Part I
Background

Authority for Audit

This report is based on an audit of Friends of Mike Ferguson, undertaken by the Audit
Division of the Federal Election Commission (the Commission) in accordance with the
Federal Election Campaign Act of 1971, as amended (the Act). The Audit Division
conducted the 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 internal review of reports filed by selected committees to determine if the
reports filed by a particular committee 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:

The receipt of excessive contributions and loans.

The receipt of contributions from prohibited sources.

The disclosure of contributions received.

The consistency between reported figures and bank records.

The completeness of receipt records.

Other committee operations necessary to the review.

DAwPRwWne

Changes to the Law

On March 27, 2002, President Bush signed into law the Bipartisan Campaign Reform Act of
2002 (BCRA). The BCRA contains many substantial and technical changes to the federal
campaign finance law. Most of the changes became effective November 6, 2002. Except
for November 7, 2002 through December 31, 2002, the period covered by this audit pre-
dates these changes. Therefore, the statutory and regulatory requirements cited in this report
are primarily those that were in effect prior to November 7, 2002.


Page

Table of Contents

Part I. Background
Authority for Audit
Scope of Audit

Changes to the Law

Part I. Overview of Campaign
Campaign Organization
Overview of Financial Activity

Part III. Findings and Recommendations


Part II
Overview of Campaign

is)

Campaign Organization

Important Dates

Friends of Mike Ferguson

e Date of Registration

May 7, 2001

. Audit Coverage

January 1, 2001 - December
31, 2002

Headquarters

Union, New Jersey

Bank Information

¢___ Bank Depositories

Two

° Bank Accounts

Two Checking Accounts

Treasurers

° Treasurer When Audit Was Conducted

William J. Morrison

° Treasurer During Period Covered by Audit

William J. Morrison

Management Information

e Attended FEC Campaign Finance Seminar No

. Used Commonly Available Campaign Management Software | Yes
Package

¢ Who Handled Accounting, Recordkeeping Tasks and Other Paid Staff

Day-to-Day Operations

Overview of Financial Activity

(Audited Amounts)
Cash on hand @ January 1, 2001 $0
Receipts
o__ From Individuals $1,224,053
o From Political Committees 6,679
o _ From Other Political Committees 793,771
o Offsets to Operating Expenditures 499
co Other Receipts 12196
© Transfers From Other Authorized
Committees 64,351
o__ Total Receipts $2,101,549
Disbursements
o__ Operating & Other Disbursements $2,045,051
o__ Total Disbursements 2,045,051
Cash on hand @ December 31, 2002 $56,498



FEDERAL ELECTION COMMISSION
Washington, DC 20463

November 18, 2003

MEMORANDUM

TO: RON M. HARRIS
PRESS OFFICER
PRESS OFFICE

FROM: JOSEPH F. STOLTZ
ASSISTANT STAFF, CTOR
AUDIT DIVISION

SUBJECT: | PUBLIC ISSUANCE OF THE AUDIT REPORT ON
FRIENDS OF MIKE FERGUSON

__. Attached please find a copy of the audit report and related documents on the
Friends of Mike Ferguson, which was approved by the Commission on November 14,
2003.

The report may be released to the public on November 25, 2003.

Attachment as stated

ce: Office of General Counsel
Office of Public Disclosure
Reports Analysis Division
FEC Library


Part III

Findings and Recommendations

Based upon our examination of the Teports and statements filed, and the records presented
by Friends of Mike Ferguson, no material non-compliance was discovered.


Report of the Audit Division on
Friends of Mike Ferguson

January 1, 2001 - December 31, 2002

Why the Audit Was

Done

Federal law permits the
Commission to conduct
audits and field
investigations of any
political committee that is
required to file reports under
the Federal Election
Campaign Act (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 Commission 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)

Friends of Mike Ferguson is the principal campaign
committee for Mike Ferguson, Republican candidate for
the U.S. House of Representatives from the state of
New Jersey, 7” District, and is headquartered in Union,
New Jersey. For more information, see the chart on the
Campaign Organization, p.2.

Financial Activity (p. 3)

e —- Receipts
o From Individuals $1,224,053
o From Political 6,679
Committees
o From Other Political 793,771
Committees
o Offsets to Operating 499
Expenditures
o Other Receipts 12,196
o Transfers From Other
Authorized Committees 64,351
o Total Receipts $2,101,549
e Disbursements
o Operating & Other $2,045,051
Disbursements
o Total Disbursements $2,045,051

Findings and Recommendations (p. 3)
Based upon our examination of the reports and
statements filed, and the records presented by Friends of
Mike Ferguson, no material non-compliance was
discovered.

"2 U.S.C. §438(b).



Report of the
Audit Division on
Friends of Mike Ferguson

January 1, 2001 —- December 31, 2002