Final Audit Report of the 

Commission on the National Right 

to Life Political Action Committee 

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 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 

conunittee complied 

with the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Future Action 

The Conunission may 

initiate an enforcement 

action, at a later time, 

with respect to the 

matter discussed in this 

report. 

About the Committee (p. 2) 

The National Right to Life Politicad Action Committee is a separate 

segregated fund of tiie National Right to Life Committee and is 

headquartered in Washington, DC. For more information, see the 

chart on the Committee Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o From Individuals $ 3,662,627 

o From Other Political Committees 9,850 

o Offsets to Operating Expenditures 4,051 

Total Receipts $ 3,676^28 

• Disbursements 

o Operating Expenditures 

o Independent Expenditures 

o Contributions to Other Conunittees 

Total Disbursements 

Commission Finding (p. 3) 

• Misstatement of Financial Activity 

$ 567.680 

2,804,925 

13,750 

$3^386,355 

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

Commission on the 

National Right to Life Political 

Action Committee 

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

Page 

Part I. Backgromid 

Authority for Audit 1 

Scope of Audit 1 

Limitations 1 

Audit Hearing 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summary 

Commission Finding 3 

Part IV. Commission Finding 

Misstatement of Financial Activity 4 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the National Right to Life Political Action Conunittee 

(NRL PAC), 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 Conunission to conduct audits and field investigations of any 

political conunittee 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 committee meet the threshold requirements for substantial compliance with the 

Act. 2U.S.C. §438(b). 

Scope of Audit 

Following Conunission-approved procedures, the Audit staff evaluated various risk 

factors and, as a result, this audit examined: 

1. the disclosure of disbursements, debts and obligations; 

2. the disclosure of individual contributors' occupation and name of employer; 

3. tiie consistency between reported figures and bank records; 

4. the completeness of records; and 

5. other conunittee operations necessary to the review. 

Limitations 

NRL PAC satisfied the recordkeeping requirements of 11 CFR §102.9 conceming 

disbursements. Testing of independent expenditures and debts was limited to a review of 

the disbursement records NRL PAC provided to the Audit staff. Absent review of external 

documentation such as some invoices and broadcast station information, the Audit staff was 

unable to determine whetfaer reporting independent expenditures or debts was required. 

Audit Hearing 

NRL PAC requested a hearing before the Commission. The request was granted and tiie 

hearing was held on Febmary 15,2012. At the hearing, NRL PAC addressed issues 

related to the scope limitation, the misstatement of financial activity and the disclosure of 

occupation and name of employer information.^ 

^ New information presented by NRL PAC at the hearing resulted in die removal of a finding on the 

disclosure of occupation and name of employer information from the audit report. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration July 12,1979 

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

Headquarters Washington, DC 

Bank Information 

• Bank Depositories One 

• Bank Accounts Two 

Treasurer 

• Treasurer When Audit Was Conducted Carol Tobias (October 29,2009 - June 

9.2011) 

Joseph M. Landmm (June 10,2011 -

Present) 

• Treasurer During Period Covered by Audit Amarie Natividad 

(January 1,2007 - September 3,2008) 

Carol Tobias 

(September 4,2008 - December 31, 

2008) 

Management Information 

• Attended Commission Campaign Finance 

Seminar 

Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand @ January 1,2007 $ 481,805 

Receipts 

o From Individuals 3,662,627 

o From Other Political Committees 9,850 

o Offsets to Operating Expenditures 4,051 

Total Receipts $ 3,676,528 

Disbursements 

o Operating Expenditures 567,680 

o Independent Expenditures 2,804.925 

o Contributions to Other Committees 13,750 

Total Disbursements $ 3,386,355 

Cash-on-hand @ December 31,2008 $ 771,978 
Part III 

Summary 

Commission Finding 

Misstatement of Financial Activity 

During audit fieldwork, a comparison of NRL PACs reported figures with bank records revealed 

a misstatement of receipts and cash-on-hand in 2007 and disbursements and cash-on-hand in 

2008. In 2007, NRL PAC overstated beginning cash-on-hand by $130,932, understated receipts 

by $29,624 and overstated ending cash-on-hand by $104,632. In 2008, NRL PAC overstated 

disbursements by $1,437,635 and understated the ending cash-on-hand by $1,300,378. In 

response to the hiterim Audit Report recommendation, NRL PAC filed amended reports, 

property disclosing 2007 and 2008 activity. The NRL PAC treasurer stated tiiat NRL PAC 

would reconcile its most recentiy reported cash balance and amend its cash balance on the next 

disclosure report filed. 

In addition, tiie original reports ftied by NRL PAC for 2007 and 2008 revealed an overstatement 

of disbursements in the amount of $687,536. NRL PAC did not submit any additional 

information or written conunents m response to the Interim Audit Report. 

The Commission approved both parts of a finding that NRL PAC misstated financial activity for 

2007 and 2008. (For more detail, see p. 4.) 
Part IV 

Commission Finding 

I Misstatement of Financial Activity | 

Summary 

During audit fieldwork, a comparison of NRL PACs reported figures with bank records revealed 

a misstatement of receipts and cash-on-hand in 2007 and disbursements and cash-on-hand in 

2008. In 2007, NRL PAC overstated beginning cash-on-hand by $130,932, understated receipts 

by $29,624 and overstated ending cash-on-hand by $104,632. In 2008, NRL PAC overstated 

disbiu^ements by $1,437,635 and understated the ending casfa-on-faand by $1,300,378. In 

response to the biterim Audit Report reconunendation, NRL PAC filed amended reports, 

property disclosing 2007 and 2008 activity. The NRL PAC treasurer stated tiiat NRL PAC 

would reconcile its most recentiy reported cash balance and amend its cash balance on the next 

disclosure report filed. 

In addition, the original reports filed by NRL PAC for 2007 and 2008 revealed an overstatement 

of disbursements in the amount of $687,536. NRL PAC did not submit any additional 

information or written conunents in response to the Interim Audit Report. 

The Commission approved both parts of a findmg that NRL PAC misstated financial activity for 

2007 and 2008. 

Legal Standard 

Contents of Reports. Each report must disclose: 

• the amount of cash-on-hand at the begirming and end of tiie reporting period; 

• the total amount of receipts for the reporting period and for the calendar year; 

• the total amount of disbursements for the reporting period and for the calendar year; and 

• certain transactions that require itemization on Schedule A (Itemized Receipts), Schedule B 

(Itemized Disbursements) or Schedule E (Itemized Independent Expenditures). 2 U.S.C. 

§434(b)(l).(2),(3).(4)and(5). 

Facts and Analysis 

A. Misstatement of Activity on Amended Reports as Compared with Bank Records 

1. Facts 

During audit fieldwork, the Audit staff reconciled reported activity with bank records for 

calendar years 2007 and 2008. The following charts outiine the discrepancies for the 

begirming and ending cash balances, receipts and disbursements for each year. Succeeding 

paragraphs address the reasons for the misstatements. 
2007 Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance 

@ January 1,2007 

$612,737 $481,805 $130,932 

Overstated 

Receipts $53,518 $83,142 $29,624 

Understated 

Disbursements $102,265 $105,589 $3,324 

Understated 

Ending Cash Balance 

@ December 31,2007 

$563,990 $459,358 $104,632 

Overstated 

The overstatement of the beginning cash-on-hand by $130,932 likely resulted from priorperiod discrepancies. 

The understatement of receipts resulted from the following: 

• Bank interest not reported 

• Vendor refunds for radio ads not reported 

• Unexplained difference 

Understatement of receipts 

$ 14.771 

4,051 

10.802 

$29.624 

The misstatements described above resulted in a $104,632 overstatement of the ending 

cash-on-hand. 

2008 Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance 

@ January 1,2008 

$563,990 $459,358 $104,632 

Overstated 

Receipts $3,626,011 $3,593,386 $32,625 

Overstated 

Disbursements $4,718,401 $3,280,766 $1,437,635 

Overstated 

Ending Cash Balance 

©December 31,2008 

$(528,400) $771,978 $1,300,378 

Understated 

The overstatement of disbursements resulted from the following: 

• Unreported disbursements 

• Disbursements to printing vendor reported twice 

• Over-reported disbursements 

• Unexplained difference 

Net overstatement of disbursements 

$ 184,070 

(1,526,656) 

(80,357) 

(14.692) 

S f1.437.635) 

The duplicate reporting of $1,526,656 in disbursements to the printing vendor was due to 

incorrect reporting of independent expenditures. NRL PAC paid for these independent 
expenditures in advance of the dissemination dates. NRL PAC should have reported these 

advance payments on Schedule B. Line 21b, as operating expenditures. Once NRL PAC 

distributed the printed materials, it should have subtracted the amounts of these 

expenditures from Line 21b and reported them as independent expenditures on Schedule 

E. NRL PAC correctly reported these expenditures on Line 21b when the payments were 

made, then correctiy disclosed the independent expenditures on Schedule E upon 

dissemination of the materials. However. NRL PAC failed to subtract the amount of the 

independent expenditures from Line 21b. 

The misstatements described above resulted in a $1,300,378 understatement of the ending 

cash-on-faand. 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the misstatements for 2007 and 2008 witii NRL PAC 

representatives during the exit conference and provided copies of relevant work papers 

detailing the misstatements. NRL PAC representatives stated that the committee would file 

the necessary amended reports. Amended reports filed by NRL PAC after the exit 

conference corrected some, but not all, of the misstatements. 

The Interim Audit Report recommended that NRL PAC: 

• amend its reports to correct the remauiing misstatements noted above; 

• reconcile the cash balance on its most recent report to identify any subsequent 

discrepancies that could affect the recommended adjustments; and 

• adjust cash as necessary on its most recent report, noting that the change is the 

result of prior-period adjustments. 

3. Committee Response to Interim Audit Report 

NRL PAC filed amended 2007 and 2008 reports to properly disclose activity as 

recommended. In a subsequent communication, the current NRL PAC treasurer stated that 

the committee would reconcile the most recent cash balance and include the revised figure on 

the next report filed to comply with the recommendation. 

4. Draft Final Audit Report 

The Draft Final Audit Report noted tiiat, in response to tiie Interim Audit Report, NRL PAC 

amended its reports to properly disclose activity as reconunended by the Audit staff. 

5. Committee Response to the Draft Final Audit Report 

NRL PAC requested an Audit Hearing. In addition. NRL PAC noted that tiie misstatement 

was largely due to a bookkeeping error. 

6. Audit Hearing 

During the audit hearing, NRL PAC counsel reiterated that most of the misstatement resulted 

from a simple mistake. He explained that NRL PAC became aware of this reporting error 

due to a negative cash-on-hand balance prior to filing its disclosure reports. NRL PAC filed 

the reports with the incorrect negative cash balance and subsequently discovered the cause of 
tiie error shortly before commencement of the audit. Corrective amendments were filed in 

response to the Interim Audit Report. 

Commission Conclusion 

On May 24,2012, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Conunission find NRL PAC 

misstated its activity in 2007 and 2008. 

The Commission approved the Audit staffs recommendation. 

B. Misstatement of Activity Reported on Original Reports as Compared with Bank 

Records 

1. Facts 

In addition to examining the most recent reports filed by NRL PAC prior to the audit, the 

Audit staff compared the original reports filed with the bank records and discovered a 

$687,536 overstatement of disbursements in 2007 and 2008. This misstatement was largely 

due to the incorrect reporting of independent expenditures as noted above. 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed tiie misstatements for 2007 and 2008 witii NRL PAC 

representatives during the exit conference and provided copies of relevant work papers 

detailing the misstatements. 

The Interim Audit Report recommended that NRL PAC submit any additional information or 

written comments it considers relevant to the matter. 

3. Committee Response to Interim Audit Report 

NRL PAC did not submit any additional information or written comments regarding this 

matter. 

4. Draft Final Audit Report 

The Draft Final Audit Report noted that NRL PAC did not address this issue in its response 

to the Interim Audit Report. 

5. Committee Response to the Draft Final Audit Report 

NRL PAC did not specifically address this issue in its response to the Draft Final Audit 

Report. 

6. Audit Hearing 

This issue was not specifically addressed at the Audit Hearing. 

Commission Conclusion 

On May 24.2012. the Commission considered the Audit Division Reconunendation 

Memorandum in which the Audit staff recommended that tiie Conunission find NRL PAC 

misstated its activity in 2007 and 2008. 

The Conunission approved the Audit staffs reconunendation.