FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

December 22, 2008 

MEMORANDUM 

To: Robert W. Biersack 

Press Officer 

From: Wanda J. Thomas 

Acting Assistant Staff Director 

Audit Division 

Subject: Public Issuance of the Audit Report on Christine Jennings for Congress 

Attached please find a copy of the audit report on Christine Jennings for Congress, 

which was approved by the Commission on December 15, 2008. 

All parties involved have received informational copies of the report and the report 

may be released to the public on December 22,2008. 

Attachment as stated 

cc:	 Office of General Counsel 

Office of Public Disclosure 

Reports Analysis Division 

FEC Library 

DSDD Website 
Report of the 

Audit Division on 

Christine Jennings for Congress 

February 23, 2005 - December 31, 2006 

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. I The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and disclosure 

requirements ofthe Act. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, with 

respect to any ofthe 

matters discussed in this 

report. 

About the Campaign (p. 2) 

Christine Jennings for Congress is the principal campaign committee 

for Christine Jennings, Democratic candidate for the U.S. House of 

Representatives from the state of Florida, 13th District, and is 

headquartered in Sarasota, Florida. For more information, see the chart 

on the Campaign Organization, p. 2. 

Financial Activity (p. 2) 

•	 Receipts 

o	 Contributions from Individuals $ 2,365,817 

o	 Contributions from Other Political 

Committees 663,059 

o	 Candidate Loans 110,000 

o	 Other Receipts 41,044 

o	 Total Receipts $ 3,179,920 

•	 Disbursements 

o Operating Expenditures	 $ 3,048,014 

o	 Loan Repayments 100,000 

o	 Other Disbursements 665 

o	 Total Disbursements $ 3,148,679 

Findings and Recommendations (p. 3) 

•	 Receipt ofContributions that Exceed Limits (Finding I) 

•	 Misstatement ofFinancial Activity (Finding 2) 

•	 Failure to File 48-Hour Notices (Finding 3) 

•	 Itemization ofContributions from Other Political Committees 

(Finding 4) 

1 2 U.S.c. §438(b). 
Table of Contents 

Page 

Part I. Background 

Authority for Audit
 

Scope of Audit
 

Part II. Overview of Campaign 

Campaign Organization 2
 

Overview of Financial Activity 2
 

Part III. Summaries 

Findings and Recommendations 3
 

Part IV. Findings and Recommendations 

Finding 1. Receipt of Contributions that Exceed Limits 4
 

Finding 2. Misstatement of Financial Activity 7
 

Finding 3. Failure to File 48-Hour Notices 9
 

Finding 4. Itemization of Contributions from Other Political Committees 10
 
Part I 

Background 

Authority for Audit 

This report is based on an audit of Christine Jennings for Congress (JFC), 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 2 U.S.c. §438(b), which permits the 

Commission to conduct audits and field investigations of any political committee that is 

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

subsection, the Commission must perform an internal review of reports filed by selected 

committees to determine ifthe reports filed by a particular committee meet the threshold 

requirements for substantial compliance with the Act. 2 U.S.c. §438(b). 

Scope of Audit 

Following Commission approved procedures, the Audit staff evaluated various risk 

factors and as a result, the scope of this audit was limited to the following: 

1. The receipt of excessive contributions and loans. 

2. The receipt of contributions from prohibited sources. 

3. The disclosure of contributions received. 

4. The consistency between reported figures and bank records. 

5. The completeness of records. 

6. Other committee operations necessary to the review. 
2 

Part II 

Overview of Campaign 

Campaign Organization 

Important Dates Christine Jennlnzs for Conzress 

• Date of Registration February 22, 2005 

• Audit Coverage February 23, 2005 - December 31, 

2006 

Headquarters 

Bank Information 

• Bank Depositories 

Sarasota, Florida 

One 

• Bank Accounts Three checking accounts and one 

money market account 

Treasurer 

• Treasurer When Audit Was Conducted 

• Treasurer During Period Covered by Audit 

Manaaement Information 

• Attended FEC Campaign Finance Seminar 

• Used Commonly Available Campaign 

Management Software Package 

• Who Handled Accounting and Recordkeeping 

Tasks 

Susan K. Flynn 

Susan K. Flynn 

Yes 

Yes 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

- - Cash on hand (iiJ February 23, 2005 

0 Contributions from Individuals 

0 Contributions from Other Political Committees 

0 Candidate Loans 

0 Other Receipts 

Total Receipts 

0 Operating Expenditures 

0 Loan Repayments 

0 Other Disbursements 

Total Disbursements 

Cash on hand @ December 31, 2006 

$0 

$ 2,365,817 

663,059 

110,000 

41,044 

$ 3,179,920 

$ 3,048,014 

100,000 

665 

s 3,148,679 

$ 31,241 
3 

Part III 

Summaries 

Findings and Recommendations 

Finding 1. Receipt of Contributions that Exceed Limits 

JFC accepted 111 contributions from individuals that exceeded the limit by $95,897. Of 

these excessive contributions, contributions amounting to $93,797 were eligible tor 

presumptive election designation and contributor attribution. However, there was no 

evidence that the required notices had been sent to contributors. The remaining excessive 

contribution, $2,100, was not eligible for presumptive redesignation and/or reattribution 

and must be refunded. In response to the interim audit report, JFC sent the required 

presumptive redesignation and/or reattribution letters and refunded the remaining 

excessive contribution of $2, I00. (For more detail, see p. 4) 

Finding 2. Misstatement of Financial Activity 

A comparison of JFC's reported financial activity to its bank records revealed that, for 

2006, receipts were understated by $193,005 and disbursements were understated by 

$196,791. Much of the misstated activity involved a loan from, and associated payments 

to, the Candidate. In response to the interim audit report, JFC filed amended reports that 

materially corrected the problems noted above. In addition, JFC amended the 2008 April 

15 Quarterly report to correct the ending cash on hand. (For more detail, see p. 7) 

Finding 3. Failure to File 48-Hour Notices 

JFC failed to file required 48-hour notices for 27 contributions totaling $43,700, received 

prior to both the primary and general elections. In response to the interim audit report, 

JFC acknowledged that it may have failed to completely report all contributions that were 

subject to the 48-hour reporting requirements, but has now instituted policies and 

procedures to achieve uniform compliance. (For more detail, see p. 9) 

Finding 4. Itemization of Contributions from Other 

Political CommitteesJFC failed to itemize 30 contributions from 24 political committees totaling $43,310 on 

Schedules A (Itemized Receipts) of its disclosure reports. In response to the interim audit 

report, JFC filed amended reports which materially disclosed these contributions. (For 

more detail, see p. 10) 
4 

Part IV
 

Findings and Recommendations
 

IFinding 1. Receipt of Contributions that Exceed Limits 

Summary 

JFC accepted III contributions from individuals that exceeded the limit by $95,897. Of 

these excessive contributions, contributions amounting to $93,797 were eligible for 

presumptive election designation and contributor attribution. However, there was no 

evidence that the required notices had been sent to contributors. The remaining excessive 

contribution, $2,100, was not eligible for presumptive redesignation andlor reattribution 

and must be refunded. In response to the interim audit report, JFC sent the required 

presumptive redesignation and/or reattribution letters and refunded the remaining 

excessive contribution of $2, 100. 

Legal Standard 

A. Authorized Committee Limits. For the 2006 election, an authorized committee may 

not receive more than a total of $2,100 per election from anyone person as adjusted 

by the Consumer Price Index (CPI). 2 U.S.c. §441a(a)(1)(A), (c) and (f); 11 CFR 

§110.1(a) and (b) and 110.9(a). 

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

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

•	 Return the questionable contribution to the donor; or 

•	 Deposit the contribution into a campaign depository and keep enough money on 

account to cover all potential refunds until the legality of the contribution is 

established. 11 CFR §103.3(b)(3) and (4). 

The excessive portion of contributions may also be redesignated to another election or 

reattributed to another contributor as explained below. 

C.	 Redesignation of Excessive Contributions. The committee may ask the contributor 

to redesignate the excess portion ofthe contribution for use in another election. 

•	 The committee must, within 60 days ofreceipt ofthe contribution, obtain and 

retain a signed redesignation letter which informs the contributor that a refund of 

the excessive portion may be requested; or 

•	 Refund the excessive amount. 11 CFR §§110.1(b)(5), 110.1(1)(2) and
 

103.3(b)(3).
 

Notwithstanding the above, when an authorized political committee receives an 

excessive contribution from an individual or a non-multi-candidate committee, the 

committee may presumptively redesignate the excessive portion to the general 

election if the contribution: 

•	 Is made before that candidate's primary election; 
5 

•	 Is not designated in writing for a particular election; 

•	 Would be excessive iftreated as a primary election contribution; and 

•	 As redesignated, does not cause the contributor to exceed any other contribution 

limit. 

Also, the committee may presumptively redesignate the excessive portion of a general 

election contribution back to the primary election if the amount redesignated does not 

exceed the committee's primary net debt position. 

The committee is required to notify the contributor in writing of the redesignation 

within 60 days of the treasurer's receipt ofthe contribution and must offer the 

contributor the option to receive a refund instead. For this action to be valid, the 

committee must retain copies ofthe notices sent. Presumptive redesignations apply 

only within the same election cycle. II CFR §110.I(b)(5)(ii)(B) & (C) and (I)(4)(ii). 

D. Reattribution of Excessive Contributions. When an authorized committee receives 

an excessive contribution, the committee may ask the contributor if the contribution 

was intended to be a joint contribution from more than one person. 

•	 The committee must, within 60 days of receipt of the contribution, obtain and 

retain a reattribution letter signed by all contributors; or 

•	 Refund the excessive contribution. 11 CFR §§11 0.1(k)(3), 110.1(1)(3) and 

103.3(b)(3). 

Notwithstanding the above, any excessive contribution that was made on a written 

instrument that is imprinted with the names of more than one individual may be 

attributed among the individuals listed unless instructed otherwise by the 

contributor(s). The committee must inform each contributor: 

•	 How the contribution was attributed; and 

•	 That the contributor may instead request a refund of the excessive amount. 11 

CFR §1l0.I(k)(3)(ii)(B). 

For this action to be valid, the committee must retain copies ofthe notices sent. 11 

CFR §II0.1(1)(4)(ii). 

E.	 Refund or Disgorge Questionable Contributions. If the identity of the original 

contributor is known, the committee must either refund the funds to the source of the 

original contribution or pay the funds to the U.S. Treasury. AO 1996-5 

Facts and Analysis 

Contributions from individuals were reviewed to determine if excessive contributions 

were received. The Audit staff identified III contributions that exceeded the limit by 

$95,897. During this review, it was noted that JFC routinely redesignated contributions 

to another election or reattributed contributions to another individual. However, JFC did 

not provide evidence of written reattributions or redesignations, or provide evidence that 

the contributors were notified of any presumptive reattribution or redesignation. 
6 

Of the excessive contributions, $93,797 could be resolved by JFC sending presumptive 

redesignation and/or reattribution letters. The one remaining excessive contribution 

($2,100) appeared resolvable only by refund. JFC did not maintain sufficient funds in its 

bank account to refund the excessive contributions. 

Prior to the exit conference, the Audit staff provided JFC representatives with a schedule 

of excessive contributions noted above. The issue was discussed at the exit conference 

with JFC representatives who agreed to review the schedule and concentrate on sending 

the necessary letters as soon as possible. 

Interim Audit Report Recommendation and Committee Response 

The Audit staff recommended that JPC: 

•	 Provide evidence demonstrating that the contributions were not excessive. Evidence 

should have included documentation that was not made available to the Audit staff 

during the audit, including copies ofsolicitation cards completed by the contributors 

at the time oftheir contribution that clearly informed the contributors ofthe 

limitations; timely notifications sent to contributors eligible for presumptive 

redesignation and/or reattribution; or, timely refunds (copies ofthe front and back of 

negotiated refund checks), redesignations, or reattributions for excessive 

contributions; or, 

•	 Absent such evidence, JFC was to send notices to those contributors that were eligible 

for presumptive redesignation and/or reattribution ($93,797) to inform them how the 

contribution was designated and/or attributed and offering a refund ofthe excessive 

amount. Absent a request for a refund by the contributors, these notices obviate the 

need for contribution refunds or payments to the U.S. Treasury. For notices sent to 

contributors, JFC was to provide a copy of each notice and evidence that it was sent. 

These notices must demonstrate that both the contributor and the individual to whom 

the contribution was reattributed were notified. If any contributor could not be 

located or if the presumptive notice came back undeliverable, JFC was to make a 

disgorgement ofthe excessive contribution to the U.S. Treasury; and 

•	 For the remaining excessive contribution, JFC was to refund the excessive portion to 

the contributor or pay the amount to the U.S. Treasury and provide evidence of such 

action (copy of the front and back of the negotiated refund check); or 

•	 If funds were not available to make the necessary refunds, JFC was to disclose the 

contribution requiring a refund on Schedule D (Debt and Obligations) until funds 

became available to make the refund. 

In response to the interim audit report recommendation, JFC provided copies of letters 

sent to contributors that were eligible for presumptive redesignation and/or reattribution 

($93,797). For the remaining contribution, ($2, 100), JFC provided a copy ofthe refund 

letter and negotiated check. 
7 

IFinding 2. Misstatement of Financial Activity 

Summary 

A comparison of JFC's reported financial activity to its bank records revealed that, for 

2006, receipts were understated by $193,005 and disbursements were understated by 

$196,791. Much of the misstated activity involved a loan from, and associated payments 

to, the Candidate. In response to the interim audit report, JFC filed amended reports that 

materially corrected the problems noted above. In addition, JFC amended the 2008 April 

15 Quarterly report to correct the ending cash on hand. 

Legal Standard 

A. Contents of Reports. Each report must disclose: 

•	 The amount of cash on hand at the beginning and end of the reporting period; 

•	 The total amount of receipts for the reporting period and for the calendar year; and 

•	 The total amount of disbursements for the reporting period and for the calendar year; 

•	 Certain transactions that require itemization on Schedule A (Itemized Receipts) or 

Schedule B (Itemized Disbursements). 2 U.S.c. §434(b)(1), (2), (3), (4) and (5). 

B. Itemizing Loans. Each person who makes a loan to the political committee during 

the reporting period must be disclosed with the following information: 

•	 Identification of any endorser or guarantor ofthe loan; 

•	 The date the loan was made; 

•	 The amount of the loan. 11 CFR §104.3(a)(4)(iv). 

Facts and Analysis 

The Audit staff reconciled reported financial activity to bank records for calendar years 

2005 and 2006. A misstatement of receipts and disbursements was noted for 2006. The 

following chart outlines the discrepancies; succeeding paragraphs address the reasons for 

the misstatements. 

2006 Activity 

Reported Bank Records Discrepancy 

Opening Cash Balance 

@J January 1,2006 

$304,028 $304,092_ $64 

Understated 

Receipts $2,584,748 $2,777,753 $193,005 

Understated 

Disbursements $2,853,813 $3,050,604 $196,791 

Ending Cash Balance 

December 31, 2006 

$28,073 2 $31,241 $3,7222 

Understated 

2 JFC's ending cash on hand does not foot due to an unexplained reduction of$6,890 on the beginning 

cash on hand for the 2006 Year End Report period. 
8 

The understatement of receipts was the net result ofthe following: 

•	 Receipt of in-kind Candidate loan not reported $ 100,000 

•	 Contributions from individuals and political committees
 

received but not reported 90,125
 

•	 Contributions from individuals and political committees
 

erroneously reported or reported twice (20,500)
 

•	 Transfers from affiliated committee not reported 14,193 

•	 In-kind contributions not reported 4,985 

•	 Unexplained Difference 4,202
 

Net Understatement of Receipts $ 193,005
 

The understatement of disbursements was the net result ofthe following: 

•	 In-kind disbursements primarily by the Candidate
 

not reported $ 104,985
 

•	 Repayment of Candidate in-kind loan not reported 100,000 

•	 Reported voided checks ( 1,819) 

•	 Unexplained Difference ( 6,374)
 

Net Understatement of Disbursements $ 196,791
 

The $3,722 understatement of ending cash on hand resulted primarily from the 

misstatements noted above as well as an unexplained reduction of $6,890 on the 

beginning cash on hand for the 2006 January 31 Year End Report period. Subsequent to 

the start of audit fieldwork, JFC filed an amended January 31 Year End Report for 2006, 

which corrected the errors in beginning and ending cash on hand for that report. As of 

the date ofthe interim audit report, the beginning and ending cash on hand for subsequent 

reports had not been corrected. 

With respect to the in-kind Candidate loan, on September 26, 2006 the Candidate 

withdrew $100,000 from her investment account and deposited it into her personal 

checking account on October 2, 2006. From this checking account, the Candidate made 

payments to Media Strategies for media costs. JFC did not disclose this loan on either 

Schedule A (Itemized Receipts) and C (Loans), nor did it report the repayment ofthe loan 

on Schedule B (Itemized Disbursements) and Schedule C of its reports. Further, JFC did 

not disclose the payment to Media Strategies. JFC repaid $50,000 ofthis loan on 

October 21,2006, another $25,000 on October 21, 2006 and the remaining $25,000 on 

November 9, 2006. No interest was paid on this loan. 

At the exit conference, the Audit staff explained the misstatements and that much ofthe 

differences resulted from the in-kind Candidate loan and its repayment not being 

reported. Representatives for JFC indicated a willingness to file amended reports to 

correct the misstatements noted above. 

Interim Audit Report Recommendation and Committee Response 

The Audit staff recommended that JFC: 
9 

•	 amend its reports to correct the misstatements noted above. The amended reports 

were to include the proper disclosure information on Schedule A for the in-kind 

Candidate loan as well as its repayment 

•	 In addition, the Audit staff recommended JFC amend its most recently filed report 

to correct the cash on hand balance with an explanation that the change resulted 

from a prior period audit adjustment. Further, JFC was to reconcile the cash 

balance of its most recent report to identify any subsequent discrepancies that may 

impact adjustments recommended by the Audit staff. 

In response to the interim audit report, JFC filed amended disclosure reports which 

materially corrected the errors noted above. In addition, JFC filed an amended report for 

the 2008 April 15 Quarterly report which contained an adjustment to correct the ending 

cash on hand. 

IFinding 3. Failure to File 48-Hour Notices 

Summary 

JFC failed to file required 48-hour notices for 27 contributions totaling $43,700, received 

prior to both the primary and general elections. In response to the interim audit report, 

JFC acknowledged that it may have failed to completely report all contributions that were 

subject to the 48-hour reporting requirements, but has now instituted policies and 

procedures to achieve uniform compliance. 

Legal Standard 

Last-Minute Contributions (48-Hour Notice). Campaign committees must file special 

notices regarding contributions of$I,OOO or more received less than 20 days but more 

than 48 hours before any election in which the candidate is running. This rule applies to 

all types of contributions to any authorized committee of the candidate, including: 

•	 Contributions from the candidate; 

•	 Loans from the candidate and other non-bank sources; and 

•	 Endorsements or guarantees ofloans from banks. 11 CFR §104.5(f). 

Facts and Analysis 

The Audit staff reviewed 268 contributions, totaling $494,633, which were greater than. 

$1,000 and received during the 48-hour notice filing period of both the primary (8117/06 

- 9/2106) and general elections (10119/06 - 11/4/06). JFC did not file 48-hour notices for 

27 contributions totaling $43,700. These included contributions from both individuals 

and political committees. For the general election 48-hour notices, 19 ($30,200) of the 

21 contributions were included in the same three deposits made on October 23, or 

October 24. 

At the exit conference, JFC was provided a schedule ofthe 48-hour notices not filed. 

Representatives for JFC did not comment, but took the workpapers for review. 
10 

Interim Audit Report Recommendation and Committee Response 

The Audit staff recommended that JFC provide evidence that 48-hour notices were timely 

filed, that no notice was required or submit any comments it considered relevant. 

In its response to the interim audit report, JFC acknowledged that it may have failed to 

completely report all contributions that were subject to the 48-hour reporting 

requirements, but does note that it did file 241 ($450,000) of the 268 ($494,633) 

contributions that required such notices. JFC's response also stated that for 2008, it has 

instituted policies and procedures to achieve more uniform compliance.. 

Finding 4. Itemization of Contributions from Other 

Political Committees 

Summary 

JFC failed to itemize 30 contributions from 24 political committees totaling $43,310 on 

Schedules A (Itemized Receipts) of its disclosure reports. In response to the interim audit 

report, JFC filed amended reports which materially disclosed these contributions. 

Legal Standard 

Regardless of Amount. Several types of receipts must be itemized on Schedule A 

regardless of amount. They include: 

•	 Contributions from political committees and similar organizations; 

•	 Transfers from other party committees and party organizations; 

•	 Transfers from non-federal accounts and of Levin funds; 

•	 Loans received; 

•	 Loan payments received; and 

•	 Refunded contributions received from political committees.
 

2 U.S.c. §434(b)(3)(B), (C), (D) and (E).
 

Facts and Analysis 

Based on its 100% review of all contributions from other political committees, the Audit 

staff identified 30 contributions from 24 other political committees totaling $43,310 that 

were not itemized on JFC's disclosure reports. All the contributions were from federal 

political action committees which require itemization on Schedule A, Line II (c), 

regardless of amount. These contributions were reported by the contributing committees. 

Included among the contributions were five in-kind contributions from three political 

committees totaling $4,985. 

At the exit conference, the Audit staff discussed these matters and provided a schedule of 

the contributions noted above. The representatives for JFC did not comment. 

Interim Audit Report Recommendation and Committee Response 

The Audit staff recommended that JFC amend its reports to disclose these contributions. 

In response to the interim audit report, JFC filed amended reports which materially 

corrected the disclosure of these contributions.