Interim Audit Report of the 

Audit Division on the Friends of 

Sharro n Angl e (February 17, 2009 -

December 3i , 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 

(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 Campaign (p. 2) 

Friends of Sharron Angle is the principal campaign committee for 

Sharron Angle, Republican candidate for the United States Senate 

from Nevada, and is headquartered in Reno, Nevada. For more 

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

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals 

o Contributions from Other 

Political Committees 

o Contributions from Other 

Authorized Committees 

o Refunds and Other Offsets 

Total Receipts 

• Disbursements 

o Operating Disbursements 

o Contribution Refunds 

o Other Disbursements 

Total Disbursements 

$ 27,790,037 

399,037 

56,544 

23,531 

$ 28,269,149 

$ 27,948,259 

206,202 

22,675 

$ 28,177,136 

Findings and Recommendations (p. 3) 

• Filing of 48-Hour Notices (Finding 1) 

• Reporting of Debts and Obligations (Finding 2) 

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

Division on the 

Friends of Sharron Angle 

{February 17, 2009 - December 31, 2010) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Part II. Overview of Campaign 

Campaign Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding 1. Filing of 48-Hour Notices 4 

Finding 2. Reporting ofDebts and Obligations 5 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the Friends of Sharron Angle (FOSA), 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 

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

factors and as a result, this audit examined: 

1. the receipt of excessive contributions and loans; 

2. the receipt of contributions from prohibited sources; 

3. the disclosure of contributions received; 

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

5. the disclosure of disbursements, debts and obligations; 

6. the consistency between reported figures and bank records; 

7. the completeness of records; and 

8. other committee operations necessary to the review. 
Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

• Date of Registration April 9,2009 

• Audit Coverage February 17,2009 - December 31,2010 

Headquarters Reno, Nevada 

Bank Information 

• Bank Depositories Three 

• Bank Accounts Five 

Treasurer 

• Treasurer When Audit Was Conducted William E. Rasavage (March 7,2011 -

October 24,2011) 

Robert Fee (October 25, 2011 - Present) 

• Treasurer During Period Covered by Audit Alan Mills 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand ^ February 17,2009 $0 

Receipts 

o Contributions from Individuals 27,790,037 

o Contributions from Other Political 399,037 

Committees 

o Contributions from Other Authorized 56,544 

Committees 

o Refunds and Other Offsets 23,531 

Total Receipts $ 28,269,149 

Disbursements 

o Operating Disbursements 27,948,259 

o Contribution Refunds 206,202 

o Other Disbursements 22,675 

Total Disbursements $ 28,177,136 

Cash-on-hand @ December 31,2010 $ 92,013 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Filing of 48-Hour Notices 

FOSA filed in an untimely manner or failed to file 48-hour notices for 169 contributions 

totaling $243,750, that were made prior to the primary and general elections. This 

included 65 earmarked contributions totaling $107,200. The Audit staff recommends that 

FOSA provide evidence that these notices were not required, provide evidence that these 

notices were filed in a timely manner or provide any further comments it considers 

relevant. (For more detail, see p. 4.) 

Finding 2. Reporting of Debts and Obligations 

The Audit staff identified debts totaling $2,287,080 that were not itemized on Schedule D 

(Debts and Obligations). The Audit staff recommends that FOSA amend its reports to 

disclose these debts and obligations on the appropriate Schedule D and provide any 

further comments it considers relevant. (For more detail, see p. 5.) 
Part IV 

Findings and Recommendations 

I Finding 1. Filing of 48-Hour Notices 

Summary 

FOSA filed in an untimely manner or failed to file 48-hour notices for 169 contributions 

totaling $243,750, that were made prior to the primary and general elections. This 

included 65 earmarked contributions totaling $107,200. The Audit staff recommends that 

FOSA provide evidence that these notices were not required, provide evidence that these 

notices were filed in a timely manner or provide any further comments it considers 

relevant. 

Legal Standard 

A. Last-Minute Contributions (48-Hour Notice). Campaign committees must file 

special notices regarding contributions of $1,000 or more received less than 20 days 

but more than 48 hours before any election in which the candidate is running. This 

rule applies to all types of contributions to any authorized committee of the candidate, 

including: 

• contributions from the candidate; 

• loans from the candidate and other non-bank sources; and 

• endorsements or guarantees of loans from banks. 11 CFR §104.5(f) 

B. Reporting by Recipient Committee. When a candidate committee receives 

earmarked contributions through a conduit, each individual contribution should be 

itemized when the individual's total contributions to the committee aggregate over 

$200 per election cycle. This itemization must include: 

• the full name; 

• address; 

• occupation and employer of the contributor; and 

• date the contribution was received by the conduit. 11 CFR §110.6(c)(2)(ii)(C) 

Contributions from PACs, authorized committees, or other political committees must 

be itemized regardless of the amount contributed. 11 CFR § 104.3(a)(4). 

In addition, the total contribution(s) transmitted through the conduit should be itemized 

on Schedule A as a memo entry. The conduit's full name and address must be provided, 

along with the date the contribution was received by the candidate committee and the 

total amount. 11 CFR §110.6(c)(2). 

Facts and Analysis 

A. Facts 

The Audit staff reviewed contributions of $1,000 or more that were received during the 

48-hour notice filing periods for the primary (May 20,2010 - June 5, 2010) and general 
(October 14, 2010 - October 30,2010) elections. FOSA filed in an untimely manner or 

failed to file 48-hour notices for 169 contributions totaling $243,750 as summarized 

below. 

Primary General Total 

48-Hour Notices Not Filed $31,200 

(21) 

$115,450 

(88) 

$146,650 

(109) 

48-Hour Notices Filed Late, 

but Before the Election 

$51,500 

(29) 

$0 $51,500 

(29) 

48-Hour Notices Filed After 

the Election 

$45,600 

(31) 

$0 $45,600 

(31) 

TOTALS $128,300 

(81) 

$115,450 

(88) 

$243,750 

(169) 

Primary election contributions for which notices were filed late (prior to or after the 

election) or not filed included 53 earmarked contributions totaling $86,100. General 

election contributions for which notices were not filed included 12 earmarked 

contributions in the amount of $21,100. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the filing of 48-hour notices with FOSA's counsel at the exit 

conference and subsequently provided schedules of the contributions for which 48-hour 

notices were not filed or were filed in an untimely manner. FOSA's counsel expressed 

concern that these notices were not filed or were filed in an untimely manner and stated 

that FOSA had established a system in which the finance director would examine the 

contributions received on a daily basis to identify those that required such notices. 

Counsel further stated that FOSA will attempt to determine the reasons why the required 

notices were not filed. 

The Audit staff recommends that FOSA provide evidence that the 48-hour notices were 

not required to be filed or were filed in a timely manner, or provide any further comments 

it considers relevant. 

I Finding 2. Reporting of Debts and Obligations 

Summary 

The Audit staff identified debts totaling $2,287,080 that were not itemized on Schedule D 

(Debts and Obligations). The Audit staff recommends that FOSA amend its reports to 

disclose these debts and obligations on the appropriate Schedule D and provide any 

further comments it considers relevant. 
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 or obligation of $500 or less must be reported once it has been outstanding 

60 days from the date incurred (the date of the transaction); the committee reports 

the debt or obligation on the next regularly scheduled report. 

• A debt or obligation exceeding $500 must be disclosed in the report that covers 

the date on which the debt was incurred. 11 CFR § 104.11 (b). 

Facts and Analysis 

A. Facts 

The Audit staff reviewed FOSA's invoices and computer files containing disbursements 

made in 2009 and 2010 to 19 selected vendors and identified debts totaling $1,413,719 

that were reported on Schedule D. However, debts totaling $2,287,080 were not reported 

on Schedule D as required.^ The majority of these debts should have been reported on 

the 2010 October Quarterly and 12 Day Pre-General reports. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the reporting of debts and obligations with FOSA's counsel at 

the exit conference and subsequently provided workpapers detailing the unreported debts. 

Counsel stated that FOSA would look into this issue. Documentation provided by FOSA 

subsequent to the exit conference was considered in the "Facts" section presented above. 

The Audit staff recommends that absent evidence that the debts did not require 

disclosure, FOSA amend its reports to itemize these debts and obligations on the 

appropriate Schedule D and provide any further comments it considers relevant. 

This is the highest unreported debt balance for the 19 vendors during the period covered by the audit.