Draft Final Audit Report on the 

Kansas Republican Party 

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). TheCommission 

generally conducts such 

audits when a 

committee appears not 

to have met the 

threshold requirements^ 

for substantial 

compliance with the 

Act. The audif 

determines'^fietherthe 

committee;complied 

with<^^|mitations, 

prohibitions^c 

disclosure requi 

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) 

The Kansas Republican Party is a^t^t^^arty committee 

headquartered in Topeka, Kansas. ^For mp information, see the 

chart on the Committee 0rgani,^^^n, p. 2 

Financial Activist 

• Receipts 

o Contributions from Individuals 

o Coritributions from Other/\ 

Polit^icarCommittees \/\ ^ 

o TransftSs^rom^-ffiliated/Otnfer / 

Party Committe^ 

o TransfersSfrom^rortfed 

Account \ / y 

_ _ ill Other Receipts 

^otal Receiplt^V^ 

IHsbursements \ / 

Op^^img-Di&bursements 

o \ All Otfifer-Disbursements 

>tal Disbursements 

$ 645,470 

50,877 

45,475 

22,239 

14,774 

$ 778,835 

$ 781,733 

6,485 

$ 788,418 

indi^gfs and Recommendations (p. 3) 

> Misstatement of Financial Activity (Finding 1) 

i /Receipt of Apparent Prohibited Contributions (Finding 2) 

¥ Payment of Federal Activity Out of Non-federal Accounts 

(Finding 3) 

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

Kansas Republican Party 

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

Part I. Background 

Authority for Audit 

Scope of Audit 

Limitations 

Part II. Overview of Committee 

Committee Organization 

Overview of Financial Activity 

Part III. Summaries 

Findings and Recommendations 

Part IV. Findings and Recommendat 

Finding 1. Misstatementof Financial Activity 

Finding 2. Receipt of Apparent Pron^ited Contributions^ ^ 

Finding 3. Payment of Federal Activite^i^Q^^CNon-federal A^cbunts 

Page 

4 

6 

9 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the Kansas Republican Party (KRP), 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 th^Gcnnmission to 

conduct audits and field investigations of any political committee^tliansVequired to file a 

report under 2 U.S.C. §434. Prior to conducting any audit und^ this subsection, the 

Commission must perform an intemal review of reports fil^'^y^elected committees to 

determine if the reports filed by a particular committee^mee^the thrb^hbld requirements 

for substantial compliance with the Act. 2 U.S.C. §.4^8(^)^^ 

Scope of Audit 

Following Commission approved procedures^ the 

factors and, as a result, this audit examined: 

^^uated variou^risk 

1. The disclosure of disbursements, \^ts>.and obligationsN^ 

2. The disclosure of expenses allocated^betwieeri federal and^nort-federal accounts. 

3. The disclosure of individual contriba^o^^oc^i^ati^n and nameof employer. 

4. The receipt of contributions from proh^bited/^otir-c^st'""^-;^^ 

5. The consistency betweisn^i:eported figures^nd bank r^rds. 

6. Thecompletene^s^o'free 

7. Other committeeSqperations necessary to t 

Limitations 

review. 

In maii)taimrigits^isburseme^f chords, KRP satisfied the minimum recordkeeping 

reqifirements of 11 CF]fe^§102.9;^^^er, the Audit staffs testing of disbursements was 

limited^by the lack of external documentation, such as invoices. This lack of third party 

records^limited the testing fpr recc^r^keeping and the proper reporting of debts and 

obligatidns; as^well as the adequacy of disclosure of information, such as, payee, address 

and purposesfordisbursements 
Part II 

Overview of Committee 

Committee Organization 

Important Dates Kansas Republican Party 

• Date of Registration March 15,1979 

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

/ \ 

Headquarters Topeka, Kansas / 

/ < 

Bank Information //\ \ 

• Bank Depositories One ^ ( \ X 

• Bank Accounts Six E^^l^ d Fourlsibik-federal 

Treasurer ^ X ^ X'' W 

• Treasurer When Audit Was Conducted ^ "St^^itzgelrsttd I:/ ' 

• Treasurer During Period Covered by Audit Enifmf&MfeJhelTtthru 2/04/Otf 

Davi<rnidme (2/05/07 thru 12/17/07) 

Morey SuljivJuj (12/18/07 thru 2/17/09) 

\ ^ 

Management Information \ \ . \ •) / 

• Attended Commission Campaign Financ&\ 

Seminar ^— \ 

• Used Commonly Av^rlablfe^Campaign \ \ 

Management Software Packagp \ \ 

Yes ^ 

• Who Handled Accobntihg and' 

Recordkeeping Tasks 

^I' d staff 

Ov^rvi<^%>^f Financial Activity 

(Audited Amounts) 

Cash on hanclvi^Slfanuary l) 2^007 $ 14,426 

Receipts \ \ / / 

o Contributions fr'onilndiViduals $ 645,470 

o Contributions from Qther Politicai Committees 50,877 

o Transfers from AfifTliated/Other Party Committees 45,475 

o Transfers from Non-federal Account 22,239 

o All Other Receipts 14,774 

Total Receipts $ 778,835 

Disbursements 

o Operating Disbursements $781,933 

o All Other Disbursements 6,485 

Total Disbursements $ 788,418 

Cash on hand @ December 31,2008 $ 4,843 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

A comparison of KRP's reported figures to bank records revealed a nnsStatement of receipts, 

disbursements and cash-on-hand in both 2007 and 2008. For 2007JGlP~d^erstated beginning 

cash on hand by $4,628, overstated receipts by $11,885, understated disbursements by $11,370 

and overstated ending cash-on-hand by $27,883. In 2008, rec^siptsWre^understated by 

$111,149, disbursements understated by $176,956 and the ena^g cas)^-(^n-hand was overstated 

by $93,690. In response to the interm audit report recorpmejidation, KRP^ahieiided its reports to 

materially correct the misstatements noted above. (For^nfbre detail, see p. 4)^ 

Finding 2. Receipt of Apparent ProhibitedJ^ntributions 

Based on a review of contributions received by KRP, thc^dit^stamdentified four contributions 

totaling $52,498 which appear to be from prohibited sourcb^ In response to the interim audit 

report, KRP indicated it had transferred $r5^Q00 from its fed^r^ipcuts non-federal account. 

Citing insufficient funds, KRP amended it^ii:io^t;i«i^nt report to^istLo^e a debt to its nonfederal account for the remaining prohibitedxoritri^Otioiis of $37,49^/(For more detail, see p. 6) 

Finding 3. Payment-.of Federal "^^ctivityxOut of Non-federal 

AccoiintSN,^ \{ ^ 

KRP appears to have^properlyinaae payments^totaling $104,859, from its non-federal 

accounts for federal^exi)en^e^. In response to the 'ir^p?n audit report, KRP amended its reports 

to disclose these disbursements^p ^id from4ts non-federal account for federal/shared expenses. 

(For more deta'il7see"p..9) ^ ^ ^ — / 
Part IV 

Findings and Recommendations 

I Finding 1. Misstatement of Financial Activity 

Summary 

A comparison of KRP's reported figures to bank records revealed a misstatement of receipts, 

disbursements and cash-on-hand in both 2007 and 2008. For 2007, K^~^3i^rstated beginning 

cash on hand by $4,628, overstated receipts by $11,885, understated disbursements by $11,370 

and overstated ending cash-on-hand by $27,883. In 2008, rec^i^s^'Ayereunderstated by 

$111,149, disbursements understated by $176,956 and the en^i^ cash^-^iand was overstated 

by $93,690. In response to the interm audit report recoinnibndal^on, KRP^amended its reports to 

materially correct the misstatements noted above. 

Legal Standard 

Contents of Reports. Each report must disclose: 

• The amount of cash on hand at the beginning and end^ th^ reporting period; 

• The total amount of receipts for the ^porting period and^rti^ calendar year; 

• The total amount of disbursements foV>^he^poit^ period^ilid^pi^ calendar year; and 

• Certain transactions that require itemiza|iph-<)^jSch^dule A (Itemhsed Receipts) or Schedule 

B (Itemized Disbursements). 2 U.S.C. §4X4(W;)J^>(3), (4)ind(5). 

Facts and Analysis, 

The Audit staff reconciled reported lictivity to ba\ik records for calendar years 2007 and 2008. 

The following chart^outhne the discrepancies for the^ginning cash balances, receipts. ^ _ _ _ '~yr o o ^ r ' 

disbursements, and the enchng^cash balances for ea^byear. Succeeding paragraphs address the 

reasons for the^misstatemem 

^20pVCommittee Activity ^ / 

\ \ • \ .\ 

^ Reported Bank Records Discrepancy 

Begini^ng^Qash Balance / 

@ January 4 i2P07 }/ 

$19,054 $14,426 $4,628 

Overstated 

Receipts $184,566 $172,681 $11,885 

Overstated 

Disbursements ^ $172,457 $183,827 $11,370 

Understated 

Ending Cash Balance @ 

December 31,2007 

$31,163 $3,280 $27,883 

Overstated 

The beginning cash on hand was overstated by $4,628 and is unexplained, but likely resulted 

from prior period discrepancies. 
The overstatement of receipts was the result of the following: 

• Contribution amount incorrectly reported (see details below) 

• Reported non-federal caucus receipts in error 

• Transfer of funds from non-federal not reported 

• Unexplained difference 

Net Overstatement of receipts 

The understatement of disbursements was the result of the following: 

• Transfer to non-federal account not reported (see details below) 

• Disbursements not reported 

Understatement of disbursements 

$ 8,220 

(25,000) 

2,599 

2.296 

$ n 1.885^ 

$ 8,220 

3.150 

$ 11.370 

KRP received a $15,000 contribution from an individual and d^osited^e funds to its federal 

account on October 24,2007. KRP reported the amount^f-^^ dontributibi^aSvS6,780, which 

represented the contribution limit for individuals $]0^Q0 less $3,220 the ambunt^of 

contributions already received from the individuabOTiqr to Octdto 24,2007, tlm^^^''^'^ 

understating receipts by $8,220 ($15,000-$6,780Mn^ition,^Ki^transferred $8,220 the 

excess portion of the contribution, from its federal accoui;it tO'lt^no^ account on 

October 25, 2007, but did not include the disbursement onite 2Q07 November monthly report. 

The $27,883 overstatement of the closing caslT^-hand was the 

described above. 

f>the misstatements 

In 2008, one of five accounts-that KRP considbred'io be nonrfederal bank accounts had a 

significant number of transactions which appeared to be federal in nature. Nearly all recei] 

and expenditures relate^^o attendance at the Republican National Convention. The Audit 

has included all acti^ity>irbm this account in reporbble>activity. 

/ V V \ \ 'Reported Bank Records Discrepancy 

Beginhing Cash Bal^nc^v 

(a, Jahviary 1,2008 \ j 

) / $31,163 $3,280 $27,883 

Overstated 

Receiptk\^^\^ J j $495,005 $606,154 $111,149 

Understated 

DisbursemeniSv^^^^^^ $427,635 $604,591 $176,956 

Understated 

Ending Cash Balance @ 

December 31,2008 

$98,533 $4,843 $93,690 

Overstated 

The understatement of receipts resulted from the following: 

• Receipts deposited into National Convention account not reported 

• Refund received from Paychex not reported 

• Receipts from various federal accounts not reported 

74,320 

2,846 

25,822 
• Permissible cash deposit for sale of yard signs not reported 13,236 

• Reported non-federal caucus receipts in error (10,000) 

• Transfers from the non-federal account not reported 13,737 

• Unexplained difference (8.812^^ 

Net Understatement of receipts $ 111 149 

The $74,320 in receipts deposited into the National Convention account included $42,498 that 

represents three possible prohibited contributions which were used to defray the cost of hotel 

rooms, breakfasts for the delegates, and entertainment as discussed in Fihding 2 below. 

The understatement of disbursements resulted from the following-f^^^^^^^^^ 

• Transfers to the non-federal account not reported /^/^^^^\ \ ^ 5,500 

• Disbursements from National Convention account, as discussed aboyeX 

not reported \! \ 105,243 

• Disbursements not reported X X 66.213 

Understatement of disbursements / V \ . $-"f76.9S6 

The majority of the $105,243 disbursements from the Na^iohsfj/Convbntion account were used 

for convention lodging expenses at the h^teUind payroll cos^sX^^ 

The $93,690 overstatement of the closing^cas^n-hand was the resultofHhe misstatements 

described above. 

The Audit staff discussed the-iniststatements fdi^20p7 and 2008/With a KRP representative during 

the exit conference and,pibvidied cbpies of relev^t workpapers detailing the misstatements. The 

KRP representative st^efd that cotreotive amendments would be filed. 

Interim Audit RepoH,^l^^omme^^ Committee Response 

The Audit staffYecrpmmended^at KRP^amondjts reports to correct the misstatements for 2007 

and 2008,ai^noted~^abpyeNJt wasNalso recommended that KRP amend its most recently filed 

report to Correct the ca^h^n^hand b^lahce^ith an explanation that the change resulted from a 

prioi^enod^udit adjustment^d thaKK^ reconcile the cash balance of its most recent report to 

identify any subsequent dis^i^e]pancies^hat may impact the $93,690 adjustment recommended by 

the Audit stkff. In response to me interm audit report recommendation, KRP amended its reports 

to materially c^trectythe^mi^i^^men^^ noted above. 

I Finding 2. Reqe^pt of Apparent Prohibited Contributions 

Summary 

Based on a review of contributions received by KRP, the Audit staff identified four contributions 

totaling $52,498 which appear to be from prohibited sources. In response to the interim audit 

report, KRP indicated it had transferred $15,000 from its federal to its non-federal account. 

Citing insufficient funds, KRP amended its most recent report to disclose a debt to its nonfederal account for the remaining prohibited contributions of $37,498. 
Legal Standard 

A. Receipt of Prohibited Corporate Contributions. Political committees may not accept 

contributions made from the general treasury funds of corporations. This prohibition applies to 

any type of corporation including a non-stock corporation, an incorporated membership 

organization, and an incorporated cooperative. 2 U.S.C. §44lb. 

B. Definition of Limited Liability Company. A limited liability company (LLC) is a business 

entity that is recognized as an LLC under the laws of the state in which it was established. 11 

CFR §110.1(g)(1). 

C. Application of Limits and Prohibitions to LLC Contributicm». A contribution from an 

LLC is subject to contribution limits and prohibitions, dependin^''6hxseVeral factors, as explained 

below: v f 

1. LLC as Partnership. The contribution is considece^s^ntributionvfrom a partnership if 

the LLC chooses to be treated as a partnership Revenue Slervice (IRS) tax 

rules, or if it makes no choice at all about itsls^ status.^A contributior^byVJ)artnership is 

attributed to each partner by his or her share^Qf^e partnership profits. 1 NDEI(^§1 10.1 

(e)(1) and (g)(2). 

2. LLC as Corporation. The contribution is considered a^orporate contribution—and is 

barred under the Act—if the LLC>ehooses to be treaie^^Sva corporation under IRS rules, 

or if its shares are traded publiclyV iT^CER §110.1(g)(3>. 

3. LLC with Single Member. The con£ibutioI^is^nsiderea'a contribution from a single 

individual if the LLC is a single-menu^er LLG tha^h^ not ^hosen to be treated as a 

corporation under IRSmles. 11 CFR\I^/1^)^ V " 

D. Limited Liabilitv.Company^s Kesponsibili^to Notify Recipient Committee. At the time 

it makes a contribu^m^m^ must notify the recipi^^t committee: 

• That it is eligible to niak^heContribution; and V/ ^ 

• In the case^of-an^C tW cbri§iders^$self>-p^Hnership (for tax purposes), how the 

contribufion-should^be attributed amonglhTe^^LC's members. 11 CFR §110.1(g)(5). 

£. ^uest'iimable Contributions. If^ committee receives a contribution that appears to be 

prohibitedik^questionable cc^n^ibution), it must follow the procedures below: 

1. Witnin rO^days after the ^reasurer receives the questionable contribution, the committee 

musteitlMrk j j 

• Retum^lhe^contrihution to the contributor without depositing it; or 

• Deposit the^d^nbution (and follow the steps below). 11 CFR §103.3(b)(l). 

2. If the committe^deposits the questionable contribution, it may not spend the funds and 

must be prepared to refund them. It must therefore maintain sufficient funds to make the 

refunds or establish a separate account in a campaign depository for possibly illegal 

contributions. 11 CFR § 103.3(b)(4). 

3. The committee must keep a written record explaining why the contribution may be 

prohibited and must include this information when reporting the receipt of the 

contribution. 11 CFR §103.3(b)(5). 

4. Within 30 days of the treasurer's receipt of the questionable contribution, the committee 

must make at least one written or oral request for evidence that the contribution is legal. 
Evidence of legality includes, for example, a written statement from the contributor 

explaining why the contribution is legal or an oral explanation that is recorded by the 

committee in a memorandum. 11 CFR § 103.3(b)(1). 

5. Within these 30 days, the committee must either: 

• Confirm the legality of the contribution; or 

• Refund the contribution to the contributor and note the refund on the report covering 

the period in which the refund was made. 11 CFR § 103.3(b)(1). 

Facts and Analysis yv 

The Audit staff reviewed contributions received by KRP and identifi,ej^/^f0iir^contributions 

totaling $52,498 from apparent corporate entities. The Audit staff'verified with the Secretary of 

State that three of these entities were incorporated when die oontprbuubns ($42,498) were made. 

These amounts were deposited into the account discussed in ending l\^Dbve used for national 

convention expenses that KRP did not consider to be a f^dSral account. T4^e^ontributions were 

to defray the cost of hotel rooms, breakfasts for the d^l^afes^nd entertainmentat the 

convention. 

The one remaining contribution ($10,000) was determmed^o b^fvim a limited li^lity company 

which may choose a corporate tax filing status. As suciW limited liability company was 

required to affirm to KRP that it was eligible to make the cbntfilnition based on its tax filing 

status being other than corporate. Reco^^ro^ed by KRP aid tipt contain any such 

affirmations or any follow-up by KRP to verify eligibility. 

The Audit staff presented this matter to a KKP\repres^ntativb-during the exit conference along 

with a schedule of the apmFent-prohibited contributions. The ^RP representative stated they 

would send a letter requ^in'g the tlax filing stat^s^ibr the limited liability company and would 

refund any remainingpr0hibited\pntributions. \ \ 

Interim Audit Repor^ Recommendation) and Committee Response 

The Audit st^reGOi^Tmende^^^ detailing the tax filing status for 

the contribu^ii-frbin^th^ liiabilityCompany and demonstrate that the remaining three 

contribMtibns were m^^with perh^i^i^e funds. Absent such evidence, it was recommended 

that^!^ refund the $52X9<^ to the contributors or transfer the funds to a non-federal account 

and provi<je^ocumentation^ifVich refunds (i.e., copies of each negotiated refund check, front 

and back) or.^rknsfer. If funds y^ere not available to make the refunds or transfer, then the 

refunds or transfe^due were to ,be disclosed on Schedule D (Debts and Obligations) until funds 

became available^tp ihake the/refunds or transfer. In response to the interim audit report KFP 

acknowledges that thqsVc!6ntributions were received from corporations or companies taxed as a 

corporation and deposited into its Federal account rather than its non-federal account. KRP 

transferred $15,000 on Janurary 25, 2010, from its federal account to its non-federal in partial 

payment of prohibited contributions and also amended its most recent report to disclose the 

remaining obligation of $37,498 ^ on Schedule D as owed by KRP to its non-federal account. 

^ In its response, KRP noted a portion of a prohibited contribution had been refunded; however, the refund was 

made from its non-federal account. In amendments filed, KRP included this in the amount owed to its non-federal 

on Schedule D. 
Finding 3. Payment of Federal Activity Out of Non-federal 

Accounts 

Summary 

KRP appears to have improperly made payments, totaling $104,859, from its non-federal 

accounts for federal expenses. In response to the interim audit report, KRP amended its reports 

to disclose these disbursements paid from its non-federal account for federal/shared expenses. 

Legal Standard 

A. Accounts for Federal and Non-federal Activity. A part^^mmittee that finances political 

activity in connection with both federal and non-federal elections^mu^tsestablish two 

accounts (federal and non-federal) and allocate shared^xpe^es-those that simultaneously 

support federal and non-federal election activity—b^tweBi^^the two accbimb. Altematively, 

the committee may conduct both federal and nonfederal activity from one^l^kRecount, 

considered a federal account. 11 CFR §102.^(a)(l)(i). ^ \ \ . / 

B. Paying for Allocable Expenses. Commission regulafioh^tfer party committees two ways 

to pay for allocable, shared federal/npn-federal expenres^-V 

• They may pay the entire amount of the^ared expenseS^ohi the federal account and 

transfer funds from the non-federaUacQbutitsto the federal^ac^urft to cover the nonfederal share of that expense; or \ \ 

They may establish a separate, federal^lloca^^on-accdunt^iito which the committee 

deposits funds from'{)Oth-ite federal ana^^i^ederahu;counts solely for the purpose of 

paying the allocabl^^pensbs of shared federal/non-federal activities. 11 CFR 

§106.5(g)(l)X4)ahd(ii)(A>, ' ' 

C. Reporting Allocable^IJxpen^es.SVp.Qhtical coipmittee that allocates federal/non-federal 

expenses^must-report eacl^^isSufsibme^^in^^ from its federal account (or separate 

allocation-accoiuEiQ^pay fo'^Vshared fed^r^l/non-federal expense. Committees report these 

kind^of disbursen^nts'lDn Sc^t kdi^le H;4 (Joint Federal/Non-federal Activity Schedule). 11 

g^W.10(b)(4). 

D. Allocation^Ratio for Administrative & Non-Candidate Specific Voter Drive Costs. State 

and local parfy^ " ' 

specific votei 

u'^xommittees^ust allocate their administrative expenses and non-candidate 

VdriVe costs-^^ccording to the fixed percentage ratio. Under this method, if a 

Presidential cand^dkte-^d Senate candidate appear on the ballot, the committees must 

allocate at least 3^0^expenses to their Federal funds. 11 CFR §106.7(d)(2)(ii) and (3)(ii). 

Facts and Analysis 

Distinct from the National Convention account addressed previously in Finding 1. Misstatement 

of Financial Activity, the Audit staff determined that KRP maintained four non-federal bank 

accounts. KRP made payments from two of its non-federal account totaling $104,859 that 

should have been paid from a federal account. Most of these payments were for allocable 

administrative and non candidate specific voter drive expenses, which KRP should have paid 

from a federal account and reported on Schedule H-4 using the fixed percentage ratio of 36% 
10 

federal and 64% non-federal in accordance with 11 CFR §106.7(d)(2)(ii) and (3)(ii). Below is a 

breakdown of the $104,859 in federal activity paid from the non-federal account: 

Pavment and Disclosure of Non Allocable Federal Election Activitv CFEA') 

Two payments totaling $7,639 were disbursed from one of the non-federal accounts for a mailer 

($6,000) which mentions a federal candidate and purchase of convention pins^ ($1,639). It 

appears KRP should have paid these expenses from a federal account. 

Pavment and Disclosure of Lodging Expense ^ 

Also, KRP paid $5,000 from one of their non-federal accounts for lod^^^^rtaining to the 

national party convention. This expense should have been paid frpifn^a. federal account. 

Pavment and Disclosure of Allocable Administrative Costs 

Additional expenses totaling $83,861 disbursed from twojion-^f^eral a^c^ihite for postage, rent, 

consulting, travel reimbursements, printing, phone service^nd^^ffice supplie^/v^re identified as 

apparent allocable administrative costs. Available ddcumentation does not indi^t^that any of 

these payments were for solely non-federal activities; therefore^they are treated as altj^able 

administrative expenses. The federal share for these expends U$M^190 ($83,86 l2>n6% Federal 

share). \ \ / 

Pavment and Disclosure of Printed Mate^als^ ^ 

Finally, $8,359 was disbursed from a non-^eraHiec^nt for printeo'malerials for which copies 

were not available to assess the nature of these expenditures. As suchf the Audit staff could not 

verify that these expenditures were properly nmde frprfi^th^on-fisderal account and were not 

required to be reported tojthe~Commission. Sho^ld^documenta^ion be provided to indicate these 

expenditures are other tlmn^liely ibn-federal in\ii^ature, KR^ should properly disclose these 

transactions. ) 1^ 

The Audit staff compared rdml^ursements:F&c.giy^^ the non-federal account for its share of 

allocable actiVi^TTThisi^nalyisis h^icated~the.i^ account could have reimbursed an 

additiorml^mounTthatU in e^ amounts at issue. Therefore, after considering all 

adjustments, it is concluded that there was;;no net funding of federal activity by the non-federal 

comf^ittee^t the end of th^Nt>vo year audit period and only the disclosure issues need to be 

addressed^by'^CRP. \ \ <^ 

At the exit conference, the Audit staff addressed these matters and provided schedules 

identifying the trsms^pp^^ted above to a KRP representative. The KRP representative stated 

that they would file ainended reports to include these memo entries. 

Interim Audit Report Recommendation and Committee Response 

The Audit staff recommended KRP demonstrate that the identified disbursements paid from the 

non-federal account are solely non-federal expenses. As part of that demonstration KRP was 

requested to obtain and provid samples of the printed materials ($8,359) and a sample or 

^ The Audit staff is unable to verity that this disbursement was properly made from a non-federal account. The 

purchase of the pins was in close proximity to the convention and other payments made to that vendor were for 

convention gifts. However, should a copy of the pin or a description of its content be provided indicating the nature 

of this expense to be allocable or solely non-federal, the Audit staff will revise its conclusion. 
11 

description of the pin to demonstrate the nature of these expenditures. Absent such a 

demonstration, it was recommended that KRP amend its reports to disclose, as memo entries, the 

above noted disbursements on Schedules B (Itemized Disbursements) or H-4 (Disbursement for 

Allocated Federal/Nonfederal Activity), as appropriate. In response to the interim audit report, 

KRP noted that due to scant records it is unable to demonstrate that these disbursements are for 

non-federal purposes. In light of the lack of records and that no non-federal overfunding 

occurred, KFP amended its reports to correctly disclose these disbursements.