guide to 

Researching Public Records.” These are publications developed for the public and filing 

community and, with the exception of Campaign Finance Law, are available to everyone 

free-of-charge. 

19The Deputy Assistant Staff Director for Disclosure is responsible for administering the State 

Relations Program. 

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Management Review of the Federal Election Commission 

amounts of data in the reports more accessible and understandable for the 

public, the following indexes are made available: 

  FEC Reports on Financial Activity and Disclosure Series (published 

indexes that consolidate and summarize data from the financial 

disclosure reports)20 

  Daily updated computer printouts of various FEC indexes 

  Index of multicandidate political committees 

  Index of registered political committees 

  Index of political committees and their sponsors 

  Index of sponsors and their political committees 

The Public Records Branch also maintains all Advisory Opinions (AOs), AO 

Requests, and associated comments and correspondence. Additional 

documents found in Public Records includes all closed compliance actions 

(Matters Under Review), audit reports, Commission memoranda, agenda 

items, agendas, certifications for closed meetings, and minutes of all 

Commission meetings. 

Public Records staff members often directly assist the public in locating and 

understanding the campaign finance documents on file with the FEC. 

Segments of the public who are most interested in FEC records include 

broadcast journalists, reporters, academicians, research specialists, political 

operatives, and employees of other Federal agencies, as well as FEC staff. 

Daily work to support the various needs of a diverse public may include the 

following: 

  Primary research for academicians, professors, and students (whose 

deadlines do not routinely fall out anywhere in particular along the 

election cycle) 

  Complex inquiries from political operatives who tend to be highly 

sophisticated employees of incumbent Senators, Members of Congress, 

or campaign organizations (these requests can take many hours of work) 

  Requests from the press for information such as audit reports, backup 

materials, or disclosure indexes 

The Public Records staff is very customer-focused. This is extremely 

important because this small office operates as the front line for FEC. Public 

Records staff must interact on a daily basis with the public, including 

20The Reports on Financial Activity and Disclosure Series Indexes are created and 

maintained by DSD. 

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Management Review of the Federal Election Commission 

everyone from political players to interested third parties to academicians 

and interns. They also provide information to other agencies as requested. 

Several articles and editorials have been written acclaiming the Public 

Records Branch and recognizing the helpful demeanor of its knowledgeable 

staff. 

Ensuring smooth access to FEC information is a relatively steady and 

consistent job within Public Records. Throughout a two-year election cycle, 

workloads peak as expected during an election year (particularly prior to 

the election). Public interest in campaign finance naturally increases during 

the election year; however, this does not imply a drop in public interest 

during nonelection years. Workload statistics indicate that the level-ofactivity for the office regularly holds constant from month to month. 

Requests are tracked and logged manually. Public Records currently 

responds to all requests within 72 hours. Depending on the requester, an 

informal priority may be assigned to certain requests if necessary, but the 

majority are short-term research projects assigned to staff as available. Since 

the office is small, staff are cross-trained and do not formally specialize in 

any particular areas of interest. The ability of Public Records staff to be so 

attentive to customer requests has helped to earn the FEC very positive 

marks regarding disclosure. 

Although Public Records is in daily touch with the needs of filers and the 

public, the knowledge gained is not widely used throughout the FEC. For 

example, Public Disclosure staff could offer valuable suggestions for 

enhancements to the disclosure database that would directly benefit users. 

However, this information remains unsolicited. 

The analytical tools and databases available for Public Records staff to 

answer requests are adequate to address only the most common requests. 

However, a significant number of requests that Public Records staff receive 

require a level of analysis that is not readily supported by the current 

disclosure database. Because the disclosure database is not easily queried 

and has limited search capabilities, Public Records staff members often 

have to use hand calculators and other more time-consuming methods of 

analysis. If a request requires more advanced analysis outside of the 

standard answers that have already been developed, then custom 

programming may be necessary to develop an adequate response. This 

would involve submitting a request to Data Systems to have one of their 

programmers, if available, write the new code. 

Despite its imaging system and disclosure database, FEC is still excessively 

paper oriented. This reliance on paper is partially driven by a majority of 

PricewaterhouseCoopers LLP Page 49 
Management Review of the Federal Election Commission 

customers who want hardcopy reports rather than softcopy. However, the 

formal mechanism for disclosure at FEC is through imaging.21 In other 

words, only after documents can be accessed on the imaging system are 

they officially considered part of the public record. 

Paper copies of most House and all Senate reports, as well as microfilm 

records of all disclosure documents, are maintained as backups to the 

imaging system. (The imaging system has gone down in the past for an 

extended period of time and forced staff to rely on these backup disclosure 

resources.) In addition, campaign finance information can be accessed 

through the FEC Web site. Although the Web site could be used as a 

backup to the imaging system to access campaign finance reports, no 

connections to the Internet are presently available for the public to use in 

the Public Records Branch. In summary, the FEC provides access to 

disclosure information through an internal imaging system and disclosure 

database, paper records, microfilm, and the Internet. 

The FEC uses a combination of imaging, microfilm, and paper records to 

maintain the public record and its own historical archives. The imaging 

system was designed to replace the microfilm process for financial 

disclosure reports. As a result, not all FEC information is as easy to access as 

it could be. Any information that is not in the imaging system or disclosure 

database cannot be accessed electronically and cannot be accessed via the 

Internet. Hardcopy and microfilm are only available in Public Records and 

must be located using a series of indexes and then manually searched. 

Despite these minor issues, the FEC does make a large amount of 

information available to the public. Public Records staff also play a key role 

in making certain that all disclosure information is accessible with or 

without technology. However, maintaining paper and microfilm documents 

in Public Records results in many hours dedicated to manual, laborintensive activities such as filing and copying. 

Improvement Opportunity 4−1: FEC should redesign a disclosure database 

that supports internal staff needs, as well as the public’s needs. The FEC 

should tap into the Public Records Branch unique, firsthand knowledge of 

stakeholders in order to enhance the organization’s value to its customers. 

Specifically, FEC databases need to be both functional for, and easy to use 

by, all internal and external users. Current relational database and data21 Except for Senate documents. All original Senate reports are filed with the Secretary of the 

Senate and copied or microfilmed for the FEC. The resolution of the photocopies and 

microfilm is not good enough for imaging. As a result, Senate reports are not available 

through the FEC imaging system or Web page, but must be maintained in Public Records as 

paper and microfilm. 

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Management Review of the Federal Election Commission 

mining technologies represent more advanced and comprehensive 

analytical tools that are more in line with the needs of the public and the 

staff.22 

Improvement Opportunity 4−2: The Public Records Office should be 

transitioned to a paperless resource center. Public Records staff could then 

spend more time working information requests and minimize administrative 

tasks such as filing and photocopying. Public Records has been proactively 

working toward this goal as fewer paper copies are made each election 

cycle. For example, PAC, party, and Presidential reports are no longer being 

stored as paper copy in file cabinets. To eliminate the remaining paper 

copy made of House and Senate reports, the FEC must have the following 

in place: 

  A completely reliable image retrieval system with appropriate backup 

alternatives 

  Point-of-entry for Senate filings to be imaged at the FEC 

  A Public Records operation that encourages the use of softcopy rather 

than hardcopy reports 

In addition, Public Records will likely want to eliminate (or at least 

minimize) the use of microfilm and entirely focus on disclosure through 

imaging and the electronic filing system. 

Improvement Opportunity 4−3: FEC should set up Internet connections on 

several PCs in the Public Records Division so that the public can access 

the FEC Web page. The ability to use the Internet would enhance the 

resources available in Public Records. Since images of campaign finance 

reports can be accessed using the FEC Web page, this would also serve as a 

backup to the imaging system. In addition, the Internet could be used to 

access other campaign finance databases and Web sites of third-party 

information providers. Its use would also demonstrate to the public how 

they can access records from their homes or offices. 

4.2.1.2 Processing Branch 

The Processing Branch is a small-scale production shop for processing FEC 

paper documentation so that it can also be stored and accessed via images 

and microfilm. FEC scans more than 2 million pages of paper per election 

22This is not meant to imply that the FEC should engage in value-laden data analysis for 

public consumption. Rather, the FEC should continue to make the basic campaign finance 

data available while striving to make it more usable as well. This would allow for easier, 

more meaningful analysis of the data both internally for staff (e.g., reports review) and 

externally for stakeholders. 

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Management Review of the Federal Election Commission 

cycle, or on average a few thousand pages per day (FEC daily processing 

volumes can vary significantly, depending on the election cycle and 

pending deadlines). 

Document processing is a back office function of the Disclosure Division 

and does not require any direct interaction with the public. Processing staff 

are primarily concerned with campaign finance reports and statements of 

organization, agency documents intended for the public record such as 

closed Matters Under Review, and internal agency documents that need to 

be archived but are not essential to the public record. 

The Processing Branch has the following responsibilities: 

  Imaging all documents intended for the public record 

  Filming all documents intended for the public record 

  Filming and indexing certain internal documents as a means of 

archiving FEC records 

  Printing hardcopy of commonly requested House documents 

  Making hardcopy from microfilm of Senate documents 

  Processing all microfilm (i.e., cutting, splicing, indexing, and delivering 

rolls) 

  Photocopying large reports (i.e., more than 100 pages) that are 

requested in Public Records 

The primary function of the Processing Branch is to facilitate the process of 

disclosure through the imaging of disclosure documents. Processing staff 

spend the majority of their time working with campaign finance reports. 

Processing is the first component of the FEC imaging process. While this 

includes responsibility for document preparation, scanning, and quality 

control, Data Systems is responsible for the second component of FEC 

imagingthe indexing of imaged documents so that they can be 

electronically located and retrieved. 

At a high level, processing includes two subprocesses, one for campaign 

finance report processing for Senate filers and one for FEC filers. The two 

processes exist because two points-of-entry for campaign finance 

documents exist. Senate committees file their original documents with the 

Secretary of the Senate, who in turn forwards copies and microfilm to the 

FEC for processing. The House, Presidential, PAC, and party committees file 

directly with the FEC. Because of the larger size and more frequent 

elections, the majority of campaign finance reports come from FEC filers 

other than Senate committees and candidates. 

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Management Review of the Federal Election Commission 

FEC document processing for Senate filers begins with a delivery from the 

Secretary of the Senate. The Senate sends either photocopies or microfilm 

to the FEC. Typically, the Senate sends photocopies of reports to the FEC 

until an entire reel of microfilm has been used. When enough Senate 

reports have filled a reel of microfilm, the Secretary will forward that 

microfilm without paper copy. As a result, Processing must reconcile the 

paper copies to the reports on microfilm so as not to miss anything. When 

the Secretary receives low volumes of reports, the FEC will tend to receive 

paper copies on a daily basis. However, during peak reporting times, the 

FEC will receive regular deliveries of microfilm. 

When the Secretary delivers paper reports to the FEC, duplicate 

photocopies are sent to Processing where they are received and logged on a 

daily basis. One copy is forwarded to Public Records to make it available 

for public viewing, and the second copy is sent to the Data Systems 

Division for data entry into the disclosure database. The Processing Branch 

will make duplicate paper copies from microfilm reports (that have not 

already been received on paper) and forward a copy to Public Records and 

one to Data Systems. 

Processing for all FEC filers includes the four sequential subprocesses of 

receiving campaign finance reports, preparing documents, scanning and 

filming reports, and postprocessing activities. 

Receipt of campaign finance reports. Document processing for FEC filers 

begins with the receipt of campaign finance reports, which can be 

submitted in a variety of ways: 

  Hardcopy paper reports  either an FEC form or some other custom 

form that includes all necessary disclosure information. This is the most 

common method of filing. 

  Version 1 disk  an electronic format that can be uploaded into the 

electronic filing system and presented as either HTML or raw data files, 

but does not support direct integration with the disclosure database. As 

a result, Version 1 filings are printed at the FEC and processed for data 

extraction as if they were submitted as hardcopy reports. 

  Version 2 disk  an update of Version 1, includes unique record 

identifiers that are necessary for automated processing of amendments 

in order to determine which transactions have changed. This format 

allows the FEC to upload campaign finance data directly into its 

electronic filing system to automatically populate the disclosure 

database and create the public record. 

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Management Review of the Federal Election Commission 

  Direct electronic submission  filers connecting directly to the FEC 

electronic filing system to instantly submit disclosure data using a 

modem connection or the Internet, rather than mailing Version 2 disks. 

  Fax  a method of filing that is only intended for the submission of 48-

hour notices related to receipt of contributions of $1,000 received 20 

days or less before an election. 

The FEC tracks total volumes of paper reports that are submitted, as well as 

summary breakdowns by type of filer. Exhibit 44 indicates the number of 

paper reports that have been received and processed over the past five 

election cycles. 

Exhibit 4-4 

Paper Reports Received 

and Processed 

Number 

100,000 

80,000 

60,000 

40,000 

20,000 

0 

‘88 ‘90 ‘92 ‘94 ‘96 

Election Cycle 

The FEC does not track volumes of documents 

according to whether they are handwritten or typed. 

Likewise, the FEC does not track volumes of 

documents that are prepared using “standard” forms as 

opposed to other custom schedules. Although 

presently unavailable, this information would be 

useful to analyze certain reporting trends (e.g., how 

reliance on handwritten material correlates to 

committee size), as well as to determine the cost and 

benefit impacts of certain disclosure policy decisions 

(e.g., mandatory electronic filing or more rigid filing 

guidelines). 

Source: MIS data The mailroom receives mailed or hand-delivered 

documents, opens the envelopes, time-stamps the 

document, paperclips the envelope to the document, and makes the 

delivery to Processing. In addition, filers can mail disks that will go to the 

mailroom for delivery to Data Systems. The Data Systems Division handles 

Version 2 disks and any reports filed electronically. Data Systems prints 

paper reports from Version 1 disks and forwards the printouts to Processing 

for imaging. The Processing Branch processes reports that come to the FEC 

as faxes, hardcopy, or Version 1 disk printouts. Faxes are received directly 

in Processing. 

If the mailroom is closed (after hours), Public Records receives hand 

deliveries and forwards them to Processing. If another FEC office (usually 

RAD) receives a campaign finance report or an amendment to a campaign 

finance report, that office forwards the document to Processing. If filers 

send House reports to the prior point-of-entry at the Clerk of the House, 

then the Clerk of the House couriers the reports to the FEC. Processing staff 

log the receipt of all disclosure documents. 

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Management Review of the Federal Election Commission 

Document preparation begins with a Processing clerk who checks to make 

sure that Processing has received the appropriate documentation. The clerk 

sorts the reports and prepares the documents for scanning, removing staples 

and bursting pages as necessary. The clerk records the date and time 

postmarked on the envelope, using an Envelope Replacement Page. This 

form is placed in back of each document and serves as a divider page. 

Scanning and filming involves setting the scanner and feeding documents in 

batches of approximately 100 pages. The operator logs each batch of 

documents into a scan log and then prints laser copies of House reports, 

which are then forwarded to Public Records for filing. 

Postprocessing occurs after the documents are scanned. The operator 

conducts a quality check to ensure that each page has been scanned, 

reassembles the originals, and records the number of documents scanned in 

a log. All original documents are delivered to Data Systems for data 

extraction. 

Postprocessing also includes processing of microfilm. As documents are 

scanned, they are also filmed. The film must be transported by messenger to 

an overnight service for developing. Nine copies of the film are returned to 

Processing the next day for splicing and delivery to various offices, 

including DSD, RAD, OGC, the Press Office, and Public Records. 

The Processing Branch makes several manual entries into handwritten logs 

to track the processing of disclosure documents. In the event that an error 

occurs, these logs can be tedious and time consuming to analyze, but they 

are necessary to determine what has happened. Even with a manual logging 

process, Processing does successfully manage large volumes of documents 

to create the public record within the statutorily imposed 48-hour deadline. 

Processing staff members are not fully utilized throughout the election 

cycle. Workloads vary from time to time, tending to steadily increase up 

through an election. In off years and slow months, Processing has some 

ancillary resource capacity that is partially applied to support other 

imaging/filming needs within the FEC. This includes the processing of 

internal documents for the public record and for archives. 

Improvement Opportunity 4−4: The Processing Branch should support all 

imaging needs throughout the Commission. Processing resources could be 

better leveraged during off-election years when less disclosure documents 

are coming into FEC. In fact, Processing staff could work with the Office of 

the General Counsel to assist that Office with its imaging needs. FEC has 

already made a large investment in in-house imaging. With the addition of 

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Management Review of the Federal Election Commission 

a second Kodak 990 scanner (intended to be operable in January 1999), 

Processing is certainly in a position to take on additional imaging 

assignments. Moreover, imaging should remain a centralized operation in 

Processing, available for the rest of the organization as needed. 

4.2.2 Data Systems Division 

The Data Systems Division maintains both a substantive role within the 

disclosure program and the support role of providing technical services for 

the entire Commission. This section focuses on the substantive, 

programmatic role of Data Systems. 

Data Systems performs two major processes⎯coding and data entry⎯that 

are critical to the disclosure of hardcopy reports. In this capacity, Data 

Systems essentially extracts data from disclosure reports that simultaneously 

populate the disclosure database and create indexes for the FEC imaging 

system. 

In addition, Data Systems also supports the FEC electronic filing system. 

When Data Systems receives Version 2 disks or direct electronic 

submissions from filers, the information is uploaded to the electronic filing 

system. This automatically populates the disclosure database23 after it passes 

through a streamlined exception process, conducted by a coding staff 

person, to resolve any ambiguities in the data, prevent erroneous reporting, 

and maintain an accurate public record. 

In comparison to electronic submissions, paper submissions require 

substantially more work and time for the FEC to make them part of the 

public record. Original hardcopy disclosure documents are delivered from 

Processing and logged and sorted in Data Systems. Many of these 

documents go through two rounds of data coding and entry, referred to as 

“Pass I” and “Pass III.” Pass I captures summary campaign finance data and 

must be completed within 48 hours after a document enters the FEC. 

Exhibits 45 and 46 indicate the volumes of reports coded in Pass I and 

Pass III over the past 14 years. 

23 Electronic filing automatically populates the disclosure database with Pass I and Pass III 

data. 

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Management Review of the Federal Election Commission 

Data Systems staff code the documents, 

identifying the necessary information that needs 

to be input into the disclosure database. The 

documents are then handed off to staff to enter 

the coded data into the disclosure database. 

The indexes for the FEC imaging system are an 

automated byproduct of the entry that creates 

the disclosure database. Up to this point, no 

images of any disclosure documents can be 

accessed. Data entry staff input the necessary 

identifiers. However, neither coders nor data 

entry staff work off the imaged reports. Rather, 

they rely on the hardcopy to do all data 

transaction coding and extraction. Overnight, 

the disclosure database matches the images 

from the imaging system to the Pass I data 

entered that day, thereby creating the public 

record. The FEC uses double data entry as a 

method of quality assurance. The next day, after 

the system has been updated, different data 

entry staff will reenter the same coded data 

(referred to as verification) and correct apparent 

errors. 

Exhibit 4-5 

Pass I Volumes 

Fiscal Year Reports Coded 

1985-86 113,252 

1987-88 120,279 

1989-90 120,386 

1991-92 124,713 

1993-94 135,856 

1995-96 140,239 

1997-98 139,582 

Source: MIS data 

Exhibit 4-6 

Pass III Volumes 

Fiscal Year Reports Coded 

1985-86 71,646 

1987-88 71,395 

1989-90 75,332 

1991-92 78,814 

1993-94 84,008 

1995-96 85,131 

1997-98 85,491 

Source: MIS data 

If the document does not require further coding, 

the original document is forwarded to the RAD 

file room. If the document has itemized 

transactions, it requires Pass III coding and entry 

(more than 60 percent of all submissions require 

Pass III coding and entry). The coders who 

perform Pass I coding are also trained to perform Pass III coding. After Pass 

III coding, most reports are sent to a contractor that enters contributor 

itemization information. If data entry staff are available, they can also 

engage in Pass III entry. FEC outsources most itemized data extraction to 

free up data entry resources for the more time-sensitive Pass I entry. The 

Pass III coding and entry process can take up to 30 days to complete before 

reports can be forwarded to the RAD file room. However, a prioritization 

system established by RAD automatically indicates specific documents that 

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Management Review of the Federal Election Commission 

should be prioritized and sent to the contractor first for expedited Pass III 

coding.24 

Current data extraction activities have successfully achieved timely and 

accurate disclosure with increasing productivity and essentially static staff 

resources. Over the past 15 years, the FEC has witnessed improvements in 

data coding and entry of disclosure information despite ever-growing 

workloads and reports that have grown in size and complexity.25 For 

example, Exhibit 47 indicates that the number of 

Pass III transactions per document have more 

than tripled since 1985.26 Exhibit 48 indicates 

substantial productivity gains related to Pass III 

coding, averaging more than a 200% increase in 

the number of transactions coded per FTE since 

1985. 

Exhibit 4-7 

Pass III Transactions 

Fiscal Year PASS III 

Transactions 

Transactions 

per Report 

1985 275,057 6.4 

1986 147,019 5.6 

1987 176,651 5.0 

1988 630,862 14.0 

1989 371,449 9.1 

1990 400,507 12.2 

1991 403,165 10.0 

1992 692,662 18.7 

1993 716,436 16.2 

1994 732,441 18.7 

1995 799,131 17.5 

1996 991,451 25.2 

1997 978,411 20.2 

1998 865,297 23.4 

Data Systems coders and entry staff worked more 

efficiently over the past several years in response 

to elevated workloads. In fact, although recent 

non-Presidential election years are beginning to 

look very similar in respect to workload to 

Presidential election years of the past, Data 

Systems has still been able to meet aggressive 

performance targets and deadlines and to 

minimize backlog (see Exhibit 49). Nevertheless, 

Data Systems coding and entry resources are 

currently stretched to their capacity. Their future 

success relies on the success of the FEC electronic 

filing system and its ability to ease paper-based 

workloads as more filers come on-line. 

24This prioritization system applies predetermined criteria (e.g., report size, time-sensitivity, 

type of filer, complexity, etc.) and works with the disclosure database in order to 

automatically generate priority status for some reports. Data Systems staff explained that 

documents defined by Reports Analysis as priority are isolated in the Pass I process, stored 

separately, and coded for Pass III before nonpriority documents. Data Systems also 

indicated that Reports Analysis might receive some nonpriority documents before priority 

documents if no Pass III processing was required. 

25More financial data is currently being disclosed in reports today than in the past. This is 

partially due to the allocation regulations for “soft money” reporting since the 1992 election 

cycle (related to Pass III itemized information) as well as more reporting requirements for 

Pass I summary information. 

26The complexity of Pass III transactions has increased not only as a result of higher volumes 

of money and transactions in the Federal election system but also because of the allocation 

regulations for “soft money” reporting since the 1992 election cycle. 

Source: MIS data 

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Management Review of the Federal Election Commission 

Exhibit 48 

Pass III Transaction Processing 

Fiscal Year Minutes per 

Transaction 

Transactions 

per FTE 

Pass III 

Improvement 

1985 2.99 35,264 

1986 3.16 33,413 -5% 

1987 3.89 27,177 -23% 

1988 1.26 84,115 139% 

1989 1.73 60,893 73% 

1990 1.37 77,021 118% 

1991 1.55 68,333 94% 

1992 .98 108,228 207% 

1993 1.03 102,348 190% 

1994 1.07 98,979 181% 

1995 1.07 98,658 180% 

1996 .87 120,909 243% 

1997 .89 119,318 238% 

1998 .95 111,357 216% 

Source: MIS data 

Exhibit 49 

Coding and Entry Completion Statistics 

Election 

Cycle 

% Coding 

Done* 

% Entry 

Done* 

Median Days 

To Complete 

1988 94.64% 93.75% 9 

1990 97.66% 96.94% 7 

1992 85.32% 84.64% 13 

1994 88.75% 87.41% 14 

1996 94.80% 94.21% 10 

1998 98.15% 97.29% 10 

* As of December of the election year 

Source: MIS data 

4.2.3 Reports Analysis Division 

The Reports Analysis Division (RAD) receives original campaign finance 

reports from Data Systems after transactional information has been coded 

and entered into the Disclosure Database. RAD analysts review campaign 

finance reports, amendments to reports, and responses to Requests for 

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Management Review of the Federal Election Commission 

Additional Information (RFAIs) to ensure an accurate 

public record of campaign finance transactions. As

depicted in Exhibit 410, approximately 12 to 15 percent 

of all reports have required RFAI action since the 1992 

election cycle.27 Exhibit 411 depicts the average time to 

process those documents during the past nine years. The 

data indicate that, since 1990, increases and decreases 

in the time reviewing reports varies in relation to 

election and non-election years, while the time spent on 

RFAI processing has generally decreased. 

Exhibit 4-10 

Percentage of Reports 

Requiring a RFAI 

Election Cycle Percentage 

1992 15.35% 

1994 13.98% 

1996 15.27% 

1998 12.05% 

Source: MIS data 

RAD begins to review reports once DSD forwards the 

original document to the RAD file room. Reports analysts 

regularly query an internal workflow program to 

determine assignments and the appropriate files to pull. 

The analyst has the option to work with the image of the 

report or the paper copy, but most analysts rely on paper 

copies for reports with more than 12 to 15 pages. 

Exhibit 4-11 

Average RFAI Processing Times 

Fiscal 

Year 

Reports 

Review 

Time* 

RFAI 

Processing 

Time 

1990** .93 hrs. 1.06 hrs. 

1991 .76 hrs. .74 hrs. 

1992** .83 hrs. .82 hrs. 

1993 .69 hrs. .61 hrs. 

1994** .75 hrs. .58 hrs. 

1995 .71 hrs. .75 hrs. 

1996** .84 hrs. .68 hrs. 

1997 .63 hrs. .46 hrs. 

1998** .84 hrs. .58 hrs. 

*Form 1 and Form 3 reviews 

**Election year 

Source: MIS data 

A reports analyst begins to review and analyze the 

documents, using a series of indexes generated in Data 

Systems from the disclosure database.28 The analyst then 

conducts detailed compliance reviews based on 

mathematical, content, and disclosure criteria and 

thresholds. These reviews require a degree of manual 

processing and can be time- and labor- intensive. The 

analyst notes any compliance problems (on a log sheet), 

such as an improper contribution or a mathematical 

error, that will trigger the RFAI process. At any time in 

the review process, an analyst who finds data entry 

discrepancies will note the issue and send the report 

back to Data Systems to reenter the correct data. Data 

Systems corrects the errors and returns the original report 

to the RAD file room.29 

27Percentages for election cycles in which a Presidential election occurs tend to be slightly 

higher because of the increased financial activity. 

28One example of an index commonly used by RAD analysts is referred to as the R Index. 

The R Index provides the history of the committee filings based on Pass I data entry and 

indicates whether a previous filing was new or amended, the type of report (monthly, 

quarterly or midyear), beginning cash on hand, coverage dates, total receipts, and ending 

cash on hand. 

29The actual number of reports or data entry issues that are sent from RAD to Data Systems 

are not effectively tracked by either division. Although the basis for return includes coding 

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Management Review of the Federal Election Commission 

If no compliance problem is found, the analyst updates the RAD Report 

Status System (RSS) and returns the report to the file room. The RSS contains 

information about the committee files, such as when Pass I and Pass III 

were started and ended, the coder’s name, and the date on which Data 

Systems sent the file to RAD. 

The RFAI process is initiated when an analyst needs additional information 

from the filer. The analyst decides whether the RFAI is a “track” or 

“nontrack” notice. Non-track (or informational) notices inform the filer to 

take corrective actions on future campaign finance reporting and thus do 

not require a response or amendment to the report submitted. Track RFAIs 

require a committee to file an amendment to the submitted report in order 

to be in compliance with the law. 

For RFAIs, the analyst completes a precoded transmittal form and forwards 

all report and transmittal sheets to a RAD secretary for completion. From 

the codes, the secretary composes the RFAI letter and returns the letter to 

the analyst. The analyst then reviews, signs, and forwards the letter with the 

corresponding file folder to either the Authorized or Non-Party/Party Branch 

Chief for approval. The Branch Chief forwards the letter to the RAD 

Compliance Branch that monitors RFAI status. If the RFAI contains a 

grammatical or content error, the Branch Chief returns the edits to the 

secretary for retyping. Once the letter is correct, the Branch Chief reviews 

and forwards it to the Compliance Branch for mailing. This process involves 

numerous administrative handoffs. 

Once received, the filer has 15 days to respond, and if the filer does not 

respond in 15 days, the Compliance Branch sends the filer a second RFAI 

letter. Once again, the filer has 15 days to respond. If the filer still does not 

respond, the reports analyst identifies and evaluates the outstanding issues. 

These issues are weighed in terms of importance and factored into a 

decision on whether the file should be referred to Audit or the General 

Counsel. If RAD decides not to refer the file to Audit or OGC, the issues 

remain outstanding, and no further action is taken. 

If the filer responds within the appropriate timeframe, the compliance 

analyst reviews the response to assess whether all outstanding issues were 

addressed. If the response is sufficient, the reports analyst reviews the 

response for accuracy and for compliance problems. If the analyst finds the 

and entry errors, along with reporting anomalies and ambiguity (where the judgment of the 

RAD analyst may differ from the coder), this process still represents rework that could be 

further assessed and potentially changed. 

PricewaterhouseCoopers LLP Page 421 
Management Review of the Federal Election Commission 

response is not accurate or that other compliance problems exist, the 

problems are noted as outstanding issues. A second RFAI may be sent to 

seek additional clarification of outstanding issues. 

FEC disclosure and compliance/enforcement activities begin to blend in 

the Reports Analysis Division (RAD). This occurs because RAD is 

responsible not only for reviewing reports and providing filing guidance to 

committees but also for issuing referrals based on noncompliance or 

reporting problems. 

Improvement Opportunity 4−5: Once the Commission has a certain date 

for mandatory electronic filing, RAD should begin to work with Data 

Systems to develop an automated, paperless review process to replace the 

existing manual, paper-intensive reviews. The vision for enhanced FEC 

electronic filing should include mathematical and logical compliance 

checks built into the front end of the system. In this respect, committees 

could immediately find and fix certain reporting problems before filing with 

the FEC. RAD analysts could then spend more time engaged in high-valueadded analysis by applying new tools such as data mining to detect 

instances of noncompliance. This new approach to reports review could 

significantly reduce RAD cycle times and intensify compliance activities. In 

conjunction with envisioning enhanced electronic filing technology, RAD 

should conduct business process reengineering at some future point for its 

reports review processes. 

The following is a “concept of operations” that provides a high-level 

conceptual model for one possible future reporting environment at FEC. 

Page 422 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

Concept of Operations 

A Model for Enhanced Reports Review and Analysis 

The primary disclosure responsibilities for reports analysts would focus on exception 

processing and a new streamlined RFAI process to facilitate voluntary compliance and 

referrals. 

Exception processing builds on the concept of a modernized disclosure program in which 

RAD analysts work with electronic data/images rather than paper campaign finance 

reports. As soon as electronic filers submit their campaign finance reports and DSD reviews 

the submissions for quality control, RAD analysts begin their work. Data extraction would 

become, for the most part, a simple and automated computer activity. Mathematical and 

logical compliance checks currently performed by RAD analysts are built into the front end 

of the electronic filing system. As a result, when the analyst receives the report, he or she 

initiates an explicit, substantive analysis based on an exception report that indicates any 

problems. Exception thresholds and criteria are defined with input from RAD, OGC, and 

Audit and also take into account FECA organizational reporting and compliance 

thresholds. 

The use of electronic filing enables data entry from the source provider and thus reduces 

errors that typically result from coding and data entry. This would significantly reduce the 

number of RFAIs, and thus workloads, throughout the disclosure program. 

Exception processing leads to these four possible outcomes of: no action, RFAI, referral to 

OGC, or referral to Audit. If the analyst identifies a potential audit or legal compliance 

problem, he or she initiates the referral process. If the analyst finds no problem with the 

report or the exception problems do not meet Audit or OGC thresholds, the analyst closes 

the file and saves it in the FEC electronic document management system. If the analyst 

needs more information to assess the exception-reported problem, he or she self-initiates 

an RFAI. 

The RFAI process begins when a RAD analyst, after conducting an exception analysis, 

determines whether more information is needed from the filer to clarify the public record 

or to correct a noncompliant transaction. The RAD analyst accesses an electronic RFAI 

template and responds to the first prompt, which is for the filer’s unique identifier. By 

entering this code, the system automatically populates the letter with the committee name, 

address, and type of report. The analyst then chooses the appropriate selections from dropdown menus to generate a standard letter request. 

Because the disclosure program involves three divisions, many disclosurerelated issues are broader in nature than the functional boundaries (i.e., 

unique roles and responsibilities) within which each division separately 

operates. Opportunities exist for the FEC to improve the current disclosure 

program and to enhance the efficiency and productivity of the offices and 

resources involved with disclosure. 

Findings and improvement opportunities related to the following six basic 

areas of the disclosure program are discussed below: organizational 

structure, hardcopy disclosure processes and filing standards, electronic 

filing and disclosure forms, Senate point-of-entry, the disclosure database, 

and management planning. 

PricewaterhouseCoopers LLP Page 423 
4.2.4 Organizational Structure 

Management Review of the Federal Election Commission 

Exhibit 412 

FEC Division Involvement in the Disclosure Process 

Receive 

Documents 

Prepare 

Documents 

Scan/Film 

Documents 

Conduct 

Post- Disclosure Processing 

Receive 

Documents 

Log and 

Sort 

Documents 

Code Pass I 

Transactions 

Pass I 

Data Entry 

Verification Pass III 

Coding 

(if necessary) 

Pass III 

Data Entry 

(if necessary) 

Deliver to 

RAD 

File Room 

Retrieve File 

from RAD 

File Room 

Review 

Report 

If Data Entry 

Errors Exist, 

Return to DSD 

Correct Data 

Entry Errors DSD 

RAD 

Responsibilities for disclosure are shared across three separate divisions: 

Disclosure (Processing and Public Records), Data Systems, and Reports 

Analysis. Each division handles its own part of the disclosure process. Highlevel or cross-cutting disclosure issues are difficult to resolve because the 

divisions work independently, without significant formal interaction. 

Although these divisions work well together to keep the disclosure process 

from breaking down, during interviews, several staff members from the 

various offices attributed fault to one another for bottlenecks and missed 

deadlines. 

No manager in Disclosure, Data Systems, or RAD is completely responsible 

for making sure that the appropriate documents get on the public record 

within 48 hours of their receipt. Accountability for disclosure is fragmented 

among these several managers. Although managers seem to have informal 

relationships, formal meetings between different divisions rarely, if ever, 

occur to discuss common issues. Backlogs develop because of inefficient 

staffing and handoffs that have not been planned to create balanced 

processing of inputs and outputs. 

Staff work in a compartmentalized environment that adds complexity and 

organizational barriers to the disclosure process and that reduces 

accountability. In spite of this organizational design, staff understand their 

roles in the disclosure process. Staff approach their jobs with a sense of 

urgency that stems from the continuously pressing deadlines. Exhibit 412 

illustrates how each of the three offices are involved in the disclosure 

process. 

Page 424 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

Improvement Opportunity 4−6: Realign resources in the Disclosure and 

Data Systems Divisions to enable a more unified approach to disclosure. 

Instead of having separate divisions perform isolated disclosure functions, 

FEC should establish a single office for disclosure. A Disclosure Manager 

would direct the office and be accountable for the process of creating the 

public record (from start to finish), as well as FEC compliance with the 48-

hour rule. One comprehensive set of performance measures could then be 

applied across the entire process. The Disclosure Office would include 

processing, coding, and data entry staff, cross-trained to assist wherever 

necessary during heavy filing periods. Disclosure processes could be 

streamlined, and certain tasks could be reassigned to eliminate rework such 

as reviewing, sorting, and logging documents. The FEC should consider 

exploring the consolidation of coding and data extraction activities. In this 

scenario, coders would perform direct data entry into the disclosure 

database, perhaps working directly from the imaged report. 

4.2.5 Hardcopy Disclosure Process and Filing Standards 

The current design of the disclosure program primarily involves paperintensive processes for transporting hardcopy original documentation 

through three divisions in order to build the public record. FEC processes 

and how work physically flows between the different divisions involved 

with disclosure, while likely once well designed, today do not seem 

appropriate for the technology available and the volumes handled. For 

example, campaign finance reports enter the FEC and go to the mailroom 

on the eighth floor, which then delivers them to Processing on the first 

floor. Processing logs the documents in and prepares them for the scanner. 

After Processing scans, films, relogs, copies, prints, reassembles, and sorts 

the documents, they go to Data Systems on the eighth floor. Data Systems 

staff log in and sort documents and begin a series of handoffs between data 

coding staff and data entry staff for Pass I. Reports that need Pass III coding 

go back to the coders for batching prior to sending them to a contractor 

who performs the Pass III data extraction. The reports are eventually 

returned to Data Systems for quality control. After all of this activity and 

movement, the reports finally end up in the RAD file room on the seventh 

floor, where RAD analysts pull them for review (which may result in RAD 

returning documents to data systems for recoding). 

Applying a general rule of process management, excessive transportation of 

documents often leads to bottlenecks, delays, missing files, and mistakes. 

For example, FEC staff currently spend time logging paper documents to 

make sure that they are accounted for and do not get misplaced. When 

mistakes do occur, it is tedious work for managers to review the logs and 

PricewaterhouseCoopers LLP Page 425 
 

Management Review of the Federal Election Commission 

determine the error, but nevertheless a necessary discipline given existing 

paper processes. The FEC reliance on paper is time- and resource-intensive 

as well as complex and subject to error. 

Because of numerous handoffs, process complexity, and a functionally 

compartamentalized disclosure process, FEC has no single measure to 

determine compliance with the 48-hour rule. In fact, to determine its 

compliance, FEC would have to manually calculate the time that disclosure 

reports spend in the mailroom, processing, coding, and data entry. 

Consequently, FEC measures recorded times from Data Systems logs 

because they are easy to monitor and relatively accurate for gauging 

compliance with the 48-hour rule. As a result, while technically meeting 

the 48-hour disclosure requirement, the start time is not measured from the 

time that the document first enters the FEC doors. 

The FEC spends considerable time and resources catering to filers who do 

not follow simple submission standards or file standard FEC forms. The 

FEC does not require filing on standard forms and accepts any functional 

equivalent as long as it includes appropriate information. Absent report 

submission standards, the FEC spends additional time and resources to 

allow filers the flexibility to choose how they submit their information. This 

flexibility has created multiple inputs into the disclosure process that lead to 

a large variance in how filers submit disclosure information. Nonstandard 

report submissions complicate the already time-consuming and laborintensive activities inherent in a paper-based disclosure program. 

The Commission remains reluctant to seriously encourage or enforce 

standard filing procedures for the filing community. Although allowing filers 

to have many choices may be indicative of a progressive customer service 

orientation, FEC inaction regarding the enforcement of standard filing 

procedures fosters inefficiencies and errors that have become costly and 

time-consuming. 

Campaign finance reports enter the FEC in a variety of ways and media. 

Allowing numerous intake points for submissions to enter the FEC adds time 

and complexity to the front end of the disclosure process. Each unique way 

that a document can come into the FEC requires a unique set of activities 

for processing. The end result can be longer cycle times and missing or lost 

documents in a very time-sensitive process. 

Many filers do not follow FEC guidelines, but send documentation directly 

to RAD analysts, one of the Commissioners, or FEC offices other than 

Processing. Although mailroom staff open all FEC mail prior to delivery and 

are trained to look for campaign finance reports and to route them to 

Page 426 PricewaterhouseCoopers LLP 
 

Management Review of the Federal Election Commission 

Processing (even if they have been incorrectly addressed by the filer), 

sometimes documents that should go to Processing are misrouted. In these 

cases, a report might not be posted within the 48-hour period. In fact, it 

might not reach Processing for days or weeks, until someone realizes that it 

should be part of the public record. FEC does not have the capability to 

track instances of these delays, but suggests that they occasionally do 

occur. 

The existing reporting process is confusing to filers because of complex 

reporting periods. Requirements to track and report campaign finance data 

along different time periods (e.g., calendar year, fiscal year, election cycle) 

complicates the disclosure process for filers. In fact, this requirement makes 

data development, comparison, and analysis more difficult for the 

candidate committees, for the FEC, and for those relying on FEC data. 

Disclosure workloads and staff productivity vary directly with election 

cycles. In general, leading up to an election, workloads increase with odd 

years tending to be slower than even years. FEC systems and resources are 

most strained during Presidential election years, because substantial 

amounts of additional work result from the political party and Presidential 

candidate committee filings. As campaign financing becomes more 

complex, as committees become more sophisticated, and as funding for 

Federal elections increase, FEC workloads will continue to grow. 

Improvement Opportunity 4−7: FEC should enforce the use of standard 

filing guidelines and forms for the entire filing community. This would 

represent a major departure from the longstanding Commission orientation 

to afford filers the maximum amount of flexibility when submitting 

campaign finance information. However, the successful transition to 

electronic filing depends on the ability to alter current reporting processes, 

procedures, and forms to create internal efficiencies and external buy-in. 

FEC must soon take actions that both streamline disclosure and move the 

filing community away from paper reporting.30 

The FEC could dramatically affect disclosure workloads and resources by 

enforcing a few standard guidelines for filing campaign finance reports. In 

particular, standardizing how forms are printed and how amendments to 

forms are submitted would yield the greatest impact. FEC should require 

that the submission of all disclosure information be in a typeface format. 

Handwritten submissions should not be accepted, but immediately returned 

to the filer. Likewise, FEC should develop clear and explicit instructions for 

30See Section 4.2.6 for a discussion on electronic filing. 

PricewaterhouseCoopers LLP Page 427 
Management Review of the Federal Election Commission 

amending forms that identify only changed transactions. Moreover, 

amendments should be completed on specific forms where filers must 

explicitly indicate which information has changed. 

Standard forms could include anything from a generic hardcopy shell to 

smart form software with drop-down menus and self-editing mathematical 

reviews (similar to those found in popular PC-based tax preparation 

software). Also, rethinking how FEC collects disclosure data through certain 

types of forms presents an opportunity to work with filers to determine how 

to minimize errors and simplify reporting procedures. This is important 

because the new standard forms must be easy to explain, read, and 

complete. Standard forms should begin to capture the look and feel of 

electronic filing so that filers eventually become comfortable with this new 

environment. 

Requiring the use of standard forms for campaign finance reports and 

amendments, in addition to enforcing standard filing procedures, would 

further streamline the disclosure process. The design and implementation of 

an improved disclosure program with standard forms should be directly tied 

to the paperless report transition strategy. The FEC must be careful not to 

develop an approach to proliferating standard forms that bolsters filers’ 

existing reliance on paper. 

The FEC will have to determine the appropriate level of enforcement 

regarding the use of standard forms to gain the benefit of new enabling 

technology. Because the FEC seems to be nearing its capacity to handle 

increasing volumes of disclosure reporting, the Commission should 

consider enforcing the use of standard forms, with civil penalties for 

noncompliance. More staff will be necessary if the FEC does not adjust its 

fundamental approach to disclosure. 

Improvement Opportunity 4−8: In the event that mandatory electronic 

filing seems unlikely in the foreseeable future, the FEC should explore 

alternate plans to the EFS that would optimize its existing investment in 

imaging technology by integrating compatible technologies such as optical 

character recognition (OCR), bar codes and workflow software. These 

technologies would enable FEC to 

  Automate some of its indexing (thus reducing the need for data coding 

and entry), 

  Guarantee that filings become public record within 12 to 24 hours, 

  More effectively track disclosure reports from the moment they enter the 

FEC and reduce the need for manual logging, and 

Page 428 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

  Route documents instantly throughout the organization. 

The success of the FEC electronic filing program depends on its wide-scale 

use throughout the filing community. This future state seems likely only if 

Congress mandates the adoption of electronic filing. In the interim, the FEC 

should continue to focus its resources according to its Strategic Plan on 

developing its electronic filing program. However, in the event that a 

Congressional authorization for electronic filing seems many years away, 

the FEC will need to revise its information technology strategy and develop 

a contingency plan that will help streamline some processes. 

Concept of Operations 

A Model for a Modernized Paper-Based Disclosure Process 

Filers would register with the FEC at the beginning of the disclosure process and receive a 

unique set of bar code stickers if they choose to file paper forms. These bar codes could 

be coded with identifying information to indicate the individual candidates and 

committees, as well as the specific type of forms being submitted. Candidates would affix 

a bar code to the top page of each report submitted to the FEC. The reports could then be 

mailed directly to the Disclosure Division, rather than going through the FEC mailroom. 

Once they arrive in the Disclosure Division, they would be prepared for imaging and fed 

through the scanner. The scanner would read the bar code and automatically create an 

index for the report, making it a part of the public record. In this scenario, the report 

becomes part of the public record shortly after it enters the FEC. Since the filer submitted 

a standard typed form, OCR technology can be applied to read specific fields within the 

scanned image and instantly extract information into the disclosure database. Specific 

reports that required a more advanced data extraction process would be automatically 

routed to a disclosure analyst who pulls up the image and then codes and enters the 

appropriate data. 

In this scenario, the FEC does not use the paper report after it has been imaged and 

automates the majority of coding and data extraction that currently takes place in Data 

Systems Division. Other scenarios can be developed in which filers submit electronic 

forms on disk or through e-mail, allowing data to be directly uploaded into the disclosure 

database without any scanning or OCR. 

The FEC should try to capture disclosure data as close to their original source as possible. 

These processes and technologies allow the FEC to accomplish that goal. In fact, 

electronic data interchange (EDI) and imaging technology have reached a point of 

maturity where organizations are more limited by stretched resources and demanding 

workloads to implement the technology than by any existing technical constraints. 

Improvement Opportunity 4−9: Report on an election cycle basis rather 

than by calendar or fiscal year. FEC currently collects and reports 

campaign finance contributor data based on calendar year reporting 

periods and election cycle contribution limits. FEC should standardize on 

one consistent reporting cycle for the entire organization. The period for 

reporting that makes the most sense for the FEC would be the election cycle 

because it provides the most accurate, meaningful, real-life picture of 

campaigns and FEC activities. 

PricewaterhouseCoopers LLP Page 429 
4.2.6 Electronic Filing and Disclosure Forms 

 

Management Review of the Federal Election Commission 

The electronic filing system, as it currently exists, streamlines the 

disclosure process, but does not meet the internal needs of staff or the 

expectations of the filing community. In comparison with the hardcopy 

disclosure process, electronic filing31 is highly efficient and results in quick 

cycle times. Electronic filing offers the most cost-effective and efficient 

method to collect campaign finance information. Disclosure information 

submitted electronically is on the public record well within 24 hours, as 

opposed to upwards of 48 hours for paper processes. In addition, filing 

electronically reduces errors because the filer (who is the source of the 

data) actually provides the data that are used to populate the disclosure 

database. These data are also converted into a TIF image that the public can 

access through the imaging system, just like any other imaged report. 

As of November 1998, 250 committees (3 percent of the filing population) 

filed electronically with the FEC. This is the first election cycle that 

committees have been able to file electronically. Until substantially more 

submissions are filed electronically, the FEC intends to rely on existing 

paper-based processes as the primary means of disclosure. Exhibit 413 

shows a breakdown of the 250 committees and how they filed. (Note that 

the FEC only tracks the number of filers who use the EFS and not the actual 

number of documents that are electronically submitted.) 

Given the FEC capital investment in 

the EFS, filers who use electronic 

filing save the FEC significant time 

and resources routinely spent on 

processing, coding, and data entry 

from paper forms. Exhibit 414 lists 

the costs associated with the EFS 

since FY 1996 and projected 

through the end of FY 2002. The 

majority of costs to date have been 

Exhibit 4-13 

Methods of E-filing 

Method of E-Filing Number of 

Filers 

Percent 

Version 1 17 7% 

Version 2 56 22% 

Modem or Internet 177 71% 

Source: Data Systems Division 

31Electronic filing (e-filing) refers to submitting campaign finance disclosure information to 

the FEC either directly through a modem or Internet connection to the Electronic Filing 

System (EFS) or via Version 2 disks that can be uploaded into the EFS by DSD staff. Although 

Version 1 software can be uploaded into the EFS, it cannot be integrated with the Disclosure 

Database and consequently must be printed and processed in the same way as paper 

reports. Nevertheless, Version 1 software generates standard typed forms that are easy to 

read and make data extraction easier. However, because the data on Version 1 disks cannot 

be used to automatically populate the Disclosure Database, this method of filing does not 

represent the true intent and vision of e-filing. 

Page 430 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

for the design and development of the EFS, procurement of the necessary 

hardware and software, and implementation of the existing system. 

Exhibit 414 

Electronic Filing System Cost Breakdown 

Cost Area FY 1996 

(actual) 

FY 1997 

(actual) 

FY 1998 

(actual) 

FY 1999 

(budget) 

FY 2000 

(planned) 

FY 2001 

(planned) 

FY 2002 

(planned) 

Contracts/ 

Procurement 

$261,350 $623,370 $423,643 $985,012 $485,000 $495,000 $505,000 

Maintenance  $45,000  $414,000 $500,000 $530,000 $565,000 

Personnel $37,000 $42,500 $60,000 $142,500 $147,000 $151,500 $156,000 

TOTALS $298,350 $710,870 $484,643 $1,541,512 $1,132,000 $1,176,500 $1,226,000 

Source: DSD Updated ADP Strategic Plan (November 10, 1998) 

During FY 1999, the FEC plans to spend approximately $690,000 for 

systems integration work and a new server to integrate the existing EFS and 

Disclosure Database. After this integration, the FEC believes it will only 

incur routine operational costs for the help desk, maintenance, and FEC 

personnel involved with technical support and programming, EFS program 

management, and data quality assurance. The majority of costs after FY 

1999 are planned for maintenance and contracting for operations and help 

desk support. 

Creating the public record through electronic filing only requires a few 

internal DSD staff resources to perform quality assurance and program 

management because a contractor administers the EFS operations, help 

desk, and maintenance. Exhibit 415 shows a visual comparison of the two 

disclosure processes that indicates how electronic filing simplifies the 

normal paper-based process. One area where the FEC would see major cost 

savings is in contracting for Pass III data extraction, which is automatically 

performed with the EFS and could potentially result in at least $150,00032 in 

annual savings. Additionally, the EFS eliminates the need and cost for 

imaging and Pass I data extraction necessary for the paper processing of 

documents33. 

32Approximately $168,000 was spent in FY 1998 completing Pass III data entry under the 

ILM contract. In addition, the cost of this contract is anticipated to increase for FY 1999 and 

FY 2000. 

33 Sections 4.2.1 and 4.2.2 discuss in more detail the time and resources that the FEC 

expends on processing paper campaign finance submissions (i.e., imaging in Processing 

and Pass I/III data coding and entry in DSD). 

PricewaterhouseCoopers LLP Page 431 
Management Review of the Federal Election Commission 

Exhibit 4-15 

Comparison Between Paper and Electronic Disclosure 

Log and 

Sort 

Pass I 

Coding 

Pass I 

Data Entry 

Verification 

Upload 

Data 

Verify 

Data 

Populate 

Database 

Create 

TIF 

Files 

Generate 2 

Sets of Data 

Files (Pass I 

and Pass III) 

Further 

Processing 

Needed? 

RAD 

File Room 

Pass III 

Coding 

Pass III 

Data Entry Disclosure 

Database 

Processing 

(Imaging) 

Data 

Systems 

Upload and 

Print Forms 

(Data 

Systems) 

paper 

Mail Room 

paper 

Version 1 disks 

paper and disks 

Version 2 disks 

electronically filed forms 

Data 

Systems 

PERFORMED AUTOMATICALLY BY THE EFS 

Exception 

Processing 

Electronic Processing of Campaign Finance Reports 

Paper Processing of Campaign Finance Reports 

Yes 

No 

Filing 

Community 

The existing electronic filing system has been designed initially to automate 

the campaign finance data collection and extraction processes. Now that 

this capability exists, DSD has indicated that the next logical step is to 

begin planning to integrate enhanced functionality that will allow for more 

extensive report review and advanced data analysis. The EFS is not 

presently used by the FEC to conduct any more extensive review or analysis 

of campaign finance data than paper submissions. In fact, in order to be fair 

and assess all filers equally, additional contribution data that are available 

with electronic filing (but not when filing paper reports) are maintained in a 

separate database that the FEC does not access or review. In short, the 

existing EFS does not readily make reviewing campaign finance data easier 

for FEC analysts. 

The current EFS also does not make complying with the FECA easier for the 

filer. No smart features were built into the front end of the system to help 

filers review and check their information before actually sending it. 

Nevertheless, the Audit Division has never had to audit any electronic 

filings. Although this may be a misleading statistic because the population 

of e-filers is small and tends to be highly sophisticated, this could be one 

indicator that the EFS helps to reduce erroneous reporting that results from 

careless mistakes. 

Page 432 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

Limitations of the current EFS are partially the result of strict deadlines 

imposed on the FEC by Congress, which called for the rapid development 

of electronic filing capabilities. Given its limited timeframe, the FEC could 

not adequately develop functional requirements for a comprehensive efiling system and thus decided on an approach to phase in new 

functionality over time.34 DSD solicited feedback from the filing community 

that was used to help develop functional system requirements. Since the 

initial electronic filing system was only intended to automate data 

collection and extraction, additional outreach was limited and, in fact, did 

not involve many FEC offices outside of DSD. DSD suggests that the next 

phase of development will include input from the appropriate FEC offices. 

Data Systems took the lead on the design and implementation of the EFS 

and is the only division seemingly accountable for the system at this time. 

The FEC maintains both paper-based and electronic disclosure processes 

without a clear strategy for how disclosure should be conducted and 

improved in the future. Maintaining separate processes without clear 

direction or coordination results in a poor use of resources. The majority of 

disclosure activities presently occur with paper forms, and the FEC has not 

developed a discrete, comprehensive strategy to transition filers to an 

electronic filing environment. The Commission is taking steps to do this, but 

the following recent efforts do not seem to follow a coordinated plan or 

roadmap: 

  On September 1, 1998, the FEC issued a news release about new 

regulations that specify that if Presidential candidates and their 

authorized committees have computerized their campaign finance 

records, they must agree to participate in the electronic filing program 

as a condition of accepting Federal funding. 

  Attempting to adapt the commercial financial management and 

reporting software used by campaigns to work with the FEC electronic 

filing system, the Commission issued an open Request for Proposals to 

private software companies to encourage the conversion of their 

products to the FEC electronic filing format. 

  In 1992, a Forms Committee was instituted as the central body to 

address issues associated with disclosure forms in a standard manner. 

Since 1996, the Forms Committee has been considering the application 

of self-coding forms in the disclosure process. Generally speaking, the 

Forms Committee characterizes self-coding forms as a concept that 

34In contrast, when designing its new case management system, the OGC was able to create 

comprehensive requirements and buy-in by involving many stakeholders over an extended 

period of time. 

PricewaterhouseCoopers LLP Page 433 
Management Review of the Federal Election Commission 

would facilitate the disclosure process by reducing FEC labor and 

increasing disclosure accuracy. The intent of self-coding forms would 

be to reduce the need for manual coding and data extraction while 

simplifying the reporting process for filers. Efforts to redesign forms may 

raise questions related to philosophies and strategies for disclosure. As a 

result, the FEC has currently suspended action on most of these forms 

issues. 

Improvement Opportunity 4−10: The FEC needs legislative authorization 

to require committees that meet certain thresholds of financial activity to 

file reports electronically by a certain date. If Congress gives FEC the 

authority to require mandatory electronic filing for major filers, then the 

Commission must formulate a transition plan with actionable strategies to 

shift filers from paper reporting to electronic filing. The FEC should begin 

transitioning to a paperless disclosure process by mandating for the 2002 

election cycle that filers who exceed certain disclosure thresholds can only 

make electronic submissions to the FEC. The larger, more experienced 

committees (many of which already have computerized financial systems) 

would be forced to start filing electronic reports. This would ease the 

transition for the entire filing community, allowing smaller, less 

sophisticated committees more time to prepare and adapt to this new filing 

environment. In fact, many filers actually have all of the necessary 

disclosure data on computers, but still submit paper forms. This practice not 

only creates more work for filers, but the FEC also spends its limited 

resources converting the paper submissions back to data that is often very 

similar to what filers originally had in their systems. 

On January 2, 1998, the FEC released the results of a survey of reporting 

committees regarding electronic filing. The survey revealed that “most 

committees have access to computers in their committee or campaign 

operations.” Furthermore, “three-fourths of these computerized committees 

have access to modems, and two-thirds of those committees can reach the 

Internet.” Survey results suggested that “the filing community has the basic 

infrastructure to take advantage of a voluntary electronic filing program for 

campaign disclosure reports,” and filers are generally positive about doing 

so. Nevertheless, the survey revealed that “ while some 20 percent of filers 

use computer software specifically purchased for bookkeeping and 

preparation of FEC reports, 66 percent of all filers continue to prepare their 

disclosure reports manually and 6 in 10 filers who have computers file 

manually.” This mixed feedback is important because it establishes a 

context that the FEC must understand in order to plan a successful 

transition: filers today basically have the computing infrastructure necessary 

to interact in an electronic reporting environment. 

Page 434 PricewaterhouseCoopers LLP 
Concept of Operations 

Reporting in a Future Electronic Filing Environment 

 

Management Review of the Federal Election Commission 

One possible vision for the future is that disclosure reports are automatically generated by a 

committee’s own financial management software. The reports would be derived from 

original record keeping, automatically validated for mathematical errors and logical 

consistency, and electronically transmitted to FEC. This eliminates redundant data entry, 

saves times, and minimizes reporting error. 

The existing FEC electronic filing system (EFS) provides the basic 

functionality for a filer to submit data in an electronic disclosure format that 

automatically integrates with the disclosure database and imaging system. 

The EFS would make complying with the FECA easier for the filer if it 

included decision support features to help filers make accurate reporting 

selections. For example, drop-down menus that list the official names of 

registered PACs would ensure more accurate reporting and faster reviews. A 

minimum level of intelligence should be built into the EFS to provide for a 

series of logical checks and mathematical reviews as a report is being 

completed. In effect, some of the analysis that RAD analysts currently 

perform would be built into the front end of the system. Before filers could 

send reports to the FEC, the system would correct mathematical errors and 

prompt filers to correct logical problems or inconsistencies in their 

submissions.35 Once filers submit their disclosure data to the FEC, the EFS 

would be integrated with a relational disclosure database that can support 

advanced analyses such as data mining and exception reporting. 

Given the appropriate legislative authorization, the FEC should establish a 

fixed timeframe for completely converting to electronic filing. However, 

during the transition to an electronic filing environment, the FEC should 

expect to support several processes for disclosure, which must be planned 

and coordinated to help filers make the transition to electronic filing over 

time. Though a recurring theme at FEC is to go any distance to please the 

filer (i.e., customer), the FEC should not envision a long-term strategy that 

incorporates multiple points-of-entry for the disclosure process. Electronic 

filing should eventually be the only option available for regular filers to 

report campaign finance information and to comply with the FECA.36 

In moving forward, the FEC should clarify accountability for meeting 

milestones and managing change associated with the FEC’s electronic filing 

initiative. Essentially, a program office within the FEC should own the 

35Many of the recommendations in this paragraph have been implemented in Version 3 of 

the Commission’s filing software, which is planned for distribution in January 1999. 

36Special provisions should be made for “paper” filing by first-time or unsophisticated filers, 

with the objective of moving them to electronic filing as soon as possible. 

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Management Review of the Federal Election Commission 

electronic filing program and coordinate project management and system 

development with DSD. 

Improvement Opportunity 4−11: The FEC should continue to solicit input 

from both filers and internal staff regarding necessary enhancements to 

the electronic filing system. Electronic filing should make it easy and costeffective for filers to comply with the FECA. At the same time, the system 

should be functional and user-friendly so that staff can efficiently review 

disclosure data and determine compliance. As DSD moves forward to 

define requirements for enhancements to the existing electronic filing 

system, it will be important to communicate that DSD is applying a phasedapproach to the system development and that involvement from all 

stakeholders is critical to the future success of the initiative. 

4.2.7 Senate Point-of-Entry 

The FEC is not the point-of-entry for Senate campaign finance documents. 

Senate candidate filings make up only 7 percent of all filings; however, 

Senate campaign finance reports tend to be longer and more complex, 

typically involving a higher number of financial transactions. As a result, 

the amount of work related to Senate filings is not directly related to volume 

of submissions or number of candidates. 

Many extra processes and activities have been created as a result of the FEC 

reticence to standardize filing procedures. Exacerbating this situation and 

outside the control of the Commissioners is the fact that not all submissions 

come directly to the FEC. Senate filers first send their campaign finance 

documents to the Secretary of the Senate for photocopying, microfilming, 

and filing. Once they are received by the Secretary, couriers then deliver 

duplicate sets of photocopies to Processing at the FEC. Processing staff log 

the photocopied reports and deliver one copy to Public Records and the 

other copy to Data Systems for data extraction. Processing also regularly 

receives nine duplicate sets of microfilmed Senate filings. Processing staff 

refer to their manual logs to reconcile which reports on the film have 

already been received as hardcopies. Reports that were not delivered from 

the Secretary of the Senate as hardcopies need to be printed from the 

microfilm at the FEC. Processing staff create the computerized index used to 

search the microfilm and then splice and deliver copies of the microfilm to 

several other offices. 

Since the resolution of microfilm and photocopies is not clear enough for 

imaging, the majority of Senate documents are only available on microfilm 

or paper. Consequently, Senate documents cannot be accessed in the same 

ways that all other campaign finance submissions are: through the FEC 

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imaging system and Internet Web site. Because the FEC is not the point-ofentry for Senate filings, the disclosure of Senate documents takes longer 

than necessary, fails to be easily accessible or user-friendly, and 

unnecessarily ties up FEC resources. 

Improvement Opportunity 4−12: The Congress should transfer the pointof-entry for Senate candidate committee reports to the FEC. In 1996, the 

FEC became the point-of-entry for all House campaign finance disclosure 

filings. As a result, FEC has been able to streamline various internal 

processes for collecting and reporting this disclosure information. When the 

FEC receives original documents from House candidates, the agency uses 

imaging technology to facilitate timely and user-friendly disclosure. 

Customer satisfaction aside, this process improvement, combined with 

imaging technology, has resulted in time and cost savings. Savings include 

costs for archiving/retrieval and storage space. In addition, staff hours once 

spent searching for information and reports are now applied to more valueadded activities. As long as the Secretary of the Senate remains the point-ofentry for Senate filings, the FEC cannot realize any of the process benefits 

that come from being the point-of-entry. In fact, the FEC has urged the 

Senate to switch to FEC point-of-entry filing for several years now. 

4.2.8 Disclosure Database 

The FEC disclosure database cannot support the level of analysis that is 

being demanded by users who are familiar with modern database 

technology. The FEC achieves high levels of customer satisfaction because 

disclosure information is current, readily available, and easy to access. 

Despite these attributes, the database could offer more value, given the time 

and resources that go into creating it. The design of the disclosure database 

limits the benefits of public disclosure and does not facilitate internal 

compliance reviews. The disclosure database dates back to computer 

architecture more than two decades old. In an effort to modernize 

interaction with the database, the FEC created a graphical user interface 

(GUI) that makes the legacy database easier to query. Still, the disclosure 

database only supports a limited set of routine queries. Data requests that 

deviate from this existing set have to be specially coded by a DSD 

programmer (time permitting). In today’s computerized society, the current 

FEC disclosure database falls short of the demands of a more attentive and 

technologically savvy public. 

Improvement Opportunity 4−13: The FEC should work with user groups to 

determine modernization requirements for the existing disclosure 

database. Users, including FEC staff (e.g., Audit staff and RAD analysts) and 

external third parties (e.g., value-added information retailers), should have 

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access to analytical tools with more advanced capabilities. The FEC should 

invest in a project to migrate existing disclosure data to a more modern 

relational database. In addition, the FEC should explore the use of datamining technology as a means of detecting more subtle and complex 

patterns of noncompliance. 

4.2.9 Management Planning 

The FEC has not thoroughly assessed its overall disclosure program in 

recent years. The Commission has not communicated an overall picture of 

its disclosure program to its staff. As a result, uncoordinated activities and 

policies of separate units create disclosure process inefficiencies and 

processing bottlenecks. Staff across the FEC do not realize how their 

actions, processes, and policies affect other offices in the organization. For 

example, the RFAI process that RAD engages in dramatically increases 

workloads throughout the entire disclosure process. This statement does not 

imply that RAD does not account for how its activities affect other offices. 

Rather, at a strategic level, the FEC has not evaluated the value of the RFAI 

against the resulting amendments to disclosure reports that greatly affect the 

volume of submissions coming into the FEC. On a more positive note, some 

examples exist of offices that do take into account interoffice processes and 

workloads. After evaluating workload statistics for the last election cycle, 

RAD subsequently adjusted its review and referral thresholds in order to 

reduce the number of its referrals to OGC. 

Despite an increasing workload, FEC management has seemingly not 

comprehensively questioned existing policies or ways of doing business 

from a big picture perspective. Similarly, the FEC has never 

comprehensively assessed the types and uses of disclosure information 

requested in light of current trends and today’s campaign environment. 

Feedback during interviews with external stakeholders indicated that 

problems exist with how filers are expected to report information.37 

Improvement Opportunity 4−14: The FEC should engage in intraprogram 

and interprogram management planning activities to improve resource 

utilization and enable process efficiencies. Decomposing and analyzing 

the disclosure process to identify key activities, linkages, inputs, outcomes, 

and deadlines would help determine how to maximize productivity. This 

37 In particular, one consistent theme was discontent with the categorization, “Other political 

committees (such as PACs),” from the Detailed Summary (page 2) of FEC Form 3. The 

problem with this summary category is that it makes PAC money difficult to specifically 

identify and implies that a committee is receiving funding from PACs, which may not be 

accurate. 

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type of exercise would also demonstrate the importance for divisions and 

programs to work together, because outcomes or issues in one specific area 

could affect other parts of the FEC. For example, assessing key reporting 

timeframes throughout an election cycle in relation to FEC workloads and 

staff utilization is critical to understand trends and optimize use of internal 

resources. With this type of management information, the FEC could 

reorganize how and when work gets done and by whom to enhance its 

organizational productivity. Distilling this key management information 

should be done within the disclosure program, as well as organizationwide 

among all four core programs. This would result in a true big picture 

understanding of FEC performance and undeveloped potential.

 4.3 Findings and Improvement Opportunities for the Compliance 

Program 

Objective: “The FEC compliance program is premised on the belief that the Commission’s 

first responsibility is to try to foster a willingness, on the part of the filing community, to 

voluntarily comply with the law’s reporting requirements, fundraising restrictions and 

public funding statutes. The Commission encourages this willingness through education 

through its disclosure program. To buttress educational efforts, the Commission carries out 

a credible Compliance Program whose objectives are: 

 Conducting desk audits of every report 

 Auditing those Committees whose reports fail to meet threshold requirements for 

substantial compliance with the FECA 

 Enforcing the law, in a timely and fair way, against persons who violate the law.” 

Source: FEC FY 2000 Budget Request Justification, November 16, 1998. 

The compliance program helps to ensure compliance with FECA’s 

disclosure provisions, limitations, and prohibitions relating to sources, 

amounts, and uses of campaign funds. Unlike the disclosure program, the 

compliance program is not a unified process with connected inputs and 

outputs that flow consecutively. Rather, the Reports Analysis Division, 

Audit Division, and Office of the General Counsel administer the following 

increasingly resource-intensive processes and tools to facilitate voluntary 

compliance, enforce compliance, and compel compliance (through court 

order): 

  Review of reports to ensure that Federal candidates and committees 

have complied with FECA disclosure requirements and the limits and 

prohibitions on the sources, amounts, and uses of funds 

  Requests for Further Information (RFAIs) and nonfiler notices that seek 

to resolve reporting problems by asking filers to voluntarily correct or 

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clarify reported transactions or by requesting submission of reports 

when filing deadlines have passed 

  Internal referrals to the Audit Division or the Office of the General 

Counsel when apparent FECA violations are considered for Commission 

action to determine the appropriate audit-for-cause or enforcement 

proceeding channels 

  Title 2 for-cause audits, which involve conducting full-scope financial 

audits to clarify the public record in situations where review of 

disclosure reports initiated an internal referral that was approved by the 

Commission 

  External complaints filed by anyone who believes that a violation of the 

FECA has occurred or is occurring 

  Title 26 Presidential audits, which involve conducting full-scope 

financial audits of Presidential candidates who receive public funding in 

order to verify compliance with the FECA and to determine any 

necessary repayments 

  Offensive litigation to compel compliance with the FECA and to seek 

judicial remedy 

  Regulations, codified at Title 11 of the Code of Federal Regulations, to 

clarify and implement the FECA and the Title 26 Presidential public 

funding statutes 

  Advisory opinions issued to those seeking specific guidance on the 

application of either the FECA or FEC regulations to campaign activities 

The following section describes these processes and identifies improvement 

opportunities associated with the offices involved with the compliance 

program. 

4.3.1 Reports Analysis Division, Compliance Activities 

As shown in Exhibit 416, the Reports Analysis Division (RAD) comprises 

three branches and a file room to maintain paper copies of all FEC reports. 

During the 1998 election cycle, the average number of committees 

assigned to a reports analyst in the Authorized Branch was 253 and in the 

Non-Party/Party Branch, 366. 

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Exhibit 416 

Federal Election Commission 

Reports Analysis Division 

(FTEs) 

Compliance Branch 

(5) 

File Room 

(4) 

Asst. Staff Director 

Reports Analysis 

(5) 

Authorized Committee Branch 

(13) 

Non Party/Party Branch 

(15) 

Source: FEC Staffing Report September 25, 1998. 

RAD seeks to create an accurate public record of campaign finance reports 

by reviewing report transactions for mathematical accuracy; the correct 

submission of forms and schedules; and adherence to FECA’s disclosure 

requirements and limitations on the amounts, sources, and uses of funds. If 

a reports analyst identifies mathematical errors, a lack of supporting 

documentation, or apparent inconsistencies with FECA requirements, a 

Request for Additional Information (RFAI) is sent to the filer seeking 

information or the submission of an amended report to clarify the record. 

All RFAIs are placed on the public record. Concurrent with this disclosure 

process, RAD conducts the initial screening process for assessing threshold 

compliance with FECA. 

FECA Section 438 (b) requires that ”prior to conducting any audit under this 

subsection, the Commission shall perform an internal review of reports filed 

by selected committees to determine if the reports filed by a particular 

committee meets the threshold requirements for substantial compliance 

with the Act. Such threshold for compliance shall be established by the 

Commission. The Commission may, upon an affirmative vote of four of its 

members, conduct an audit and field investigation of any committee which 

does not meet the threshold requirements established by the Commission.” 

The FEC implements this statutory directive through the reports analysis and 

RFAI processes. RAD maintains an Audit Point Assessment system applied 

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separately to authorized and nonauthorized committees. Depending on the 

committee status, the scoring system is based on roughly 20 standards. 

Detailed written criteria with dollar and percentage thresholds support the 

standards. The Commission considers these standards to be confidential to 

maintain the efficacy of its enforcement process, but generally the threshold 

standards look toward the following areas: 

  General report preparation 

  Omitted information and missing supporting schedules 

  Timeliness of report submission 

  Transactions inconsistent with FECA prohibitions and limitations 

The Commissioners have affirmatively approved the Audit Point Assessment 

system and threshold levels for point assignment. The Commissioners have 

also specified the number of points at which a committee is considered not 

in substantial compliance and therefore warrants potential action through 

an audit for cause or enforcement referral. Each election cycle, the 

Commissioners review recommendations from the RAD Authorized and 

Non-Party/Party Branches for changes to their review and referral 

procedures based on the disposition of RAD referrals to Audit and OGC. 

The Commissioners approve all changes to the threshold standards. 

Threshold standards trigger three courses of action: 

  The issuance of an RFAI requesting additional information or a report 

amendment 

  The referral to OGC for enforcement notification and action 

  The assignment of an audit point that accumulates toward a potential 

referral to the Audit Division for an audit-for-cause action 

Under FEC practice, committees receive two opportunities through the RFAI 

process to correct report submissions. Many RFAIs identify several 

deficiencies with a filing that require subsequent requests for submission of 

additional information. During the 1996 election cycle, RAD sent first and 

second RFAIs, nonfiler, and information notices to authorized and 

nonauthorized committees as indicated in Exhibit 417. 

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Management Review of the Federal Election Commission 

Whenever a registered 

committee fails to submit 

a report on its reporting 

due date, RAD sends a 

nonfiler notification to 

the committee alerting it 

of this deadline and 

requesting immediate 

submission of the report. 

Informational notices 

inform committees to 

take corrective steps on 

future report 

submissions, e.g., placing 

the committee FEC identification number on all schedules. These notices, 

like RFAIs, are placed on the public record, but do not require a committee 

to amend its reports. 

6,596 

Exhibit 417 

1996 Election Cycle Requests for Additional 

Information 

Type of Notice Authorized 

Committees 

Nonauthorized 

Committees 

First RFAI 5,289 

Second RFAI 3,254 3,024 

Nonfiler 1,905 2,322 

Informational 3,254 2,322 

TOTAL Notices Sent 13,702 14,264 

Source: RAD summary of notices sent for the 1996 election cycle, 

submitted to PwC October 21, 1998. 

4.3.1.1 RFAIs 

For the 5,289 first and 3,254 second RFAIs sent to authorized committees 

during the 1996 election cycle, 17,606 deficiencies with threshold 

standards were identified by RAD for correction. Of this total number of 

RFAIs: 

  40 percent related to mathematical errors on the reports 

  23 percent related to missing report schedules 

  17 percent related to missing or inadequate information 

The remaining 20 percent applied to numerous FECA limitation and 

prohibition standards. 

Similarly, for the 6,596 first and 3,024 second RFAIs sent to nonauthorized 

committees during the 1996 election cycle, 16,607 deficiencies with 

threshold standards were identified by RAD for correction. Of this total 

number of RFAIs: 

  40 percent related to mathematical errors on the reports 

  18 percent related to missing report schedules 

  7 percent related to missing or inadequate information 

The remaining 35 percent applied to numerous FECA limitation and 

prohibition standards. 

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4.3.1.2 Audit Point Assessment Review 

RAD completes separate Audit Point Assessment reviews for authorized and 

nonauthorized committees. Because the FECA limits the time in which 

authorized committees may be approved for audits-for-cause to a period of 

six months after the date of the general election, RAD first reviews 

authorized committees for potential referrals. (The FECA does not include a 

similar statutory audit-for-cause time constraint for nonauthorized 

committees.) 

For authorized committees, RAD begins its review of a set number of 

committees involved in election outcomes between winners and opponents 

that were close. The Commission first focuses on close elections because it 

considers that FECA violations would have the greatest impact on these 

elections. (The number of committees and the election result margin are 

considered confidential by the FEC to protect the efficacy of its compliance 

processes.) 

After completion of this first grouping of authorized committees, all 

remaining authorized committee point assessments are reviewed. 

Generally, committees in this second group are ineligible for audit-forcause referrals because RAD cannot complete this review within FECA’s 

six-month for-cause approval timeframes. Potential violations identified 

during this review, however, can be referred to OGC, following the same 

threshold criteria applied to the first group. 

During the 1996 election cycle, 99 authorized committees exceeded the 

Audit Point Assessment threshold standards and were referred to the Audit 

Division for consideration of for-cause audit actions. RAD consults with the 

Audit Division to ascertain the number of audits that the Division can 

initiate and complete, given time and staff resource constraints. Based on 

this estimate, RAD then submits a batched referral of twice the number of 

authorized committees that Audit indicated that it could handle. By 

doubling the number of referrals, RAD provides backup selections in case 

the Commissioners decide not to authorize for-cause actions on the top 

Audit Point Assessment recipients. 

Based on the Audit Division’s assessment of the time and resources that 

would be consumed to initiate for-cause audits of authorized committees, 

only seven authorized committees were approved by the Commissioners 

for audits for cause resulting from activities in the 1996 election cycle. 

These seven for-cause actions represented the committees with the highest 

accumulation of points under the Point Assessment system. In addition to 

receiving point scores, Commissioners also rely on a detailed Report 

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Management Review of the Federal Election Commission 

Analysis and Audit Referral memorandum that provides detailed discussion 

on how points were assigned. Of the seven committees that the 

Commissioners approved for audits for cause, six represented newly 

registered authorized committees for the 1996 election. Only one 

authorized committee represented an incumbent candidate. 

After the referral process for authorized committees is completed, RAD 

prepares a similar listing of nonauthorized committees that have exceeded 

the Audit Point Assessment thresholds. During the 1996 election cycle, 95 

nonauthorized committees exceeded the thresholds. Eight nonauthorized 

committees were approved by the Commissioners for audits for cause. 

38 

These committees also accumulated the largest number of audit points 

assigned by RAD. Exhibit 418 indicates the number of RAD referrals to the 

Audit Division and OGC for FY 1993 through FY 1998. 

The Audit Point Assessment system is 

conducted with a high level of internal 

control and review to ensure that point 

assignments conform to the RAD 

standards. The RAD Compliance Branch 

uses an automated system to track RFAIs 

and assigned points. RAD reports analysts 

use a separate manual system to track 

RFAIs and point assignments. Both 

systems are compared to verify RFAI 

responses and point scoring. RAD reports 

analysts maintain detailed paper logs 

providing an audit trail of review work 

performed and their findings. RAD 

supervisors review analyst logs, RFAIs, 

and reviewed files to ensure consistency 

and accuracy. While redundant processing of point assignment between 

reports analysts and compliance staff is evident, the system provides a 

double check to ensure that audit points are assigned fairly. 

Exhibit 418 

RAD Referrals to Audit and 

OGC (1993−1998) 

RAD Referrals to: 

101 

Source: MIS data, RAD Review, 

September 30, 1998. 

Fiscal Year Audit OGC 

1993 84 112 

1994 13 93 

1995 60 

1996  28 

1997 200 57 

1998 1 33 

38In addition to the seven authorized and eight nonauthorized committees that the 

Commission approved for audits-for-cause, Audit resources were also required for three 

additional audits that were not in the for-cause category. 

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Reports analysts manually conduct a review of all filed reports. A calculator 

is used to verify the mathematical accuracy of the reported financial 

activity, both for the period in question and the calendar year. All entries on 

supporting schedules are calculated to ensure that the totals concur with 

the various summary page figures. Exhibit 419 represents the average time 

that analysts spend reviewing reports filed by type of committee during the 

1998 election cycle. 

RAD referrals to OGC primarily involve FECA 

reporting violations related to nonfiling or 

chronically late filing. The referrals also identify 

cases of excessive contributions, but in some 

instances, these apparent violations result from a 

committee’s difficulty in attributing 

contributions between the primary and general 

elections and tracking election-cycle 

contribution limits against calendar-year 

reporting timeframes. RAD referrals are sent to 

the Office of the General Counsel Central 

Enforcement Docket, where they are rated under 

the Enforcement Priority System for case 

activation and assignment. This process is 

discussed further at Section 4.4.3. 

Exhibit 419 

Average Minute per Report Review 

Committee Type 

Average 

Minutes per 

Report 

Authorized Committees 

 Presidential 16 

 House 24 

 Senate 50 

Nonauthorized Committees 

 Non-Party 15 

 Party 57 

 Delegate 7 

 Independent 

Expenditure 

7 

 Communication 

Costs 

6 

Improvement Opportunity 4−15: Continue to 

calibrate the RAD referral thresholds with OGC 

Enforcement Section civil penalty guidelines so 

that RAD referrals to OGC result in conciliation 

agreements with monetary penalties. A review 

of 20 randomly selected closed matters under 

review indicated the a few referrals to OGC from RAD were beneath the 

threshold level established by OGC civil penalty guidelines for 

recommendation to the Commission. Continued efforts to harmonize the 

RAD referral criteria and OGC civil penalty guidelines will focus resources 

on reporting violations that warrant civil penalty disposition. 

Source: RAD response to PwC data request, 

October 5, 1998. 

Improvement Opportunity 4−16: To increase the level of detection of 

patterns of improper campaign finance practices, RAD should initiate a 

data-mining and contributor-collaboration software pilot to assess the 

degree to which “financial” transaction violations can be identified. Until 

the FEC implements a mandatory electronic filing system and RAD 

redesigns its reports review process, reports analysts will continue to 

manually verify calculations and transactions on each page of each filed 

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report. While RAD does use the disclosure database to conduct 

transactional analysis with filed reports, the design of the disclosure 

database limits the ability to detect patterns of contributions that might be 

connected by name, address, or timing. Such a software package was 

presented to the Commission for an Advisory Opinion ruling (AOR) on 

using the FEC disclosure database for marketing purposes (see AOR 

199804). 

4.3.2 Audit Division, Title 2 Audits for Cause 

The Audit Division is primarily responsible for two different audit functions: 

Title 2 Audits for Cause and Title 26 Presidential Audits. Although the FEC 

does not have the authority to conduct random audits,39 a candidate or 

committee can be audited for cause if a review of its filings indicates 

noncompliance with the FECA. These Title 2 audits are one tool used by the 

FEC in order to deter noncompliance. (Title 26 Presidential Audits are 

discussed in relation to the Presidential Public Funding Program later in 

Section 4.4.) 

Exhibit 420 depicts an organizational chart of the Audit Division at the 

end of FY 1998. The Audit Division has a total staff of 30 permanent FTEs 

and depending on the election cycle, may have a number of temporary 

positions to handle peak workloads. Twenty-six of these positions are 

divided across six audit teams, each with a team manager. Three of the 

audit teams report to one Deputy Assistant Staff Director and the other three 

teams report to a second Deputy Assistant Staff Director. A third Deputy 

Assistant Staff Director is responsible for administering the Presidential 

Election Campaign Fund. The entire Audit Division is led by the Assistant 

Staff Director for Audit, who manages the division with the assistance of the 

three Deputies. 

39The FEC conducted random audits in 1976. In total, 106 audits occurred of both winning 

and losing candidates randomly selected by seat. In 1979, Congress amended the law to 

eliminate the FEC’s ability to conduct random audits. There are those who believe that the 

FEC cannot effectively test its own referral criteria without periodically going out to the 

filing community to conduct a small sample of random audits (in a similar fashion as the 

IRS). They also believe that random audits would not only validate FEC thresholds for 

noncompliance, but would also serve as a deterrent. 

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Exhibit 420 

Federal Election Commission 

Audit Division 

(FTEs) 

Audit Team 1 

(4) 

Audit Team 4 

(5) 

Audit Team 2 

(5) 

Audit Team 5 

(3) 

Audit Team 3 

(4) 

Audit Team 6 

(5) 

Asst. Staff Director 

Audit Division 

(1) 

Deputy Asst Staff Director 

(1) 

Deputy Asst Staff Director 

(1) 

Deputy Asst Staff Director, PEFP 

(1) 

Source: FEC Staffing Report September 25, 1998. 

Title 2 audits pass through the four phases of Commission vote and 

notification to the committee, preaudit process, fieldwork, and postaudit 

report processing. 

The input that triggers the audit-for-cause process comes from the RAD 

referral process, discussed in Section 4.3.1.2. RAD routinely sends a batch 

of authorized committees in March (following the year of the general 

election) and a batch of nonauthorized committees between August and 

December (following the year of the general election) to the Audit Division. 

Title 2 audits for cause must be approved by the Commissioners prior to 

initiating the audits. 

4.3.2.1 Commission Vote and Notification of Committee 

Title 2 audits are nearly identical for both authorized and unauthorized 

committees. However, a statutory time constraint that applies to Title 2 

audits for authorized committees requires the FEC to initiate these audits 

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within six months after the general election. The term “initiate” implies that 

Audit staff have commenced field work. As a result, once the referrals are 

received in Audit from RAD (nearly four and a half months after the general 

election), the staff usually have only six weeks to get authorization from the 

Commissioners to begin their work. The Commissioners and the Audit 

Division discuss the number of audits that can potentially be completed, 

given available resources and existing workloads. As a rule, the 

Commissioners customarily select the referrals with the highest number of 

points for auditing. At this point in the process, any audit referrals that do 

not get at least four votes of approval or are not pursued (because of 

resources and timing) are considered closed (although a referral from RAD 

to OGC could still occur). 

In comparison, Congress requires that Title 2 audits for unauthorized 

committees be initiated within 30 days of the Commission’s vote to conduct 

an audit. The Commissioners will determine which referrals will not be 

subject to immediate audit-for-cause actions. As Audit Division resources 

become available, referrals will be selected from the pool (usually based on 

their audit points) and forwarded to the Commissioners for approval to 

conduct an audit. Without the same six-month window that exists for 

Title 2 audits of authorized committees, the FEC can conduct more audits of 

unauthorized committees over a longer period of time. 

Once the Commission has approved a referral, Audit will send an overnight 

pro forma letter to the committee to explain that it has been selected for a 

Title 2 audit. This letter also requests the committee to make certain 

information available that is necessary for the FEC Audit staff to review prior 

to commencing the fieldwork. The auditors will then contact the committee 

to schedule the fieldwork. The auditee can either have the auditors begin at 

once or request a delay. If a delay is requested, the audit can be scheduled 

outside of the 30-day or six-month window. Contact with the committee 

and scheduling is presumed to initiate the audit, thus satisfying all statutory 

time constraints. 

4.3.2.2 Preaudit Process 

Auditors familiarize themselves with issues related to the committee and 

begin to prepare for fieldwork. Auditors contact RAD and OGC to discuss 

any information relevant to the auditee, such as an existing MUR or RFAI. 

During the preaudit process, auditors review past and present reports to 

identify trends and potential areas to focus on during the audit. Reporting 

data for receipts and disbursements is analyzed from information 

maintained in the disclosure database. These data are prepared for 

reconciliation with the electronic financial data requested from the 

PricewaterhouseCoopers LLP Page 449 
Management Review of the Federal Election Commission 

committee in the letter of notification (the electronic data that the FEC 

requests may or may not be provided by the committee). After completing 

their preliminary analysis in the preaudit phase, Audit staff may need to 

modify the audit program to add areas that require further review. 

4.3.2.3 Fieldwork 

FEC auditors conduct an entrance conference with the committee at the 

beginning of their fieldwork. During this conference, the auditors establish 

points of contact with the committee and explain why the committee was 

selected for an audit, what they should expect, and what initial information 

will need to be accessible for review. 

An inventory of records, including limited testing, is first conducted to 

determine whether the records are materially complete and in an auditable 

state. If a material portion of the records has not been provided, the auditee 

is notified in writing and given 30 days to obtain the requested records. If, 

at the end of this 30-day period, the records are available, fieldwork will 

commence. If not, the auditors may recommend to the Commissioners that 

subpoenas for records be authorized both to the auditee and to any other 

entities in possession of the relevant records. 

Once the records are deemed materially complete, the fieldwork is then 

conducted using the audit program developed during the preaudit phase. 

Auditors perform tests and, depending on the amount of activity, use 

sampling methods to test the auditee’s transactions. They gather evidence 

and data for the workpapers to support the findings in the final report. 

An exit conference is conducted at the conclusion of fieldwork. The 

auditors disclose to the committee any material findings that they 

discovered. After the exit conference, the auditors leave the field, and the 

auditee has 10 days to submit its official response to the findings. A 

committee can send the auditors any documented evidence, receipts, or 

reports that may prove a finding incorrect. When the auditors return from 

the field, they assess the findings against thresholds established by the 

Commission in order to determine their materiality. 

4.3.2.4 Postaudit Report Processing 

The auditors prepare an interim audit report that discloses any material 

findings. The interim audit report encompasses any response submitted by 

the auditee after the exit conference. The auditors have complete discretion 

with regard to incorporating edits and revisions into the main body of the 

report. The Audit staff complete the audit program and index workpapers 

Page 450 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

for the Team Manager’s review. An internal peer review process reviews the 

draft report and associated workpapers. 

If the findings are material, but do not contain any unresolved legal issues, 

the report is prepared and forwarded to the auditee. In this situation, the 

report does not require Commissioner review or approval, and the auditee 

has 30 days to respond to the findings (a one-time 15-day extension can be 

requested). The auditors prepare the final audit report after either receiving 

the response or the deadline lapses. The final report will include any 

response from the auditee. Once again, the auditors have complete 

discretion with regard to edits and revisions that result from auditee 

responses. After referencing, the final audit report is forwarded to 

Commissioners for a tally vote or consideration at an open Commission 

meeting. This is the first opportunity for the Commissioners to review the 

actual audit report. A copy of the report is also distributed to the auditee 

prior to the vote. If the Commissioners approve the report, the official final 

report is provided to the auditee and then publicly released. If the 

Commissioners do not vote to approve the report, the report is still publicly 

released, and the Commissioners can attach their remarks. When the 

Commissioners do not approve audit report findings, the matter is 

considered closed, and the report is placed on the public record. 

If the findings in the interim report contain any unresolved legal issues, 

Audit will forward the report to the Public Financing, Ethics, and Special 

Project section of OGC who will review the findings to determine possible 

legal implications. After this review, OGC forwards a legal analysis to 

Audit, and if Audit agrees with OGC, the legal analysis will be 

appropriately incorporated into the interim report. If Audit disagrees with 

OGC, a cover memo will be drafted with the Audit opinion and attached to 

the legal analysis and interim report, which will go directly to the 

Commissioners for discussion in an executive session. This discussion could 

occur over several executive sessions and involve a process in which Audit 

staff work with the Commissioners to revise the interim report. The 

Commissioners eventually approve the interim report and forward it to the 

auditee. 

After the Final Report has been issued, a determination within the Audit 

Division is made about whether to refer a case to the OGC for enforcement 

action. 

Conducting audits for cause does not appear to achieve any definitive 

purpose or outcome. The most obvious reason for conducting audits for 

cause is to deter noncompliant behavior; however, the Commissioners have 

not defined a deterrence theory for the Title 2 audit process. Audit does not 

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Management Review of the Federal Election Commission 

appear to have enough resources to conduct a sufficient number of audits 

for cause to have a deterrent effect throughout the filing community. 

Referrals are received semiannually in Audit, totaling approximately 100 

referrals annually. Approximately 8 to 10 percent of these referrals are 

typically audited. For example, in the 1996 election cycle, RAD referred 

99 authorized committees for audits for cause, but only 7 were actually 

audited. This example is not meant to attribute fault to the Audit Division. 

Rather, the Commissioners have not determined a priority and clear 

purpose for Title 2 audits, and this has resulted in an ineffective audit-forcause program supported by an inadequate number of audit staff. A few 

observations about staff utilization related to different types of audits yield 

further elaboration on the incomplete deterrence provided by audits for 

cause. 

Utilization patterns indicate that the resources devoted to audits for cause 

for a two-year period, primarily during the Presidential election year, are 

insufficient to maintain a significant and consistent number of audits for 

cause as a viable deterrent. During a Presidential election year, Audit staff 

can only be assigned to a small number of audits for cause. The majority of 

staff must be assigned to Title 26 Presidential audits during the year of, and 

the year after, an election, and audits for cause pick up later during the last 

two years of the four-year election cycle.40 This occurs largely as a result of 

the statutory priority of Title 26 Presidential audits over Title 2 audits and 

the Commissioners’ policy to complete Presidential audits within two years 

of the date of the general election. 

Looking ahead to the Year 2000 election an open Presidential election 

year with no incumbent more candidates will likely run for the Presidency 

than in 1996. This likelihood will require additional Audit resources to 

conduct more Title 26 audits, further reducing the Audit Division’s capacity 

to conduct Title 2 audits. Exhibit 421 indicates utilization patterns within 

the two major audit areas41 of FEC during the 1992 presidential election 

cycle. 

40A four-year election cycle as it pertains to FEC activities and workload would typically 

include the year prior to the Presidential election, the year of the election, and two years 

after the election. 

41The two major FEC Audit areas include Presidential Audits and Audits for Cause. These 

areas can be further divided into Presidential Primary Audits and Presidential General 

Election Audits, as well as Audits for Cause for both Authorized and Unauthorized 

Committees. 

Page 452 PricewaterhouseCoopers LLP 
 

Management Review of the Federal Election Commission 

Exhibit 421 

Audit Division Workload Utilization 

0 

500 

1,000 

1,500 

2,000 

2,500 

3,000 

3,500 

4,000 

4,500 

1 

1992 

4 7 10 1 

1993 

4 7 10 1 

1994 

4 7 10 1 

1995 

4 7 10 1 

1996 

4 7 10 

Presidential Audits - 13 Audits Audit-for-Cause (Authorized) - 21 Audits 

Audit-for-Cause (Unauthorized) - 22 Audits General Election Audits - 2 Audits 

Total Hours 

Hours

Note: The 1992 election cycle was used because it was the most recent four-year cycle that includes 

comprehensive data for both a Presidential election and regular elections (the 1996 election cycle 

would have required data from 1998 that is not yet available). This exhibit was generated from data 

obtained from the FEC MIS system, which includes a time-reporting capability that captures the hours 

charged by an employee to a particular audit. 

When questioned about why they do audits for cause, the Audit staff 

consistently reply, “In order to verify disclosure of the campaign reports 

and clarify the public record.” Often what is reported is not exactly what 

occurs regarding campaign finances, and the audit for cause can be 

considered one of the last tools FEC has to work with a committee towards 

voluntary compliance. To this end, the outcome of some audits for cause is 

a series of amendments to bring a committee’s report into compliance. In 

addition, some Audit staff view the audit for cause to be a learning tool for 

new and less experienced committees. However, the FEC completes so few 

audits for cause that it is not clear that this is truly an effective mechanism 

for clearing the public record and teaching campaigns proper compliance 

with the FECA. Furthermore, audits for cause represent a reactive and 

expensive approach to enforcing compliance and promoting education. 

The FEC does not appear to use audits for cause to identify and disseminate 

information about important trends that may be occurring in the field. It is 

not evident that the FEC analyzes the findings from audit reports to distill 

potentially important lessons learned that could affect the conduct of the 

PricewaterhouseCoopers LLP Page 453 
Management Review of the Federal Election Commission 

disclosure or compliance programs. Many Title 2 audits of authorized 

committees involve new and less experienced candidates. Of these audits 

for cause, most findings were a result of poor bookkeeping and reporting 

behavior as opposed to willful violations. Common audit areas include 

misstatement of financial activity, failure to itemize disbursements, and 

apparently excessive contributions. 

Many of these findings were addressed through voluntary submissions of 

amendments, at times completely unprompted by the FEC. Also, these 

newer committees usually do not generate any significant legal issues for 

OGC. Further analysis of this information could result in the identification 

of better educational support for new candidates or enhanced disclosure 

methods. Audit staff have suggested that they are not completely confident 

of the informational value that could come from historically assessing audits 

for cause, because the low number of these audits may be statistically 

insignificant to provide accurate insights. Also, because audits for cause are 

not randomly selected, this assessment could present statistical 

inaccuracies. Nevertheless, the audit results can be tracked and used so 

long as the FEC is careful and does not attempt to distill significant 

conclusions solely from these results. 

Once an audit for cause is approved by the Commissioners, the FEC 

conducts a full-scope audit of committee finances and does not focus 

solely in the areas where RAD identified potential problems. This means 

that all areas of the committee are audited, and testing can result in the 

auditors expanding their scope of analysis for further investigation into any 

particular area. In this respect, audits for cause allow the FEC to audit 

random areas once a committee has been flagged through the referral 

process. In fact, Audit staff frequently spend large amounts of time working 

issues that are completely unrelated to whatever initially triggered the 

referral. The FEC does not track Audit findings that were related to the 

initial RAD referral or findings discovered as a result of the full-scope nature 

of audits for cause. However, it is evident that full-scope audits take longer 

and cost more than limited-scope audits. 

Audits for cause are not directly tied to OGC prioritization thresholds and 

often result in no enforcement action. The Audit Division spends nearly 

half of its budget to investigate audits for cause, or approximately $2 

million from 1992 to 1996. Each audit for cause typically costs between 

$30,000 and $50,000 to complete. The total cost of audits for cause is 

typically as much as the Title 26 Presidential audits over an election cycle. 

Audit report referrals to OGC go directly to Public Financing, Ethics, and 

Special Projects (PFESP) where they are prioritized using separate criteria 

Page 454 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

(EPS II). This arrangement between Audit and PFESP has evolved over the 

past several years in an effort to dedicate legal resources to support Title 2 

and Title 26 audit outcomes. Within PFESP, Title 26 referrals are prioritized 

over Title 2 referrals; however, no formal prioritization is given to Audit 

referrals to ensure that some action occurs, even though the FEC has 

already expended significant resources to thoroughly review a committee’s 

records. No action is initiated on Audit referrals until sufficient resources 

become available. In many cases, resources are never assigned, and the 

statute of limitations expires, forcing the FEC to close the referral without 

taking action. OGC can also review the referral and deem the findings 

insufficient to warrant civil penalties. Between 1992 and 1996, Audit 

referred 32 matters to OGC out of 43 Title 2 audits for cause. 

Enforcement actions resulted in only 4 of the 32 referrals, primarily 

because PFESP could not effectively process the volume of referrals from 

Audit in a timely manner or assigned low enforcement priority ratings to 

Title 2 referrals. 

Improvement Opportunity 4−17: Assign Audit resources to establish a 

compliance program that achieves value-added outcomes. To more 

effectively use its Audit resources, the Commission should take the 

following actions: 

  Determine the strategic purpose and priority of audits for cause 

  Appropriately staff the Title 2 program 

  Redesign the referral process (beginning in RAD) 

  Restructure the Audit Division 

The FEC Title 2 program is underfunded to produce broad results that go 

beyond affecting individuals involved with isolated audits. In other words, 

the low number of Title 2 audits that the FEC can presently conduct can 

only marginally affect the entire filing community. As a result, Title 2 audits 

seem to validate the public record and deter instances of noncompliance 

only on a limited, case-by-case basis. Although the actual deterrent effect of 

Title 2 audits is difficult to measure, certainly not enough audits are 

conducted. The Audit Division would be the first to acknowledge that many 

more audits are needed, which causes the value of the Title 2 program, as it 

exists today, to be in question. 

The Commission should define the goals of the Title 2 program and 

determine how audits for cause fit with the overall mission of the FEC. For 

example, if the Commission intends to rely on Title 2 audits as a viable 

deterrent of noncompliance, then the funding for the Title 2 program should 

be increased to conduct more audits. In fact, the FEC has taken steps in this 

PricewaterhouseCoopers LLP Page 455 
Management Review of the Federal Election Commission 

direction by increasing funding and staffing levels in the Audit Division 

(further additions are planned for the next fiscal year). Given this recent 

action, the Commissioners should now work to determine a threshold for 

the appropriate number of Title 2 audits necessary to potentially increase 

visibility in the filing community and to deter noncompliant behavior. 

The current referral process does not effectively prioritize work across the 

FEC divisions involved with compliance and ultimately results in the 

misallocation of highly skilled Audit resources. Referrals and specific staff 

projects should be prioritized based on a single integrated set of thresholds 

approved by the Commission and applicable throughout the Divisions 

involved with compliance. 

Audit should be primarily engaged in Title 2 audits that are active priorities 

for the Commission. Generally speaking, once an audit is initiated, the FEC 

should plan to commit sufficient resources to assure an appropriate 

compliance outcome. Audits that generate referrals to PFESP, which 

subsequently are not considered for potential enforcement action reflect a 

pattern of ineffective resource allocation. The FEC must either establish the 

means to create adequate enforcement outcomes for Title 2 referrals or else 

reassess the purpose of the Title 2 program. 

The Audit Division could be restructured to incorporate all functional 

responsibilities for the Title 2 program. For example, legal staff could be 

assigned to audit teams, perhaps on a rotational basis, and the Audit 

Division would assume greater responsibility and accountability to 

complete each enforcement action. The OGC would primarily be involved 

with providing quality assurance for the attorneys assigned to Audit. The 

intent here is to consolidate the responsibilities associated with conducting 

Title 2 audits and enforcement actions in order to achieve the following 

objectives: 

  Streamline the Title 2 audit/enforcement process by eliminating 

unnecessary handoffs between organizational units (e.g., reduce or 

eliminate the need for formal legal comments from OGC, immediate 

responsiveness with regard to writing subpoenas) 

  Involve attorneys early in the process so that they become familiar with 

relevant Audit issues and can quickly offer legal guidance as needed 

  Develop cross-disciplinary expertise between attorneys and auditors 

  Ensure that each Title 2 audit results in a distinct outcome 

  Enable the administration of a civil penalty schedule for routine Audit 

referrals (see improvement opportunity 421) 

Page 456 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

In order to explore this vision of a combined Title 2 audit and civil 

enforcement program, the FEC will need to establish a team of Audit and 

OGC staff to further deliberate and plan this new environment. 

The FEC might also consider innovative approaches to specialization and 

project planning in order to maintain an adequate and consistent level of 

Title 2 audits. This initiative could include exploring specialized teams of 

auditors who primarily focus on Title 2 audits or Title 26 audits. By 

analyzing utilization patterns and specific work cycles, staff work could be 

appropriately scheduled to eliminate downtime and maximize project 

consistency. This could free up some audit resources by reducing 

disruptions in the workflow that currently create inefficiencies. For 

example, when auditors routinely switch between different committees and 

types of audits, they must expend valuable time to refamiliarize themselves 

with the audit work and issues. 

Another alternative approach to conduct more Title 2 audits involves 

limiting the scope of the audits. Limited-scope audits would require less 

resources and have shorter cycle times. The decision to implement limitedscope audits for cause will partially be a philosophical one. The issue boils 

down to whether more audits focused in specific areas are better than fewer 

audits with a broader range.42 Audit management has suggested that being 

constrained to look only at the flags generated through the referral process 

would detrimentally affect findings. However, a more thorough cost-benefit 

analysis tied to specific outcomes that the FEC hopes to achieve with Title 2 

audits would inform this decision. 

In addition, more referrals could be subject to audit if the Congress 

extended the statute of limitations from six months to one year. This 

extension would allow the FEC more time to coordinate its Audit staff to 

initiate more Title 2 audits, thus increasing coverage to a greater number of 

potential violators. However, even if this time period is extended, all audits 

for cause should still be completed, as a general rule, prior to the date of 

the following general election. 

Process inefficiencies that affect Title 2 audits appear to be unique to the 

campaign environment. The Audit Division is well managed to produce 

42One issue with incorporating limited-scope audits into the Title 2 program is that, 

historically speaking, the flags from the current RAD referral process do not routinely 

correspond to the findings. This should be factored into both redesigning the referral 

process and the philosophical decision regarding the use of limited-scope audits to achieve 

some desired outcome. 

PricewaterhouseCoopers LLP Page 457 
Management Review of the Federal Election Commission 

discrete outputs and meet deadlines. However, the staff operates in a 

campaign environment that creates certain unavoidable inefficiencies: 

  Auditors often have to either use manual schedules to analyze financial 

data or input the data into software applications for audit testing. No 

statutory regulations require committees to submit their financial data 

through electronic media, as is the case with Title 26 audits. Even 

though many committees keep their records using a form of electronic 

media, they often do not voluntarily make electronic submissions that 

would help the auditors do their job. 

  Audit programs are difficult to streamline because Commissioners 

demand high degrees of precision and have low tolerance for error. As 

a result, an audit program frequently increases in length as it is 

modified. 

  Auditors operate in an environment that has been likened to “auditing 

in a fishbowl.” Many interested parties are watching the FEC and want 

to know that each campaign and committee is evaluated against 

identical criteria and subject to the same analytical interpretation. 

  The postaudit reporting phase involves a lengthy process that has 

multiple reviews among numerous Divisions, as well as waiting periods 

for auditee responses. Commissioners’ reviews also take time, but help 

to informally create leadership involvement. 

The Audit Division has proactively made improvements to its internal 

processes. Auditors use e-mail to send documents, reports, and 

communications when out in the field. Field staff use PCs with spreadsheet, 

word-processing, database, and sampling applications. They are able to 

connect to the FEC home network to search specific reports and get 

information. They have developed standard in-house electronic workpapers 

for easy access and also maintain hardcopy workpapers, correspondence, 

and reports on file. 

The FEC has also adopted improved audit techniques, such as sampling, to 

increase Audit staff efficiency. Auditors use dollar unit sampling to test a 

large population of transactions. 

The Audit Division maintains an extensive and informative MIS timereporting system. Audit management actively tracks the status of each 

project and monitors individual staff hours per audit phase. Although Audit 

does collect a great deal of data, they do not routinely defer to the 

management information at hand for decision-making purposes. This is, in 

part, a result of the fact that information is gathered according to numerous 

reporting cycles and reported in a variety of hard-to-use formats. 

Page 458 PricewaterhouseCoopers LLP 
 

Management Review of the Federal Election Commission 

4.3.3 Office of the General Counsel 

The Office of the General Counsel (OGC) is the largest organizational unit 

of the FEC. During FY 1998, OGC maintained an average level of 99 FTEs, 

representing 34 percent of the FEC total staff authorization and 29 percent 

of the Commission’s FY 1998 appropriation of $30.9 million. 

The General Counsel is one of three statutory officers appointed by the 

Commission and is responsible for directing the agency’s enforcement 

activities, representing and advising the FEC in legal actions brought before 

it, and serving as the Designated Agency Ethics Official. The Office of the 

General Counsel handles all civil litigation, including Title 26 Presidential 

public funding cases that come before the U.S. Supreme Court. OGC also 

drafts Advisory Opinions and regulations for Commissioner consideration, 

as well as other legal memoranda interpreting Federal campaign finance 

laws. 

Four Associate General Counsels supervise organizational sections divided 

along the following functional lines: 

  Public Financing, Ethics, and Special Projects (PFESP) 

  Enforcement 

  Policy 

  Litigation 

  Other (the General Counsel and nonsupervisory support staff) 

Exhibit 422 depicts the organization of OGC, with FTEs associated with 

each section as of the end of FY 1998. Exhibit 423 shows the allocation of 

OGC staff among functions at the end of FY 1998. Total OGC personnel 

grew by nine during FY 1998 and will continue to grow in FY 1999. 

PricewaterhouseCoopers LLP Page 459 
Management Review of the Federal Election Commission 

Exhibit 422 

Office of the General Counsel 

With Full-Time-Equivalent Staffing 

Assc. General 

Counsel 

Enforcement

 (5) 

Assc. General 

Counsel 

Policy

 (2) 

Assc. General 

counsel 

Litigation

 (3) 

Assc. General Counsel 

Public Finance, Ethics, 

Special Projects

 (4) 

Library

 (2) 

Team 2

 (6) 

PFESP Docket

 (3) 

Team 1

 (7) 

Enforcement 

Team 2

 (10) 

Enforcement 

Team 3

 (8) 

Enforcement 

Team 4

 (10) 

Central 

Enforcement 

Docket

 (6) 

Legal Review 

Administrative Law

 (4) 

Enforcement 

Team 1

 (11) 

Advisory 

Opinions and 

Legal Review -

FECA

 (2) 

Regulations

 (6) 

District Court Litigation

 (11) 

Appelate Court Litigation

 (2) 

General Counsel

 (7) 

Source: FEC Staffing Report September 25, 1998. 

Page 460 PricewaterhouseCoopers LLP 
 

Management Review of the Federal Election Commission 

Exhibit 423 

Allocation of OGC FTE Resources for FY 1998 

OGC Staff TOTAL Enforcement PFESP Policy Litigation Other 

Attorneys 63 28 13 10 11 1 

Paralegals 18 10 4 2 2 0 

Investigators 2 2 0 0 0 0 

Ethics 1 0 1 0 0 0 

Library 2 0 0 0 0 2 

Secretaries 12 5 2 2 2 1 

Administrative 10 4 0 0 1 5 

TOTALS 108 49 20 14 16 9 

Source: FEC FY 2000 Budget Justification, Table 11, November 16, 1998. 

4.3.3.1 Overview of the Enforcement Process 

As depicted by Exhibits 424 and 425, the entire enforcement process has 

12 primary decision steps, 8 of which require Commissioner approval.43 

Exhibit 424 illustrates the potential steps and levels of review that could 

occur throughout the enforcement process. 

43 The scope of this review does not include issues related to the interpretation of FECA; the 

enforcement process as specified under the FECA or FEC regulation; or Commissioner 

actions with respect to approving OGC enforcement, litigation, or policy or Advisory 

Opinion recommendations. However, all of these factors are interrelated and affect 

compliance and enforcement outcomes. 

PricewaterhouseCoopers LLP Page 461 
1. Complaint/Referral 

A. Complaint/Referral

Received

Sent to Respondent

Response Due

Request for Extension of Time Received

Response Received 

B. Amendment to Complaint 

Received

Sent to Respondent

Response Due

Request for Extension of Time Received

Response Received 

C. Supplement to Complaint

Received

Sent to Respondent

D. Motion to Dismiss

Received

Circulated To Commission 

E. Case Transferred

F. Case Rated 

Initial Rating

Case Re-Rated

4. Reason To Believe (RTB) Finding 

A. Commission Action on Report

B. RTB Notification to Respondent

Request for Extension Of Time Received

Response Received 

C. Preliminary Pre-Probable Cause Conciliation

(PPCC) Requested

Drafted Report With Agreement to Team Leader 

Final Report With Agreement to Team Leader 

Assoc. GC/GC Sign Report

6. Pre-Probable Cause Conciliation Concluded 

Commission Action (Approve/Reject) on Report 

7. Discovery/Investigation Authorized 

A. Discovery Planning and Approval 

Draft Discovery Due to Team Leader 

Final Subpoena Report to Team Leader 

Assoc. GC/GC Sign Report 

Commission Approves Discovery 

B. Deposition (by Witness) 

Subpoena Issued 

Scheduled 

C. Written Discovery (by Witness) 

Sent 

Request for Extension of Time Received 

Response Received 

8. Probable Cause To Believe (PCTB) Brief 

Draft to Team Leader 

Rewrite to Team Leader 

Circulate Draft to Senior Staff 

Final to Team Leader 

Mailed to Respondent 

Response Due 

Request for Extension of Time Received 

Response Received 

Draft PCTB Report to Team Leader 

Final PCTB Report to Team Leader 

Assoc. GC/GC Sign Report 

9. Probable Cause To Believe Finding 

10. Probable Cause Conciliation Approved 

Approved By Commission 

Negotiations 

Reminder Letter 

Draft of Report to End PCC to Team Leader 

Final Report to Team Leader 

Assoc. GC/GC Sign Report 

2. Case Activated 

or Case Deactivated 

3. First General Counsel’s Report 

Draft to Team Leader 

Rewrite to Team Leader 

Circulate Draft to Senior Staff 

Final to Team Leader 

Assoc. GC/GC Sign Report 

Circulated to Commissioners 

11. Probable Cause Conciliation Concluded

 Commission Action (Approve/Reject) on Report 

12. Case Disposition 

Dismissed 

No Reason to Believe (RTB) 

RTB/No Further Action 

Conciliation 

- Amount Of Civil Penalty 

- Respondents Included 

Suit Authorization 

5. Pre-Probable Cause Conciliation Commenced 

Approved by Commission 

Negotiations 

Reminder Letter 

Draft of Report to End PPCC to Team Leader 

Final Report to Team Leader 

Assoc. GC/GC Sign Report 

Source: FEC Enforcement Case Stages, January 1, 1998 

Management Review of the Federal Election Commission 

Exhibit 424 

Federal Election Commission 

Enforcement Process 

Page 462 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

Exhibit 425 

Enforcement Process Review Steps 

Step Enforcement Process Activity 

Commissioner 

Approval 

Required 

1 Receive Complaint or Referral No 

2 Activate or Deactivate a Case No 

3 Circulate First General Counsel’s Report to Commissioners No 

4 Find Reason to Believe Yes 

5 Commence Pre-Probable Cause Conciliation Yes 

6 Conclude Pre-Probable Cause Conciliation Yes 

7 Authorize Discovery and Investigation Yes 

8 Circulate Probable Cause Brief No 

9 Find Probable Cause to Believe Yes 

10 Commence Probable Cause Conciliation Yes 

11 Conclude Probable Cause Conciliation Yes 

12 Dispose of Case by Commissioners Yes 

Cases enter the enforcement process through either internal or external 

means. Internally generated cases result from the following actions: 

  Referrals from the Reports Analysis Division that have met specific 

thresholds 

  Field audits conducted for cause by the Audit Division 

  Title 26 Presidential public funding audits 

  FEC Directive Six-initiated referrals 

  Referrals from other agencies, such as the Department of Justice, that 

come across potential FECA violations during the course of other 

investigations 

  Sua Sponte submissions in which individuals or groups voluntarily 

disclose to the FEC the facts of a violation that has occurred on their 

part 

Externally generated matters arise from complaints filed by individuals or 

groups alleging violations of FECA or FEC regulations. 

Central Enforcement Docket. Whether internally or externally generated, 

cases are received by the Central Enforcement Docket (CED) or the Public 

Financing, Ethics, and Special Projects (PFESP) Docket. Internal referrals are 

assigned Matter Under Review (MUR) numbers once the Commission has 

PricewaterhouseCoopers LLP Page 463 
Management Review of the Federal Election Commission 

found the Reason To Believe. For externally 

generated complaints, complainants are notified 

of the receipt of their complaint and informed that 

the Commission will notify them again once the 

entire case is resolved. Until then, the FEC is 

required by law to keep its actions regarding the 

MUR confidential 

Within five days after receiving a complaint, OGC 

sends each respondent a copy of the complaint. 

The respondent then has 15 days to respond in 

writing, explaining why no action should be 

taken. 

Filing a Complaint 

Any person may file a complaint if he or 

she believes that a violation of the 

Federal election campaign laws or FEC 

regulations has occurred or is about to 

occur. The complaint must be made in 

writing and must comply with certain 

requirements. For example, it must 

  Provide the full name and address 

of the person filing the complaint 

(called the complainant); 

  Be signed, sworn, and notarized; 

  Clearly recite the facts that show 

specific violations under FEC 

jurisdiction; 

  Clearly identify each person, 

committee, or group who is alleged 

to have committed a violation 

(called the respondent); 

  Include any documentation 

supporting the allegations, if 

available; and 

  Differentiate between statements 

based on the complainant’s 

personal knowledge and those 

based on information and belief 

(statements not based on personal 

knowledge should identify the 

source of the information). 

Case Activation. After the 15-day response period 

has elapsed, CED processes each case through the 

Enforcement Priority System to create a relative 

ranking of case importance. Cases warranting the 

use of Commission resources are held in an 

“inactive” status. Every four to six weeks, the 

Associate General Counsel and the Enforcement 

Team Assistant General Counsels convene to 

review the pending docket in order to assign and 

activate cases to staff attorneys depending on their 

availability and skill level. A memorandum is 

provided to the Commissioners regarding which 

cases have been selected for activation. 

First General Counsel’s Report. Once a case is activated, an initial legal 

and factual analysis is provided in the First General Counsel’s Report, 

usually within 30 days of case activation. Prepared by staff attorneys, the 

report is then reviewed by an Assistant General Counsel or Associate 

General Counsel before either being submitted to the Commissioners for a 

tally vote or placed on the Commissioners’ agenda. The First General 

Counsel’s Report recites the factual and legal basis of the case and 

generally makes one or more of four threshold recommendations to the 

Commissioners for their consideration: 

  To open a Matter Under Review or decline to open a Matter Under 

Review (only for internally generated matters) 

  To find Reason To Believe or not To find Reason to Believe 

  To take no further action and close the file or open an investigation 

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  To approve the factual and legal analysis and proposed conciliation 

agreement 

Case Disposition. If the Commission finds a Reason To Believe a violation 

has occurred in filing and other simple cases, initial efforts are directed at 

attempting to reach a Pre-Probable Cause Conciliation Agreement with the 

respondents. Otherwise, an investigation is required before the Commission 

is willing to begin efforts at Pre-Probable Cause Conciliation.44 OGC 

provides a Commissioner-approved draft agreement to the respondents, and 

if agreed to, the signed document is presented to the Commissioners for 

final approval. 

If conciliation efforts fail to reach a settlement, the Commission may move 

to the next enforcement step, using its investigative authority to make use of 

depositions, interrogatories, and subpoenas. If an investigation substantiates 

a Finding of Probable Cause To Believe, OGC sends a brief to the 

respondents regarding the Probable Cause recommendation.45 

Respondents also file briefs in response to the Probable Cause 

recommendation. After reviewing the briefs of both the General Counsel 

and the respondent, Commissioners vote on whether there is Probable 

Cause To Believe that a violation has occurred or is about to occur. Four 

affirmative votes of the Commissioners are required. If the Commissioners 

decide that there is No Probable Cause To Believe, the case is closed, and 

the parties are notified. If the Commissioners determine that there is 

Probable Cause To Believe that the law has been violated, they attempt to 

correct or prevent the violation by entering into a written Conciliation 

Agreement with the respondent. 

Conciliation. If the Commission and the respondent negotiate a 

Conciliation Agreement, the written agreement becomes effective once it is 

approved by the affirmative votes of four Commissioners and signed by the 

respondent and either the Associate General Counsel or General Counsel. 

The agreement generally includes a description of the facts and the law, 

admissions of the violations by the respondent, any remedial actions that 

the respondent must take, and a provision for the payment of a civil penalty 

44 Pre-probable cause conciliation does not appear in the FECA but the Commission 

innovated the concept to speed case resolution. 

45 A General Counsel’s brief is sent to the respondent even if the General Counsel believes 

the investigation did not substantiate a finding of Probable Cause to Believe. In this case, 

the General Counsel’s recommendation to the Commissioners would be to find No 

Probable Cause To Believe. From the period of January 1, 1994, through September 30, 

1998, the Commission has disposed of only one case with a finding of No Probable Cause 

To Believe (see Exhibit 426). 

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by the respondent. If conciliation does not result in an agreement within the 

90-day period, the FEC may file suit against the respondent in Federal 

district court. 

A complainant who disagrees with the Commission’s dismissal of a 

complaint or who believes that the FEC failed to act in a timely manner 

may file a petition in the U.S. District Court for the District of Columbia 

seeking to find that the Commission’s actions were “arbitrary and 

capricious” or “contrary to law.” 

4.3.3.2 Overall Case Disposition 

During the period January 1,1994, through September 30, 1998, the 

Commission closed 1,179 cases, or roughly 21 cases per month over this 

57 month period. Exhibit 426 illustrates case disposition statistics for this 

timeframe. Of this total: 

  59 percent were dismissed 

  3 percent were found to have No Reason To Believe 

  12 percent were found to have Reason To Believe but no further action 

was taken. 

  Only one case was found to have No Probable Cause to Believe with 

no further action taken. 

  1 percent were found to have Probable Cause To Believe but no further 

action was taken. 

  22 percent of all cases resulted in a Conciliation Agreement 

  2 percent resulted in suit authorization 

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Exhibit 426 

Federal Election Commission CASE DISPOSITION 

January 1, 1994 through September 30, 1998 

ACTION 

CY 1994 CY 1995 CY 1996 CY 1997 CY 1998* TOTAL 

Cases % Cases % Cases % Cases % Cases % Cases % 

Dismissed 192 61% 120 51% 93 46% 222 74% 71 58% 698 59% 

No Reason to 

Believe 

12 4% 8 3% 9 4% 3 1% 4 3% 36 3% 

Reason to 

Believe** 

33 11% 36 15% 42 21% 19 6% 10 8% 140 12% 

No Probable 

Cause to 

Believe** 

0 0% 1 0% 0 0% 0 0% 0 0% 1 0% 

Probable 

Cause to 

Believe** 

2 1% 3 1% 5 2% 2 1% 1 1% 13 1% 

Conciliation 67 21% 65 27% 46 23% 52 17% 32 26% 262 22% 

Suit 

Authorization 

8 3% 4 2% 9 4% 3 1% 5 4% 29 2% 

TOTAL 314 100% 237 100% 204 100% 301 100% 123 100% 1179 100% 

*CY 1998 through Sept. 30, 1998 

** No further Action Taken 

Source: OCG response to PwC data request 10/6/98 

In 1995, the Commission began using an activation ratio as a more 

meaningful measure of enforcement performance. This is the ratio of active 

enforcement cases to all pending cases, where the monthly average number 

of active cases is divided by the monthly average of total pending cases in 

the enforcement and PFESP dockets. Exhibit 427 illustrates the average 

monthly active and inactive cases for the calendar year 1995 through 

September 30, 1998. 

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Exhibit 427 

Average Monthly Active and Inactive Cases 

January 1, 1995 through September 30, 1998 

Calendar Active Cases Inactive Cases Total 

Year Cases Number % of Total Number % of Total 

1995 139 47% 155 53% 294 

1996 121 44% 151 56% 272 

1997 98 33% 198 67% 296 

1998* 92 51% 90 49% 182 

* Through September 30, 1998 

Source: OGC response to PwC data request October 6, 1998. 

Activation ratios are affected by the number of enforcement personnel 

available, the number of respondents, and the seriousness and complexity 

of cases. During this 45-month timeframe, enforcement staff levels were 

limited by budgetary constraints, the number of complaints increased 

approximately 30 percent, the number of respondents increased by 155 

percent, and the Commission began pursuing cases involving complex 

cases resulting from the 1996 election cycle. 

Exhibit 428 illustrates the monthly average number of pending cases and 

the monthly average number of respondents in pending enforcement cases. 

As the data indicate, the monthly average of total pending cases has 

remained relatively constant, but the number of respondents per pending 

case has doubled. As the number 

of respondents increases per case, 

each investigative step in the 

enforcement process consumes an 

increasing amount of resources to 

move the case forward. Each of the 

12 steps in the FEC enforcement 

process, as described in Exhibit 4-

24, could be worked for each 

respondent in a Matter Under 

Review. In general, the level-ofeffort required to work each case 

has increased approximately 100 

percent from the 1995 and 1996 

average number of respondents per 

case to the average 1998 number. 

Exhibit 428 

Average Number of Respondents in Pending Cases 

January 1, 1995 through September 30, 1998 

1995 1996 1997 1998* 

Monthly Average 

Number of Total 

Pending Cases

 294 271 296 182 

Monthly Average 

Number of Total 

Respondents 

1537 1416 2071 2090 

Monthly Average 

Number of Respondents 

per Pending Case

 5.2 5.2 7.0 11.5 

*Through September 30, 1998. 

Source: OGC response to PwC data request October 6, 1998. 

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The growing number of respondents and increasing case complexity is 

beginning to exceed the enforcement capacity of the FEC. The 

Commission represents that it now “grapples with such complex legal 

matters as determining when improper coordination between a candidate 

and a labor union or corporation occurs, analyzing whether soft money is 

being used to fund contributions to Federal candidates, defining what type 

of entity qualifies as a political committee, and determining when a person 

qualifies as a member of a membership association.”46 Because of this case 

complexity and the increasing number of respondents, significant 

enforcement actions may not be activated in the future or if activated, may 

be dismissed for lack of resources. Increasing the number of enforcement 

personnel will increase case activation and closure rates. 

Other factors also appear to inhibit FEC case activation and disposition: 

Factors Internal to FEC Factors External to FEC 

 Limited investigative resources to 

conduct interviews, analyze 

nonfinancial documents, and assess 

geographically dispersed fact patterns 

 Each step in the enforcement process 

(as shown in Exhibit 424) requires 

repetitive reviews, supervisory 

concurrence, and approval. 

 Absence of workload standards and 

monitoring system to assess staff 

utilization and case progress 

 Inability to leverage third-party Federal 

investigative resources47 

 Inherent legal and factual complexity 

 Number of respondents 

 FECA-specified time frames 

 FECA requirements for Commissioner 

approval at numerous investigative 

stages 

 Respondent’s cooperation in providing 

information 

 Five-year statute of limitations 

The Commissioners have taken several steps to increase case resolution. For 

example, they 

  Sent conciliation proposals with many Reason To Believe notices to 

speed case disposition, 

  Authorized OGC to conduct more discovery through informal means, 

and to eliminate formal approval steps in order to speed case 

disposition, 

  Authorized the circulation of certain enforcement matters for tally votes, 

and 

46Federal Election Commission, FY 2000 Budget Request Justification, November 16, 1998, 

page 29. 

47The FEC has requested enforcement assistance from the Department of Justice. 

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  Authorized the use of standard civil penalty guidelines for RAD referred 

reporting-related violations in developing recommendations to the 

Commission. 

Within the last two years, OGC has begun employing a document imaging 

system to help manage large document-intensive cases. 

Improvement Opportunity 4−18: The OGC should convene an internal 

working group of enforcement staff attorneys and team leaders to develop 

recommendations for consideration by the Commissioners to reduce the 

number of internal legal reviews embedded in the current enforcement 

process. As illustrated in Exhibit 424, and echoed by interviews with staff 

attorneys and Commissioners, the number of hierarchical reviews and 

revisions at each stage of enforcement cases result in lengthy rework 

processes that slow case movement. Efforts should be directed at reducing 

the number of handoffs and levels of hierarchical reviews to get reports to 

the Commissioners in shorter time periods. 

4.3.3.3 Enforcement Priority System 

In early 1992, the Office of the General Counsel set out to develop a system 

that would enable the Commission to more effectively manage its caseload 

as part of a total quality management initiative. Although each staff attorney 

had specific work assignments, OGC had never attempted to develop 

detailed criteria for prioritizing cases on an officewide basis. As the General 

Counsel stated in his September 22, 1992, Memorandum to the 

Commission: “ ...we have become more and more dissatisfied with the 

length of time it is taking us to complete enforcement cases. As we have 

noted on many occasions, we have too many cases for too few people. 

While many of our cases need more than one staff member assigned, the 

staff resources are just not present.” 

OGC established internal teams to research, develop, and design an 

approach to systematically prioritize cases. Information was gathered from 

an internal OGC staff survey, a survey of Commissioners, reviews of 

literature on Commission proceedings, and contacts with other Federal 

agencies (such as the Securities and Exchange Commission, the Equal 

Employment Opportunity Commission and the Federal Energy Regulatory 

Commission), as well as State election enforcement agencies. 

In 1993, the Commissioners first approved the Enforcement Priority System 

(EPS) design and then approved 

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Management Review of the Federal Election Commission 

  The process to implement the new Enforcement Priority System; 

  A listing of cases for dismissal whose activity had occurred prior to 

January 1, 1989; 

  A listing of cases recommended for dismissal because their significance 

was less relevant to newly rated pending cases; and 

  The establishment of the Central Enforcement Docket as the point-ofentry for all new enforcement matters to apply the EPS screening criteria 

consistently. 

By approving the EPS, the Commissioners changed the FEC enforcement 

approach “...to focus its resources to pursue more effectively those cases 

that are likely to have the most important impact on the administration of 

the Federal election campaign system.” Referred to in the General 

Counsel’s memorandum as an “organic” system subject to circumstantial 

change, the Commissioners periodically review the EPS and approve 

revisions to its underlying subelements. 

The EPS is based on the following seven elements disclosed in January 

1994 under a Freedom of Information Act request: respondents/players, 

impact on the process, intrinsic seriousness of the violation, topicality of the 

activity, development of the law, subject matter, and countervailing 

considerations. 

In order to assess the effectiveness and fairness of the EPS, three senior 

members of the PwC project team signed confidentiality agreements with 

the FEC that allowed access to sensitive EPS documentation, including 

scoring sheets for closed cases, and a review of 20 randomly selected 

closed cases. In-depth interviews were conducted with the Enforcement 

Associate General Counsel and the staff responsible for the Central 

Enforcement Docket. 

The application of the EPS meets its original intention of allowing the 

exercise of judgment while providing sufficient structure to lessen the 

likelihood of inconsistent application. EPS appears to provide meaningful 

differentiation among cases and allows OGC and the Commissioners to 

assess a comparative ranking of top cases. No partisan bias was evident in 

the rating of cases along the seven criteria or in the assignment of points, 

nor was the weighting differentially associated with type of committee, 

whether authorized or nonauthorized, or political party. All 

Commissioners receive the complete EPS scoring sheets on all cases from 

the Central Enforcement Docket. A high level of document security and 

internal control structure surrounds the EPS process. 

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The EPS assigns points to internal referrals and external complaints that 

result in a categorization of internal referrals or external complaints into 

“tiers.” Tier rankings provides the Commission with a management tool to 

match the seriousness of a particular case to the resources available to 

undertake investigation of the matter. 

All EPS ratings are performed under the direction of the Central 

Enforcement Docket (CED). CED uses the referral or complaint, respondent 

replies, and publicly available statistical data in FEC filings to complete the 

EPS ratings for each case. CED staff also conduct activities associated with 

incoming cases, such as notifying respondents, responding to requests for 

extension of time, and receiving responses. Ranked cases are held in the 

CED on an “inactive” status, pending assignment to an enforcement team. 

Case Activation. On average, enforcement staff attorneys work three cases 

at any given time.48 Each month, the Associate General Counsel for 

Enforcement and the enforcement team leaders assess the nonactivated 

cases in inventory and select which cases to activate. In addition to the EPS 

rating and ranking, they consider the capabilities of staff with time coming 

available, the amount of available time the staff will have, and the 

Commission’s desire to enforce the full spectrum of the law. They also 

consider cases going stale which, if not activated soon, would be dropped 

because of “staleness”.49 A copy of the detailed EPS rating is provided to the 

Commissioners, who also have the complaint and responses, and access to 

the publicly available information. This information, presented on a 

monthly basis, gives the Commissioners the opportunity to evaluate case 

activation decisions. 

The Commission’s enforcement docket encompasses the broad spectrum 

of possible FECA violations to ensure compliance coverage for all areas of 

the law. Cases can range from internally generated straightforward late 

filing violations involving a single respondent to external complaints 

alleging complex and multiple violations involving numerous respondents. 

The EPS system provides preliminary case information and tracks cases up 

to the point that they are assigned to staff. At this point, the MUR Tracking 

48 For the Enforcement Section, MIS pending case status data indicate that on average, 3.4 

active cases were assigned per FTE in FY 1996, 2.8 active cases were assigned per FTE in 

FY 1997, and 2.4 active cases were assigned per FTE in FY 1998. Source: MIS Summary 

Report, September 1998. 

49Stale cases are those in which the gathering of evidence to support allegations becomes 

more difficult to develop as the case ages. In addition, staleness can also reflect cases 

whose resolution would exceed the five-year Federal statute of limitations. 

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System (MTS) captures limited input regarding assigned staff and internal 

case deadlines. 

One tier contains cases which are typically not activated because they are 

low rated. An exception to this general rule would be when the 

Commissioners vote to activate because of other matters (involving the 

committee, individual or organization subject to the complaint or referral) 

are also ongoing within the Commission. 

Another low rated tier of cases is worked to maintain the integrity of the 

FEC requirement for fair and full and timely disclosure. These cases 

typically can be worked more quickly and are assigned to new attorneys 

and attorneys with short gaps in their schedules. Very few of these cases are 

dropped for staleness. 

Some high priority cases are dropped for staleness. The longer these cases 

cannot be activated and assigned to enforcement staff, the utility of 

commencing an investigation declines until they reach a point when 

activation would in all likelihood not result in substantive closure. 

Under the EPS process, cases that are either low rated or have become stale 

are dismissed at periodic intervals. During each calendar quarter, OGC 

recommends batches of cases to the Commission for dismissal. During the 

period of January 1, 1994 through September 30, 1998, 59 percent of the 

1,179 cases considered by the FEC were dismissed. Approximately 40 

percent of the dismissals were attributed to staleness, and 55 percent were 

attributed to low EPS prioritization. The remaining cases were dismissed for 

other reasons. 

Typically, the dismissed cases have remained inactive within the Central 

Enforcement Docket for specific time periods that vary with their tier 

classification. (The thresholds are held confidential by the Commission to 

protect the efficacy of the enforcement process). As shown in Exhibit 429, 

most dismissals are attributed to EPS low rated or staleness scorings. 

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Exhibit 429

 Cases Dismissed under the Enforcement Priority System 

January 1, 1994 through September 30, 1998 

Action 1994 1995 1996 1997 1998* TOTALS 

Cases Dismissed under EPS 

 Low-Rated 128 66 34 128 32 388 

 Stale 49 54 52 79 39 273 

Other Reasons 15  7 15  37 

Total Cases Dismissed 192 120 93 222 71 698 

*Through September 30, 1998 

Source: OGC response to PwC data request October 6, 1998. 

The Commission is provided with a monthly status report of OGC 

enforcement activities that identifies cases which have been activated; 

however, the report does not state why one case was activated over 

another, or which cases have not been activated and why. The 

Commissioners do have copies of individual complaints, responses, and 

EPS rating sheets which provides the raw materials to review and question 

the bases for case activation. However, the information is not provided in 

the same useful format that OGC works from. The Commissioners do 

periodically question why a case was or was not activated and the 

Commissioners are provided a narrative summary of low rated cases 

recommended for dismissal. (Stale cases are not summarized). At least four 

Commissioners must affirmatively approve all decisions to dismiss cases. 

The Public Financing, Ethics, and Special Projects (PFESP) Section 

maintains its own rating and ranking system called EPS II which was 

developed in 1995 in an effort to further streamline OGC procedures 

related to Presidential public financing audits. PFESP handles internal 

referrals and complaint-generated matters related to Title 2 and Title 26 

audit matters. 

EPS II has tiers for ranking cases; most low rated cases are dismissed. EPS 

II gives greater weight to matters pertaining to Presidential publicly funded 

committees over Title 2 for cause matters. EPS II applies different rating 

criteria for evaluation of Title 2 committees from those of the EPS 

mechanism maintained by the Central Enforcement Docket. Enforcement 

matters may be transferred to the PFESP Docket when a case involves an 

audited committee or contains issues that overlap with a pending audit. 

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While Enforcement has closed 863 cases during the October 1, 1994 to 

September 30, 1998 period, PFESP has closed only 70 cases, according to 

MIS data.

50 As represented by the General Counsel, Conciliation 

Agreements were reached in 20 cases involving 152 respondents with civil 

penalties totaling $403,863. EPS II statistics indicate that most dismissals are 

attributed to low ratings and staleness. It appears that PFESP and Audit 

Division resources could be better leveraged by the early identification in 

the audit cycle of whether the Matters Under Review are considered low 

rated or have inherent statute-of-limitation timelines that would inevitably 

lead to dismissal. 

Improvement Opportunity 4−19: OGC should prepare and maintain 

documentation identifying why cases were selected for activation. Where 

activation decisions are not strictly based on EPS rankings, OGC should 

document the reasons why and provide them to the Commissioners. OGC 

should also provide the Commissioners with a periodic report of 

nonactivated cases pending in its inactive inventory, with a profile of 

offense characteristics. 

Improvement Opportunity 4−20: Development efforts should be initiated 

by OGC to define additional scoring criteria that estimate resource 

allocation by tier of case. The use of the case management system will 

enable OGC to track enforcement staff resources spent on each step of the 

enforcement process by case. Case resource consumption information can 

be aggregated over a period of time to correspond to each tier in EPS and 

EPS II. For example, OGC could associate a range of average costs by tier, 

similar to the average costs per Matter Under Review currently tracked by 

the detailed management information report.51 

4.3.3.4 Allocation of OGC Enforcement Resources 

During FY 1998, OGC tracked 174,773 staff hours, equivalent to 99.3 FTEs 

(1760 hours is equivalent to 1 FTE) along seven aggregated programmatic 

functions. Excluding OGC administration (supervisory and nonsupervisory 

time, approximately 47 percent of MIS reported hours were consumed by 

enforcement activities conducted by the PFESP and Enforcement Sections. 

50Unlike the CED EPS tracking system, PFESP maintains a poorly organized spreadsheet 

tracking system of cases that in some instances lacks complete information regarding case 

disposition. Based on spreadsheet data provided by PFESP docket staff on October 30, 

1998, the study team could only aggregate closed case dispositions for 41 cases opened 

and closed during this period. 

51Detailed MIS reports for FY 1997 and FY 1998 indicate that the average cost per externally 

generated Matter Under Review was $35,005 and $42,193, respectively. 

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PFESP primarily conducts legal reviews of Title 26 Presidential public 

funding audits and Title 2 for-cause audits. The Section also reviews debt 

settlement proposals and administrative terminations referred from the 

Reports Analysis Division and supports the Commission’s oversight of ethics 

policy and specific projects. 

The Enforcement Section oversees all other enforcement proceedings. It is 

further subdivided into four Enforcement Teams and the Central 

Enforcement Docket. Each enforcement team handles a diversity of cases 

ranging in origin, offense, and complexity. As indicated in Exhibits 430 

and 431, externally-generated complaints consume 82% of PFESP 

enforcement-related activity and more than 60% of the Enforcement staff 

time. Externally generated 

matters consume more 

resources dedicated to the 

investigative phases of the 

enforcement process. 

Exhibit 430 

PFESP Section Resource Allocation (FY 1998) 

PFESP Enforcement Functions Hours FTE 

Internal Referral Title 2 626 .4 

Internal Referral Title 26 Public Finance 1,554 .9 

External Complaint Title 2 2,045 1.2 

External Complaint Title 26 Public Finance 7,811 4.4 

PFESP Total Enforcement 12,036 6.8 

Source: MIS OGC Hours and FTE FY 1998, November 19, 1998. 

Exhibit 431 

Enforcement Section Resource Allocation (FY 1998) 

Enforcement Functions Hours FTE 

Debt Settlements and Administrative Terminations 898 .5 

Central Enforcement Docket 7,440 4.2 

Enforcement Policy 2,774 1.6 

External Complaint Enforcement 42,961 24.4 

Internal Referral Enforcement 15,432 8.8 

Internal Referral Presidential Enforcement 1,032 .6 

Enforcement Section Totals 70,538 40.1 

Source: MIS OGC Hours and FTE FY 1998, November 19, 1998. 

The allocation of FY 1998 

Enforcement resources 

appears to correspond to the 

mixture of internally and 

externally generated 

enforcement matters. As 

shown in Exhibit 432, the 

FEC has more cases resulting 

from complaints than from 

internal referrals. Moreover, 

as illustrated by 1994 and 

1996 data, the number of 

complaints filed during an 

election year increases 

significantly. It should be 

noted that a case filed in one 

year might not be activated 

for disposition until the 

following year. 

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Exhibit 432 

External Complaints and Referrals 

January 1, 1994 through September 30, 1998 

1994 1995 1996 1997 1998* TOTALS 

External Complaints 259 53 258 63 79 712 

Internal Referrals 97 95 56 84 32 364 

Total New Cases 356 148 314 147 111 1076 

* Through September 30, 1998 

Source: OGC response to PwC data request October 6, 1998. 

4.3.3.5 Internal Referrals 

The Central Enforcement Docket receives referrals generated by the Reports 

Analysis Division (RAD) and matters referred from other Federal agencies. 

RAD referrals are based on a point scoring system reviewed and adjusted 

after each election cycle by the Commission to focus enforcement 

resources on the more egregious violations that cover the spectrum of FECA 

prohibitions, limitations, and disclosure requirements (See discussion at 

Section 4.3.1.2). The number of RAD referrals to OGC has been decreasing 

since the 1990 election cycle because the thresholds for RAD referrals were 

raised to reduce the workload sent to OGC. In FYs 1990 and 1991, for 

instance, RAD made 112 and 243 referrals to the OGC, respectively. In FYs 

1997 and 1998, RAD made 57 and 33 referrals to OGC, respectively.52 

In general, RAD referrals represent instances of nonfiling, chronic late 

filing, and excessive contributions. A RAD analyst prepares a referral 

template that identifies the name of the political committee, the relevant 

statute, a background summary describing the potential violations, and 

supporting documentation such as a computer print-out of dates of when 

reports where filed and RAD notices sent. The Central Enforcement Docket 

receives the referral and rates it according the EPS tier rankings. 

Based on a review of 20 randomly selected cases, on average, internal 

RAD referrals move through the enforcement process in shorter 

timeframes than external complaints. But Central Enforcement Docket 

case-activation times vary widely. For instance, two nearly identical 

chronically late filer RAD referrals to OGC (made in April 1997 for 

potential violations that occurred in the 1996 election cycle) were tracked. 

One case was activated by CED within 30 days of receipt. A Conciliation 

Agreement was reached two months later. The other case was activated by 

52 MIS report October 21, 1998. 

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CED eight months later in November 1997. A Conciliation Agreement was 

not reached for another five months, fully 13 months from the date of the 

RAD referral. Both agreements levied identical civil penalties. 

Internal RAD referrals appear to be mechanical recitations of factual and 

legal circumstances. Unlike external complaints, little variation in the 

composition of the First General Counsel’s report to the Commission 

recommending opening a Matter Under Review, finding Reason To Believe, 

and approving a conciliation agreement with a civil penalty was observed. 

More than 25 percent of enforcement resources are consumed by internal 

referrals. As noted earlier, internal referrals to the CED include matters from 

the Reports Analysis Division, as well as matters referred from other Federal 

agencies or sua sponte filings. MIS data indicate that 15,432 hours, 

equivalent to 8.8 FTEs, were spent during FY 1998 on closing 48 internal 

referrals. Based on an average projected FTE rate per hour of $31.8153, close 

to $500,000 was expended on labor for working these cases to conclusion, 

or roughly $10,000 per closed internal referral. 

Improvement Opportunity 4−21: The Congress should authorize the FEC 

to establish an administrative fine system for straightforward filing and 

record-keeping-related violations within legislatively prescribed fine 

ceilings. The FEC should be allowed to specify guidelines that correspond 

to thresholds set in the Reports Analysis OGC referral and Audit point 

scoring criteria. Internal referrals from the both the Reports Analysis and 

Audit Divisions (related to Title 2 for-cause audits) should be made eligible 

for administrative fine disposition.54 

Establishment of a standard fine schedule for nondeliberate and 

straightforward reporting violations would move some reporting violations 

out of the enforcement process and allow existing Enforcement resources to 

be reallocated to more significant and complex external complaints. To 

create a unified process, the administrative fine process should be 

administered by the Reports Analysis and Audit Divisions. Further analysis 

is required to identify the specific amount of resources that could be 

reallocated from the PFESP and Enforcement Sections, but an estimate of 

four to six FTEs appears reasonable. 

53MIS report, January, 1998. 

54Amendments to the FECA would be required to institute an administrative fine system. 

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4.3.3.6 Management Information Systems 

Management Review of the Federal Election Commission 

OGC maintains a comprehensive index of deadlines, timeframes and time 

goals for specific enforcement actions and assignments. Without a formal, 

computer-based case management tracking system, it is not possible to 

verify adherence to these timeframes. The absence of an integrated 

management information system is more pronounced in the Office of the 

General Counsel, where simple case input and output measures do not 

adequately reflect the wide variety of case composition. 

OGC currently uses a manual time allocation system to account for staff 

time on case, program, and subprogram activities. But the intent of the time 

allocation system is to track hours by FTE to avoid breaching statutory FTE 

ceilings, not for performance management. Staff manually record time, 

which is then given to the Office of Planning and Management for input 

into the FEC Management Information System (MIS). MIS data reflect the 

number and percentage of pending cases, the status of activation, and 

historical averages. 

The Enforcement Section does track hours by cases, but they do not believe 

that these data are particularly accurate because of inconsistent staff record 

keeping. Moreover, the Enforcement Section does not have benchmarks to 

determine attorney capacity and to evaluate attorney workload handling. 

Interviews with OGC managers and staff confirm that time allocation 

system information and MIS data are not used for managing workloads but 

rather is primarily used for budget justifications and reporting purposes at 

the Commission level. 

In FY 1998, more than 29,000 hours (equivalent to 16.6 FTEs) were 

recorded under “General Counsel Administration.”55 Failure to apportion 

supervisory and nonsupervisory responsibilities among OGC programs 

understates the true compliance costs associated with program activities. 

OGC is in the process of implementing a case management system. In 

November 1997, the Commission awarded a contract to Law Manager Inc. 

(LMI) to modify its off-the-shelf legal management software program to meet 

the needs of OGC.56 This system presents OGC with the opportunity to 

more efficiently manage its caseload by tracking more data related to case 

characteristics and status. Increased management information will allow 

55MIS OGC Hours and FTE FY 1998, November 18, 1998. 

56As noted in the Section 1, PricewaterhousCoopers is a subcontractor to LMI, which began 

this work before GAO contracted with PwC to conduct this management review. GAO was 

informed of this potential conflict of interest prior to contract award. 

PricewaterhouseCoopers LLP Page 479 
Management Review of the Federal Election Commission 

OGC to measure accurately the amount of resources associated with 

specific case characteristics and the time associated with phases of a case. 

Building case resource profiles creates an opportunity for OGC to present to 

the Commission a case “budget” submission that estimates resources 

projected to be consumed with specific case disposition. With better case 

management information in hand, the Commission will be in a position to 

assess actions that it can take to further streamline the enforcement process. 

Improvement Opportunity 4−22: The FEC should compile an annual 

descriptive offense profile of compliance matters to better inform 

Commissioners, policy makers, and the public of emerging law 

enforcement trends [identical to Improvement Opportunity3−2]. The FEC 

represents that it seeks to enforce the full spectrum of the FECA. Creating an 

offense categorization profile would better inform Commissioners, policy 

makers, and the public of emerging or changing noncompliance patterns. 

For Commissioners, this information would help them strategically decide 

on the proportional allocation of compliance resources. For the policy 

makers and the public, it would better communicate the law enforcement 

challenges faced by the FEC and where the FEC chose to commit its 

compliance resources. 

4.4 Presidential Public Funding Findings 

Objective: “Under the Public Financing Program, the Commission seeks to: 

  Certify the eligibility of Presidential candidates and committees for Federal payments 

in a timely and accurate fashion 

  Help ensure that U.S. Treasury payments to certified committees are made accurately 

and on time 

  Promote public trust that all public monies are accounted for and expended in 

compliance with the FECA” 

Source: FEC FY 2000 Budget Request Justification, November 16, 1998. 

Every Presidential election since 1976 has been financed with public funds. 

Congress designed the public funding program to correct several problems 

perceived in the Presidential electoral process including: 

  Disproportionate influence (or appearance of influence) of the 

wealthiest contributors 

  Demands of fundraising that prevented some candidates from 

adequately presenting their views to the public 

  Increasing cost of Presidential campaigns 

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Management Review of the Federal Election Commission 

To address these problems, Congress devised a program that combines 

public funding with limitations on nonpublicly provided contributions and 

expenditures. Dollars from the $3 Federal Income Tax checkoff accumulate 

in the Presidential Election Campaign Fund to provide 

  Matching funds to qualified Presidential candidates for primaries, 

  Funds to the major parties for Presidential nominating conventions, and 

  Outright grants to the Presidential nominees for the general election. 

Based on statutory criteria, the FEC determines which Presidential 

candidate committees are eligible to receive public funds. Once a 

committee qualifies and is certified by the Commissioners, public funds are 

disbursed by the Treasury Department. To receive public funds, Presidential 

candidates must agree to the following conditions: 

  Abide by the statutory limits on contributions and expenditures 

  Maintain detailed records of their financial activities 

  Comply with the Title 26 audit requirements 

  Make repayments to the Treasury based on Commission determination 

The Audit Division administers two integral processes within the 

Presidential public funding program: certification of public funding and 

Title 26 audits. Both of these processes are primarily executed by the Audit 

staff with assistance from the Office of the General Counsel for coordinating 

legal review and concurrence of matching fund certification, as well as 

addressing any legal issues that arise from Title 26 audits. 

4.4.1 Certification of Public Funding 

Under the FECA, the Commission is required to determine whether 

candidates meet certain eligibility criteria and to certify candidates eligible 

to receive public funds. The public funding program essentially involves 

processes for the certification of primary matching funding, convention 

funding, and general election grants. 

Primary Matching Funds. The certification of primary matching funds 

begins with eligibility certification. Primary election candidates seeking 

matching funds submit a Letter of Agreements and Certifications. This letter 

is a contract with the Government in which a candidate promises to 

comply with the law and an FEC audit in exchange for public funding. A 

candidate’s “threshold submissions” may accompany this letter as well. 

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Management Review of the Federal Election Commission 

Threshold submissions include documentation of individual contributions 

up to $250 each. Candidates can first send in threshold submissions to 

establish their eligibility during the year before the election. Candidates 

seeking their party’s nomination to the Presidency qualify to receive 

matching funds by raising more than $5,000 in each of 20 states (i.e., a sum 

of individual contributions no more than $250 each that totals over 

$100,000). The first matching payments are then made in January of the 

election year. 

The FEC requires participants in the Presidential public funding program to 

submit contribution information through electronic media in order to 

expedite the certification and disbursement of matching funds. Data 

Systems makes hardcopy printouts of the threshold submissions for use in 

Audit, which reviews all threshold submissions with zero tolerance for 

error. The Deputy Assistant Staff Director of Audit manages this process 

with a few temporary staff who: 

  Verify that each check is matchable by State, based on statutory criteria; 

  Verify that contributor information is adequate (i.e., includes name of 

contributor, occupation, and correct signature); and 

  Analyze threshold submissions for any unusual patterns or trends. 

Audit staff follow standard review procedures for threshold submissions to 

verify that the requests meet the necessary standards of matchability. This 

process is actually repeated twice by a another staff person, reviewed by 

the Deputy Assistant Staff Director, and then reviewed once again in a 

referencing process by an available auditor. In addition, the Deputy 

Assistant Staff Director identifies apparent trends using Data Systems 

printouts that sort the threshold submissions based on a variety of single 

variables. 

If the candidate submits all appropriate documentation and meets the 

necessary requirements, Audit prepares an eligibility report for the 

Commissioners. Upon report approval, Audit drafts a letter to the Treasury 

Department approving the disbursement of funds. Audit proactively works 

with candidates to help them become eligible for primary matching funds. 

Once the Commission determines that a candidate has met the eligibility 

criteria, he or she may submit monthly contributions up to $250 from 

individuals for matching. Presidential candidates and committees are also 

required to provide electronic media for all matching submissions. After 

eligibility certification, Audit staff rely on a sample of committee 

submissions (created by Data Systems from the candidate’s electronic 

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Management Review of the Federal Election Commission 

media) to determine the appropriate amount that is matchable. Audit uses 

reject codes to indicate why specific submissions within the sample were 

not matchable. If a sample has too many erroneous submissions, the entire 

request for matching funds can be rejected that month. Once Audit 

determines that an amount is matchable, it recommends how much to 

certify for Commission approval. Upon Commissioner approval, the FEC 

issues a letter to Treasury for the actual disbursement of funds. 

Convention Funding. The certification of convention funding involves a 

grant process that takes only a few days and occurs once every four years. 

The Treasurer or President of the convention committee sends a Request for 

Funds letter to the FEC. Audit reviews the letter, works with the committee 

to make any necessary revisions, and makes a recommendation to disburse 

funds. The letter is forwarded to OGC for legal analysis. Audit incorporates 

any feedback from OGC into a report for the Commissioners. The 

Commissioners generally vote within 24 hours to approve the funding, and 

a letter is drafted and forwarded to Treasury. 

Each major party is entitled to a public grant of $4 million (based on 1976 

statutory formula plus a cost-of-living adjustment) to finance its Presidential 

nominating convention. In 1996, each major party received approximately 

$12 million. A qualified minor party (a party whose Presidential candidate 

received between 5 and 25 percent of the vote in the preceding election) 

may become eligible for partial convention funding based on its 

Presidential candidate’s share of the popular vote in the preceding election. 

New parties are not eligible for convention funding. 

General Election Grants. As soon as the Presidential and Vice Presidential 

candidates are nominated by the parties, they immediately send a signed 

Nomination letter to the FEC to begin the certification for general election 

funding. Audit and OGC simultaneously review the letter to make sure that 

it satisfies all of the necessary requirements. Audit will work with the 

candidates to quickly identify any information that may have been 

neglected and correct the situation. Once the letter is accepted, Audit 

prepares a Grant Eligibility Report. The Commissioners immediately vote, 

and if they approve the funding, a letter is drafted and transmitted to 

Treasury certifying payment. This entire process takes only a few hours. 

4.4.2 Title 26 Audits 

The Presidential election audits, also known as Title 26 audits, cannot begin 

until the Presidential candidate either drops out of the Presidential race or is 

forced to discontinue by statute (not receiving enough votes in the primary 

elections) or the general election has been completed. The intent of this 

PricewaterhouseCoopers LLP Page 483 
Management Review of the Federal Election Commission 

policy is to avoid interference with the candidate’s election schedule by 

creating negative publicity that may occur in the course of an audit. The 

audit will not commence until a candidate is completely out of the race and 

the FEC is at no risk of affecting the outcome of an election. 

As shown in Exhibit 433, Title 26 general election and primary audits cost 

significantly more than Title 2 for cause audits because they require more 

technical steps. Presidential campaigns are 

  Nationwide and involve millions of dollars, 

  Subject to state limits for primary elections, 

  Subject to limits for certain types of expenditures and contributions, and 

  Subject to qualified campaign expense determinations. 

Exhibit 433 

Average Hours and Costs of Title 2 and Title 26 Audits 

Type of Audit Average Hours Average Costs 

Title 2 for cause (Authorized committee) 1,480 $37,000 

Title 2 for cause (Unauthorized committee) 2,125 $54,000 

Title 26 General Election 5,290 $142,000 

Title 26 Post Primary 5,085 $127,000 

Source: FEC Audit Division MIS data. 

From the beginning of the Presidential public funding program, the FEC has 

been criticized over the timeliness with which it completes its Presidential 

audits. Again, as illustrated in Exhibit 433, the average hours spent 

conducting a general election or primary audit exceeds 5,000 hours, or the 

equivalent of more than 2.8 FTEs per audit. For the 1996 Presidential 

election, for example, the Audit Division performed three general election 

audits and 11 primary election audits.57 

For Title 26 audits, auditors make sure that once a candidate or committee 

receives public funds, the candidate or committee complies with all 

applicable limits on expenditures and contributions. In most instances, 

distinguishing between primary or general election contributions and 

expenditures complicates these audits. For example, the way a donation is 

57In addition, the Audit Division executed Presidential campaign committee General Election 

Legal and Compliance Fund audits and five convention funding-related audits. 

Page 484 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

attributed requires analysis to identify where and when it was made and by 

whom. 

Presidential audits receive a high degree of public scrutiny because they 

can result in Commissioner-ordered repayments of public funds. If Audit 

staff make a determination that repayments are warranted, they must also 

consider whether the matter in question applies to other Presidential 

committees. If Audit staff propose a finding that is inconsistently applied, 

other committees may seek redress. Everyone is looking at every issue, and 

Audit staff defend their findings all the way through the audit process right 

up to Commissioner consideration. 

In order to improve the timeliness of Presidential audits, the FEC has 

accorded Presidential audits higher priority over all other FEC audits. FEC 

directives require that all Presidential campaign election audits must be 

completed within two years of the date of the general election. 

The postaudit/reporting stage is a lengthy process that has many reviews 

with different Divisions and waiting periods for the auditee. In the 

Presidential audit cycle, the FEC successfully restructured this stage to 

eliminate some of the review processes and waiting periods in order to 

meet the Commission’s two-year deadline to complete all Presidential 

audits. The Exit Conference Memorandum (ECM) used in Title 26 audits 

reduces the formal involvement of Commissioners in the production of 

audit reports. However, even within the new ECM process, informal and 

formal reviews by OGC of the ECM and the Final Audit Report represent 

handoffs that require staff to spend additional time learning and deciphering 

issues. 

Although using the ECM speeds the entire audit process, it also allows the 

public to officially access the Final Audit Report at the same time as the 

Commissioners. Once the Final Audit Report is forwarded to the 

Commissioners in open session, it may take several sessions to come to a 

final vote on the Report. Commissioners, OGC, and the Audit Division 

review and discuss the Report. The Audit Division and OGC often have to 

revise Audit Reports and make changes depending on the outcomes of 

Commissioner meetings. 

During the 1992 election cycle, more than $43 million of public funds 

were disbursed to the Presidential candidates and approximately $2.2 

million were repaid by candidates as a result of Title 26 audits. The cost to 

conduct the audits for the Presidential primary candidates, the general 

election, and the convention committees during the 1992 election cycle 

PricewaterhouseCoopers LLP Page 485 
 

Management Review of the Federal Election Commission 

was approximately $2.1 million. Thus, the amount of repayments was 

nearly equal to the cost of the audits. 

4.5 Election Administration 

Objective: “Through the Office of Election Administration, the agency will: 

  Carry out its statutory responsibilities under the National Voter Registration Act 

(NVRA) to help improve the national level of voter registration 

  Help ensure that state and local election officials receive informational and 

educational assistance in administering Federal elections in an efficient and effective 

manner 

  Foster public confidence in the fairness and reliability of the polling process in Federal 

elections.” 

Source: FEC FY 2000 Budget Request Justification, November 16, 1998. 

Although part of the FEC, the Office of Election Administration (OEA) does 

not focus on campaign finance issues but rather assists State and local 

election officials by responding to inquiries, publishing research, and 

conducting workshops on all matters related to election administration. The 

OEA also answers questions from the public and briefs foreign delegations 

on the U.S. election process, including motor-voter registration and voting 

statistics 

OEA is comprised of five staff: a Director, a Deputy Director, and three 

research specialists. OEA has no support staff on a regular basis but 

employs a temporary administrative assistant. The staff is cross-trained to 

cover absences caused by frequent travel. OEA’s international work is high 

level and policy-oriented. The Office resembles a library, with many paper 

reports and books filed in shelves along the walls. 

OEA programs are divided into the two major areas of Continuing 

Operational Programs and Intermittent Research Projects. Continuing 

Operational Programs encompasses statutorily mandated tasks under the 

FECA, of the National Voter Registration Act (NVRA), and Voting Systems 

Standards (VSS) as well as such traditional programs and publications as 

Clearinghouse Advisory Panel meetings, community outreach through 

speaking engagements and conferences, the FEC Journal on Election 

Administration, and the Election Case Law publication. 

Intermittent research projects comprise those tasks that are not mandated by 

statute, but are authorized by law and assist OEA in meeting its statutory 

mandate. These research projects include updating the Ballot Access and 

Innovation in Election Administration series and producing such 

Page 486 PricewaterhouseCoopers LLP 
 

 

Management Review of the Federal Election Commission 

publications as Absentee Voting, Training Election Officials, and 

Organizing Election Offices. 

OEA produces many products each year. During 1997, it completed its 

second report to Congress on the implementation of the National Voter 

Registration Act (NVRA), the “ motor-voter” law. This report, The Impact of 

the National Voter Registration Act of 1993 on the Administration of 

Elections for Federal Office, 19941996, contained an analysis of the 

NVRA’s impact and recommendations for improving the administration of 

the Act. 

Another 1997 OEA publication  Developing a Statewide Voter 

Registration Database  detailed how State election administrators can 

assist and support local election offices by developing an integrated 

Statewide voter registration database. OEA also released new editions of 

two series: Election Case Law ’97 and the Journal of Election 

Administration, Vol. 18. The case law update summarized court decisions 

on selected election administration topics through December 1996. The 

Journal examined systems of representation, including Illinois’ experience 

with cumulative voting and a discussion of how alternative systems of 

representation can be used as voting rights remedies. 

Although one of OEA’s main responsibilities is to respond to inquiries, it 

does not have an automated tracking system. The OEA proposes to image 

all files to facilitate file and retrieval capabilities and seek ways to make its 

research easier to access. Some OEA data exist on the FEC Web site such as 

voter registration, election turnout figures, a graph of trends, a synopsis of 

the NVRA report and tables, and the election office directory. 

The OEA relationship with the rest of the FEC is sound, although there is a 

perception that other Divisions and the Commissioners view OEA as a 

research and development function  independent of and not connected 

to the FEC mission concerning campaign finance. 

PricewaterhouseCoopers LLP Page 487 
5.0 

Summary of Recommendations 
Management Review of the Federal Election Commission 

5.0 Summary of Recommendations 

Sections 3 and 4 of this report contain 33 opportunities for improvement to 

increase overall FEC performance. They range from incremental short-term 

changes that could be implemented entirely by the FEC, to significant and 

long-term changes that require Congressional action. This section narrows 

the universe of opportunities to a targeted list of 21 recommendations that 

will yield the largest sustainable increase in FEC performance. In general, 

three overarching themes are presented. 

First, the Congress and the FEC need to initiate actions that will eventually 

allow the FEC to shift some resources from its disclosure activities to its 

compliance programs through the following means: 

  Develop a comprehensive, mandatory electronic data filing system for 

the major filers in conjunction with a significant business process 

reengineering effort throughout the FEC 

  Redesign disclosure processes, using industry standard database 

software, and realign disclosure organizational units to improve 

processing time, accuracy, and cost 

  Monitor compliance with the FECA through a computer-based 

exception reporting system to verify transaction accuracy, content, and 

disclosure thresholds 

Second, consideration of further increases in enforcement staff levels should 

be linked with implementation of activities to increase compliance and 

enforcement productivity in the following ways: 

  Move nondeliberate and straightforward reporting violations such as 

failure to meet reporting deadlines away from the enforcement process 

and into an administrative fine system which will allow enforcement 

resources to focus on more significant violations 

  Establish workload and performance standards for all compliance 

matters to better allocate and manage available resources 

  Aggregate data about compliance matters by descriptive offense 

category to better coordinate screening criteria and to prioritize 

compliance resources for the strategic outcomes desired by 

Commissioners 

  Reassess the roles and responsibilities within the Office of the General 

Counsel to reduce staff time consumed in repetitive legal reviews of 

PricewaterhouseCoopers LLP Page 51 
Management Review of the Federal Election Commission 

enforcement matters and to harmonize the reports review and auditscreening criteria referrals to expedite case activation 

Third, the organization needs to renew itself by conducting a broad range 

of organizational development activities to strengthen leadership and 

accountability, to enhance human resource management, and to nurture 

increased communication and collaboration throughout the organization. 

Exhibit 51 identifies four recommendations that require Congressional 

authorization to improve FEC capabilities and provide the foundation to 

implement further FEC managed actions to streamline disclosure processes 

and reallocate compliance resources. Recommendation timeframes identify 

the election cycle for which these amendments should be made effective. 

Exhibit 51 

Recommendations Requiring Congressional Action 

Recommendation Timeframe Report 

Citation 

1. Authorize mandatory electronic filing for major filers. 

Electronic filing offers the most cost-efficient and effective 

method to capture campaign finance transactions. FEC 

needs legislative authority to require committees, which 

meet FEC-determined thresholds of financial activity, to 

file reports electronically by a date certain. 

For the 

2002 

election 

cycle 

4.2.6 

2. Standardize reporting on an election-cycle basis 

(campaign-to-date basis), rather than a calendar-year 

basis. Standardized reporting periods on an election-cycle 

basis would simplify candidate committee recordkeeping, reduce the number of filing errors requiring 

RFAIs, and increase the usefulness of the disclosure 

database. 

For the 

2002 

election 

cycle 

4.2.5 

3. Transfer the point-of-entry for Senate candidate 

committee reports to the FEC. The FEC must maintain 

separate and costly filing, imaging, and document 

retrieval processes to accommodate Senate filings. 

Establishing the FEC as the single point-of-entry for filings 

would reduce FEC costs and increase the timeliness of 

filing and compliance notices. 

For the 

2000 

election 

cycle 

4.2.7 

4. Authorize the FEC to establish an administrative fine 

schedule, subject to reasonable appeal procedures, for 

straightforward disclosure violations. Moving these 

violations out of the formal enforcement process would 

allow the more efficient and effective use of enforcement 

resources for activating and resolving more significant 

matters under review. 

For the 

2000 

election 

cycle 

4.3.3.5 

Page 52 PricewaterhouseCoopers LLP 
 

Management Review of the Federal Election Commission 

Exhibit 52 identifies six recommendations to improve the FEC disclosure 

program. Recognizing that the FEC is fully occupied with day-to-day 

operational requirements, implementation assistance from outside sources 

may be required. An estimate for that assistance is identified under 

“Approach.” Recommendation timeframes identify the fiscal year in which 

implementation should be initiated. 

Exhibit 52 

Recommendations for FEC Action: Disclosure 

Recommendation Approach Timeframe 

Report 

Citation 

5. Enforce the use of standard filing guidelines and 

forms for the entire regulated community during 

the transition to electronic filing. Standardizing 

how forms and amendments to forms are submitted 

and requiring the submission of all disclosure 

information in a typeface format would improve the 

disclosure and reports review processes. 

Will require 

Notice of 

Proposed 

Rule Making 

FY 

1999 

4.2.1 

6. Set up Internet connections on several PCs in 

the Public Records Division so that the public can 

access the FEC Web page. This step enhances 

resources available in Public Records. 

Minimal 

Data Systems 

support 

FY 

1999 

4.2.1 

7. Engage in intraprogram and interprogram Ongoing FY 4.2.9 

management-planning activities to improve work with 1999 

resource utilization and to enable process business 

efficiencies. Increased emphasis on management process 

planning will support improvements in disclosure maps as a 

productivity. baseline 

8. Realign resources in Disclosure and in Data 

Systems coding and entry into a single disclosure 

process with one accountable manager. 

Consolidating the disclosure process from two 

divisions into one with a single manager will 

increase accountability and streamline disclosure 

process functions and resources. 

Three 

months 

developing 

consolidation plan 

($50,000 for 

facilitation 

support) 

FY 

2000 

4.2.4 

9. Work with internal and external user groups to Six months FY 4.2.8 

determine modernization requirements for the to design 2000 

existing disclosure database. Beginning to assess ADP strategy 

internal and external user requirements will ($500,000 

accelerate the move away from DB1032 to a for database 

relational database and thereby strengthen the design 

disclosure and reports analysis processes. support and 

acquisition) 

PricewaterhouseCoopers LLP Page 53 
Management Review of the Federal Election Commission 

Exhibit 52 

Recommendations for FEC Action: Disclosure 

Recommendation Approach Timeframe 

Report 

Citation 

10. Transition to a paperless disclosure and reports 

review process. During the transition period to an 

electronic filing environment, the FEC will need to 

support existing and new disclosure and reports 

review processes. For example, the Reports 

Analysis Division requires a business process 

reengineering (BPR) study to design an electronic 

reports review and exception reporting system. 

(Dependent on Congressional authorization to 

require mandatory electronic filing with a date 

certain.) 

Six months 

to design 

and 

document 

system 

requirements 

($500,000 

for BPR 

study) 

FY 

2001 

3.3.10 

4.2.3 

Exhibit 53 identifies five recommendations to improve the FEC 

compliance program. Recognizing that the FEC is fully occupied with dayto-day operational requirements, implementation assistance from outside 

sources may be required. An estimate for that assistance is identified under 

“Approach”. Recommendation timeframes identify the fiscal year in which 

implementation should be completed. 

Exhibit 53 

Recommendations for FEC Action: Compliance 

Recommendation Approach Timeframe 

Report 

Citation 

11. Prepare and maintain documentation 

supporting EPS case-activation decisions. This 

step will increase the transparency and 

accountability of OGC case-activation decisions. 

Two months FY 

1999 

4.3.3.3 

12. Compile an annual descriptive offense profile 

of compliance matters to better inform 

Commissioners, policy makers, and the public 

about emerging law enforcement trends. To 

undertake this project, the FEC will need outside 

assistance from other Federal law enforcement 

statistics agencies and a contractor to design a 

database (in conjunction with the case 

management system) and to code closed cases. 

Eight months 

to research, 

design, 

automate, and 

code closed 

cases 

($250,000) 

FY 

1999 

3.3.4 

4.3.3.6 

Page 54 PricewaterhouseCoopers LLP 
Management Review of the Federal Election Commission 

Exhibit 53 

Recommendations for FEC Action: Compliance 

Recommendation Approach Timeframe 

Report 

Citation 

13. Convene an internal OGC working group to 

develop recommendations for consideration by 

the Commissioners to reduce the number of 

legal reviews embedded in the enforcement 

process. This effort will speed Commissioner 

consideration of enforcement case stages. 

Four months FY 

2000 

4.3.3.2 

14. Complete the case management system and 

use the workflow and staff utilization data to 

establish enforcement workload standards. After 

the system has tracked cases throughout FY 1999, 

a baseline set of metrics should guide the 

development of these standards. 

Twelve 

months 

FY 

2000 

4.3.3.6 

15. Assign dedicated resources to establish a 

single Title 2 audit-for-cause process in the Audit 

Division independent of Title 26 audit resource 

requirements. Conducting a predetermined 

threshold number of audits for cause is necessary 

to enhance visibility in the filing community and 

to deter noncompliant activities. 

Additional 

Audit Division 

personnel 

FY 

2001 

4.3.2.4 

Exhibit 54 describes six recommendations to enhance FEC organizational 

capacity. 

Exhibit 54 

Recommendations for FEC Action: Organizational Development 

Recommendation Approach Timeframe 

Report 

Citation 

16. Select a permanent Staff Director tasked to 

improve overall organizational performance. The 

FEC now has the opportunity to select a permanent 

Staff Director who can help renew the 

organization. FEC Commissioners should consider 

retaining an executive-recruiting firm to validate 

the candidate list for their consideration. 

Two months to 

identify 

candidates 

($50,000 for 

candidate 

validation) 

FY 

1999 

3.3.6 

17. Establish annual performance objectives for 

the Staff Director and the General Counsel. To 

establish and maintain organizational 

accountability, Commissioners need to 

communicate desired organizational achievements 

to both statutory officers and delegate authority to 

execute tasks. 

Three months 

to establish 

performance 

criteria 

FY99 3.3.6 

PricewaterhouseCoopers LLP Page 55 
 

Management Review of the Federal Election Commission 

Exhibit 54 

Recommendations for FEC Action: Organizational Development 

Recommendation Approach Timeframe 

Report 

Citation 

18. Encourage more collaboration and 

communication among existing work groups. The 

Staff Director should convene regularly scheduled 

meetings to increase cross-divisional 

communication and collaboration and to review 

management information system performance 

data. 

Minimal FY

1999 

3.3.5 

19. Develop a new performance appraisal process 

for managers. A pilot project should be initiated, 

using an upward feedback system, to ensure that 

FEC managers have put into practice those 

behaviors that foster communication and 

ownership of problems and reward innovation. 

Six months to 

research,

develop, and 

administer 

pilot survey 

($50,000) 

FY 

1999 

3.3.7 

20. Explore alternatives to the Federal General 

Service classification system. Alternatives to the 

current use of the Federal GS classification system 

should be explored as a means to increase 

promotional opportunities and provide a more 

flexible compensation system. 

Four months to 

research and 

investigate 

options, with 

OPM support 

FY 

1999 

3.3.11 

21. Conduct customer satisfaction surveys after an 

election cycle to understand expectations and 

measure changes in filer satisfaction with the 

products and services provided by the FEC. Using 

the baseline findings provided in this report, 

regular surveys will allow FEC to discontinue 

services that have diminishing value, to better 

understand the needs of the filing community, and 

to better deploy FEC resources. 

$75,000 each 

election cycle 

FY 

2001 

3.3.3 

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6.0 FEC Comments 

The FEC was provided a draft of the report on January 15, 1999, and invited 

to comment. Their response, dated January 21 (beginning on the next page) 

is included in its entirety. 

The page number references in their response are to the draft report. While 

there was no major revision to the report, most of the page references are 

different because of editing to improve readability, page layout changes, 

development of final graphics, and revisions to the text. These latter 

revisions were in response to technical comments on minor points of fact 

by FEC as well as the study team’s further analysis of the FEC and its 

processes. 

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