11

D. Preserving Records and Copies of Records. The treasurer of a political committee must
preserve all records and copies of reports for 3 years after the report is filed. 2 U.S.C.
§432(d).

Facts and Analysis

A. Unreported Cash Disbursements

The examination of bank records and the disbursements database revealed that DMFS issued
five checks totaling $17,950 during July 2004 which were used to make subsequent cash
payments to numerous vendors and individuals. Four of the checks were made payable to an
employee and one was made payable to a committee consultant. According to its accounting
database, 123 cash payments totaling $16,490 were made to numerous individuals and vendors
through November 2004. Two of these cash payments totaling $2,002 were not included in

report totals.

Using DMFS’s database, the Audit staff identified the items associated with each check and
determined the difference between the five cashed checks ($17,950), and the database records
of the corresponding payments ($16,490), was $1,460. This amount was not reported. The
database provided no information as to the treatment of this unaccounted for cash.

When the Audit staff reconciled DMFS’s bank activity to its reported activity, an adjustment in
the amount of $3,462° was necessary to account for unreported and unaccounted for cash

payments. See Finding 1.

B. Excessive Cash Disbursements

The Audit staff reviewed the disbursements database to assess the nature of these cash
disbursements. According to database descriptions, the cash payments were primarily used to
pay get-out-the-vote (GOTV) costs.!° The Audit staff concluded that payments in the amount
of $15,402 are excessive cash disbursements; 32 cash payments in excess of $100 totaling
$13,942 and $1,460 in unaccounted for cash.

C. Recordkeeping for Cash Disbursements

DMFS failed to maintain sufficient supporting documentation relating to the cash
disbursements. Committee officials were unable to confirm the use of a petty cash fund and a
review of DMFS’s disbursement records did not yield any evidence to show that DMFS ever
established or maintained a formal petty cash fund. DMFS did keep a record of most cash
payments related to the five checks in its computerized accounting system. That record is
adequate for cash disbursements of less than the $100 cash limit, but most of the cash was
disbursed in amounts greater than $100. For those disbursements, DMFS presented copies of
only the front sides of two of the five cashed checks. DMFS also provided internally generated
vendor cover sheets. The cover sheets along with statements by DMFS established that the
cash was used to make subsequent disbursements. Except for one $502 item, DMFS presented
no other supporting documentation for the cash payments such as receipts, invoices,

° The sum of unreported and unaccounted for cash in 2004 ($2,002 + $1,460).
‘0 Examples of such costs included: GOTV salaries; travel reimbursements, food purchases for GOTV volunteers,
etc. However, routine vendor payments, for example office supplies, were also noted.


Part II
Overview of Campaign

Campaign Organization

Important Dates

Denise Majette for Senate

¢ Date of Registration

January 16, 2002

e Audit Coverage

January 1, 2003 — December 31, 2004

Headquarters

Decatur, GA

Bank Information

¢ Bank Depositories

Three

e Bank Accounts

3 Checking, 3 Investment

Treasurer

e Treasurer When Audit Was Conducted

Mr. Roger LeVine

¢ Treasurers During Period Covered by Audit

Mr. John Adams, Mr. Degas Wright, Mr.
Roger LeVine

Management Information

e Attended FEC Campaign Finance Seminar __| Yes
e Used Commonly Available Campaign
Management Software Package Yes
e¢ Who Handled Accounting and
Paid Staff

Recordkeeping Tasks

Overview of Financial Activity
(Audited Amounts)

Cash on hand @ January 1, 2003 $ 17,930
o Contributions from Individuals 1,358,867
o Contributions from Political Committees 610,355
o Other Receipts 14,523
Total Receipts $ 1,983,745
o Operating Expenditures 1,875,436
o Loan Repayments 66,700
o Contribution Refunds 53,300
o Other Disbursements 2,910
Total Disbursements $ 1,998,346
Cash on hand @ December 31, 2004 $ 3,329



Interim Audit Report Recommendation and Committee Response

The Audit staff recommended that DMFS amend its reports to correct the misstatements noted
above and amend its most recent report to show the adjusted cash on hand balance, with an
explanation that it resulted from audit adjustments from a prior period. In response, DMFS
filed amended reports materially correcting the misstatements. Likewise, DMFS amended its
most recently filed report correcting the cash on hand balance.

| Finding 2. Recordkeeping for Disbursements

Summary
A sample review of operating expenditures indicated that approximately 19% of expenditures

were not properly documented. The errors were all for disbursements greater than $200 for
which there were no canceled checks, wire confirmations, or vendor invoices. The Audit staff
recommended that DMFS obtain and provide the missing records. In response to the IAR,
DMES stated that it had located and submitted all of the missing documents to the Audit staff;
however, the Audit staff notes that no documentation related to any of the errors from the
sample review was received.

Legal Standard
A. Required Records for Disbursements. For each disbursement, the treasurer of a political

committee must keep records on the:

e Amount;

e Date;

e Name and address of the payee;°

© Purpose (a brief description of why the disbursement was made - see below); and

¢ If the disbursement was made on behalf of a candidate, the candidate’s name and the

office sought by the candidate.

Ifthe disbursement was in excess of $200, the records must include a receipt or invoice
from the payee, or a cancelled check or share draft to the payee. If the disbursement
was by credit card, the record must include the monthly statement or customer receipt
and the cancelled check used to pay the credit card bill.

2 U.S.C. §432(c)(5) and 11 CFR §102.9(b).

B. Preserving Records and Copies of Reports. The treasurer of a political committee must
preserve all records and copies of reports for 3 years after the report is filed. 2 U.S.C. §432(d).

Facts and Analysis

The Audit staff reviewed operating expenditures on a sample basis and determined that
approximately 19% of operating expenditures were not properly documented. The only
documentation available for these expenditures was the entries on DMFS’s electronic database.
The errors were for disbursements greater than $200 for which there was no canceled checks,

receipts or invoices, and/or expense reports.

5 The Audit staff's review of cash disbursements revealed similar errors. See Finding 4.
° The payee is usually the person providing the goods or services to the committee. In the case of travel advances,
however, the payee is the person receiving the advance. 11 CFR §102.9(b)(2).


with the law regarding cash disbursements, provide any relevant comments and submit the
missing disbursement documentation. In response, DMFS submitted copies of the negotiated
checks for the transactions in question and stated that it had therefore complied with the law
regarding cash disbursements.

(For more detail, see p. 9)


Part III
Summaries

Findings and Recommendations

Finding 1. Misstatement of Financial Activity

A comparison of DMF%S’s reported figures to bank records revealed that DMFS had materially
misstated disbursements and the ending cash on hand balances for both calendar years 2003
and 2004 as well as the beginning cash balance for 2004. The majority of the misstatement
resulted from DMFS’s failure to disclose certain operating expenditures. In response to the
interim audit report (IAR), DMFS filed amended reports that materially corrected the
misstatements.

(For more detail, see p. 5)

Finding 2. Recordkeeping for Disbursements.

A sample review of operating expenditures indicated that approximately 19% of expenditures
were not properly documented.? The errors were all for disbursements greater than $200 for
which there were no canceled checks, wire confirmations, or vendor invoices. The Audit staff
recommended that DMFS obtain and provide the missing records. In response to the IAR,
DMFS stated that it had located and submitted all of the missing documents to the Audit staff;
however, the Audit staff notes that no documentation related to any of the errors from the
sample review was received.

(For more detail, see p. 7)

Finding 3. Disclosure of Form 3Z-1

DMFS failed to file Form 3Z-1 (Consolidated Report of Gross Receipts for Authorized
Committees) with its 2003 July Quarterly report, and disclosed incorrect amounts on the 3Z-1
filed with its 2003 Year-End report. The Audit staff recommended that DMFS provide any
relevant information on this matter. In response to the IAR, DMFS submitted a statement
explaining why the Form 3Z-1 for 2003 July Quarterly report was not filed and the reasons
incorrect amounts were disclosed on the Form 3Z-1 filed with its 2003 Year-End report.

(For more detail, see p. 8)

Finding 4. Cash Disbursements

DMFS issued five checks totaling $17,950, four made payable to an employee and one made
payable to a consultant during July 2004 which were used to make subsequent cash payments
to numerous vendors and individuals. The Act requires political committees to make all
disbursements, except those from a petty cash fund, by check or similar draft drawn on a
committee account.

In addition, DMFS failed to maintain sufficient supporting documentation from the recipients
of the cash payments. The Audit staff recommended that DMFS demonstrate it had complied

3 The Audit staff’s review of cash disbursements revealed similar errors. See Finding 4.


The net understatement of disbursements was the result of the following:

¢ Operating expenditures not reported + $17,768
e¢ Unreported loan repayment to candidate + 2,000
¢ Operating expenditures reported but not located in bank
records - 3,012
e Unexplained difference - 2,622
Net Understatement of Disbursements $14,134

The overstatement of ending cash on hand in the amount of $13,865 was the result of the
misstatements noted above.

2004 Activity
Reported Bank Records Discrepancy
Opening Cash Balance @ $321,444 $307,579 $13,865
January 1, 2004 Overstated
Receipts $1,327,040 $1,327,749 $709
Understated
Disbursements $1,597,870 $1,631,999 $34,129
Understated
Ending Cash Balance @ $68,147° $3,329 $64,818
December 31, 2004 Overstated
The net understatement of disbursements was the result of the following:
¢ Operating expenditures (including payroll) not reported + $43,999
¢ Two unreported bank loan repayments + 6,515
¢ Unreported cash disbursements (See Finding 4) + 3,462
¢ Unreported in-kind contribution + 195
Operating expenditures reported but not located in bank
records - 18,462
e Unexplained difference - 1,580
Net Understatement of Disbursements $34,129

The overstatement of ending cash on hand in the amount of $64,818 was the result of the
misstatements noted above.

At the exit conference, the Audit staff provided DMFS representatives with schedules detailing
the discrepancies. DMFS representatives agreed to amend the reports.

‘ This does not foot due to a discrepancy of $17,533 between the ending cash balance as reported on the 2004
April Quarterly report and the beginning cash balance as reported on the 2004 Pre-Primary report.


FEDERAL ELECTION COMMISSION
WASHINGTON, D.C. 20463

December 1, 2006

MEMORANDUM

TO:

FROM:

SUBJECT:

ROBERT W. BIERSACK
PRESS OFFICER
PRESS OFFICE , 4

JOSEPH F. STOLTZ {
ASSISTANT STAFF
AUDIT DIVISION /

PUBLIC ISSUANCE OF THE FINAL AUDIT REPORT ON
DENISE MAJETTE FOR SENATE

Attached please find a copy of the final audit report and related documents on
Denise Majette for Senate, which was approved by the Commission on November 21,

2006.

Informational copies of the report have been received by all parties involved and
the report may be released to the public.

Attachment as stated

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


Facts and Analysis

DMFS failed to file Form 3Z-1 (Consolidated Report of Gross Receipts for Authorized
Committees) with its 2003 July Quarterly report and disclosed incorrect amounts on the 3Z-1
filed with its 2003 Year-End report.

DMFS reported gross primary election receipts of $623,844 on the Form 3Z-1 filed with its
2003 Year-End report. The Audit staff determined gross receipts for the primary election of
$671,070, an understatement of $47,226. The totals reported for the general election were
materially correct. There were no personal contributions from the candidate.

Interim Audit Report Recommendation and Committee Response

The Audit staff recommended that DMFS demonstrate that the required forms were correctly
filed or provide any additional comments relevant to this matter. In response, the DMFS
Comptroller explained that the failure to file Form 3Z-1 with the 2003 July Quarterly report
was caused by “...an administrative oversight in the version of campaign finance filing
software used by the committee." Once the DMFS realized this omission “three days later,” it
filed an amended report containing the Form 3Z-1. She added that several Requests for
Additional Information from the Commission’s Reports Analysis Division necessitated five
amendments for this report over a 13-month period. Further, she explained that “...the same
computer-driven oversight” led to the exclusion of the Form 3Z-1 from the October 2003
amendment. She noted that the amended 2003 July Quarterly report which was filed in
response to the IAR included the correct Form 3Z-1.

DMFS did amend its 2003 July Quarterly report to include the Form 3Z-1 once it discovered
that the form was omitted from its original report. However, this form is time sensitive.
Therefore filing the form after the due date does not resolve the issue.

As far as the incorrect amounts disclosed on the Form 3Z-1 for the 2003 Year-End report, the
DMFS Comptroller explained that the originally filed report was based on data that was
corrected via an amendment filed in response to the IAR. She pointed out that the amended
report included a corrected Form 3Z-1. Regardless of the accuracy of the subsequent
amendments, the Comptroller provided no explanation as to why DMFS disclosed incorrect
amounts on its originally filed 2003 Year-End report.

The purpose of the Form 3Z-1 is to inform an opposing candidate if he or she is entitled to an
increased contribution limit. To ensure that the information disclosed on the Form 3Z-1 is
meaningful to an opposing candidate, such information must be disclosed timely and

accurately.

| Finding 4. Cash Disbursements

Summary
DMES issued five checks totaling $17,950, four made payable to an employee and one made
payable to a consultant during July 2004 which were used to make subsequent cash payments

to numerous vendors and individuals. The Act requires political committees to make all


DMES’s disbursement records consisted of some check copies supplied by the committee
(front only), some invoices and receipts, and committee-prepared vendor cover sheets. See
Finding 4 for a discussion of cash disbursements.

At the exit conference, DMFS’s representatives were informed of this matter and they stated
that they would review their records for additional documentation and would provide any
additional documentation located.

Interim Audit Report Recommendation and Committee Response

The Audit staff recommended that DMFS review its disbursement records and identify those
payments in amounts greater than $200 for which there was no canceled check, invoice or bill
and obtain and submit the required documentation for the Audit staff’s review. In response,
the DMFS Comptroller stated that they had located the supporting documentation required for
all disbursements and submitted them for the auditors’ review. The Audit staff notes that
DMES did submit the copies of canceled checks relative to Finding 4, Cash Disbursements, but
that none of the documents submitted related to any of the sample errors for the recordkeeping
for disbursements review. As a result, the interim audit report conclusion is unchanged.

| Finding 3. Disclosure of Form 3Z-1

Summary
DMFS failed to file Form 3Z-1 (Consolidated Report of Gross Receipts for Authorized

Committees) with its 2003 July Quarterly report and disclosed incorrect amounts on the 3Z-1
filed with its 2003 Year-End report. The Audit staff recommended that DMFS provide any
relevant information on this matter. In response to the IAR, DMFS submitted a statement
explaining why the Form 3Z-1 for 2003 July Quarterly report was not filed and addressed the
issue of incorrect amounts disclosed on the Form 3Z-1 filed with its 2003 Year-End report.

Legal Standard
Special Reporting Requirements. Principal campaign committees of candidates for the U.S.

House and the U.S. Senate must file FEC Form 3Z-1 as part of their July Quarterly and Year-

End Reports in the year preceding the year in which the general election for the office sought is
held. The information in this form allows opposing candidates to compute their “gross receipts
advantage” used to determine whether a candidate is entitled to an increased contribution limit.

The following information must be disclosed:

1. Gross receipts to date for the primary and general elections,
2. Aggregate amount of contributions from personal funds of the candidate for the primary

and general elections, and,
3. Acalculation of gross receipts less the candidate’s personal contributions for each election.

11 CFR §104.19.

7 This regulation became effective January 27, 2003; as such, this election cycle is the first that required filing of
this form.


Part IV
Findings and Recommendations

| Finding 1. Misstatement of Financial Activity

Summary

A comparison of DMFS’s reported figures to bank records revealed that DMFS had materially
misstated disbursements and the ending cash on hand balances for both calendar years 2003
and 2004 as well as the beginning cash balance for 2004. The majority of the misstatement
resulted from DMFS’s failure to disclose certain operating expenditures. In response to the
IAR, DMFS filed amended reports that materially corrected the misstatements.

Legal Standard
A. Contents of Reports. Each report must disclose:
¢ The amount of cash on hand at the beginning and end of the reporting period;
e 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.
e Certain transactions that require itemization on Schedule A or Schedule B.
2 U.S.C. §434(b)(1), (2), (4).

Facts and Analysis

The Audit staff reconciled DMFS’s reported activity to its bank records and determined there
was a material misstatement of disbursements and ending cash on hand in calendar year 2003.
Similarly, the cash on hand balance and the disbursement total were misstated in calendar year
2004. The following charts detail the discrepancies between DMFS’s reported activity and its
bank records. Succeeding paragraphs explain, to the extent possible, why the discrepancies
occurred.

2003 Activity
Reported Bank Records Discrepancy
Opening Cash Balance @ $17,699 $17,930 $231
January 1, 2003 Understated
Receipts $655,958 $655,996 $38
Understated
Disbursements $352,213 $366,347 $14,134
Understated
Ending Cash Balance @ $321,444 $307,579 $13,865
December 31, 2003 Overstated



Part I
Background

Authority for Audit

This report is based on an audit of Denise Majette for Senate (DMFS), 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

This audit examined:

The receipt of excessive contributions and loans.

The receipt of contributions from prohibited sources.

The disclosure of contributions received.

The disclosure of disbursements, debts and obligations.
The consistency between reported figures and bank records.
The completeness of records.

Other committee operations necessary to the review.

NANRYWN

Committee History

Denise Majette (the Candidate) was running for re-election to the House of
Representatives for Georgia’s 4h Congressional District until April 19, 2004, when the
Candidate filed a Statement of Candidacy (FEC Form 2) declaring her candidacy for the
open U.S. Senate seat. On April 15, 2004 an amended Statement of Organization (FEC
Form 1) was filed changing the committee’s name from Committee to Re-Elect Denise
Majette to Denise Majette for Senate. No change was made to the FEC Identification
number and DMFS did not open any new bank accounts. For purposes of this audit, all
financial activity between January 1, 2003 and December 31, 2004 was included in audit

testing.


12

contemporaneous memoranda, etc. As a result, sufficient records (for payments in excess of
$200) were not available for $12,349" in cash payments.

The Audit staff’s review of the committee’s disbursements database yielded eleven additional
checks issued between July and August 2004 totaling $34,958 that were recorded as “GOTV”
expenditures and made payable to the same two individuals as the five checks discussed above.
Due to the lack of documentation associated with these disbursements, the Audit staff was
unable to determine whether the designated payees provided goods or services in return for
payment or whether the funds were used to reimburse multiple payees as discussed above in
Section A. None of the checks appears to be salary or consulting payments.

This matter was presented to DMFS representatives at the exit conference. They stated that
they were not aware of the requirements relating to cash payments at the time these payments
were made.

Interim Audit Report Recommendation

The Audit staff recommended that DMFS:

¢ Demonstrate it complied with the provisions of 2 U.S.C. §432(h) regarding cash
disbursements;

¢ Provide any comments it deemed relevant regarding the cash disbursements;

© Obtain and submit the missing disbursement documentation to support the $12,349, noted
above; and,

e Provide the missing disbursement documentation to support the $34,958, noted above.

Committee Response and Audit Staff's Assessment

In response, DMFS provided copies of the five negotiated checks issued in July 2004, totaling
$17,950, which were used to make subsequent cash payments to numerous vendors and
individuals. DMES also provided copies of the eleven negotiated checks issued in July and
August 2004, totaling $34,958, that were made payable to the same two individuals noted
above and were recorded as “GOTV” expenditures. The Comptroller stated that payment was
made from DMFS to the payees in accordance with 2 U.S.C. §432(h) for all of these checks.

She offered the following:
In many cases, as noted in the IAR, the original payees acted as intermediaries, further

disbursing funds individually. As would be required of secondary and tertiary
disbursements made, for example, through a commercial credit card, the Committee made
every best effort to obtain and report name, address, date, amount and purpose for every
secondary and tertiary transaction.

For every transaction, the Committee endeavored to obtain complete invoices and receipts
from payees. However, during the fast-paced, statewide primary and primary runoff in
2004, full documentation was sometimes only obtained for the primary transaction, not any
secondary or tertiary transaction that may have occurred. In these instances, the
Committee’s good faith efforts to completely document the flow of funds are seen in the
presence of vendor cover sheets, receipts, service memorandums and other bank records,

‘| ‘This figure includes an unreported and unaccounted for amount of $1,460 discussed above in Section A.


Table of Contents

Part I. Background
Authority for Audit
Scope of Audit
Committee History

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. Recordkeeping for Disbursements
Finding 3. Disclosure of Form 3Z-1
Finding 4. Cash Disbursments

Page

NN

CorUH


Report of the
Audit Division on

Denise Majette for Senate
January 1, 2003 - December 31, 2004

Why the Audit About the Campaign (p. 2)
Was Done Denise Majette for Senate is the principal campaign committee
for Denise Majette, Democratic candidate for the U.S. Senate

Federal law permits the
from the state of Georgia, and is headquartered in Decatur, GA.

Commission to conduct

audits and field For more information, see chart on the Campaign Organization,
investigations of any p.2.

political committee that is

required to file reports Financial Activity (p. 2)

under the Federal e Receipts

Election Campaign Act o Contributions From Individuals $ 1,358,867
(the Act). The o Contributions From Political

Commission generally Committees 610,355
conducts such audits o Other Receipts 14,523
when a committee o Total Receipts $ 1,983,745
appears not to have met « Disbursements

the threshold o Operating Expenditures $ 1,875,436
requirements for . o Loan Repayments” 66,700
substantial compliance © Contribution Refunds 53,300
with the Act.’ The audit o Other Disbursements 2,910
determines whether the o Total Disbursements $ 1,998,346

committee complied with

the limitations, 4 Findings and Recommendations (p. 3)

promotions guiremen ‘s Misstatement of Financial Activity (Finding 1)

of the Act. Recordkeeping for Disbursements (Finding 2)
Disclosure of Form 3Z-1 (Finding 3)

Cash Disbursements (Finding 4)

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

' 2US.C. §438(b).
? The Candidate’s House reelection committee was the original recipient of all loans in 2002; these were

later repaid by the Senate committee.


10

disbursements, except those from a petty cash fund, by check or similar draft drawn on a
committee account.

In addition, DMFS failed to maintain sufficient supporting documentation from the recipients
of the cash payments. The Audit staff recommended that DMFS demonstrate it had complied
with the law regarding cash disbursements, provide any relevant comments and submit the
missing disbursement documentation. In response, DMFS submitted copies of the negotiated
checks for the transactions in question and stated that it had therefore complied with the law
regarding cash disbursements.

Legal Standard

A. Disbursement by Check. A political committee may only make expenditures in cash, not
to exceed $100, from a petty cash fund. A written journal for such cash expenditures is to be
maintained by the treasurer. All other disbursements shall be made by check or similar draft
drawn on account(s) established at the campaign’s depository(ies). 2 U.S.C. §432(h).

B. Petty Cash Fund. A political committee may maintain a petty cash fund out of which it
may make expenditures not in excess of $100 to any person per purchase per transactions.

It is the duty of the treasurer to keep and maintain a written journal of all petty cash
disbursements. The written journal shall include:

e Name and address of every person to whom any disbursement is made,
Date,
Amount,
Purpose, and
If disbursement is made for a candidate, the journal shall include the name of that
candidate and the office (including State and Congressional district) sought by
such candidate. 11 CFR §102.11.

C. Required Records for Disbursements. For each disbursement, the treasurer of a political
committee must keep records on the:

e Amount,

e Date,

e Name and address of the payee,®

© Purpose (a brief description of why the disbursement was made),

e Ifthe disbursement was made on behalf of a candidate, the candidate’s name and

office sought by the candidate; and,

e If the disbursement was in excess of $200, the records must include a receipt or an
invoice from payee, or a cancelled check or share draft to the payee. If the
disbursement was made by credit card, the record must include the monthly
statement or customer receipt and the cancelled check used to pay the credit card
bill. 2 U.S.C. §432(c)(5) and 11 CFR §102.9(b).

® The payee is usually the person providing the goods or services to the committee. In the case of travel advances,
however, the payee is the person receiving the advance. 11 CFR §102.9(b)(2).


13

all of which have been transmitted to the FEC, as requested, at various points throughout
this audit. These documents, specifically the service memorandums, make apparent that at
no point was there a material misrepresentation of the flow of funding, nor was anything
other than the enormous pressure Committee staff were operating under responsible for the
now-realized potential omissions in obtaining certain documentation.

The Comptroller acknowledged that the individuals who received the 11 GOTV payments
acted merely as intermediaries further disbursing the funds. While she did not explicitly
confirm that these payments were made in cash, by referring to 2 U.S.C. 432 (h), she pointed
out DMFS’s compliance with this regulation. The Audit staff therefore reasonably concluded
that these disbursements were made in cash.

While DMFS contended that it exercised best efforts to obtain and report the secondary
transactions, it failed to document them beyond the general statement in its response. DMFS
did not provide any agreements with the persons who received the funds. Further, it did not
provided any documentation reflecting the accounting treatment of either the petty cash
disbursements or disbursements greater than $100. DMEFS provided no documents to prove
that it made necessary follow-up requests with the ultimate payees in order to document the
disbursement process. DMFS also failed to explain why the best efforts failed to produce even
partially complete records relative to the 11 GOTV payments. Regarding the five payments
supported in detail in DMFS’s database, DMFS did not elaborate as to why this detail
information was not disclosed on its FEC reports.

Finally, the DMFS Comptroller did not address the issue of the 32 cash payments in excess of
$100 totaling $13,942.