Section 104.3(a) (4) (ii) of Title 11 of the Code of
Federal Regulations states, in part, that the identification of
each contributor and the aggregate year-to-date total for such
contributor shall be reported for all committees (including
political committees and committees which do not qualify as
political committees under the Act) which make contributions to
the reporting committee during the reporting period with the date
of receipt and the amount of any such contribution.

The Committee did not itemize 27 contributions from 24
committees totaling $2,587.94. This represents 10% of the dollar
value and 36% of the number of contributions received from
committees.

In the interim report the Audit staff recommended that
within 30 days of receipt of this report, the Committee file a
comprehensive amendment for 1980 itemizing the 27 contributions.

The final day of the Committee's response period was
December 16, 1981. On January 4, 1982, the Audit staff received
a letter dated December 30, 1981 stating that the amended report
for 1980 itemizing the contributions would be forthcoming
contingent upon the receipt of information requested regarding
funds received from unregistered organizations (see Finding A).

Recommendation
The Audit staff recommends that the Committee file a

comprehensive amendment for 1980 itemizing the 27 contributions
and thereby correcting the public record.


-3-

cancelled refund check, front and back) were to be provided to
the Audit staff. It was also recommended that the Committee
adopt procedures in the future to determine whether any
contributions received from unregistered committees were
transferred from accounts which contained prohibited funds.

The final day of the Committee's response period was
December 16, 1981. On January 4, 1982 the Committee provided to
the Audit staff letters sent to each of the 35 contributing
committees, the responses received to those letters, and a letter
from the Executive Director stating that the Committee forwarded
follow-up letters to committees which did not respond.

Recommendation

The Audit staff recommends that based on the responses
above, the Committee refund any contributions which may contain
funds received from prohibited sources, and establish procedures
for determining the source of funds transferred from local and
county committees. The procedures should include the following:

1) The verification by phone or letter of the
permissibility of funds received from unregistered committees.
A record should be kept of all communications oral and written.

2) Dissemination of information to local and county
committees concerning the types of contributions prohibited in
federal elections.

3) Procedures whereby tranferring committees
automatically include a statement with their transfer stating
that, the transfer was made from an account which received only
contributions subject to the prohibitions and limitations of the
Act.

4) Procedures to refund transfers received from

organizations which are not established pursuant to 11 C.F.R.
102.5(a) and (b).

B. Disclosure of Contributions from Committees

Section 434(b) (3) (B) and (D) of Title 2 of the United
States Code requires that each report under this section disclose
the identification of each political or affiliated committee
which makes a contribution or transfer to the reporting committee
together with the date and amount of any such contribution or
transfer.


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t . .
FEDERAL ELECTION COMMISSION
WASHINGTON, D.C. 20463
A81-37 |
April 22, 1982.
MEMORANDUM
TO: FRED EILAND
PRESS OFFICE
FROM: BOB COSTA

SUBJECT: PUBLIC ISSUANCE OF FINAL AUDIT REPORT -
. NEBRASKA DEMOCRATIC STATE CENTRAL COMMITTEE

Attached please find a copy of the final audit report of the
Nebraska Democratic State Central Committee which was approved_by
the Commission on April 14, 1982.

Informational copies of the report have been received by all
parties involved and the report may be released to the public.

Attachment as stated

ec: FEC Library
RAD
Public Record


FEDERAL ELECTION COMMISSION
WASHINGTON, D.C. 20463

A81-37

REPORT OF THE AUDIT DIVISION
ON THE .
NEBRASKA DEMOCRATIC STATE CENTRAL COMMITTEE

I. Background

A. Overview

This report is based on an audit of the Nebraska
Democratic State Central Committee ("the Committee"), undertaken
by the Audit Division of the Federal Election Commission in
accordance with the Commission's audit policy to determine
whether there has been compliance with the provisions of the
Federal Election Campaign Act of 1971, as amended ("the Act"),
The audit was conducted pursuant to Section 438(b) of Title 2 of
the United States Code which states, in part, that the Commission
may conduct audits and field investigations of any political
committee required to file a report under Section 434 of this
title. Prior to conducting any audit under this section, the
Commission shall 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.

The Committee registered with the United States House
of Representatives on April 17, 1972 as the State Committee of
the Democratic Party of Nebraska. The Committee maintains its
headquarters in Lincoln, Nebraska.

The audit covered the period January 1, 1980 through
December 31, 1980. During the period, the Committee reported a
beginning cash balance of $865.20, total receipts for the period
of $134,647.87, total expenditures for the period of $134,962.76,
and an ending cash balance on December 31, 1980 of $550.31.

This audit report is based on documents and working
papers which support each of the factual statements. They form
part of the record upon which the Commission based its decisions
on the matters in the report and were availabale to the
Commissioners and appropriate staff for review.


B. Key Personnel

The Treasurers of the Committee during the period
audited were Mr. Donald Geis from January 1, 1980 through
November 23, 1980 and Ms. Lola J. Staley from November 24, 1980
through the close of the period covered by the audit.

Cc. Scope

The audit included such tests as verification of total
reported receipts and expenditures and individual transactions;
review of required supporting documentation; analysis of
Committee debts and obligations; and such other audit procedures
as deemed necessary under the circumstances.

II. Audit Findings and Recommendations

A. Receipt of Funds From Unregistered Organizations

Section 441b of Title 2 of the United States Code
states, in part, that it is unlawful for any corporation or any
labor organization to make a contribution or expenditure in
connection with any Federal election to political office and
unlawful for any political committee to knowingly accept or
receive any such contribution or expenditure.

The Committee maintains a Federal and non-Federal
account into which funds are deposited for the purpose of
financing Federal and non-Federal elections respectively. A
review of the Federal account disclosed 57 receipts totaling
$11,398.76 from 35 unregistered committees. The Nebraska
Political Accountability and Disclosure Act permits corporate and
labor contributions for non-Federal elections. The Committee's
assistant treasurer stated, when questioned, that the Committee
did not determine whether the transfers contained prohibited
funds.

A previous audit of the Committee covering the period
January 1, 1976 through March 31, 1978 revealed a similar
problem. At that time the Committee was directed to contact the
unregistered committees to inquire whether the noted transfers
contained prohibited funds.

In the interim report, the Audit staff recommended that
within 30 days of receipt of the report the Committee submit
evidence that the contributions totaling $11,398.76 were not
transferred from accounts which contained prohibited funds. If
any of the contributions were transferred from accounts
containing prohibited funds, the Audit staff recommended that the
contributions be refunded or transferred to the non-federal
account. Evidence of the refund/transfer, (copies of the