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This report is based on an audit of the Democratic

State Committee of Delaware ("the Committee") undertaken by the

Audit Division of the Federal Election Commission in accordance

wi·th. the .Commiss.ion'.s allQit.: P9J:!-cy, to determine whether there

has been compliance wi th the provisions of tile Fede'ral Election

Campaign Act of 1971, as amended (lithe Act"). The audit was

conducted pursuant to Section 438(a) (8) of Title 2, United States

Code, which directs the Commission to make from time to time

audits and field invcstiqations with respcct to reports and

statements filed under the provisions of the Act.

A. Overview

Background

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FI:DlRAI II [CliON COi\\" \ISSION

REPORT OF THE AUDIT DIVISION

ON

DEMOCRA'frC s'rATE COMMI'fTEE OF DELAWARE

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'rhe Commitlt'(l rC<Jistered \-lith the Comptroller General

of the United States 011 April 17, 1972. The audit covered the

period January 1, 197() thl'OU~Jh June 30, 1978. During the period,

January 1, 1976 throuqh December 31, 1976, the Commit.tee reported

an opening cash balanc(~ of $6,238.00, total receipts of -$66,428.00,

total expenditures of $71,526.00, and a closing cash balance of

$1,140.00. During the calendar years 1977 and 1978 the Conunittec

did not support federal candidates in excess of $1,000, therefore

not meeting the requirf 'lI1pnts of a political committee under the

Act. On October 23, 1~18, the Committee filed a letter with the

Commission which ildvis~d that the July 10, 1978 report was the

Committee's termination report. '1'he letter further stated that

the residual funds of the Committee would bc used for State

activity. The CommittL'(~ maintained its headquarters in Wilmington,

Delaware.

This audit r0port is based on documents and working

papers supporting each of its factual statements. They form

part of the record upon which the Commission based its decisions

on the matters in this report and were available to Commissioners

and appropriate staff for review •

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u. Key Personnel

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The principal officers of the Committee durinq the

period covered by the audit were Hr. :-tichacl Poppitti, Chairman,

January 1, 1976 to February 6, 1976, ~1r. Henry Topel, Chdirman

February 6, 1976 to tlH' t>rcsf..~nt; Mr. Joshua T\oJil1ey, TrL~"5urer

January 1, 1976 to F(\!Jt'Uilry G, 1976, and :·1r. Clifford B. Hearn,

Jr., Treasurer, Februill:-y G, 1976 to the present.

c. Scope

The audit included such tests as verification of total

reported receipts and expenditures and individual transactions;

review of required suplJortinq dOcllmentationj analysis of Conunittee

debts ilnd obll(Jations; and, such other audit procedures as deemed

necessary under the circumstances.

II. Auditor's Statcm~Ilt and Description of Findings

It is the opinion of the l\udil stafr, based upon examination

of the reports and stat (~rncnt,s fi]t'd and lllt~ records presented,

that except for the de (iciencies noted b(~ low, the reports and

statemenls of the Democratic State Comr;li ltec of Delaware fairly

present the financial activi ties 0 r thl~ Cor.u~1i t tee for the period

covcred by thC' lludi t. l~urther, e:,:ct.'pl "-l~~ noted be lot_v, no matcrial

problcm~; in complyinq \\..i th t.he Fl'c.h'ral Elc?ction Camp.:lign j\ct, were

disCOVL\)'l~d during the course of t.h\."' audi L.

Section 432 (<1) of rri tIe 2, Uni tC'd States Code states,

in part, that the treasurer is required Lo obtain and keep a

rccciplc\l bi 11, statirvj the particulars, fer every c:-:pendi ture

made by or on behalf of a political committee in excess of $100,

and for .:lny such cx~cnditurc in a lesser amount, if the aggregate

amount of such expenditures to Lhl" same person during a calendar

year exceeds S100.

Further, Spclion l02.9(c) (4) of Title 11, Code of

Federal !\("'qullltions states, in part, that \e:hen a receipted bill

is nOl d\-.:li l.:ltJ le, thp treasurer may keep the cancelled check (s)

showiuq p.:ly:~~ent (s) of the bill; and the bill, invoice or other

contcmporan'::oi.~~; memol-andur.1 of the trans~c~ion supplied to the

committt.'l"" b~' the payCt) containinq tIll' i,,:c:~tification of the

payee, anu th0 ULl te, ~U:l0unt and particul..1rs of the e:-:penditurc •
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Our examination of the Conunittee's expenditure records

revealed that it did not maintain supporting documentation for

60 (33.90~) of the 177 expenditures requiring such documentation

in 1976. The 60 expenditures totaled $20,204.85 (45.95~ of the

$43,975.22 of expenditures requiring such documentation). The

chairman of the Committee agreed to attempt to obtain this documentation.

At our rcquest, on January 8,1979, tht' Committee

submitted the required documentation for 29 or thl' unsupported

expenditures. For 24 of thc rcmaininq 31 un~upported expenditures

the Committee submitted proof of their efforts to secure the

necessary documentation. The Committee did not submit the neceSSiJr'

documentation or proof of their efforts to obtain such documentatirJ:

for seven (7) of the unsupported expenditures (3.95~) totaling

$2,096.87 (4. 77r;,).

Recommendation

Based on the Committee's efforts, the Audit staff recommends

that the Commission determine that the Committee has used its

best efforts to comply with Section 432(d) and that no further

action be taken on this matter.

B. Chanljes in Statement of Organization

Section 433 (c) of rritle 2, United States Code requires

that any chan9c in information previously suumittcd in a statement

of orgllnization 5h.:\1] be reported to the Commission \..~ithin a 10

day period following the change.

Our rcvie\oJ of the Commi ttee' s original statement of

organization and subsequent amendments revealed that the Committee

did not disclose the present chairman of the Committee or the

present custodian of the Conwittee's books and accounts. In

addition, our reViC\'l of the Committee's bank records indicated

that the Committee diu not disclose one cumpaign depository. The

COInr.li ttcc agreed to [.i.le an amended statement of organization

to incl ude th(~sc ch&JlllJes, which occurred in 1976.

On \J an Uc3 r~o 2 (), 1979, the Comllli t tee filed an anendcd

statCr.lpnt of organizulion disclosinq the ncccssar:,' information.

Recommendation

\';t' recommcnLi th..it the Commission take no further action in

this matter.
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Other ~1iltters

l'resented below are other matters noted during the audit

for which the Audit staff feels that no additional action is

necessary.

'l'he solicitation materials of the Committee did ·not contain

the statement of availability of reports as required by section

435 (d) of tht.~ Act. Th(~ Committee chairman acknowledged the

omission and has slaLec.1 that he now fully understands the requirement.

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