Part II
Overview of Campaign

Campaign Organization

Important Dates

Committee to Elect Kevin Scott

e Date of Registration

August 17, 2005

e Audit Coverage

August 17, 2005 — December 31, 2006

Headquarters

Wakefield, Massachusetts

Bank Information

e Bank Depositories

2

e Bank Accounts

2 Checking Accounts

Treasurer

e Treasurer When Audit Was Conducted

Barry Greenspan

e Treasurer During Period Covered by Audit

David Elliot Cohen (8/17/05 — 4/2/06);
Tom Jay Cing-Mars (4/3/06 — 6/12/06);
Barry Greenspan (6/13/06 — present)

Management Information

e Attended FEC Campaign Finance Seminar _| No

¢ Used Commonly Available Campaign No
Management Software Package

e¢ Who Handled Accounting and Kevin Scott

Recordkeeping Tasks

Overview of Financial Activity

(Audited Amounts)
Cash on hand @ August 17, 2005 $ 288
o Contributions From Individuals 328,962
o Contributions From Political Party Committees 250
o Loans — Made by the Candidate 47,100
Total Receipts $ 376,312
o Operating Expenditures 369,616
o Loan Repayments 4,350
Total Disbursements $ 373,966
Cash on hand @ December 31, 2006 $ 2,634



such contacts; and, amend its reports to disclose any information obtained from those
contacts.

In response, CKS provided copies of letters sent to the majority of contributors and filed
amended reports disclosing the contributor information received as a result of its efforts.
CKS materially complied with the recommendation.


Part IV
Findings and Recommendations

| Finding 1. Misstatement of Financial Activity

Summary

In calendar year 2006, CKS overstated receipts and disbursements by $106,977 and
$93,300 respectively. It appears that most of the misstatements were due to double
reporting of unitemized amounts. Subsequent to the exit conference, CKS amended its
reports to materially correct the misstatements.

Legal Standard

Contents of Reports. Each report must disclose:

e 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 election cycle; and

e The total amount of disbursements for the reporting period and for the election cycle;

¢ 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).

Facts and Analysis

The Audit staff reconciled reported activity to bank records for calendar year 2006 and
determined there was a material misstatement of receipts, disbursements, and ending
cash. The following chart outlines the discrepancies between the totals on CKS’s
disclosure reports and the bank records.

2006 Activity
Reported Bank Records Discrepancy
Opening Cash Balance $731 $591 $140
Overstated
| Receipts $461,449 $354,472 $106,977
Overstated
Disbursements $445,728 $352,428 $93,300
Overstated
Ending Cash Balance $22,187 $2,635 $19,522
Overstated



Part III
Summaries

Findings and Recommendations

Finding 1. Misstatement of Financial Activity

In calendar year 2006, CKS overstated receipts and disbursements by $106,977 and
$93,300 respectively. It appears that most of the misstatements were due to double
reporting of unitemized amounts. Subsequent to the exit conference, CKS amended its
reports to materially correct the misstatements. (For more detail, see p. 4.)

Finding 2. Disclosure of Occupation and Name of
Employer

CKS did not adequately disclose contributor’s occupation and/or name of employer for
25 contributions totaling $9,167. CKS did not use “best efforts” to obtain, maintain and
submit the required contributor information. In response to the interim audit report, CKS
filed the necessary amended reports to materially comply with the recommendation. (For
more detail, see p. 5.)


per election cycle, either by itself or when combined with other contributions from the
same contributor. 2 U.S.C. §434(b)(3)(A).

B. Required Information for Contributions from Individuals. For each itemized

contribution from an individual, the committee must provide the following information:
¢ The contributor’s full name and address (including zip code);

The contributor’s occupation and the name of his or her employer;

The date of receipt (the date the committee received the contribution);

The amount of the contribution; and

The election cycle-to-date total of all contributions from the same individual. 11

CFR §§100.12 and 104.3(a)(4) and 2 U.S.C. §434(b)(3)(A).

C. Best Efforts Ensures Compliance. When the treasurer of a political committee
shows that the committee used best efforts (see below) to obtain, maintain, and submit
the information required by the Act, the committee’s reports and records will be
considered in compliance with the Act. 2 U.S.C. §432(h)(2)(i).

D. Definition of Best Efforts. The treasurer and the committee will be considered to

have used “best efforts” if the committee satisfied all of the following criteria:

e All written solicitations for contributions included:

o Aclear request for the contributor's full name, mailing address, occupation,
and name of employer; and
o. The statement that such reporting is required by Federal law.

e Within 30 days after the receipt of the contribution, the treasurer made at least one
effort to obtain the missing information, in either a written request or a documented
oral request.

e The treasurer reported any contributor information that, although not initially
provided by the contributor, was obtained in a follow-up communication or was
contained in the committee’s records or in prior reports that the committee filed
during the same two-year election cycle. 11 CFR §104.7(b).

Facts and Analysis

The Audit staff reviewed contributions from individuals for disclosure of occupation
and/or name of employer. The review identified 25 contributions (42%), totaling $9,167,
where CKS did not properly disclose the contributor’s occupation and/or name of
employer. Of the 25 errors, the occupation and/or name of employer were either blank
(16) or incomplete (9). The records provided the Audit staff did not contain any follow
up requests for the missing contributor information.

In response to the exit conference, CKS agreed that no follow-up attempts were made to
obtain the information. As such, CKS did not use “best efforts” to obtain, maintain and

submit this information.

Interim Audit Report Recommendation and Committee Response
The Audit staff recommended that CKS make an effort to contact those individuals for
whom the required information was missing or incomplete; provide documentation of


FEDERAL ELECTION COMMISSION
Washington, DC 20463

December 19, 2007

MEMORANDUM

TO: ROBERT W. BIERSACK
PRESS OFFICER
PRESS OFFICE

FROM: JOSEPH F. STOLTZ
ASSISTANT STAFF/DIRECTOR
AUDIT DIVISION

SUBJECT: | PUBLIC ISSUANCE OF THE REPORT OF THE AUDIT DIVISION ON
THE COMMITTEE TO ELECT KEVIN SCOTT. :

Attached please find a copy of the audit report on the Committee to Elect Kevin
Scott, which was approved by the Commission on December 4, 2007.

All parties involved have received informational copies of the report and the report
may be released to the public on December 19, 2007.

Attachment as stated

ce: Office of General Counsel
Office of Public Disclosure
Reports Analysis Division
FEC Library
Web Manager


Explanation of Discrepancies

Opening Cash Balance - The $140 overstatement was the result of minor reporting
errors from the previous year.

Receipts
The overstatement for receipts was due to the following:
¢ Candidate loans deposited but not reported + $ 11,400
¢ Unitemized receipts apparently reported in both the
itemized and unitemized totals - 118,377
Net overstatement $ 106,977
Disbursements

The overstatement of disbursements was due to the following:

e Disbursements reported twice - $ 10,842
e Bank fees not reported + 463
¢ Two disbursements over reported - 4,447
¢ Unitemized disbursements apparently reported in both the
itemized and unitemized totals - 78.474
Net overstatement 93,301

Ending Cash Balance - The misstated cash balance at December 31, 2006 was the result
of the errors described above.

This matter was discussed at the exit conference. CKS stated that it may have
unintentionally reported itemized and unitemized receipts and disbursements incorrectly.
Subsequent to the exit conference, CKS filed amended disclosure reports that materially
corrected the misstatements noted above.

Finding 2. Disclosure of Occupation and Name of
Employer

Summary

CKS did not adequately disclose contributor’s occupation and/or name of employer for
25 contributions totaling $9,167. CKS did not use “best efforts” to obtain, maintain and
submit the required contributor information. In response to the interim audit report, CKS
filed the necessary amended reports to materially comply with the recommendation.

Legal Standard
A. Itemization Required for Contributions from Individuals. An authorized

candidate committee must itemize any contribution from an individual if it exceeds $200


Part I
Background

Authority for Audit

This report is based on an audit of the Committee to Elect Kevin Scott (CKS), 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 if the 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 consistency between reported figures and bank records;

2. The disclosure of individual contributors’ occupation and name of employer; and,
3. The receipt and permissibility of loans.


Table of Contents

Part I. Background
Authority for Audit
Scope of Audit

Part II. Overview of Campaign
Campaign Organization
Overview of Financial Activity

Part III. Summaries

Findings and Recommendations

Part IV. Findings and Recommendations
Finding 1. Misstatement of Financial Activity
Finding 2. Disclosure of Occupation and Name of Employer

Page

n


Report of the Audit Division
on the

Committee to Elect Kevin Scott
August 17, 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.’ The audit
determines whether the
committee complied with
the limitations,
prohibitions and
disclosure requirements
of the Act.

Future Action
The Commission may
initiate an enforcement
action, at a later time,
with respect to any of the
matters discussed in this
report.

' 2U.S.C. §438(b).

About the Campaign (p. 2)

Committee to Elect Kevin Scott is the principal campaign
committee for Kevin Paul Scott, Republican candidate for the
U.S. Senate from the state of Massachusetts and is headquartered
in Wakefield, Massachusetts. For more information, see the chart
of the Campaign Organization, p. 2.

Financial Activity (p. 2)

« Receipts
o Contributions From Individuals $ 328,962
o Contributions From Political 250
Party Committees
o Loans — Made by the Candidate 47,100
o Total Receipts $ 376,312
« Disbursements
o Operating Expenditures $ 369,616
o Loan Repayments 4,350
o Total Disbursements $ 373,966

Findings and Recommendations (p. 3)
¢ Misstatement of Financial Activity (Finding 1)
e Disclosure of Occupation and Name of Employer (Finding 2)