sen 

VIA E-MAIL AND U.S MAIL 

June 5. 2018 

Thomas Hintermisler 

Federal Election Commission 

Assistant StalT Director 

Audit Division 

1050 First Street NE 

Washington D.C.. 20463 

Re: Response to Interim Audit Report 

Dear Mr. Hintermister: 

This responds to the Federal Election Commission's (the ••Commission"b Interim 

Audit Report of the Audit Division concerning the 2015-2016 election cycle act 

the Friends of Erik Paulsen Committee (the "Committee"). 

vities of 

The Interim Audit Report includes only one llnding—relying entirely on 

contribution sampling and projections drawn from that sampling, the Interim Auqit Report 

finds that the Committee might have received excessive contributions of SI 34.78 6. 

Although sampling has been blessed by the Commi.ssion as a general IT 3 

Audit Division's projections here are incorrect because the sampled items relied 

Audit Division were not excessive contributions (or erroneous in any other \va\ 

contraiy. the Committee provided the auditors with evidence demonstrating tha 

the sample items involved e.\ce.ssive contributions—and the auditors agreec 

concerns regarding the sample items have been resolved. Because the 

contributions were not errors, the Audit Division cannot draw statistical projectijo 

them, per Commission regulation. See 11 C.F.R. § 9038.1(0(2). 

Even if the interim audit report correctly applied statistical sampling, th 

Audit Report's findings suggest, at most, a technical record-retention issue relat 

maintenance of the redesignation/reattribution letters sent by the Comiji 

contributors. Although the Committee docs not believe that an\' contributions ide i 

the Audit Division were excessive, it has nonetheless resolved any potential e 

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Mr. Thomas Hintermister 

June 5,2018 

Page 2 

sending reattribution and redesignation letters to every contributor whose contribution was 

reattributed or redesignated in 2016. Thus, the error—if there really was an error—has been 

corrected. There are no excessive contributions, and thus the Audit Division should close 

this audit and issue a report with no findings. 

A. The Commission's projections from statistical sampling were improper 

because the sample items were not errors. 

When a Commission audit relies on statistical sampling for its findings, the audited 

Committee must "respond only to the specific sample items used to make the projection," 

and may demonstrate that "any apparent errors found among the sample items were not 

errors." Upon such a showing, the Commission must revise its projection based on the 

reduced number of errors in the sample. 11 C.F.R. § 9038.1(f)(2). 

Here, the Committee presented evidence that every sample item relied on by the 

Audit Division was not, in fact, an error. For every sample item identified as a potentially 

excessive contribution, the Committee resolved the Commission's concerns by producing 

either (1) evidence that the potentially excessive contribution was refunded or (2) a letter 

redesignating or reatrributing the donor's contribution. 

The Commission's Audit Division acknowledged that the Committee addressed and 

resolved each of the sample items in an e-mail to the Committee's treasurer on March 1, 

2018 in which auditor Terry O'Brien wrote "the Committee addressed and resolved the 

remaining 100% . review items ($31,800.00) with its submission of redesignation/ 

reattribution letters." See Exhibit 1. 

The Committee has done more than simply show that redesignation/reattribution 

letters were sent to donors. The Committee also has produced evidence showing that letters 

resolving excessive contributions were timelv sent to all donors identified by the Audit 

Division. That evidence includes (1) proof that every donor received a solicitation 

explaining that his or her contribution would be reallocated or redesignated before the 

donor made the contribution and (2) a letter from the Committee's representative—^Josi 

Hellier—explaining that she recalled sending timely reallocation or redesignation letters at 

the time the contribution was reallocated or redesignated to every person on the Audit 

Division's list of supposedly excessive contributions. 

This evidence already produced by the Committee resolved the auditors' concerns 

regarding the alleged errors in the sample items. Because those concerns were resolved, as 

a matter of regulation the Audit Division cannot use those sample items as the basis for 

statistical projection under 11 C.F.R. § 9038.1(f)(2). 
Mr. Thomas Hintermister 

Junes, 2018 

Pages 

B. The Committee has demonstrated that every donor received a reattribution or 

redesignation letter when warranted during the 2016 cycle. 

Following the audit exit conference, the Audit Division requested the Committee 

review a spreadsheet of additional allegedly excessive contributions, and other 

contributions of $1,000 or greater, and then "go trough the committee's records and find 

items, similar to the ones we found during field work, that require a 

redesignation/reattribution letter to be sent to the contributor." The Audit Division 

indicated that if the Committee sent new reattribution or redesignation letters to donors 

"found during field work" and identified on the spreadsheet, "this should address the issue 

we presented at the exit conference." See Exhibit 2. 

In preparing a response to the Interim Audit Report, the Committee recognized 

that—contrary to the Audit Division's representations—^the Committee had produced 

reattribution and redesignation letters for nearly all the contributions listed on the 

spreadsheet. The Conunittee's treasurer notified the Audit Division of its error. On June 4, 

2018 (the day before this response letter was due), the Audit Division sent an e-mail to the 

Committee's treasurer acknowledging the Committee already had produced letters to 

nearly all the individuals listed on its spreadsheet.' See Exhibit 3. 

Having resolved the Audit Division's concerns regarding (1) the sample items 

identified before the Interim Audit Report and (2) all but a handful of additional items 

identified after the Interim Audit Report, the Committee was left to guess which 

contributor(s) (if any) should receive (yet another) reattribution or redesignation letter. To 

be clear, as noted above, the Committee sent timely reattribution and redesignation letters 

in every instance where a letter was warranted, and the Committee has provided sufficient 

evidence to prove this point. Yet, rather than adopt this evidence in their findings, the 

auditors speculated there could be issues and asked that the Committee use its limited 

resources to go back and review all of the Conunittee's records to identify any instances 

where contributors might not have received letters. See Exhibit 1 (asking Committee to 

"review its contributions to find any items requiring a presumptive 

reattributed/redesignated letter but for which no letter was sent and/or maintained"). 

In order to resolve the Audit Division's speculative concerns, the Committee, 

decided to send another round of redesignation and reattribution letters to every donor 

whose contribution was reallocated or redesignated during the 2015-2016 election cycle. 

Those letters are attached to this response as Exhibit 4. 

' Unfortunately, during the course of the audit, there were at least three instances where the Committee 

independently discovert that it had produced records that the auditors claimed to be missing. The auditors' mistakes 

seem inadvertent, but—nonetheless—created a significant burden for the Committee, which was required repeatedly 

to double check the auditors' factual findings. 
Mr. Thomas Hintermister 

Junes, 2018 

Page 4 

C. The Audit Division should report no findings or, at a minimum, revise its 

methodology and findings to comport with the evidence. 

The Audit Division should accept the Committee's evidence demonstrating that the 

Committee sent a reallocation or redesighation letter in every instance where a letter was 

warranted. This should resolve the audit—which at this point reflects, at most, a 

recordkeeping issue—and the Final Audit Report should include no findings. 

Thank you for your attention to this matter. 

Sincerely, 

David W. Asp 

Treasurer