Final Audit Report of the 

Commission on the National 

Council of Farmer Cooperatives 

Co-op/PAC 

(January 1, 2009 - December 31, 2010) 

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 

(tiie Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

witii tiie Act.^ The audit 

determines whether the 

committee 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 any of 

the matters discussed in 

this report. 

About the Committee (p. 2) 

The National Council of Farmer Cooperatives Co-op/PAC is a 

non-connected, qualified, multi-candidate political action 

committee and is headquartered in Washington, D.C. For more 

information, see chart on Committee Organization, p 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions fi'om Individuals 

o Contributions from Other 

Political Committees 

o Other Receipts 

Total Receipts 

• Disbursements 

o Contributions to Political 

Committees 

o Other Disbursements 

Total Disbursements 

$ 64,195 

46,000 

6,352 

$ 116,547 

$ 128,500 

421 

$ 128,921 

Commission Findings (p. 3) 

• Misstatement of Financial Activity (Finding 1) 

• Disclosure of Occupation/Name of Employer (Finding 2) 

• Disclosure of Contributions to Candidate Conunittees (Finding 3) 

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

Commission 

on the 

National Council of Farmer 

Cooperatives Co-op/PAC 

(January 1, 2009 - December 31, 2010) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Audit Hearing 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Commission Findings 

Finding 1. Misstatementof Financial Activity 4 

Finding 2. Disclosure of Occupation/Name of Employer 6 

Finding 3. Disclosure of Contributions to Candidate Committees 8 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the National Council of Farmer Cooperatives Coop/PAC (NCFC), undertaken by the Audit Division of the Federal Election Commission 

(tiie Conimission) 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 Commission 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 intemal 

review of reports filed by selected committees to determine whether 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 Conunission-approved procedures, the Audit staff evaluated various risk 

factors and as a result, this audit examined: 

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

2. the disclosure of disbursements; 

3. the consistency between reported figures and bank records; 

4. the completeness of records; and 

5. other committee operations necessary to the review. 

Audit Hearing 

NCFC declined the opportunity for a hearing before the Conimission on the matters 

presented in this report. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration September 24,1976 

• Audit Coverage January 1,2009 - December 31,2010 

Headquarters Washington, DC 

Bank Information 

• Bank Depositories One 

• Bank Accounts One Checking 

Treasurer 

• Treasurer When Audit Was Conducted Kelsey Swango 

• Treasurer During Period Covered by Audit Randall Jones 9/20/06-3/25/09 

Jill Thomson 3/26/09-8/23/11 

Management Information 

• Attended Commision Campaign Finance 

Seminar 

Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand ® January 1,2009 $ 44,630 

Receipts 

o Contributions from Individuals 64,195 

o Contributions from Other Political 

Committees 46.000 

o Other Receipts 6,352 

Total Receipts $ 116,547 

Disbursements 

o Contributions to Political Committees 128,500 

o Other Disbursements 421 

Total Disbursements $ 128,921 

Cash-on-hand @ December 31,2010 $ 32,256 
Part III 

Summaries 

Commission Findings 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of NCFC's reported figures with its bank records 

indicated that in 2009, NCFC understated receipts and disbursements by $10,770 and 

$806, respectively, and overstated ending cash by $5,134. In 2010, NCFC overstated 

beginning cash by $13,001 and disbursements by $6,500. In response to the Interim 

Audit Report, NCFC filed amended disclosiu-e reports to correct the misstatements. 

The Commission approved a finding that NCFC misstated its financial activity for 

calendar years 2009 and 2010. 

(For more detail, see p. 4.) 

Finding 2. Disclosure of Occupation/Name of Employer 

During audit fieldwork, a review of itemized contributions from individuals indicated that 

57 percent of the contributions failed to include adequate disclosure for occupation and 

name of employer. The Audit staff found that the required infomiation was available for 

89 percent of the itemized contributions in NCFC's records. In response to the Interim 

Audit Report, NCFC filed amended reports to include the missing information. 

The Commission approved a finding that NCFC failed to adequately disclose the 

occupation and name of employer for 57 percent of its itemized contributions. 

(For more detail, see p. 6.) 

Finding 3. Disclosure of Contributions to Candidate 

Committees 

During audit fieldwork, a review of disbursements identified 80 percent of contributions 

to federal candidates that failed to include required disclosure information, such as office 

sought, state and district, or disclosed incorrect candidate information. In response to the 

Interim Audit Report, NCFC filed amended reports to include the missing or corrected 

information. 

The Commission approved a finding that NCFC failed to adequately disclose 80 percent 

contributions to federal candidates. 

(For more detail, see p. 8.) 
Part IV 

Commission Findings 

Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of NCFC's reported figures with its bank records 

indicated that in 2009, NCFC understated receipts and disbursements by $10,770 and 

$806, respectively, and overstated ending cash by $5,134. In 2010, NCFC overstated 

beginning cash by $13,001 and disbursements by $6,500. In response to the Interim 

Audit Report, NCFC filed amended disclosure reports to correct the misstatements. 

The Commission approved a finding that NCFC misstated its financial activity for 

calendar years 2009 and 2010. 

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 requne 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 Analjrsis 

A. Facts 

During audit fieldwork, the Audit staff reconciled NCFC's reported financial activity 

with its bank records for calendar years 2009 and 2010. The following charts outiine the 

discrepancies for the receipts, disbursements and ending cash balances for 2009 and 

2010. Succeeding paragraphs address the reasons for the misstatements. 

2009 Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance 

@ January 1,2009 

$44,630 $44,630 $0 

Receipts $43,485 $54,255 $10,770 

Understated 

Disbursements $60,887 $61,693 $806 

Understated 

Ending Cash Balance 

@ December 31,2009 

$42,326^ $37,192 $5,134 

Overstated 

^ The amount in this column cannot be calculated accurately due to numerous discrepancies throughout 

2009 between amounts reported for ending cash and the beginning cash in the subsequent period. 
In 2009, NCFC understated receipts by $10,770 as a result of failing to report any of its 

July receipts. 

The understatement of disbursements was due to the following: 

• Disbursements supported by check/debit, not reported 

• December 2009 disbursement, reported June 2010 

• Disbursements reported, not supported by check/debit 

• Disbursement incorrectiy reported 

Net Understatement of Disbursements 

$ 5,601 

1,500 

(3,500) 

(2,795) 

$ 806 

NCFC overstated the beginning cash balance for 2010 by $13,001 for the above reasons 

and because NCFC reported an increase in the beginning cash balance of $7,877 

($50,193 - $42,326) as of Januaiy 1,2010. The difference in the 2009 ending cash and 

tiie 2010 beginning cash illustrates NCFC's failure to consistently report beginning cash 

balances tiiat equaled ending cash balances from tiie previous period.' 

2010 Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance 

@ Januaiy 1,2010 

$50,193 $37,192 $13,001 

Overstated 

Receipts $61,292 $62,292 $1,000 

Understated 

Disbursements $73,728 $67,228 $6,500 

Overstated 

Ending Cash Balance 

@ December 31,2010 

$32,257'' 32,256 $1 

Overstated 

The overstatement of disbursements was due to the following: 

• Disbursements supported by check/debit, not reported 

• December 2009 disbursement, reported June 2010 

• Disbursements reported not supported by check/debit 

Net Overstatement of Disbursements 

$ 3,000 

(1,500) 

(8.000^ 

B. Interim Audit Report & Audit Division Recommendation 

At the end of audit fieldwork. Audit staff discussed this matter with NCFC 

representatives at the exit conference. NCFC representatives acknowledged the 

discrepancies in the reports and indicated that NCFC would file corrective amendments. 

^ NCFC failed to carry over the correct ending cash balance to the subsequent report for all but one of its 

reports filed between May 2009 and Year-End 2010. The Reports Analysis Division sent 19 Requests for 

Additional Information concerning this issue to NCFC during the period covered by the audit. 

* The amount in this column cannot be calculated accurately due to numerous discrepancies throughout 

2010 between amounts reported for ending cash and the beginning cash in the subsequent period. 
The Interim Audit Report recommended that NCFC amend its reports to conect the 

misstatements noted above. 

C. Committee's Response to Interim Audit Report 

NCFC filed amended reports to materially conect the misstatement of receipts, 

disbursements and ending cash-on-hand for 2009 and beginning cash-on-hand and 

disbursements for 2010. 

D. Draft Final Audit Report 

In the Draft Final Audit Report, the Audit Staff acknowledged that NCFC materially 

resolved the misstatements by filing amended disclosure reports. 

NCFC did not offer any additional comments in its response to the Draft Final Audit 

Report. 

Commission Conclusion 

On June 18,2012, the Commission considered the Audit Division Recommendation 

Memorandum which recommended that the Commission adopt a finding that NCFC 

misstated financial activity for the calendar years of2009 and 2010. 

The Commission approved the Audit staffs recommendation. 

Finding 2. Disclosure of Occupation/Name of Employer | 

Summary 

During audit fieldwork, a review of itemized contributions from individuals indicated that 

57 percent of the contributions failed to include adequate disclosure for occupation and 

name of employer. The Audit staff found that the required information was available for 

89 percent of the itemized contributions in NCFC's records. In response to the Interim 

Audit Report, NCFC filed amended reports to include the missing information. 

The Conimission approved a finding that NCFC failed to adequately disclose the 

occupation and name of employer for 57 percent of its itemized contributions. 

Legal Standard 

A. Required Information for Contributions from Individuals. For each itemized 

contribution from an individual, the committee must provide the following 

infomiation: 

• the contributor's full name and address (including zip code); 

• the contributor's occupation and the name of his or her employer; 

• the date of receipt (the date the committee received the contribution); 

• the amount of the contribution; and 

• the calendar year-to-date total of all contributions from the same individual. 

2 U.S.C. § 434(b)(3)(A) and 11 CFR §§ 100.12 and 104.3(a)(4)(i). 
B. Best Efforts Ensure Compliance. When the treasurer of a political committee 

shows that the committee used best efforts (see below) to obtain, maintain, and submit 

the information required by the Act, the committee's reports and records will be 

considered in compliance witii tiie Act. 2 U.S.C. § 432(i) and 11 CFR §104.7(a). 

C. Definition of Best Efforts. The treasurer and the committee will be considered to 

have used "best efforts" if the committee satisfied all of the following criteria. 

• All written solicitations for contributions included: 

o a clear request for the contributor's full name, mailing address, occupation, 

and name of employer; and 

o the statement that such reporting is required by Federal law. (Note that the 

request and statement must appear in a clear and conspicuous manner on 

any response material included in a solicitation.) 

• Within 30 days of receipt of the contribution, the treasurer made at least one 

effort to obtain the missing information, in either a written request or a 

documented oral request. 

• The treasurer reported any contributor information that, although not initially 

provided by the contributor, was obtained in a follow-up communication or was 

contained in the committee's records or in prior reports that the conimittee filed 

during the same two-year election cycle. 11 CFR § 104.7(b). 

Facts and AnaLysis 

A. Facts 

During audit fieldwork, a review of NCFC's itemized contributions from individuals for 

disclosure of occupation and name of employer indicated that NCFC failed to disclose 

the required information for 57 percent of contributions itemized. In a review of NCFC's 

records, the Audit staff noted that NCFC had the required information for 89 percent of 

the itemized contributions reviewed. NCFC failed to include in its reports the 

information it had in its possession. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to NCFC representatives at the exit conference. The 

treasurer stated that NCFC would, using the contributor infomiation already obtained, 

amend the reports to disclose occupation and name of employer. 

The Interim Audit Report recommended that NCFC file amended reports to disclose the 

occupation and name of employer for contributions from individuals. 

C. Committee's Response to Interim Audit Report 

NCFC filed amended reports to materially conect the inadequate and/or missing 

disclosure information for occupation and name of employer for itemized contributions 

from individuals. 
D. Draft Final Audit Report 

In the Draft Final Audit Report, the Audit Staff acknowledged that NCFC materially 

resolved this matter by filing amended disclosure reports. 

NCFC did not offer any additional comments in its response to the Drafr Final Audit 

Report. 

Commission Conclusion 

On June 18,2012, the Commission considered the Audit Division Recommendation 

Memorandum which recommended that the Commission adopt a finding that NCFC 

inadequately disclosed occupation and name of employer information on contributions 

received from individuals. 

The Commission approved the Audit staffs recommendation. 

Finding 3. Disclosure of Contributions to Candidate 

Committees 

Summary 

During audit fieldwork, a review of disbursements identified 80 percent of contributions 

to federal candidates that failed to include required disclosure information, such as office 

sought, state and district, or disclosed inconect candidate information. In response to the 

Interim Audit Report, NCFC filed amended reports to include the missing or conected 

information. 

The Commission approved a finding that NCFC failed to adequately disclose 80 percent 

contributions to federal candidates. 

Legal standard 

Reporting Contributions to Candidate Committees. When operating expenditures to 

the same person exceed $200 in a calendar year, the committee must report: 

• the amount of the expenditures; 

• the date when the expenditures were made; 

• the name and address of the payee; 

• tiie purpose of die expenditures (2 U.S.C. § 434(b)(5)(A) and 11 CFR § 

104.3(b)(3)(i)); and 

• the candidate's name and office sought (mcluding the state and, if applicable. 

Congressional district) (11 CFR §104.3(b)(3)(v)). 
Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed NCFC's contributions to candidate 

committees. The review indicated that NCFC failed to conectly disclose candidate 

information such as state, office sought and, if applicable, congressional district for 80 

percent of the contributions. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to NCFC representatives at the exit conference. The 

treasurer stated that NCFC would amend its reports to properly disclose candidate 

infomiation for each contribution. 

The Interim Audit Report recommended that NCFC file amended reports to properly 

disclose the candidate information, such as office sought, candidate state and, if 

applicable, congressional district for its contributions to candidate committees. 

C. Committee's Response to Interim Audit Report 

NCFC filed amended reports to materially conect the inadequate and/or inconect 

disclosure information for contributions to federal candidates. 

D. Draft Final Audit Report 

In the Draft Final Audit Report, the Audit Staff acknowledged that NCFC materially 

resolved this matter by filing amended disclosiu-e reports. 

NCFC did not offer any additional comments in its response to the Draft Final Audit 

Report. 

Commission Conclusion 

On June 18,2012, the Commission considered the Audit Division Recommendation 

Memorandum which recommended that the Commission adopt a finding that NCFC 

inadequately disclosed candidate information on their contributions to federal candidates. 

The Commission approved the Audit staff's recommendation.