·,,

0'-,

("

~.

FEDERAL ELECTION COMMISSION

WASHINGTON, D,C, 204&3

A8l-32

REPORT OF THE AUDIT DIVISION

ON THE

DEMOCRATIC STATE CENTRAL COMMITTEE

FEDERAL CANDIDATES FUND

I. Background

A. ,Overview

. . This report is based upon'an audit of the Democratic

State Central Committee (of California) Federal 'Candidates Fund

("the Committee"), undertaken by the Audit Division of the

Federal Election Commission in accordance with the Commission's

audit policy to determine whether there has been compliance with

the provisions of the Federal Election Campaign Act of 1971, as

amended ("the Act"). The audit was conducted pursuant to Section,

438(b) of Title 2 of the United States Code which states, in.

part, that the Commission may conduct audits and field

investigations of any political committee required to file a

report under Section 434 of this title. Prior to conducting any audit under this section, the Commission shall perform an

internal review of reports filed by selected committees to

determine if the reports filed by a particular committee meet the

threshold requi~ements for substantial compliance with the Act.

The Committee registered with the Compt~oller General

of the United States on September 16, 1975. The Committee

maintains its headquarters in Los Angeles, California. "The audit

covered the period from January 1, 1980 through December 3l~

1980. The Committee reported a beginning dash balance of

$1,980.00, total receipts of $171,672.00, total expenditures of

$173,663.00, and an ending cash balance of $(11.00).

This audit report is based on documents and workpapers

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

the record upon which the Commission based its decisions on the

matters in the report and were available to the Commissioners and

appropriate staff for review.
..

-2-

B. Key Personnel

The Treasurer of the Committee during the period of the

audit was Madale Watson from January 1, 1980 to January 31, 1980

and Loretta Collier from February 1, 1980 to December 31, 1980.

-

. '..,

,', , .

...e

C. Scope

The audit included such tests as ve~ification of total

reported receipts and expenditures and individual transactionsI

review of required supporting documentation and analysis of

Committee debts and obligationsI and such other audit procedures

as deemed necessary under the circumstances.

II. Audit Findings and Recommendations

A. Continuous Disclosure of Debts and Obligations

Section 104.ll(a) of Title 11, Code of Federal

Regulations states in relevant part, that debts and obligations owed by or to a political committee which remain outstanding. shall be continuously reported until extinguished. Also, Section

l04.3(d) of Title 11, Code of Federal Regulations states in

relevant part, that each report filed under 11 C.F.R. 104.1

shall, on Schedule C or 0, as appropriate, disclose the amount

and nature of outstanding debts and obligations owed by or to the

reporting committee.

.. .

On November 23,1981, the Committee filed an amended

1980 Year End report and an amended 1981 Mid Year report. These

reports disclosed $11,942.00 1/ in debts and obligations owed by the Committee on line 10 of FEC form 3X (Summary Page), but did

not include the requisite supporting Schedules '0' for

itemization purposes.

During the audit it was determined that the Committee

disclosed four (4) debts and obligations totaling $9,730.00 in

the 1980 30 Day Post General Election Report, but did not

disclose them in the 1980 Year End Report or thereafter. The

debts remain outstanding through the close of the audit fieldwork

(October 27, 1981).

1/ Due to overbilling errors by a vendor, the amount included

on the amended reports ($11,942.00) varies from the audit

verified amount noted above ($9,730.00). The difference

of $2,212.00 is not a legitimate debt owed by the Committee

and should not be included on the recommended amended

reports.