Attachment as stated

cc: FEC Library

~~lic Record

FRED EILAND

PRESS OFFICE ~~ /

BOB COSTA -f\.,'-""""

PUBLIC ISSUANCE OF FINAL AUDIT REPORT - INDIANA DEMOCRATIC CONGRESSIONAL

VICTORY COMMITTEE

WASHINGTON, 0 C 20463

FEDERAL ELECTION COMMISSION

A8l-6l

March 29,' 1982

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

Indiana Democratic Congressional Victory Committee which was

approved by the Commission on March 16, 1982.

Informational copies of the report have been received by all

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

SUBJECT:

FROM:

MEMORANDUM

TO:

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FEDERAL ELECTION CO'MMISSION

WASHINCTON. D.C. 21M63

REPORT OF THE AUDIT DIVISION

ON THE

INDIANA DEMOCRATIC CONGRESSIONAL VICTORY COMMITTEE

. I. Background

A. Overview

This report is based on an audit of the Indiana

Democratic Congressional Victory 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 March 26, 1979. The Committee maintains its

headquarters in Indianapolis, Indiana.

The audit covered the period January 1, 1980 through

December 31, 1980. The Committee reported a beginning cash

balance on January 1, 1980 of $-0-: total receipts for the period of $33,656.88: total expenditures for the period of $33,222.15

and a closing cash balance on December 31, 1980 of $434.73.

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.

B. Key Personnel

The principal officer of the Committee during the

period audited was Mr. Claude R. Magnuson, Treasurer.
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C. Scope

The audit included such tests as verification of total

reported receipts, expenditures, and individual transactionsJ

review of required supporting documentationJ analysis of

Committee debts and obligationsJ and such othe~.audit procedures

as deemed necessary under the circumstances. Although the

contribution records provided by the Committee met the

recordkeeping requirements of 2 U.S.C. 432(c) and 11 C.F.R.

102.9(a), they did not include sufficient material prepared outside of the Committee. Therefore, no verification of

individual contribution transactions was performed.

II. Audit Finding and Recommendation

A. Allocation of Administrative Expenses

Section 102.5(a) (1) of Title 11, Code of Federal

Regulations states, in part, that a political party committee w~ich finances political activity in connection with both federal

and non-federal elections shall either: (i) Establish a separate federal account in a depository which shall be treated as a

separate federal political committee which shall comply with the

requirements of the ActJ or (ii) Establish a political committee

which shall receive only contributions subject to the

prohibitions and limitations of the Act, regardle~s of whether

such contributions are for use in connection with'federal or nonfederal elections.

Section 10G.l(e) of Title 11 of the Code of Federal

Regulations states, in part, that Party committees and other

political committees which have established Federal campaign committees shall allocate administrative expenses on a reasonable

basis between their Federal and non-Federal accounts in

proportion to the amount of funds expended on Federal and nonFederal elections or on another reasonab1e basis.

The Committee has established a separate account and

has treated it as a separate Federal political committee.

However, the Committee has not allocated administrative expenses between its Federal and non-Federal accounts as required by 11

C.F.R.10G.l(e). Instead, the non-Federal account has paid the

administrative expenses for both the Federal and the non-Federal

accounts.

Committee officials stated that they tried to keep the

two accounts totally separate and did not realize portions of

administrative costs should have been allocated to and paid by

the Federal account.