FEDERAL ELECTION COMMISSION 

WASHINGTON, O.C. 20463 

August 10,2016 

MEMORANDUM 

To: 

Through: 

From:. 

The Commission 

Alec Palmer 

Staff Director 

Patricia C. Orrock M,jpca 

Chief Compliance Officer 

Thomas E. Hintermister-<<\ 

Assistant Staff Director 

Audit Division 

Rickida Morcomb 

Audit Manager 

By: 

Subject: 

A'knea Smith 

Lead Auditor 

Resubmission: Audit Division Recommendation Memorandum on the 

Utah Republican Party (URP) (A13-06) 

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

the Audit staff is resubmitting its recommendations below and discusses the findings in 

the attached Draft Fiiud Audit Report (DFAR). The original Audit Division 

Reconunendation Meiriorandum was circulated August 9,2016, and was withdrawn jfor 

technical edits. The Qfiice of General Counsel has reviewed this memorandum and 

concurs with the recoirunendations. 

Finding 1. Receipt of Prohibited Contributions 

URP deposited five apparent prohibited contributions totaling $23,600 into its 

federal account. Prior to notification of the audit, URP realized the questionable 

funds were prohibited and subsequently transferred $23,600 into a non-federal 

account, albeit in an untimely manner to correct this matter. In response to the 

Interim Audit Report (lAR) recommendation, URP did not provide any 

documentation to demonstrate the funds were transferred within thirty days of the 

date on which it discovered the contributions were prohibited and stated feat it had 

long since rem^ied fee issue. In response to fee DFAR, URP again stated the 

issue identified wife this finding was remedied. 
The Audit staff recommends that the Commission find that URP deposited in its 

federal account prohibited contributions, totaling $23,600, that were untimely 

resolved. 

Finding 2. Receipt of Contributions that Exceeds Limits 

URP accepted contributions from three individuals that exceeded the contribution 

limits by $42,925. Prior to notification of the audit, URP realized that these 

contributions exceeded the limits and subsequently transferred the excessive 

portion of the contributions to a non-federal account, albeit untimely. In response 

to the lAR recommendation, URP stated it has long since remedied the issue. 

URP did not provide any documentation to demonstrate the funds were transferred 

within 60 days of receiving the excessive contributions. In response to the DFAR, 

URP again stated the issue identified with this finding was remedied. 

The Audit staff recommends that the Commission find that URP accepted 

contributions that exceeded the limits by $42,925 and the funds were untimely 

resolved with a transfer to a non-federal account. 

Findings. Misstateinent of Financial Activity 

The Audit staff determined that for 2011, URP had a misstatement of financial 

activity for receipts totaling $107,013 and an overstatement of ending cash-onhand balance totting $ 10,028. For 2012, URP understated its receipts and 

disbursements by $114,582 and $96,176, respectively. In response to the lAR 

recommendation, URP amended its disclosure reports to materially correct the 

misstatements for both 2011 and 2012. In response to the DFAR, URP stated it 

already amended its disclosure reports. 

The Audit staff recommends that the Commission fmd that URP misstated its 

financial activity for the calendar years 2011 and 2012. 

Finding 4. Recordkeeping for Employees 

For the period covered by the audit, URP did not maintain any monthly payroll 

logs or equivalent records, as required, to document the percentage of time each 

employee spent in cormection with a federal election. For 2011 and 2012, URP 

miade payments to employees totaling $285,242 for which URP did not maintain 

monthly payroll logs. This amount includes payroll paid to URP employees as 

follows. 

A. Employees reported on Schedule IT4 (Disbursements for Allocated 

Federal/Non-Federal Activity) and paid with federal and non-federal funds 

during the same month (totaling $269,776); 

B. Employees reported on Schedule H4 and also paid with 100 percent nonfederal funds during the same month (totaling $962); and 

C. Employees paid exclusively with non-federal funds in a given month 

(totaling $14,504). 

In response to the audit, URP provided an affidavit from the executive director 

stating that during the period covered by the audit the identified employees did not 

spend more than 25 percent of their compensated work time on activities in 
connection with a federal election. In addition, URP stated it did not maintain 

monthly payroll logs during the 2012 election cycle but intends to maintain such 

payroll logs in the future. In response to the lAR recommendation and the DFAR, 

U)^ stated it had resolved the issue. 

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

monthly payroll logs totaling $285,242, as required, to document the percentage of 

time each employee spent in connection with a federal election. 

Finding 5. Reporting of Debts and Obligations 

URP failed to disclose debts and obligations owed to five vendors and one staff 

member totaling $205,323 on Schedule D (Debts and Obligations). In response to 

the LAR recommendation, URP filed amended reports to disclose $101,711 of the 

$111,191 debts wd obligations owed to the five vendors. However, URP did not 

materially correct the reporting of debts and obligations since it did not disclose 

the $94,132 debt owed to the staff member. URP disagreed that these items owed 

to the staff member should be considered as debt. 

URP stated it was not aware of the staff member's expenses until after the staff 

member provided receipts and/or expense reports to Ae treasurer. URP's regular 

practice was to issue reimbursements within a calendar week of receipt of the 

expense reimbursement form. URP did not provide any documentation 

demonstrating when it received the expense reimbursement forms from the staff 

member in question. Nor did URP provide the staff member's credit card billing 

statements with the closing date of Ae billing cycle. In response to the DFAR, 

URP stated it already amended its disclosure reports as recommended by the Audit 

staff. 

The Audit staff reconunends that the Conunission find that URP failed to disclose 

debts and obligations to five vendors and one staff member totaling $205,323 on 

Schedule D. 

Finding 6. Apparent Excessive Contribution-Staff Advance 

One staff member received reimbursements for credit card expenditures totaling 

$46,904 that appear to have been reimbursed untimely. URP did not provide the 

staff member's credit card billing statements to support that the reimbursements 

were irmde within 60 days after the closing date of the billing statement. As such, 

of the $46,904 untimely reimbursements to the staff member, the Audit staff 

considered $28,637 as excessive contributions from the staff member until the 

expenses were reimbursed. 

In response to the JAR recommendation and the DFAR, URP stated it strongly 

disagreed with the Audit staffs position because URP was not aware of the 

reimbursable expenses when they were incurred. URP only became aware of the 

staff member's reimbursable expenses after he presented receipts and/or expense 

reports to the treasurer, which frequently occuired after the underlying expenses 

were incurred. URP further noted that its regular practice was to issue staff 

reimbursements within a calendar week of presentation of such reports. Given this 
4 

practice, URP feels the Commission should not consider these expenses as 

contributions as of the date they were incurred. 

The Audit staff recommends that the Commission find that URP accepted 

contributions fix>m a staff member that exceeded the limits by $28,637 until the 

expenses were reimbursed by URP. 

URP did not request an audit hearing. 

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

30 days of the Commission's vote. 

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

Memorandum will be placed on the next regularly scheduled open session agenda. 

Documents rekded to this audit report can be viev^ in the Voting Ballot Matters folder. 

Should you have any questions, please contact A'knea Smith or Rickida Morcomb at 694-

1200. 

Attaclunem: 

- Draft Final Audit Report of the Audit Division on the Utah Republican Parly 

cc: Offiice Of General Counsel 
Draft Final Audit Report of the 

Audit Division on the Utah 

Republican Party 

(Januaiy 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 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 Utah Republican Party is a state party committee 

headquartered in Salt Lake City, Utah. For more information, see 

the chart on the Committee Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals 

and Political Committees 

o Transfers from Affiliated and 

Other Political Committees 

o Transfers from Non-Federal 

Accounts 

o Other Receipts 

Total Reraipts 

•. Disbursement 

o Operating Expenditures 

o Foetal Election Activity 

o Transfers to Affiliated and Other 

Political Committees 

o Other Disbursements 

Total Disbursements 

$ 7S3,6S0 

1,119,025 

880,121 

114,894 

S 2,867,690 

$2,388,485 

390,806 

9,152 

38,475 

$ 2,826,918 

Findings and Recommendations (p. 3) 

• Receipt of Prohibited Contributions (Finding 1) 

• Receipt of Contributions that Exceed Limits (Finding 2) 

• Misstatement of Financial Activity (Finding 3) 

• Recordkeeping for Employees (Finding 4) 

• Reporting of Debts and Obligations (Finding 5) 

• Apparent Excessive Contribution - Staff Advance (Finding 6) 

S2U.S.C. §30111(b). 
Draft Final Audit Report of the 

Audit Division on the 

Utah Republican Party 

(Januaiy 1, 2011 - December 31, 2012) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Commission Guidance 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations ' 

Finding 1. Receipt of Prohibited Contributions S 

Finding 2. Receipt of Contributions that Exceeds Limits 8 

Findings. Misstatement of Financial Activity 10 

Finding 4. Recordkeeping for Employees 13 

Findings. Report ofDebts and Obligations 14 

Finding 6. Apparent ^cessive Contribution- Staff Advance 18 
Parti 

Baekgrovnd 

Authority for Audit 

This report is based on an audit of the Utah Republican Party, 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 conunittee that is required to file a 

report under S2 U.S.C. §30104. Prior to conducting any audit under this subsection, the 

Commission must perform an internal review of reports filed by selected committees to 

determine if the reports filed by a particular committee meet the threshold requirements 

for substantial compliance with the Act. 52 U.S.C. §30111 (b). 

Scope of Audit 

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

factors and as a result, this audit examined: 

1. the receipt of excessive contributions and loans; 

2. the receipt of contributions from prohibited sources; 

3. the disclosure of contributions received; 

4. the disclosure of disbursements, debts and obligations; 

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

6. the consistency between reported figures and bank records; 

7. the completeness of records; and 

8. other committee operations necessary to the review. 

Commission Guidance 

Request for Early Commission Consideration of a Legal Question 

Pursuant to the Commission's "Policy Statement Establishing a Program for Requesting 

Consideration of Legal Questions by the Commission," several state party committees 

unaffiliated with URP requested early consideration of a legal question raised during 

audits covering the 2010 election cycle. Specifically, the Commission addressed whether 

monthly time logs under 11 CFR § 106.7(d)(1) were required for employees paid with 100 

percent federal funds. 

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

committees to keep a monthly log for employees paid exclusively wi^ federal funds. 

Exercising its prosecutorial discretion, however, Ae 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 URP representatives of the payroll requirement and 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 URP employees paid with 

100 percent federal funds and reported as such. 
Part II 

Overview of Committee 

Committee Organization 

ImportiBiit Dates 

• Date of Registration March 16.1978 

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

Headquarters Salt Lake City, Utah 

Bank Information 

• Bank Depositories . One 

• . Bank Accounts Four Federal and Two Non-Fnieral 

Treasurer 

• Treasurer When Audit Was Conducted' Dave Crittenden (9/20/2013 -.5/05/14) 

Cameron Robinson (5/06/14 - Present) 

• Treasurer During Period Covered by Audit Mike McGauley 

MaAageriient information ' • 

• Attended Commission Campaign Finance 

Seminar 

Yes 

• . Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staif and Treasurer 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand @ January.l, 2011 $ 421 

R^ipts 

o Contributions fh}m Individuals and Political 753,650 

Committees 

o Transfers from Affiliated and Other Political 1,119,025 

Committees 

o Transfers from Non-Federal Accounts 880,121 

o Other Receipts 114,894 

Total Kedeipts $2,867,690 

Disbursements 

o Operating Expenditures 2,388.485 

o Federal Election Activity 390,806 

o .Transfers to Affiliates arid Other Political 9,152 

Committees 

o Other Disbursements 38.475 

Totai Disbursements $2,826,918 

Cash-on-hand @ December 31,2012 $ 41,193 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Receipt of Prohibited Contributions 

During audit fieldwork, a review of contributions revealed that URP deposited five 

apparent prohibited contributions totaling $23,600 into its federal account. URP 

transferred $23,600 into a non-federal account, albeit in an untimely manner, to correct 

this matter. In response to the Interim Audit Report recommendation, URP did not 

provide any documentation to demonstrate the funds were transferred within thirty days 

of the date on which it discovered the contributions were prohibited. URP's counsel 

stated that URP has long since remedied the issue identified for. this finding. The Audit 

staff concludes that URP untimely resolved prohibited contributions totaling $23,600. 

(For more detail, see p. S) 

Finding 2. Receipt of Contributions that Exceeds Limits 

During audit fieldwork, the Audit staff identified apparent excessive contributions from 

three individuals that exceeded contribution limits by $42,925. These errors occurred as 

a result of URP not resolving the excessive portion of the contributions by issuing a 

refund to the contributor or making a transfer to a non-federal account in a timely 

manner. Subsequently, URP transferred the excessive portion of the contributions to a 

non-federal account, albeit untimely. In response to the Interim Audit Report 

recommendation, URP did not provide any documentation to demonstrate the funds were 

transferred within sixty days of receiving the excessive contributions. URP's counsel 

stated that URP has long since remedied the issue identified for this finding. The Audit 

staff concludes that URP untimely resolved excessive contributions totaling $42,925. 

(For more detail, see p. 8) 

Finding 3. Misstatement of Financial Activity 

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

records revealed a misstatement of financial activity for receipts in 2011 totaling 

$107,013 and an overstated ending cash-on-hand balance totaling $10,028. In addition, 

URP had a misstatement of receipts and disbursements for 2012. In 2012, URP 

understated its receipts and disbursements by $114,582 and $96,176, respectively. In 

response to the Interim Audit Report recommendation, URP amended its disclosure 

reports to materially correct the misstatements for both 2011 and 2012 reports. 

(For more detail, see p. 10) 

Finding 4. Recordkeeping for Employees 

During audit fieldwork, the Audit staff identified that URP 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 
4 

payments to URP employees totaling $285,242 for which URP did not maintain monthly 

payroll logs. This consisted of $269,776 for which payroll was allocated with federal and 

non-federal funds, and $15,466 for which payroll was exclusively paid with non-federal 

funds. In response to the Interim Audit Report recommendation, URP's counsel stated 

that URP has long since remedied the issue identified for this finding. URP has complied 

with the Interim Audit Report recommendation by implementing a plan to maintain 

monthly payroll logs in the future. 

(For more detail, see p. 13) 

Finding 5. Reporting of Debts and Obligations 

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

obligations to five vendors and one staff member totaling $205,323 oii Schedule D (Debts 

and Obligations). In response to the Interim Audit Report recommendation, URP filed 

amended reports to disclose debts and obligations reg^ing the five vendors totaling 

$101,710.79. However, URP did not disclose the debt totaling $94,1.32 for the staff 

member because it disagrees that these items should be considered as debt As a result 

URP did not materially correct the reporting of debts and obligations. 

(For more detail, see p. 14) 

Finding 6. Apparent Exce.88ive Contribution-Staff Advance 

One URP staff member received reimbursements for credit card expenditures totaling 

$46,904 that appear to have been reimbursed untirnely. URP did not provide the staff 

member's credit card billing statements to support the reimbursements were made within 

60 days after the closing date of the billing statement. In response to the Interim Audit 

Report recommendatipn, URP^ted it strongly disagrees with this assertion because 

URP was not aware of the reimbursable expen^ when they were incurred. URP did not 

provide any documentation to demonstrate the reimbursements were made within the 

proper time limitations. As such, of the $46,904 untimely reimburseinents to the staff 

member, the Audit staff considers $28,637 as excessive contributions from the staff 

member lintil the. expenses were reimbursed. No further action will be taken since the 

staff member was eventually reimbursed for the expenses. 

(For hfiore detail, see p. 18) 
Part IV 

Findings and Recommendations 

I Findiiig 1. Receipt of Prohibited Contributions . 

Summary 

During audit fieldwork, a review of contributions revealed that URP deposited five 

apparent prohibited contributions totaling $23,600 into its federal account. URP 

transferred $23,600 into a non-federal account, albeit in an untimely manner, to correct 

this matter. In response to the Interim Audit Report recoinmendation, URP did not 

provide any documentation to demonstrate the fimds were transferred within thirty days 

of the date on which it discovered the contributions were prohibited. URP's counsel 

stated that.URP has lorig since remedied the issue identified for this finding. The Audit 

staff concludes that URP untimely resolved prohibited contributions totaling $23,600. 

Legal Standard 

A. Receipt of Prohibited Corporate.Contributions. Political committees may not 

accept contributions from, the general treasury funds of corporations. This prohibition 

applies to any type of corporations including a non-stock corporation, as incorporated 

membership organization, and an incorporated membership organization, and an 

incorporated cooperative. S2 U.S.C. §30118. 

B. Receipt of Prohibited Contributions T General Prohibition. Candidates and 

committees may riot accept contributions (in the form of money, in-kind contributions 

or loans): 

1. In the name of another: or 

2. Frohfi the treasury funds of the following prohibited sources: 

• Corporations (this means any incorporated organization, including a non-

- stock corporation, an incorporated membership organization, and an 

incorporated cooperative); 

• Labor Organizations; or 

• National Banks; 

3. Federal Government Contractors (including partnerships, individuals, and sole 

proprietors who have contracts with the federal government); and 

4. Foreign Nationals (including individuals who are not U.S. citizens and not 

lawfully admitted for permanent residence; foreign governments and foreign 

political parties; and groups organized under the laws of a foreign country or 

groups whose principal place of business is in a foreign country, as defined in 

22U.S.C. §611(b)). 52 U.S.C. §§30118, 30119,30121, and 30122. 

C. Questionable Contributions. If a committee .receives a contribution that appears to 

be prohibited (a questionable contribution), it must follow the procedures below: 
1. Within 10 days after the treasurer receives the questionable contribution, the 

committee must either: 

• Return the contribution to the contributor without depositing it; or 

• Deposit the contribution (and follow the steps below). 11 CFR 

§10a.3(b)(l). 

2. If the committee deposits the questionable contribution, it may not spend the 

funds and must be prepared to refund them. It must therefore maintain 

sufficient funds to make the refunds or establish a separate account in a 

campaign depository for possibly illegal contributions. 11 CFR § 103.3 (b)(4). 

3. The committee must keep a written record explaining why the contribution 

may be prohibited and must include this information v^en reporting the 

receipt of the contribution. 11 CFR §103.3(b)(S). 

4. Within 30 days of the treasurer's receipt of the questionable contribution, the 

committee must make at least one written or oral request for evidence that the 

contribution is legal. Evidence of legality includes, for example, a written 

statement from the contributor explaining why the contribution is legal or an 

oral explanation that is recorded by the committee in a memorandum. 11 CFR 

§103.3(b)(l). 

5. Within these 30 days, the committee must either: 

• Confirm the legality of the contribution; or 

• Refund the contribution to the contributor and note the refund on the 

report covering the period in which the refund was made. 11 CFR 

§103.3(b)(l). 

D. Federal v. Nonfederal Account. The federal account may contain only those funds 

that are permissible under the federal election law; the nonfederal account may 

contain funds that are not permitted under the federal law (but are legal under state 

law), such as contributions that exceed the limits of the federal law and contributions 

from prohibited sources, such as corporations and labor organizations. 11 CFR 102.S 

(a)(l)(i)and(a)(3). 

I 

E. Late Discovery of Prohibited Contribntion. If the treasurer in exercising his or her 

responsibilities under 11 CFR 103.3(b) determined that at the time a contribution was 

received and deposited, it did not appear to be made by a corporation, labor 

organization, foreign national or F^eral contractor, or made'in the name of another, 

but later discovers that it is illegal based on new evidence not available to the political 

committee at the time of receipt and deposit, the treasurer shall refund the 

contribution to the contributor within thirty days of the date on which the illegality is 

discovered. If the political committee does not have sufficient funds to refund the 

contribution at the time of the illegality is discovered, the political committee shall 

make the refund from the next funds it receives. 11 CFR 103.3(b)(2). 
Facts and Analysis 

A. Facta 

During audit fieldworic, the Audit staff reviewed contributions to URP from other 

political committees and identified five contributions totaling $23,600 from apparent 

prohibited sources. Each of these contributions appeared to be from corporations; 

however, the Audit staff could not verify the corporate tax status with the Utah Secretary 

of State. It is noted that the state of Utah allows unlimited contributions from 

corporations. In accordance with 11 CFR § 103.3(b)(4), URP deposited these 

questionable funds into its federal account and maintained sufficient federal funds to 

refund them. 

Prior to notification of the audit, URP realized the questionable funds were in fact 

prohibited contributions that were mistakenly deposited into the federal account and 

subsequently transferred $20,000 of the $23,600 in prohibited contributions to a nonfederal account. The transfer was made more than thirty days from discovering the 

contributions were prohibited pursuant to 11 CFR § 103.3(b)(2). Therefore, at the 

conclusion of audit fieldwork, the $20,000 transfer was considered untimely resolved and 

the amount of prohibited contributions totaling $3,600 remained unresolved for two of 

the contributors. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with URP representatives during the exit conference 

and provided a schedule of the ^)parent prohibited contributions identified in the review: 

URP representatives, stated that some of the prohibited contributions had already been 

resolved and that the supporting documents have already been provided to the Audit staff. 

In response to the exit conference, URP representatives reiterated that a $20,000 transfer 

had already been made to a non-federal account to resolve three prohibited contributions. 

For the remaining prohibited amount, URP stated h would disgorge the $3,600 at its 

earliest opportunity to comply with the Audit staffs recommendation. URP transferred 

the remaining $3,600 prohibited contributions from the federal account to a non-federal 

account on August 11,20IS. The transfers, totaling $23,600, were untimely. 

The Interim Audit Report recommended URP demonstrate that transfers totaling $23,600 

to resolve the impermissible contributions were made within thirty days of the date on 

which it discovered the contributions were prohibited. Absent such a demonstration, the 

Audit staff would conclude that URP transferred the prohibited contributions totaling 

$23,600 in an untimely manner. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit. Report recommendation, URP's counsel stated that URP 

has long since remedied the issue identified for this finding. URP did not provide any 

documentation to demonstrate the funds were transferred within thirty days of the date on 
which it discovered the contributions were prohibited. The Audit staff concludes that 

URP untimely resolved prohibited contributions totaling $23,600 

I Finding 2. Receipt of Contributions that Eareeeds Limits | 

Summary 

During audit fieldwork, the Audit staff identified apparent excessive contributions from 

three individuals that exceeded contribution limits by $42,925. These errors occurred as 

a result of llRP not resolving the excessive portion of the contributions by issuing a 

refund to the contributor or making a transfer to a non-federal account in a timely 

manner. Subsequently, URP transferred the excessive portion of the cpntributions to a 

non-federal account, albeit untimely. In response to the Interim Audit Report 

recommendation, URP did not provide any documentation to demonstrate the funds were 

transferred within 60 days of receiving the excessive contributions. URP's counsel stated 

that URP has long since remedied the issue identified for this finding. The Audit staff 

concludes that URP untimely resolved excessive contributions totaling $42;92S. 

Legal Standsurd 

A. Party Committee Limits. For the 2012 election cycle, a party committee may not 

receive more than a total of $10,000 per year from any one contributor. 52 U.S.C. 

§30116(a)(lXD) and 11 CFR §110.9. 

B. Handling Contributions That Appear Excessive. If a committee receives a 

contribution that appears to be excessive, the committee must either: 

1. Return the questionable check to the donor; or 

2. Deposit the check into its federal account.and: 

• Keep enough money in the account to cover all potential refunds; . 

. • Keep a written record explaining why the contribution may be illegal; 

• Include the explanation on Schedule A if the contribution has to be itemized 

before its legality is established; 

• Seek a reattribution of the excessive portion, following the instructions provided 

in Commission regulations (see below for explanation of reattribution); and 

• If the committee does not receive a proper reattribution within 60 days after 

receiving the excessive contribution, refund the excessive portion to the donor. 

11 CFR §§103.3(b)(3),(4) and (5) and 110.I(k)(3)(ii)(B). 

C. Joint Contributions. Any contribution made by more than one person (except for a 

contribution made by a partnership) must include the signature of each contributor on the 

check or in a separate writing. A joint contribution is attributed equally to each donor 

unless a statement indicates that the funds should be divided differently. 11 CFR 

§Ild.l(k)(l)and(2). 

D. Reattribution of Excessive Contributions. Commission regulations permit 

committees to ask donors of excessive contributions whether they had intended their 

contribution to be a Joint contribution from more than one person and whether they would 
like to reattribute the excess amount to the otfier contributor. The committee must 

inform the contributor that: 

1. The reattribution must be signed by both contributors; 

2. The reattribution must be received by the committee within 60 days after the 

committee received the original contribution; and 

3. The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(k)(3). 

Within 60 days after receiving the excessive contribution, the committee must either 

receive the proper reattribution or refund the excessive portion to the donor. 11 CFR 

§§ 103.3(b)(3) and 110.1(k)(3)(ii)(B). Further, a political committee must retain written 

records concerning the reattribution in order for it to be effective. 11 CFR §110.1 (1)(S). 

Facts and Anal]^ 

A. Facts 

The Audit staffs review of contributions indicated that URP deposited apparent 

excessive contributions from three individuals totaling $42,925 into its fikleral account. 

These excessive contributions were a result of URP not refunding or transferring the 

excessive portion to a non-federal account in a timely manner. URP did maintain 

sufficient funds in its federal accounts to make the refunds during the audit cycle. The 

three individuals each made the contributions in 2012 with checks imprinted with single 

accountholders. It is unclear if the contributors intended their contributions to be for the 

URP's federal or non-federal accounts. 

Prior to notification of the audit, URP realized the contributions were excessive. URP 

reported the $42,925 as federal contributions on Schedules A as well as debt to the nonfederal account on Schedule D. In order to resolve the excessive portions, URP 

subsequently made transfers totaling $42,925 to a non-federai account in January and 

April 2014. However, the transfers were required to be made within 60 days of receipt of 

the original contributions and are therefore considered untimely. 

I 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter at the exit conference and provided URP 

representatives a schedule, of the apparent excessive contributions. URP representatives 

stated the contributions were deposited into the federal account but should have been 

deposited into a non-federal account. Once discovered, URP reported the transactions as 

debt owed to a non-federal account until the transfers were made. URP representatives 

added that documentation had already been provided to the Audit staff. 

In response to the exit conference, URP representatives stated they have already taken 

corrective action and do not believe any further remedial measures are needed at this 

time. Supporting documentation was also provided. The Audit staff acknowledges the 

subsequent transfers totaling $42,925 to a non-federal account as a remedy for the 

excessive amount was made in an untimely manner. 
10 

The Interim Audit Report recommended URP demonstrate that the funds were transferred 

timely (within 60 days of receiving the excessive contribution). Absent such a 

demonstration, the Audit staff would conclude that URP transferred the $42,925 

excessive contributions in an untimely manner. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, URP's counsel stated that URP 

has long since remedied the issue identified for this finding. URP did not provide any 

documentation demonstrating the funds were transferred within 60 days of receiving the 

excessive contributions. The Audit staff concludes that URP untimely resolved excessive 

' contributions totaling $42,925. 

I Finding 3. Misstatement of Financial Activi]^ 

Summary 

During audit fieldwork, a comparison of URP's reported financial activity wife its bank 

records revealed a misstatement of financial activity for receipts in 2011 totaling 

$107,013 and an overstated ending cash-on-hand balance totaling $10,028. In addition, 

URP had a misstatement of receipts and disbursements for 2012. In 2012, URP 

understated its receipts and disbursements by $114,582 and $96,176, respectively. In 

response to fee Interim Audit Report recommendation, URP amended its disclosure 

reports to materially correct fee misstatements for both 2011 and 2012 reports. 

Legal Standard 

Contents of Reports. Each report must disclose: 

• fee amount of cash-on-hand at fee beginning and end of fee reporting period: 

• the total amount of receipts for fee porting period and for fee calendar year; 

• fee total amount of disbursements for the reporting period and for fee calendar 

yiear, and; 

• certain transactions feat require itemization on Schedule A (Itemized Receipts) 

or Schedule B Gtemized Disbursements). 52 U.S.C. 30104 (b)(l),(2),(3),(4) and 

. (5)-

Facta and Analyala 

A. Facts 

As part of audit fieldwork, fee Audit staff reconciled URP's reported financial activity 

with its bank records for 2011 and 2012. For fee 2011 bank reconciliation, fee Audit 

staff identified a misstatement of receipts and of fee ending cash-on-hand balance. For 

the 2012 bank reconciliation, URP understated both its receipts and disbursements. The 

following charts detail fee discrepancies between URP's disclosure reports and its bank 

records, and the succeeding paragraphs explain why fee discrepancies occurred. 
II 

2011 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2011 

$183 $421 $238 

Understated 

Receipts $542,049 $532,991 $9,058 

Overstated 

Disbursements $537,131 $538,339 $1,208 

Understated 

Ending Cash Balance @ 

December 31,2011 

$5,101 ($4,927) $10,028 

Overstated 

Receipts in 2011 were overstated by $9,058. However, when evaluating the identified 

errors, regardless of whether the errors were positive or negative (abwlute value), the 

receipts were misstated by $107,013. In addition, the $10,028 overstatement of ending 

cash-on-hand balance resulted from the following adjustments that should be made to 

correct the reporting of receipts totaling $107,013: 

Transfers in>m non-federal accounts, over reported 

Transfers from non-federal accounts, not reported 

Contributions from individuals, not reported 

Contributions over reported (not support^ by a deposit) 

Unitemized contributions, over reported. 

Sum of Reporting .Adjustments 

$36,301 

49,0!26 

25 

IS^SOO 

iifii 

g 107.013 

2012 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2012 

$5,101 ($4,927) $10,028 

Overstated 

Receipts $2,220,117 $2,334,699 $114,582 

Understated 

Disbursements $2,192,403 $2,288,579 $96,176 

Understated 

Eliding Cash Balance @ 

December 31,2012 

$32,816' $41,193 $8,377' 

Undersjtated 

The understatement of receipts resulted from the following: 

• Transfers from non-federal accounts, over reported ($20,584) 

• Transfer fnim non-federal accounts, not reported 133,058 

• Contributions from political committees, individuals & refunds 

not reported 66,758 

• Contributions from individuals and political committees 

' This total does not foot due to dollar amount rounding. 

^ This total does not foot due to dollar amount rounding. 
over reported 

• Unitemized contributions, over reported 

• Unexplained differences 

Net Understatement of Receipts 

The understatement of disbursements resuited from the foilowing: 

• Payroli and payroi! taxes, not reported 

• Bank fees, not reported 

• Vendor payments, transfers to the non-federai account, 

and other disbursements, not reported 

• Bank fees, over reported 

• Operating disbursements, over reported 

• Federai Election Activity, over reported 

• Transfers to affiiiated/odier party committees, over reported 

•* Unexplained differences 

Net Understatement of Disbursements 

12 

asm) 

(lk3SI) 

(37,631) 

« 114.582 

$48,105 

1,387 

75,201 

(5,887) 

(2,695) 

. (1.173) 

(904) 

(17.858) 

•TO4.174 

The $8,377 understatement of the ending cash-on-hand balance resuited from the 

misstatements described above. -

B. Interim Audit Report ft Audit Division Reconunendation 

The Audit staff discussed this matter with URP representatives at the exit conference and 

provided'supporting schedules of the misstatements. URP representatives asked 

questions for clarification md ^ted they may amend the reports if they determine the 

supporting schedules provided by the Audit staff are correct 

In response to the exit coriference, URP representatives stated they will amend the reports 

"at a time the Commission deems appropriate, in accordance with the Audit Division's 

instructions." 

ITie Interim Audit Report recommended URP amend its disclosure reports to correct the 

misstatements noted above and reconcile the cash-on-hand balance on its most recent 

report to identify any subsequent discrepancies that could affect the recommended 

adjustments. The Interim Audit Report further recommended that URP adjust the cashon-hand balance as necessiuy on its most recent report, noting that the adjustment is the 

result of prior-period audit adjustments. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, URP amended its disclosure 

reports to materially correct the misstatements for both 2011 and 201.2 reports. 
13 

I Finding 4. Recordkeeping for Emplciyees 

Summary 

During audit fieldwork, the Audit staff identified that URP 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 

payments to URP employees totaling $285,242 for which URP did not maintain monthly 

payroll logs. This consisted of $269,776 for which payroll was allocated with federal and 

non-federal funds, and $15,466 for which payroll was exclusively p^id with non-federal 

funds. In response to the Interim Audit Report recommendation, URP's counsel stated, 

that URP has long since remedied the issue identified for this finding. URP has complied 

with the Interim Audit Report recommendations by implementing a plan to maintain 

monthly payroll logs in the future. 

Legal Standard 

Maintenance of Monthly Logs. Pa^ committees must keep a monthly log of the 

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

Allocations of salaries, wages, and fringe benefits are to be undertaken as follows: 

• employees who spend 25 percent or less of their compensated time in a given 

month on federal election activities must be paid either from the federal account 

or be allocated as administrative costs; 

• employees who spend more than 25 percent of their compensated time in a given 

month on federal election activities must be paid only firom a federal account; and, 

• employees who spend none of their compensated time in a given month on federal 

election activities may be paid entirely with funds that comply with state law. 11 

CFR §106.7(dXl). 

Facts and Analysis 

A. Facts 

During audit fieldwoi^, the Audit staff reviewed disbursements for payroll. URP did not 

maintain any monthly payroll logs or equivalent records to document the percentage of 

time each employee spent in connection with a federal election. These logs are required 

to document fee proper allocation of federal and non-federal funds used to pay employee 

claries and wages. For 2011 and 2012, URP dijd not maintain monthly Ipgs for 

$285,242^ in payroll. This amount includes jiayroll paid as follows to URP employees. 

1. Employees reported on Schedule H4(Shared Federal/Non-Federal Activity) 

and paid wife a mixture of federal and non-federal funds during fee same 

month (totaling $269,776); 

2. Employees reported on Schedule H4 and also paid with both a mixture of 

federal and non-federal funds and exclusively non-federal funds during fee 

same month (totaling $962); and 

* This total does not include payroll for employees paid with 100 percent federal funds and reported as 

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

Legal Question, Page 1). Payroll amounts are stated net of taxes and fHnge benefits. 
. 14 

3. Employees paid exclusively with non-federal funds in a given month and not 

reported by URP (totaling $14,504). 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the recordkeeping requirement with URP representatives 

during the exit conference. URP representatives stated they believed Ae payroll was 

allocated correctly. URP has not located any payroll logs and noted that the plan moving 

forward is to keep payroll logs. 

In response to the exit conference, URP representatives stated that the "[p]arty undertook 

efforts to ensure that staff time and other expenses were properly allocat^ b^een its 

federal and non-federal accounts. The Party did not however, maintain monthly payroll 

logs during the 2012 election cycle." URP representatives further stated they intend to 

maintain such payroll logs in the future. 

URP submitted an affidavit from the executive director during 2011-2012 audit cycle 

stating that identified employees did not spend more than 25 percent of their 

compensated work time on activities in connection with the f^eral election. The 

affidavit further states that the executive director also did not spend more than 25 percent 

of his time on activities in connection with a federal election. 

The affidavit provided by URP does not resolve the recordkeeping finding because it 

does not document the time an employee spent in connection with a federal election. 

The Interim Audit Report recommended that URP provide evidence that it maintained 

monthly time logs to document the percentage of time an employee spent in connection 

with a federal election; or implement a plan to maintain monthly payroll logs in the 

future. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, URP's counsel stated that URP 

has long since remedied the issue identified for this finding. Again, in response to the 

exit conference, URP representatives stated they did not maintain monthly payroll logs 

but intend to maintain monthly payroll logs in the future. As such, URP has complied 

with the Interim Audit Report recommendation by implementing a plan to maintain 

monthly payroll logs. 

I Finding 5. Report of Debts and Obligations 

Summary 

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

obligations to five vendors and one staff member totaling $205,323 on Schedule D (E)ebts 

and Obligations). In response to the Interim Audit Report recommendation, URP filed 

amended reports to disclose debts and obligations regarding the five vendors totaling 

$101,710.79. However, URP did not disclose the debt totaling $94,132 for the staff 
15 

member because it disagrees that these items should be considered as debt. As a result, 

URP did not materially correct the reporting of debts and obligations. 

Legal Standard 

A. Continuous Reporting Required. A political committee must disclose the amount 

and nature of outstanding debts and obligations until those debts are extinguished. 

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

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

owed by the committee and debts owed to the committee, together with a statement 

explaining the circumstances and conditions under which each debt and obligation was 

incurred or extinguished. 11 CFR §104.11(a). 

C. Itemizing Debts and Obligations. 

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

the date incurred (the date of the transaction); the committee reports it on the next 

regularly scheduled report. 

• A debt exceeding $500 must be disclosed in the report that covers the date on 

which the debt was incurred. 11 CFR §104.11(b). 

D. Advances by Committee Staff and Other Individuals. 

1. Scope. This section applies to individuals who are not acting as commercial 

vendors. Individuals who are acting as commercial vendors shall follow the 

requirements of 11 CFR §§116.3 and 116.4. 

2. The treatment as contributions. The payment by an individual from his or . 

her personal funds, including a personal credit ca^, for the costs incurred in 

providing goods or services to, or obtaining goods or services that are used by 

or on behalf of, a candidate or political committee is a contribution unless the 

payment is exempted under 11 CFR 100.79, it shall be considered a 

contribution by the individual unlessa) The payment is for the individual's transportation expenses incurred 

while traveling on behalf of a candidate or political committee of a 

political party or for usual and normal subsistence expenses incurred 

by an individual, other than a volunteer, while traveling on behalf of a 

candidate or political committee of a political party; and 

b) The individual is reimbursed within sixty days after the closing date of 

the billing statement on which the charges first appear if the paymcrit 

was made using a personal credit card, or within thirty days after the 

date on which the expenses were incurred if a personal cr^it card was 

not used. For puiposes of this section, the closing date shall be the 

date indicated on the billing statement which serves as the cutoff date 

for determine which charges are included on that billing statement. In 

addition, "subsistence expense" includes only expenditures for 

personal living expenses related to a particular individual traveling on 

committee business, such as food or lodging. 11 §CFR 116.5(b). 
16 

3. Treatment as debts. A political committee shall treat the obligation arising 

from a payment described in paragraph (b) of this section as an outstanding 

debt until reimbursed. 11 CFR §116.S(c). 

4. Settlement or forgiveness of the debt. The individual and political 

committee may agree to the total forgives of the debt (see 11 CFR §116.8) or 

settlement of the debt if less than the entire amount owed (See 11 CFR 

§116.7), provided that the requirements of 11 CFR §116.7 or §116.8, as 

appropriate, including the submission of the information specified in these 

sections and Commission review, are satisfied. The provision of this part 

shall not be construed to require the individual to forgive or settle the debt for 

less than the entire amount owed. 

5. Reporting. The political committee shall continue to report the obligation 

arising from the payment as a debt in accordance with 11 CFR §116.7(f) or 

until the Commission has completed a review of the request to forgive the 

debt pursuant to 11 CFR §116.8, or until the political committee pays the debt, 

whichever occurs first. 1ICFR §116.S. 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed URP's disbursement records and 

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

debts, staling $205,323^ that URP failed to report qn Schedule D during the audit period 

conceming five vendors and one staff merriber. Based-oathiel recordSj the Ave vendors 

totaling $111,191 provided nuinly catering, mailings/printing services, software, 

equipment rental and administrative expenses. The Audit staff calculated the debts to the 

vendors based on the invoice date and the subsequent payment date. Most of the debts 

were greater than $500 iand were outstanding for periods ranging from 31 to 416 days. 

The debt related to the staff member, totaling $94,132, was for reimbursements for 

committee expenses paid with the staff member's personal credit card. Most 

reimbursements were made more than 60 days from the date of the expense per the 

reimbursement form. The debt amount for the staff member was calculated based on 

provided documentation consisting of an expense reimbursement form submitted by the 

staff member, and/or invoices. The Audit staff used the individual dates of incurrence 

listed on the expense reimbursement form. The Audit staff did not use the date the 

reimbursement form was submitted because this date was unknown. Documentation such 

as the staff member's credit card billing statements, requested by the Audit staff, was not 

provided. URP provided one credit card statement with the closing billing date during 

fieldwork. 

^ Each debt in this amount was counted once even if it is a required disclosure over multiple periods. In 

order for URP to conectly file amended reports, schedules were provided that included the amount of 

each debt required to be reported for each reporting period. 

* The staff member is also discussed in Finding 6 for possible violation of 11 CFR §116.S(b), advances by 

committee staff considered a contribution. 
I 17 

I B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed the reporting of debts and obligations 

with URP representatives and provided a schedule detailing the transactions requiring 

disclosure on Schedule D. URP representatives acknowledged they understood the 

schedules for vendors. They further stated the staff member turned in the expense reports 

late so URP did not know when the expenses needed to be reimbursed or that the 

expenses had been incurred. Therefore, the expenses could not be reported correctly. 

In response to the exit conference, URP representatives noted that most of the debt items 

were related to expense reimbursements paid to the staff member. URP representatives 

questioned the Audit staffs date calculation and stated they were not aware of the staff 

member's expenses until after receipts and/or expense reports were presented to the 

treasurer, which frequently occurred well after the underlying expenses were incurred. 

URP representatives added the regular practice was to issue reimbursements to the staff 

member within a calendar week of receipt of the expense reimbursement form. URP 

i feels that the Audit staff should not consider these expenses as debt items from the date 

) they were incurred since, generally, URP was not aware of the expense until well after 

' the date of incurrence. 

t 

The Audit staff acknowledges that providing this individual's credit card statements with 

the billing cycle closing date could have reduced some of the debt disclosure omissions 

for the staff member. However, unless copies of the credit card statements are provided 

to show the closing date of the billing cycle, the Audit staffs analysis would remain 

unchanged. URP offered no further comments on the five vendors representing $111,191 

of the undisclosed debt and obligations. 

The Interim Audit Report recommended URP provide documentation demonstrating the 

expenditures totaling $205,323 did not require reporting on Schedule D; or provide the 

staff member's credit card billing statements with the closing date of the billing cycle. 

The Interim Audit Report further recommended absent such documentation, URP amend 

its reports to disclose debts and obligations totaling $205,323 on Schedule D. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, URP filed amended reports to 

disclose $101,711 ofthe $1.11,191 in debts for the five vendors. However, URP did not 

disclose any of the staff member's debt totaling $94,132. URP restated they were not 

aware of the staff member's expenses until after receipts and/or expense reports were 

presented to the treasurer. The regular practice was to issue reimbursements within a 

calendar week of receipt of the expense reimbursement form. Therefore, URP does not 

think these expenses are debt. 

It is noted URP did not provide any documentation demonstrating the date it received the 

expense reimbursement forms from the staff member. Nor did URP provide the staff 

member's credit card billing statements with the closing date of the billing cycle. 

Without this information to document alternative dates, the Audit staffs debt calculation 

continues to be based on the individual date of incurrence listed on the expense 
18 

reimbursement forms provided during fieldwork. The totai debt not reported is now 

$103,612 ($94,132 + $9,480). As such, URP did not materially correct the reporting of 

debts and obligations. 

Fiindiji^ 6. Apparent Excessive Contribtttion- Staff Advance 

Summary 

One URP staff member received reimbursements for credit card expenditures totaling 

$46,904 that appear to have been reimbursed untimeiy. URP did not provide the staff 

member's credit card biliing statements to support the reimbursements were made within 

60 days after the closing date of the billing statement. In response to the Interim Audit 

Report recommendation, URP stated it strongly disagrees with this assertion because 

URP was not aware of the reimbursable expenses when they were incurred. URP did not 

provide any documentation to demonstrate the reimbursements were made within the 

proper time limitations. As such, of the $46,904 untimely reimbursements to the staff 

member, the Audit staff considers $28,637 as excessive contributions fiom the staff 

member until the expenses were reimbursed. No further action will be taken since the 

staff member was eventually reimbursed for the expenses. 

Legal Standard 

A. Advances by Committee Staff and Other Individuals. 

1. Scope. This section applies to individuals who are not acting as commercial 

vendors. Individuals who are acting as commercial vendors shall follow the 

requirements of 11 CFR §§ 116.3 and 116.4. 

2. The treatment as contributions. The payment by an individual fiom his or 

her personal funds, including a personal credit card, for the costs incurred in 

providing goods or services to, or obtaining goods or services that are used by 

or on behalf of, a cuididate or political committee is a contribution unless the 

payment is exempted under 11 CFR 100.79, it shall be considered a 

contribution by the individual unlessa) The payment is for the individual's transportation expenses inured 

while traveling on behalf of a candidate or political committee of a 

political party or for usual and normal subsistence expenses incurred 

by an individual, other than a volunteer, while traveling on behalf of a 

candidate or political committee of a political party; and 

b) The individual is reimbursed within sixty days after the closing date of 

the billing statement on which the charges first appear if the payment 

was made using a personal credit card, or within thirty days after the 

date on which the expenses were incurred if a personal cr^it card was 

not used. For purposes of this section, the closing date shall be the 

date indicated on the billing statement which serves as the cutoff date 

for determine which charges are included on that billing statement. In 

addition, "subsistence expense" includes only expenditures for 

personal living expenses related to a particular irvdividual traveling on 

committee business, such as food or lodging. 11 §CFR 116.S(b). 
19 

I 

! 3. Treatment u debts. A political committee shall treat the obligation arising 

I fiom a payment described in paragraph (b) of this section as an outstanding 

debt until reimbursed. II CFR § 116.S(c). 

4. Settlement or forgiveness of the debt. The individual and political 

committee may agree to the total forgives of the debt (see 11 CFR §116.8) or 

settlement of the debt if less than the entire amount owed (See 11 CFR 

§116.7), provided that the requirements of 11 CFR §116.7 or §116.8, as 

appropriate, including the submission of the information specified in these 

sections and. Commission review, are satisfied. The provision of this part 

shall not be construed to require the individual to forgive or settle the debt for 

leiss than the entire amount owed. 

5. Reporting. The political committee shall continue to report the obligation 

arising from the payment as a debt in accordance with 11 CFR §116.7(f) or 

until the Commission has completed a review of the request to forgive the 

debt pursuant to 11 CFR §116.8, or until thb political conuhittee pays the debt, 

whichever occurs first. 11 CFR §116.S. 

B. Travel Expenses Exceeding S2,000 Exemption. Payments for transpo^tion 

expenses^ that exceed the $2,000 travel exemption are considered contributions unless 

the committee reimburses them: 

• Within 60 days', if the payments were made on a credit card; or 

• Within 30 days, if the payments were made with cash or a check. 11 CFR 

§1 l6.S(b) and 100.79(a)(2). 

C. Party Committee Limits. A party committee may not receive more than a total of 

$10,000 a year finm any one contributor. 52 U.S.C. §30116(a)(1)(D). 

Facts and Analysis 

A. Facts 

Duriiig audit fieldwork, the Audit staff reviewed individuals who received 

reimbursements from URP.. One staff member received reimbursements totaling 

$ 197,$5:6 thraughout the audit cycle for expenditures paid mostly with theemployee's 

peirsonal credit card.' Ofth^ reimbursements, $46,9(14 was more than 60 day^: hem the 

date of the expense per the reimbursement form. The Audit staff calculated the days 

outstanding by using the individual dates of incurrence listed on the expense 

^ Including usual and normal subsistence expenses (such as food and lodging) incurred while traveling on 

behalf of the candidate. 

' Sixty days after the closing date of the credit card billing statement where the charge first appeared. 

' Based on the documentation provided, the Audit staff could not verify if five transactions were paid using 

the employee's personal credit card versus cash or check. 
20 

reimbursement form. Of the $46,904 untimely reimbursements, $28,637 ($46,904 -

$18,267) is considered an excessive contribution from the staff member, pursuant to 11 

CFR §116.5(b). 

URP provided invoices, receipts, and expense reimbursement forms to support the 

expenditures but provided only one ctedit card statement with the closing billing date 

during audit fieldwork. None of these untimely reimbursements were for travel expenses 

that were reimbursed within 60 days from the date of the expense per the reimbursement 

form, or within 30 days if paid with cash or check, per 11 CFR§116.S(b) and 

100.79(a)(2). 

B. Interim Audit Report fls Audit Divieion Recommendation 

At the exit conference, the Audit staff discussed the reimbursements for the one staff 

member and provided a schedule detailing the transactions (with the discussion of debts 

and obligations at Finding 5 above). URP representatives stated the staff member turned 

in the expense reports late so URP did not know when the expenses needed to be 

reimbursed or that the expenses had been incurred. 

In response to the exit conference, URP representatives questioned the Audit staffs date 

calculation and stated they were not aware of the staff member's expenses until after 

receipts and/or expense reports were presented to the treasurer, which frequently occurred 

well after the underlying expenses were incurred. URP representatives added the regular 

practice was to issue reimbursements to the staff member within a calendar week of 

receipt of the expense reimbursement form. 

The Audit staff acknowledged that providing this individual's credit card statements with 

the billing cycle closing date could have reduced the amount considered to be an 

excessive contribution from the employee. However, unless copies of the credit card 

statements with the billing cycle closing date are provided to demonstrate the 

reimbursements were timely, the Audit staffs analysis would remain unchanged. The 

$28,637 is considered ah. excessive contribution from the staff member until reimbursed. 

The Interim Audit Report recommended URP provide documentation, such as the 

employee's credit card statement with the closing billing date, to demonstrate the 

reimbursements were timely. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, URP stated it strongly 

disagrees with this finding. URP restated they only became aware of the staff member's 

reimbursable expenses after he presented receipts and/or expense reports to the treasurer, 

which frequently occurred after the underlying expenses were incurred. In addition URP 

The untimely stafT reimbursements totaled SS0,904. The amount was adjusted to S46,904 after applying 

the S4,000 travel allowance per 11 CFR §100.79(a)(2). The amount was further adjusted because an 

individual may contribute up to $10,000 per year to a state party. The staff member contributed $1,733 

In 2011 and did not make a contribution to URP in 2012. Thetefbre the staff member could have 

contributed $18,267 ($20,000 - $1,733). 
21 

said the regular practice was to issue staff reimbursements within a calendar week of 

presentation. Given this practice, URP feels the Commission should not consider these 

expenses as in-kind contributions as of the date they were incurred. 

The Audit staff maintains the closing date on the billing statement is important because it 

is used as the trigger date to determine if the expenses initially paid for by the staff 

member will result in a contribution to URP. Specifically, the Commission's regulations 

require payments by a committee staff member to be treated as contributions, unless the 

payments are exempt finm the definition of contribution as unreimbursed transportation 

and subsistence expenses under 11 CFR §100.79 and 11 CFR §116.S(b). If the payments 

are not exempt, they are contributions unless (1) the payments are for a staff member's 

travel expense or subsistence expenses incurr^ while travelirig on behalf of the 

committee, and (2) the committee reimburse the staff member within 60 days "after the 

closing date of the billing statement on which the charges first appear if the payment was 

made using a personal credit card, or within thirty days after the date on which the 

expenses were incurred if a personal credit card was not used". 11 CFR §116.S(b)(l ) & 

(2). 

URP provided one credit card statement with a billing closing date. Given that most 

credit card statements are 30 days or one month in length, if the Audit staff was to infer 

the other closing dates based on the one credit card statement that was available with a 

closing date in lieu of the actual billirig date, the total amount of excessive contributions 

from the staff member would no longer be material.'' However, inferring the closing 

date is not as precise as using the actual billing date. Without all the necessary credit 

card billing statements, the Audit staff cannot verify that the staff member was 

reimbursed within sixty days after the closing date of the billing statement. 

The Audit staff notes URP did not provide all the necessary credit card statements of the 

staff member with the closing billing dates, nor did URP provide documentation to 

demonstrate the date it received the expense reimbursement form. Without this 

documentation to show the reimbursements were made within the proper time limitations, 

URP received excessive contributions totaling $28,637 from the staff member until the 

expenses were reimbursed. No further action will be taken since the staff member was 

eventually reimbursed for the expenses. 

" If the inferred billing date is used in lieu of the actual billing closing dates from the credit card statements 

as provided by the committee, the total amount of debts and obligations not disclosed for the staff 

member reduces from $94,132 to $50,259. See Finding 5-Report of Debts and Obligations, page 14.