FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

April 13, 2010 

MEMORANDUM 

To: Judith Ingram 

Press Officer 

From: Joseph F. Stoltz ,1ik.a 

Assistant Staff 'PfIIc&rr 

Audit Division :/

II 

Subject: Public Issuance of the Audit Report on the 2008 Democratic National 

Convention Committee, Inc. 

Attached please find a copy of the audit report on the 2008 Democratic National 

Convention Committee, Inc., which was approved by the Commission on March 31, 2010. 

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

may be released to the public on April 13, 2010. 

Attachment as stated 

cc:	 Office of General Counsel 

Office of Public Disclosure 

Reports Analysis Division 

FEC Library 
Report of the 

Audit Division on the 

2008 Democratic National 

Convention Committee, Inc. 

June 1, 2007 - December 31, 2008 

Why the Audit 

Was Done 

Federal law requires the 

Commission to audit the 

national committee of a 

party who receives 

payments for presidential 

nominating conventions.' 

The audit examines the 

receipt and use of Federal 

funds and whether the 

committee otherwise 

complied with the 

limitations, prohibitions 

and disclosure 

requirements of the 

election law. 

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 2008 Democratic National Convention Committee, Inc. was 

responsible for the day to day arrangements and operations of the 

Democratic Presidential nominating convention. It is headquartered 

in Washington, DC. For more information, see chart on the 

Committee Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o Federal Funds $16,820,760 

o Offsets to Convention Expenditures 217,625 

o Total Receipts $17,038,385 

• Disbursements 

o Convention Expenditures $16,245,563 

o Total Disbursements $16,245,563 

Finding and Recommendation (p. 3) 

Net Outstanding Convention Expenses - Unspent Funds 

I 26 U.S.c. §9008(g) 
Report of the 

Audit Division on the 

2008 Democratic National 

Convention Committee, Inc. 

June 1, 2007 - December 31,2008
 
4 

Table of Contents 

Page 

Part I. Background 

Authority for Audit
 

Scope of Audit
 

Inventory of Committee Records
 

Part II. Overview of Committee 

1

1

1
 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summaries 

Finding and Recommendation 3 

Amount Owed to the U.S. Treasury 3 

Part IV. Finding and Recommendation 

Net Outstanding Convention Expenses - Unspent Funds 
1 

Part I 

Background 

Authority for Audit 

This report is based on an audit of the 2008 Democratic National Convention Committee,
 

Inc. (DNCC), undertaken by the Audit Division of the Federal Election Commission (the
 

Commission) as mandated by Section 9008(g) of Title 26 of the United States Code.
 

That section directs the Commission to conduct an examination and audit of the
 

payments for presidential nominating conventions no later than December 31 of the
 

calendar year in which the presidential nominating convention is held.
 

Scope of Audit 

This audit examined: 

1.	 The disclosure of receipts and loans. 

2.	 The disclosure of disbursements, debts and obligations. 

3.	 The recordkeeping process and completeness of records. 

4.	 The consistency between reported figures and bank records. 

5.	 The accuracy of the Statement of Net Outstanding Convention Expenses. 

6.	 The committee's compliance with requirements concerning expenditures for 

convention expenses. 

7.	 Other committee operations necessary to the review. 

Inventory of Committee Records 

The Audit staff routinely conducts an inventory of committee records before it begins the 

audit fieldwork. The DNCC records were materially complete and the fieldwork began 

immediately. 
2 

Part II 

Overview of Committee 

Committee Organization 

Important Dates DNCC 

• Date of Registration June 1,2007 

• Audit Coverage June 1, 2007 - December 31, 2008 

Headquarters Washington, DC 

Bank Information 

• Bank Depositories Three 

• Bank Accounts Three 

Treasurers 

• Treasurer When Audit Was Conducted Andrew Tobias 

• Treasurer During Period Covered by Audit Andrew Tobias 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Used Commonly Available Campaign 

Management Software Package Yes 

•	 Who Handled Accounting and Paid Staff 

Recordkeeping Tasks 

Overview of Financial Activity (Audit~d Amounts) 

Cash on hand @ June 1,2007 $0 

o Federal Funds 16,820,760 

o Offsets to Convention Expenditures 217,625 

Total Receipts $ 17,038,385 

o Convention Expenditures 16,245,563 

Total Disbursements $ 16,245,563 

Cash on hand @ December 31, 2008 $ 792,822 
3 

Part III 

Summaries 

Finding and Recommendation 

Net Outstanding Convention Expenses - Unspent Funds 

The DNCC received $16,820,760 to finance the Democratic National Convention. The 

Statement of Net Outstanding Convention Expenses (NOCE), as calculated by the Audit staff 

at the time of the Preliminary Audit Report, showed an amount of unspent funds. The Audit 

staff recommended that the DNCC provide documentation demonstrating that either no 

repayment or that a lesser repayment is due. On July 23,2009, the DNCC made an interim 

repayment of $297. 

In response, the DNCC demonstrated that adjustments to the actual and estimated winding 

down costs were required. These adjustments have been incorporated into the revised 

statement that reflects an amount of unspent funds of $2,677. 

The Audit staff recommends that the Commission make a determination that the remaining 

portion of unspent funds, $2,380 ($2,677 - $297), is repayable to the United States Treasury. 

(For more details see page 4.) 

Amount Owed to the U.S. Treasury 

Net Outstanding Convention Expenses - Unspent Funds $ 2,380 
4 

Part IV 

Finding and Recommendation 

INet Outstanding Convention Expenses - Unspent Funds 

Summary 

The DNCC received $16,820,760 to finance the Democratic National Convention. The 

Statement of Net Outstanding Convention Expenses (NOCE), as calculated by the Audit staff 

at the time of the Preliminary Audit Report, showed an amount of unspent funds. The Audit 

staff recommended that the DNCC provide documentation demonstrating that either no 

repayment or that a lesser repayment is due. On July 23,2009, the DNCC made an interim 

repayment of $297. 

In response, the DNCC demonstrated that adjustments to the actual and estimated winding 

down costs were required. These adjustments have been incorporated into the revised 

statement that reflects an amount of unspent funds of $2,677. 

The Audit staff recommends that the Commission make a determination that the remaining 

portion of unspent funds, $2,380 ($2,677 - $297), is repayable to the United States Treasury. 

Legal Standard 

A. Entitlement to Payments From the Fund. The national committee of a major party 

shall be entitled to payments with respect to any presidential nominating convention, in 

amounts that, in the aggregate shall not exceed $4,000,000, as adjusted by the Consumer 

Price Index. The major party entitlement for the 2008 nominating convention was 

$16,820,760. 26 U.S.C. §9008(b)(l) and (5). 

B. Repayments. Any portion of the entitlement that remains unspent after all convention 

expenses have been paid, shall be returned to the Secretary of the Treasury. The national 

committee or convention committee shall make an interim repayment of unspent funds based 

on the financial position of the committee as of the end of the ninth month following the last 

day of the convention, allowing for a reasonable amount as determined by the Commission to 

be withheld for unanticipated contingencies. The interim repayment shall be made no later 

than 30 calendar days after the end of the ninth month following the last day of the 

convention. 11 CFR §9008.12(b)(5). 

C. Repayment Determination Procedures. The Commission will follow the same 

repayment determination procedures, and the committee has the same rights and obligations 

as are provided for repayment determinations involving publicly funded candidates under 11 

CFR 9007.2(c) through (h). 11 CFR §9008.12(c). 

D. Net Outstanding Campaign Expenses (NOCE). A convention committee shall file, no 

later than sixty days after the last day of the convention, a statement of that committee's "net 

outstanding convention expenses." This statement must contain, among other things: 
5 

•	 The total of all committee assets including cash on hand, amounts owed to the 

committee and capital assets listed at their fair market value; 

•	 The total of all outstanding obligations for qualified campaign expenses; and 

•	 An estimate of necessary winding-down costs. 11 CFR §9008.1 O(g). 

Facts and Analysis 

For the 2008 election, each major political party was entitled to receive $16,820,760 to 

finance its national Presidential nominating convention. The 2008 Democratic National 

Convention ended on August 28, 2008. The DNCC filed a Statement of Net Outstanding 

Convention Expenses as of October 12, 2008. Revised NOCE Statements were also 

submitted with the most recent received on February 4,2010. The Audit staff reviewed 

financial activity through January 31,2010 and estimated the winding down cost in preparing 

the figures shown on the following page. 
6
 

Statement of Net Outstanding Campaign Expenses
 

As of October 12, 2008
 

As Prepared Through January 31, 2010
 

Assets 

Cash in Bank $3,172,401
 

Accounts Receivable 67,418
 

Total Assets $3,239,819 

Liabilities 

Accounts Payable for Qualified Convention 

Expenditures $2,221,913 

Actual Winding Down Expenses - 10/13/09 - 1/31/10 1,013,286 

Estimated Winding Down Expenses 2/01/10 - 4/30/10 1,943 

Total Liabilities $3,237,142 

Net Outstanding Convention Expenses $ 2.677 

(Surplus) 
7 

At the exit conference, DNCC representatives were provided a copy of the NOCE as 

calculated by the Audit staff. That NOCE statement included a larger unspent amount. On 

July 23,2009, the DNCC made an interim repayment of $297,2 less than anticipated based on 

the information available at the time of the exit conference. A revised NOCE statement was 

received on September 16, 2009, that detailed additional winding down expenses, resulting in 

an amount of unspent funds of $440. 

Preliminary Audit Report Recommendation And Committee Response 

The Audit staff recommended that the DNCC provide documentation demonstrating that 

either: (a) no repayment of unspent funds is due, or (b) a lesser amount is due. 

In response, the DNCC demonstrated that adjustments to winding down costs were required. 

Documentation for the changes was reviewed and accepted. As a result, a net decrease in 

winding down was demonstrated which increased the amount of unspent funds to $2,677. 

The Audit staff and the DNCC are in agreement on the amount of unspent funds. 

Recommendation 

The Audit staff recommends that the Commission make a determination that the remaining 

portion of unspent funds, $2,380 ($2,677-$297), is repayable to the United States Treasury. 

This payment was approximately three weeks late. However given the small amount involved, the timing is 

not material. 

2