Interim Audit Report of the 

Audit Division on the Freedom's 

Defense Fund 

(Januaiy 1, 2011 - December 31, 2012) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduc 

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 me 

the threshold 

requirements for 

substantial compliance 

with the Act.' Theaudt 

determines whether the 

committee complied wijtl 

the limitations, 

prohibitions and 

. disclosure requirement! 

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 thi 

report. 

About the Committee (p. 2) 

The Freedom's Defense Fund is a non-connected committee, 

headquartered in Arlington, Virginia. For more information, see 

the chart on Committee Organization, p.2. 

' 52 U.S.C. §30111(b). 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals 

o Other Receipts 

Total Receipts 

Disbursements 

o Operating Expenditures 

o Contributions to 

Candidates/Committees 

o Independent Expenditures 

o Other Disbursements 

Total Disbursements 

$ 3,626,052 

54,481 

$3,680,533 

$3,221,626 

107,900 

376,492 

14,728 

$3,720,746 

Findinga and Recommendations (p. 3) 

• Misstatement of Financial Activity (Finding I) 

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

• Reporting of Apparent Independent Expenditures (Finding 3) 

• Recordkeeping for Communications (Finding 4) 
Interim Audit Report of the Audit 

Division on the 

Freedom's Defense Fund 

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

Page 

Part I. Background 

Authority for Audit I 

Scope of Audit 1 

Part n. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding]. Misstatementof Financial Activity S 

Finding 2. Disclosure of Occupation and Name of Employer 6 

Finding 3. Reporting of Apparent Independent Expenditures 8 

Finding 4. Recordkeeping for Communications .11 
Parti 

BackgjcouxM. 

Cam 

Authority for Audit 

This report is based on 

Audit Division of the F 

the Federal Election 

conducted the audit 

conduct audits and fieic 

report under 52 U.S.C. 

Commission must perfoi 

determine if the reports 

for substantial compliani 

Scope of Audit 

Following Commission 

factors and as a result, 

1. 

in audit of the Freedom's Defense Fund (FDF), undertaken by the 

ideral Election Commission (the Commission) in accordance with 

ipaign Act of 1971, as amended (the Act), llie Audit Division 

puijsuant to 52 U.S.C. §30111(b), which permits the Commission to 

investigations of any political committee that is required to file a 

|30104. Prior to conducting any audit under this subsection, the 

rm an internal review of reports filed by selected committees to 

filed by a particular committee meet the threshold requirements 

ice with the Act. 52 U.S.C. §30111(b). 

•approved procedures, the Audit staff evaluated various risk 

lis audit examined: 

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

2. the disclosure of debts and obligations pertaining to independent expenditures; 

3. the consistency between reported figures and bank records; 

4. the completeness of disbursement records; 

5. the disclosure of ini lependent expenditures; and 

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

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration June 7,2004 

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

Headquarters Arlington, Virginia 

Bank Information 

• Bank Depositories One 

• Bank Accounts Three checking accounts 

Treasurer 

• Treasurer When Audit Was Conducted Scott Mackenzie 

• Treasurer During Period Covered by Audit Scott Mackenzie 

Management Information 

• Attended Commission Campaign Finance 

Seminar 

Yes 

• Who Handled Accounting and 

Recordkeeping Tasks • 

Treasurer 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand ^ January 1,2011 S 46,043 

Receipts 

o Contributions from Individuals 3.626,052 

o Other Receipts 54,481 

Total Receipts $3,680,533 

Disbursements 

o Operating Expenditures 3,221,626 

o Contributions to Candidates/Committees 107,900 

o Independent Expenditures 376,492 

o Other Disbursements 14,728 

Total Disbursements $3,720,746 

Cash-on-hand ® December 31,2012 $5330 • 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

The Audit staffs comparison of FDF's reported financial activity with its bank records 

revealed that, for 2011, FDF understated its reported disbursements by $S2,3S7, and 

overstated its ending cash-on-hand balance by $62,220. The Audit staff recommends that 

FDF amend its disclosure reports to correct these misstatements. 

(For more detail, see p. S.) 

Finding 2. Disclosure of Occupation and Name of 

Employer 

During audit fieldwork, a review of all contributions fivm individuals requiring 

itemization indicated that 2,911 contributions totaling $378,639 lacked adequate 

disclosure of occupation and name of employer. FDF did not demonstrate "best efforts" 

to obtain, maintain and submit this information. The Audit staff recommends that FDF 

establish "best efforts" by filing amended reports to correct the disclosure of occupation 

and name of employer. 

(For more detail, see p. 6.) 

Finding 3. Reporting of Apparent Independent 

Expenditures 

During audit fieldwork, the Audit staff reviewed disbursements to verify that the 

independent expenditures that FDF disclosed on Schedule E (Itemized Independent 

Expenditures) were reported accurately. FDF disclosed independent expenditures 

totaling $385,619. The Audit staff identified additional disbursements disclosed as 

operating expenditures on Schedule B, Line 21b (Operating Expenditures) totaling 

$868,015 which appear to be independent expenditures and for which no 24/48 hour 

reports were filed. 

If FDF believes that the apparent independent expenditures totaling $868,015 did not 

require reporting as independent expenditures, the Audit staff recommends that FDF 

provide evidence to support its conclusion. Absent such evidence, the Audit staff 

recommends that FDF amend its reports to disclose these disbursements as independent 

expenditures on Schedule E and submit revised procedures for reporting independent 

expenditures in the future, it is also recommended that FDF provide documentation to 

support the public dissemination for these communications to determine whether 24/48-

hour reports were required to be filed. 

(For more detail, see p. .8.) 
Finding 4. Recordkeeping for Communications 

During audit fieldwork the Audit staff reviewed disbursements to verify the accuracy of 

the information and pn per classification of transactions disclosed on reports. PDF 

reported 13 expenditur ;s totaling $90,814 on Schedule B, Line 21b (Operating 

Expenditures) with pur roses of "direct mail - creative" and "direct mail - postage." 

Documentation that w£ s provided by PDF was insufficient to make a determination 

pertaining to the purpo le for these expenditures and verification as an operating expense. 

The Audit staff recomr lends that PDF provide, in sufficient detail, the necessary 

information from whic i the reported expenditures totaling $90,814 may be verified or 

explained. Such recon s should include the missing copies of communications, and, if 

the communication has 

communication with an invoice(s). 

(For more detail, see p 

already been provided, information associating each 

11.) 
Part IV 

Findings and Recommendations 

I Finding 1. Misstatement of Financial Activity 

SmnniAfy 

The Audit staffs com] 

revealed that, for 2011 

overstated its ending 

FDF amend its disclosi 

liaison of FDF's reported financial activity with its bank records 

FDF understated its reported disbursements by $52,357, and 

cdsh-on-hand balance by $62,220. The Audit staff recommends that 

lure reports to correct these misstatements. 

Le^ Standard 

Contents of Reports. 

• the amount of 

• the total amount 

• the total amount 

year; and 

• certain transact! 

Schedule B (Item 

(5). 

Bach report must disclose: 

cash-on-hand at the beginning and end of the reporting period; 

of receipts for the reporting period and for the calendar year; 

of disbursements for the reporting period and for the calendar 

ons that require itemization on Schedule A (Itemized Receipts) or 

lized Disbursements). 52 U.S.C. §30104(b)(l), (2), (3), (4), and 

Facts and Anal3rsls 

A. Facts 

During audit fieldwork 

its bank records for cal 

FDF misstated disbursemi 

outlines the discrepanci 

succeeding paragraphs 

the Audit staff reconciled FDF's reported financial activity with 

lendar years 2011 and 2012. The reconciliation determined that 

ents and ending cash-on-hand for 2011. The following chart 

es between FDF's disclosure reports and its bank records. The 

ixplain why the discrepancies occurred. 

2011 Committee Act vity 

Reported Bank Records Discrepancy 

Beginning Cash-on-H 

January 1,2011 

md @ $43,781 $46,043 ($2,262) 

Understated 

Receipts $1,324,490 $1,312,365 $12,125 

Overstated 

Disbursements $1,293,431 $1,345,788 ($52,357) 

Understated 

Ending Cash-on-Hanc 

(fli E)ecember31,201 

$74,840 $12,620 $62,220 

Overstated 
cani 

The understatement of 

• Contributions to 

• Vendor payment n 

• Unexplained diffei 

Net Understatemi 

disbursements resulted from the following differences: 

didates/committees not reported $ S 1,650 

>t reported 2,900 

tences f 2.1931 

lent of Disbursements S 52,357 

The $62,220 overstater lent of the ending cash-on-hand balance primarily resulted from 

the misstatements described above. 

B. Interim Audit RepjDi 

At the exit conference, 

errors that caused the ir 

would be filed to correct 

The Audit staff recomn 

amend its reports to 

Finding 2. 

Employer 

irt & Audit Division Recommendation 

the Audit staff provided work papers and discussed the reporting 

isstatements. llie PDF Treasurer stated that amended reports 

the misstatements. 

correct 

ends that, within 30 calendar days of service of this report, PDF 

:t the misstatements for 2011 as noted above. 

Disclosure of Occupation and Name of 

Summary 

During audit fieldwork, 

itemization indicated th 

disclosure of occupatioi i 

to obtain, maintain and 

establish "best efforts" 

and name of employer. 

a review of all contributions from individuals requiring 

at 2,911 contributions totaling $378,639 lacked adequate 

and name of employer. PDF did not demonstrate "best efforts" 

submit this information. The Audit staff recommends that PDF 

jy filing amended reports to correct the disclosure of occupation 

Legal Standard 

A. Itemization Required for Contributions from Individuals. A political committee 

other than an authorize( committee must itemize any contribution from an individual if it 

exceeds $200 per calen ar year, either by itself or when combined with other 

contributions fh)m the i ame contributor. 52 U.S.C §30104(b)(3)(A). 

B. Required Informal on for Contributions from Individuals. For each itemized 

contribution from an individual, the committee must provide the following information: 

• the contributon s fiill name and address (including zip code); 

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

• the date of rect ipt (the date the committee received the contribution); 

• the amount of he contribution; and 

• the calendar year-to-date total of all contributions from the same individual. 52 

U.S.C. §30104[b)(3)(A) and 11 CFR§§ 100.12 and 104.3(a)(4)(i). 
res 

littee 

C. Best Efforts Ensu 

shows that the commi 

the information required 

considered in compliance 

Th 

D. Definition of Best 

have used "best effc 

• All written so 

o a clear 

and nam 

o the statemi 

o Note: 

manner 

• Within 30 da; 

effort to obtaii 

documented 

• The treasurer 

provided by tli 

contained in 

during the san 

Facts and Analysis 

A. Facts 

A review of all contribdi 

contributions totaling $3 

to be itemized by FDF, 

majority of the contribi 

were blank on the Schedi 

The Audit staff reviewed 

utilized "best efforts" h i 

FDF did not prdv 

282 contribution! 

FDF had the rec 

however, this ir 

Compliance. When the treasurer of a political committee 

used best efforts (see below) to obtain, maintain, and submit 

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

with the Act. 52 U.S.C. §30102(i). 

Sfforts. The treasurer and the committee will be considered to 

Its" if the committee satisfied all of the following criteria, 

icitations for contributions included: 

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

of employer; and 

lent that such reporting is required by Federal law. 

le request and statement must appear in a clear and conspicuous 

>n any response material included in a solicitation, 

lys of receipt of the contribution, the treasurer made at least one 

the missing information, in either a written request or a 

oral request. 

] eported any contributor information that, although not initially 

e contributor, was obtained in a follow-up communication or was 

e committee's records or in prior reports that the committee filed 

e two-year election cycle. 11 CFR § 104.7(b). 

itions from individuals requiring itemization indicated that 2,911 

78,639, or 41% of total contributions from individuals required 

lacked disclosure of occupation and name of employer. The 

tor entries (2,669 of 2,911) that lacked the required information 

lules A (Itemized Receipts) filed with the Commission. 

the contribution records provided by FDF to determine if it had 

obtain, maintain and submit the missing information. 

ide documentation showing it made follow-up best efforts lor 

s totaling $26,841 ($378,639 - $351,798). 

uired information for 2,629 contributions totaling $351,798; 

brmation was not disclosed on the FEC reports. 

B. Interim Audit Repbi 

At the exit conference, 

occupation and name o 

Treasurer commented thi 

employer information, 

demonstrating that FDI 

employer information. 

irt & Audit Division Recommendation 

he Audit staff provided schedules and discussed the omission of 

'employer information from the disclosure reports. The FDF 

at he had obtained some of the missing occupation and name of 

In its response to the exit conference, FDF provided a work paper 

had obtained most of the missing occupation and name of 

FDF also provided copies of letters that it had sent to contributors 
to obtain the missing occupation and name of employer information. This additional 

documentation demonstrated that FDF had obtained occupation and name of employer 

information for $256,451 of the errors; however amended disclosure reports were not 

filed.^ This amount is included in the $351,798 noted above. 

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

establish "best efforts" by amending its reports to disclose the missing information 

relating to the 2,629 contributions totaling $351,798 ($95,347 + $256,451). 

Finding 3. Reporting of Apparent Independent 

Expenditures 

SummaTy 

During audit fieldwork, the Audit staff reviewed disbursements to verify that the 

independent expenditures that FDF disclosed on Schedule E (Itemized Independent 

Expenditures) were reported accurately. FDF disclosed independent expenditures 

totaling $385,619. The Audit staff identified additional disbursements disclosed as 

operating expenditures on Schedule B, Line 21b (Operating Expenditures) totaling 

$868,015 which appear to be independent expenditures and for which no 24/48 hour 

reports were filed. 

If FDF believes that the apparent independent expenditures totaling $868,015 did not 

require reporting as independent expenditures, the Audit staff recommends that FDF 

provide evidence to support its conclusion. Absent such evidence, the Audit staff 

recommends that FDF amend its reports to disclose these disbursements as independent 

expenditures on Schedule E and submit revised procedures for reporting independent 

expenditures in the future. It is also recommended that FDF provide documentation to 

support the public dissemination for these communications to determine whether 24/48-

hour reports were required to be filed. 

Legal Standard 

A. Definition of Independent Expenditures. The term "independent expenditure" 

means an expenditure by a person for a communication expressly advocating the 

election or defeat of a clearly identified candidate that is not made in coordination 

with any candidate or authorized committee or agent of a candidate. No expenditure 

shall be considered independent if the person making the expenditure allows a 

candidate, a candidate's authorized committee or their agents, or a political party 

committee or its agents to become materially involved in decisions regarding the 

communication as described in 11 CFR 109.21(dX2), or shares financial 

responsibility for the cost of production or dissemination with any such person. 11 

CFR §100.16. 

' FDF's database contained the occupation and name of employer information for an additional 420 

contributions totaling $93,347. 
B. Disclosure Requi remi 

be reported on Schedi 

the same payee dur 

expenditures made 

as memo entries on 

expenditures of $2(|0 

the total of those e: 

104.4(a) and 104.1 

lents - General Guidelines. An independent expenditure shall 

lule E if, when added to other independent expenditures made to 

ng the same calendar year, it exceeds $200. Independent 

j.e., publicly disseminated) prior to payment should be disclosed 

Schedule E and as a debt on Schedule D. Independent 

or less need not be itemized, though the committee must report 

xpenditures on line (b) of Schedule E. 11 CFR §§104.3(b)(3)(vii). 

C. Last-Minute Independent Expenditure Reports (24-Hour Reports). Any 

independent expem itures aggregating $1,000 or more, with respect to any given 

election, and made ifter the 20"' day but more than 24 hours before the day of an 

election, must be re jorted and the report must be received by the Commission within 

24 hours after the expenditure is made. A 24-hour report is required each time 

additional indepenaent expenditures aggregate $1,000 or more. The date that a 

communication is publicly disseminated serves as the date that the committee must 

use to determine whether the total amount of independent expenditures has, in the 

aggregate, reached or exceeded the threshold reporting amount of $1,000. 11 CFR 

§§ 104.4(f) and 10415(g)(2). 

D. Independent Expenditure Reports (48-Hour Reports). Any independent 

expenditures aggregating $10,000 or more for an election in any calendar year, up to 

and including the 2^h day before an election, must be disclosed within 48 hours each 

time the expenditures aggregate $10,000 or more. The reports must be filed with the 

Commission within 48 hours after the expenditure is made. A 48-hour report is 

required each time additional independent expenditures aggregate $10,000 or more. 

The date that a communication is publicly disseminated serves as the date that the 

committee must use to determine whether the total amount of independent 

expenditures has, in 

amount of $10,000. 

luch i 

E. Definition of Expi 

communication that; 

• Uses phrases si 

"defeat" accomi 

incumbent," or 

which in contex 

or defeat of one 

stickers, advei 

• When taken as i 

proximity to the 

containing advo( 

candidate(s) becbi 

o the electoral 

and 

ressly Advocating. The term "expressly advocating" means any 

the aggregate, reached or exceeded the threshold reporting 

11 CFR §§l04.4(f) and 104.5(gXl). 

as "vote for the President," "re-elect your Congressman," 

ipanied by a picture of one or more candidate(s), "reject the 

communications of campaign slogan(s) or individual word(s), 

can have no other reasonable meaning than to urge the election 

or more clearly identified candidate(s), such as posters, bumper 

irtisements; or 

whole and with limited reference to extemal events, such as the 

election, could only be interpreted by a reasonable person as 

;acy of the election or defeat of one or more clearly identified 

luse: 

1 portion of the communication is unmistakable, unambiguous, 

suggestive of only one meaning; and 
10 

o reasonable minds could not differ as to whether it encourages actions to 

elect or defeat one or more clearly identified candidate(s) or encourages 

some other kind of reaction. 11 CFR § 100.22(a) and (b). 

F. Formal Requirements Regarding Reports and Statements. Each political 

committee shall maintain records with respect to the matters required to be reported 

which shall provide in sufficient detail the necessaiy information and data from which the 

filed reports may be verified, explained, clarified, and check for accuracy and 

completeness. 11 CFR §104.14(b)(1). 

Facts and Analysis 

A. Reporting of Apparent Independent Expenditures 

1. Facts 

During audit fieldwork, the Audit staff reviewed disbursements to ensure that 

independent expenditures were disclosed correctly on Schedule E. FDF disclosed 

independent expenditures totaling $385,619 on Schedule E. However, FDF also 

made media-related expenditures totaling $868,015 and disclosed them as operating 

expenditures on Schedule B, Line 21b (Operating Expenditures), when it appears that 

they should have been reported as independent expenditures on Schedule E. 

According to vendor invoices, FDF was billed $868,015 for mailers. The invoices 

contained the mailer identification codes, the quantity of pieces mailed, the date that 

the pieces were mailed, and the cost of each mailing. A review of the mailers that 

were made available indicated that they contained language expressly advocating the 

election or defeat of a clearly identified candidate, which is Federal Election Activity 

that is required to be reported on Schedule E as defined under 1ICFR § 100.22(a). 

A breakdown of the analysis for these expenditures is as follows: 

Apparent Independent Expenditures Reported as Operating Expenditures 

(Copy of Communication Made Available) 

FDF made 137 apparent independent expenditures totaling $868,015 for which it 

provided supporting documentation such as invoices and the associated mailers 

for each invoice. All of these communications contained language expressly 

advocating the election or defeat of a clearly identified candidate, as defined 

under 11 CFR §100.22(a). 

The majority of the mailers advocated the defeat of Barack Obama in the 2012 

general election. Some of the mailers included statements directly advocating 

defeat such as, "Barack Obama must be defeated," and "It's going to take a 

Herculean effort to defeat Barack Obama...this bully must be exposed and 

defeated." Other mailers contained language such as, "we conservatives need to 

start attacking Barack Obama's re-elect efforts NOW.. .if we're going to.. .do 

what's necessary to make Barack Hussein Obama a one-term president." and "It 

goes without saying that Barack Obama must be defeated...Together, you and I 
11 

must take Barack Obama and his liberal-progressive hacks head-on. This is the 

only way that they will be defeated!" 

2. Interim Audit Report & Audit Recommeudatiou 

At the exit conference, the Audit staff presented schedules of apparent independent 

expenditure reporting errors. In response to the exit conference, the FDF Treasurer 

stated that FDF's position would be that these expenditures were fundraising 

expenditures and not independent expenditures. 

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

FDF provide documentation and evidence that apparent independent expenditures 

totaling $868,015 did not require reporting as independent expenditures. Absent such 

evidence, the Audit staff recommends that FDF amend its reports to disclose these 

disbursements as independent expenditures on Schedule E and submit revised 

procedures for reporting independent expenditures. 

B. Failure to File 24/48- Hour Reports for ludepeudeut Expeuditures 

1. Facts 

During audit fieldwork, the Audit staff reviewed independent expenditures reported 

by FDF, as well as the apparent independent expenditures noted above, to determine 

whether additional reporting of24/48-hour reports was required.^ As noted above, 

the Audit staff identifled apparent independent totaling $868,015 which may also 

require filing of24/48-hour reports. 

2. luterim Audit Report & Audit Recommeudatiou 

At the exit conference, the Audit staff presented schedules of independent 

expenditure reporting errors. The FDF Treasurer stated that FDF's position would be 

that these expenditures were fundraising expenditures and not independent 

expenditures. 

Absent documentation and evidence that apparent independent expenditures totaling 

$868,015 did not require reporting as independent expenditures (per Part A above), 

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

FDF provide documentation to support the date of public dissemination for the 

communications to determine whether a filing of a 24/48-hour report was required. 

I Finding 4. Recordkeeping for Communications . | 

Summary 

During audit fieldwork, the Audit staff reviewed disbursements to verify the accuracy of 

the information and proper classification of transactions disclosed on reports. FDF 

^ The date the expenditure is publicly distributed serves as the date that the independent expenditure is 

made for purposes of the 24/48-hour reports. FDF provided a master list of all mailers that included the 

mail date for each mailer on the list. 
12 

reported 13 expenditures totaling $90,814 on Schedule B, Line 21b (Operating 

Expenditures) with purposes of "direct mail - creative" and "direct mail - postage." 

Documentation that was provided by FDF was insufficient to make a determination 

pertaining to the purpose for these expenditures and verification as an operating expense. 

The Audit staff recommends that FDF provide, in sufficient detail, the necessaiy 

information from which the reported expenditures totaling $90,814 may be verified or 

explained. Such records should include the missing copies of communications, and, if 

the communication has already been provided, information associating each 

communication with an invoice(s). 

Legcd Standard 

A. Formal Requirements Regarding Reports and Statements. Each political 

committee shall maintain records with respect to the matters required to be reported 

which shall provide in sufficient detail the necessary information and data fix>m which 

the filed reports may be verified, explained, clarified, and check for accuracy and 

completeness. 11 CFR § 104.14(b)(l). 

B. Preserving Records and Copies of Reports. The treasurer of a political committee 

must preserve all records and copies of reports for 3 years after the report is filed. 

52 U.S.C. §30102(d). 

Facts and Amd3rsis 

A. Facts 

During audit fleldwork, the Audit staff reviewed disbursements to verify the accuracy of 

the information and proper classification of transactions disclosed on reports. FDF 

reported expenditures totaling $90,814 for which documentation was insufficient to make 

a determination pertaining to whether these disbursements were correctly reported on 

Schedule B, Line 21b (Operating Expenditures). 

The Audit staffs analysis resulted in the following: 

Disbursements - Invoices Provided - Not Able to Associate with Copies of 

Communications ($90,814) 

Disbursements totaling $90,814 were paid to two direct mail vendors and were 

disclosed on Schedule B with purposes of "direct mail - creative" and "direct 

mail - postage." For these disbursements, FDF provided invoices but did not 

provide information about the related mail communications. Without a copy of 

the associated communications, the Audit staff is unable to determine how FDF 

should have reported these disbursements. During audit fieldwork, the Audit staff 

requested copies of the mail communications. To date these records have not 

been provid^. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff presented a schedule of the disbursements for 

which further records were necessary to verify the accuracy of FDF's reporting. The 
13 

Audit staff requested copies of the mail communications. The PDF Treasurer stated that 

he would contact the vendors to find the missing mail communications, or find out if the 

invoices had incorrect mailer job identifiers, and would provide the Audit staff with any 

documentation that was obtained. 

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

provide, in sufficient detail, the necessary information fix>m which the reported operating 

expenditures totaling $90,814 may be verified or explained. Such records should include: 

• Copies of communications that can be associated to the vendor invoices, and 

• If the communication has already been provided, information associating each 

communication with an invoice(s).