FEDERAL ELECTION COMMISSION

WASHt"iGTON, D.C 20463

AK007957

April 19, 1996

MEMORANDUM

SUBJECT: PUBLIC ISSUANCE OF THE FINAL AUDIT REPORT ON

BOB BARR FOR CONGRESS '94

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TO:

FROM:

RON M. HARRIS

PRESS OFFICER

PRESS OFFICE

ROBERT J. COSTA *7;-

ASSISTANT STAFF D(aJ.~ AUDIT DIVISION

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Attached please find a copy of the final audit report

and related documents on Bobb Barr for Congress '94~-Wfiich

was approved by the Commission on April 9, 1996.

Informational copies of the report have been received by

all parties involved and the report may be released to the

public.

Attachment as stated

cc: Office of General Counsel

Office of Public Disclosure

Reports Analysis Division

FEe Library

H"TfRO'" TOO'" "-'-0 TOMORKO\\

D£OICAHP TO ~HPI'L TH( PUBLIC l~f()RM(O
REPORT OF THE AUDIT DIVISION

ON

Bob Barr for Congress '94

Approved April 9. 1996

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FEDERAL ELECTIO~ CO\t~1ISSI0!'i

999 E STREET. S.\\..

\"·ASHISGTO~. D.C.
TABLE OF CONTENTS

BOB BARR FOR CONGRESS '94

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Executive Summary

Final Audit Report

Background

Findings

Transmittal to Committee

Chronology

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3

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5

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FE[)ERAL ELECTlt)' C()"\!\'ISSIO~

FINAL AUDIT REPORT

ON

BOB BARR FOR CONGRESS '94

EXECUTIVE SUMMARY

Bob Barr for Congress '94 (the Committee) registered with

the Clerk of the u.s. House of Representatives on August 13, 1993,

as the principle campaign committee for Robert L. Barr Jr.,

Republican candidate for the U.S. House of Representatives from

Georgia's Seventh Congressic~al District.

The audit was conducted pursuant to 2 U.S.C. Section 438(b),

which states, that the Commission may conduct audits of any

political committee whose reports fail to meet the threshold level

of compliance set by the Commission.

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The findings of the audit were presented to the Committee at

an exit conference held at the completion of field work on June

30, 1995, and later. in an inter~ audit report. The Committee's

responses to those findings are included in the final audit

report.

The following is an overview of the findings contained in

the final audit report.

Apparent Prohibited Contributions- 2 U.S.C. Section 441b(a);

11 CFR Sections 103.3(b)(:) and l03.3(b){4). The Committee

received twenty contributions from sixteen corporations totaling $5,570. With the exception of one $250 contribution, the

Committee provided photocopies of the front of refund checks for

the prohibited contributions and in some instances evidence of

negotiation of the checks. The Committee has stated that it will

provide evidence of the remaining refunds once they have cleared

the Committee's account.

Apparent Excessive Contributions- 2 U.S.C. Section

441a(a)(1)(A) and (a)(2)(A); 11 CFR Sections; 110.1(b)(5)(i) and

(ii), 110.1(k), 110.4(c)(1) and (2), 110.9(a) and 103.4(b). The

Committee received sixty-two contributions from forty-seven

contributors which exceeded the donor's limitations by $40,804 and

excessive cash contributions from fourteen individuals totaling

$1,705. Also, the Audit staff identified $37,950 in contributions

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which were not itemized. Of this amount $20,100 were

contributions which were either wholly or in part excessive. The

Audit staff discovered notes on the photocopies of three of the

excessive contributions that indicate that the Committee was aware

that the contributions were excessive and either did not record

them, or recorded them so that they did not appear to be

excessive. With the exception of one $20 cash contribution, the

Committee provided photocopies of the fr~nt of refund checks for

all the excessive contributions and evidence that a portion of the

refund checks were negotiated. The Committee has stated that it

will provide evidence of the remaining refunds once they have

cleared the Committee'S account.

Misstatement of Financial Activity- 2 U.S.C. Sections

434(b)(l), (2) and (4). The Audit staff's 1993 bank

reconciliation determined that the Committee understated its

receipts by $4,439 and understated its disbursements by $3,549.

As a result, ending cash on hand was understated by $890. In

1994 the Committee's disbursements were understated by $14,331.

The Committee filed amended disclosure reports for calendar year

1993 but did not materially the errors. The Committee's amended

disclosure reports for calendar year 1994 were materially correct.

omission of Disclosure Information- 2 U.S.C. Section

434(b)(3) and 11 CFR Section 104.7(a) and (b). The audit

disclosed that approximately 25\ of the Committee's itemized

contributions lacked complete information. In addition, with

respect to the disclosure of occupation and name of employer,

one-third of the contributions itemized after the effective date

of the Commission's revised best efforts regulations lacked the

required information and evidence of necessary efforts to obtain

it. The Committee filed amended Schedules A for a portion of the

contributions. However, the amended disclosure reports leave an

error rate of 18\ for disclosure information. The Committee did

not address disclosure of occupation and name of employer.

~eporting of Contributions from Political Committees- 2

U.S.C. Section 434(b)(2)(D) and (b)(3)(B). During the audit

period the Committee failed to itemize forty-four contributions

from political committees totaling $27,100. The Committee

included twenty-five of the forty-four contributions in their 1995

Mid-Year report. Also the Committee filed amended disclosure

reports which itemized most of the remaining items.
FEDERAL ElECTI():\: C()i"!\,1ISSION

REPORT OF THE AUDIT DIVISION

ON

BOB BARR FOR CONGRESS '94

AK007800

ARt9S-10

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I. Background

A. Audit Authority

This report is based on an audit of Bob Barr for

Congress '94 (the Committee), undertaken by the Audit Division of

the Federal Election Commission in accordance 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 subsection,

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.

B. Audit Coverage

The audit covered the period from March 3, 1993, the

inception of bank activity, through December 31, 1994. The

Committee reported a beginning cash balance of $0; total receipts

for the period of $648,266; total disbursements for the period of

$622,340; and an ending cash balance of $25,926.!1

c. Campaign Organization

The Committee registered with the Clerk of the House of

Representatives on August 13, 1993 as the principal campaign

committee for Robert L. Barr, Jr., Republican candidate for the

u.s. House of Representatives from the State of Georgia for the

Seventh District.

1/ All amounts in this report have been rounded to the nearest

dollar. " • ·.f ., ., t\', .~., ......

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The Treasurer of the Committee from inception until

OCtober 17, 1993 was Robert M. Parsons. Mr. Charles C. Black

became the Treasurer on OCtober 18, 1993 and is the current

Treasurer.

To handle its financial activity, the campaign used 3

bank accounts at various tfmes. From these accounts the campaign

made approx~ately 900 disbursements. Approximately 2,570

contributions totaling roughly $533,000 were received from

individuals and 120 contributions totaling $121,900 were received

froln political comr,~~~ttees and other committees.

D. Scope

The audit included testing of the following general

categories:

1. The receipt of contributions or loans in excess of

the statutory limitations (see Finding II.B.);

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the receipt of contributions from prohibited sources,

such as those from corporations or labor organizations

(see Finding II.A.);

proper disclosure of contributions from individuals,

political committees and other entities, to include the

itemization of contributions when required, as well as,

the completeness and accuracy of the information

disclosed (see Finding II.B, 11.0 and II.E)i

proper disclosure of disbursements including the

itemization of disbursements when required, as well

as, the completeness and accuracy of the information

disclosed;

proper disclosure of campaign debts and obligations;

the accuracy of total reported receipts, disbursements

and cash balances as compared to campaign bank records

(see Finding II.C.);

7. adequate recordkeeping for campaign transactions:

8. other audit procedures that were deemed necessary in the

situation.

Unless specifically discussed below, no material

non-compliance was detected. It should be noted that the

Commission may pursue any of the matters discussed in this report

in an enforcement action. Although in maintaining its records the

Committee satisfied the minimum recordkeeping requirements of 11

CFR §102.9, the Audit staff's testing of disbursements by the

Committee was limited due to the lack of invoices, receipts, and

other third party documentation. In its testing of disbursements

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the Audit staff was able to locate invoices for only 11\ of the

.items tested. Therefore, for most disbursements, no documentation

from third parties ,~as available for the Audit staff to

independently verify items such as vendor addresses, purpose of

disbursement and reporting of debts and obligations.

II. Findings and Recommendations

A. Apparent Prohibited Contributions

Section 441b(a) of Title 2 of the United States Code

states, in relevant part, that it is unlawful for any corporation

organized by authority of any law of Congress, to make a

contribution or expenditure in connection with any election to any

political office, or in connection with any pr~ary election or

political convention or caucus held to select candidates for any

political office.

Section 103.3(b)(2) of Title 11 of the Code of Federal

Regulations states, in part, that the treasurer shall refund the

contribution to the contributor within thirty days of the date on

which the illegality is discovered.

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Section l03.3(b)(4) of Title 11 of the Code of Federal

Regulations states, in part, that any contribution which appears

to be illegal and which is deposited into a campaign depository

shall not be used for any disbursements by the political c~ittee

until the contribution has been determined to be legal. The

political committee must either establish a separate account in a

campaign depository for such contributions or maintain sufficient

funds to make all such refunds.

The Audit staff's review of contributions identified

twenty-three apparent prohibited contributions from eighteen

entities totaling $5,570. Included among these contributions were

contributions of $1,000 each from Autumn Lake and Summerlake

Properties L.P. and a $500 contribution from Knight Davidson

Rosewood I. All three checks were dated August 19, 1994, signed

by the same individual, and were accompanied by a letter on the

letterhead of Knight Davidson Companies, Inc. which stated, in

part, "Enclosed please find our checks totaling $2,500.00 for

Bob's campaign." The letter also indicated that the three

entities were limited partnerships and listed a different

individual as the contributor for each entity. It is further

noted that the contribution from Knight Davidson Rosewood I was

disclosed under the individual listed while the other two

contributions were not itemized.

At the exit conference, Committee representatives were

provided schedules of the apparent prohibited contributions.

Committee representatives responded by questioning whether some of

the items were actually prohibited and asking why we had included

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contributions from limited partnerships as prohibited

contributions. The Audit staff responded by stating that our

inquiries had indicated that the ent.ities were incorporated.

In response to the exit conference, the Committee stated

that the three contributions discussed above were checks from

limited partnerships with the contributions designated for

individuals. The Audit staff conducted additional research and

was able to determine that Summerlake Properties and Autumn Lake

were limited partnerships. However, the research also indicated

that Knight Davidson CompaniEs, Inc. was the general partner~1 for

each of these entities. Our reviews were unable to identify the

limited partners for Summerlake Properties or Autumn Lake.

With respect to Knight Davidson Rosewood I, the Audit

staff was unable to verify that it is in fact a limited

partnership and if it is, the identity of the partners. However,

based on the apparent relationship with Summerlake Properties,

Autumn Lake, and Knight Davidson Companies Inc., the contribution

was included among the apparent prohibited contributions pending

the submission of additional information.

As noted previously, in the cover letter from Knight

Davidson Companies, Inc., each contribution was apparently

attributed to an individual. It was not established that the

individuals were p~~tners in their personal capacities. Two of

the three individuals are corporate officers of Knight Davidson

Companies, Inc. Also, if any of the individuals could be

identified as partners in their personal capacities, then

documentation would need to be provided to demonstrate that the

personal profits or losses of the individual partners were

affected and the profits or losses of any corporate partners were

not affected.

The Committee further responded that for nine of the

entities who made apparent prohibited contributions, eight of the

checks did not indicate that they were from a corporation and for

four of the nine the Committee had contacted the Georgia Secretary

of State who had informed them that the entities were not recorded

as corporations. The Audit staff again contracted the Georgia

Secretary of State and verified that all nine were registerea as

corporations in Georgia.

2/ A limited partnership has both general and limited

partners who share the profits of the business. The

general partner has a right to manage the business and

has unlimited liability whereas a limited partner has no

right to manage the business or act as its agent and has

liability limited to his capital contribution to the

business.

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For the final six entities included in this finding, the

Committee did not respond. The interim audit report concluded

that absent further documentation, there remained twenty-three

apparent prohibited contributions which totaled $5,570. Finally,

it was noted that the Committee did not maintain sufficient funds

pursuant to 11 CFR Sl03.3(b)(4) to make refunds of the apparent

prohibited contributions.

In the interim audit report, the Audit staff recommended

that the Committee provide documentation to demonstrate that the

contributions in question were not from prohibited sources and

absent such a demonstration the Audit staff recommended that the

Committee refund the contributions and provide evidence of the

refunds (i.e., copies of front and back of negotiated checks).

In response to the interim audit report, the Committee

provided documentation for three contributions totaling $1,125

which indicates the contributions were not f~om prohibited

sources. With the exception of one $250 it~m, the Committee

provided photocopies of the front of refund checks for the

remaining prohibited contributions including those related to the

three business discussed above. No action was taken with respect

to the remaining $250 contribut.ion. The refund checks were dated

between January 13, 1996 and January 29, 1996. As of February 29,

1996, twelve of the refund checks had cleared the Committee's bank

account. The Committee has stated that it will provide evidence

of the remaining refunds once they have cleared the Committee's

account.

B. Apparent Excessive Contributions

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'-- Sections 441a(a)(1)(A} and (a)(2)(A) of Title 2 of the

United States Code state, that r•.' person shall make contributions

to any candidate and his authorized political committees with

respect to any election for Federal office which, in the

aggregate, e~~eed $1,000 and that no multicandidate political

committee shall make contributions to any candidate and his

authorized political committees with respect to any election for

Federal office which, in the aggregate, exceed $5,000.

Sec~ion 110.1(b)(5)(i) and (ii) of Title 11 of the Code

of Federal Regulations states, in part, that the treasurer of an

authorized political committee may request a written redesignation

of a contribution by the contributor for a different election if:

the contribution was designated in writing for a

particular election, and the contribution, either on

its face or when aggregated with other contributions

from the same contributor for the same election,

exceeds the limitation on contributions set forth in 11

eFR 110. 1 ( b) ( 1 ) :

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o the contribution was designated in writing for a

particular election and the contribution was made after

that election and the contribution cannot be accepted

u:\der the net debts outstanding provisions of 11 CFR

11Q.1(b) (3);

o the contribution was not designated in writing for a

particular electio~i, and the contribution exceeds the

limitation 0'(, contributions set forth in 11 CFR

110. 1 (b) ( 1 ); or

o the contribution was not designated in writing for a

particular election, and the contribution was received

after the date of an election for which there are net

debts outstanding on the date the contribution is

received.

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Further, a contribution shall be considered to be

redesignated for another election if the treasurer of the

recipient authorized political committee requests that the

contributor provide a written redesignation of the contribution

and informs the contributor that the contributor may request the

refund of the contribution as an alternative to providing a

written redesignation and within sixty days from the date of the

treasurer's receipt of the contribution, the contributor provides

the treasurer with a written redesignation of t.he contribution for

another election, which is signed by the contributor.

Section 110.1{k) of Title 11 of the Code of Federal

Regulations states any contribution made by more than one person,

except for a contribution made by a partnership, shall include the

signature of each contributor on the check, money order, or other

negotiable in~~rument or in a separate writing and if a

contribution ~ade by more than one person does not indicate the

amount to be attributed to each contributor, the contribution

shall be attributed equally to each contributor.

If a contribution to a candidate or political committee,

either on its face or when aggregated with other contributions fro~ the sarne contributor, exceeds the limitations on

contributions set forth in 11 CFR 110.1(b), (C) or (d), as

appropriate, the treasurer of the recipient political committee

may ask the contributor whether the contribution was intended to

be a joint contribution by more than one person. A contribution

shall be considered to be reattributed to another contributor if

the treasurer of the recipient political committee asks the

contributor whether the contribution is intended to be a joint

contribution by more than one person, and informs the contributor

that he or she may request the return of the excessive portion of

the contribution if it is not intended to be a joint contribution,

and within sixty days from the date of the treasurer's receipt of

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the contribution, the contributors provide the treasurer with a

written reattribution of the contribution, which is signed by each

contributor, and which indicates the amount to be attributed to

each contributor if equal attribution is not intended.

Section 110.4(c)(1) and (2) of Title 11 of the Code of

Federal Regulations states that with respect to any campaign for

nomination for election or election to Federal office, no person

shall make contributions to a candidate or political committee of

currency of the United States, of any foreign country, which in

the aggre9a~e exceed $100 and a candidate or committee receiving a

cash contribution in excess of $100 shall promptly return the

amount over $100 to the the contributor.

Section 110.9(8) of Title 11 of the Code of Federal

Regulations states that no candidate or political committee shall

accept any contribution or make any expenditure in violation of

the provisions of part 110. No officer or employee of a political

committee shall accept a contribution made for the benefit or use

of a candidate, or make any expenditure on behalf of a candidate,

in violation of any limitation imposed on contributions and

expenditures under this part 110.

The Committee provided a computer file to support its

contributions received. However, the file contained amounts to

support only 70\ ($455,228) of total receipts for the audit

period. The Committee also maintained photocopies of contributor

checks. However, the copies of checks contained many duplicate

copies and were in no identifiable order. As a result, the Audit

staf: sorted ~he check copies alphabetically and removed the

duplicates so that testing could be performed. The total of the

check copies after duplicates were removed was $617,645 (~5' of

total receiptr').

A review of contributions from individuals was conducted

to determine if contributions in excess of the limitations were

received. Sixty-two such contributions from forty-seven

contributors were identified. The excessive portions of these

contributions totaled $40,804 or approximately 8% of total

contributions from individuals.

l~ong the excessive contributions were eight instances

where checks drawn on joint accounts were reported as attributed

to account holders who had not signed the contribution check and

for which no signed reattributions were presented. Three other

excessive contributions were identified as designated on the

Committee's disclosure reports to elections other than that

indicated by the date of the contribution although no written

designations or redesignations were located. Based on the amounts

of many of the excessive contributions, it appears that the

Committee was internally reattributing and redesignating items

without obtaining the written authorizations. However, as noted

below, many of the excessive contributions were not itemized and

thus the Audit staff could not review the manner in which they

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were reported. According to the Committee treasurer, he did not

think the Committee obtained any reattributions or redesignations

and would be surprised if any existed.

The Audit staff identified $37,950 in contributions

which were not itemized as required. Of this amount, $20,100 were

contributions which were either wholly or in part excessive. In

addition, two of the excessive contributions were itemized in

amounts less than the contribution. The reported amounts were not

in excess of the contribution limitations. The Audit staff also

discovered notes on the photocopies of three of the excessive

contributions. These notes indicated that the Committee was aware

that the contributions were excessive and either did not record

them, or recorded them so that they did not appear to be

excessive. The notes stated "Both Paul and Sybil XS (excessive

$1,000) not entered", "Entered $400 of $500 CK (check) XS

(excessive) contribution", and "Contribution entered under Anne,

John has topped out."

Also identified by the Audit staff was an apparent

excessive contribution from a political party. The C~orgia

Republican Party made two contributions after the date of the

primary election, each in the amount of $5,000. The Georgia

Republican Party, in response to an inquiry from the Commission's

Report~ Analysis Division, justified the two contributions by

mainta1~ing that there were two separate elections, a pr~ary

runoff and a general election and designated the first $5,000 as a

primary contribution. However, no pr~ary runoff election took

place.

Further, neither a separate account for potential

excessive contributions nor any attempt to monitor amounts

required to be held in the Committee's regular accounts pursuant

to 11 CFR §103.4(b) were found. None of the excessive

contributions had been refunded.

Additionally, a review of the Committee's contribution

records revealed excessive cash contributions from fourteen

individuals. The excessive portions of these contributions

totaled $1,705. None of the excessive cash contributions had been

refunded.

At the exit conference, Committee representatives were

provided schedules of the identified excessive contributions. A

Committee representative responded by indicating that he could not

believe that we (the Federal Election Commission) would not allow

reattributions and redesignations at this point and that we would

require the Committee to refund the excessive contributions.

The Committee responded to the exit conference by

indicating that they received verbal authorization from the

contributor to designate the items identified by the Audit staff

as excessive. Additionally they indicated that they were

currently searching through their files to locate any written

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authorizations. However, 11 CFR SI10.1(b)(S) and SI10.1(k)

require redesignations and reattributions to occur in writing

within sixty days from the date of the treasurer's receipt of the

contribution.

In the interim audit report, the Audit staff recommended

that the Committee provide evidence to demonstrate that the

contributions noted above ~ere not excessive to include

documentation to demonstrate any timely reattributions or

redesignations. Also, the Audit staff recommended that the

Committee provide the source and purpose of the notes written on

copies of the contributor checks mentioned above, and provide

evidence to demonstrate that the apparent excessive contributions

were not knowingly and willfully retained and misreported.

Absent such a demonstration, the Audit staff recommended

that the Committee refund these contributions and provide evidence

of the refunds in the form of the front and back of the negotiated

refund checks. In addi ti.on, the Audit Staff reconunended the

Committee file amended Schedules A for the excessive contributions

that were not itemized on its disclosure reports. If the

Committee did not have the funds to make these refunds, the Audit

staff recommended that the Committee file amended Schedules 0 to

disclose these items as debts owed by the Committee.

In response to the interim audit report, with the

exception of one $20 excessive cash contribution, the Committee

provided photocopies of the front of refund checks for all the

excessive contributions from individuals. All refund checKs were

dated in January, 1996 and as of February 29, 1996, forty-six

refunds totaling $32,478 had cleared the Committee's account. The

Committee has stated that it will provide evidence of the

remaining refunds once the checks have cleared the bank. With

respect to the one excessive contribution from the Ger-: ]ia

Republican Party, the Committee was able to provide d~~:umentation

which indicated that the first $5,000 contribution was designated

for primary debt and thus no excessive contribution occurred.

Also, the Committee filed amended Schedules A for the

Audit period on February 20, 1996. These amendm~nts materially

corrected the public record relative to the itemization of these

excessive contributions.

The Committee's response to the interim audit report did

not address the notes found on copies of some of the contribution

checks or provide evid~,~e that these excessive contributions were

not knowingly and '~illf~lly retained and misreported.

c. Miss~~~ement of Financial Activity

Sect:oJ~:-= 434(b)(1), (2), and (4) of Title 2 of the

United States (. ·ct:" sta'tes, in relevant part, that each report

shall disclos~ :h/~ amc~nt of c~sh 0~ hand at the beginning of the

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reporting period, the total amount of all receipts and the total

amount of all disbursements for the period and calendar year.

The Audit staff's reconciliation of the Committee'8

reported activity to amounts reflected in its bank re:o~Qs

revealed the following misstatements of financial act1v1ty for

calendar years 1993 and 1994. The Committee did not maintain

records to show the derivation of its reported amounts. Absent

such records, the Audit staff could not identify all differences

between bank activity and reported activity.

1. 1993 Misstatement

The Audit staff's 1993 bank reconciliation determined

that the Committee understated its receipts by $4,439 and

understated its disbursements by $3,549. As a result, ending cash

on hand was understated by $890.

The receipts misstatement was the result of a $1,000 NSF

contribution reported, unreported receipts totaling $1,850 from

the Bob Barr '94 Exploratory account, in-kind contributions

totaling $401 not reported and a reconciling adjustment of $3,188.

The disbursements misstatement was the result of two

1994 disbursements totaling $827 being reported in 1993,

unreported disbursements in the Year End 1993 report totaling

$3,882, three in-kind contributions totaling $401 not reported and

two miscellaneous adjustments totaling $74 and a reconciling

adjustment of $19.

2 • 1994 Misstatement

The Audit staff's 1994 bank reconciliation determined

that the Committee's beginning cash-cn-hand was understated by

$890 as a result of the 1993 misstatement. In addition,

disbursements were understated by 514,331. These items and a

small receipts misstatements resulted in ending cash-on-hand being

overstated by $7,341.

The disbursement misstatement was the result of six

disbursements totaling $3,390 which were not reported, a $1,000

voided check which was reported, one disbursement which was

understated by $9,000, miscellaneous adjustments totaling $10 and

a reconciling adjustment of $2,951.

At the exit conference, Committee representatives were

provided schedules for the differences identified in 1993 and

1994. Committee representatives responded by questioning who was

the payee for one disbursement in 1994 and agreed to examine the

materials presented and file amended disclosure reports as

necessary.

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In the interim audit report, the Audit staff recommended

that the Committee file amended Schedules A, B and Summary Pages

for both calendar years to correct the public record.

In response to the interim audit report, the Committee

made several points regarding its reported receipts and

disbursements in addition to filing amended disclosure reports on

February 20, 1996 for both 199~ and 1994. The amended disclosure

report for 1993 contained the same total reported receipts and

disbursements as the original reports filed by the Committee.

With respect to the 1993 recnlpts, the Committee's amended reports

removed the reported NSF contribution. The Committee stated that

total receipts-were not affected because the actual net amount of

deposits were originally reported. The Committee also stated that

the $1,850 not reported from the Bob Barr '94 Exploratory account

was not a contribution, but a transfer between accounts. For 1993

disbursements, the Committee stated that the two disbursements for

1994 were actually written on December 31, 1993 and thus were

correctly reported. For the remaining adjustments f the Committee

stated that the amounts were from the bank statements and although

some amounts were not itemized, they were reported in unitemized

disbursements.

As noted previously the Committee did not provide

workpapers detailing how it calculated its reported figures. The

Audit staff examined the Committee's bank records and, after

making the relevant adjustments for items such as NSF

contributions, outstanding checks and in-kind contributions, was

able to determine that 1993 reported receipts and disbursements

were understated by $4,439 and $3,549 respectively.

The $1,850 item for the Bob Barr '94 Exploratory account

was not a transfer between accounts. This amount represents

receipts for March, 1993 deposits into that account. There is no

evidence that these contributions were reported. The Committee's

other accounts were not opened at that time and thus no transfer

of funds could have occurred. Even if the Committee insists that

this amount and the reported NSF contribution were accounted for

in the reported totals, it does not alter the fact that total

receipts were understated by $4,439 and thus the Committee has

still not corrected the 1993 receipts misstatement.

With respect to disbursements, the Audit staff accepted

the Committee's explanation that the two 1994 disbursements

totaling $827 were actually written in 1993. However, when this

amount is added to outstanding checks, the understatement of

disbursements is increased to $4,376. Also, the Audit staff

acknowledges that we do not know which disbursements are contained

in the Committee's unitemized amount. Ho\n~ver, we were able to

identify all disbursements which were not itemlzed and after

adjusting for the unitemized amounts, determined that $3,882 could

not have been reported and that $401 in either in-kind
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contributions or other disbursements were also not reported.

Therefore, the Committee could not have reported total

disbursements and the public record has still not been corrected

for the Committee's 1993 disbursements.

The Committee's amended disclosure reports for calendar

year 1994 were materially correct. Thus, the Committee has

complied with the Audit stnff's recommendation for 1994.

D. Omission of Disclosure Information

Section 434(b)(3) of Title 2 of the United States Code

states, in relevant part, that each report under this section

shall disclose the identification of each person (other than a

political committee) who makes a contribution to the reporting

committee during the reporting period, whose contribution or

contributions have an aggregate amount or value in excess of $200

within the calendar year.

Section 431(13) of Title 2 of the United States Code

states, when used in this Act: the term "identification" means in

the case of any individual, the name, the mailing address, and the

occupation of such individual, as well as the name of his or her

employer: and in the case of any other person, the full name and

address of such person.

Section 104.7(a) and (b) of Title 11 of the Code of

Federal Regulations~1 states, in part, that if best efforts have

been used to obtain, maintain and submit the information required

by the Act for the political committee, any report of such

committee shall be considered in compliance with the Act. The

treasurer and the committee will only be deemed to have exercised

best efforts if all of the following are present: all written

solicitations for contributions include a clear request for the

contributor's full name, mailing address, occupation and name of

employer, and include the statement that reporting of such

information is required by Federal law; the treasurer makes at

least one effort, in either a written request or a documented oral

request, within thirty days of the receipt of the contribution, to

obtain the information; and the treasurer reports all contributor

information not provided by the contributor, but in the

committee's possession, including information in contributor

records, fundraising records and previously filed reports, in the

same two year election cycle.

A sample of contributions received by the Committee

revealed an error rate of 25% for disclosure of information on

reports filed by the Committee. The majority of these errors

resulted from differences between the reported aggregate

year-to-date amounts versus the actual aggregate year-to-date

amounts. Sixty-three percent of these errors occurred in the 1994

3/ The effective dat.e of this reg\'lation is March 3, 1994.

Page 1';, A?;;r~eC 4/9,' 9E
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October Quarterly and Pre-General Election report periods. The

remaining errors included contribution amounts disclosed

incorrectly and contributions disclosed under a different account

holder's name (see Finding II.B. above).

With respect to disclosure of occupation and name of

employer information, the majority of the errors occurred after

the effective date of the change to 11 CFR §104.7. Therefore,

this finding relates to the contributions received after that

date. A sample of contributions received by the Committee also

revealed the Committee failed to disclose occupation and/or name

of employer information for 33% of the contributions received

after March 3, 1994 and requiring such disclosure. Fifty-nine

percent of these omissions were during the 1994 October Quarterly

and Pre-General Election report periods. The Committee did not

demonstrate best efforts to obtain, maintain and submit the

information. The majority of the errors were instances where the

Committee did not obtain the information. In other instances, the

information was obtained and not disclosed or was disclosed

incorrectly.

At the exit conference, Committee representatives were

informed of the disclosure errors~ The Committee believed some of

the disclosure errors were the result of a computer error.

In the interim audit report, the Audit staff recommended

that the Committee file amended Schedules A to correct the public

record.

In response to the interim audit report, the Committee

filed amended Schedules A on February 20, 1996 which corrected the

public record for a portion of the contributions noted in the

interim audit report. However, the amended disclosure reports

leave an error rate of 18\ for disclosure of information. The

Committee did not address disclosure of occupation and name of

employer. Therefore, the Committee has not materially complied

with the Audit Staff's recommendation.

E. Reporting of Contributions from Political Committees

Sections 434(b)(2)(D) and (b)(3)(B)of Title 2 of the

United States Code state that each report under this section shall

disclose for the reporting period and calendar year, the total

amount of all receipts from other political committees and the

identification of each political committee which makes a

contribution to the reporting committee during the reporting

period, together with the date and the amount of any such

contribution.

A review of contributions from political c~mmittees was

conducted to determine if contributions were reported as required.

Forty-four contributions from political committees were identified

as not being itemized. The amount of the contributions was

$27,100.

Page 15, Approved 4/9/96
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At the exit conference, Committee representatives were

provided schedules of these c~ntributions. The Committee

representatives responded by questioning if the Committee actually

received the contributions since a portion of these items were

identified from Commission disclosure records.

The Committee included twenty-five of the forty-four

political committees that were previously unitemized in their 1995

Mid-Year report. In addition, the Committee filed amended

disclosure reports on September 13, 1995, which itemized most of

the remaining items.

In the inter~ audit report, the Audit staff recommended

no further action.

Page 16, Approved 4/9/96
AK007919

FEDERAL ELECTION COMMISSION

WASH1I\iGT01'. 0 C 10Jh'

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April 11, 1996

Mr. Charles Black, Treasurer

Bob Barr for Congress '94

231 Maxham Road, Suite 100

Austell, GA 30001

Dear Mr. Black:

Attached please find the Final Audit Report on Bob Barr

for Congress '94. The Commission approved the report on

April 9, 1996.

The Commission approved final audit report will be

placed on "the public record on April 19, 1996. Should you

have any questions regarding the public release of the

report, please contact the Commission's Press Office at (202)

219-4155. Any questions you have related to the matters

covered during the audit or in the report should be directed

to Robert Morcomb or Joe Swearingen of the Audit Division at

(202) 219-3720 or toll free at (800) 424-9530.

Sincerely,

~~:; Robert ~/ Costa

Assist nt Staff Director

Audit Division

Attachment as stated

\ , .' f ,. " '" l " • ..., .... .. ..". \"'. f ' ... ! r I

\ ...... , ..... \ \.. t., I \ \.. ":" '" '\ '; '." -1 ) .......... , )1, "I

Page 17, ApproveC 4/9/96
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Page 18, Approved 4/9/96
CHRONOLOGY

BOB BARR FOR CONGRESS '94

Audit Fieldwork 6/12/95 - 6/30/95

o

Interim Audit Report to

the Conunittee

Response Received to the

Interim Audit Report

Final Audit Report Approved

11/29/95

2/16/96

4/9/96

Page 19, Approved 4/9/96