Final Audit Report of the 

Commission on the American 

Financial Services Association 

PAG 

(January 1, 2013 - December 31, 2014) 

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 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 American Financial Services Association PAC is a qualified, 

non-party political action committee headquartered in 

Washington, D.C. For more information, see the chart on the 

Committee Organization, p.2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals 

o Contributions from Other 

Political Committees 

o Other Receipts 

Total Receipts 

• Disbursements 

o Transfers to Affiliated/Other 

Party Committees 

o Contributions to Federal 

Candidates/Other Committees 

o Other Disbursements 

Total Disbursements 

$ 820,603 

10,000 

24,380 

S 854,983 

$ 22,000 

735,850 

• 25,304 

S 783,154 

Commission Findings (p. 3) 

• Misstatement of Financial Activity (Finding 1) 

• Excessive Contributions Made to Federal Candidates 

(Finding 2) 

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

Commission on the 

American Financial Services 

Association PAG 

(January 1, 2013 - December 31, 2014) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Audit Hearing 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Commission Findings 

Finding 1. Misstatement of Financial Activity S 

Finding 2. Excessive Contributions Made to Federal Candidates 9 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the American Financial Services Association PAC 

(AFSAPAC), 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 disclosure of individual contributors' occupation and name of employer; 

2. the disclosure of disbursements, debts and obligations; 

3. contributions to candidate committees; 

4. the consistency between reported figures and bank records; 

5. other committee operations necessary to the review. 

Audit Hearing 

AFSAPAC declined the opportunity for a hearing before the Commission on the matters 

presented in this report. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration March 17,1976 

• Audit Coverage January 1,2013 - December 31,2014 

Headquarters Washington, D.C. 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Two 

Treasurer 

• Treasurer When Audit Was Conducted Bill Himpler 

• Treasurer During Period Covered by Audit Bill Himpler 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand ® January 1,2013 S 246,207 

Receipts 

o Contributions from Individuals 820,603 

o Contributions from Other Political 10,000 

Committees 

o Other Receipts 24,380 

Total Receipts S 854,983 

Disbursements 

o Transfers to Affiliated/Other Party 

Committees 

22,000 

o Contributions to Federal Candidates/Other 735,850 

Committees 

o Other Disbursements 25,304 

Total Disbursements $ 783,154 

Cash-on-hand @ December 31,2014 $ 318,036 
Part III 

Summaries 

Commission Findings 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of AFSAPAC's reported financial activity with its 

bank records revealed a misstatement of receipts, disbursements, and the beginning and 

ending cash balances for 2013, and the beginning and ending cash balances for 2014. For 

2013, AFSAPAC understated the beginning cash balance by $113,536, understated 

receipts by $10,081, understated disbursements by $67,905, and understated the ending 

cash balance by $55,712. For 2014, AFSAPAC understated the beginning cash balance 

by $55,712, and the ending cash balance by $53,393. Multiple amendments were filed 

after the beginning of the audit for both 2013 and 2014, but they did not fully correct the 

misstated amounts. 

In response to the Interim Audit Report (lAR) recommendation, AFSAPAC stated that it 

filed amended reports on January 13,2016, which significantly changed the misstated 

amounts. However, these amendments were not filed in direct response to the 

misstatements identified by the audit. Absent filing amended reports to materially correct 

the misstatements, AFSAPAC has not complied with the lAR recommendation. In 

response to the Draft Final Audit Report, AFSAPAC did not provide any additional 

information or documentation concerning this matter. 

The Commission approved a finding that AFSAPAC misstated its financial activity for 

calendar years 2013 and 2014. 

In addition, AFSAPAC's original reports for 2013 and 2014 materially understated 

receipts by $310,683. AFSAPAC attempted to correct these misstatements and filed 

amended reports for each reporting period during the two year election cycle. In 

response to the lAR recommendation, AFSAPAC did not provide any additional 

comments regarding its understatement of receipts on its original reports. In response to 

the Draft Final Audit Report, AFSAPAC did not provide any additional information or 

documentation concerning this matter. 

The Commission approved a finding that AFSAPAC misstated its financial activity in its 

original reports filed for calendar years 2013 and 2014. (For more detail, see p. 5.) 

Finding 2. Excessive Contributions Made to Federal 

Candidates 

AFSAPAC made 11 contributions to seven federal candidate committees that, when 

aggregated with 22 previous contributions, appear to have exceeded the contribution limit 
by $18,000. In response to the exit conference, AFSAPAC redesignated contributions of 

$17,000 related to the finding, and was seeking or had obtained refunds for the remaining 

amount. In response to the lAR reconimendation, AFSAPAC stated that it had filed 

amended reports to properly reflect these redesignations; however, no amended reports 

have been received and the refunds were not discussed. In response to the Draft Final 

Audit Report, AFSAPAC provided a copy of a $500 contribution refund check for the 

remaining excessive contribution amount of $1,000, which left an immaterial amount of 

$500 unresolved. 

The Commission approved a finding that AFSAPAC made excessive contributions to two 

federal candidates totaling $1,000, of which $500 has been refunded to AFSAPAC. (For 

more detail, see p. 9.) 
Part IV 

Commission Findings 

I Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of AFSAPAC's reported financial activity with its 

bank records revealed a misstatement of receipts, disbursements, and the beginning and 

ending cash balances for 2013, and the beginning and ending cash balances for 2014. For 

2013, AFSAPAC understated the beginning cash balance by $113,536, understated 

receipts by $10,081, understated disbursements by $67,905, and understated the ending 

cash balance by $55,712. For 2014, AFSAPAC understated the beginning cash balance 

by $55,712, and the ending cash balance by $53,393. Multiple amendments were filed 

after the beginning of the audit for both 2013 and 2014, but they did not fully correct the 

misstated amounts. 

In response to the Interim Audit Report (lAR) recommendation, AFSAPAC stated that it 

filed amended reports on January 13,2016, which significantly changed the misstated 

amounts. However, these amendments were not filed in direct response to the 

misstatements identified by the audit. Absent filing amended reports to materially correct 

the misstatements, AFSAPAC has not complied with the lAR recommendation. In 

response to the Draft Final Audit Report, AFSAPAC did not provide any additional 

information or documentation concerning this matter. 

The Commission approved a finding that AFSAPAC misstated its financial activity for 

calendar years 2013 and 2014. 

In addition, AFSAPAC's original reports for 2013 and 2014 materially understated 

receipts by $310,683. AFSAPAC attempted to correct these misstatements and filed 

amended reports for each reporting period during the two year election cycle. In 

response to the lAR recommendation, AFSAPAC did not provide any additional 

comments regarding its understatement of receipts on its original reports. In response to 

the Draft Final Audit Report, AFSAPAC did not provide any additional information or 

documentation cpnceming this matter. 

The Commission approved a finding that AFSAPAC misstated its financial activity in its 

original reports filed for calendar years 2013 and 2014. 

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. Misstatement of Financial Activity- Most Recent Reports Filed Prior to the 

Audit 

1. Facts 

As part of this audit, the Audit staff reconciled AFSAPAC's reported financial 

activity with its bank records for calendar years 2013 and 2014. The following charts 

outline the discrepancies between AFSAPAC's disclosure reports and its bank 

records. Succeeding paragraphs explain why the discrepancies occurred. 

2013 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2013 

$132,671 $246,207 $113,536 

Understated 

Receipts $380,743 $390,824 $10,081 

Understated 

Disbursements $293,006 $360,911 $67,905 

Understated 

Ending Cash Balance 

@ December 31,2013 

$220,408 $276,120 • $55,712 

Understated 

The beginning cash balance was understated by $113,536 and the discrepancy is 

unexplained, but it likely resulted from prior period misstatements. 

The understatement of receipts resulted from the following: 

• Contributions from individuals, amount not reported (net) $5,500 

• Unreported other receipts 10,775 

• Unexplained difference (6.1941 

Net Understatement of Receipts $10.081 

The understatement of disbursements resulted from the following: 

• Contributions to political committees.not reported $48,100.. 

• Contribution refunds not reported 5,000 

• Bank fees not reported 2,485 

• Disbursement to Sponsor's account not reported 10,775 

• Unexplained difference 1.545 

Understatement of Disbursements $67.905 
2014 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2014 

$220,408 $276,120 $55,712 

Understated 

Receipts $462,985 $464,159 $1,174 

Understated 

Disbursements $418,751 $422,243 $3,492 

Understated 

Ending Cash Balance 

® December 31,2014 

$264,642 $318,036 $53,394 

Understated 

The $53,394 understatement of the 2014 ending cash balance resulted mostly from 

reporting discrepancies noted above from the prior year. 

AFSAPAC filed amended reports on January 13,2016, subsequent to the audit 

notification letter, dated November 18,2015. These reports disclosed a cash increase 

of $42,915 for 2013. However, the amendments only minimally corrected the 

reporting discrepancies for 2013, and the beginning and ending cash balances for 

2014 remained materially misstated. 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the misstatements for 2013 and 2014 with AFSAPAC s 

representatives during the exit conference and provided copies of relevant work 

papers detailing the misstatements. In response, an AFSAPAC representative stated 

that it filed amended reports to correct the misstatements; however, the amendments 

were filed after AFSAPAC was notified of the audit and the amounts were still 

misstated as described in the preceding paragraph. 

The lAR recommended that AFSAPAC amend its disclosure reports to correct the 

misstatements for both 2013 and 2014. In addition, the lAR recommended that 

AFSAPAC amend its most recently filed report to correct the cash-on-hand balance 

with an explanation that the change resulted from a prior period audit adjustment. 

Further, that AFSAPAC should reconcile the cash balance of its most recent report to 

identify any subsequent discrepancies that may affect the adjustment recommended 

by the Audit staff. 

3. Committee Response to Interim Audit Report 

In response to the lAR recommendation, AFSAPAC stated that it filed amended 

reports on January 13,2016, which significantly changed the misstated amounts and 

that the reduction in the misstated amounts evidences AFSAPAC's corrective action. 

AFSAPAC also stated that the misstatements were all timing related, due to staff 

limitation and difficulty with the FEC software. 

As stated in the lAR, the amendments filed by AFSAPAC prior to the issuance of the 

TAR did not sufficiently correct the 2013 and 2014 misstatements. The following 

misstatements remain in the amended reports. For 2013, the beginning cash balance, 

receipts, disbursements, and ending cash balance were understated by $70,621, 
$9,981,67,905 and $12,697, respectively. For 2014, AFSAPAC understated its 

beginning cash balance by $12,697, and its ending cash balance by $10,379. The 

Audit staff was able to verify certain problems in filing reports mentioned by 

AFSAPAC, but they were resolved quickly. Absent the filing of amended reports to 

correct the misstatements above, AFSAPAC has not complied with the lAR 

recommendation. 

4. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that AFSAPAC amended its reports 

subsequent to audit notification and corrected some of the identified misstatements. 

However, AFSAPAC did not file amended reports to correct the misstatement of 

financial activity for the calendar years 2013 and 2014, nor did it correct the most 

recent disclosure report to show the adjusted cash-on-hand balance with a 

corresponding explanation. 

5. Committee Response to the Draft Finai Audit Report 

AFSAPAC did not provide any additional information or documentation in its 

response to the Draft Final Audit Report. 

Commission Conclusion 

On June 22,2017, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that 

AFSAPAC misstated its financial activity for calendar years 2013 and 2014. 

The Commission approved the Audit staffs recommendation. 

B. Misstatement of Financial Activity - Original Reports Filed 

1. Facts 

In addition to reconciling AFSAPAC's most recent reports (filed prior to audit 

notification) with its bank statements, the Audit staff also compared its originally 

filed reports with its bank statements. The purpose of this additional reconciliation 

was to identify the degree to which AFSAPAC had misstated its original filings. 

From this review, the Audit staff determined that AFSAPAC understated its receipts 

by $310,683, for the two-year period that ended December 31,2014. However, as 

shown in the charts above, under discrepancies for receipts, AFSAPAC filed 

amendments that corrected all but $11,255 ($10,081 + $1,174) of this receipt 

understatement. 

The Audit Staff also noted that AFSAPAC filed multiple amended reports for every 

filing period for 2013 and 2014, filing a total of 151 amendments. For example, for 

the August 2013 monthly report AFSAPAC filed amended reports three times in 

2014, two times in 2015, and one time in 2016. 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed AFSAPAC's understatement of receipts contained in the 

original reports it filed at the exit conference. In response, an AFSAPAC 
representative made a rebuttal to the potential understatement finding by providing 

information about the corrections made in its amended filings. The Audit staff 

explained to the representative that amendments have no impact on the finding since 

the finding is based upon the original reports filed. 

The lAR recommended that AFSAPAC provide any additional comments it deemed 

necessary with respect to this matter. 

3. Committee Response to Interim Audit Report 

AFSAPAC did not provide any comments regarding this matter. 

4. Draft Final Audit Report 

The Draft Final Audit Report restated the finding from the Interim Audit Report that 

AFSAPAC, based on the filing of its original reports, understated receipts by 

$310,683. The recommendation was also restated, and requested AFSAPAC to 

provide any additional comments it deemed necessary with respect to this matter. 

5. Committee Response to the Draft Final Audit Report 

AFSAPAC did not provide any additional information or documentation in its 

response to the Draf) Final Audit Report. 

Commission Conclusion 

On June 22,2017; the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that 

AFSAPAC misstated its financial activity in its original reports filed for calendar years 

2013 and 2014. 

The Commission approved the Audit staffs recommendation. 

Finding 2. Excessive Contributions Made to Federal 

Candidates 

Summary 

AFSAPAC made 11 contributions to seven federal candidate committees that, when 

aggregated with 22 previous contributions, appear to have exceeded the contribution limit 

by $18,000. In response to the exit conference, AFSAPAC redesignated contributions of 

$17,000 related to the finding, and was seeking or had obtained refunds for the remaining 

amount. In response to the lAR recommendation, AFSAPAC stated that it had filed 

amended reports to properly reflect these redesigilations; however, no amended reports 

have been received and the refunds were not discussed. In response to the Draft Final 

Audit Report, AFSAPAC provided a copy of a $500 contribution refund check for the 

remaining excessive contribution amount of $1,000, which left an immaterial amount of 

$500 unresolved. 
10 

The Commission approved a finding that AFSAPAC made excessive contributions to two 

federal candidates totaling $1,000, of which $500 has been refunded to AFSAPAC. 

Legal Standard 

A. Contribution Defined. A gift, subscription, loan (except when made in accordance 

with 11 CFR §§100.82 and 100.83), advance, or deposit of money or anything of value 

made by any person for the purpose of influencing any election for Federal office is a 

contribution. 11 CFR § 100.52(a). 

B. Contribution Limits. No multicandidate political committee shall make contributions 

to any candidate and his authorized political committees with respect to any election for 

Federal office which, in the aggregate, exceed $5,000. 52 U.S.C. §30116 (a)(l)(2)(A). 

C. Definition of Muiticandidate Committee. 

• A multicandidate committee is a political committee (other than an authorized 

candidate committee) that has satisfied the following 3 requirements: 

• It has been registered under the federal election campaign law for at least 6 

months. 

• It has received contributions from more than 50 contributors. 

• It has made contributions to at least 5 federal candidates. (This last 

requirement does not apply to state party committees.) 52 U.S.C. 

§30116(a)(4). 

• A political committee affiliated with another political committee that has already 

qualified as a multicandidate committee automatically becomes a multicandidate 

committee by virtue of that affiliation. But it shares the contributions limits with its 

affiliated committee. 52 U.S.C. §30116(a)(5). 

Facts and Analysis 

A. Facts 

The Audit staff reviewed AFSAPAC's reported contributions made to federal candidate 

committees totaling $492,000. Of this amount, 11 contributions to seven federal 

candidate committees when aggregated with 22 other contributions appear to exceed the 

contribution limit by $18,000. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff presented'the excessive contribution matter to 

AFSAPAC representatives and provided a schedule of potentially excessive 

contributions. The Audit staff explained that the excessive contributions resulted from 

aggregation with other contributions made to the same committees for the same election. 

The Audit staff asked AFSAPAC's representatives to provide an explanation and 

documentation for any item on the schedule that they believed to be incorrect. The 

representatives stated that they would review the items and provide an appropriate 

response. 
11 

In response to the exit conference, AFSAPAC's representative did not mention any 

corrections to the schedule of excessive contributions, but did provide the Audit staff, 

redesignation letters that were sent out to six of the excessive recipient committees for 

17,000 of the excessive $18,000 amount.^ For the remaining excessive contributions, it 

was said that a refund had been received and another refund was being sought. 

The lAR recommended AFSAPAC amend its reports to properly report the elections for 

which the contributions totaling $17,000 were redesignated and provide evidence for the 

$1,000 in contribution refund checks and their deposit, or provide evidence (or make 

other comments) that any of the excessive contribution amounts were not excessive. 

C. Committee Response to Interim Audit Report 

In response to the lAR recommendation, AFSAPAC stated it had redesignated and 

amended their reports for excessive contributions totaling $18,000 but the schedule only 

addressed $ 17,000 of the finding amount.^ In addition, no amended reports were 

received to reflect the redesignation for any of the amounts, nor did AFSAPAC mention 

or provide copies of any refund checks for the $1,000 in remaining excessive 

contributions. AFSAPAC has clarified it did not make excessive contributions of 

$17,000. Absent further evidence of contribution refunds obtained by AFSAPAC, the 

remaining $1,000 is considered an excessive contribution made by AFSAPAC. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that AFSAPAC did not make excessive 

contributions of $17,000. However, without further evidence of contribution refunds 

obtained by AFSAPAC, the remaining $1,000 is considered an excessive contribution 

made by AFSAPAC. 

E. Committee Response to Draft Finai Audit Report 

In response to the Draft Final Audit Report, AFSAPAC provided a copy of a $500 

contribution refund check, which left an immaterial amount of $500 unresolved. 

Commission Conclusion 

On June 22,2017, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that 

AFSAPAC made excessive contributions to two federal candidates totaling $1,000, of 

which $500 has been refunded to AFSAPAC. 

The Commission approved the Audit staffs recommendation. 

' The committee provided redesignation letters for $18,000 but one of the letters redesignated a 

contribution for $1,000 to a different election that was not found to be excessive by the Audit staff, leaving 

$ 1,000 that was not redesignated or for which refunds were not received.