THE FEDERAL ELECTION COMMISSION

Washington, DC 20463

April 11, 2019

MEMORANDUM 

To: The Commission 

Through: Alec Palmer 

Staff Director 

From: Patricia C. Orrock 

Chief Compliance Officer 

Rickida Morcomb

Audit Manager 

By: Bill Antosz 

Lead Auditor 

Subject: Audit Division Recommendation Memorandum on the New Jersey 

Republican State Committee (A17-17) 

Pursuant to Commission Directive No. 70 (FEC Directive on Processing Audit Reports), 

the Audit staff presented the Draft Final Audit Report (DFAR) to the New Jersey 

Republican State Committee (NJRSC) on March 14, 2019 (see attachment). In response to 

the DFAR, NJRSC stated it would not be submitting an additional response or requesting 

an audit hearing. 

This memorandum provides the Audit staff’s recommendation for each finding outlined in 

the DFAR. The Office of General Counsel has reviewed this memorandum and concurs 

with the recommendations. 

Finding 1. Misstatement of Financial Activity 

In response to the Interim Audit Report, NJRSC stated the understatement of 

receipts by $100,000 and the understatement of disbursements by $99,980 was a 

“clerical oversight” in the reporting of a transfer and that the misstatements were 

corrected with an amended report filed on August 14, 2018. The amended report 

corrected the public record. Additionally, NJRSC filed a Form 99 (Miscellaneous 

Electronic Submission) changing its cash on hand as of November 26, 2018. NJRSC 

stated it would not be submitting an additional response to the DFAR. 

The Audit staff recommends that the Commission find that NJRSC misstated its

receipts and disbursements for calendar year 2016.
2

Finding 2. Reporting of Debts and Obligations

In response to the Interim Audit Report, NJRSC filed a Form 99 disclosing debts 

and obligations, which corrected the public record. NJRSC stated it would not be 

submitting an additional response to the DFAR. 

The Audit staff recommends that the Commission find that NJRSC failed to disclose 

debts and obligations to eight vendors totaling $58,324.

If this memorandum is approved, a Proposed Final Audit Report will be prepared within 30 

days of the Commission’s vote.

In case of an objection, Directive No. 70 states that the Audit Division 

Recommendation Memorandum will be placed on the next regularly scheduled open 

session agenda.

Documents related to this audit report can be viewed in the Voting Ballot Matters folder. 

Should you have any questions, please contact Bill Antosz or Rickida Morcomb at 694-

1200.

Attachment:

- Draft Final Audit Report of the Audit Division on the New Jersey Republican 

State Committee

cc: Office of General Counsel
Draft Final Audit Report of 

the Audit Division on the New 

Jersey Republican State 

Committee

(January 1, 2015 - December 31, 2016)

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 audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act.1 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.

About the Committee (p. 2)

The New Jersey Republican State Committee is a state party 

committee headquartered in Trenton, New Jersey. For more 

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

Financial Activity (p. 2)

 Receipts

o Contributions from Individuals

o Contributions from Political 

Committees

o Transfers from Affiliated 

Committees

o Other Receipts

Total Receipts

$ 1,103,366

315,325

1,593,755

2,265

$ 3,014,711

 Disbursements

o Operating Expenditures

o Transfers to Affiliated Committees

o Coordinated Party Expenditures

o Contribution Refunds

o Federal Election Activity

o Other Disbursements

Total Disbursements

$ 1,055,532

1,605,635

93,721

23,110

335,379

61,500

$ 3,174,877

Findings and Recommendations (p. 3)

 Misstatement of Financial Activity (Finding 1)

 Reporting of Debts and Obligations (Finding 2)

 

1

 52 U.S.C. §30111(b).
Draft Final Audit Report of the 

Audit Division on the

New Jersey Republican State 

Committee

(January 1, 2015 - December 31, 2016)
Table of Contents

Page

Part I. Background

Authority for Audit 1

Scope of Audit 1

Part II. Overview of Committee

Committee Organization 2

Overview of Financial Activity 2

Part III. Summaries

Findings and Recommendations 3

Part IV. Findings and Recommendations

Finding 1. Misstatement of Financial Activity 4

Finding 2. Reporting of Debts and Obligations 5
1

Part I

Background

Authority for Audit

This report is based on an audit of the New Jersey Republican State Committee (NJRSC), 

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 52 U.S.C. §30111(b), which permits 

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

is required to file a report under 52 U.S.C. §30104. 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. 52 U.S.C. §30111(b).

Scope of Audit

Following Commission-approved procedures, the Audit staff evaluated various risk 

factors and as a result, this audit examined: 

1. the receipt of excessive contributions;

2. the receipt of contributions from prohibited sources;

3. the disclosure of contributions received;

4. the disclosure of individual contributors’ occupation and name of employer;

5. the disclosure of disbursements, debts and obligations;

6. the disclosure of expenses allocated between federal and non-federal accounts;

7. the consistency between reported figures and bank records;

8. the completeness of records; and

9. other committee operations necessary to the review.
2

Part II

Overview of Committee

Committee Organization

Overview of Financial Activity

(Audited Amounts)

Cash on hand @ January 1, 2015 $ 237,334

Receipts

o Contributions from Individuals $ 1,103,366

o Contributions from Political Committees 315,325

o Transfers from Affiliated Committees 1,593,755

o Other Receipts 2,265

Total Receipts $ 3,014,711

Disbursements

o Operating Expenditures $ 1,055,532

o Transfers to Affiliated Committees 1,605,635

o Coordinated Party Expenditures 93,721

o Contribution Refunds 23,110

o Federal Election Activity 335,379

o Other Disbursements 61,500

Total Disbursements $ 3,174,877

Cash on hand @ December 31, 2016 $ 77,168

Important Dates

 Date of Registration July 23, 1982

 Audit Coverage January 1, 2015 - December 31, 2016

Headquarters Trenton, New Jersey

Bank Information

 Bank Depositories Three

 Bank Accounts Three Federal, Three Non-Federal

Treasurer

 Treasurer When Audit Was Conducted April Bengivenga (7/19/17 - present)

 Treasurer During Period Covered by Audit James Foerst (3/18/15 - 7/18/17)

John O. Bennett (10/31/08 - 3/17/15)

Management Information

 Attended FEC Campaign Finance Seminar Yes

 Who Handled Accounting and 

Recordkeeping Tasks

Paid Staff
3

Part III

Summaries

Findings and Recommendations

Finding 1. Misstatement of Financial Activity

During audit fieldwork, a comparison of NJRSC’s reported financial activity with its 

bank records revealed a misstatement of receipts and disbursements in calendar year 

2016. Specifically, NJRSC understated its receipts and disbursements by $100,000 and 

$99,980, respectively. Subsequent to the exit conference, NJRSC filed an amended 

disclosure report that corrected the receipts and disbursements. In response to the Interim 

Audit Report recommendation, NJRSC stated the understatement of receipts and 

disbursements was a “clerical oversight”. Additionally, on January 16, 2019, NJRSC 

filed a Form 99 (Miscellaneous Electronic Submission) correcting its cash on hand as of 

November 26, 2018.

(For more detail, see p. 4.)

Finding 2. Reporting of Debts and Obligations

During audit fieldwork, the Audit staff noted that NJRSC failed to disclose debts and 

obligations owed to eight vendors totaling $58,324. In response to the Interim Audit 

Report recommendation, NJRSC filed a Form 99 on February 13, 2019 to disclose these 

debts and obligations, which corrected the public record.

(For more detail, see p. 5.)
4

Part IV

Findings and Recommendations

Finding 1. Misstatement of Financial Activity

Summary

During audit fieldwork, a comparison of NJRSC’s reported financial activity with its 

bank records revealed a misstatement of receipts and disbursements in calendar year 

2016. Specifically, NJRSC understated its receipts and disbursements by $100,000 and 

$99,980, respectively. Subsequent to the exit conference, NJRSC filed an amended 

disclosure report that corrected the receipts and disbursements. In response to the Interim 

Audit Report recommendation, NJRSC stated the understatement of receipts and 

disbursements was a “clerical oversight”. Additionally, on January 16, 2019, NJRSC 

filed a Form 99 (Miscellaneous Electronic Submission) correcting its cash on hand as of 

November 26, 2018.

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; 

 the total amount of disbursements for the reporting period and for the calendar 

year; and

 certain transactions that require itemization on Schedule A (Itemized Receipts) or 

Schedule B (Itemized Disbursements). 52 U.S.C. §30104(b)(1), (2), (3), (4), and 

(5).

Facts and Analysis

A. Facts

During audit fieldwork, the Audit staff reconciled NJRSC’s reported financial activity 

with its bank records for calendar years 2015 and 2016. The reconciliation identified that 

NJRSC misstated receipts and disbursements for 2016. The following chart details the 

discrepancies between NJRSC’s disclosure reports and bank activity. The succeeding 

paragraphs explain why the discrepancies occurred.

2016 Committee Activity

Reported Bank Records Discrepancy

Beginning Cash on hand @ 

January 1, 2016

$62,830 $59,129 $3,701

Overstated 

Receipts $2,606,298 $2,706,298 ($100,000)

Understated

Disbursements $2,588,279 $2,688,259 ($99,980)

Understated

Ending Cash on hand @ 

December 31, 2016

$80,849 $77,168 $3,681

Overstated
5

The reported 2016 beginning cash on hand was overstated by $3,701 and is unexplained, 

but likely resulted from prior period reporting discrepancies.

The understatement of receipts resulted from the following:

 Transfer from affiliated committee not reported $100,000

Understatement of Receipts $100,000

The understatement of disbursements resulted from the following:

 Transfer to affiliated committee not reported $99,980

 Wire fee for transfer to affiliated committee not reported 20

 Transfer to affiliated committee reported incorrectly (20)

Net Understatement of Disbursements $99,980

B. Interim Audit Report & Audit Division Recommendation

At the exit conference, the Audit staff discussed the misstatements for calendar year 2016 

with NJRSC representatives and provided schedules detailing the misstatements. NJRSC 

representatives did not provide any comments. 

Subsequent to the exit conference, NJRSC filed an amended disclosure report that 

corrected the receipts and disbursements.

The Interim Audit Report recommended that NJRSC provide any additional comments it 

may have with respect to this matter.

C. Committee Response to Interim Audit Report

In response to the Interim Audit Report recommendation, NJRSC stated the 

understatement of receipts and disbursements was a “clerical oversight” in the reporting 

of transfers and that the misstatements were previously corrected with an amended report,

filed on August 14, 2018. Additionally, NJRSC filed a Form 99 stating that its cash on 

hand as of November 26, 2018 was $147,184, and that this amount would serve as the 

beginning cash on hand for the Year End 2018 report.

Finding 2. Reporting of Debts and Obligations

Summary

During audit fieldwork, the Audit staff noted that NJRSC failed to disclose debts and 

obligations owed to eight vendors totaling $58,324. In response to the Interim Audit 

Report recommendation, NJRSC filed a Form 99 on February 13, 2019 to disclose these 

debts and obligations, which corrected the public record.

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. 52 

U.S.C. §30104(b)(8) and 11 CFR §§104.3(d) and 104.11(a).
6

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

owed by the committee and debts owed to the committee, together 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.

 A debt of $500 or less must be reported once it has been outstanding 60 days from 

the date incurred (the date of the transaction); the committee would report it 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. 11 CFR §104.11(b).

Facts and Analysis

A. Facts

During audit fieldwork, the Audit staff reviewed NJRSC’s disbursement records and 

disclosure reports for proper reporting of debts and obligations. This review identified 

debts owed to eight vendors totaling $58,3242that NJRSC failed to report on Schedule D

(Debts and Obligations) during the audit period. Based on a review of the records, these 

vendors mainly provided parking space, utilities3, marketing, advertising, 

solicitation/fundraising, consulting, and legal services. NJRSC reported debt totaling 

$91,849 on Schedule D during the audit cycle. The Audit staff calculated the debts owed 

to the vendors based on the invoice date and the subsequent payment date.

4

 Debts were 

outstanding for periods ranging from 18 to 300

5 days.

B. Interim Audit Report & Audit Division Recommendation

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

representatives at the exit conference and provided a schedule detailing the transactions 

requiring disclosure on Schedule D. NJRSC representatives asked questions pertaining to 

the calculation of debt, and stated that they would verify the amounts paid. 

The Interim Audit Report recommended that NJRSC provide additional documentation 

demonstrating that these transactions were not obligations which required reporting on 

Schedule D. Absent such documentation, the Audit staff recommended that NJRSC 

amend its reports or file a Form 996to correctly disclose these debts and obligations.

 

2

 Each debt in this amount was counted only once even if it was required to be disclosed over multiple periods.

3

 Utilities were gas and electric payments for a NJRSC satellite office. The debt was incurred in 2014 but 

was not paid until March 2015. Therefore, the debt should have been reported on the 2015 February, 

March, and April Monthly reports. 

4

 For one vendor, where the invoice date was unavailable, the ending date of the period of service for 

which the service was performed was utilized. For example, if services were performed during the 

period ranging from April-June 2015, then the Audit staff used June 30, 2015 as the invoice date.

5

 Two debts were outstanding for 18 and 29 days, respectively. Both of these items were outstanding at the 

end of reporting periods and therefore reportable.

6

 NJRSC was advised by the Audit staff that if it chose to file a Form 99, instead of amending its 

disclosure reports, the form must contain all pertinent information that is required on each schedule.
7

C. Committee Response to Interim Audit Report

In response to the Interim Audit Report recommendation, NJRSC filed a Form 99 on 

February 13, 2019, properly disclosing the debts and obligations, and correcting the 

public record.