Interim Audit Report of the 

Audit Division on the 

Democratic Executive 

Committee of Florida 

January 1, 2007 - December 31, 2008 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political conmiittee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act.' The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Future Action 

The Conmiission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

About the Committee (p. 2) 

The Democratic Executive Conmiittee of Florida is a state party 

committee headquartered in Tallahassee, Florida. For more 

information, see the chart on the Committee organization, p.2. 

Financial Activity (p. 2) 

Receipts 

o $ 1,381,039 Contributions from Individuals $ 1,381,039 

o From Other Political Committees 379,860 

0 From Affiliated/Other Party 

Committees 20,465,884 

o Transfers from Non-federal Account 2,037,583 

o All Other Receipts 516,180 

Total Receipts $ 24,780,546 

Disbursements 

o Operating Disbursements $ 12,999,529 

o Federal Election Activity 11,409,932 

0 Other Disbursements 288,438 

Total Disbursements $ 24,697,899 

Findings and Recommendations (p. 3) 

• Excessive Coordinated Party Expenditures (Finding 1) 

• Failure to Itemize Coordinated Party Expenditures on Schedule F 

(Finding 2) 

• Allocation of Expenditures (Finding 3) 

• Misstatement of Financial Activity - Levin Fund (Finding 4) 

• Disclosure of Disbursements (Finding 5) 

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

Division on the 

Democratic Executive Committee 

of Florida 

January 1, 2007 - December 31, 2008 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding 1. Excessive Coordinated Party Expenditures 4 

Finding 2. Failure to Itemize Coordinated Party Expenditures on Schedule F 6 

Finding 3. Allocation of Expenditures 7 

Finding 4. Misstatementof Financial Activity-Levin Fund 11 

Finding 5. Disclosure of Disbursements 12 
Parti 

Background 

Authority for Audit 

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

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

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

amended (the Act). The Audit Division conducted the audit pursuant to 2 U.S.C. 

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

political committee that is required to file a report under 2 U.S.C. §434. Prior to 

conducting any audit under this subsection, the Commission must perform an intemal 

review of reports filed by selected committees to determine if the reports filed by a 

particular conmiittee meet the threshold requirements for substantial compliance with the 

Act. 2 U.S.C. §438(b). 

Scope of Audit 

Following Commission approved procedures, the Audit staff evaluated various risk 

factors and as a result, this audit examined: 

1. The receipt of excessive contributions and loans. 

2. The receipt of contributions from prohibited sources. 

3. The disclosure of individual contributors* occupation and name of employer. 

4. The disclosure of disbursements, debts and obligations. 

5. The disclosure of expenses allocated between federal and non-federal accounts. 

6. The consistency between reported figures and bank records. 

7. The completeness of records. 

8. Other committee operations necessary to the review. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration April 19,1972 

• Audit Coverage January 1,2007 - December 31,2008 

Headquarters Tallahassee, FL 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Six Federal and Two Non-federal 

Treasurer 

• Treasurer When Audit Was Conducted Alma Gonzalez 

• Treasurer During Period Covered by Audit Rudy Parker 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand January 1,2007 $ 203,156 

o Contributions from Individuals 1,381,039 

o From Other Political Committees 379,860 

o From Affiliated/Other Party Committees 20.465,884 

o Transfers from Non-federal Account 2.037,583 

o All Other Receipts 516,180 

Total Receipts $ 24,780,546 

o Operating Disbursements 12,999,529 

o Federal Election Activity 11.409,932 

o Other Disbursements 288,438 

Total Disbursements $ 24,697,899 

Cash-on-hand @ December 31,2008 $ 285,803 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Excessive Coordinated Party Expenditures 

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

2008 coordinated party expenditures limit on behalf of a House candidate by $35,108. 

Our review identified two media ads and two direct mail pieces that appear to represent 

coordinated party expenditures. The Audit staff recommends that DECF provide 

evidence that it did not exceed the coordinated spending limit or obtain a $35,108 refund 

from the Candidate. (For more detail, see p. 4) 

Finding 2. Failure to Itemize Coordinated Party 

Expenditures on Schedule F 

During fieldwork, the Audit staff identified 64 expenditures, totaling $207,665, that were 

not itemized on Schedules F (Itemized Coordinated Party Expenditures). The 

expenditures were made on behalf of six congressional candidates. Subsequent to the 

start of audit fieldwork, DECF filed amended reports that substantially disclosed the 

expenditures in question as coordinated party expenditures on Schedules F. The Audit 

staff recommends that DECF provide any additional information or comments that it 

considers relevant to this matter. (For more detail, see p.6) 

Finding 3. Allocation of Expenditures 

During fieldwork, the Audit staffs review of disbursements made from the federal and 

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

in the amount of $107,536. The Audit staff recommends that DECF demonstrate that 

these disbursements were not allocable expenditures or reimburse the non-federal account 

$107,536. (For more detail, see p. 7) 

Finding 4. Misstatement of Financial Activity - Levin 

Fund 

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

account. However, DECF's Levin Fund account closed in November 2006. The Audit 

staff recommends that DECF amend its most recent report to correct the overstatement of 

cash-on-hand. (For more detail, see p. 11) 

Finding 5. Disclosure of Disbursements 

During audit fieldwork, the Audit staff calculated that disbursement entries, totaling 

$9,554,713, contained inadequate or incorrect disclosure information. The Audit staff 

recommends that DECF file amended reports to correct the disclosure errors. 

(For more detail, see p. 12) 
Part IV 

Findings and Recommendations 

I Finding 1. Excessive Coordinated Party Expenditures 

Summary 

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

2008 coordinated party expenditures limit on behalf of a House candidate by $35,108. 

Our review identified two media ads and two direct mail pieces that appear to represent 

coordinated party expenditures. The Audit staff recommends that DECF provide 

evidence that it did not exceed the coordinated spending limit or obtain a $35,108 refund 

from the Candidate. 

Legal Standard 

A. Coordinated Party Expenditures. National party committees and state party 

committees are permitted to purchase goods and services on behalf of candidates in the 

general election—over and above the contributions that are subject to contribution limits. 

Such purchases are termed "coordinated party expenditures." They are subject to the 

following rules: 

• The amount spent on "coordinated party expenditures" is limited by statutory 

formulas that are based on the Cost of Living Adjustment (COLA) and the voting 

age population. 

• Party committees are permitted to coordinate the spending with the candidate 

committees. 

• The parties may make these expenditures only in connection with the general 

election. 

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

expenditures. 

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

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

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

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

assign its authority to make coordinated party expenditures to another political party 

committee. Such an assignment must be made in writing, state the amount of the 

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

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

assigned authority to make coordinated party expenditures must maintain the written 

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

A. Facts 

The coordinated expenditure limit for the 2008 election cycle for a House of 

Representatives candidate in the state of Florida was $42,100. DECF provided 

documentation from the Democratic Congressional Campaign Committee (DCCC) 

showing that the DCCC authorized DECF to spend $17,900 of its limit on behalf of 

Annette Taddeo, a candidate for the House of Representatives. Therefore, DECF's 

coordinated spending limit for this candidate was $60,000. 

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

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

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

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

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

line 21b. 

One media ad discussed the candidate's position on health care. The other discussed the 

opponent's voting record on health care and taxes. The disclaimer for each ad stated, 

"Paid for by the Florida Democratic Party and Taddeo for Congress. Approved by 

Annette Taddeo." 

According to the invoices, a vendor located in Virginia processed and mailed the two 

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

an email communication from a vendor representative to a representative of DECF 

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

campaign. Although requested, DECF provided no evidence that volunteers processed 

either mail piece. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff provided DECF representatives with a schedule of 

the apparent excessive coordinated expenditures. In response, DECF representatives 

stated they believed they were authorized to spend an additional $22,400 because the 

DCCC had reported spending only $1,754 in coordinated campaign expenditures on 

behalf of candidate Taddeo. DECF also stated that the combined total spent on Taddeo 

was less than the $84,200 available. They believe that the DCCC and DECF coordinated 

to achieve this and that the remaining authority would have been transferred to the 

DECF. DECF also stated that the Taddeo mail pieces represented exempt activity. 

The Audit staff recommends that, within 30 calendar days of service of this report, DECF 

demonstrate that it did not exceed its coordinated spending limit by providing evidence 

that: 

• it received additional spending authority from the DCCC prior to spending in 

excess of its $60,000 limitation; and 
• there was volunteer involvement with respect to the two direct mail pieces. 

Absent such evidence, the DECF should obtain a refund in the amount of $35,108 

($95,108 - $60,000) from the Candidate and provide evidence of the refund received. 

Such evidence should include a copy of the refund check and bank statement showing the 

deposit of the refund check. 

Finding 2. Failure to Itemize Coordinated Party 

Expenditures on Schedule F 

Summary 

During fieldwork, the Audit staff identified 64 expenditures, totaling $207,665, that were 

not itemized on Schedules F (Itemized Coordinated Party Expenditures). The 

expenditures were made on behalf of six congressional candidates. Subsequent to the 

start of audit fieldwork, DECF filed amended reports that substantially disclosed the 

expenditures in question as coordinated party expenditures on Schedules F. The Audit 

staff reconmiends that DECF provide any additional information or comments that it 

considers relevant to this matter. 

Legal Standard 

Reporting Coordinated Party Expenditures. Each political conamittee shall report the 

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

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

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

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

the expenditure is made. 11 CFR §104.3 (b)(l)(viii). 

Facts and Analysis 

A. Facts 

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

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

six congressional candidates; they represented payments for staff salaries, direct mail, 

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

amended reports that substantially disclosed the expenditures in question as coordinated 

party expenditures on Schedule F. 

B. Interim Audit Report & Audit Division Recommendation 

This matter was presented at the exit conference. In response, DECF stated that it believes 

two of the disbursements, totaling $12,708, were volunteer mailings (Taddeo mail pieces 

discussed in Finding 1) and thus would not need to be reported on Schedules F. 

The Audit staff reconmiends that, within 30 calendar days of service of this report, DECF 

provide any additional information or comments that it considers relevant to this matter. 
I Finding 3. Allocation of Expenditures 

Summary 

During fieldwork, the Audit staffs review of disbursements made from the federal and 

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

in the amount of $107,536. The Audit staff recommends that DECF demonstrate that 

these disbursements were not allocable expenditures or reimburse the non-federal account 

$107,536. 

Legal Standard 

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

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

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

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

non-federal share of that expense; or 

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

deposits funds from both its federal and non-federal accounts solely for the 

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

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

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

106.7(f). 

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

federal/non-federal expenses must report each disbursement it makes from its federal 

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

Committees report these kinds of disbursements on Schedule H4 (Disbursements for 

Allocated Federal/Non-federal Activity). 11 CFR §104.17(b)(3). 

D. Allocation Required for Generic Voter Drives. State and local party committees 

must allocate all of their costs for generic voter drives. A generic voter drive is an 

activity that urges the general public: 

• to register to vote; 

• to vote; or 

• to support candidates of a particular party or candidates who are associated with a 

particular issue, without mentioning a specific candidate. 11 CFR § 106.7(c)(5). 

E. Allocation Ratio for Administrative & Generic Voter Drive Costs. State and local 

party committees must allocate their administrative expenses and generic voter drive 

costs dependent upon which federal offices appear on the ballot for the election year. 

The minimum percentage of federal funds would be at least: 

• 36 percent if both a Presidential candidate and a Senate candidate appear on the 

ballot; 

• 28 percent if a Presidential candidate but not a Senate candidate appears on the 

ballot; 
• 21 percent if a Senate candidate, but no Presidential candidate appears on the 

ballot; and, 

• 15 percent if neither a Presidential nor a Senate candidate appears on the ballot. 

llCFR§106.7(d)(2)and(3). 

F. Allocation of Costs of Federal Election Activity. Expenditures for public 

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

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

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

used. 11 CFR§300.33(c) 

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

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

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

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

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

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

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

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

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

§106.7(d)(l) 

Facts and Analysis 

A. Facts 

The Audit staff calculated the non-federal share of expenditures required to be disclosed 

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

account. It calculated that the non-federal portion of shared activity was $2,222,695. 

However, the non-federal account transferred $2,242,955, resulting in an overfunding of 

$20,260. 

In addition to the above, the following expenditures were paid directly from the nonfederal account but appear to represent 100 percent federal activity or allocable activity. 

• An absentee chase ballot ($3,745) that included a picture of President Bush and 

Vice President Cheney with a red line through the pictures and a caption stating, 

"We Can't Afford More Of The Same." The back side of tiie mailer stated, "Send 

the Republicans a Message - You can Make the Difference Vote Democratic" 

followed by a sample ballot listing the Democratic nominee for President and 

Vice President, Congressional Districts 2 and 4, State Senator District 3, State 

Representative Districts 8 and 9, County Commissioner, City Commissioner and 

District Supervisor. Furtiier, an email between the Leon Coimty Chair and the 

DECF makes clear that the DECF expenditure was in connection with a federal 

election. Based on the above, the sample ballot should have been paid with 

federal funds. As a result, the non-federal account overpaid $3,745. 
An invoice for $17,240, with the description, "Consulting Fee for Creole 

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

available for review. However, if the activity represents a public communication 

that named a clearly identified federal candidate, the cost would have to be paid 

with 100 percent federal funds. If the cost represented get-out-the-vote activity, it 

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

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

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

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

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

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

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

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

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

$17,240. 

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

was $212,313. According to DECF, the building is occupied by DECF and the 

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

one month (January 2007), DECF paid half of the monthly rent directly from the 

non-federal account and half from the federal account. Rent payments from the 

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

and 72 percent non-federal. Thus the non-federal account paid 86 percent of the 

rent for the DECF headquarters. As a result, the non-federal account overpaid its 

share of rent by $28,482 ($181,347 - $152,865). 

DECF was not able to produce monthly time logs for six employees documenting 

their time spent on federal and non-federal activities. In addition, the records 

supplied by three individuals did not attest to working 25 percent or less of their 

time on federal activity for all the pay periods in which their salaries were 

allocated between federal and non-federal activity. Absent records to demonstrate 

the activity engaged in by the employees in question, $23,172 was considered to 

potentially be a non-allocable expense that should have been paid entirely by the 

federal account. 

Ten fundraising programs and events were reviewed for the proper allocation of 

expenses between federal and non-federal accounts. The cost of each fundraising 

program or event in which DECF collected both federal and non-federal funds 

was allocated based on the funds received method. One event, the 2008 Jefferson 

Jackson Dinner, accoimted for the amount of overfunding identified. The 

proportion of federal funds received to non-federal funds received as calculated 

by DECF was 8 percent federal to 92 percent non-federal. Per the Audit staffs 

calculation, the amount of funds received was 16 percent federal and 84 percent 
10 

non-federal. The review indicated that the non-federal account overpaid its share 

of the fundraising cost by $14,637. 

In summary, the Audit staff calculated that the non-federal account potentially 

overfunded its share of expenditures by $107,536 ($20,260 + $3,745 + $17,240 + 

$28,482 + $23,172 + $14,637). 

B. Interim Audit Report & Audit Division Recommendation 

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

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

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

did not provide any documentation supporting its position. 

With respect to the rent allocation and the Caucus, Counsel for DECF (Counsel) stated 

that the Caucus is "considered an autonomous project of the state party ... they do not 

have a separate legal entity. Therefore, they did not sign the lease." Counsel further 

stated that the Caucus employees are on the payroll of the state party, so they would 

technically qualify as employees of the party. 

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

fundraising expenses. 

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

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

position that the mailer represented 100 percent non-federal activity. The mailer clearly 

identified a candidate for federal office. The email between the Leon County Chair and 

DECF makes clear that the DECF expenditure was in connection with a federal election. 

Therefore, the cost of the absentee chase ballot should have been paid with federal funds. 

Consulting Fee for Creole Translators/Haitian American G.O.T.V. - DECF did not 

provide any documentation supporting its position that the activity was 100 percent nonfederal. As previously stated, until more information is provided, it is assumed that the 

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

Rent Payments - A state party committee may either pay administrative costs, including 

rent, from its federal account, or allocate such expenses between its federal and nonfederal accounts. 11 CFR § 106.7(c)(2). In the Explanation and Justification for section 

106.7(c), the Conunission recognizes tiiat state party committees engage in multiple nonfederal activities, but the Commission determined that the administrative costs underlying 

a state party committee's activities should be allocated. Therefore, the rent payments in 

question should have been allocated on a 28 percent federal and 72 percent non-federal 

basis. 
11 

The Audit staff recommends that, within 30 calendar days of service of this report, DECF 

provide documentation that clarifies and supports the solely non-federal nature of the 

above noted expenditures or reimburse the non-federal account $107,536. 

Finding 4. Misstatement of Financial Activity - Levin 

Fund 

Summary 

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

account. However, DECF's Levin fund account closed in November 2006. The Audit 

staff recommends that DECF amend its most recent report to correct the overstatement of 

cash-on-hand. 

Legal Standard 

Contents of Levin Reports. Each report must disclose: 

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

reporting period; 

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

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

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

Levin Fimds) or Schedule L-B (Itemized Disbursements of Levin Funds). 11 CFR 

§300.36 (b)(2)(B). 

Facts and Analjrsis 

A. Facts 

Disclosure reports filed by DECF indicated a cash balance in the Levin fund account of 

$6,438. DECF has disclosed this cash balance throughout the audit period. However, 

Levin fund bank records indicate that the account was closed on November 16,2006. 

Other than the cash-on-hand balance, DECF did not disclose any Levin fund receipts or 

disbursements. 

B. Interim Audit Report & Audit Division Recommendation 

This matter was discussed with DECF representatives at the exit conference. DECF 

representatives made no comment on this matter. Therefore, the Audit staff recommends 

that, within 30 calendar days of service of this report, DECF amend its most recent report 

to correct the overstatement of Levin fund cash-on-hand. 
12 

Finding 5. Disclosure of Disbursements 

Summary 

During audit fieldwork, the Audit staff calculated that disbursement entries, totaling 

$9,554,713, contained inadequate or incorrect disclosure information. The Audit staff 

recommends that DECF file amended reports to correct the disclosure errors. 

Legal Standard 

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

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

• amount; 

• date when the expenditures were made; 

• name and address of the payee; and 

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

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

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

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

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

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

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

reporting "purpose": advance, election-day expenses, other expenses, expense 

reimbursement, miscellaneous, outside services, get-out-the-vote, and voter registration. 

11 CFR §104.3(b)(3)(i)(B) and Commission Policy Statement at 

www.fec.gov/law/policy/purposeofdisbursement/inadequate_purpose_list_3507. 

Facts and Analsrsis 

A. Facts 

The reported purpose of the disbursement, when considered with the identity of the 

disbursement recipient, must clearly specify what was purchased. The Audit staff 

reviewed disbursements itemized by DECF for proper disclosure on both a sample and 

100 percent basis. These reviews disclosed that the combined dollar value of errors 

identified was $9,554,713. This amount is comprised of $1,708,395, the projected dollar 

value of errors from the sample review and $7,846,318 in errors from a 100 percent 

review of disbursements not included in the sample population.^ 

From the 100 percent review, more than $7,300,000 of the disclosure errors were for 

campaign materials that, for the most part, (1) described Senator Obama's position on 

issues, (2) compared Senator Obama and Senator McCain's position on issues or (3) were 

for get-out-the-vote telephone calls authorized by Obama for America. The majority of 

errors in the review were for inadequate or incorrect purposes disclosed. 

^ The error amount was projected using a Monetary Unit Sample with a 95 percent confidence level plus 

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

low as $1,350,377 or as high as $2,066,413. 
13 

Examples of incorrect purposes included: 

• Three mail pieces that described Senator McCain's position on an issue were 

disclosed as either "Absentee/Early Vote Mail" or "Direct Mail/Early Vote." The 

mail pieces did not discuss obtaining an absentee ballot or voting early. 

• A mail piece that stated vote Obama and provided polling locations, voting and 

ride information was disclosed as "Generic Literature." 

Examples of inadequate purposes included: 

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

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

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

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

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

disclosed as Literature, Generic Mail, or Direct Mail. 

The disclosure errors identified in the sample review were similar to the errors discussed 

above. 

B. Interim Audit Report & Audit Division Recommendation 

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

stated they would review this issue. 

The Audit staff recommends that, within 30 calendar days of service of this report, DECF 

file amended reports to correct the disclosure errors.