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FEDlR/\1. ELECTION COMMISSION

lUc; '110:111 N W.

W""tU,C 1()N.fll". ln4h~

REPORT OF THE AUDIT DIVISION

ON THE

GINGRICH CAMPAIGN FUND

I. Background

A. Overview

This report is based on an audit of the Gingrich

Campaign Fund ("the Committee"), undertaken by the Audit

Division of the pcderal Election Commission in accordance

with the Commis:';ion' s audit policy to dctermine whether

there has been compliance with the provisions of the Federal

Election Campaign Act of 1971, as amcnded ("the Act"). The

audit was conducted pursuant to Section 438(a) (8) of Title

2 of the United States Code which directs the Commission to

make from time to time audits and field investigations with

respect to reports and statements filed under the provisions

of the Act•

The Committee registered with the Office of the

Clerk of the United States House of Representatives on

January 10, 1974, in support of Mr. NC\oJton J,. Gingrich,

candidate for the office of United States Representative for

the 6th Congressional District of Georgia. The Candidate

designated the Committee as his principal campaign committee

on March 24, 1976. The Comnlittee maintains its headquarters

in Carrollton, Georgia.

The audit covered the period from January 1, 1975,

through September 30, 1977, the final coverage date of the

latest report filed by the Conunittce at the time of the audit.

The Comnlittee reported a beginning cash balance on January 1,

1975 of ($31), total receipts for the period of $157,927.32,

total expenditures for the period of $157,830.41 and a closing

cash balance on September 30, 1977 of $67.24. ~/

This audit report is based on documents and working

papers which support each of the 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 Commissioners

and appropriate staff for review.

!/ Insignificant difference $1.33, Conmittec incorrectly 0\0"0\ carricd forward their cash on hand figure.

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B. Key Pcrnonnel

The principal officers of the Committee during the

period of the audit were Mrs. Jan Whaley, Chairperson from J~nu~ry 1, 1975 through April 25, 1976: Mr. Gary G. Crook, Ch~irman from April 26, 1976 through September 30, 1977: Mrs.

Jan Whaley, Co-Chairperson from April 26, 1976 through September

30, 1977; and Mr. Roger Miles, Treasurer from January 1, 1975

thr-ou(Jh December 31, 1975; Mr. L. 11. Carter, Treasurer from

January 1, 1976 through September 30, 1977.

C. Scope

The audit included such tests as verification of total

reported receipts and expenditures and individual transactions;

review of required supporting documentation; analysis of

Committee debts ~nd obliqations; and such other audit procedures

as deemed neces~ary under the circumstances.

II. Auditor's Statement and Description of Findings

It is the opinion of the Audit staff, based upon examination

of the reports and statements filed and the records presented,

that except for the deficiencies noted below, the reports and

statements of the Gingrich Campaign Fund fairly present the

financial activities of the Committee for the period covered by

the audit. Further, except as noted below, no material problems

in complying with the Federal Election Campaign Act were

discovered during the course of the audit.

A. Retention of Supporting Documentation for Expenditures

Section 432(d) of Title 2 of the United States Code

states, in part, that it shall be the duty of the treasurer to

obtain and keep a receipted bill, stating the particulars, for cvc~y expenditure made by or on behalf of a political committee

in excess of $100 in amount, and for any such expenditure in a

lesser amount, if the aggregate amount of such expenditures to

the same person during a calendar year exceeds $100.

Section l02.9(c) (4) of the Commission's Regulations

states that if a receipted bill is not available, the treasurer

may keep the cancelled check showing payment of the bill; and

the bill, invoice or other contemporaneous memorandum of the

transaction.

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During the course of the audit, it was determined that

the Conunittee did not obtain and keep the bill, invoice or

other contemporaneous memorandum for 74 expenditures, totaling

$34,717.73. These figures represent 13.5~ of the number and

24.6% of the total dollar value of expenditures requiring

supporting documentation.

The treasurer stated that he would make an effort to

obtain these documents and forward them for our review.

Recommendation

The Committee obtained 52 of the 74 necessary documents,

and made them availaule to the Audit staff for review. In

addition, the Committee officials presented evidence of their

efforts to obtain the documentation for the remaining 22 items.

It is our opinion that the Committee has demonstrated its best

efforts to obtain and submit the required documentation, pursuant

to Section l02.9(e) of the Commission's Regulations, therefore,

we recommend no further action on this matter.

Section 433(c) of Title 2 of the United States Code

states, that any change in information previously submitted in

a statement of organization ~;hall be reported to the Commission

within a lO-day period following the change.

B. Changes to Statement of Organization

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From our review of the Committee records and through

discussions with the treasurer, we determined that the Committee's

statement of organization had not been updated to disclose either

the current or previous trcil~;urer of the Committee. The treasurer

indicated that he was not aware that this situation existed.

Recommendation

Since the Committee has filed the necessary amendment on

March 31, 1978, disclosing the required information, we recommend

no further action on this matter. .

c. Reporting of Total Receipts and Expenditures

Section 434(b) (8) and (11) of Title 2 of the United

States Cod~ states, in part, that each report shall disclose

the total sum of all receipts and expenditures by or for such

cOMnittce or candidate during the reporting period •

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Our review of the Committee's records indicated that

the Committee itemized a loan rcp~ymcnt of $1,000, as a negative

receipt on Schedule A, Line lab, and also itemized a refund of

$533 as a negative expenditure on Schedule B, li~e 20a. The

loan repayment was made by check drawn on, and the refund was

deposited in, the Committee's depository. The reporting of

these transactions did not affect ending cash, but understated

both reported receipts and expenditures by $1,533.

The treasurer stated that he was not aware that this

reporting practice would affect receipts and expenditures in

this manner.

Rcconunendation

Since the Committee has filed an amended report on March 31,

1978, properly disclosing these transactions, we recommend no

further action on this matter.

D. Reporting of Debts and Obligations

Section 434(b) (12) of Title 2 of the united states Code

states, in part, that each report shall disclose the amount and

nature of debts and obligations owed by or to the committee, in

such form as the Commission may prescribe.

Section l04.8(a) of the Commission's Regulations states,

in part, that debts and obligations which remain outstanding

after the election shall be continuously reported until

extinguished.

1) During the course of the audit, it was determined

that the Committee reported 54 debts on its Schedule C, however,

in 26 instances the Committee did not disclose the final payment

of each debt on this schedule. The treasurer stated he was not

aware of this oversight.

2) It was also determined that the Committee reported

a transfer to an affiliated committee, but erroneously reported

this transaction as a debt owed to the Comnlittee on Schedule C,

line 26. The treasurer stated that this transaction was a transfer

and not a loan to the affiliated committee.

Reconlfficndat ion

Since the Committee has filed the required amendments to

Schedule C disclosing the necessary transactions and deleting

the erroneously reported debt, we recommend no further action

on these matters.

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