MEMORANDUM

TO:

FROM:

SUBJECT:

FEDERAL ELECTION COMMISSION

\\'ASHING10N. 0 C 204&3

A82-9

March 28, 1983

FRED EILAND

PRESS OFFICER /

BOB COSTA "?l,/'<--'

PUBLIC ISSUANCE OF FINAL AUDIT-REPORT - NORTH CAROLINA REPUBLICAN EXECUTIVE COMMITTEE

'. II"

Attached please find a copy of the final audit report of

the North Carolina Republican Executive Conmittee which was

approved by the Commission on March 15, 1983.

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: FEC Library

RAD

~blic Record
FEDERAL ELECTION COMMISSION

\\' A~tH~G101', 0 ( 204&3

......

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A82-9

REPORT OF THE AUDIT DIVISION

ON THE

NORTH CAROLINA REPUBLICAN EXECUTIVE COMMITTEE

1. Background

A. Overview

This report is based on an audit of the North Carolina

Republican Executive Committee (lithe 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 (lithe 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 Federal" Election

Commission on March 16, 1976 and maintains its headquarters in

Raleigh, North Carolina.

The audit covered the period January 1, 1981, through

October 13, 1982. The Committee reported a beginning cash

balance at January 1, 1981 of $387.151 total receipts for the

period of $605,020.691 total expenditures for the period of

$539,586.95; and an ending cash balance at October 13, 1982 of

$65,820.89.

This report is based on documents and working papers supporting each of its factual statements. They form part of the

record upon which the Commission based its decisions on the

matters in this report and were available to Commissioners and

appropriate staff for review.
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B. Key Personnel

The Treasurers of the Committee during the period of

the audit were Mr. Thomas L. Lucas, Jr. from January 1, 1981

through July 25, 1981J and Mr. James F. McIntyre, III from July 25, 1981 until the present.

C. Scope

The audit included such tests as verification of total

reported receipts and expenditures and individual transactionsJ

review of required supporting documentation, analysis of

Committee debts and obligations; and such other audit procedures

as deemed necessary under the circumstances• •

II. Audit Finding and Recommendation

Rased on examination of the reports and statements filed and

the records presented by the Committee, no material problems in

complying with the Federal Election Campaign Act were discovered

during the course of the audit.

FiDERAL ELECTION COMMISSION

FROM:

SUBJECT:

MEMORANDUM

TO:

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A82-2

April 13, 1983

FRED EILAND

PRESS OFFIC~ .

BOB COSTA -/Y

PUBLIC ISSUANCE OF FINAL AUDIT REPORT - BELL FOR SENATE COMMITTEE, INC. - '82

Attached please find a copy of the final audit report of the

Bell For Senate Committee, Inc. - '82 which was approved by the

Commission on March 31, 1983.

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: FEC Library RAD ~ublic Record
FEDERAL ELECTION COMMISSION

WASHINCTON. 0 C 20463

A82-2

-,

.,.

REPORT OF THE AUDIT DIVISION

ON THE

BELL FOR SENATE COMMITTEE, INC. - '82

I. Background

A. Overview

This report is based on an audit of the Bell For Senate

Committee, Inc. - '82 (-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 re-registered with the Federal Election

Commission on March 3, 1981.!1 The Committee maintains its

headquarters in Hamilton Township, New Jersey.

The audit covered the period January 1, 1981 through September 30, 1982, the latest report filed at the time of the

audit. The Committee reported a cash balance on January 1, 1981

of $11,348.91, total receipts of $2,276,022.67, total

expenditures of $2,281,315.55, and a cash balance on September

30, 1982 of $2,467.18. 11

11 The Committee did not terminate after the 1978 Senate race

due to its outstanding debts.

2/ The reported totals do not calculate correctly due to math

errors. (See Finding II.B.>.
-2-

This audit report is based on documents and work papers which support each of its factual statements. TheI form part of

the recora upon which the Commission based its dec sions on the

matters in the report and were available to the Commissioners and

appropriate staff for review.

B. Key Personnel

The Treasurers of the Committee during the period covered by the audit were Kathryn Christiansen from inception of

the audit period through March 3, 1981, Seward H. Jacobi from

March 3, 1981 through May 4, 1981; and Deborah K. Smarth from May 4, 1981 through the present.

C. 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. Apparent Excessive Contributions

From Individuals

,.~ Section 441a(a) (1) (A) of Title 2 of the United States

Code states that no person shall make contributions to any candidate and his authorized political committees with respect to

any election for Federal office which, in the aggregate, exceed

$1,000.

A review of the Committee's contribution records

indicated that the Committee received contributions from 30

contributors which in the aggregate, exceeded $1,000. The amount

in excess of the $1,000 limitation totaled $15,744.00. The

Committee Treasurer was aware of 16 excessive contributions at

the time of the audit and was in the process of contacting the

contributors with respect to resolving the excessive portion of

those contributions.

The Committee Treasurer explained that the primary

cause of this problem was the fact that the Committee employed two separate systems for the retention of requisite contribution

information. For those contributions raised by "direct mail n

solicitation, the Committee utilized an automated system, for all

other contributions the Committee used an index card system which

was maintained manually. When the Committee received
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contributions from individuals as a result of a combination of

"direct mail" solicitation and other fundraising efforts, the

Committee had difficulty in aggregating these contributions.

Prior to the commencement of the audit fieldwork, the

Treasurer had issued refund checks totaling $4,217.00 to 11

contributors, however, at the end of the fieldwork, refund checks

had been negotiated by only four payees totaling $1,125.00.

The Audit Division recommended that the Committee,

within 30 days of receipt of the interim report, provide documentation to demonstrate that the remaining contributions

were not in excess of the limitations, or issue refund checks and

provide copies (both front and back) of the negotiated refund

checks and the refund checks issued but not reviewed during the

fieldwork, along with copies of the relevant bank statements.

The Committee provided 16 additional negotiated refund

checks totaling $6,709.00, along with relevant bank statements.

In addition, the Committee provided documentation (i.e., the

attribution of the contribution to a spouse, and the application of the contribution to the 1978 primary debt) which demonstrated

that contributions totaling $7,910 were no longer in excess of

the limits.

Recommendation

The Audit Division recommends no further action.

B. Misstatements of Financial Activity

Sections 434(b) (2) and (4) of Title 2 of the United

States Code state, in part, that each report filed shall disclose

for the calendar year the total amount of all receipts, and the

total amount of all disbursements.

During the course of the audit, it was discovered that

the Committee understated its financial activity in 1982. The

Committee understated receipts by $64,425.29, and understated

disbursements by $67,115.83. These discrepancies were, for the

most part, due to errors made by the Committee during the report preparation stage. The Committee did not have an explanation for

these errors.

The Audit Division recommended that the Committee,

within 30 days of receipt of the interim report, file a

comprehensive amendment for 1982 to accurately depict its

financial activity noted above.
"

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A comprehensive amendment was received from the

Committee on March 22, 1983, in which the Committee complied with the recommendation in the interim audit report.

Recommendation

The Audit st~ff recommends no further action.