THE FEDERAL ELECTION COMMISSION 

Washington, DC 20463 

November 14,2017 

MEMORANDUM 

To: The Commission 

Through: 

From: 

By: 

Subject: 

Alec Palmer 

StafT Director 

Patricia C. Orrock 

Chief Compliance Officer 

Thomas E. Hintermister'^^^^i^^^;^^?^ 

Assistant Staff Director 

Audit Division 

Nicole Burgess 

Audit Manager 

Tesfai Asmamaw 

Lead Auditor 

Resubmission: Audit Division Recommendation Memorandum on the NY 

Republican Federal Campaign Committee (NYR) (A13-1 ij 

This Office is resubmitting the subject Audit Division Recommendation Memorandum 

(ADRM). The original ADRM was circulated on October 20,2017, and was withdrawn 

on November 6,2017 to provide additional clarification in the presentation of Finding 4, 

Reporting of Apparent Independent Expenditures, which arose after a teleconference with 

NYR counsel on November 3,2017. 

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

the Audit staff presented the Draft Final Audit Report (DFAR) to the NY Republican 

Federal Campaign Committee on August 10,2017 (see attachment). In response to the 

DFAR, the committee provided additional information, as noted below. NYR did not 

request an audit hearing. 
This memorandum provides the Audit staffs 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 (lAR), NYR stated that, it would be costly 

and perhaps impossible to reconstruct the records necessary to recreate its filings. 

Additionally, NYR stated that none of the non-federal funds were used for federal 

activities; these funds were not reported on its disclosure reports because they 

were not subject to FEC regulation. In response to the DFAR, NYR reiterat^ its 

lAR response, stating that the misstatements were predominantly driven by the 

processing of non-federal credit card contributions through the federal account. 

NYR stated that it no longer processes credit card receipts in this manner and 

further believes that by promptly transferring the non-federal contributions and not 

using these funds on federal activity, it remained compliant at all times and 

correctly omitted this activity from its FEC disclosure reports, again referring to 

Advisory Opinion 2001-17 (DNC Services) to support its position. NYR 

contended that although the advisory opinion refers to receipts of "composite" 

contributions made by a single check, its logic applies. 

NYR did not file amended disclosure reports to correct the misstatements. As 

such, NYR's reported financial activity for 2011 and 2012 remains materially 

misstated for receipts and disbursements. 

The Audit staff recommends that the Commission find that in 2011, NYR 

understated its receipts by $204,900 and its disbursements by $191,367; and in 

2012, NYR understated its receipts by $149,247 and its disbursements by 

$151,593. 

Finding 2. Recordkeeping for Employees 

In response to the lAR, NYR concurred with the finding by stating that it was 

unable to provide time logs for its employees during the audit period and 

implemented procedures to ensure it maintains the payroll logs in the future. 

However, NYR stated in response to the DFAR that it disagreed with the Audit 

staffs assertion that it concurred with this finding. NYR believes it has 

established through sworn affidavits that its employees who spent a significant 

portion of their time with federal elections during the 2011-2012 election cycle 

were paid properly from its federal account, as the law requires. NYR stated the 

sworn affidavits should satisfy the Audit staff with respect to the employee 

recordkeeping requirement. 

The Audit staff recommends that the Commission find that NYR failed to maintain 

monthly payroll logs totaling $713,427, as required, to document the percentage of 

time each employee spent in connection with a federal election. 

Finding 3. Disclosure of Occupation/Name of Employer 

' The Office of General Counsel forwarded formal comments in regards to the NYR OFAR response to 

Finding 1. Misstatement of Financial Activity. 
In response to the lAR, NYR established "best efforts" by including memo entries 

in its most recent disclosure report specifically addressing 91 contributions totaling 

$276,197. However, since this submission did not include all the contributions for 

which NYR had the contributor information, it did not materially correct the 

disclosure errors. In response to the DFAR, NYR stated that "the Committee 

satisfied the "best efforts" requirements of 11 C.F.R. § 104.7(b), and thus is in 

compliance with its reporting obligations under Federal Election Campaign Act. 

52 U.S.C. § 30102(i)." 

Of the 205 contributions totaling $563,191: 

• NYR did not provide documentation for 95 contributions showing it made 

follow-up best efforts for contributions totaling $214,944. 

• NYR had the required documentation for 110 contributions totaling 

$348,247, however this information was not disclosed on its FEC reports. 

The Audit staff recommends that the Commission find that NYR failed to 

materially disclose occupation/name of employer information for 205 

contributions from individuals totaling $563,191. 

Finding 4. Reporting of Apparent Independent Expenditures 

In response to the lAR, NYR provided five additional affidavits including four 

from its mail vendors and a second affidavit from the Executive Director during 

the audit period and two new direct mail pieces. NYR stated that these additional 

affidavits detail the active role volunteers played in the production and distribution 

of the mailers, in coordination with NYR and the former Executive Director. In 

response to the DFAR, NYR reemphasized that these disbursements are part of 

NYR's non-allocable mail program. In addition, NYR reiterated that these 

disbursements were not independent expenditures thus 24/48- hour reports did not 

need to be filed. Finally, NYR challenged the express advocacy conclusion for 31 

mailers attributed to 11 CFR § 100.22(b). 

The Audit staff recommends that the Commission find that NYR failed to report 

mailers containing express advocacy totaling $236,476 (no records provided 

documenting the volunteer materials exemption) and failed to file 24/48-hour 

reports for these mailers. 

For $906,027 of apparent independent expenditures in which NYR provided 

affidavits to document the volunteer materials exemption, due to the lack of a clear 

standard for the exemption, the Audit staff recommends that the Commission 

make a final decision regarding this amount. 

Finding 5. Recordkeeping for Communications 

NYR did not address this finding in its response to the lAR. In response to the 

DFAR, NYR stated that it has been unable to locate the records at issue. 

The Audit staff recommends that the Commission find that NYR failed to provide 

the necessary records for expenditures totaling $77,354. 
If this memorandum is approved, a Proposed Final Audit Report will be prepared within 

30 days of the Commission's vote, which will reflect the changes above for Finding 4. 

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 Tesfai Asmamaw or Nicole Burgess at 

694-1200. 

Attachments: 

- Draft Final Audit Report of the Audit Division on the NY Republican Federal 

Campaign Committee 

- LRA 1038 (NY Republicans) - Draft Final Audit Report 

- LRA 1038 (NY Republicans) - Audit Division Recommendation Memorandum 

cc: Office of General Counsel 
Draft Final Audit Report of the 

Audit Division on the NIT 

Republicaii Federal Campaign 

Committee 

(January 1, 2011 - December 31, 2012) 

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.' The audit 

determines Sy^^er-the 

committ^'Cdmplied with . 

the lirajjatjons, 

prohibrtmhs.and 

disclosure i^^'rements 

of the Act. . 

About the Committee (p, 2) 

The NY Republican Federal C.anipaig^.Committee is a state party 

committee headq\iartered in Albany, York.^ For more 

information, see the-chart gp the Comraltt^Qrganization. p. 2. 

Financial Actiii^ty (p. 2) 

• Receipts 

o Contributions from Individuals 

o CqnO'ibutions from Pofitical 

Coihiiiittees 

o Transfers from Affiliated and 

Other Political Osmmittees 

o Transfers from Nofi-iederal 

: ,:.v Accounts.. - ' 

— o Other Recmpts 

' Total Receipts 

^ • ; Disbursements 

- o Operkting Expenditures 

' .6 Refunds of Contributions 

o . Federal Election Activity 

o Other Disbur^ments 

Total Disbursements 

$ 1,606,371 

257,350 

2,522,875 

1,682,587 

177,507 

S 6,246,690 

$2,921,022 

20,200 

2,716,291 

350.929 

$6,008,442 

Future Action 

The Commission may 

initiate an enforcement' 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

Findings and Recommendations (p. 3) 

• Misstatement of Financial Activity (Finding 1) 

• Recordkeeping for Employees (Finding 2) 

• Disclosure of OccupationA^ame of Employer (Finding 3) 

• Reporting of Apparent Independent Expenditures (Finding 4) 

• Recordkeeping for Communications (Finding 5) 

'52 U.S.C. §301 n(b). 
Draft Final Audit Report of the 

Audit Division on the 

NY Republican Federal Campaign 

Committee 

(January 1, 2011 - DeQ^bfer 31, 2012) 

•••••v. 

-• •/•'••••• y. •../ ' 

••A.., •••• • A- •I-'. . •"'* -f 

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•••, v." • 

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Part I. Background 

Authority for Audit 

Scope of Audit. 

Commission Guidance 

Part II. Overview of Committee 

Committee Organization 

Overyiew of Financial Activity 

Part III. Summaries 

Findings and Reconunendations 

Part IV. Findings and RecommendationJ^ 

Finding 1. Misstatement of Flnanc.l.a . Vity-. 

Finding 2. Recordkeeping for.ErripU • 

Finding 3. Disclosure of Occupatioih .)yer K 

Finding 4. Reporting of Appar^;ind.eFt::. J J:.: L\: 's ^ 

Findings. Recordkeeping for Coitununic~ " • > 

Page 

1 

I 

1. 

2 

2 

5 

8 

10 

12 

17 

•••ovffir. 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the NY Republican Federal Campaign Committee^ (NYR), 

undert^en 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 r^ijired to file a report 

under 52 U.S.C. §30104. Prior to conducting any audit under this sub^tion, the Commission rausit 

perform an internal review of reports filed by selected committees te^je^imine if the reports filed 

by a particular committee meet the threshold requirements for siib'stantiiEd^^mpliance with the Act. 

52 U.S.C. poll 1(b). 

Scope of Audit 

Following Commission-approved procedures, the Audit;staff evaluated various risk-^tdrs.and as a 

result, this audit examined; 

1. the disclosure of individual contributors' occupation and n^e of employer; 

2. the disclosure of disbursements, debts and obligations; • 

3. the disclosure of expenses allocated betii^n federal and noit-^bral accounts; 

4. the consistency between reported figures aha records; f 

5. the completeness of records; '% •. P 

6. the disclosure of independent expenditures; and . -

7. other committee operatipn% necessary to the iifeview. 

Commission Guidance ' 

Request for Early Commissidp,jC6hside|8^jo^n.q.f a Legal Question 

Pursuant to ttje«C6ii^][^sipn's "Pol^^ Statemmt Establishing a Program for Requesting 

Consideration of Legal'^ujestjons by :&e Commission," several state party committees unaffiliated 

with NYjUTCquested earlyic^nsideratrbh pf.a legal question raised during audits covering the 2010 

election cV^e.^ Specifically, t|^ommi»ion addressed whether monthly time logs under 11 CFR 

§106.7(d)(l)'^ere required for Employees paid with 100 percent federal funds. 

The Commission concluded, b^-a vote of 5-1, that 11 CFR §106.7(d)(l) does require committees to 

keep a monthly fog fdr'^ployees paid exclusively with federal funds. Exercising its prosecutorial 

discretion, however, the Commission decided it will not pursue recordkeeping violations for the 

failure to keep time logs or to provide affidavits to account for employee salaries paid with 100 

percent federal funds and reported as such. The Audit staff informed NYR representatives of the 

payroll log requirement and of the Commission's decision not to pursue recordkeeping violations 

for failure to keep payroll logs for salaries paid and correctly reported as 100 percent federal. This 

audit report does not include any findings or recommendations with respect to NYR employees paid 

with 100 percent federal funds and reported as such. 

' On December 23,2013, the Commission received a Statement of Organization from the New York Republican Federal 

Campaign Committee ofTicially changing its name to NY Republican Federal Campaign Committee. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration August 2,1976 

• Audit Coverage January 1,2011 - December 31,2012 

Headquailers Albany. NewiYork", 

Bank Information 

• Bank Depositories Two .. . 

• Bank Accounts Eight'Pederal, Two Non-fedebL 

Treasurer 

• Treasurer When Audit Was Conducted Jo}m'Itipdmaq (3/18/ll - Present) 

• Treasurer During Period Covered by Audit Jane Cbiwip (10/5/09 - 3/17/11) 

Management Information 

• Attended Commission Campaign Finanbe A 

Seminar 

Yes 

V 

• Who Handled Accounting and 

Recordkeeping Tasks 

of Fii 

fudlted, 

is . 1 . 

i' r 

*;• 

i^ncial Activity 

bnounts) 

Cash-on-handij(^'Jahuary 1, 'Otil $ 59,732 

Receipts '"'A. 

o CoplJnMutions from Indiyiiiiuals « 1.606,371 

o Contrihitipns from Politi^r^ommi'ftges 257,350 

o Trahsfers''-^m Affiliated a- . Other Political 

Committees C.*. 2,522,875 

o Transfers frotii 1^on-federaI Accounts 1,682,587 

o Other Receipts 177,507 

Total Receipts $6,246,690 

Disbursements 

o Operating Expenditures 2,921,022 

o Refunds of Contributions 20,200 

o Federal Election Activity 2,716,291 

o Other Disbursements 350,929 

Total Disbursements S 6,008,442 

Cash-on-hand @ December 31,2012 $ 297,980 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of NYR's reported financial activity with bank 

i^ords revealed material misstatements in both 2011 and 2012. In response to the 

Interim Audit Report recommendation, NYR stated that, it would be costly and perhapis 

impossible to reconstruct the records necessary to recreate.iis fiUngs^ NYR did not file 

amended disclosure reports to correct the misstatement. As such, NS^L'S reported 

financial activity for 20.11 and 2012 remains materially misstated for receipts and 

disbursements. (Pgr more detail, see p. S.) .... 

Finding 2. Recordkeeping for Employees^.. 

During audit Geldwork, the Audit staff determined thhtt^R did not maintain any 

monthly payroll logs, as required, to .document the perceti^ge of time each employee 

spent in connection with a federal election. For 2011 and 26.12, the Audit staff identiGed 

payments to NYR employees totaling ^713,427 fpr which NYR.;did not maintain monthly 

payroll Ipgs. This consisted of payroll wliich ^ .^.Upcated with^Tederal and non-federal 

funds: There was no payroll paid exclusively with nOnTj^deral fends. In response.to the 

Interim Audit. Report recgpin^endation, NY^ cohcutred wjth the finding by 

acknowledging the np^ tS C^pipVe its systeth for keeping and maintaining monthly 

employee payroll and Im^inplemented ptpcedures that will maintain the necessary 

documentation in the^ture. (Ij^or more detail, ^ p. 8.) 

Finding '3% piscldlii^re o/^6cbupation/Name of Employer 

A revidW of cOntfi]l>]|i1i:qns fixiM'lpdLviduals requiring itemization indicated that 205 

cont|[^utions totalin^$.5.63,191 laekqd or had inadequate disclosure of occupation and/or 

riame'^employer. In tuition, "bgst efforts" to obtain, maintain and submit the 

information had not beerr-^gificiently documented for these contributions. In response to 

the Interirh Audit Report r^ommendation, NYR included memo entries in its most 

recently filed disclosure t|port providing the missing contributor information. 

(For more detail, .see p.,,>l 0.) 

Finding 4. Reporting of Apparent Independent EiXpenditures 

During audit fieldwork, the Audit staff reviewed expenditures totaling $1,352,118, that 

NYR disclosed on Schedule B, Line 30(b), (Federal Election Activity Paid Entirely with 

Federal Funds), that appear to be apparent independent expenditures that should have 

been disclosed on Schedule E, Line 24, (Independent Expenditures). NYR maintained 

that these expenditures were part of its non-allocable mail program. NYR provided 

documentation supporting the use of volunteers, totaling $209,615. 
Additionally, NYR did not provide sufficient documentation pertaining to dissemination 

dates to verify whether 24/48-hour reports were required to be filed for the apparent 

independent expenditures totaling $1,142,503. 

In response to the Interim Audit Report recommendations, NYR submitted additional 

documentation and reiterated that the expenditures were part of its volunteer mail 

program. (For more detail, see p. 12.) 

Finding 5. Recordkeeping for Communications 

During audit fieldwork, the Audit staff reviewed disbursements to.^bHfy the accuracy of 

infonnation and proper classification of transactions disclp^e^i^repoits.. The Audit 

staff identified $77,354 for which sufficient records were nof^ph^^ldpd. Without a copy 

of the invoices and the associated communications, the ACti^it sta^'i^piable to determine 

how NYR should have reported these disbursements. ^.NY^'did not ^^i^s this finding 

in its response to the Interim Audit Report. (For more detail, see p. 17.). .• ' '• 

..4:' '• 

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Part IV 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of NYR's reported financial activity with bank 

records revealed material misstatements in both 2011 and 2012. Ipucisponse to the 

Interim Audit Report recommendation, NYR stated that, it wpuldliie costly and perhaps 

impossible to reconstruct the records necessary to recreate i^^^^ NYR did not file 

amended disclosure reports to correct the misstatements. sucl^l^R's reported 

financial activity for 2011 and 2012 remains materially jnis$$ated fpr^'^ceipts and 

disbursements. '' " V, 

Legal standard. 

A. Contents af Reports. Each report must discldae: A 

• the amount, of cash-on<han'd at the beginning and end of the reporting period; 

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

• the total amount of disbursements:fo^.^e reporting period and for the calendar year; 

and 

• certain transactions that.require itemi^tioh oh'Schedule A (itemized Receipts) or 

Schedule B (Itemized Disbursements). ,52 U,S.C.-^^Q;1,04(&)(1). (2), (3), (4). and (5). 

B. Federal vs. Non-ll^de^^^count; The!ifederal account may not.accept fimds that 

are not permissible'yinderied^a election law. 11 CFR §§:1.02.5(a)(.l)(i) and II CFR 

§§102.5(a)(2)(i)-(iii>;>. 

Facts ai|d,A98dysi8 

A. «,avta 

•J 

bufiil^^udit'fieldwork,' ty Audit reconciled NYR's reported fiiuuicial activity with 

its bank^lioords-for 2011 -^.d 2012. The reconciliation identified that NYR misstated 

receipts ahdj^sburserhents'for 2011 and 2012. The following charts outline the 

discrepancies bjeftween N'V^'s disclosure reports and its bank records, and the succeeding 

paragraphs explaiin why ^^e discrepancies occurred. 
2011 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2011 

$57,528 $59,732 $2,204 

Understated 

Receipts $1,620,406 $1,825,306 $204,900 

Understated 

Disbursements $1,562,000 $1,753,367 $191,367 

Understated 

Ending Cash Balance @ 

December 31,2011 

$115,934 $131,671 $15,737 

Understated 

The beginning cash balance was understated by $2,204.and is unexj^l^h^, but likely 

resulted from prior-period discrepancies. 

The understatement of receipts resulted from f^ Jt#pwing: 

• Transfers from non-federal accounts for all^ble acjdnty, 

not reported ^ ' 

• Unreported deposit ' 

• Non.-fed.eral contributions deposited in the 

federal account, not reported 

• Unexplained differences 

Net Understatement of. Receipts > 

. •• v 

Vr 

+ 

+ 

$14,321 

975 

190,000 

396 

f. • 

The understatement pf disburaiaipents resulted from the following: 

• Transfer of ppn-fedecal .contributions tojhe non-federal 

account, not rppbr^^ 

• Net credit card ciiik^es;'hof i^rted 

Net UniiristajfemciiiW 

+ 

+ 

$204.900 

190,000 

1,563 

196 

The $ f5>737 u.nders.tate.m|.nt of the ending cash balance resulted firom the misstatements 

descritiedia^bve. -V 

• ' i;'. 

2012 Comiiiittee.A£tivity 

Reported Bank Records Discrepancy 

Begiiming Cash Balance @ 

January 1,2012 

$115,934 $131,671 $15,737 

Understated 

Receipts $4,272,137 $4,421,384 $149,247 

Understated 

Disbursements $4,103,481 $4,255,074 $151,593 

Understated 

Ending Cash Balance @ 

December 31,2012 

$284,590 $297,981 $13,391 

Understated 
The undeistatement of receipts resulted from the following; 

• Transfers from non-federal accounts for allocable activity, 

not reported 

• Non-federal contributions deposited in the 

federal account, not reported 

• Unexplained differences 

Net Understatement of Receipts 

The understatement of disbursements resulted from the following:- • 

• Transfer of non-federal contributions to the non-feder^^ 

account, not reported 

'• Unexplained differences 

Net Understatement of Disbursements 

A . 

+ $11,750 

+ 157,447 

19.950 

+ $149.247 

157,447 

L854 

The $13,391 understatement of the ending cash bhjance resulted from the 

described above. •••• ' • 

For the $347,447 ($190,000 + $157,447) not reported" aB^ye. NYR stated it used a federal 

account as its merchant account, deposing federal and rion^fjsderal contributions. 

Subsequently, NYR would transfer "af^jbo^nbution th^^ vOaS|tem federally 

impermissible funds^ or that exceeded fe^erali^gl^bution llmi^,'tb the appropriate nonfederal account. NYR stated that some ^^m^^^cies wd^ due to the manner in 

which the credit cards contributions were E^c.eS 

The Audit staff conf^ed tiid^^^as one wir^and three credit card deposits into the 

federal accoimt.tqti^hg $310,0^, that were identified by NYR as non-federal 

contributions. The Au^it-staff ^ unable to id^tiiy the bank deposits for the remaining 

$37,447, hoyyeyer, was dWd.td ven1^'$3^7i447 was transferred to the non-federal account 

via 12 igdividual^transactiohs:; Finally^ the Audit staff was able to verify $321,647 of 

these don-federal f^sfers wdH^ported as contributions on the state reports. 

1 •' A * >.• 

B. Interim Audit Repo^dt Audif Division Recommendation 

The Audi|.s^ffdiscussed^tte misstatement of receipts and disbursements with the NYR 

representativb at the exit cenference. NYR representatives asked questions for 

clarification ai^'-s^id theyi-would respond after having time to review each issue. The 

Audit staff providi^ schedules detailing the misstatement, of receipts and disbursements. 

In response to the exitconference, NYR stated all federal and non-federal credit card 

contributions were deposited in the federal account as a matter of administrative 

convenience. 

Furthermore, the NYR representatives stated that the order to ensure greater compliance 

and avoid accepting impermissible funds in the federal account, they have implemented a 

' [n response to the exit conference, NYR representatives stated these contributions were federaliy 

permissible. Due to the lack of documentation, the Audit staff was unable to verify the permissibility of 

the contributions. 
new system for processing credit card contributions. Through a new software vendor, 

NYR staff determines whether the contributions should be deposited in the federal or 

non-federal account based on the Commission and New York State Board of Elections 

regulations. Once identified, contributions are deposited directly into the appropriate 

NYR bank account. 

The Interim Audit Report recommended that NYR amend its disclosure reports to correct 

the misstatements noted above and reconcile the cash balance on its most recent report to 

identify any subsequent discrepancies that could affect the recommended adjustments. 

"-V .. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, N^I^'s^ted that, it would be 

costly and perhaps impossible to reconstruct the records rie^bssar^tp. ^reate its filings. 

Additionally, N'^ stated that none of the non-federal,|und^ .were use^&r federal 

activities; these funds were not reported on its disclosure reports becaus(B.^§y were not 

subject to FEC regulation. NYR elaborated that the non-federal funds wei^^jtorted on 

the public record as a part of its state reports. N^AISQ citeid. Advisory Opini^20i01-17 

(DNC Services) in support of its position. Howevt^ln the.Advisory Opinion,.the 

Commission primarily addressed the question of ho^r^^bnal committee should report 

contributions intended to be split intq^federal and a non-td^il component. Thus to the 

extent that the contributions routed ttiii^^ die federal acc^mt^were composite 

contributions, containing both federal ^^^^-jf^eral componei^i.'its treatment of these 

would appear to be permissible under fhe^reasdlSi^^t, forth in m Advisory Opinion. 

However, in this case, the funds were deposited nm bei^j^.Qf the "composite" nature of 

the contributions, but jpar,p^mistrative cohvqmence. Therefore, some of the 

contributions intended to be vyholly non-fedefi^ and havihg no federal component could 

have been routed fb^^^gh the federal-account.The Audit staff.requests.that NYR.clarify 

with respect to the cOhj^bution^^at iSsue whethi^ahd to what extent the boinfrlbutiOhs 

involved were "compoSifj^^conMbutipq^On^ining both a federal and a non-federal, 

component, sDe^^as, a copy.^.the soubr^^ device for credit card contributions 

indicat^g that a fe^ieml/non-ifi^eral component was raised. 

. • v.-' ' 

N'YR,'di!d not file amend^djsclosufe reports to correct the misstatements. As such, 

NYR'si^][;prted fmanciai;^tivity -for 2011. and 2012 remains materially misstated for 

receipts ahd'.disbursementsj 

Finding 2. R.ec.ofdkeeping for Employees 

Summsuy 

During audit fieldwork, the Audit staff determined that NYR did not maintain any 

monthly payroll logs, as required, to document the percentage of time each employee 

spent in connection with a federal election. For 2011 and 2012, the Audit staff identified 

* Absent clarification of the "composite" nature of these contributions, this could result in a violation of 11 

CFR §102.5 (a)(2)(i)-(iii). 
payments to NYR employees totaling $713,427^ for which NYR did not maintain 

monthly payroll logs. This consisted of payroll which was allocated with federal and 

non-federal funds. There was no payroll paid exclusively with non-federal funds. In 

response to the Interim Audit Report recommendation, NYR concurred with the finding 

by acknowledging the need to improve its system for keeping and maintaining monthly 

employee time logs, and has implemented procedures that will maintain the necessary 

documentation in the future. 

Legal Standard 

Maintenance of Monthly Logs. Party committees must keep a rnpn^hly log of the 

percentage of time each employee spends in connection with a federal election. 

Allocations of salaries, wages, and ^nge benefits are to be^M^t^en as follows: 

• employees who spend 25 percent or less of their coApensa^Mme in a given 

month on federal election activities must be pat^ eimer from t^^eral account 

or be allocated as administrative costs; 

• employees who spend more than 25 percent'of their compensated tim|;in a^iiven 

month on federal election activities mun^be^paid onlVfrom a federal abi^nt; and, 

• employees who spend none of their compe'ns^^ tiin6 iii- a given month on federal 

election activities may be paid entirely with f^w^nat comply with state law. 11 

CFR §106.7(d)(l). 

Facts and Analysis 

A. Facts 

During audit fieldwo|^, :Ih^^ 

maintain any montMy payrol 

time each employe^sp^nt in i 

lit staff revie^'^ disburs^ents for payroll. NYR did not 

; or equivalent records to document the percentage of 

:tion with a federal election. These logs are required 

to document the.prop^r/alloca^im of federal anct ti^-federal funds used to pay employee 

salaries and wages. For^Ol.L KYRdid not maintain monthly logs for 

$713,427 ih pferplk. This hlh^nt incM^s payroll paid as follpws to NYR employees: 

Employees replged on S'^^ule H4 (Disbursements for AHqcated Federal 

'\and Nonfederal A|jtivity]l and paid with allocated federal and non-federal 

during the s%e mpnth (totaling $713,427). 

NYR providedlhe Audit^aff with affidavits fham the farmer Executive Director 

attesting to the was able to determine those employees.who spent Jess than 

25% of their time infe'deral activity. There was no payroll paid exclusively with nonfederal funds.^ The affidavits provided by NYR do not resolve the recordkeeping finding 

because they do not document the time that an employee spent in connection with a 

federal election and the documents were provided after notification of the audit. 

^ This total does not include payrol! for employees paid with 100 percent federal fiinds and reported as 

such. (See Part I, Background, Commission Guidance, Request for Early Commission Consideration of a 

legal Question, Page 1.) Payroll amount does not include taxes and fnnge benefits. 

' This is based on the Audit staffs review of the available disbursement records and state reports. 
10 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the recordkeeping requirement with NYR representatives 

during the audit fieldwork and at the exit conference. NYR representatives asked 

questions for clarification and said they would respond after reviewing each issue. 

Subsequently, NYR representatives stated that contemporaneous payroll logs were not 

kept; however, every effort was made to ensure that employees that spent significant time 

on federal elections were paid properly from the federal account. Further, NYR stated 

that a policy had been adopted and implemented to maintain monthly payroll logs.^ 

The Interim Audit Report recommended that NYR provide montl^y.phyroll logs that 

indicated the time spent in connection with a federal election apd provide a copy of the 

policy implemented in January 2014. ' 

C. Committee Response to Interim Audit Report . • 

In response to the Interim Audit Report recommend^oii, NYR concurred vvith the 

finding by stating that it is unable to provide tin^ logs for its employees duiijgg the audit 

period, most of whom no longer work for NYR. tipwever, NYR stated it has 

implemented procedures to ensure it maintains the^ik^ssary documentation iq^he future. 

In addition, NYR submitted a copy of its policy and a^s^j^Ie monthly payroll log. 

Finding 3. Disclosure of^Occupation/lfitoe of Employer | 

Summary 

A review of contributions from individuals:jeqi>iifingiteih^tion indicated that 205 

contributions total lacked or hkd'inadequate disclosure of occupation and/or 

name of employer. Jn additlon^Vbest efforts%o obtain, maintain and submit the 

information had nol^een suffi^ntly documented for these contributions. In response to 

the Interim Audit Repoft-roconuhendation, NYl^ncluded memo entries in its most 

recently file^ .^^clpsure l%^^'^yidi^;t^jinissm^ contributor information. 

Legal %tandar)^-

A.; lipmizatipn requu^Rjfor Gbntribut^^ from [ndividuail.s. A political cqmrnittee 

o'&ef ih»n an authorized''|^mitteie'niust itemize any contribution from an individual if it 

exceeds 'l^O per .calenda#ear, either by itself or when combined with other 

contribuljoni^ftpm the sa^ contributor. 52 U.S.C §30104(b)(3XA). 

B. Required Iniil|l^afien for Contributions from Individuals. For each itemized 

contribution irom im-'individual, the committee must provide the following information: 

• The 'contributor's full name and address (including zip code); 

• The contributor's occupation and the name of his or her employer; 

• The date of receipt (the date the committee received the contribution); 

• The amount of the contribution; and 

' The Audit staff did not receive a copy of the policy nor a sample timesheet as noted in the narrative 

supplied by NYR. 
11 

• The calendar year-to-date total of all contributions from the same individual. 

11 CFR §§100.12 and 104.3(a)(4) and 52 U.S.C §30104(b)(3)(A). 

C. Best Efforts Ensures Compliance. When the treasurer of a political committee 

shows that the committee used best efforts (see below) to obtain, maintain, and submit 

the information required by the Act, the committee's reports and records will be 

considered in compliance with the Act. 52 U.S.C. §30102(i). 

D. Definition of Best Efforts. The treasurer and the committee will be considered to 

have used "best efforts" if the committee satisfied all of the folloydng criteria: 

• All written solicitations for contributions included: 

o A clear request for the contributor's full name, mailini|'address, occupation, 

and name of employer; and 

o The statement that such reporting is required by Federal iaw., . 

• Within 30 days after the receipt of the cont^iition, the treasurer ihade at least one 

effort to obtain the missing information, .in either a written request of a 

documented oral request. 

The treasurer reported any contributor information thi^.Mfoough not initially provided by 

the contributor, was obtained in a foU.ow-up communication-.or was contained in the 

committee's records or in prior report^ •^^•tiie committee fite^>durihg-the same two-year 

election cycle. 11 CFR §104.7(b). ^ 

i 

Facts and Analysis ' , 

A. Facts f " " ' v 

A review of itemia^contribiitiiahs indicated that 205 contributions totaling $563,191, or 

40 percent of the doll^yalue ofHndividual con^utions required to be itemized by 

NYR, lacked or had ini^^uafo%|qlp.s|^ of bcbupation/name of employer. 

A revmw of tlu^^^dule A '(I^mized Receipts) filed with the Commission determined 

the iplowing: 120 to^i^S3,34,027 did not disclose the occupation or name of 

mj^]^pr, 77 errors total^g $191,764' disclosed the occupation or the name of employer 

I and of the eight remaining errors totaling $37,400, seven 

Inoccupation or name of employer as self-employed. 

fide documentation for 95 contributions showing it made followup best effo^sfbr contributions totaling $214,944. 

NYR had the required documentation for 110 contributions totaling $348,247, 

however this information was not disclosed on its FEC reports. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed this matter with the NYR representatives 

and they asked questions for clarification. Subsequent to the exit conference, NYR 

provided the Audit staff a list of individual contributors with occupation and name of 

employer information omitted. NYR representatives stated that since the 2012 cycle, 

NYR has made a point of sending and keeping records of follow-up correspondence. 
12 

NYR representatives further stated that NYR's record of demonstrating that best efforts 

have been made is supported by the fact that it has not received any Commission 

Requests for Addition^ Information letters on this issue in the 2013-2014 cycle.' 

Further, it has implemented a policy that when additional information arrives, the public 

record will be updated to reflect that information. 

The Interim Audit Report recommended that, NYR establish "best efforts" by amending 

its reports to disclose the missing information relating to the 110 contributions for which 

it had the required documentation. • • •. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, NYR'e^blished "best efforts" 

by including memo entries in its most recent discldsure report sp^^c^ly addressing 91 

contributions totaling $276,197. However, this submis^ipn did not ma^i^ially qqrreet the 

disclosure errors. 

Finding 4. Reporting of Appared^ Independent 

Expenditures % 

Summsury 

During audit fieldwork, the Audit staff r^vieyved expenditures^trtaling $1,352,118, that 

NYR disclosed on Schedule B, Line 30(b), l^e'd^l Election Activity Paid Entirely with 

Federal Funds), that appear to be apparent^ndeped^tmtiexpenditures that should have 

been disclosed on Schedule E, Line 24, (Independent Expraditures). NYR maintained 

that these expenditu^s ^^(^,|part of its non-^oeable mail program. NYR provided 

documentation su^prting thd^e of voluntee^ totaling $209,615. ' ' • * * Additionally, NYR did ^t proidde sufficient documentation pertaining to dissemination 

dates to verify whether 24i^8-hdur repibrts^were required to be filed for the apparent 

independent expendij^res tbtal^g $1,142,503. 

In re^j^onse to the .Int^i|[£Audit'import recommendations, NYR submitted additional 

docu^i^tation hnd reite^i^ that'fHe expenditures were part of its volunteer mail 

program'.' 

Legal Stan&rd 

A. Definition oHndepOndent Expenditures. The term "independent expenditure" 

means an expenditurb by a person for a cornmunicatiqn expressly advocating the election 

or defeat of a clearly identified candidate that is not made in coordination with any 

candidate or authorized committee or agent of a candidate. No expenditure shall be 

considered independent if the person making the expenditure allows a candidate, a 

candidate's authorized committee or their agents, or a political party committee or its 

agents to become materially involved in decisions regarding the communication as 

described in 11 CFR 109.21(d)(2), or shares financial responsibility for the cost of 

production or dissemination with any such person. 11 CFR § 1 GO. 16(a) & (c). 

' The Audit staff has verified that the Commission has not sent Requests for Additional Information letters.. 
13 

B. Expressly Advocating. Expressly advocating means any communication that - (a) 

Uses phrases such as "vote for the president," "re-elect your Congressman," "support Ae 

Democratic nominee," "cast your ballot for the Republican challenger for the Republican 

challenger for U.S. Senate in Georgia," accompanied by a picture of one or more 

candidate(s), or communications of campaign slogan(s) or individual word(s), which in 

context can have no other reasonable meaning than to ui:ge the election or ^feat of one or 

more clearly identified candidate(s). (b) When taken as a whole and with limited 

reference to external events, such as the proximity to the election, could only be 

interpreted by a reasonable person as containing advocacy of the ele^ion or defeat of one 

or more clearly identified candidate(s). 11 CFR § 100.22. -

C. Disclosure Requirements - General Guidelines. Aii independ^t expenditure shall 

be reported on Schedule E (Itemized Independent Expenditures) if, wb^ added to other 

independent expenditures made to the same payee during the same caleiti^ year, it 

exceeds $200. Independent expenditures made (i.e., publicly disseminatedypripr to 

payment should be disclosed as memo entries on Schedule E and as a debt on Schedule 

D. Independent expenditures of $200 or less need hot.be i^ized, though the committee 

must report the total of those expenditures on line (b) oh Schedule E. 11 CFR 

§§104.3(b)(3)(vii), 104.4(a) and 104.11. 

D. Last-Minute Independent Expenditiire'Reports (24-Ho'ur'^eports). Any 

independent expenditures aggregating SUQOO or-hij?Te,. with respect to any given election, 

and made after the 20"' day but more than Z4 hours bbfbre the day of an election, must be 

reported and the report-^iist be received by the Commissidh within 24 hours after the 

expenditure is madq. : 24-h(CfjjK.report is required each time additional independent, 

expenditures aggrej^e $1,000 dr more. The date that a communication is publicly 

disseminated serves hs the date diat the committee must use to determine whether the 

total amount of independbh|. expi^dijures has, in the aggregate, reached or exceeded the 

thieshol.d Rjppfting amouriftfS CiFR §§104.4(f) and 104.5(g)(2). 

E. Ij^epenclent Expen(|iture itepprts (48-Hour Reports). Any independent 

exp^^im^ aggregating $10,000'br more for an election in any calendar year up to and 

including.the 20th day before an election, must be disclosed within 48 hours each time 

the expen^il||^s aggregat^;iB10,000 or more. The reports must be filed with the 

Commissioiii'S^'ftiin 48 hoi^ after the expenditure is made. 11 CFR §§ 104.4(f) and 

104.5(g)(1). 

'I. 

F. Formal Requirements Regarding Reports and Statements. Each political 

committee shall maintain records with respect to the matters required to be reported 

which shall provide in sufficient detail the necessary information and data from which the 

filed reports may be verified, explained, clarified, and checked for accuracy and 

completeness. CFR §104.14(b)(1). 

G. Volunteer Activity. The payment by a state committee of a political party of the 

costs of campaign materials (such as pins, bumper stickers, handbills, brochures, posters, 

party tabloids or newsletters, and yard signs) used by such committee in connection with 
14 

volunteer activities on behalf of any nominee(s) of such party is not a contribution, 

provided that the conditions below are met. 

1. Such payment is not for costs incurred in connection with any broadcasting, 

newspaper, magazine, bill board, direct mail, or similar type of general public 

communication or political advertising. The term direct mail means any 

mailing(s) by a commercial vendor or any mailing(s) made from commercial lists. 

2. The portion of the cost of such materials allocable to Federal candidates must be 

paid from contributions subject to the limitations and prohibitions of the Act. 

3. Such payment is not made from contributions designated by Ae donor to be spent 

on behalf of a particular candidate for federal office. , 

4. Such materials are distributed by volunteers and not by cbmmereial or for-profit 

operations. 

5. If made by a political committee, such payments'shall be rW|brted by the political 

committee as a disbursement in accordance wiA 11 CFR § l ()'4;!'$;b.ut need not be 

allocated to specific candidates in committee reports. • •» i 

6. The exemption is not applicable to camp^gh materials purchased by;Ae national 

party committees. 11 CFR §100.87 (a>, (b>/.(c), (d), (e) and (g) and 1 lliPR 

§100.147 (a), (b), (c), (d), (e) and (g). " 

Facts and Analysis 

a ' • 

A. Reporting of Independent Expenditures • 

1. Facts *;• . 

During audit fiel^wD^.the Audit staff fdviewed disbursements to ensure proper 

reporting. The Audit st^ noted that f^R did not disclose any independent 

expendituj^s^^pn 3chedui^£, however, made apparent, media-relatjcd expenditures 

totaling Si,142ji03 and disclosed them Federal Election Activity on Schedule 

B.. NYR maintain%'4^t-t|te^:ii^i^ are part of its non-allocable mail 

break^diyn analysiVofthese expenditures is as follows: 

a. IndependeA^xpendita^ Reported as Federal Election Activity 

(Associated l^.iler and'^thvoice Provided under 11 CFR §100.22(a)) 

^YR made 88 i^isbursements for apparent independent expenditures for direct 

i^U totaling $E®5,372 for which it provided a copy of the mailer with an 

associated invoice. According to the Audit staifT, each of these direct mailers 

contaihod..language expressly advocating the election or defeat of a clearly 

identifi^-Bahdidate as defined under 11.CFR § 100.22(a). 

b. Independent Expenditures Reported as Federal Election Activity 

(Associated Mailer and Invoice Provided under 11 CFR 100.22(b)) 

NYR made 31 apparent.independent expenditures for direct mail totaling 

$276,131 for which it provided a copy of the mailer with an associated invoice. 

These communications encouraged the reader to vote for Republicans noting 

various reasons why the Democrats were bad for New York. Based on the 

definition of express advocacy under 11 CFR 100.22(b), the Audit staff 
15 

believes that these communications could only be interpreted by a reasonable 

person as advocating the election or defeat of clearly identified candidate(s). 

c. Volunteer Material Exemption 

To support the volunteer material exemption, NYR representatives provided 

seven affidavits with the associated invoices and mailers from vendors and 

campaign officials, totaling $906,027. The affidavits detailed that the 

volunteers sorted, bundled, bagged and tagged the mail pieces by local zip 

code as part of the NYR "non-allocable volunteer program" during the audit 

period. NYR did not submit affidavits for the remaining Sf236,476 in invoices 

and mailers. Based on the limited documentation provided, the Audit staff 

determined these disbursements totaling $1,142,503 ^>b(e apparent 

independent expenditures. / 

In addition to the expenditures discussed abbve, one invoice ^llhg $209,615 

included pictures of a single volunteer ^working on each indiyidU^ipail piece. 

NYR provided signed volunteer fOpm^:^Qr eight mul pieces which ii^cted the 

volunteer's name, address, the date and t^.title dflhe mail piece. The job 

performed was left blank on all of the focni&^^li'se^ on the dates on the forms, 

it appeared most of this volunteer activity occ\u^ immediately prior to the 

2012 General Election. Due.'^tq th.e lack gf clarity ragging the degree of 

volunteer involvement and the iqji^untpn} and type(sfdf;j^dence needed to 

qualify a given disbursement for an exprgss-.advocacy.cfommunicatipn as 

exempt under the volunteer materials exempfji^j t^& disbursement will not 

deemed an independent expenditure:- • ' ' 

theCorfpiissiion has dddreissed the applicability of the volunteer materials 

exemption in the Fin^i Audit Reports'ojFthe Arizona Republican Party, the 

Democratic Ex|^ve..t^pip^t^ge ^.Fiprida, and the Teimessee Republican 

these ^erts, the CUrUnission leeognizeda lack of clarity regatdinigthe ap^icat^ of tlie^y^lunteer.materials exemption. The CpmmissicMi had 

attempted'to-^^ulate^h consensus pplicy regarding what epns^tuties 

.. . substantial vdli^teerinvdivernent for the purpose of applying theexemption', 

'but this was nev^ achieved. Since a lack of clarity exists concerning the 

application of the volunteer materials exemption, it follows, that the type and 

amojtot of documentation needed to support volunteer involvement is also 

uncleai'! 

In view of the uncertainty regarding the amount of volunteer involvement 

needed to qualify for the volunteer materials exemption, as well as the amount 

of dociunentation required to support such an exemption, the Audit staff 

recommended that, NYR provide more detailed information and 

documentation for any volunteer involvement associated with each mailer. 

' Proposed Interim Enforcement Policy, Agenda Document No. 10-16. 
16 

2. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff presented a schedule detailing these 

expenditures to NYR representatives. In response to the exit conference, the 

NYR representatives provided invoices, mailers, photographs, signed volunteer 

forms and signed affidavits specifically addressing the volunteer component in 

processing the direct mailers. Further, NYR representatives stated that as a result 

of the audit process, NYR was developing a policy that documents the volunteer 

component of the NYR non-allocable mail program. 

# • 

The Interim Audit Report recommended that NYR prov4(^e documentation and 

evidence that apparent independent expenditures totaljl^^^Ji,142,303 did not 

require reporting as independent expenditures. Evidbnce sh^ld have included 

any documentation such as volunteer tlmeshe.q|5fpa photography to support the 

involvement of volunteers in the processin^f distribution of thciii^i^munications 

noted above. Absent such evidence, the Interim Audit Report reco^qnded that 

NYR amend its reports to disclose thesd'^^ursemehts as jndependerit]|;f c 

expenditures on Schedule E and submit re't^^prq^^^res for reportinj^ 

independent expenditures. 

3. Committee Response to the Audit Report^ 

In response to the Interim Aiidif|;^ommen^tii^..{^r^ submitted five 

additional affidavits, including four vertdors'and a second affidavit 

from the Executive Director durin^^he ^udif pe^^und two new direct mail 

pieces'". NYR.stated.that these additioiial affidaW^detail the active role 

volunteers played iiii'ttj.q production and distribution of the mailers, in 

coordination with NYRand the focmef Executive Director. Further, the affidavit 

from the fornier Executive Director attested that "[a]ll of the express advocacy 

mailings repoiXe^ |sfedi^^.e|^tira agti^tyon Line 30(b) of the Committee's 

F£(X'd^losure re^^.during ikelOil Election Cycle were part of the 

.. Commifr^''^plunt^M|ul Program," and that he "followed the same 

procedures described in [£|parlier afHdavit] to ensure there was substantial 

... yoluDteer. particr^tioq in 4f-of the mailings' production and distribution." NYR 

in^tains that thes%:additrdnal affidavits along with the previously submitted 

mdtefials more diamsufficiently established that the. expenditures were properly 

reporti^..|iS non-all(^cable mailers under the volunteer materials exemption. Due 

tb the ladli of a^qfear standard for applying the volunteer materials exemption, the 

Audit staff f^ onable to determine whether, sworn affrdavits of the natute 

submitted by NYR suffice to document the involvement of volunteers. 

NYR associated two new direct mail pieces with two invoices previously provided. Although both of the 

new direct mail pieces still contain express advocacy, the characteristics of one piece have requalified its 

classification from 11 CFR § 100.22(a) to 11 CFR § 100.22(b), revising the totals to $8S4,SS7 and 

$287,947, respectively. 
17 

B. Failure to File 24/48-Hour Reports for Independent Expenditures 

1. Facts 

In addition to not reporting any independent expenditures during the audit period, 

NYR also did not file 24 or 48-hour reports for any independent expenditures. 

Therefore, the apparent independent expenditures identiAed above by the Audit 

staff may also have required such filings. 

2. Interim Audit Report & Audit Division Recommendatiptfu. 

At the exit conference, the Audit staff discussed with N^R representatives the 

requirements for filing 24/48-hour reports. NYR repr^^i^ives did not offer 

any comments regarding this matter. ^ 

The Interim Audit Report recommended that^- ahisent document^i^n^and evidence 

that apparent independent expenditures totaling $1,142,503 did not^i^uire 

reporting as independent expenditures ^p^ Part A above), NYR provrae^,. 

documentation to support the date of public '(^ij^semin^fion for each 

communication to determine whether a 24/48-ft6^'report was required. 

3. Committee Response to the Interim Audit Bepo^'^^ 

In response to the Interim Audit R^or^qecommendaf^^YR submitted 

additional documentation addres^d in l%^>jab6ve. Tlfe^udit staff maintains 

that NYR failed to file 24/48-hour repoi^^"^^^^... 

I Finding 5. Rficordkeijeping foii^iCommunications 

Summary ' 

During audit fieldwork, thb Au^it sthffteviewed diisbursemCnts to verify the accuracy of 

jnformqtjon and^il^per classification oflrahsactjons disclosied on reports, the Audit 

staff^^6ntified S77^54,for wfifeh snffcieiit records were not providied: Withodt'a cpjjy 

of tlie invoices and the!ieusbciat^^mmuhications, the Audit staff is. uneble to determine 

hpw''l^|L should have imported these disbursements, NYR did opt address this finding ip 

its response. tb.-the InteriniT'^udit Report. 

CLegal Standard 

A. Formal Requirements Regarding Reports and Statements. Each political 

committee shall ma&tain records with respect to the matters required to be reported 

which shall provide in sufficient detail the necessary information and data from which the 

filed reports may be verified, and checked for accuracy and completeness. 11 CFR 

§104.14(b)(l). 

B. Preserving Records and Copies of Reports. The treasurer of a political committee 

must preserve all records and copies of reports for 3 years after the report is filed. 52 

U.S.C. §30102(d). 
18 

Facts and Analysis 

A. Facts 

During the fieldwork, the Audit staff reviewed disbursements to verify the accuracy of 

the information and proper classification of transactions disclosed on reports. NYR made 

seven expenditures totaling $77,354 for which documentation was insufficient to make a 

determination pertaining to whether these disbursements were correctly reported on 

Schedule B, Line 30(b). 

The Audit staffs analysis resulted in the following: 

. was di^^d on Schedule 

a candidate^^^ficatibn 

was provided. '^^AudijC staff 

ient. To date, ^^Mler or 

lil. ptbdueliqprhas not 

1. Disburiiement- Invoice Provided -No Copy of the 'Comiiiuiiicatibh PhiVi'ded 

(S11I747) 

A disbursement totaling $ 11,747 was paid to a 

B, Line 30(b) with puipose FEA - Mail Producti 

number, but no mailer associated with the djsb 

requested copies of the associated mailers fdt^ 

other documentation to associate the payment 

been provided. 

2. Disbursements- No GoniieS of GSlSmuiiicafidris 

Disbursements totaling $65,607 

B, Line 30(b) with purposes FEA -

Postage - candidate name/district, 

number, FEA - 100|y|^eral: FEA 

name. However, Ji^^^ptidn was 

details, the Au^^taiT is qi^^e to verify 

Election ActiViti^^]^ Aud^tdfT-requesl 

or 

disbursements. To t 

iih. 

FexitiQQiiferer 

[ mail pieces'! 

repQitiBj^rhe Interim; 

the associa'^.mail pije 

• jMii Provided f$65.60.71 

veitd,oi|<^feepqrte.d on Schedule 

B - ^^dale name, FEA -

jdidate identification 

'and Fl • 'ail Production - candidate 

(vided by i^YR. Without sufficient 

:'s reporting of these amounts as Federal 

ntdtidh for each of these 

^umehtatiohM^ not been provided. 

irt A-^dit Division Recommendation 

^presented NYR with schedules of the invoices and 

irhieh f^ras were necessary to verify the accuracy of 

yt Repdrt recommended that, NYR provide the invoices and 

)r disbursements totaling $77,354. 

C. Com mitted'l^sponse to Interim Audit Report 

NYR did not addr^Cm$ finding nor did it provide any additional documentation in its 

response to the Ihtefim Audit Report. The Audit staff considers the matter a violation of 

the recordkeeping requirements at 11 CFR §104.14(b)(1).