Interim Audit Report of the 

Audit Division on Hall for 

Congress 

(January 1, 2015 – December 31, 2016) 

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.1 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.

About the Campaign (p. 2)

Hall for Congress is the principal campaign committee for 

Isadore Hall, III, Democratic candidate for the United States 

House of Representatives from the state of California, 44th

District, and is headquartered in Long Beach, California. For 

more information, see the Campaign Organization chart, p.2. 

Financial Activity (p. 2)

 Receipts

o Contributions from Individuals 

o Contributions from Political 

Committees 

o Offsets to Operating 

Expenditures 

Total Receipts

$ 1,144,755 

734,986 

1,643 

$ 1,881,384 

 Disbursements

o Operating Expenditures 

o Contribution Refunds 

o Other Disbursements 

Total Disbursements

$ 1,913,514 

25,155 

2,950 

$ 1,941,619 

Findings and Recommendations (p. 3) 

 Receipt of Contributions in Excess of the Limit (Finding 1) 

 Use of General Election Contributions for Primary 

Expenditures (Finding 2) 

 

1

 52 U.S.C. §30111(b). 
Interim Audit Report of the Audit 

Division on 

Hall for Congress 

(January 1, 2015 – December 31, 2016) 
Table of Contents 

 Page

Part I. Background 

 Authority for Audit 1 

 Scope of Audit 1 

Part II. Overview of Campaign 

Campaign Organization 2 

 Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding 1. Receipt of Contributions in Excess of the Limit 4

Finding 2. Use of General Election Contributions for Primary Expenditures 7
 1

 

Part I 

Background 

Authority for Audit 

This report is based on an audit of Hall for Congress (HFC), 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 52 U.S.C. §30111(b), which permits the Commission to 

conduct audits and field investigations of any political committee that is required to file a 

report under 52 U.S.C. §30104. 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. 52 U.S.C. §30111(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; 

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. 
 2 

Part II 

Overview of Campaign 

Campaign Organization 

Overview of Financial Activity 

(Audited Amounts) 

 

Cash-on-hand @ January 1, 2015 $ 67,109 

Receipts 

o Contributions from Individuals 1,144,755 

o Contributions from Political Committees 734,986 

o Offsets to Operating Expenditures 1,643 

Total Receipts $ 1,881,384 

Disbursements 

o Operating Expenditures 1,913,514 

o Contribution Refunds 25,155 

o Other Disbursements 2,950 

Total Disbursements $ 1,941,619

Cash-on-hand @ December 31, 2016 $ 6,874 

 

2

 The committee changed its name from Hall for Congress Exploratory Committee to Hall for Congress on January 

14, 2016. 

Important Dates 

 Date of Registration2 June 21, 2011 

 Audit Coverage January 1, 2015 - December 31, 2016 

Headquarters Long Beach, California 

Bank Information 

 Bank Depositories One 

 Bank Accounts One Checking 

Treasurer 

 Treasurer When Audit Was Conducted David Gould 

 Treasurer During Period Covered by Audit David Gould 

Management Information 

 Attended FEC Campaign Finance Seminar Yes 

 Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 
 3

 

Part III 

Summaries 

Findings and Recommendations 

Finding 1. Receipt of Contributions in Excess of the Limit

During audit fieldwork, the Audit staff reviewed contributions from individuals to 

determine if any exceeded the contribution limit. This review indicated that HFC 

received apparent excessive contributions totaling $61,683. These errors occurred as a 

result of HFC not resolving the excessive portions of contributions by forwarding 

presumptive redesignation letters to its contributors in a timely manner. In response to 

audit fieldwork and in response to the exit conference, HFC untimely resolved the 

excessive contributions from individuals. The Audit staff recommends that HFC provide 

any comments it deems relevant to this matter. (For more detail, see p.4.)

Finding 2. Use of General Election Contributions for 

Primary Expenditures 

During audit fieldwork, a review of contributions received before the primary election 

held on June 7, 2016, identified that HFC spent general election contributions totaling 

$71,407 on primary election expenses. As such, HFC did not meet the requirements that 

general election contributions not be used for primary election expenses. The Audit staff 

recommends that HFC provide any comments it deems relevant to this matter. (For more 

detail, see p.7.) 
 4

 

Part IV 

Findings and Recommendations

Finding 1. Receipt of Contributions in Excess of the Limit 

Summary 

During audit fieldwork, the Audit staff reviewed contributions from individuals to 

determine if any exceeded the contribution limit. This review indicated that HFC 

received apparent excessive contributions totaling $61,683. These errors occurred as a 

result of HFC not resolving the excessive portions of contributions by forwarding 

presumptive redesignation letters to its contributors in a timely manner. In response to 

audit fieldwork and in response to the exit conference, HFC untimely resolved the 

excessive contributions from individuals. The Audit staff recommends that HFC provide 

any comments it deems relevant to this matter. 

Legal Standard 

A. Authorized Committee Limits. An authorized committee may not receive more 

than a total of $2,700 per election from any one person or $5,000 per election from a 

multi-candidate political committee. 52 U.S.C §30116(a)(1)(A); 11 CFR §§110.1(a) 

and (b) and 110.9. 

B. Handling Contributions That Appear Excessive. If a committee receives a 

contribution that appears to be excessive, the committee must either: 

 Return the questionable check to the donor; or 

 Deposit the check into its federal account and: 

 Keep enough money in the account to cover all potential refunds or 

establish a separate account in a campaign depository for such 

contributions; 

 Keep a written record explaining why the contribution may be illegal; 

 Include this explanation on Schedule A if the contribution has to be 

itemized before its legality is established; 

 Seek a reattribution or a redesignation of the excessive portion, following 

the instructions provided in the Commission regulations (see below for 

explanations of reattribution and redesignation); and 

 If the committee does not receive a proper reattribution or redesignation 

within 60 days after receiving the excessive contribution, refund the 

excessive portion to the donor. 11 CFR §§103.3(b)(3), (4) and (5) and 

110.1(k)(3)(ii)(B). 

C. Joint Contributions. Any contribution made by more than one person, except for a 

contribution made by a partnership, must include the signature of each contributor on 

the check, money order, or other negotiable instrument or in a separate writing. A 

joint contribution is attributed equally to each donor unless a statement indicates that 

the funds should be divided differently. 11 CFR §110.1(k)(1) and (2). 
 5

 

D. Reattribution of Excessive Contributions. The Commission regulations permit 

committees to ask contributors of excessive contributions (or contributions that 

exceed the committee’s net debts outstanding) whether they had intended their 

contribution to be a joint contribution from more than one person and whether they 

would like to reattribute the excess amount to the other contributor. The committee 

must inform the contributor that: 

 The reattribution must be signed by both contributors; 

 The reattribution must be received by the committee within 60 days after the 

committee received the original contribution; and 

 The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(k)(3). 

Within 60 days after receiving the excessive contribution, the committee must either 

receive the proper reattribution or refund the excessive portion to the donor. 11 CFR 

§§103.3(b)(3) and 110.1(k)(3)(ii)(B). Further, a political committee must retain 

written records concerning the reattribution in order for it to be effective. 11 CFR 

§110.1(l)(5). 

Notwithstanding the above, any excessive contribution that was made on a written 

instrument that is imprinted with the names of more than one individual may be 

presumptively attributed among the individuals listed unless instructed otherwise by 

the contributor(s). The committee must inform each contributor: 

 How the contribution was attributed; and 

 The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(k)(3)(B). 

E. Redesignation of Excessive Contributions. When an authorized candidate 

committee receives an excessive contribution (or a contribution that exceeds the 

committee’s net debts outstanding), the committee may ask the contributor to 

redesignate the excess portion of the contribution for use in another election. The 

committee must inform the contributor that: 

 The redesignation must be signed by the contributor; 

 The redesignation must be received by the committee within 60 days after the 

committee received the original contribution; and 

 The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(b)(5). 

Within 60 days after receiving the excessive contribution, the committee must either 

receive the proper redesignation or refund the excessive portion to the donor. 11 CFR 

§§103.3(b)(3) and 110.1(b)(5)(ii)(A). Further, a political committee must retain 

written records concerning the redesignation in order for it to be effective. 11 CFR 

§110.1(l)(5). 

F. Presumptive Redesignation- When an individual makes an excessive contribution to 

a candidate’s authorized committee, the campaign may presumptively redesignate the 

excessive portion to the general election if the contribution: 
 6

 

 Is made before that candidate’s primary election; 

 Is not designated in writing for a particular election; 

 Would be excessive if treated as a primary election contribution; and 

 As redesignated, does not cause the contributor to exceed any other contribution 

limit. 11 CFR §110.1(b)(5)(ii)(B)(1)-(4). 

The committee is required to notify the contributor by any written method including 

electronic mail, of the redesignation within 60 days of the treasurer’s receipt of the 

contribution, and must offer the contributor the option to receive a refund instead. 11 

CFR §110.1(b)(5)(ii)(B)(5) and (6). 

Facts and Analysis 

A. Facts 

The Audit staff utilized sample testing and a review of other contributions not included in 

the sample population to identify apparent excessive contributions from individuals. 

Excessive Contributions-Testing Method 

Sample Projection Amount3 $61,683 

Total Amount of Excessive Contributions $61,683 

Reasons for Excessive Contributions 

Excessive Contributions not resolved via 

presumptive notification or refund $61,683 

Total Amount of Excessive Contributions $61,683

B. Additional Information 

HFC did not maintain a separate account for questionable contributions. Based on its 

cash-on-hand at the end of the audit period ($6,874), it appears that HFC did not maintain 

sufficient funds to make refunds of the apparent excessive contributions. 

C. Interim Audit Report & Audit Division Recommendation 

During fieldwork, the Audit staff discussed this matter with HFC representatives. At the 

exit conference schedules of the apparent excessive contributions were provided. HFC 

representatives asked if presumptive reattribution/redesignation letters could still be 

issued. The Audit staff stated that any presumptive letters sent in response to the exit 

conference would resolve the excessive contributions, albeit untimely. 

 

3

 The sample error amount ($61,683) was projected using a Monetary Unit Sample with a 95 percent 

confidence level. The sample estimate could be as low as $35,479 or as high as $87,887.
 7

 

In response to the exit conference, HFC submitted the following documentation: 

Corrective Action Taken by Committee 

Presumptive Letters Sent-Untimely $44,500 

In response to the exit conference, the Audit staff concludes of the $61,683 in excessive 

contributions, HFC demonstrated that it resolved contributions totaling $44,500 in an 

untimely manner. As such, HFC has materially resolved the excessive contributions, 

albeit untimely. 

 

The Audit staff recommends that, within 30 calendar days of service of this report, HFC 

provide any comments it deems relevant to this matter. 

Finding 2. Use of General Election Contributions for 

Primary Expenditures 

Summary 

During audit fieldwork, a review of contributions received before the primary election 

held on June 7, 2016, identified that HFC spent general election contributions totaling 

$71,407 on primary election expenses. As such, HFC did not meet the requirements that 

general election contributions not be used for primary election expenses. The Audit staff 

recommends that HFC provide any comments it deems relevant to this matter. 

Legal Standard 

A. Accounting for Contributions and Expenditures. If a candidate, or his or her 

authorized committee(s), receives contributions that are designated for use in 

connection with the general election pursuant to 11 CFR §110.1(b) prior to the date of 

the primary election, such candidate or such committee(s) shall use an acceptable 

accounting method to distinguish between contributions received for the primary 

election and contributions received for the general election. Acceptable accounting 

methods include, but are not limited to: 

1. The designation of separate accounts for each election, caucus or convention; or 

2. The establishment of separate books and records for each election. 11 CFR 

102.9(e).

B. Limitations, Contributions, and Expenditures. The contribution limits are applied 

separately with respect to each election. 52 U.S.C. §30116(a)(6); 11 CFR. §§100.2 

and 110.1(j). 

C. Limitations, Contributions, and Expenditures. Under the Act, an individual may 

not make a contribution to a candidate with respect to any election in excess of the 

limit, which was $2,700 per election during the 2016 election cycle. 52 U.S.C. 

§30116(a)(1)(A), and 11 CFR §110.1(b)(1). 
 8

 

D. Definition of Election. A primary election and general election are each considered 

a separate “election” under the Act. 52 U.S.C. §30101(1). 

E. Prohibited Contributions and Expenditures. Candidates and political committees 

are prohibited from knowingly accepting excessive contributions. 52 U.S.C. 

§30116(f). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff calculated the daily cash balance to determine if 

general election contributions were used by HFC to pay primary election expenses. The 

primary election for the state of California was held on June 7, 2016. The amount of 

primary election contributions HFC raised prior to the primary election was $902,925 and 

the amount of general election contributions raised was $155,358.4

 The Audit staff 

identified that HFC spent $71,4075 of general election contributions on primary election 

expenditures. HFC began spending general election contributions on primary election 

expenditures on April 21, 2016 and for 48 days, continued through the primary election 

on June 7, 2016. On May 27, 2016, HFC’s running balance of general contributions 

spent on primary expenditures, reached the highest amount, $109,083. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with HFC representatives at the exit conference and 

provided schedules detailing the use of general election contributions used for primary 

election expenses. In response to the exit conference, HFC representatives stated that the 

cost of fundraising and compliance should be attributed to the daily cash analysis 

calculation. Further, HFC representatives provided a list of expenses that it believes 

should be attributed to the general election. 

The Audit staff recommends that, within 30 calendar days of service of this report, HFC 

provide documentation to demonstrate that general election contributions totaling 

$71,407 were not used to fund primary election activity. Absent such demonstration, 

HFC should provide any additional comments it considers necessary with respect to this 

matter.

 

4

 These amounts are net of contribution refunds. 

5

 This amount does not include $32,854 in general election expenses provided by the committee in response 

to the exit conference.