Final Audit Report of the 

Commission on the New Hampshire 

Republican State 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 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 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 New Hampshire Republican State Committee is a state party 

conmiittee headquartered in Concord, New Hampshire. For more 

information, see the chart on the Committee Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals $ 427,091 

o Contributions from Other 295,028 

Political Committees 

o Transfers from Affiliated/Other 1,538,140 

Party Committees 

o Transfers from Non-federal 10,494 

Account 

o Offsets/Other Federal Receipts 9,758 

Total Receipts $ 2,280,511 

Disbursements 

o Other Federal Operating 

Expenditures 

o Refunds/Other Disbursements 

o Federal Election Activity 

o Transfers to Affiliated/Other 

Party Committees 

Total Disbursements 

$ 679,235 

12,961 

1,395,099 

176,375 

$ 2,263,670 

Commission Findings (p. 3) 

• Misstatement of Financial Activity (Finding 1) 

• Reporting of Debts and Obligations (Finding 2) 

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

Commission on the New 

Hampshire Republican State 

Committee 

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

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit I 

Limitations 1 

Audit Hearing 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Commission Findings 3 

Part IV. Commission Findings 

Finding 1. Misstatement of Financial Activity 4 

Finding 2. Reporting of Debts and Obligations 7 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the New Hampshire Republican State Committee 

(NHRSC), 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 committee 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 internal 

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. 2 U.S.C. §438(b). 

Scope of Audit 

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

factors and as a result, this audit examined: 

1. the disclosure of disbiu-sements, debts and obligations; 

2. the disclosure of expenses allocated between federal and non-federal accounts; 

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

4. the consistency between reported figures and bank records; 

5. the completeness of records; and 

6. other committee operations necessary to the review. 

Limitations 

In maintaining its disbursement records, NHRSC satisfied the minimum recordkeeping 

requirements of 11 CFR §102.9; however, the Audit staffs testing of disbursements was 

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

party records limited testing of the nature of the expenditures and the adequacy of 

disclosure information, such as, payee address and purpose for disbursements. 

Audit Hearing 

New Hampshire Republican State Committee declined the opportunity for a hearing 

before the Commission on the matter presented in this report. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration October 2, 1980 

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

Headquarters Concord, New Hampshire 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Four Federal, Two Non-Federal 

Treasurer 

• Treasurer When Audit Was Conducted Robert Scott 

• Treasurer During Period Covered by Audit Robert Scott 

Management Information 

• Attended FEC Campaign Finance Seminar No 

• Who Handled Accounting and Recordkeeping 

Tasks 

Paid and Volunteer Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash on hand @ January 1,2007 $ 39,293 

o Contributions from Individuals 427,091 

o Contributions from Other Political Committees 295,028 

o Transfers from Affiliated/Other Party 

Committees 

1,538,140 

o Transfers from Non-federal Account 10,494 

o Offsets/Other Federal Receipts 9,758 

Total Receipts $2,280,511 

o Other Federal Operating Expenditures 679,235 

o Refunds/Other Disbursements 12,961 

o Federal Election Activity 1,395,099 

o Transfers to Affiliated/Other Party Committees 176,375 

Total Disbursements $ 2,263,670 

Cash on hand @ December 31,2008 $ 56,134 
Part III 

Summaries 

Commission Findings 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of NHRSC s reported figures to bank records 

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

receipts and ending cash in 2008. For 2007, NHRSC understated receipts by $17,444, 

disbursements by $29,263 and overstated ending cash-on-hand by $9,929. In 2008, 

receipts were understated by $59,317 and ending cash-on-hand was understated by 

$26,142. In response to the Interim Audit Report, NHRSC amended its reports to 

materially correct the misstatements. 

The Commission approved a finding that NHRSC misstated financial activity for 

calendar years 2007 and 2008. (For more detail, see p. 4) 

Finding 2. Reporting of Debts and Obligations 

During audit fieldwork, the Audit staff noted that NHRSC did not disclose debts 

outstanding as of January 1, 2007, in the amount of $375,082 for legal services. In 

response to the Interim Audit Report, NHRSC amended its reports to materially correct 

the disclosure of these debts. 

The Commission approved a finding that NHRSC failed to disclose debt for legal services. 

(For more detail, see p. 7) 
Part IV 

Commission Findings 

Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of NHRSC s reported figures to bank records 

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

receipts and ending cash in 2008. For 2007, NHRSC understated receipts by $17,444, 

disbursements by $29,263 and overstated ending cash-on-hand by $9,929. In 2008, 

receipts were understated by $59,317 and ending cash-on-hand was understated by 

$26,142. In response to the Interim Audit Report, NHRSC amended its reports to 

materially correct the misstatements. 

The Commission approved a finding that NHRSC misstated financial activity for 

calendar years 2007 and 2008. 

Legal Standard 

Contents of Reports. Each report must disclose: 

• The amount of cash-on-hand at the beginning and end of the 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) or 

Schedule B (Itemized Disbursements). 2 U.S.C. §434(b)(l), (2), (3), (4) and (5). 

Facts and Analysis 

A. Facts 

As part of this audit, the Audit staff reconciled reported activity to bank records for 

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

beginning cash balances, receipts, disbursements, and the ending cash balances for each 

year. Succeeding paragraphs address the reasons for the misstatements, if known. 
2007 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2007 

$37,403 $39,293 $1,890 

Understated 

Receipts $298,127 $315,571 $17,444 

Understated 

Disbursements $299,428 $328,691 $29,263 

Understated 

Ending Cash Balance @ 

December 31,2007 

$36,102 $26,173 $9,929 

Overstated 

The beginning cash-on-hand was understated by $1,890, and is unexplained, but is 

likely the result of prior period discrepancies. 

The net understatement of receipts was the result of the following: 

• Unreported transfers from non-federal account $10,000 

• Reported intra-account transfer as a transfer from a non-federal account (500) 

• Unreported deposit 3,851 

• Unexplained difference 4.093 

Net understatement of receipts $17.444 

The understatement of disbursements was the result of the following: 

• Unreported disbursements $14,451 

• Unreported transfers to non-federal accounts 12,375 

• Unexplained difference 2.437 

Understatement of disbursements $29.263 

The $9,929 overstatement of the ending cash-on-hand was the result of the 

misstatements described above. 

2008 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2008 

$36,102 $26,173 $9,929 

Overstated 

Receipts $1,905,623 $1,964,940 $59,317 

Understated 

Disbursements $1,911,733 $1,934,979 $23,246 

Understated 

Ending Cash Balance @ 

December 31,2008 

$29,992 $56,134 $26,142 

Understated 
The net understatement of receipts resulted from the following: 

• Unreported transfers from Republican National Committee (RNC) $30,100 

• Unreported interest from a certificate of deposit 672 

• Unreported receipt from non-federal account 3,394 

• Transfer from RNC reported incorrectiy 900 

• Unreported receipt from a political party committee 40,000 

• Reported receipts not supported by deposits (5,000) 

• Receipts erroneously linked to committee (10,000) 

• Unexplained difference (749) 

Net understatement of receipts $59.317 

The understatement of disbursements in the amount of $23,246 resulted from 

disbursements that were not reported $12,674, disbursements reported incorrectly 

($2,706) and an unexplained under reporting of disbursements $13,278. 

The $26,142 understatement of the ending cash-on-hand was the result of the 

misstatements described above. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff presented this matter during the exit conference and provided work 

papers detailing the adjustments. NHRSC representatives made no comment on the 

issue. 

The Audit staff recommended that NHRSC: 

• Amend its reports to correct the misstatements for 2007 and 2008 as noted above; 

and, 

• Amend its most recently filed report to correct the cash-on-hand balance with an 

explanation that the change resulted from a prior period audit adjustment. 

Further, NHRSC should reconcile the cash balance of its most recent report to 

identify any subsequent discrepancies that may impact the $26,142 adjustment 

recommended by the Audit staff. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report, NHRSC filed amended reports that materially 

corrected the misstatements. 

In addition, NHRSC demonstrated that some adjustments suggested in the Interim Audit 

Report were not necessary. The amounts shown in the table above have been revised to 

refiect these changes. 

D. Draft Final Audit Report 

In the Draft Final Audit Report, tiie Audit staff acknowledged that it and NHRSC 

representatives agreed upon clarifications and the committee filed corrective 

amendments. 
Commission Conclusion 

On October 12,2011, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit Division recommended that the Commission adopt a 

finding that NHRSC misstated financial activity for calendar years 2007 and 2008. 

The Commission approved the Audit staffs recommendation. 

Finding 2. Reporting of Debts and Obligations 

Summary 

During audit fieldwork, the Audit staff noted that NHRSC did not disclose debts 

outstanding as of January 1, 2007, in the amount of $375,082 for legal services. In 

response to the Interim Audit Report, NHRSC amended its reports to materially correct 

the disclosure of these debts. 

The Commission approved a finding that NHRSC failed to disclose debt for legal services. 

Legal Standard 

A. Continuous Reporting Required. A political committee must disclose the amount 

and nature of outstanding debts and obligations until those debts are extinguished. 

2 U.S.C §434(b)(8) and 11 CFR §§104.3(d) and 104.11(a). 

B. Itemizing Debts and Obligations. 

• A debt of $500 or less must be reported once it has been outstanding 60 days from 

the date incurred; the committee reports it on the next regularly scheduled report. 

• A debt exceeding $500 must be disclosed in the report that covers the date on 

which tiie debt was incurred. 11 CFR § 104.11 (b). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff identified debt outstanding for legal services as of 

January 1,2007, totaling $375,082, not disclosed by NHRSC. During the audit period, 

NHRSC made payments, which reduced the outstanding balance to $305,082, as of 

December 31,2008. None of the reports filed during the audit period included the 

outstanding balance of this debt. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff presented this matter during the exit conference and provided work 

papers detailing the debts. NHRSC representatives made no comment on the issue. 

The Audit staff recommended that NHRSC amend its reports to disclose this debt and 

corresponding debt payments on Schedules D. 
C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report, NHRSC filed amended reports that materially 

corrected the disclosure of these debts. 

D. Draft Final Audit Report 

In the Draft Final Audit Report, the Audit staff acknowledged that it and NHRSC 

representatives agreed upon clarifications and the committee filed corrective 

amendments. 

• 

Commission Conclusion 

On October 12,2011, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit Division recommended that the Commission adopt a 

finding that NHRSC failed to disclose debt for legal services. 

The Commission approved the Audit staffs recommendation.