Why the Audit 

Was Done 

Federal law requires the 

Commission to audit the 

national committee of a 

party who receives 

payments for presidential 

nominating conventions.' 

The audit examines the 

receipt and use of Federal 

funds and whether the 

committee otherwise 

complied with the 

limitations, prohibitions 

and disclosure 

requirements of the 

election law. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

Preliminary Audit Report of the 

Audit Division on the Committee 

on Arrangements for the 2012 

Republican National Convention 

(June 22, 2010 - October 31, 2013) 

About the Committee (p. 2) 

The Committee on Arrangements for the 2012 Republican 

National Convention (CO A) was responsible for the day-to-day 

arrangements and operations of the Republican Presidential 

nomination convention. COA is headquartered in Washington, 

DC. For more information, see chart on the Committee 

Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o F^eral Funds 

o Loans Received 

o Offsets to Convention 

Expenditures 

Total Receipts 

• Disbursements 

o Convention Expenditures 

o Loan Repayments 

Total Disbursements 

$ 18,248,300 

1,000,000 

998,957 

$ 20,247,257 

$ 17,789,385 

1,000,000 

$ 18,789,385 

Findings and Recommendations (p. 3) 

• Net Outstanding Convention Expenses (Finding 1) 

• Failure to Itemize Debts (Finding 2) 

26U.S.C. 89008(g). 
Prelim^ary Audit Report of the 

Audit Division on the Committee 

on Arrangements for the 2012 

Republican National Convention 

(June 22, 2010 - October 31, 2013) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Inventory of Committee Records 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Reconunendations 3 

Part IV. Findings and Recommendations 

Finding!. Net Outstanding Convention Expenses 4 

Finding 2. Failure to Itemize Debts 6 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the Committee on Arrangements for the 2012 

Republican National Convention (COA), undertaken by the Audit Division of the Federal 

Election Commission (the Commission) as mandated by Section 9008(g) of Title 26 of 

the United States Code. That section directs the Commission to conduct an examination 

and audit of the payments for presidential nominating conventions no later than 

December 31 of the calendar year in which the presidential nominating convention 

involved is held. 

Scope of Audit 

This audit examined: 

1. the disclosure of receipts and loans; 

2. the disclosure of disbursements, debts and obligations; 

3. the recordkeeping process and completeness of records; 

4. the consistency between reported figures and bank records; 

5. the accuracy of the Statement of Net Outstanding Convention Expenses; 

6. the committee's compliance with requirements concerning expenditures for 

convention expenses; and 

7. other committee operations necessary to the review. 

Inventory of Committee Records 

The Audit staff routinely conducts an inventory of conunittee records before it begins the 

audit fieldwork. COA records were materially complete and the fieldwork began 

immediately. 
Part II 

Overview of Committee 

Committee Organization 

Important Datn 

• Date of Registration June 21,2010 

•' Audit Coverage June 22,2010 - October 31,2013 

Headquarters Washington, DC 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Three Accounts 

Treasurer 

• Treasurer When Audit Was Conducted Anthony Parker 

• Treasurer During Period Covered by Audit Louis Pope 6/21/2010 - 04/12/2011 

Anthony Parker 4/13/11 - Present 

Management Information 

• Attended Commission Campaign Finance 

Seminar 

Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand ® June 22,2010 $0 

Receipts 

o Federal Funds 18,248,300 

o Loans Received 1,000,000 

o Offsets to Convention Expenditures 998,957 

Total Receipts $ 20,247,257 

Disbursements 

o Convention Expenditures 17,789,385 

o Loan Repayments 1,000,000 

Total Disbursements S 18,789,385 

Cash-on-hand @ December 31,2012 S 1,457,872 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Net Outstanding Convention Expenses 

COA received $18,248,300 in federal funds to finance the Republican National 

Convention. The Statement of Net Outstanding Convention Expenses (NOCE), as 

calculated by the Audit staff, shows an amount of unspent funds of $ 1,020,769. This 

amount is repayable to the United States Treasury. On June 28,2013, COA made an 

interim repayment of $350,000. The Audit staff recommends that COA provide 

documentation demonstrating that either no repayment of unspent funds is due or a lesser 

amount is due. Absent such a demonstration, the Audit staff will recommend that the 

Commission determine that the remaining $670,769 ($1,020,769 - $350,000) is repayable 

to the United States Treasury. (For more detail, see p. 4.) 

Finding 2. Failure to Itemize Debts 

Audit fieldwork found that COA failed to report debts and obligations relating to four 

vendors totaling $272,085 on Schedule D (Debts and Obligations). The Audit staff 

recommends that, absent documentation demonstrating that these expenditures did not 

require reporting on Schedule D, COA amend its disclosure reports to properly disclose 

these debts. (For more detail, see p. 6.) 
Part IV 

Findings and Recommendations 

I Finding 1. Net Outstanding Convention Expenses 

Summary 

COA received $18,248,300 in federal funds to finance the Republican National 

Convention. The Statement of Net Outstanding Convention Expenses (NOCE), as 

calculated by the Audit staff, shows an amount of unspent funds of $1,020,769. This 

amount is repayable to the United States Treasury. On June 28,2013, COA made an 

interim repayment of $350,000. The Audit staff recommends that COA provide 

documentation demonstrating that either no repayment of unspent funds is due or a lesser 

amount is due. Absent such a demonstration, the Audit staff will recommend that the 

Commission determine that the remaining $670,769 ($1,020,769 - $350,000) is repayable 

to the United States Treasury. 

Legal Standard 

A. Entitlement to Payments From the Fund. The national committee of a major party 

shall be entitled to payments with respect to any presidential nominating convention, in 

amounts that in the aggregate shall not exceed $4,000,000, as adjusted by the Consumer 

Price Index. The major party entitlement for the 2012 nominating convention was 

$18,248,300. 26 U.S.C. §9008(b)(l) & (5). 

B. Repayments. Any portion of the entitlement that remains unspent after all convention 

expenses have been paid shall be returned to the Secretary of the Treasury. The national 

committee or convention committee shall make an interim repayment of unspent funds 

based on the financial position of the committee as of the end of the ninth month 

following the last day of the convention, allowing for a reasonable amount as determined 

by the Commission to be withheld for unanticipated contingencies. The interim 

repayment shall be made no later than 30 calendar days after the end of the ninth month 

following the last day of the convention. 11 CFR §9008.12(b)(5). 

C. Repayment Determination Procedures. The Commission will follow the same 

repayment determination procedures, and the committee has the same rights and 

obligations as are provided for repayment determinations involving publicly funded 

candidates under 11 CFR 9007.2(c) through (h). 11 CFR §9008.12(c). 

D. Net Outstanding Campaign Expenses (NOCE). A convention committee shall file, 

no later than 60 days after the last day of the convention, a statement of that committee's 

"net outstanding convention expenses." This statement must contain, among other things: 

• The total of all committee assets including cash on hand, amounts owed to the 

committee and capital assets listed at their fair market value; 

• The total of all outstanding obligations for qualified campaign expenses; and 

• An estimate of necessary winding-down costs. 11 CFR §9008.10(g). 
Facts and Analysis 

A. Facts 

For the 2012 national conventions, each major political party was entitled to receive 

federal funds of $18,248,300 to finance its national presidential nominating convention. 

The 2012 Republican National Convention ended on August 30,2012. COA filed a 

Statement of Net CXitstanding Convention Expenses as of October 14,2012. The Audit 

staff reviewed financial activity through October 31,2013, and estimated the winding 

down cost in preparing the figures shown below. 

Statement of Net Outetanding Convention Expenses 

As of October 14, 2012 

Prepared Through October 31, 2013 

Cash in Bank 

Capital Assets 

Accounts Receivable 

$2,556,924 

15,372 

1,047,743 

Total Assets $3,620,039 

Liabilities 

Accounts Payable for Qualified Convention 

Expenses at 10/14/12 

Winding Down Costs 

Actual (10/15/12 - 10/31/13) $643,943 

Estimated (11/1/13-8/3 l/M) 115.300 [a] 

$1,840,027 

759.243 

Total Liabilities 

Net Outstanding Convention Expenses (Surplus) 

as of October 14,2012 

S2.599.270 

$1,020,769 

Less: Interim Repayment made June 28,2013 

Amount Repayable to the United States Treasury 

f$350.0001 

[a] Estimated winding down costs will be compared to actual winding down cost and adjusted accordingly. 
The NOCE as calculated by the Audit staff shows unspent funds of SI,020,769. At the 

exit conference, COA representatives were provided a copy of the NOCE as calculated 

by the Audit staff. The Audit staff explained that the amounts will have subsequent 

adjustments relating to future financial activity. A COA representative stated that the 

amounts are close to their numbers and that COA would be filing an updated NOCE. 

Pursuant to 11 CFR 9008.12(b)(S), COA made an interim repayment of $350,000 to the 

United States Treasury on June 28,2013. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff reconunends that, within 60 calendar days of service of this report, COA 

provide documentation demonstrating that either: (a) no repayment of the remaining 

unspent funds is due; or (b) a lesser amount is due. Absent such a demonstration, the 

Audit staff will reconunend that the Commission determine that the remaining portion of 

unspent funds of $670,769 is repayable to the United States Treasury. 

I Finding 2. Failure to Itemize Debts 

Summary 

Audit fieldwork found that COA failed to report debts and obligations relating to four 

vendors totaling $272,085 on Schedule D (Debts and Obligations). The Audit staff 

recommends that, absent documentation demonstrating that these expenditures did not 

require reporting on Schedule D, COA amend its disclosure reports to properly disclose 

these debts. 

Legal Standard 

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

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

2 U.S.C. §434(b)(8) and 11 CFR §§104.3(d) and 104.11(a). 

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

owed by and to the committee 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. 

• Once it has been outstanding 60 days from the date incurred, a debt of $500 or less 

must be reported on the next regularly scheduled report. 

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

the debt was incurred, except reoccurring administrative expenses (such as rent) 

shall not be reported as a debt before the payment due date. 11 CFR § 104.11 (b). 
Facts and Analsrsis 

A. Facts 

During audit fieldwork, the Audit staff reviewed disbursement records and disclosure 

reports for proper reporting of debts and obligations using both sampling and a 100 

percent review. These reviews identified debts owed to four vendors totaling $272,085 

that COA failed to disclose. COA should have reported the debts on Schedule D of its 

disclosure reports that covered the dates on which the debts were incurred. Specifically, 

COA incurred a debt totaling $80,500 on May 22,2012, owed to Campaign 

Solutions/The Donatelli Group and should have reported the debt on Schedule D of its 

July 2012 Quarterly report. In addition, COA should have reported on Schedule D of its 

October 2012 Quarterly report a debt totaling $13,762 owed to Mass Relevance that was 

incurred between August 27 and September 12,2012, a debt totaling $162,811 owed to 

Smart Source that was incurred between July 16 and September 17,2012, and a debt 

totaling $15,012 owed to Vente Networks that was incurred on September 10,2012. The 

number of days outstanding for the debts ranged from 43 days to 93 days. It should be 

noted that COA did not report any debts during the audit period. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the reporting of debts and obligations with COA 

representatives and provided schedules detailing the transactions requiring disclosure. 

COA representatives had no conmient on this matter. In response to the exit conference, 

COA wrote that it disagreed with the basis for a finding that it failed to itemize debts. 

COA noted that it promptly paid all invoices following a diligent internal review process 

in which the invoices were reviewed for accuracy, legitimacy, approved by the 

designated committee persormel and extinguished during the subsequent reporting period. 

Nevertheless, COA agreed to file amended Schedules D, to disclose the four items 

identified by the Audit staff. 

The Audit staff recommends that, within 60 calendar days of service of this report, absent 

documentation demonstrating that these expenditures did not require reporting on 

Schedule D, COA amend its disclosure reports to properly disclose these debts.