FEDERAL ELECTION COMMISSION 

WASHINGTON, o.c. 20463 

November 17, 2008 

Ernest Leonard, Treasurer 

Butterfield for Congress Committee 

P.O. Box 2571 

Wilson, NC 27894 

Dear Mr. Leonard: 

Attached, please find the Report of the Audit Division OnButterfield for 

Congress. The Commission approved this report on November 5,2008. 

The Commission approved Final Audit Report will be placed on the public record 

on November 24, 2008. Should you have any questions regarding the public release of 

this report, please contact the Commission's Press Office at (202) 694-1220. 

Any questions you may have related to matters covered during the audit or in the 

report should be directed to Sheraline Thomas or Martin Favin of the Audit Division at 

(202) 694-1200 or toll free at (800) 424-9530. 

Sincerely, 

yV~~~w

Wanda J. Thomas 

Acting Assistant Staff Director 

Audit Division 

Attachment as stated 
Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

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 audi ts 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act.' The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

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 this 

report. 

Report of the 

Audit Division on Butterfield for 

Congress Committee 

January 1, 2005 - December 31, 2006 

About the Campaign (p. 2) 

Butterfield for Congress Committee is the principal campaign 

committee for George K. Butterfield, Democratic candidate for the 

U. S. House of Representatives from the state of North Carolina, 1st 

District, and is headquartered in Wilson, North Carolina. For more 

information, see the chart on the Campaign Organization, p.2. 

Financial Activity (p. 2) 

•	 Receipts 

o	 From Individuals $ 119,358 

o	 From Other Political Committees 264,855 

o	 Other Receipts and Offsets to 1,904 

Operating Expenditures $ 386,117 

o	 Total Receipts 

•	 Disbursements 

o Operating Expenditures	 $ 228,296 

o Loan Repayments Made	 35,000 

o Other Disbursements	 96,824 

o Total Disbursements	 $ 360,120 

Finding and Recommendation (p. 3) 

•	 Misstatement of Financial Activity 

I 2 U.S.c. §438(b). 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1
 

Scope of Audit 1
 

Part II. Overview of Campaign 

Campaign Organization 2
 

Overview of Financial Activity 2
 

Part III. Summary 

Finding and Recommendation 3
 

Part IV. Finding and Recommendation 

Misstatement of Financial Activity 4
 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the Butterfield for Congress Committee (BFC), 

undertaken by the Audit Division of the Federal Election Commission (the Commission) 

in accordance with the Federal Election Campaign Act of 1971, as amended (the Act). 

The Audit Division conducted the audit pursuant to 2 U.S.c. §438(b), which permits the 

Commission to conduct audits and field investigations of any political committee that is 

required to file a report under 2 U.S.c. §434. Prior to conducting any audit under this 

subsection, the Commission must 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. 2 U.S.c. §438(b). 

Scope of Audit 

Following Commission approved procedures, the Audit staff evaluated various risk 

factors and as a result, the scope of this audit was limited to the following: 

1. The consistency between reported figures and bank records; 

2. The disclosure of individual contributors' occupation and name of employer; and, 

3. The review of loans. 
2 

Part II 

Overview of Campaign 

Campaign Organization 

Important Dates Butterfield for Conzress Committee 

• Date of Registration May 19,2004 

• Audit Coverage January 1, 2005 - December 31, 2006 

Headquarters Wilson, North Carolina 

Bank Information 

• Bank Depositories One 

• Bank Accounts One checking account 

Treasurer 

• Treasurer When Audit Was Conducted Ernest Leonard 

• Treasurer During Period Covered by Audit Ernest Leonard 

Management Information 

• Attended FEC Campaign Finance Seminar No 

• Used Commonly Available Campaign 

Management Software Package 

Yes 

•	 Who Handled Accounting and Paid staff 

Recordkeeping Tasks 

Overview of Financial Activity 

(Audited Amounts) 

Cash on hand @ January 1, 2005 $ 28,336 

0 From Individuals 119,358 

0 From Other Political Committees 264,855 

0 Other Receipts and Offsets to 

Operating Expenditures 1,904 

Total Receipts $ 386,117 

0 Operating Expenditures 228,296 

0 Loan Repayments 35,000 

0 Other Disbursements 96,824 

Total Disbursements $ 360,120 

Cash on hand @ December 31, 2006 $ 54,333 
3 

Part III 

Summary 

Finding and Recommendation 

Misstatement of Financial Activity 

A comparison of BFC's reported figures to its bank records revealed that in 2005:
 

beginning cash was understated by $2,950; receipts, disbursements and ending cash were
 

overstated by $6,250, $1,069 and $2,231, respectively. In the interim report, the Audit
 

staff recommended that BFC amend its disclosure reports to correct these misstatements.
 

In response, BFC filed amended reports that materially corrected the misstatements.
 

(For more detail, see p. 4)
 
4 

Part IV
 

Finding and Recommendation
 

IMisstatement of Financial Activity 

Summary 

A comparison of BFC's reported figures to its bank records revealed that in 2005:
 

beginning cash was understated by $2,950; receipts, disbursements and ending cash were
 

overstated by $6,250, $1,069 and $2,231, respectively. In the interim report, the Audit
 

staff recommended that BFC amend its disclosure reports to correct these misstatements.
 

In response, BFC filed amended reports that materially corrected the misstatements.
 

Legal Standard
 

Contents of Reports. Each report must disclose:
 

•	 The amount of cash on hand at the beginning and end of the reporting period; 

•	 The total amount of receipts for the reporting period and for the calendar year; and 

•	 The total amount of disbursements for the reporting period and for the calendar year; 

•	 Certain transactions that require itemization on Schedule A (Itemized Receipts) or 

Schedule B (Itemized Disbursements). 2 U.S.c. §434(b)(l), (2), (3), (4) and (5) 

Facts and Analysis 

The Audit staff reconciled BFC's reported financial activity to its bank records and 

determined that there was a misstatement of cash on hand, receipts, and disbursements in 

calendar year 2005. The following chart outlines the discrepancies and succeeding 

paragraphs explain, to the extent possible, the reasons for the misstatements. 

2005 Activity 

Reported Bank Records Discrepancy 

Opening Cash Balance 

@ January 1,2005 

$25,386 $28,336 $2,950 

Understated 

Receipts $191,170 $184,920 $6,250 

Overstated 

Disbursements $139,765 $138,696 $1,069 

Overstated 

Ending Cash Balance 

@ December 31, 2005 

$76,791 $74,560 $2,231 

Overstated 

The $2,950 understatement of beginning cash on hand could not be explained but most 

likely resulted from prior period errors. 
5 

The overstatement of receipts resulted from the following: 

•	 Four contributions from other political committees
 

reported twice - $5,000
 

•	 Two reported contributions from other political
 

committees could not be traced to the bank records 1,500
 

•	 One unreported credit card receipt + 250
 

Net Overstatement of Receipts - $6,250
 

The $1,069 overstatement of disbursements could not be explained. Also, the cash on 

hand at December 31, 2005 was overstated by $2,231 as a result of the misstatements 

detailed above. 

The Audit staff explained the misstatements to BFC's treasurer and provided schedules 

detailing these discrepancies. The treasurer stated that BFC would amend its reports to 

correct the misstatements. 

Interim Audit Report Recommendation and Committee Response 

The Audit staff recommended that BFC: 

•	 amend its 2005 reports to correct the misstatements; and 

•	 amend the cash balance on its most recently filed report with an explanation that it 

resulted from audit adjustments from a prior period. It is further recommended 

that BFC reconcile the cash balance on its most recent report to identify any 

subsequent discrepancies that may impact adjustments recommended by the Audit 

staff. 

In response, BFC materially corrected its most recently filed report with an explanation 

for the change. In addition, the BFC Treasurer noted that they had reconciled reported 

figures to bank records for periods subsequent to the period covered by the audit.