Draft Final Audit Report of the 

Audit Division on tlie Tennessee 

Democratic Party 

(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 

(tiie Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met ^Aiii 

the threshold 

requirements for 

substantial compliance 

witii the Act.', Jlie.audit 

determinej^whyiilB^lhp, 

comnut^compliedm. 

the HtS^tejpns, '^^ 

prohibiti0ils:|!nd 

disclosure re(|p|:^ments 

of tiie Act. "^^1, 

Future Actio^ 

The Commission may 

initiate an enforcement 

action, at a later time, 

wi± respect to the matter 

discussed in this report. 

About the Committee^^i^^ 

The Tennessee Democratic Payi^is a state party committee 

headquartered in Nashvill^JP^^ssee. For more information, 

see the chart on the Comii«ttee ^^dzation, p. 2. 

Financial. 

fill 

^^vit^ . 3) 

Receipts 

o Contributions fri^Individuals 

o =:vPolitical CommlS 

..butions '^ii . 

o ^rariSi®|Sj|rom Affiliati^^'^ 

o Tr^fersi3:^3|[^^n^ and 

Levl^j ^^^^iunt^^^ 

o Othefjpeceipts •>" 

Total Recilipts 

disbursements 

6-^^!lip0irating Expenditures 

o Transfers to Affiliates 

^ ;^'"p .^Independent Expenditures 

6i!^' Coordinated Party Expenditures 

o Federal Election Activity 

o Other Disbursements 

Total Disbursements 

• Levin Receipts 

• Levin Disbursements 

$1,371,485 

160,485 

426,007 

647,358 

79,155 

$2,684,490 

$1,536,893 

10,185 

20,100 

975 

1,091,186 

46,828 

$2,706,167 

$150,000 

$137,180 

Finding and Recommendation (p. 4) 

Filing of Levin Schedules 

2 U.S.C. §438(b). 
Draft Final Audit Report of the 

Audit Division on the 

Tennessee Democratic Party 

(January 1, 2011 - December 31, 2012) 

%• 
Table of Contents 

Page 

Part I. Background 

Autiiority for Audit 1 

Scope of Audit 1 

Part II. Overview of Committee 

Committee Organization ^j^i^ 2 

Overview of Financial Activity " 3 

Part III. Summary 

Finding and Recommendation ^ 

Part IV. Finding and Recommng^Lation, %^ 

Filing of Levin Schedules "^5%. S^^'x. P ^ 

^^^^ 

1. J'^'^^i^^ 
Parti 

Background 

Authority for Audit 

This report is based on an audit of tiie Tennessee Democratic Party (TDP), undertaken by 

the Audit Division of the Federal Election Conunission (tiie Commission) in accordance 

with the Federal Election Campaign Act of 1971, as amended (tiie Act). The Audit 

Division conducted tiie audit pursuant to 2 U.S.C. §438(b), which permits tiie 

Commission to conduct audits and Held investigations of any pojltijQal committee that is 

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

subsection, the Commissioh must perform an intemal levity, 

committees to determine if the reports filed by a particul^'6onuii| 

requirements for substantial compliance with the Act.4.2 Ul^S.C. §4^ 

"' • 

Scope of Audit 

Following Commission-approved procedures^^ 

factors and as a result, this audit examined: 

1. 

2. 

3. 

4. 

5. 

6. 

7. the completeness^i^^ecordsilfjm 

8. other committee oj^^iilions |^qessary to the^i^^view. 

filed by selected 

meet the threshold 

c Audit strnxvaluated vari ^ risk 

occupation 

ions; 

the receipt of excessive contributions; 

the disclosure of individual contributors 

the disclosure of disbursements, del 

the disclosure of expenses allocated bet 

accounts; 

the consistency b&tw^0^x&^Tttd figureis ahd bank records; 

the disclosure of u][|^penlf^&t expenditures; 

fename of employer; 

eral, non-rederal, and Levin 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration May 19,1983 

• Audit Coverage January 1,201 l^^g^ecember 31,2012 

Headquarters Nashville, T^miesse^ 

Bank Information 

• Bank Depositories Two 4§^' ' 

• Bank Accounts Fiv^^dckl, Thre^^^n-federal, One 

Treasurer 

• Treasurer When Audit Was Conducted "W^e M#]day 1^'^ 

• Treasurer During Period Covered by Audit Ma^J^gleyf January 1,2011-October 

i n 9lf¥i% 

David dailispn: October 11,2011-

.pecemberS£g20l2 

Management Information ^' 

• Attended Commission Campaign Finaiipe 

Seminar J^^^si^x 

• Who Handled AcCpunting'aliii > 

Recordkeeping Tlsiy^^ i "• \ 

Paid Staff 
Overview of Financial Activity 

(Audited Amoimts) 

Cash-on-hand @ January 1,2011 $45,680 

Receipts 

o Contributions from Individuals 1,371,485 

o Political Committee Contributions 160,485 

o Transfers from Affiliates 426,007 

o Transfers from Non-federal and Levin 

Accounts 

.# 647,358 

.. •^.•''• V^y'"; 

o Other Receipts •f: 79,155 

Total Receipts 

Disbursements ^ 

o Operating Expenditures ^^K 

o Transfers to Affiliates io,W 

o Independent Expenditures 20,f00 

o Coordinated Party Expenditures . 

o Federal Election Activity 

""^^ 975 

1,091,186 

o Otiier Disbursements W^'S^i^.. 46,288 

Total Disbursements % ^^"'^^ fes.. r $2,706,167 

Cash-on-hand @ December 31,2012 % 

.J^k w 

$23,804^ 

Levin Cash-on-haiidS© Jani ^ 1,2011 % $0 

Total Levin Receipti?!;:.. W %^ ^ $ 150,000 

Total Levin Disburseir^its. ^^^i^^,,^., ^ $ 137,180 

Levin Cashr^ll^^nd @ i)t^mberM^Ml^'^' $ 12,820 

^ TDP's ending cash-on-hand was understated by $199 due to immaterial reporting errors. 
Part III 

Summaiy 

Finding and Recommendation 

Filing of Levin Schedules 

A review of Levin activity indicated that TDP received and disbursed Levin funds during 

calendar year 2012 tiiat totaled $150,000 and $137,180, respec^#|i^ TDP did not, 

however, disclose this activity on Schedule L (Aggregation Levin Funds), Schedule 

L-A (Itemized Receipts of Levin Funds), or Schedule L-BJO[^^^d Disbursements of 

Levin Funds). After the Audit staff brought this omissiofM) Td^yfttention, TDP filed 

the missing schedules. In response to the Interim Au^|Re^prt red^lnendation, TDP 

stated that its omission of Levin schedules L on i^|^st%eneral repoil^as inadvertent 

and the information for those schedules was ent^d into it| compliance s^ware for 

inclusion on the Post-General report. However,' 

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

^^ata w^^mitted when pi''report was 

• 5*4-

•^Si-;:-^;:. 

"Ilk i 
Part IV 

Finding and Recommendation 

Finding 1. Filing of Levin Schedules 

Summary 

A review of Levm activity indicated that TDP received and disbursed Levin funds during 

calendar year 2012 tiiat totaled $150,000 and $137,180. respectively. TDP did not, 

however, disclose this activity on Schedule L (Aggregation P&g&f&y^ Funds), Schedule 

L-A (Itemized Receipts of Levin Funds), or Schedule L-B (It^^zed disbursements of 

Levin Funds). After tiie Audit staff brought this omission^'l^|^ attention, TDP filed 

the missing schedules. In response to the Interim Audit f^ort r^i^nendation, TDP 

stated that its omission of Levin schedules L on its PgSt^lneral rep^^^as madvertent 

and the information for those schedules was enter^ into its complianc^^i^tware for 

inclusion on the Post-General report. Howeverji&e data was omitted whenlthe report was 

filed. M: '9" 

Legal Standard 

A. Reporting. '^Ife^.-., '^PrIf a state, district or local party coirunitt0^'l')?.pmbined armuailTeoeipts and disbursements 

for federal election activity (FEA) total ^,,OO0^j^j||^ duringl^e calendar year, the 

committee must disclose receipts and disbOrsep^eiats'^!^^ funds and Levin funds 

used fbr FEA. 11 CFR,§3Sia^(b)(2). 'W ' y 

B. Contents of L^ii|[^eports^ach report n^g.disclose: 

• the amount of caih)-on-htiid for I^vin fMds at the beginning and end of tiie 

• tit^<t)£ai a^^i i of Levin fund receipts for the reporting period and for the 

calendar year; . 

i^^otal amount c^^vin fi ^ disbursements (including allocation transfers) for 

th^lfi^prting perio^i^d th6 calendar year; and 

• certain^^sactions ;mat require itemization on Schedule L-A (Itemized Receipts 

of Leviti'S^ds) o^Schedule L-B (Itemized Disbursements of Levin Funds) -

itemize receipts and disbursements of $200 or more to or from any person for 

Federal electiciii activities. 11 CFR §300.36 (b)(2). 

Facts and Analysis 

A. Facts 

The Audit staff reviewed TDP's Levin activity and noted tiiat TDP received $150,000 

and disbursed $137,180 during tiie 2012 Post-General reporting period (October 18,2012 

- November 26,2012).^ For this period, the begiiming cash balance was $0 and the 

This was TDP's only Levin activity for the period covered by the audit. 
ending cash balance was $12,820. TDP did not, however, file tiie required Schedules L, 

L-A and L-B until tiie Audit staff brought the omission to TDP's attention during audit 

fieldwork. A TDP representative acknowledged that TDP did not file the schedules due 

to an error during transmission of the reports required for the reporting period. 

TDP maintained a separate bank account for its Levin fiind receipts and disbursements. 

The 2012 Levin fund receipts consisted of transfers from TDP's non-federal account. 

The 2012 Levm fund disbursements consisted mainly of a transfer to TDP's non-federal 

account and payments for voter identification and get-out-tiie-vote programs. 

B. Interim Audit Report & Audit Division Recommendati( 

The Audit staff discussed this issue with TDP representative^^ng the exit conference. 

TDP representatives reiterated tiiat TDP did not disclose thr^^|b.fund activity due to an 

oversight and tiiat as soon as tiie Audit staff notified TpB^f tiiis oip^sion, it filed the 

missing Levin schedules with the Conunission. ^^fe^;. 

The Audit staff recommended that TDP subrriit^a^ additional information ii^^i^inments 

it considered relevant to the matter. ^M-^^ '•y^ 

C. Committee Response to the Interim Audit Repon^u 

In its response, TDP reiterated that an aitended report waAli 

omission. Furtiier, TDP explained tiiat 'i^&]|^^ e Levin fi 

reportmg software for inclusion on the Po^t-G^hl^pi^ort, it 

from the report when the report was filed. "fTDJI^v^so^ 

several years dial it had^ig^&hle Levin activity which 

when notified of the 

a was entered into the 

as inadvertently excluded 

itiat this was the first time in 

contributed to this oversight. 

'•• S^' 

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