Interim Audit Report of the 

Audit Division on the Utah 

Republican Party 

(January 1, 2011 - December 31, 2012). 

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 Utah Republican Party is a state party committee 

headquartered in Salt Lake City, Utah. For more information, see 

the chart on the Committee Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals 

and Political Committees 

o Transfers fix)m Affiliated and 

Other Political Committees 

o Transfers from Non-Federal 

Accounts 

o Other Receipts 

Total Receipts 

• Disbunements 

o Operating Expenditures 

o F^eral Election Activity 

o Transfers to Affiliated md Other 

Political Conunittees 

o Other Disbursements 

Total Disbunements 

$ 753,650 

1,119,025 

880,121 

114,894 

S 2,867,690 

$ 2,388,485 

390,806 

9,152 

38,475 

i 2326,918 

Findings and Recommendations (p. 3) 

• Receipt of Prohibited Contributions (Finding 1) 

• Receipt of Contributions that Exceed Limits (Finding 2) 

• Misstatement of Financial Activity (Finding 3) 

• Recordkeeping for Employees (Finding 4) 

• Reporting of Debts and Obligations (Finding 5) 

• Apparent Excessive Contribution - Staff Advance (Finding 6) 

' 52U.S.C.§30111(b). 
Interim Audit Report of the Audit 

Division on the 

Utah Republican Party 

r • 

(January 1, 2011 - December 31, 2012) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1. 

Commission Guidance 1 

Part 11. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding!. Receipt of Prohibited Contributions S 

Finding 2. Receipt of Contributions that Exceed Limits 8 

Findings. Misstatement of Financial Activity 10 

Finding 4. Recordkeeping for Employees 12 

Findings. Reporting ofDebts and Obligations 14 

Finding 6. Apparent Excessive Contribution - Staff Advance 17 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the Utah Republican Party (URP), 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 52 U.S.C. §30111(b), which permits the Commission to 

conduct audits and field investigations of any political committee that is required to file a 

report under 52 U.S.C. §30104. 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. 52 U.S.C. §30111(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 disbursements, debts and obligations; 

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

6. the consistency between reported figures and bank records; 

7. the completeness of records; and 

8. other committee operations necess^ to the review. 

Commission Ghiidance 

Request for Early Commission Consideration of a Legal Question 

Pursuant to the Commission's "Policy Statement Establishing a Program for Requesting 

Consideration of Legal Questions by the Commission," several state party committees 

unaffiliated with URP requested early consideration of a legal question raised during 

audits covering the 2010 election cycle. Specifically, the Commission addressed whether 

monthly time logs under 11 CFR § 106.7(d)(1) were required for employees paid with 100 

percent federal funds. 

The Commission concluded, by a vote of 5-1, that 11 CFR § 106.7(d)(1) does require 

committees to keep a monthly log for employees paid exclusively with federal fiinds. 

Exercising its prosecutorial discretion, however, the Commission decided it will not 

pursue recordkeeping violations for the failure to keep time logs or to provide affidavits 

to account for employee salaries paid with 100 percent federal funds and reported as 

such. The Audit staff informed URP representatives of the payroll requirement and the 

Commission's decision not to pursue recordkeeping violations for failure to keep payroll 

logs for salaries paid and correctly reported as 100 percent federal. This audit report does 

not include any findings or recommendations with respect to URP employees paid with 

100 percent federal funds and reported as such. 
Partn 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration March 16,1978 

• Audit Coverage January 1,2011 - December 31,2012 

Headquarters Salt Lake City, Utah 

Bank Information 

a Bank Depositories One 

e Bank Accounts Four Federal and Two Non-Federal 

Treasurer 

e Treasurer When Audit Was Conducted Dave Crittenden (9/20/2013 - 5/05/14) 

Cameron Robinson (5/06/14 - Present) 

• Treasurer During Period Covered by Audit Mike McCauley 

Management Information 

• Attended Commission Campaign Finance 

Seminar 

Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff and Treasurer 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand ® January 1,2011 $ 421 

Receipts 

o Contributions from Individuals and Political 

Committees 

• 753,650 

o Transfers fix)m Affiliated and Other Political 

Committees 

1,119,025 

o Transfers from Non-Federal Accounts 880,121 

o Other Receipts 114,894 

Total Receipts $2,867,690 

Disbursements 

o Operating Expenditures 2,388,485 

o Federal Election Activity 390,806 

o Transfers to Affiliates and Other Political 

Committees 

9,152 

o Other Disbursements 38,475 

Total Disbursements $2,826,918 

Cash-on-hand @ December 31,2012 $ 41,193 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Receipt of Prohibited Contributions 

During audit fieldwork, a review of contributions revealed that URP deposited five 

apparent prohibited contributions totaling $23,600 into its federal account. URP 

transferred $23,600 into a non-federal account, albeit in an untimely manner, to correct 

this matter. Since URP acknowledged the receipt of impermissible contributions and 

transferred the funds to a non-federal account, the Audit staff recommends that URP 

demonstrate that the funds were transferred within thirty days of the date on which it was 

discovered the contributions were prohibited. Absent such a demonstration, the Audit 

staff concludes that URP transferred the $23,600 prohibited contributions in an untimely 

maimer. 

(For more detail, see p. 5) 

Finding 2. Receipt of Contributions that Exceed Limits 

During audit fieldwork, the Audit staff identified apparent excessive contributions fix)m 

three individuals that exceeded contribution limits by $42,925. These errors occurred as 

a result of URP not resolving the excessive portion of the contributions by issuing a 

refund to the contributor or making a transfer to a non-federal account in a timely 

maimer. Subsequently, URP transferred the excessive portion of the contributions, to a 

non-federal account, ^beit untimely. Since URP acknowledged the receipt of excessive 

contributions and transferred the flmds to a non-federal account, the Audit staff 

recommends that URP demonstrate that the funds were transferred timely (within 60 days 

of receiving the excessive contribution). Absent such a demonstration, the Audit staff 

concludes that URP transferred the $42,925 excessive contributions in an untimely 

maimer. 

(For more detail, see p. 8) 

Finding 3. Misstatement of Financial Activity 

During audit fieldwork, a comparison of URP's reported financial activity with bank 

records revealed a misstatement of financial activity for receipts in 2011 totaling 

$107,013 and an overstated ending cash-on-hand balance totsding $10,028. In addition, -

URP had a misstatement of receipts and disbursements for 2012. In 2012, URP 

understated its receipts and disbursements by $114,582 and $96,176, respectively. The 

Audit staff recommends that URP amend its disclosure reports to correct the 

misstatements. 

(For more detail, see p. 10) 
Finding 4. Recordkeeping for Employees 

During audit fieldwork, the Audit staff identified that URP did not maintain any monthly 

payroll logs, as required, to document the percentage of time each employee spent in 

connection with a federal election. For 2011 and 2012, the Audit staff identified 

payments to URP employees totaling $285,242 for which URP did not maintain monthly 

payroll logs. This consisted of $269,776, for which payroll was allocated with federal 

and non-federal funds, and $15,466, for which payroll was exclusively paid with nonfederal funds. For URP employees paid with an allocation of federal and non-federal 

funds or exclusively non-fe^ral funds, the Audit staff recommends that URP provide 

monthly payroll logs that indicate time spent in connection with a federal election. 

Absent the provision of monthly time logs, the Audit staff reconunends that URP 

implement a plan to maintain such monthly payroll logs in the future. 

(For more detail, see p. 12) 

Finding 5. Reporting of Debts and Obligations 

During audit fieldwork, the Audit staff noted that URP failed to disclose debts and 

obligations to five vendors and one staff member totaling $205,323 on Schedule D (Debts 

and Obligations). The Audit staff recommends that the URP amend its disclosure reports 

to include these debts and obligations on Schedule D. 

(For more detail, see p. 14) 

Finding 6. Apparent Excessive Contribution - Staff 

Advance 

One URP staff member received reimbursements for credit card expenditures totaling 

$46,904 that appear to have been reimbursed untimely. URP did not provide the staff 

member's credit card billing statements to support the reimbursements were made within 

60 days after the closing date of the billing statement. Absent such documentation, the 

Audit staff considers $28,637 of the $46,904 to be an excessive contribution fn)m the 

staff member until the expenses were reimbursed. The Audit staff reconunends URP 

demonstrate these reimbursements were made within the proper time limitations. 

(For more detail, see p. 17) 
Part IV 

Findings and Recommendations 

Finding 1. Receipt of Prohibited Contributions 

Siimmaiy 

During audit fieldwork, a review of contributions revealed that URP deposited five 

apparent prohibited contributions totaling $23,600 into its federal account. URP 

transferr^ $23,600 into a non-federal account, albeit in an untimely manner, to correct 

this matter. Since URP acknowledged the receipt of impermissible contributions and 

transferred the funds to a non-federal account, the Audit staff recommends that URP 

demonstrate that the funds were transferred within thirty days of the date on which it was 

discovered the contributions were prohibited. Absent such a demonstration, the Audit 

staff concludes that URP tiansferr^ the $23,600 prohibited contributions in an untimely 

manner. 

Legal Standard 

A. Receipt ofProhibited Corporate Contributions. Political committees may not 

accept contributions from the general treasury funds of corporations. This prohibition 

applies to any type of corporations including a non-stock corporation, as incorporated 

membership organization, and an incorporated membership organization, and an 

incorporated cooperative. 52 U.S.C. §30118. 

B. Receipt of Prohibited Contributions-General Probibition. Candidates and 

committees may not accept contributions (in the form of money, in-kind contributions 

or loans): 

1. In the name of another, or 

2. From the treasury funds of the following prohibited sources: 

• Corporations (this means any incorporated organization, including a non-stock 

corporation, an incorporated membership organization, and an incorporated 

cooperative); 

• Labor Organizations; or 

• National Banks; 

3. Federal Government Contractors (including partnerships, individuals, and sole 

proprietors who have contracts with the federal government); and 

4. Foreign Nationals (including individuals who are not U.S. citizens and not 

lawfully admitted for permanent residence; foreign governments and foreign 

political parties; and groups organized under the laws of a foreign country or 

groups whose principal place of business is in a foreign country, as defined in 22 

U.S.C. §611(b)). 52 U.S.C. §§30118,30119,30121, md 30122. 

C. Questionable Contributions. If a committee receives a contribution that appears to 

be prohibited (a questionable contribution), it must follow the procedures below: 
1. Within 10 days after the treasurer receives the questionable contribution, the 

committee must either: 

• Retum the contribution to the contributor without depositing it; or 

• Deposit the contribution (and follow the steps below). 11 CFR 

§103.3(b)(l). 

2. If the committee 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 

conunittee 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)(l). 

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 refiuiid was made. 11 CFR 

§103.3(b)(l). 

D. Federal v. Nonfederal Account. The federal account may contain only those funds 

that are permissible under the federal election law; the noi^ederal account may 

contain f\mds that are not permitted under the federal law (but are legal under state 

law), such as contributions that exceed the limits of the federal law and contributions 

fh)m prohibited sources, such as corporations and labor organizations. 11 CFR 102.5 

(a)(l)(i)and(a)(3). 

E. Late Discovery of Prohibited Contribution. If the treasurer in exercising his or her 

responsibilities under 11 CFR 103.3(b) determined that at the time a contribution was 

received and deposited, it did not appear to be made by a corporation, labor 

organization, foreign national or Federal contractor, or made in the name of another, 

but later discovers that it is illegal based on new evidence not available to the political 

committee at the time of receipt and deposit, the treasurer shall refund the 

contribution to the contributor within thirty days of the date on which the illegality is 

discovered. If the political committee does not have sufficient funds to refund the 

contribution at the time of the illegality is discovered, the political committee shall 

make the refund from the next funds it receives. 11 CFR 103.3(b)(2). 
Facts and Analjrsis 

A. Facts 

During audit fieldwork, the Audit staff reviewed contributions to URP from other 

political committees and identified five contributions totaling $23,600 from apparent 

prohibited sources. Each of these contributions appeared to be from corporations; 

however, the Audit staff could not verify the corporate tax status with the Utah Secretary 

of State. It is noted that the state of Utah allows unlimited contributions from 

corporations. In accordance with 11 CFR § 103.3(b)(4), URP deposited these 

questionable funds into its federal account and maintained sufficient federal funds to 

refund them. 

Prior to notification of the audit, URP realized the questionable funds were in fact 

prohibited contributions that were mistakenly deposited into the federal account and 

subsequently transferred $20,000 of the $23,600 in prohibited contributions to a nonfederal account. The transfer was made more than thirty days from discovering the 

contributions were prohibited pursuant to 11 CFR §103.3(b)(2). Therefore, at the 

conclusion of audit fieldwork, the $20,000 transfer was considered untimely resolved and 

the arriount of prohibited contributions totaling $3,600 remained unresolved for two of 

the contributors. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit st^ discussed this matter with URP representatives during the exit conference 

and provided a schedule of the apparent prohibited contributions identified in the review. 

URP representatives stated that some of the prohibited contributions had already been 

resolved and that the supporting documents have already been provided to the Audit staff. 

In response to the exit conference, URP representatives reiterated that a $20,000 transfer 

had already been made to a non-federal account to resolve three prohibited contributions. 

For the remaining prohibited amount, URP stated it would disgorge the $3,600 at its 

earliest opportunity to comply with the Audit staffs recommendation.. URP transferred 

the remaining $3,600 prohibited contributions from the federal account to a non-federal 

account on August 11,2015. The transfers, totaling $23,600, were untimely. 

The Audit staff recommends that, within 30 calendar days of service of this report, URP 

demonstrate that transfers totaling $23,600 to resolve the impermissible contributions 

were made within thirty days of the date on which it was discovered the contributions 

were prohibited. Absent such a demonstration, the Audit staff concludes that URP 

transferred the $23,600 prohibited contributions in an untimely manner. 
Finding 2. Receipt of Contributions that Exceed Limits 

Summaiy 

During audit fieldwork, the Audit staff identified apparent excessive contributions from 

three individuals that exceeded contribution limits by $42,925. These errors occurred as 

a result of URP not resolving the excessive portion of the contributions by issuing a 

refund to the contributor or making a transfer to a non-federal account in a timely 

manner. Subsequently, URP transferred the excessive portion of the contributions to a 

non-federal account, albeit untimely. Since URP acknowledged the receipt of excessive 

contributions and transferred the funds to a non-federal account, the Audit staff 

recommends that URP demonstrate that the funds were transferred timely (within 60 days 

of receiving the excessive contribution). Absent such a demonstration, the Audit staff 

concludes that URP transferred the $42,925 excessive contributions in an untimely 

manner. 

Legal Standard 

A. Party Committee Limits. For the 2012 election cycle, a party committee may not 

receive more than a total of $10,000 per year from any one contributor. 52 U.S.C. 

§30116(a)(1)(D) and 11 CFR §110.9. 

B. Handling Contributions That Appear Excessive. If a committee receives a 

contribution that appears to be excessive, the committee must either: 

1. Return the questionable check to the donor; or 

2. Deposit the check into its federal account and: 

• Keep enough money in the account to cover all potential refunds; 

• Keep a written record explaining why the contribution may be illegal; 

• Include the explanation on Schedule A if the contribution has to be itemized 

before its legality is established; 

• Seek a reattribution of the excessive portion, following the instructions provided 

in Commission regulations (see below for explanation of reattribution); and 

• If the committee does not receive a proper reattribution within 60 days after 

receiving the excessive contribution, refrmd the excessive portion to the donor. 

11 CFR §§103.3(b)(3),(4) and (5) and 110.1(k)(3)(ii)(B). 

C. Joint Contributions. Any contribution made by more than one person (except for a 

contribution made by a partnership) must include the signature of each contributor on 

the check or in a separate writing. A joint contribution is attributed equally to each 

donor unless a statement indicates that the funds should be divided differently. 11 

CFR§110.1(k)(l)and(2). 

D. Reattribution of Excessive Contributions. Commission regulations permit 

committees to ask donors of excessive contributions whether they had intended their 

contribution to be a joint contribution from more than one person and whether they 

would like to reattribute the excess amount to the other contributor. The committee 

must inform the contributor that: 
1. The reattribution must be signed by both contributors; 

2. The reattribution must be received by the committee within 60 days after the 

committee received the original contribution; and 

3. The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(k)(3). 

Within 60 days after receiving the excessive contribution, the committee must either 

receive the proper reattribution or refund the excessive portion to the donor. 11 CFR 

§§103.3(b)(3) and 110.1(k)(3)(ii)(B). Further, a political conunittee must retain 

written records concerning the reattribution in order for it to be effective. 11 CFR 

§110.1(1X5). \ 

Facts and Analysis 

A. Facts 

The Audit staffs review of contributions indicated that URP deposited apparent 

excessive contributions from three individuals totaling $42,925 into its federal account. 

These excessive contributions were a result of URP not refimding or transferring the 

excessive portion to a non-federal account in a timely manner. URP did maintain 

sufficient funds in its federal accounts to make the refunds during the audit cycle. The 

three individuals each made the contributions in 2012 with checks imprinted with single 

accountholders. It is unclear if the contributors intended their contributions to be for the 

URP's federal or non-federal accounts. 

Prior to notification of the audit, URP realized the contributions were excessive. URP 

reported the $42,925 as federal contributions on Schedules A as well as debt to the nonfederal account on Schedule D. In order to resolve the excessive portions, URP 

subsequently transferred $42,925 to a non-federal account in January and April 2014. 

However, the transfers were required to be made within 60 days of receipt of the original 

contributions and are therefore considered untimely. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter at the exit conference and provided URP 

representatives a schedule of the apparent excessive contributions. URP representatives 

stated the contributions were deposited into the federal account but should have been 

deposited into a non-federal account. Once discovered, URP reported the transactions as 

debt owed to a non-federal account until the transfers were made. URP representatives 

added that documentation had already been provided to the Audit staff. 

In response to the exit conference, URP representatives stated they have already taken 

corrective action and do not believe any further remedial measures are needed at this 

time. Supporting documentation was ^so provided. The Audit staff acknowledges the 

subsequent transfers totaling $42,925 to a non-federal account as a remedy for the 

excessive amount was made in an untimely manner. 
10 

The Audit staff recommends that, within 30 calendar days of service of this report, URP 

demonstrate that the funds were transferred timely (witMn 60 days of receiving the 

excessive contribution). Absent such a demonstration, the Audit staff concludes that 

URP transferred the $42,925 excessive contributions in an untimely manner. 

Finding 3. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of URP's reported financial activity with its bank 

records revealed a misstatement of financial activity for receipts in 2011 totaling 

$107,013 and an overstated ending cash-on-hand balance totaling $10,028. In addition, 

URP had a misstatement of receipts and disbursements for 2012. In 2012, URP 

understated its receipts and disbursements by $114,582 and $96,176, respectively. The 

Audit staff recommends that URP amend its disclosure reports to correct the 

misstatements. 

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). 52 U.S.C. 30104 (b)(i),(2),(3),(4) and 

. (5). 

Facta and Analyaia 

A. Facta 

As part of audit fieldwork, the Audit staff reconciled URP's reported financial activity 

with its bank records for 2011 and 2012. For the 2011 bank reconciliation, the Audit 

staff identified a misstatement of receipts and of the ending cash-on-hand balance. For 

the 2012 bank reconciliation, URP understated both its receipts and disbursements. The 

following charts detail the discrepancies between URP's disclosure reports and its bank 

records, and the succeeding paragraphs explain why the discrepancies occurred. 

2011 Committee Activity 

Reported Bank Records Discrepancy 

Begiiming Cash Balance @ 

January 1,2011 

$183 $421 $238 

Understated 

Receipts $542,049 $532,991 $9,058 

Overstated 

Disbursements $537,131 $538,339 $1,208 

UnderstatedEnding Cash Balance @ 

December 31,2011 

$5,101 ($4,927) $10,028 

Overstated 
11 

Receipts in 2011 were overstated by $9,058. However, when evaluating the identified 

errors, regardless of whether the errors were positive or negative (absolute value), the 

receipts were misstated by $107,013. In addition, the $10,028 overstatement of ending 

cash-on-hand balance resulted from the following adjustments that should be made to 

correct the reporting of receipts totaling $107,013: 

Transfers from non-federal accounts, over reported 

Transfers from non-federal accounts, not reported 

Contributions from individuals, not reported 

Contributions over reported (not supported by a deposit) 

Unitemized contributions, over reported 

Sum of Reporting Adjustments 

$36,301 

49,026 

25 

15,500 

6.161 

$ 107.QU 

2012 Committee Activity 

Reported Bank Records DiscrepauQr 

Beginning Cash Balance @ 

January 1,2012 

$5,101 ($4,927) $10,028 

Overstated 

Receipts $2,220,117 $2,334,699 $114,582 

Understated 

Disbursements $2,192,403 $2,288,579 $96,176 

Understated 

Ending Cash Balance @ 

December 31,2012 

$32,816' $41,193 $8,377' 

Understated 

The understatement of receipts resulted fix)m the following: 

• Transfers fn)m non-federal accounts, over reported ($20,584) 

• Transfer fn)m non-federal accounts, not reported 133,058 

• Contributions from political committees, individuals & refunds 

not reported 66,758 

• Contributions fh)m individuals and political committees 

over reported (15,668) 

• Uiiitemized contributions over reported (11,351) 

• Unexplained differences (37.63 T> 

Net Understatement of Receipts $ 114.S82 

The understatement of disbursements resulted fit)m the following: ' 

• Payroll and payroll taxes, not reported $48,105 

• Bank fees, not reported 1,387 

• Vendor payments, transfers to the non-federal account, 

and other disbursements, not reported 75,201 

• Bank fees, over reported (5,887) 

^ This total does not foot due to dollar amount rounding. 

^ This total does not foot due to dollar amount rounding. 
12 

• Operating disbursements, over reported (2,695) 

• Federal Election Activity, over reported (1,173) 

• Transfers to afTiliated/olher party committees, over reported (904) 

• Unexplained differences (17.8581 

Net Understatement of Disbursements S96.176 

The $8,377 understatement of the ending cash-on-hand balance resulted from the 

misstatements described above. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with URP representatives at the exit conference and 

provided supporting schedules of the misstatements. URP representatives asked 

questions for clarification and stated they may amend the reports if they determine the 

supporting schedules provided by the Audit staff are correct. 

In response to the exit conference, URP representatives stated they will amend the reports 

"at a time the Commission deems appropriate, in accordance with the Audit Division's 

instructions." 

The Audit staff recommends that, within 30 calendar days of service of this report, URP 

amend its disclosure reports to correct the misstatements noted above and reconcile the 

cash-on-hand balance on its most recent report to identify any subsequent discrepancies 

that could affect the recommended adjustments. The Audit staff further recommends that 

URP adjust the cash-on-hand balance as necessary on its most recent report, noting that 

the adjustment is the result of prior-period audit adjustments. 

Finding 4. Recordkeeping for Employees 

Summary 

During audit fieldwork, the Audit staff identified that URP did not maintain any monthly 

payroll logs, as required, to document the percentage of time each employee spent in 

cormection with a federal election. For 2011 and 2012, the Audit staff identified 

payments to URP employees totaling $285,242 for which URP did not maintain monthly 

payroll logs. This consisted of $269,776 for which payroll was allocated with federal and 

non-federal funds, and $15,466 for which payroll was exclusively paid with non-federal 

funds. For URP employees paid with an allocation of federal and non-federal funds or 

exclusively non-federal funds, the Audit staff recommends that URP provide monthly 

payroll logs that indicate the time spent in connection with a federal election. Absent the 

provision of monthly time logs, the Audit staff recommends that URP implement a plan 

to maintain such monthly payroll logs in the future. 

Legal Standard 

Maintenance of Monthly Logs. Party committees must keep a monthly log of the 

percentage of time each employee spends in connection with a federal election. 

Allocations of salaries, wages, and fringe benefits are to be undertaken as follows: 
13 

• employees who spend 25 percent or less of their compensated time in a given 

month on federal election activities must be paid either from the federal account 

or be allocated as administrative costs; 

• employees who spend more than 25 percent of their compensated time in a given 

month on federal election activities must be paid only from a federal account; and, 

• employees who spend none of their compensated time in a given month on federal 

election activities may be paid entirely with funds that comply with state law. 11 

CFR §106.7(d)(l). 

Facts and Analsrsis 

A. Facts 

Ehiring audit fieldwork, the Audit staff reviewed disbursements for payroll. URP did not 

maintain any monthly payroll logs or equivalent records to document the percentage of 

time each employee spent in connection with a federal election. These logs are required 

to document the proper allocation of federal and non-federal funds used to pay employee 

salaries and wages. For 2011 and 2012, URP did not maintain monthly logs for 

$285,242^ in payroll. This amount includes payroll paid as follows to URP employees. 

1. Employees reported on Schedule H4(Shared Federal/Non-Federal Activity) 

and paid with a mixture of federal and non-federal funds during the same 

month (totaling $269,776); 

2. Employees reported on Schedule H4 and also paid with both a mixture of 

federal and non-federal funds and exclusively non-federal funds during the 

same month (totaling $962); and 

3. Employees paid exclusively with non-federal funds in a given month and not 

reported by URP (totaling $14,504). 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the recordkeeping requirement with URP representatives 

during the exit conference. URP representatives stated they believed the payroll was 

allocated correctly. URP has not located any payroll logs and noted that Ae plan moving 

forward is to keep payroll logs. 

In response to the exit conference, URP representatives stated that the "[pjarty undertook 

efforts to ensure that staff time and other expenses were properly allocated between its 

federal and non-federal accounts. The Party did not however, maintain monthly payroll 

logs during the 2012 election cycle." URP representatives further stated they intend to 

maintain such payroll logs in the future. 

URP submitted an affidavit from the executive director during 2011-2012 audit cycle 

stating that identified employees did not spend more than 25 percent of their 

compensated work time on activities in connection with the federal election. The 

* This total does not include payroll for employees paid with 100 percent federal funds and reported as 

such (see Part I, Background, Commission Guidance, Request for Early Commission Consideration of a 

Legal Question, Page I). Payroll amounts are stated net of taxes and fKnge benefits. 
14 

affidavit further states that the executive director also did not spend more than 25 percent 

of his time on activities in connection with a federal election. 

The affidavit provided by URP does not resolve the recordkeeping finding because it 

does not document the time an employee spent in connection with a federal election. 

As such, the Audit staff recommends that, within 30 calendar days of service of this 

report, URP: 

• Provide evidence that it maintained monthly time logs to document the 

percentage of time an employee spent in connection with a federal election; or 

• Implement a plan to maintain monthly payroll logs in the future. 

Finding 5. Reporting of Debts and Obligations 

Summary 

During audit fieldwork, the Audit staff noted that URP failed to disclose debts and 

obligations to five vendors and one staff member totaling $205,323 on Schedule D (Debts 

and Obligations). The Audit staff reconunends that the URP amend its disclosure reports 

to include these debts and obligations on Schedule D. 

Legal Standard 

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

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

52 U.S.C. §30104(b)(8) and 11 CFR §§104.3(d) and 104.11(a). 

B. Separate Schedules. A political committee must file separate schedules for debts 

owed by the conunittee and debts owed to the committee, together with a statement 

explaining the circumstances and conditions under which each debt and obligation 

was incurred or extinguished. 11 CFR §104.11(a). 

C. Itemizing Debts and Obligations. 

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

the date incurred (the date of the transaction); the committee reports it on the next 

regularly schedul^ report. 

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

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

D. Advances by Committee Staff and Other Individuals. 

1. Scope. This section, applies to individuals who are not acting as commercial 

vendors. Individuals who are acting as commercial vendors shall follow the 

requirements of 11 CFR §§116.3 and 116.4. 

2. The treatment as contributions. The payment by an individual from his or 

her personal funds, including a personal credit ca^, for the costs incurred in 

providing goods or services to, or obtaining goods or services that are used by 

or on behalf of, a candidate or political committee is a contribution unless the 
15 

payment is exempted under 11 CFR 100.79, it shall be considered a 

contribution by the individual unlessa) The payment is for the individual's transportation expenses inured 

while traveling on behalf of a candidate or political committee of a 

political party or for usual and normal subsistence expenses incurred 

by an individual, other than a volunteer, while traveling on behalf of a 

candidate or political conunittee of a political party; and 

b) The individual is reimbursed within sixty days after the closing date of 

the billing statement on which the charges first appear if the payment 

was made using a personal credit card, or within thirty days after the 

date on which the expenses were incurred if a personal credit card was 

not used. For purposes of this section, the closing date shall be the 

date indicated on the billing statement which serves as the cutoff date 

for determine which charges are included on that billing statement. In 

addition, "subsistence expense" includes only expenditures for 

personal living expenses related to a particular individual traveling on 

conunittee business, such as food or lodging. 11 §CFR 116.S(b). 

3. Treatment as debts. A political committee shall treat the obligation arising 

from a payment described in paragraph (b) of this section as an outstanding 

debt until reimbursed. 11 CFR §116.5(c). 

4. Settlement or forgiveness of the debt. The individual and political 

committee may agree to the total forgives of the debt (see 11 CFR §116.8) or 

settlement of the debt if less than the entire amount owed (See 11 CFR 

§116.7), provided that the requirements of 11 CFR §116.7 or §116.8, as 

appropriate, including the submission of the information specified in these 

sections and Commission review, are satisfied. The provision of this part 

shall not be construed to require the individual to forgive or settle the debt for 

less than the entire amount owed. 

5. Reporting. The political committee shall continue to report the obligation 

arising from the payment as a debt in accordance with 11 CFR §116.7(f) or 

until the Commission has completed a review of the request to forgive the 

debt pursuant to 11 CFR §116.8, or until the political committee pays the debt, 

whichever occurs first. 1ICFR §116.5. 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed URP's disbursement records and 

disclosure reports for proper reporting of debts and obligations. This review identified 

debts totaling $205,323^ that URP failed to report on Schedule D during the audit period 

concerning five vendors and one staff member^. Based on the records, the five vendors 

' Each debt in this amount was counted once even if it is a required disclosure over multiple periods. In 

order for URP to conectly file amended reports, schedules were provided that included the amount of 

each debt required to be reported for each reporting period. 

' The staff member is also discussed in Finding 6 for possible violation of 11 CFR § 116.5(b), advances by 

committee staff considered a contribution. 
16 

totaling $111,191 provided mainly catering, mailings/printing services, software, 

equipment rental and administrative expenses. The Audit staff calculated the debts to the 

vendors based on the invoice date and the subsequent payment date. Most of the debts 

were greater than $500 and were outstanding for periods ranging from 31 to 416 days. 

The debt related to the staff member, totaling $94,132, was for reimbursements for 

committee expenses paid with the staff member's personal credit card. Most 

reimbursements were made more than 60 days from the date of the expense per the 

reimbursement form. The debt amount for the staff member was calculated based on 

provided documentation consisting of an expense reimbursement form submitted by the 

staff member, and/or invoices. The Audit staff used the individual dates of incurrence 

listed on the expense reimbursement form. The Audit staff did not use the date the 

reimbursement form was submitted because this date was unknown. Documentation such 

as the staff member's credit card billing statements, requested by the Audit staff, was not 

provided. URP provided one credit card statement with the closing billing date during 

fieldwork. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed the reporting of debts and obligations 

with URP representatives and provided a schedule detailing the trai^tions requiring 

disclosure on Schedule D. URP representatives acknowledged they understood the 

schedules for vendors. They further stated the staff member turned in the expense reports 

late so URP did not know when the expenses needed to be reimbursed or that the 

expenses had been incurred. Therefore, the expenses could not be reported correctly. 

In response to the exit conference, URP representatives noted that most of the debt items 

were related to expense reimbursements paid to the staff member. URP representatives 

questioned the date calculation and stated they were not aware of the staff member's 

expenses until after receipts and/or expense reports were presented to the treasurer, which 

fr^uently occurred well after the underlying expenses were incurred. URP 

representatives added the regular practice was to issue reimbursements to thie staff 

member within a calendar week of receipt of the expense reimbursement form. URP 

feels that the Audit staff should not consider these expenses as debt items from the date 

they were incurred since, generally, URP was not aware of the expense until well after 

the date of incurrence. 

The Audit stafTacknowledges that providing this individual's credit card statements with 

the billing cycle closing date could have reduced some of the debt for the staff member 

that would require disclosure. However, unless copies of the credit card statements are 

provided to show the closing date of the billing cycle, the Audit staffs analysis would 

remain unchanged. URP offered no further comments on the five vendors representing 

$111,191 of the undisclosed debt and obligations. 

The Audit staff recommends that, within 30 calendar days of service of this report, URP: 

• Provide documentation demonstrating that these expenditures totaling $205,323 

did not require reporting on Schedule D; or 
17 

• Provide the staff member's credit card billing statements with the closing date of -

the billing cycle. 

• Absent such documentation, amend its reports to disclose debts and obligations 

totaling $205,323 on Schedule D. 

Finding 6. Apparent EKcesaive Contribution - Staff 

Advance 

Summary 

One URP staff member received reimbursements for credit card expenditures totaling 

$46,904 that appear to have been reimbursed untimely. URP did not provide the staff 

member's credit card billing statements to support the reimbursements were made within 

60 days after the closing date of the billing statement. Absent such documentation, the 

Audit staff considers $28,637, of the $46,904 to be an excessive contribution from the 

staff member until the expenses were reimbursed. The Audit staff recommends URP 

demonstrate these reimbursements were made within the proper time limitations. 

Legal Standard 

A. Advances by Committee Staff and Other Individuals. 

1. Scope. This section applies to individuals who are not acting as commercial 

vendors. Individuals who are acting as commercial vendors shall follow the 

requirements of 11 CFR §§116.3 and 116.4. 

2. The treatment as contributions. The payment by an individual from bis or 

her personal funds, including a personal credit card, for the costs incurred in 

providing goods or services to, or obtaining goods or services that are used by 

or on behalf of, a candidate or political committee is a contribution unless the 

payment is exempted under 11 CFR 100.79, it shall be considered a 

contribution by the individual unlessa) The payment is for the individual's transportation expenses inured 

while traveling on behalf of a candidate or political committee of a 

political party or for usual and normal subsistence expenses incurred 

by an individual, other than a volunteer, while traveling on behalf of a 

candidate or political committee of a political party; and 

b) The individual is reimbursed within sixty days after the closing date of. 

the billing statement on which the charges first appear if the payment 

was made using a personal credit card, or within thirty days after the 

date on which the expenses were incurred if a personal cr^it card was 

not used. For purposes of this section, the closing date shall be the 

date indicated on the billing statement which serves as the cutoff date 

for determine which charges are included on that billing statement. In 

addition, "subsistence expense" includes only expenditures for 

personal living expenses related to a particular individual traveling on 

committee business, such as food or lodging. 11 §CFR 116.5(b). 

3. Treatment as debts. A political committee shall treat the obligation arising 

from a payment described in paragraph (b) of this section as an outstanding 

debt until reimbursed. 11 CFR §116.5(c). 
18 

4. Settlement or forgiveness of the debt. The individual and political 

committee may agree to the total forgives of the debt (see 11 CFR §116.8) or 

settlement of Ae debt if less than the entire amount OA^ (See 11 CFR 

§116.7), provided that the requirements of 11 CFR §116.7 or §116.8, as 

appropriate, including the submission of the ihfonnation specified in these 

sections and Commission review, are satisfied. The provision of this part 

shall not be construed to require the individual to forgive or settle the debt for 

less than the entire amount owed. 

5. Reporting. The political committee shall continue to report the obligation 

arising from the payment as a debt in accordance with 11 CFR §116.7(f) or 

until the Commission has completed a review of the request to forgive the 

debt pursuant to 11 CFR §116.8, or until the political committee pays the debt, 

whichever occurs first. 11 CFR §116.5. 

B. Travel Expenses Exceeding S2,000 Exemption. Payments for transportation 

expenses^ that exceed the $2,000 travel exemption are considered contributions unless 

the committee reimburses them: 

• Within 60 days", if the payments were made on a credit card; or 

• Within 30 days, if the payments were made with cash or a check. 11 CFR 

§116.5(b) and 100.79(a)(2). 

C. Party Committee Limits. A party committee may not receive more than a total of 

$10,000 a year from any one contributor. 52 U.S.C. §30116(a)(1)(D). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed individuals who received 

reimbursements from URP. One staff member received reimbursements totaling . 

$197,850 throughout the audit cycle for expenditures paid mostly with the employee's 

personal credit card^. Of these reimbursements, $46,904 was more than 60 days fn)m the 

date of the expense per the reimbursement form. The Audit staff calculated the days 

outstanding by using the individual dates of incurrence listed on the expense 

reimbursement form. Of the $46,904 untimely reimbursements, $28,637 ($46,904 -

$18,267) is considered an excessive contribution from the staff member, pursuant to 11 

CFR§116.5(b)'°. 

^ Including usual and normal subsistence expenses (such as food and lodging) incurred while traveling on 

behalf of the candidate. 

' Sixty days after the closing date of the credit card billing statement where the charge first appeared. 

' Based on the documentation provided, the Audit staff could not verify if five transactions were paid using 

the employee's personal credit card versus cash or check. 

The total S46,904 is adjusted because an individual may contribute up to $10,000 per year to a state 

. party. The staff member contributed $1,733 in 2011 and did not make a contribution to URP in 2012. 

Thereibre the staff member could have contributed $ 18,267 ($20,000 - $ 1,733). In addition, a $4,000 

travel allowance was already taken into consideration per 11 CFR §100.79(a)(2). 
19 

URP provided invoices, receipts, and expense reimbursement forms to support the 

expenditures but provided only one credit statement with the closing billing date during 

audit fieldwork. None of these untimely reimbursements were for travel expenses that 

were reimbursed within 60 days from the date of the expense per the reimbursement 

form, or within 30 days if paid with cash or check. 

B. Interim Audit Report ft Audit Division Recommendation 

At ihe exit conference, the Audit staff discussed the reimbursements for the one staff 

member and provided a schedule detailing the transactions (with the discussion of debts 

and obligations at Finding S above). URP representatives stated the staff member turned 

in the expense reports late so URP did not know when the expenses needed to be 

reimbursed or that the expenses had been incurred. 

In response to the exit conference, URP representatives questioned the date calculation 

and stated they were not aware of the staff member's expenses until after receipts and/or 

expense reports were presented to the treasurer, which frequently occurred well after the 

underlying expenses were incurred. URP representatives ^ded the regular practice was 

to issue reimbursements to the staff member within a calendar week of receipt of the 

expense reimbursement form. 

The Audit staff acknowledges that providing this individual's credit card statements with 

the billing cycle closing date could have reduced the amount considered to be a 

contribution fn)m the employee. However, unless copies of the credit card statements 

with the billing cycle closing date are provided to demonstrate the reimbursements were 

timely, the Audit staffs analysis would remain unchanged. The $28,637 is considered an 

excessive contribution from the staff member until reimbursed. 

The Audit staff recommends that, within 30 calendar days of service of this report, URP 

provide documentation, such as the employee's credit card statement with the closing 

billing date, to demonstrate the reimbursements were timely.