MEMORANDUM

TO:

FROM:

SUBJECT:

FEDERAL ELECTION COMMISSION

WASHINGTON, 0 C. 204&3

December 4, 1981

FRED EILAND

PRESS OFFICE

BOB COSTA

PUBLIC ISSUANCE OF FINAL AUDIT REPORT - CALIFORNIA REPUBLICAN VICTORY FUND

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Attached please find a copy of the final audit report of

the California Republican Victory Fund which was approved by the Commission on November 20, 1981.

Informational copies of the report have been received by all parties involved and the report may be released to the

public.

Attachment as stated

cc: FEe Library

RAD

~ub1ic Record
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A81-15

FEDERAL ELECTION COMMISSION

WASHINCTON. D.C. 204&3

REPORT OF THE AUDIT DIVISION

ON THE

CALIFORNIA REPUBLICAN VICTORY FUND

I. Background

A. Overview

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This report is based on an audit of the California

Republican Victory Fund (lithe Committee"), undertaken by the

Audit Division of the Federal Election Commission in accordance

with the Commission's audit policy to dete~ine whether there

has been compliance 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 that the Commission may, upon the · affirmative vote of four of its members, conduct an audit of

any committee which does not meet the threshold requirements

for substantial compliance established by the Commission.

The Commdttee registered with the Federal Election

'Commission on September 15, 1980. The Committee maintains

its headquarters in Playa Del Rey, California.

The audit covered the period August 13, 1980 1/ through December 31, 1980. During the period, the Committee reported a

beginning cash balance of $-0-, total receipts for the period of

$584,327.47, total expenditures for the period of $537,222.54,

and an ending cash balance on December 31, 1980 of $47,104.93.

This audit report is based on documents and working

papers which support each of the factual statements. They form

part of the record upon which the Commission based its decisions

on the matters in the report and were available to the Commissioners

and appropriate staff for review.

B. Key Personnel

The Treasurer of the Committee was Judith Marie Harrison

from inception of the Committee through December 31, 1980.

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c. Scope

The audit included such tests as verification of reported receipts and expenditures and individual transactions~ review of

required supporting documentation; analysis of Committee debts

and obligations~ and, such other audit procedures as deemed

necessary under the circumstances.

II. Audit Findings and Recommendation

A. omission of Occupation and/or Name of Employer

Section 432~)(3) of Title 2 of the United States Code

states that the Treasurer of a political committee shall keep an

account of the identification of any person who makes a contribution

or contributions aggregating more than $200 during a calendar year, together with the date and amount of any such contribution.

Section 434(b) (3)'of Title 2 of the United States Code

states, in part, that each report shall disclose the identification . of each person who makes a contribution(s) to the committee in an

aggregate amount or value in excess of $200 within the calendar

year, together with the date and amount of any such contribution.

Section 100.12 of Title 11 of the Code of Federal

Regulations states, in part, that "identification" means, in

the case of an individual, his or her full name; mailing address;

occupation1 and the name.of his or her employer.

A sample review of the Committee's individual receipt records indicated that the Committee had not adequately recorded

and disclosed the occupation and name of employer for its

contributors. A 100% review of contributions requiring this

information was conducted. This review disclosed that the required info~ation was missing for 110 contributors. The contributions

from these contributors totaled $183,275.00 and comprised 51% of

the dollar amount and 30% of the number of contributions requiring this information.

All of the contributions lacking this info~ation were

the result of one fundraisinq event and also contributions received

where the Audit staff could find no evidence of a written solicitation

which would facilitate the collection of this info~ation. Further,

the Audit staff could find no evidence in the Committee's records

that the information has been requested at a later date •
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.·The Committee Treasurer stated that she would attempt to

obtain the info~ation and file amended reports.

In the interim report, the Audit staff recommended that

within 30 days of receipt of the report that the Committee obtain the

missing contributor info~ation and file a comprehensive amendment

disclosing the info~ation or provide evidence of best efforts to

obtain the info~ation.

.. The final day of the Committee's response period was

October 22, 1981. On November 9, 1981 the Audit staff received

the Committee's response which contained the majority of the

requested contributor information. A review of the response disclosed that the Committee had substantially complied with the

Audit staff's recommendation.

Recommendation

The Audit staff recommends no further action on this matter.

B. Timely Deposit of Receipts

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Section 103.3(a) of Title 11 of the Code of Federal

Regulations states, in part, that all receipts by a political committee shall be deposited in account(s) established pursuant

to 11 C.F.R. 103.2. The treasurer of the committee shall be

re.sponsible for making such deposits. All deposits shall be

made within 10 days of the treasurer's receipt.

A sample review of the Committee's deposits disclosed

that receipts were not being deposited within the requisite time

period. A 100% review of the Committee's deposits identified 66

deposits totaling $210,647.57 which were not deposited within 10

days of the treasurer's receipt. These deposits comprised 63'

of the number and 36% of the dollar amount of the Committee's

receipts. The review also revealed that the deposits were made

anywhere from 13 to 33 days after the deposit slips were prepared.

The Committee treasurer stated that deposits were not

made in a timely manner because the deposit slips were prepared

at the time of receipt of the contribution, however, they were

often not deposited until a later date. The receipts processing procedures described above may have contributed to the Committee

having to file an amended 12 Day Pre-General Election Report

disclosing $91,920.73 in receipts not contained in the original

report.

Recommendation

The Audit staff recommends that in the future, the Committee

deposit receipts within the time limits set forth under Section

103.3(a) of Title 11 of the Code of Federal Regulations.
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C. Failure to Itemize Debts and Obliqa~ions

... · Section 434(b) (8) of Title 2 of the United States Code

states, in part, that each report under this section shall disclose

the amount and nature of outstanding debts and obligation. owed by

such political committee.

Section 104.11(a) and (b) of Ti~le 11 of ~he Code of

Federal Regulations states, in part, that debts and obligations owed by a political commi~tee shall be continuously reported until

extinguished. These deb~s and obligations shall be reported on

separate schedules together with a statement explaining the

circumstances and conditions under which each debt and obligation

was incurred or extinguished. In addition, a debt, obligation,

or other promise to make an expenditure, the amount of which is

$500 or less, shall be reported as of the time payment is made or

no later than 60 days after such obligation is incurred, whichever

comes first. Any debt or obligation, the amount of which is over

$500 shall be reported as of the time of the transaction.

During the review of expenditure documentation, it was dete~ined that the Committee failed to disclose on Schedule C,

fifteen debts in amounts greater than $500 totaling $53,053.34

which were outstanding at the close of the third quarterly, 12 Day Pre- and the 30 Day Post-General Election Report periods. These debts were paid and disclosed as expenditures on subsequen~

reports.

Recommendation

The Audit staff recommends that since the obligations

were subsequently paid and disclosed on Schedule B tha~ no

L further action be taken on this matter.
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