FEDERAL ELECTION COMMISSION 

WM8HM3fTQN,IX& 20483 

October 6,2017 

MEMORANDUM 

To: The Commission 

Thnnigh: Alec Pelmnf^ 

Staff Director 

Ftom: Patricia C.Oirocl^/^^^ 

Giief Compliance Officer 

Thomas E. HinteimisterTy^ 

Assistant Staff Director 

Audit Division 

RidddaMoroomb 

Audit Manager 

By: WUiiam Antosz VWA 

Lead Auditor 

Sulject: Audit Division Recommendation Memorandum ou the Conservative 

Majority Fdnd (CMF) (AI3-i7) 

Pursuant to Commission Directive No. 70 (FEC Directive on ftDcessing Audit Reports^ 

the Audit staff presented the Draft Final Audit Report (DFAR) to CMF on June 28,2017 

(seeattadunent). In response to the DFAR dated July 14.2017, CMF did not pro^ any 

new iufbnnation and requested an audit bearing which occuired on September 14,2017. 

This memorandum provides the Audit staff's recommendation for eadi finding outlined in 

theDFAR. Hw Office ofGenerdCounsd has reviewed this memorandum and concurs 

with the reccnunendations. 

Finding 1. Mtaslalemcnt of Flnandal Activity 

in response to ftw Interim Audit Report (lAR), the CMF Treasurer staled that CMF 

did not apee that it had misstated its disbursements by $2,163,830; and that it had 

amended its 2012 disclosure reports to correct some of the errors tor faiconect 

dates, payee names, and the reporting ofthe bank service chaiges only. However, 

amended discloaure reports were not filed. In response to the DFAR, the CMF 

lYeasurer stated that CMF stood by its lAR response; and acknowledged that 

amended reports were not filed. Die CMF Tkeasurer added that the disclosure 

reports will be iwMiHiMt 

This matter was not addressed at the audit hearing. 
Ilie AudU stafTiecoiiimends that the Cammisiion find that in 2012, CMF 

misstated its diabunemeatB by S2,163.830. 

Fladlegl. DiscloaeieofOecepatloawad NaieeofKMpkycr 

In response to the lAR, the CMF Treasurer stated that CMF had obtained most of 

the occupation and name of employer infonnatkxi and provided *1)est effort^ 

leders. The CMF TYeasuier also stated CMF amended its discloBure reports to 

coiRGi the maiority of the disdoBure of 527 contribudons fiom individuals totaling 

$86^745 that tadied adequate disclosure of the contributor's occiqiation and name 

ofemployer. However, amended disclosure reports were not filed Inresponseto 

the DFAR, the CMF Treasurer stated that CMF stood by Its response to the lAR, 

and acknowledged that amended reports were not filed. The CMF TYeasuier added 

that the disclosure reports will be amended. 

This matter was not addressed at the audit hearing. 

Thii AiwBt fwnnmnieiMh tht the rnmmiwrinn flfwl flMt r.MF fiiilgd tn Higr-loM* 

occupation and lume of employer infixmation for 527 contributions fiom 

individuals totaling 886^745. 

Findings. Reporting of Appnrent Independent Kapendttnies 

CMF disclosed independent expenditures totaling $1.^47.233 on Schedule E 

(ttemind Independent ExpendituresX vdtlch vns ^73,297 less than the Audit 

stafTs apparent independent expenditure calculation of $1,620,530. Inresponseto 

the lAR, the CMF TYeasnrer staled that the actual amount of independent 

expenditures was $914^856^ and provided a breakdown of how it determined this 

reduced amount fiom the original reported amount CMFslAR response 

mentioned that it bad filed amended reports to correct the reporting of 51 

independent expenditures totaling $185,663 disclosed with an incorrect vendor 

name. CMF filed new and amended 24/48-hour reports for independent 

eKpendhures totaling $764,082 but did not specifk^ly address the $90,260 

untimely filed 24-bourreports. However, CMF did not file amended reports to 

correct die disclosure of its indeperulentenpendituies. in response to the DFAR, 

the CMF TYeasuier stated that CMF stood by its response to the lAR, and 

acknowledged that amended reports were not filed. The CMF TYeasuier added 

that the disclosure reports will be amended. 

At the audit hearing the CMF TYeasurer described how the telephone calls that 

CMF made had a dual purpose of providing a political message and soliciting a 

contribution, and staled that the costs of lelephane calls should be allowed to be 

allocated as such. The CMF TYeasuier also referred to the October 2014 Journal of 

Aceountancy article that mentioned how not for profit committees could allocate 

Joint costs using a rational and systematic allocato methodology. TheCMF 

Treasurer concluded that he acted in good feith and in accordance with the 

American of Certified Public Accountants by allocating Joint costs in a 

reasonable manner and applying those costs consistently throughout the audit 

period. Therefore^ the difference between the Audit stalTsdeleimhiBtion of 
appment nufepeadent expendhuics and CMF'a allocated detennination of 

indqMndentcxpcnditiifes ahouldnoticsultinafine. 

The Audit ataff recommends that the Commlsslba find that CMF did not properiy 

dhcloae apparent independent expendituras totaling S273^97 on Schedule E; and 

ftikd to comet the vendorname for Independent expenditures totaling $185,663 

disclosed on Schedule E. In addition, the Audit staff recommends that the 

Commission find that CMF foiled to file 24/48-hour reports for apparent 

Independent expenditures totaling $273,297; and that 24-hour reports totaling 

$90^60 were filed untimely. 

Flidfaigd. Reporting of Debts and ObUgations 

In response to foe lAR, the CMF IVeasurer staled that ten invoices diould have 

been billed to a 527 ofgaaizRkMU and provided a cfaeefc copy (front only) written 

by the 527 oiganization for iteyment of the invoices. The CMF lYeasurer further 

stated that all debts and obligations owed had been properly reported, and 

maintained that debts totaling $67,800 identified by the Audit staff were incuired 

by another committee. However, the CMF lYeasurer did not provide 

documentation to support whether or not CMF received the services on the 

invokes. In response to the DFAR, the CMF lYeasurer stated the CMF stood by 

its lAR response. 

This maOer was not addressed at the audit hearing. 

The Audit staff recommends that the Commission find foat CMF foiled to disclose 

debts and obligations totaling $67,800. 

Findings. ReeonlkeeplngforGomBianleatlons 

In response to the lAR, the CMF Treasurer provided two media vendor invoices, 

four television advertisements, and slated that CMF believed that all 

documentation needed by the Audit staffhad been provided. In response to the 

DPAR, the CMF lYeasurer stated that CMF stood iy its lAR response. 

Ihis matter was not addressed at the audit hearing. 

The Audit fPlff rPPOmi"e«k romifit«Mn finrf lh»t rUP wr# 

the necessary records pertaining to disbursements totaling $117,933. 

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

30 days of the Commission's vote. 

la case of an objcetloii, Directive Na 70 staiBB that the Audit DhrUon 

RertMnmendatlon Mereorendnm wfll be plneed on the next regniuffy scheduled open 

Documents related to this audit report can be viewed in the Voting Ballot Matters folder. 

Should you have ariy questions, please contact William Antosz or Rkiuda Morcomb at 

694-1200. 
AUadnnoit: 

Draft Final Audit Report of the Audit Division on the Conservative Majority Fund 

cc: Office of General Counsel 
Dfaft Final Andlt Report of the 

Audit Division on the 

Conservative Hidority Fond 

(Jufy 9, 2012 - December 31, 2012) 

Why the Audit 

Was Done 

Federal law permits the 

CommismoD to condUGt 

audits and field 

investigatioiis of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Cominiasion generally 

conducts such audits 

when a committee 

appeannottohave 

the threshold 

requirements for 

substantial compliance 

with the 

detenni: 

Patofo 

The Commission mi 

Initiate an enforcement 

action, at a later time, 

whh respect to any of the 

matlen discussed in this 

report 

Ahoat the Committee 

The Conservative Majority 

headquartered in 

foe chart on Committee 

FInanrfe 

• Rcedpti 

o Coiitril 

TafealRecdpti 

a non-Gomiected committee, 

fa. For more infimation, see 

p-Z 

$2,81V66 

$2314,766 

Expenditures 

its 

$ U9M17 

1347333 

$2,745350 

end PimrmnnrrdwHime (r ?) 

nent of Financial Activity (Finding 1) 

Disclosure of Occupatian and Name of Emplc^ (Finding 2) 

Reporting of Apparent Ihdepcndent Expenditures finding 3) 

Reporting of Dcte and ObligOions (Finding 4) 

Recordkeeping for Communications (Finding 5) 

> S2U.SX:.§3011l(b). 
Draft Final Audit Report of the 

Audit Division on the 

Conservative Bfl^Jority Fund 

(July 9, 2012 - December 31, 2012) 
Table of Contents 

Putl. BaekgEODBd 

Authority for Audit 

Scope of Audit 

Putn. Overview of Committee 

Committee Orgmizatkm 

Overview of FnuniGial Activity 

FertllL Snmmeifee 

Findingi and Recommendations 

Pert IV. Finding* and 

Findingi. Mintatenient of Financial 

Fiiiding2. Disclosure of Occupation and Ni 

Findings. Reporting of AppanntJndqiendcnt 

Finding 4. Reporting of Debts 

Findings. Reconflfieepingfor 
Parti 

Background 

Aathority fi>r Audit 

This report is based on an audit of the Conserative Majority Fund (CMF), undertaken by 

the Audt Division of the Federal Election Commission (the Commission) in accoidaiioe 

with the Federal Bieclion Campaign Act of 1971, as amended (the Act). TheAudit 

Division conducted the audit pursuant to 52 U.S.C. {3011 l(bX which permits the 

Commission to conduct audits and field iiivestigBtioiis of any pojitei committee that is 

required to file a report under 52 U.SX^. {30104. Priorto 

subsectian, the Cornmission must perfimn an mtemal 

committees to determine if the reports filed by a particu! 

requirements for substantial compliance whfa the 

Boope of Audit 

Following Conunission-approved 

foctors and as a result; this audit examined: 

1. the disclosure of contributums received; 

2. the disclosure ofindividuBlcarrtri%|g[s'occupation 

3. the disclosure of debts and obU 

4. the consistency between reported 

5. the completeness of disbursemem 

6. the disclosure of mdnalimexpenditt 

7. other committee tdima^wessaiy to sreview. 

audit under this 

filed by selected 

meet the threshold 

of employer; 
Partn 

Overview of Committee 

Committee Oigenisation 

ImnortMtDBtw 

• Date of Regulation July 9,2012 

• AuditCovcwae Ju»y9,2012-J liberal, 2012 

Hcedq—tteiB 

BuikblbniutiiM 

• Bank Depogftories 

• "wnig Accounts 

TuBMurer 

IVBMurerWhcn Audit Was Conducted 

e TVeasuicr During Period Covered fay Audit 

M"'ffeut luforreatlon 

Attended Commisskm Campaign F: 

Seminar 

Who Handled 

Recordkeeping 

clal Activity 

t») 

CMh-on-haBgJnlv9.20lK r SO 

Raedirta V 

o ConlriblHionsifc|Mividels 2,814w766 

Tdai Rccduta S2JU4.766 

DlibnneBBeuto ^ 

o Openting ExpenditurBa 1398.617 

o • « 1347333 

Total DbbHMMMi S2.74SJB90 

Caih-on hand ffllPecegiber 31,2012 $68316 
Part m 

Summaries 

Findings and Recommendations 

Finding 1« MlaetEtement of FInnnelal Activity 

The Audit staffs oompsrison of CMF's finsnclal activity with its bank recGnls fcvcalcd a 

material misstatement of disbufsemcnb in calendar year 2012. O^^inlsstaiBd its 

disbuiseiiieiits by $2,163,830. In response to the Interim Ai^Mepmiecommendation, 

the CMF Treasurer stated that CMP did not agree that it lud^Mted Hs disbursements 

by $2,163,830^ and it had amended its 2012 disclosure iHrts tMjjmt some ofthe 

Girais for incorrect dates and names. However, as oQ|edkta of tlm|Dpit, no aniended 

reports have been filed by CMF to correct the puhUfiecdM. Absent^^gingof 

amended icpoits, CMF didnnsementa remain •ylp*'*'' bxJi2,163Ji30. 

(For more detail, see p. 5.) 

Finding 2# DiaolMnn 

Bm^toynr 

During audit fieldwoik, a review of all 

Itemization indicated that 327 contril 

ofthe contributor's occupation and 

efforts" to obtain. 

Report recom: 

reports to correct 

disclosure reports have 

of amended 

Fin 

Bxpendi 

During audit fiel 

expenditures that 

were accurately and 

Fame of 

fiom iuBitfals requiriiig 

743 IpSed adequate disclosure 

did not demonstrate "best 

response to the Interim Audit 

that CMF ILKI amended hs disclosure 

of this report, no amended 

the public record. Absent the filing 

lacking adequate disclosure of 

remains as $86,743. 

Apparent Independent 

Audit staff reviewed disbursements to verify the independem 

on Schedule E (itemized Independent Expenditures) 

pletely disclosed. 

The Audit staff identified didmrsemenis totaling $469,136 which were not reported as 

apparent independent expenditures. Also independent expenditures totaling $183,663 

were disclosed with an incorreGt vendorname. 

With respect to the filing of24/48-hour reports required for certain independent 

expendhines, CMF did not file 24-hour rejxxts totaling $90^260 in a tiniely manner and 

did not file 24/48-hour reports firr apparent independent expenditures totaling $469,136 

noted above. 
In lesponie to the Interim Audit Reimft reGommendatioii, the CMF Treasurer stited that 

the atfuai amount of independent expenditures was $914,856 and CMF has filed new and 

amended 24/48-hour reports tbr independent expenditures totaling $764,082. After 

reviewing additional voidor invoices that were provided, the Audit staff has aooepted that 

expenditures totaling $195,839 were not independent expendhurea, and reduced 

apparent Independent exp^hures not reported to $273^297 ($469,136 - $195,839). 

Also^ CIdF's response mentioned that it had filed amended reports to cotrect the 

reporting of the 51 independent expenditures totaling $185>S63 disclosed with the 

incoirect vendor name. However, even though the CMFlYcasurer said that amended 

reports were filed, as of the date of this report, CMF has not filed m —disclosure 

refxxts concerning the independent expenditures. Absent evideaKgt the expenditures 

in question did not require reporting as independent riipfiiil|hM iiiiil did not require 

24/48-hour reports, the Audit staffconsiders the expendimanbyng $273,297 to be 

independent expenditures, and CMF has not complied wffthe reiknendation to 

corr^thediscloaurefivSI iiidepeiidentexpenditui|AManng$l8i 

Q^or more detail, see p. 9.) 

$67300 that were not 

CMF contended that it was 

lercommittee. In 

the cH^Hreasurer provided a 

of $93,990 along whh 

all debts a^ obligations 

consider this adequate 

!ing $67,800 did not require disclosure 

of debts required to be disclosed on 

Finding 4. Reporting of Ddbto 

During audit fieldwoifc,the Audit staff identified 

disclosed on Schedule D (Debts and ghMgathms) 

not liable fin a portion of the I 

response to the interim Audit Report: 

check copy (fiont only) written 1^ a 527' 

ten invoices billed to tteJ^argsnizationj 

owed have been properi^|R||± TheAuSfstaff 

documentation to da^MstrsteMt the debts I 

byCMF. Absentfum^docunStation,the 

Schedule D remains as I 

(For more dOdlKgo. 15.1 

5. 

Jieldwork, 

the infiumiBynd proper 

staff identifieMD4J99 

of the invoices 

determine how C 

Interim Audit 

_ for 

udh reviewed disbursements to verify the accuracy of 

fication of transactions disclosed on reports. The Audit 

ichsufGcient records were not provided. Whhoutacopy 

communications, the Audit staff was unable to 

have reported these disbursements. In response to the 

imendatkm, the CMF TVeasurer provided two media vendor 

invoices; finir television advertisements, and stated that CMF believed that all 

documentation needed by the Audit staff has been provided. The Audit staffconcludes 

that the records provided by CMF demonstrated that disbursements totaling $224^768 

were operating expenditures and disbursements totaling $79331 were insufficiently 

documented. In addition, disbursements totaling $38302, which were originally included 

in the apparent independent expenditure finding, are not sufficiendy documented. Absent 

further documentation, the Audit staff considers the remaining disbursements totaling 

$117,933 ($79331 + $38302) to be insuffidently documented. 

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

Findings and Recommendations 

I Finding 1. lU—tatement of Aetlidty 

The Audit staff's comparison of CMF's financial activity with its bank ncoids revealed a 

material misstatement ofdiriMncmenlsin calendar year 2012. CI 

disbursements by $2,163,830. In response to the Interim Audits 

the CMF IVeasurer slated that CMF did not agree that it had^ 

by $2,163,830; and it had amended its 2012 disclosure 

enofs for inconcct dates and names. However, as of 1 

reports have been filed by CMF to oonect the publfo^UBA Al 

amended reports, CMF disbunements remain muHedfo $2,163,1 

misstated its 

recommendatiaii, 

its disbursements 

some of the 

no amended 

.filing of 

Contents of Reporta. Each report must disclose: 

• the amount ofcash-on-handa(te beginning 

• the total amount of receipts 

• the total amount of dii 

yeanood 

• certain transactions 

ScheduleB 

(5). 

of the reporting period; 

for the calendar yean 

for the calendar 

A (Itemized Recebds) or 

30104(bX1X(2X(3),(4Xand 

reconciled CMF's repoiled financial activity with 

. The reconciliation deteimined that CMF 

12. ^The foilowing chart outlines the discrepancies 

and hs bank recoids. Hie suoceeding paragraphs 

occurred. 

2012 Committee i^Bvttv 

Reported BankRaeoida Dtaenponesr 

Begjiming Cash Balance 

(aJulv9.20l2 

$0 $0 $0 

Receipts $2,8K767 $2,816,253 ($1,486) 

Understated 

Disbursements $2,743,851 $2,747,337 ($1^ 

Understalad 

Ending Cash Balance 

(SI December 31,2012 

$68,916 $68,916 $0 
CMFiiiidenlatodhsdisbunGmentsby$1^86in2012. However, when evaluating the 

identified enois, leganlleu of whether the enon were positive or negptive (abeolule 

vahie), the Audit staff discovered fliat CMF misstated its dlafauisements by $2,163,830 as 

follows: 

The misstatement of diabursements resulted from the foUowing diffoicnces: 

• ExpendituiesuiideMepoited or not reported^ 

• Expenditures over-reported ornot supported hy bank pigments 

• Baiik charges not reported 

Sun of Reporrteg A4I 

$1,081,176 

1,081,172 

LdS2 

82,163330 

Although the chart demonstreted that ovemll CMF had 

dMyurseinents hy $1.486 in 2012, the Audit staff 

the majority of its diabuiseoients. Thedl 

that; during the period from CMF's inception 

was unable to irialch vendor payments to any 

over^TCporting and undcHeporting on its disc! 

reporting expenditures of $1,081,172 and under^i 

of$l,082358. 

& InteriaiAMlit Report dkAndit 

At the exit conference, the Audit staff | 

discussed the reporting emiB that caused 

additional comments. 

hs 

. CM^S^ot properly report 

'teporteo^Bi^ a matmer 

October 23,2012j^^Audit staff 

du_ 

hedin 

Expenditures and bank charges 

of tIfE misstated activity and 

k'^lie CMF lYeasurer had no 

The biterim Audit 

misstatements for 2012' 

jecorti Ithat its reports to correct the 

I to Andit Report 

! to the lntdBAudit^B|miecommendation, the CMF Treasurer stated that 

disagreed^b it ha^mstated its disbursements by $2,163330. Also^the 

stated thatHjhe discrepancy of $1386 was a simple case of bank 

charges mis^Bto being rKited as contrsrieceipts (not-eufiicient-funds checks or 

credit card chaigH^frH reduce receipts) instead ofas bank service charges." CMF 

did agree that sooi^wtonaines and some dates were reported incomctly; therefore; the 

CMF Treasurer said^hended 2012 disclosure reports were filed to correct the payee 

names, incorrect dates, and the reporting of the bank service charges only (see Finding 3 

-Reporting of Apparent independent ExpenditurBs). However, as ofthe date of this 

report, the Audit s^determined that no amended reports have been filed by CMF to 

correct the public record. Absent the filing ofamended reports, CMF disbursements 

remain misstated by $2,163,830. 

s Tliii •imiii! inrlmhiiturn i nmMlllisi • IfSillngTn.fin Is milili li ihi( isiiirtnliiii WM liiiiifni bus hi 

mstoadBtomiiHuupwtifadngtohimihreedhbiwoiBiaidioiildbeispoiiBd. See Reoordkeeplqg Ibr 

Commiiiiieitlon Fladliig; p.18. 
Finding 2. ModlosnreofOeeapntlonandllftmeof 

Bmplofcr 

During aiuUt fieldwoik, a review of all Gontributiona fiom indlvidiials requiring 

itemization indicated that 327 Gontributkmatotaiing $86^743 lacked adequate discioaure 

oftfae contributor's occupation and name of employer. CMFdidnotdemonatrateliest 

effbrts" to obtain, maintain and submit thiainfiMmatkML In response to the Interim Audit 

Report recommendation, the CMF lYeasurer stated that CMF h^^Mided ha disclosure 

repiMts to correct the enors. However, as of the date of this igjwi n^bmended 

disclosure reports have been filed by CB4F to cofiect the piMK|coid. Absent the filing 

ofamended reports, the amount of contributions iadang wquaHsclosure of 

occupation and name ofemplqyer remains as $8d,7^ 

A* Required lafDrmation for Coatril 

contributian fiom an individual, the comml 

infbnnation; 

• the contributor's fiiii name 

• the contributor's occupation 

• the date ofreceipt (the date the^ 

• the amount of the contribution; 

• die calendar ye|gg|rige total of) 

U.S.C. iSOlMUSI^aiid 11 

(incii 

of his 

ived 

B. Beat Eflbrts EM 

shows thaUfaaxomm 

thei 

the same iiulividual. 52 

and 1043(aX4Xi). 

of a political committee 

below) to obtain, maintain, and submit 

ittee's reports and records will be 

52 U.SX:. $30102(1') and 11 CFR S104.7(a). 

treasurer and the committee will be considerBd to 

the oanunittBe satisfied all of the following criteria. 

for contributions included: 

for the contributor's full name, mailing address, occupation, 

of empkyen and 

this audi reporting is required by Fedenl law. 

Note: The request and stntement must appeal in a clear and conspicuous 

manner on any response material included in a solicltatian. 

Within 30 days ofreceiptofthe contribution, the treasurer made at least one 

effort to obtain the missing infixmation, in eiiher a written request or a 

documented cnl requesL 

The treasurer reported any contributor inlbrmation tha^ although not initially 

provided by the contributor, was obtained in a foiiowHip Gomrrumication or was 

contained in the oonunlttee's records or in prior reports that the committee filed 

during the same two-year election cycle. 11 CFR g 104.7(b). 
8 

A. Fkdi 

A leview of all oonlributioiis fiom individuals requiriiig ftemization indicated that 527 

contributions totaling $86^745, or 30% of total oontributions fiom individuals lequiied to 

be itemized by CMF, iaclwd disclosure of the contributor's occupation and name of 

employer. For most ofthese entries, the contributor's occupation and name of employer 

information (453 of527) were blank on the Schedule A (Itemized Receipts) filed with the 

Commission. 

The Audit staff reviewed the receipt records provided by 

utilized **best efforts" to obtain, maintain and submit the 

determine if it had 

CMF did not provide documentation diowi^ll^pSe foi 

requests for48contributionstotaiing$9,^0^86,745 -$77^ 

efforts 

CMF had the required information ibr4 

however, this information was not disclosed 

In response to die audit, CMF subm 

requirements: within thirty days of 

sent, clearly asking for the missing in 

contributors would be informed of the 

such information; 

address would be 

the information, CnittDuid arflid its: 

occupation and name o: 

oontril 

contri 

:"bcst efforts" 

^the conflH^ a letter would be 

solicgmg a contribution; (ii) 

law for the reporting ^ 

a fax number and an email 

I Treasurer staled that upon receipt of 

ride the new hifbrmttion. Although 

obtained for the mqjority of its 

that these follow up letters were sent to 

response to the CXI 

occupation and 

amended disclosure: 

above. 

it sihff provided schedules and discussed the omission of 

name of employer. The CMF Treasurer commented that 

issing occupation and name of employer informatioiL In 

CMF provided documentation detailing the comributor's 

employer information for $45369 of the erion, however 

were not filed.' This amount is included in foe $77^405 noted 

Ihe Interim Audit Report recommended that CMF establirii "best efforts" by amending 

its reports to disclose the missing information relating to the 479 contributions totaling 

$77^5. 

' CMF*sdnit«eGonlrii»dfliBooGiipmonsnd 

coiSribiaioiii totritng $32338> 

of nployer tidbnintlon for a addltiiiml 203 
C. Conmlttae Rapoue to Intcfin AsdH Report 

In lesponse to the Interim Audit Rq»rt tecommeDdadoii, the CMF TPBUunr stated that 

CMF had obtained occupation and nameof cmployBr infonnation Ibrall but 30 of its 

conlributon and restated its licsteflfoits^procodunB. The response also included a 

listing of the 30 contiibuton for whom CMF was unable to obtain the missing occupation 

and name of empioyer infonnation. In addition, 478 liesteflforta^letlen were provided. 

Further, the response mentioned that CMF had amended its disclosure reports to oonect 

the mqority of the errors. However, as ofthe dale ofthis report, the Audit staff 

determined that no amended reports have been filed by CMF to correct the public record. 

Absent the filing of amended reports, the amount of contributionsjicking adequate 

disclosure of occupation and name of employer remains as; 

Findings. RaportlngofAppnmt 

During audit fieldwork, the Audit staffreviewed di 

expeiulitures that CMF reported on Schedule E (Hem: 

were accunlely and completely discf 

The Audit staff identified di 

apparent independent expenditures. Abb 

were disclosed witfa an in^MKt vendor 

to verify tlieindependent 

ident Expenditures) 

136 wlH were not reported as 

itures totaling $185,663 

With respect to 

expenditures, CMF di 

did not fib 

noted 

In 

the 

amended 

reviewing 

expenditures totb 

apparent ii 

Abo,CMF's 

reporting ofthe SI independent expenditures totaling $185,663 disclosed whh the 

incorrect vendor name. However, even though the CMF'Deasuter said that amended 

reports were filed, as of the dale ofthis report, CMF has not filed any amended disclosure 

rejxrrts concerning the independent expenditures. Absent evidence that the expenditures 

in question did not reqinre reporting as independent expenditures and did not require 

24/48-hourieports^ the Audit staff considers the expenditures totaling $273,297 to be 

independent expenditures, and CMF has not complied with the recommendation to 

conect the disclosure fbr 51 independent expenditures totaling $185,663. 

ihed for certain independent 

ing $90;260 in a timely manner and 

expenditures totaling $469,136 

recommendation, the CMF lYeasurer stated that 

was $914^856 arxl CMF has filed new and 

indqiendentexpenditiires totaling $764^082. After 

invoices that were provided, the Audit staff has accepted that 

9 were not independent expendhures; and reduced the 

itures not reported to $273,297 ($469,136 - $195,839). 

mentioned that it had filed amended reports to correct the 
10 

A. DdlaitioioflBdapMidftETp—ditiim The tenn'iiidependem expenditure^ 

means an expenditure by a peison fin-a Gommunicatiao expressly advocating the 

election or defeat of a cleaily identified candidalelfaat is not made in cootdination 

with aoy candidate or authorized committee or agent of a candidate. II CFR 

Si00.16. 

R Dhckianre Baqnlfwenta-General Gnldclinea. An independent expenditure shall 

be repotted on Schedule E If, vriien added to other Independent expeialiluics made to 

the same payee during the same calendar year. It exceeds $20& Independent 

expenditures made (Le., publicly disseminaled) prior to p»||Hie(mld be disclosed 

as memo entries on Scheie E and as a debt on Schedul^F Independent 

expenditures ofS200 or less need not be itBniized,thouplMQmmittBe must report 

the total ofthose expenditures on line (b) of Sdieduli^ 11 C^US104J(bX3XviiX 

104A(a) and 104.11. 

C. Laat-Mlnnte Independent Expendttnre 

independent expendltuies aggregating $1 

election, and nuKle after the 20^ d^y but more 

election, must be reported and thereport must be 

24 houn after the expenditure is ni^A 24-hour 

additional Independent expenditur^l^gtp $1,000 

communication is publicly 

use to determine whether the total 

aggregate^ reachedthe miri^n repot 

f§104A(0aiidl 

lespcct to av given 

befinetheoi^ofan 

by the Commission within 

required each time 

The date that a 

date^Kt the committee must 

expendltuies has, in the 

amount of $1,000. 11 CFR 

R Independent El 

expendil 

tlm^ 

be.dfclosed witlil 

imustbe^ 

GxpenMre is made. 

asthedaBhatthe 

J 

leportingi 

(48-H^ Reports). Any Independent 

respect to any given election, at any 

I to and Efeluding the 20th day befbre an election, must 

I the expendltuies agpegste $10,000 or more. 

ived Commission within 48 hours after the 

: a communication is pubikiy disseminated serves 

I must use to deteimine whether the total amount of 

has, in the aggregate^ reached or exceeded the threshold 

,000. 11 CFR S§104A(Q and 104.5(^1). 

R Definition of] Advocating. The term "expressly advocating^ means any 

communication fiiat; 

• Uses phrases such as "Smte fin-the President," "re-elect your Congressman,** 

'McfeaC* accompanied by a tdctureofone or more candidate(5),'*r^cct the 

incumbent," or communications of campaign slogan(s) or individual woni(sX 

which in context can have no other reasonable meaning than to uige the elert^ 

or defeat of one ormore clearly identified candidatB(sX such as posters, bumper 

stidcers, advertisement^ or 
11 

When taken as a whole and with limited reference to exIeniBl events, such as the 

proximity to the electna, could only be inteqiRted by a reasonable pcfson as 

containing advocacy of the election or defetf of one or more cleeriy identified 

candidate(s) because: 

o the eiedonl portion ofthe communication is unmistakabie^unambiguousk 

and suggestive of only one meaning; and 

o reasonable minds couid not differ as to whether it encourages actions to 

elect or defeat one or more cleariy identified candldate(s) or encourages 

some other Und of reaction. 11CFR 1100.22(B) and (b). 

political 

lired to be reported 

data from which the 

feriMamyand 

F. Formal Reqnirf anta ReganUng Reporta and 

committee shall mamtain records wife respect to the 

which shall provide in sufficient detail the necessaiy in 

filed reports m^ be verified, explained, clarified, and 

completeness. 11 CFR $104.14^X1)-

A. Reporting of Apparent Independent 

1. Facta 

During audit fieidwoifc, the Audit I 

reporting of independent 

to ensure the proper 

ified the fbilowing: 

not reporiEd totaiing $469,136. 

Schedule E totaling $185,663. 

IheA 

dl _ 

Audit 

the 

avaiiaiMBirerify the 

disbuiaei^KwerB 

as operating 

determmtfig 

invoices or payments to any 

Schedule B (Itemized Disbunements) or Schedule 

how it classified communications and how 

lents, as well as, if any documentation was 

amounts. CMFsta^ that portions of some 

as independent expenditures and the remaining portions 

However, CMF did not explain its methodology fiir 

[isbunemenls were disclosed. 

Absent documentation of how disburaementa were disclosed, the Audit staff used the 

following approach to determine the amount^ that should have been reported as 

apparent independent expenditures: 

* Tin Audit nsfforighnhy leclwted fa Us winiilsHnii ofthBtonlconirttilbutedteliiJepBndcBl 

citpcuiliUaci a wrirtyofuilnr types ofcortdswribed OB thslBwolcB^mchM, portage afltaHlllmcai 

letlBr^, com iianrlrtril whh credit caid pmrrwing connected whfa *ihlfilliiMat letlwi* and with 

"irqiilsliinn aial pmrieilwE"" rhnrl itnliiling thr'Vipilafttnn and pmrrwlng^ "rmial ilsts^ 

*>uaportlair^*1ookbc«wiricBa,*andooaliMwrlrtiitl¥ddicrBAgMidwnilliig'^Memlimtf'siichMa 

flag and bumper adoker. These coals deacribedou the hnoloei are not defleed ID tannsofliow they an 

ratrtad to the oommuoiosilces, but the dssoriptioos aright wise quaaflnna whether some of them should 
12 

Communicatioiis such as the tetephone calls, followHip ktten, and tclevlsioa 

advertisements contaming expRss advocacy of a cleaiiy Ideiitified candidate 

were considered to have most likely disseminated befixe the date of the 

BRieral election. 11 CFR S100.22(a) 

Based on communications that the Audit staff determined were disseminated 

befine the November 6,2012 general election, any associated costs were 

considered independent expenditures. 

Based on communications that tiie Audit staff 

after the general election, any associated costs 

expenditufes.' 

Apparent Independent Expendttniea (i 

Made Available) 

The Audh staff detennined that CMF 

totaling $1,816309. However, CMF on|y 

totaling $1,347333. Therefine, the Audit 

amount of apparent indepcnd^pLCTPcnditutes 

provided the associated comm 

dates, advertisements, and solic 

that CMF had not paid and ibr 

on Schedule E wheyte commun 

debt owed^ also^fllfebve been di 

Obligption^^k phoflMlls and 

exprresly aBreBtina theHection or 

(Mnedunderl 

disseminated 

lidered operating 

irannlcalion 

itures 

11 

ilated an under^eported 

$469,136, fiir which CMF 

phone scripts and call 

included $328350 

ilisclosed memo entries 

mated. The corresponding 

lulcD (Debts aiul 

advertisements contained language 

a clearly identified randidatr, as 

follow up letters contained language 

identified candidate, as defined 

which i 

This 

on 

ifbrthei 

lAudlt 

IwMfa 

rineetlieMaei 

' TheAudhniffi 

vendor cooptalBil the I 

SM II CJ.R.i 100.16. flatheriaviewafterCMF'i 

IDB AIIBIIIBIT OBBUGIN OOn MKMinH wlD OPHu GHO 

IfiiirniwlarqiiiiitlnniTpiinrriildi.inrllinii nuiiiii. wil liifli 

wkh pradudiig sad dfalrlbuliiig the eGnmanicreQni. 

of dWee Hned on amh hivoloe to enfanM the dWe on whtch CMF*i 

The Audh reffiwed the Ian dyr of the dWD nsge • the dele of 

completion fcraUlnvdbe^eeceiii ibr those hwoicei to which die daw laiyoccunnd partly befcre and 

pmtly after the genemleleodon dale. In that oaee^ the Audftnaffchoae to pro-rale the coat of the service 

Boooidtog to the propotdon of the dale naige ooomitog beftm and after the genenl deciicn. 

* Only S67300 of the S328330woiildbewqulindtDbedlacloaedaadctAatoMCMFdlaoloacddebtowod 

lothlavendortolBlhig$260^4SOonita20l2year<ndicpart See Fhidhigd-Reporting of Debte and 

ObUgaitona, p.15. 

' CMF has todlcalBd that the two telephone acrlpta, two ibIlowHailctlBn, and thieeielevlelon 

nlMiiilwiia lii In din ftiallt rtaflTi pnainainn loiainiias ilai liilm lailwinr nf fommiiiilraliiaii llm man 

made durii^ the andh period. However, tovolcaatadlcaie there wm an addhlcoal 2 tetoviaion 

ailwileiaiaiSi.errniiilhitl RnmnlwipingBir riaiiiiaBilialliaie.p Itl Baaadontheeomentofthe 
13 

ladspcBdcBt Ezpendttara Reported OB Schcdilc E (McpMdnt 

EipeBdHorc Schedflle)-DliGloeflre Emm 

CMFdisclo9ed51 iiidependeiitexpGiiditiiicstala]ingSI8S,663withaniiiconect 

vcndorneine. These expenditures were diecloeedBspBid to the media vendor. 

However, CMF did not meke direct p^ments to this vendor. The media vendor's 

services were billed to CMF throng invoices fiom another vendor, and CMF 

made dhect payments to that vendor instead of the media vendor. 

2. Inflerim Andtt Report A AndltDlvlsioBRccoaii 

At the exit conference, the Audit stafT presented schedules 

expenditure reporting errors. In response to the exit conj 

provided an email addressing S301,972 of the ex| 

A. 1 (a) sbove. The email diowed that June 2012 

billed to CMF were actually incurred by i 

paidhythatcommfttee.' Otherthanthe 

did not provide any other documentation 

for $92,411. 

Hie Interim Audit Report 1 

• Provide documentation 

totaling $469,136 did not 

Absent such evidence, CMF i 

disbursements as independent I 

proceduresJ^lm|[ng ii 

Amend llBporfeTBrrect the 

ll8S,663. 

independent 

tfaeCMFTVeasurer 

: not paid in section 

: $92^11 that were 

have been 

by CMF, 

tha^^otheri 

Treasurer 

liable 

that CMF:' . ^ 

that aiusitelMenendent expenditures 

gasiniulkpdmex 

iBiendeilni reports to disclose these 

ule E and submit revised 

namefortheSl independent 

MF belli 

this amount' 

anattdHmntthati 

IftUTB' 

mvoices. 

lit Report 

Report recommendatioii, the CMF Treasurer staled 

bthe aStajmount of independent expenditures was $914^856 

on the amended disclosure reports. CMF provided 

how it determined vdiether an expenditure VMS an 

independent expenditure, along with 20 additional vendor 

CMF oonsideredlfe following costs as independent expenditures: all costs 

associalBd whh & media vendor ($629,73(0^ 20K of all outbound phone calls 

($133,25(9 since approximately one mimite ofan avenge five minute call contained a 

taped antMbama message; 30% of all rental list costs ($30,223) sifice the lists were 

used for outbound calls which had a dual purpose of delivering a political message 

and solicltiiig a contribution, and all bumper stidEer costs incurred before the general 

election ($2,087), since the costs contained apolitica] message. Costslotaling 

The other GommhlMtiMa CMF comndsliHSblelbr the 192^11 debt b not r^btsrad with the 
14 

$92,411 were GonsideRd ID be costs associated with a 527 oiganization'(see Finding 

4 - Repotting of Debts and ObligstionsX and all other costs were considered ID be 

either fimdnlsfaig or administntive in nature. CMF did not provide any new phone 

scripts." 

HW Audit staff maintains the script used fx the telephone calls, the tbiiow-up letters 

sent, and the media television advertisenients provided by CMF and made before the 

general election contained express advocacy, making the costs for these and all other 

lelated costs independent exp^itures. CMF's statement that some ofthe costs were 

fondraisingonjy does not take into account that fandraislnglqigra with express 

advocacy language are not excluded from the regulation defl^Hb^at 11CFR 

§100.16.'^ AlsoyCMF*s response mentioned that it hadj[Kamended reports to 

correct the reporting ofthe 51 independent expenditim^wBto $185,663 disclosed 

with the incorrect vendor name. However, as ofthe flteof^Bvort, CMF has not 

filed any amended disclosure leixxts concemu 

After reviewing additional vendor ii were 

staff reduced the apparent independent 

staff accepted that legal and accounting expendf 

independent expenditures. Also^ Audit staff 

pundiBse and mailing of Ameru atfiMLfK13,122X 

($4,650), and credit card 

apparent indqrendent expeiulitures. 

of$157,537fiDmits 

these to be 

removed from 

recordkeeping 

notsuflkientto 

Ft 

byCMvB^Audit 

$195339. ^Audit 

Ibig $64^160 were not 

that costs relating to the 

to lock box services 

5305) were not 

Vemoved disbursements 

and now considers 

Ing S38302 have been 

total and moved to the 

provided for these cxpendhures is 

should have heen repotted (See 

$1,347333 

thttthe 

expenditures, the 

expenditures. 

: of apparent independent expenditures to 

As prevknisiy stated, CMF reported 

in tne'amount (ff$i347333. Therefore, CMF has not 

indepoMleiit expenditures totaling $273397 ($13^30-

reporting as independent expenditures. Abs^evidence 

question did not require reporting as independent 

lit staff considers these expenditures to be independent 

* SeetbolaolelS. 

''SeBiNiaiole4. 

" CMF pravhlBd one more tricvMon nlw illaiiiaiiil, brlagiiig flie total provided by CMF to tbw. The 

CMP TYeMuurnwedSriUBlevlihiiiidverthcuicuUiifaidBpcndMifpciiditiae. However die Audit 

wt# thh IBIIIMM iKiirt—flB|rHMlllUrT frtCSUte 

ttdoeiaotcoidihieKpwMedvececy. AndtheecMtbBotapBloflidiffndliig 

"SeetfaeFhiil Audit Report ofthe Commiwloo on the Legacy ComuiiUeePolMceJ Action ComnitiBe, 

Fhidlag 2 (200S decdaa qicle). 
IS 

B. FUlBKtDFIk24M-HdiirReporlilbrlMl8pciidaitEzpaidHBni 

1. FIMII 

During audit fieldwoik, the Audit staflricviewaddiabunements to detenninewfaelher 

24/48-hour icpoits were property filed J' The Audit staff delennined that CMF filed 

untimely 24-hour repoftafiir 13 Independent expenditures totaling S90L260. Fortfaese 

expenditures!, 24-hour reports were filed 13 to 27 days after the dissemination date. 

As noted abc^ the Audit staff also identified apparent independent expenditures 

totaling $469,136 which may also require filing of24/48-hour reports. 

2, Interim Audit Report A Andtt Dhrishn Reeon 

At the exit conftrenoe^ the Audit staff presented schedu 

24/48-hour reports that were not filed. TheCMF 

comments. 

Absent documentation and evidence that 

$469,136 did not require reporting as i 

aboveX the Interim Audit Report 

'untimely and possible 

no additlonid 

support the date of public dissemination tor the 

whether a filing of a 24/48-hour report was requ 

recommended that CMF provide oHmentation to 

reports totaling $90^260 were filed 

3. Committee ReapoMr to the Int 

In response to the Report! 

that die actual anjHit of iHpendentcxi 

new and amendHw48-hoKeDOf1s fi)r ii 

independent tDtaling 

-Ua) 

to 

to determine 

Interim Audit Report also 

that the 24-hour 

y 

the CMF Tkeasurer Stated 

was $914,856 and CMF has filed 

expenditures totaling $764,082. 

$273 

mdependeri 

reqidred filing' 

the 24-hour reports totaling $90,260 

restsles that CMF under-reported tiie 

itures totaling $273,297. The Audit staff was 

reports filings CMF made addressed these 

Absent evidence that the expenditures totaling 

section A J. above) did not require reporting as 

the Audit staffconsiders these expenditures inqy have 

reports. 

I Finding 4. ltep«MrHiig of Debte md OfcHg-HaM 

During audit fieldwori^ the Audit Staff identified debts totaling $67,800 that were imt 

disclosed on Schedule D (Debts and Obligations) as required. CMF contended that it wm 

not liable fiir a portion ofthe expenses, as they were incurred by another committee. In 

13 SeelboliioteS. 
16 

lesponae to thcinterim Audit Rqxxt Eecommendation, the CMF TYcasuicr provided a 

ch^ copy (fiont only) written 1^ a 527 oryniization for iteyment of S93,990 along whh 

ten invoioes billed to ite 327 oiganizatlon, and concluded that all debts and obligations 

owed have been properiy repofted. Ibe Audit slalTdoes not consider this adequate 

documentation to demonstrate that the debts totaling $67,800 did not require disclosure 

byCMF. Absent farther documentation, the amount ofdebts required to be disclosed on 

Schedule D remains as $67,800. 

disclose the amount 

extinguished. 

A. Contfainons Baportlng Raqaircd. A political oommittec 

and nature of outstanding debts and obligations until those 

52 U.Sr. §30104(bXQ and 11CFR S§104.3(d) andlOi 

• A debt ofS500 or less must be reported 

the date incurred (the date of the 

regularly scheduled report. 

• A debt exceeding S500 must be disclosed 

which the debt was incuned. 11CFRS104. 

the committee 

C Reporting DtepntadDeUa. A 

acoordancewith 11 CFR 104.3(d) 

ofvalue to the political committee, tfotii 

commhtee shall di 

any amount the pqll 

isowed. Ihe 

disclosure of 

waiver of any claim' 

§116 

60daysfiom 

ontlienext 

A. Flaete 

Hie Audit 

obligations, 

except for the 201 

wnior. This vendor 

a disputed debt in 

provided something 

ived, the political 

lounts paid to the creditor, 

it owes adB the amount the creditor claims 

on the appropriate reports that the 

an admisskm of liability or a 

have against the creditor. 11 CFR 

and disclosure reports for proper reporting ofdebts and 

cycle, CMF over-iepoited (U owed to one vendor 

Report, which did not include $67,800** owed to the 

ided media services for CMF. 

B. Interim Andtt Report A Audit DIvisloaReeonimcndatiDn 

At the exit conference; the Audit staff provided a schedule and discussed 0w debt 

reporting matter with the CMF Treasurer. In response to the exit conference, the CMF 

^ Ttie Audtinrir idtetiOed pwrnmli owed to tlili vndor totrting $328,250. See Fiadiag 3 - Repoitiqg of 

Appeient tndependent BipendltuiM, p. 9. Only S07A00oftliB 8328^50 would be nqrired to tw 

dleeiond to dfot, ilaeo CMF dliclond debt owed to this vendor tonliBg $2fiOASO on hi 2012 yoMd 

icpoft CMF conlepdi dm nivoieei totetfaig 892At 1 oftlie 8328,250 billed wen famned by another 

conuahtoe. 
17 

Trenurer provided an email showing that June 2012 expeiues totaling $92,411 that were 

billed to CMF were actually incurred hy another committee and should have been paid by 

that committee. However, no further documentation or explanation was provided to 

associate these expenses witfa another committee. The Audit stafTwas not able to verify 

that the other committee is actually liable fi)r the debt As a result, the debt that CMF did 

not report on its Sclw*''e D remained as $67,800. 

The Interim Audit Report reconunended that CMF provide documentation demonstrating 

that these expenditures did not require reporting on Schedule D and documentation to 

support that the expenses totaling $92,411 were billed enoneouslyjp CMF. Abaentsuch 

doramentstion. It was further recommended that CMF amend vfthcts to disclose the 

unreported debts totaling $67,800. 

C Commltlee Response to Interim Andit Report 

In response to die Interim Audit Report recomnien^^l^Ae CMF^^nuer stated that 

CMF's executive director was also the TreasuR^^527 organizBtion^ld that ten 

ruly2012 

CMF 

CMF instead o^the 527 

^fganizatian for payment of 

luded that all debts and 

Invoices should have been billed to the 527 ^ 

oiganizBtion was tenninatlng^^ and CMF was'j 

maintained the vendor mistakenly billed the ten in 

oiganization. A check copy (from oi^written by the 

the ten invoices totaling $93,990" wnHRdded, and C 

obligations owed to die vendor were 

bi a conference held after the Interim A 

that he had requested 

oiganization and 

demonstiBte that 

ten invoices. Subseqi 

invoices wgMdHri^ to 

the new uffE9HlhBntaii 

CMF*neand 

The AudOnff maintains 

contained th^^e 

service fiirbil 

billed to the 527 

the CMF Treasurer stated 

^hedt GoJ^writlen by the 527 

*s bank statements in an attempt to 

of the services provided on the 

provided ten more Invoices. The 

ly provided totaling $93,990, except that 

527 oii^ization's name and address instead of 

provided by CMF and correctly billed to CMF 

s, the same costs, and used the same calendar dates of 

services on the invoices CMF claimed should have been 

If CMF continues to contend it did not receive the service 

"EnlllleioiasiiladanderNGtionS27 ofthetn code we ooBridHied"polliiGdomsBialioiii,* defined 

gBMialbr ei e pwtyi conuniBBe or ewoeirtlon thet b ofgeniad aid openled prinerlfy fbr die pmpoie of 

hdhiBBdng die eebdiofl. noninrtlon or eppofaanntf of aqr faidividuBl to ay fbdend, rtsle or looel 

piddte oflloe, or otBa In e polMal orgeniiilhei AllpoUdcnloonnnltleaifartiieablerandlDenpom 

whh the FEC ae S27 ofpnlaliooi^ but not all 527 oipidBtlom ae nqnlied to ffle with the PEC. 

Sona fib icpcrti with the Inlanel Revenue Senda (IRS). 

" IRS leooris indicale dalihe 527 aiinfaaion dheohed OB Angurt 29; 201Z 

" The CMF Tieeaner baled Hat onfy $92d4l 1 of the $83,990 bflled aa Incuiied by the 527 ommMon. 

And that the dilftnna of $1,579 ($93,990 - $92A1I) aa a CMF medb expeae dm would be 

rnniiilriril in hn en In Itwl mntrHinrinn than Ihr TTT nigenfiainn. with liai oirralyii pnnlon uflTn 

($1,579 - SI jOOO) fayebb a nialtand. 
18 

on the invDices In quesdou and that the $92,411 is the debt ofthe 527 oiganization, then 

CMF couU report it as dlqnilable debt per 11CFR {116.10(a). 

The Audit staff concliides that although the amount of the dwck copy provided agreed 

with the total ofthe 10 invoices in question, CMF has not demonstiated that this check 

was successAilly negotiated and that the $9^411 billed to CMF was not Incuned by 

CMF. Absent further documentation, such as a haiik statement supporting die check in 

question was n^otiated or a statement fiom the vendor that the 10 invoioes in question 

should have been billed to the 527 organizBtion or documenlation that CMF did not 

receive the services noted on the invoices, the debt CMF has not reported on Schedule D 

remains as $67,800. 

I Findings. Itecondheepiiig Ibir Com 

During audit fieldwoik, the Audit staff 

the infofination and proper classification of 

staff identified $304399 fbr which sufficient 

ofthe invoices and the associated 

detennine how CMF dwuld have 

Interim Audit Report recommendation, 

invokes^ four tension advertisements, 

documentation needed 

that the records 

were operating 

documented. In 

in the appareirt 

further 

$117 

comm 

which shall 

the filed repor 

completenesa. 1 

to veri^ tflBciuBcy of 

onieporv: DwAudit 

notprovided. Witfaoutacopy 

theMjjt staff was unable to 

dUwneiiil^k. la response to the 

two media vendor 

iieved that all 

The Audit staff concludes 

that diafiursements totaling $224,768 

^totaling $79,631 were insufficiently 

8,302, which were originally included 

are not sufficiently documented. Absent 

the remaining disbuisemcnts totaling 

insufficiendy documented. 

ling Raports and Statements. Each political 

fracoids with respect to the matters required to be reported 

ifficient detail the necessary infixmation and data fiom which 

verified, explained, clarified, and check fiir accuracy and 

%S104.l4<bX1). 

B. PnsenrlngRceonis and Copies of Reports. Die treasurer ofa political committee 

must preserve all records and copies ofieportsfbr 3 years after the report is filed. 52 

U.SC.i30l02(d). 
19 

A. Full 

During audit fiekhvoik, the Audit staflf reviewed diabursenwnti to verity the accuracy of 

the infbnnation reported on the discloaure reports. 

The Audit staff's analysis resulted in the following: 

I. 

«79A3n 

CMF made two dhbuiaciueuts to a media vendor lGCa]ingg9,63l" for which 

documentation was insufiSdent to make a detenninatkmjnbv these 

disbuisementsdmuld be reported. Available documoHon included the 

disburaemcnt database; canceled check copies, a^aHMrnements. Whhouta 

copy of the htvolces and the associated cainmimMKons,nBaudit staff was 

unabfo to determine how CMFriuuldhavejpp^gMiesedllHKinenls. The 

Audit staff* requested the invoices, pwrneaAocumentation. anrafoies of foe 

communications. 

iL pirtffWfiii-Ii^'ifjaeBProviiled-Ini 

Pmvidadimi.76m 

Disbursements tolaiing $224, 

media vendor. The invoices 

television advertisement not 

oommunicatkm, the Audit staff 

costs. The Audhrii^kauested 

were paid to one 

was an additional 

Without a copy of the 

MF's reporting of these 

communication. 

B. Interim Ai 

At the exit conference^ 

which 

schedule of the disbuisements for 

Treasurer did not provide any 

>udlt 

Audit stainl^ delennii 

($79,631 +$|^6g)0D 

included Gopicn 

andiftheoainmi 

communication wHh 

that CMF provide the necessary recoids so the 

reporting for the disbuisements totaling $304^99 

encM amendments. Such records should have 

wifo identification of the associated communication, 

already been provided, information associating each 

invoice(s). 

C rirmmltf—AnititBifpftrf 

in response to the Interim Audit Report recommendation, the CMF TVeasurer provided 

the two missing invoices for the disbursements for which no invoices or copies of 

communications were provided ($79,631). Although the two invoices were provided, the 

invoices do not indicate what advertisements were run and CMF did not provide a copy 

ofthe relative communications. Therefore, foe Audit staff still ccnsldefs the 

" Thb mount h s |Mrt of the mpsndhieM not nportsd wUch Ii 

Flmneial Acdvfor, p. S. 

ta FhuUiig 1 - MhUiMneBl of 
20 

disbunemcnts for which originally no Invoksea or copies of communications woe 

provided (S79.631) to he insufficiently documented. 

Also, die CMF Treasurer provided four television advertisementa for the disbursements 

fbr which invoices were provided but the Audit staff questioned whether tfaoe was an 

additional television gdveitisement ($224^768). Ofthefinir television advertisements 

provided, three advotiaements had already hem provided to the Audit staff during audit 

fleldwoik. CMF did not provide the fifth advertisement implied in an invoice.^* The 

CMF TVeasufcr staled that the media vendor had confinned that there was only one 

Ohamamre television advertisement evm though the invoices ideated that there was 

anObama-careadvertieementandaRepealObamacareadvcrtu^Mi Therefiue, 

acooiding to the CMF Treasurer, there were only fi)ur televijif advertisements, and 

CMF had provided all ftair of the advertisements. Afterj 

advertiaements provided, the Audit staff deemed 

(^mating expendhufOS, and ftitf die costs fin all ofj 

been sufficiently documented. 

Lthe television 

,8224^768 as 

have 

In addhioii, the Audit staff has moved to this' 

had previously considered to be apparent ii 

Reporting of Apparent Independent q^pcnditures). 

rehded expenses totaling $28,901, imeHtfiie woiec: 

$9,276, a sample premium chaigB oft 

Ahhou^ invoices had bem provided 

sufficient to deleimine howtfiese expendii 

1 totaling 08,302 that it 

(SeeFindi^Bincludcd web 

glcplioiK call oosis of 

I of $100. 

documentation was not 

reported. 

The Audit staff I 

totaling $224,768^ 

and should be reported^ 

has proAu documentation fi)r disbursements 

> that the dnu^sements were operating expenditures 

The Audit staff considers the 

1,631 +$38302) to be insufficiently 

>*SeeF(Nlnole7.