Final Audit Report of the 

Commission on 

Rossi for Senate 

(May 24, 2010 - December 31, 2010) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political conunittee 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 

conimittee 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 the matter 

discussed in this report. 

About the Campaign (p. 2) 

Rossi for Senate is the principal campaign committee for Dino 

Rossi, Republican candidate for the United States Senate from the 

state of Washington, headquartered in Mukilleo, Washington. 

For more information, see the chart on the Campaign 

Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o From Individuals 

o From Political Committees 

o Transfers from Affiliates 

o Offsets to Operating 

Expenditures 

Total Receipts 

• Disbursements 

o Operating Expenditures 

o Contribution Refunds 

o Transfers to Authorized 

Committees 

Total Disbursements 

Commission Finding (p. 3) 

• Misstatement of Financial Activity 

$ 8,348,360 

641,248 

665,484 

19,298 

$ 9,674,390 

$ 9,553,965 

20,360 

1,500 

$ 9,575,825 

2U.S.C. §438(b). 
Final Audit Report of the 

Coinmission on Rossi for Senate 

(May 24, 2010 - December 31, 2010) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Audit Hearing 1 

Part II. Overview of Campaign 

Campaign Organization 2 

Overview of Financial Activity 2 

Part III. Summary 

Commission Finding 3 

Part IV. Commission Finding 

Misstatement of Financial Activity 4 
Parti 

Backgromid 

Authority for Audit 

This report is based on an audit of Rossi for Senate (RFS), 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 intemal review of reports filed by selected committees to 

determine whether 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, this audit examined: 

1. the receipt of excessive contributions and loans; 

2. the receipt of contributions from prohibited sources; 

3. the disclosure of contributions received; 

4. the disclosure of individual contributors* occupation and name of employer; 

5. the consistency between reported figures and bank records; 

6. the completeness of records; and 

7. other committee operations necessary to the review. 

Audit Hearing 

Rossi for Senate declined the opportunity for a hearing before the Commission on the 

matter presented in this report. 
Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

• Date of Registration June 8,2010 

• Audit Coverage May 24,2010 - December 31,2010 

Headquarters Mukilleo, Washington 

Bank Information 

• Bank Depositories One 

• Bank Accounts One Checking 

Treasurer 

• Treasurer When Audit Was Conducted Phil Dyer (June 8,2010 - January 30,2012) 

Dino Rossi (January 31,2012 - present) 

• Treasurer During Period Covered by Audit Phil Dyer 

Management Information 

• Attended Commission Campaign Finance 

Seminar 

No 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amoimts) 

Cash-on-hand @ May 24,2010 $ 0 

Receipts 

o From Individuals 8,348,360 

o From Political Committees 641,248 

o Transfers from Affiliates 665,484 

o Offsets to Operating Expenditures 19,298 

Total Receipts $9,674390 

Disbursements 

o Operating Expenditures 9,553,965 

o Contribution Refunds 20.360 

o Transfers to Authorized Conimittees 1,500 

Total Disbursements $ 9,575,825 

Cash-on-hand @ December 31,2010 $ 98,565 
Part III 

Summary 

Commission Finding 

Misstatement of Financial Activity 

During audit fieldwork. a comparison of RFS's reported fmancial activity with its bank 

records revealed a misstatement of disbursements. In response to the Interim Audit 

Report recommendation. RFS amended its disclosure reports to materially correct the 

misstatement. 

The Conunission approved a finding that RFS misstated its financial activity for calendar 

year 2010. (For more detail, see p. 4.) 
Part IV 

Commission Finding 

I Misstatement of Financial Activity 

Summary 

During audit fieldwork. a comparison of RFS's reported financial activity with its bank 

records revealed a misstatement of disbursements. In response to the Interim Audit 

Report recommendation. RFS amended its disclosure reports to materially correct the 

misstatement. 

The Commission approved a finding that RFS misstated its financial activity for calendar 

year 2010. 

Legal Standard 

Contents of Reports. Each report must disclose: 

• the amoimt 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; 

• the total amount of disbursements for the reporting period and for the election 

cycle; and 

• certain transactions that require itemization on Schedule B (Itemized 

Disbursements). 2 U.S.C. §434(b)(l). (2), (3). (4) and (5). 

Facts and Analjrsis 

A. Facts 

The Audit staff reconciled RFS's reported activity with its bank records and identified a 

misstatement of disbursements for 2010. The following chart details the discrepancy and 

the succeeding paragraphs explain the reasons for the misstatement. 

2010 Activity 

Reported Bank Records Discrepancy 

Beginning Cash-on-Hand 

@ May 24, 2010 

$0 $0 $0 

Receipts $9,645,437 $9,674,390 $28,953 

Understated 

Disbiursements $9,421,114 $9,575,825 $154,711 

Understated 

Ending Cash-on-Hand 

@ December 31,2010 

$150,678^ $98,565 $52,113 

Overstated 

^ RFS's reported ending cash balance does not equal the difference of receipts and disbursements because 

RFS decreased its beginning cash-on-hand balance by $73,645 on its October 2010 Quarterly report. 

Absent that error, the reported ending cash balance as of December 31,2010, would have been $224,323. 
As noted above, RFS understated disbursements by $154,711 in 2010. This misstatement 

of disbursements resulted from the following reporting discrepancies. 

• In-kind contributions reported as memo entries + $ 3,010 

• In-kind contributions reported on Schedule A, not on Schedule B + 4,847 

• Disbursements reported but not supported by check or debit - 178,492 

• Payroll Disbursements not reported + 40,958 

• Operating Disbursements not reported + 289,986 

• Unexplained Difference ; 5.598 

Net Understatement of Disbursements $ 154,711 

RFS made payroll disbursements totaling $40,958 that could not be traced to its reports. 

The payroll disbursements consisted of payroll dated on July 1,2010 ($22,422), and on 

July 15,2010 ($18,536). In addition, there were operating disbursements totalmg 

$289,986 that could not be traced to RFS reports. These disbursements consisted of a 

media vendor payment ($231,047), two payments for consulting services ($33,350), and 

other disbursements ($25,589). 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff and RFS representatives discussed the misstatement at the exit 

conference. The Audit staff also provided schedules supporting the disbursement 

adjustments. RFS representatives acknowledged the discrepancies in its reports and 

indicated that RFS would file corrective amendments. 

The Interim Audit Report recommended that RFS amend its disclosure reports to correct 

the misstatement of disbursements for 2010 and amend its most recently filed report to 

correct the cash-on-hand balance with an explanation that the change resulted from a 

prior-period audit adjustment. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, RFS filed amended disclosure 

reports that materially corrected the misstatement of disbursements for 2010. 

D. Draft Final Audit Report 

In the Draft Fmal Audit Report, the Audit staff acknowledged that RFS had filed 

corrective amendments. RFS did not offer any additional conunents in its response to the 

Draft Final Audit Report. 

Commission Conclusion 

On July 12,2012, the Conunission considered the Audit Division Reconunendation 

Memorandum in which the Audit staff recommended that the Commission adopt a 

fmding that RFS misstated its financial activity for calendar year 2010. The Commission 

approved the Audit staffs reconunendation.