JENNIFER CARROLL FOR CONGRESS

CHRONOLOGY
Audit Fieldwork 07/16/01 — 07/26/01
Interim Audit Report to Committee 08/01/02
Response Received to the Interim Audit Report 09/20/02 & 10/03/02
Final Audit Report Approved 10/02/02
Final Audit Report to Committee 10/25/02

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copies (front only) of four refund checks issued on September 17, 2002, totaling $5,800.
With respect to the remaining $1,000 excessive contribution, JCFC neither provided
evidence that the contribution was not excessive nor evidence that a refund check had

been issued.
B. MISSTATEMENT OF FINANCIAL ACTIVITY

Sections 434(b)(1), (2) and (4) of Title 2 of the United States Code state.
in part, that a political committee shall disclose the amount of cash on hand at the
beginning of the reporting period and the total amount of all receipts and all
disbursements for the reporting period and calendar year.

The Audit staff's reconciliation of JCFC’s reported financial activity to its
bank records for calendar year 2000 revealed material misstatements with respect to
reported disbursements and ending cash. Minor differences identified in reported receipts
were provided to JCFC to assist it in bringing its reported cash on hand into line with the
bank balance. JCFC did not maintain records to show derivation of its reported amounts.
Absent such records, the Audit staff could not identify all differences between bank and
reported activity.

JCFC should have reported disbursements totaling $1,065,620. However,
it reported total disbursements of only $1,040,878, an understatement of $24,742. The
understatement was primarily due to JCFC not reporting credit card transactions
($11,245), in-kind contributions as disbursements (4.674), and ATM withdrawals and
bank charges ($729). Further, JCFC issued a check to an individual for $15,000 but
reported this transaction as $6,869, a net underreporting of $8,131.2 Asa result of the
errors noted above, ending cash-on-hand was overstated.

This matter was discussed at the exit conference. Workpapers detailing all
reporting discrepancies have been provided to JCFC.

The Audit staff recommended that JCFC file amended Summary and
Detailed Summary pages as well as the necessary supporting schedules for calendar year
2000 correcting the misstatements.

An assistant to the treasurer indicated that she was having trouble loading
the FEC software but was communicating with the Commission’s electronic filing
personnel. To date, no amended reports have been received.

3 JCFC erroneously disclosed receiving a loan of $6,869 from an individual who placed media ads. The
individual was subsequently owed $15.000 in media commissions. JCFC paid the $15.000 but only
disclosed this payment as $6,869, apparently to offset the erroneously reported loan.

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To manage its financial activities, JCFC maintained one bank account, and
two investment accounts. Approximately 500 disbursements were made from the bank
account. JCFC received approximately 6,900 contnbutions from individuals, totaling
approximately $644,700, which represents about 56% of total receipts. In addition, JCFC
received 214 contributions from political action committees and other committees, such
as party committees and candidate committees, totaling approximately $333,800; loans
received from the candidate totaling approximately $14.100; and, offsets to operating
expenditures and other receipts totaling approximately $148,600. JCFC filed its reports
electronically. Accounting, recordkeeping and reporting functions were performed by
volunteer campaign staff. No one associated with the campaign had prior campaign
finance experience or attended a Commission seminar or conference.

D. AUDIT SCOPE AND PROCEDURES

Following Commission-approved procedures, the Audit staff evaluated
various risk factors to determine the scope of this audit. The audit included testing of the
following general categories:

1. The receipt of contributions or loans in excess of the statutory
limitations (see Finding II.A.);

2. the receipt of contributions from prohibited sources; such as those
from corporations or labor organizations;

3. proper disclosure of contributions from individuals, political
committees and other entities, to include the itemization of
contributions when required, as well as the completeness and
accuracy of the information disclosed;

4. the accuracy of total reported receipts, disbursements and cash
balances as compared to bank records (see Finding II.B.);

5. adequate recordkeeping for transactions, and;
6. other audit procedures that were deemed necessary in the situation.

Unless specifically discussed below, no material non-compliance was
detected. It should be noted that the Commission may pursue any of the matters
discussed in this report in an enforcement action.

Il. AUDIT FINDINGS AND RECOMMENDATIONS

A. APPARENT EXCESSIVE CONTRIBUTIONS.
Sections 441(a)(1)(A) and (2)(A) of Title 2 of the United States Code

state, that no person shall make contributions to any candidate and his authorized political
committees with respect to any election for Federal office which, in the aggregate, exceed

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FEDERAL ELECTION COMMISSION 01-06
WASHINGTON, DC 20463

REPORT OF THE AUDIT DIVISION
ON
JENNIFER CARROLL FOR CONGRESS

I. BACKGROUND

A. AUDIT AUTHORITY

This report is based on an audit of Jennifer Carroll for Congress (JCFC),
undertaken by the Audit Division of the Federal Election Commission (the Commission)
in accordance with the provisions of the Federal Election Campaign Act of 1971, as
amended (the Act). The audit was conducted pursuant to Section 438(b) of Title 2 of the
United States Code which states, in part, that the Commission may conduct audits and
field investigations of any political committee required to file a report under Section 434
of this title. Prior to conducting any audit under this subsection, the Commission shall
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.

B. AUDIT COVERAGE

The audit covered the period from April 27, 1999 (the date of the first
financial transaction) through December 31, 2000. JCFC reported a beginning cash
balance of $0; total receipts for the period of $1.145.306; total disbursements for the
period of $1,049,198; and an ending cash balance of $95,779.

Cc. CAMPAIGN ORGANIZATION

JCFC registered with the Commission on June 17, 1999 as the principal
campaign committee of Jennifer Carroll, Republican candidate for the U.S. House of

ard

Representatives from the State of Florida. 3" District.

The treasurer of JCFC for the audit period was Charles Curry.” JCFC
maintains its headquarters in Jacksonville. Florida.

Totals do not foot. JCFC erroneously reduced cash-on-hand by $329 on its Year-End 1999 disciosure
reportr

On August 7, 2001, JCFC amended its Statement of Organization, naming Nolan A. Carroll as
treasurer.

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contributor. If a contribution to a candidate on its face or when aggregated with other
contributions from the same contributor exceeds the limitations on contributions set forth
in 11CFR 110.1(b) or (d), as appropriate, the treasurer may ask the contributor whether
the contribution was intended to be a joint contribution by more than one person. A
contribution shall be considered to be reattributed to another contributor if the treasurer of
the recipient political committee asks the contributor whether the contribution is intended
to be joint contribution by more than one person, and informs the contributor that he or
she may request a return of the excessive portion of the contribution if it is not intended
to be a joint contribution; and within 60 days from the date of the treasurer’s receipt of
the contribution, the contributors provide a written reattribution of the contribution,
which is signed by each contributor, and which indicates the amount to be attributed to
each contributor if equal attribution is not intended.

The Audit staff's review of contributions identified apparent excessive
contributions from 14 individuals and one political action committee totaling $16,900.
The contributions were received prior to the primary election. The contributor’s checks
did not include an election designation. Further, no documentation was found in JCFC’s
records that demonstrated any attempt to obtain reattribution or redesignation of the
excessive amounts. However, JCFC’s database and disclosure reports attributed the
excessive portion of each contribution to the general election.

JCFC did not maintain a separate account to deposit questionable
contributions but consistently maintained balances sufficient to cover the excessive
contributions. Using election designations recorded by JCJF, the Audit staff also
performed an analysis of contributions and disbursements to determine whether any of the
contributions designated for the general election had been spent on primary election
expenses. That analysis indicated that primary activity was not funded by contributions
designated for the general election.

At the exit conference, JCFC representatives were provided a schedule of
the excessive contributions. Subsequent to the exit conference, JCFC provided copies of
refund checks (front only) issued to 11 contributors, totaling $10,100.

In the interim audit report, the Audit staff recommended that JCFC
provide evidence, which demonstrated the remaining contributions in question, totaling
$6,800, were not excessive. Absent such evidence, the Audit staff recommended that
JCFC refund the excessive contributions and provide evidence of all refunds (copies of
the front and back of the negotiated refund checks. to include negotiated copies of the 11
refund checks discussed above). If funds were not currently available to make the
necessary refunds, those contributions requiring refunds should have been disclosed as
debts on Schedule D (Debts and Obligations) until such time that funds became available
to make the refunds.

In response to the interim audit report, JCFC provided copies of negotiated
refunds checks for $9,000 of the $10,100 refunds mentioned above. JCFC also provided

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FEDERAL ELECTION COMMISSION

WASHINGTON, DC 2040s

November 6, 2002

MEMORANDUM

TO: Ron M. Harris ~
Press Officer
Press Office

FROM: Joseph F. Stoltz (
Assistant Staff for

Audit Division
SUBJECT: Public Issuance of the Final Audit Report on Jennifer Carroll for Congress

Attached please find a copy of the final audit report and related documents on
Jennifer Carroll for Congress that was approved by the Commission on October 2, 2002.

All parties involved have received informational copies of the report and the
report may be released to the public.

Attachment as stated

ce: Office of General Counsel
Office of Public Disclosure
Reports Analysis Division
FEC Library


FEDERAL ELECTION COMMISSION

WASHINGTON DC 2040

October 25, 2002

Ms. Jennifer Carroll

Jennifer Carrol! for Congress
7163 Augusta Drive

Green Cove Springs, FL 32043

Dear Ms. Carroll:

Attached, please find the Report of the Audit Division on Jennifer Carrol! for
Congress. The Commission approved this report on October 2, 2002.

The Commission approved Report will be placed on the public record on
November 6, 2002. Should you have any questions regarding the public release of this
report, please contact the Commission's Press Office at (202) 694-1220.

Any questions you may have related to matters covered during the audit or in the
report should be directed to Renee T. Coleman-Bunn or Thomas J. Nurthen of the Audit
Division at (202) 694-1200 or toll free at (800) 424-9530.

Sincerely,

/ Joseph F. Stoltz
Assistant Staff Director
Audit Division

Attachment as stated

cc: Charles Curry, Treasurer

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$1,000 and that no multi-candidate political committee shall make contributions to any
candidate and his authorized political committees with respect to any election for Federal
office which, in the aggregate, exceed $5.000.

Section 110.1(b) of Title 11 of the Code of Federal Regulations explains
that with respect to any election means that if the contnbution is not designated in writing
by the contributor for a particular election then the contribution applies to the next
election for that Federal office after the contribution is made. A contribution is
considered made when the contributor relinquishes control over the contribution by
delivering the contribution to the Candidate, the political committee, or an agent of the
committee. A contribution mailed is considered made on the date of the postmark.

Section 103.3(b)(3) of Titie 11 of the Code of Federal Regulations states.
in part, that contributions which exceed the contribution limitations may be either
deposited into a campaign depository or returned to the contributor. If any such
contribution is deposited, the treasurer may request redesignation or reattribution of the
contribution by the contributor in accordance with 11 CFR 110.1(b), 110.1(k) or 110.2(b),
as appropriate. If a redesignation or reattribution is not obtained, the treasurer shall,
within sixty days of the treasurer’s receipt of the contribution, refund the contribution to
the contributor.

Section 103.3(b)(4) of Title 11 of the Code of Federal Regulations states
that any contribution which appears to be illegal under 11 CFR 103.3(b)(1) or (3), and
which is deposited into a campaign depository shall not be used for any disbursements by
the political committee until the contribution has been determined to be legal. The
political committee must either establish a separate account in a campaign depository for
such contributions or maintain sufficient funds to make all such refunds.

Section 110.1(b)(5) of Title 11 of the Code of Federal Regulations states,
in part, that the treasurer of an authorized political committee may request a written
redesignation of a contribution by the contributor for a different election if the
contribution exceeds the limitation on contributions set forth in 11 CFR 110.1(b)(1). A
contribution shall be considered to be redesignated for another election if the treasurer of
the recipient authorized political committee requests that the contributor provide a written
redesignation of the contribution and informs the contributor that the contributor may
request the refund of the contribution as an alternative to providing a written
redesignation; and within sixty days from the date of the treasurer's receipt of the
contribution, the contributor provides the treasurer with a written redesignation of the
contribution for another election, which is signed by the contributor.

Section 110.1(k) of Title 11 of the Code of Federal Regulations states, in
part, any contribution made by more than one person shall include the signature of each
contributor on the check, money order, or other negotiable instrument or in a separate
writing. Furthermore, a contribution made by more than one person that does not indicate
the amount to be attributed to each contributor shall be attributed equally to each

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FEDERAL ELECTION COMMISSION

WASHINGTON, DC 2405

REPORT OF THE AUDIT DIVISION ON

JENNIFER CARROLL FOR CONGRESS

EXECUTIVE SUMMARY

Jennifer Carroll for Congress (JCFC) registered with the Federal Election Commission on
June 17, 1999, as the principal campaign committee for Jennifer Carroll, Republican candidate
for the U.S. House of Representatives from the State of Florida, 3rd District.

The audit was conducted pursuant to 2 U.S.C. §438(b). which states that the Commission
may conduct audits of any political committee whose reports fail to meet the threshold level of
compliance set by the Commission.

The audit findings summarized below were presented to JCFC at the completion of
fieldwork on July 21, 2001 and later in the interim audit report. JCFC’s responses to the findings
are contained in the audit report.

APPARENT EXCESSIVE CONTRIBUTIONS - 2 U.S.C. §§441a(a)(1)(A) and (2)(A); 11 CFR
§§110.1(b), 103.3(b)(3) and (4), 110.1(b)(5) and 110.1(k). The Audit staff identified excessive
contributions from 14 individuals and one political action committee totaling $16,900. In
response, JCFC representatives provided copies of negotiated refund checks totaling $9,000. In
addition, JCFC provided non-negotiated copies of refund checks totaling $6,900. With respect to
the remaining $1,000 excessive contribution, JCFC neither provided evidence that the
contribution was not excessive nor evidence that a refund had been made.

MISSTATEMENT OF FINANCIAL ACTIVITY — 2 U.S.C. §$434(b)(1), (2) and (4). The Audit
staff's reconciliation of JCFC’s reported financial activity to its bank records for calendar year
2000 revealed material misstatements with respect to reported disbursements and ending cash.

The Audit staff recommended that JCFC file amended reports for calendar year 2000
correcting the misstatements. As of the date the Commission approved the final audit report (10-
2-02), no amended reports had been received '

' Subsequently, the Audit staff received paper copies of amended reports. However, they did not materially

correct the misstatements. Further, they were required to be filed electronically.

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JENNIFER CARROLL FOR CONGRESS

TABLE OF CONTENTS

Executive Summary
Final Audit Report
Background
Findings
Transmittal to Committee

Chronology

Page

La


REPORT OF THE AUDIT DIVISION
ON

JENNIFER CARROLL FOR
CONGRESS

Approved on October 2, 2002

FEDERAL ELECTION COMMISSION
999 E STREET, N.W.
WASHINGTON, D.C.



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