• FEDERAL ELECTION COMMISSION

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A83-68

September 9, 1983

MEMORANDUM

Attached please find a copy of the final audit report of the

Mid-America Conservative Political Action Committee which was

approved by the Commission on August 31, 1983.

Informational copies of the report have been received by all

parties involved and the report may be released to the public.

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I··...

TO:

FROM:

SUBJECT:

le'H:t:D EILANu

PRESS OFFICER ...,

BOB COSTA ..

PUBLIC ISSUANCE OF FINAL AUDIT REPORT - MID-AMERICA CONSERVATIVE POLITICAL

ACTION COMMITTEE

•

Attachment as stated

cc: FEe Library

RAD

Public Record
FEDERAL ELECTION COMMISSION

WASHING10N. 0 C 20463

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A83-68

. REPORT OF THE AUDIT DIVISION

ON THE

MID-AMERICA CONSERVATIVE POLITICAL ACTION COMMITTEE

I. Background

A. Overview

This report is based on an audit of the Mid-America

Conservative Political Action Committee ("the Committee"),

undertaken by the Audit Division of the Federal Election

Commission in accordance with the Commission's audit policy to

determine 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, in part, that the

Commission, may conduct audits and field investigations of any political committee required to file a report under Section 434

of this title. Prior to conducting any audit under this section,

the Commission shall 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.

The Committee registered with the" Federal Election

Commission on February 3, 1981.' The Committee maintains its

headquarters in Waterloo, Iowa.

The audit covered the period January 1, 1981 through December 31, 1982 •. The Committee reported a cash balance at

January 1, 1981 of $-0-; total receipts for the period of

$240,063.12; total disbursements for the period of $238,543.02:

and a cash balance on December 31, 1982 of $1,520.10.

This audit report is based on documents and work papers

which support each of its 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.
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B. Key Personnel

The Treasurer of the Committee during the period

covered by the audit was Mr. Leroy Dale Corey.

c. Scope

The audit included such tests as vertification of total

reported receipts and disbursements 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. The Committee's

contribution records met the recordkeeping requirements of 2

U.S.C. Section 432(c) and 11 C.F.R. Section 102.9(a). Because

the Committee did not maintain additional contributor records

generated outside the Committee (for example, copies of

contributor checks or contributor cards completed by

contributors), this audit did not include the standard audit

procedure of verification of individual contributions to such

records. However, the maintenance of those records is not

required to comply with the recordkeeping section of the Act.

II. Audit Finding and Recommendation

A. Deposits of Receipts and Cash Disbursements

Section 432(h) (1) of Title 2 of the United States Code

states, in part, that each political committee shall maintain at

least one checking account and such other accounts as the

committee determines at a depository designated by such

committee. All receipts received by such committee shall be

deposited in such accounts. No disbursements may be made (other

than petty cash disbursements) by such com~ittee except by check

drawn on such accounts.

Section l03.3(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

responsible for making such ~eposits. A committee shall make all

disbursements by check or similar drafts drawn on an account at

its designated campaign depository, except for expenditures of

$100 or less made from a petty cash fund.

During the review of Committee bank records, it was

noted that the Committee had made a practice of requesting some

portion of the amount shown on its bank deposit slips be returned

in cash, with the net amount being deposited into the Committee

account. The Committee treasurer stated ttat in the past this

cash had been used for Committee travel expenses, postal

services, and supplies. The Audit staff was able to identify $47,611 handled in this manner. Also, a review of the

Committee's expenditure ledger disclosed that $42,309 in cash

expenditures went to pay postal expenses. The remaining $5,302

in expenditures could not be readily identified.
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The treasurer explained that this practice haa been aiscon~inued and that all receipts are currently being aeposited. He also noted that he intended to create a petty cash fund to

provide for incidental disbursements.

Recommendation

In view of the treasurer's s~atement that the practice has

been discontinued, the Audit staff recommends no further action.