Attachment as stated

cc: FEC Library

RAD

v~ublic Record

February 2, 1981

FRED EILAND

PRESS OFFICE

BOB COSTA .~~

PUBLIC ISSUANCE OF FINAL AUDIT

REPORT - COMMITTEE FOR THE

SURVIVAL OF A FREE CONGRESS

WASHINGTON. 0 C 204&3

FEDERAL ELECTION COMMISSION

Informational copies of this report have been received

by all parties involved and this report may be released to

the public as of today, February 2, 1981.

Attached please find a copy of the final audit report

of the Committee For the Survival of a Free Congress which

was approved by the Commission on January 16, 1981 .

FROM:

MEMORANDUM

SUBJECT:

TO:

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II. Audit Findings

The principal officers of the Committee during the

period audited were Ms. Kathleen Teague, Chairman from January

1, 1977 through January 13, 1977; Ms. Addah Jane Hurst,

Chairman from January 14, 1977 through present; and Mr. Charles

A. Moser, Treasurer.

C. Scope

The audit included such tests as verification of total

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. " .

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Disclosure of Itemizable Contributions

Key Personnel

A.

B. '

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During the audit period, Section 434(b) (2) of Title 2

of the United States Code stated that reports shall disclose the . identification of each person who has made one or more contributions to the Committee within the calendar year in an aggregate

amount in excess of SlOO.OO, together with the amount and date

of such contributions•

.. , Contributions collected by the Committee' during' the

audit period were solicited and processed under two (2) distinct

methods. The first method utilized internal Committee resources

(office, staff, etc.) in the solicitation and processing functions

of raising contributions. Although the Committee did not maintain,

a formal system of recording contributor information for these,

"internally" raised receipts in 1977-1978, the 1979 records were

modified, in view of increasing activity, to incorporate

contributor history'records. A 100% review of these "internally"

raised contributions indicated that there were no material

irregularities with respect to this method.

The second method of raising funds utilized the services

of, a direct mail fundraiser to solicit contributions and perform

aggregation functions necessary to maintain a contributor history

and prepare FEC disclosure reports. Contribution records for

these receipts were maintained on a computerized system and were

available for review on microfich~. These "fundraised" receipts

were reviewed on a random sample basis for proper itemization.

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The sample review was conducted at a 90% confidence

level·and produced an observed error rate of approximately 21%.

The sample errors consisted of contributors who made one (1) or

more contributions aggregating in excess of $100 during a given

calendar year which were not itemized on the Committee's disclosure

reports, as required. One (1) problem affecting the itemization

of contributions was caused, in part, by inconsistencies in the

keyline code (a series of characters taken from the contributor's

name and address). The Committee's computerized system for

aggregating contributions from an individual was based on the

assignment of a keyline code for each contribution recorded in the

data base. If there was a change in name or zip code characteristic~

making up the keyline code, the computer would produce a new

contribution record which would not aggregate with any other contri-~

,butions from the same individual. For example, if John Smith's . , name was initially entered as John E. Smith and a later contribution'

'entered as J. E. Smith, two (2) different contribution records . . would be created in the data base and Mr. Smith would appear as

"two (2) different contributors. A similar problem would occur if

',the zip code was entered differently from one, contribution to

: the next. '

One explanation for many of these sample itemization

errors involves the processing of several computer tapes ' containing all "fundraised" receipts for a reporting period • .Typically, these tapes are processed by the direct mail fundraiser

at the end of a reporting period. The information contained on

':the tapes is merged with the contribution history record stored

in the computer to provide a complete record of all contributions

received during a calendar year~ The processing also results in

the generation'of a computer listing containing.all contributions

aggregating in excess of $100.00. The listing is subsequently

used by the Committee to itemize all "fundraised" contributions' . on Schedule A of the disclosure report. 'Any contributions contained

on computer tapes processed after a cutoff date would not be

'itemized with other "fundraised" contributions in the disclosure

reports and yet, would be reflected in the aggregate year-to-date

totals in the contribution history record stored: in the computer.

Another explanation for some of the sample itemization

errors is that computer tapes containing the contribution records

for part of one (1) ~onth's activity were merged with the computer

history record twice and thereby overstated the aggregate contribution totals in the data base for certain contributors. During-.

our review of Committee records, we noted this problem occurred in

two (2) reporting periods in 1978 and may have occurred in other

periods. 1:/

A co~parison between 1978 receipts deposited in the campaign'

depository (cst3blishcd solely to receive "fundraised" receiptE

and contributions recorded in the data base indicated the data'

base contained approximately l5~ ($157,477.33) more in. receipts than the campaign depository. ..
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A breakdown of ~he sample errors by year indica~es ~ha~ four (4) errors occurred wi~h 1977 con~ribu~ions, 71 errors occurred wi~~ 1978 con~ributions and one (1) error occurred wi~h 1979 con~ributions.

The Audit Division recommended ~hat ~he Commit~ee file

a comprehensive contribu~or lis~ing for calendar year 1978, disclosing all con~ributions requiring itemization. Subsequently on

December 4, and December 23, 1980, ~he Committee filed a contri- .buto~ listing which substantially corrected the i~emization errors.

Recommendation

Based on the above, we recommend no further action on ~his matter.

B. Matters Referred to the Office of General Counsel

Certain other matters noted during the audit were

referred to the Commission's Office of General Counsel for

consideration on October 5, 1979, and January 29, 1980 and September 22, 1980 •
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