Draft Final Audit Report of the 

Audit Division on the National 

Council of Farmer Cooperatives 

Co-op/PAC 

(January 1, 2009 - 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 compli 

with the Act.^Th( 

determines whether th^ 

conunittee 

with theJ^atK 

prohjhiKns and 

disoiofl^l^quirements 

of the Acf! 

Future Acl 

The Commission 

initiate an enforcemc 

action, at a later time, 

with respect to any of 

the matters discussed in 

this report. 

Ahout the Committee (p. 2) 

The National Coimcil of Farmer Cooperatives Co-op/PAC is a nonconnected, qualified, multi-candid|^H|olitical Action Committee and 

is headquartered in Washingto]]^^C. For more information, see chart 

on Conunittee Organization. 

Financial Ac: 

• Receipts 

o Contribiitid 

o Contributions 

^Dlitical Conunit! 

o CHm<eceipts 

Toi 

Disbu; 

o ContflButflhs to 

ConmiKes 

Other Dlbursements 

?otal Disbumatents 

$ 64,195 

46,000 

6,352 

$ 116,547 

$ 128,500 

421 

$ 128,921 

[s and Recommendations (p. 3) 

[tement of Financial Activity (Finding 1) 

Tclosure of Occupation/Name of Employer (Finding 2) 

Disclosure of Contributions to Candidate Committees (Finding 3) 

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

Audit Division on the 

National Council of Farmer 

Cooperatives Co-op/PAC 

(January 1, 2009 - Dece 2010) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 

Scope of Audit 

Part II. Overview of Committee 

Committee Organization 

Overview of Financial Activity 

Part III. Summaries 

Findings and Recommendations 

Part IV. Findings and Reco 

Finding 1. Misstatement of Financial Acfivif 

Finding 2. Disclosure of Occupation/Name of 

Finding 3. Disclosure of Contributions to Candidal 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the National Council of Farmer Cooperatives Coop/PAC (NCFC), 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 fldi^nvestigations of any 

political committee that is required to file a report under 2 U.^^§43H. Prior to 

conducting any audit under this subsection, the Conunissio»^^perform an internal 

review of reports filed by selected conmiittees to determjvwnM||^e reports filed by a 

particular committee meet the threshold requirement^^rl^bstanm^l^npliance with the 

Act. 2 U.S.C. §438(b). 

Scope of Audit 

Following Commission-approved procedures, the 

factors and as a result, this audit examined: 

1. the disclosure of individual contr^^^* occupation 

the disclosure of disbursements; 

the consistency between reported fi^esH^^Kl^ record; 

the completeness of records; and 

other conmiittee op§gg|d^ecessary tcaje^ review. 

2. 

3. 

4. 

5. 

us risk 

ame of employer; 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

Date of Registration 

Audit Coverage 

Headquarters 

Bsmk Information 

Bank Depositories 

Bank Accounts 

Treasurer 

Treasurer When Audit Was Conducted 

Treasurer During Period Covered by Audit 

Management Information 

• Attended FEC Campaign Finance 

• Who Handled Accounting and 

Recordkeeping Tasks 

iiai Activity 

lounts) 

Cash-OB^^g @ Januar^|009^^f^ $ 44,630 

Receipts ^^^^ ^ 

o Contributi^Hjjjom IndividHs 64,195 

o Contributions^^LOther^litical 

Conimittees ^^^^^ ^ 46,000 

o Other Receipts 6,352 

Total Receipts ^ $ 116,547 

Disbursements 

o Contributions to Political Conunittees 128,500 

o Other Disbursements 421 

Total Disbursements $ 128,921 

Cash-on-hand @ December 31,2010 $ 32,256 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of NCFC's reported figures with its bank records 

indicated that in 2009, NCFC understated receipts and disbursemA^y $10,770 and 

$806, respectively, and overstated ending cash by $5,133. Injpo, NCFC overstated 

beginning cash by $13,000 and disbursements by $6,500. i^^^raise to the Interim 

Audit Report, NCFC filed amended disclosure reports to^m:ec^^inisstatements. 

(For more detail, see p. 4) 

Finding 2. Disclosure of Occun^on/ltome of fa^uogrer 

During audit fieldwork, a review of itemizedxom^^ionsJ||m individual^laicated that 

57 percent of the contributions failed to include ad^^tansclo^ure for occupation and 

name of employer. The Audit staff found that the reqilKLinformation was available for 

89 percent of the itemized contributi^^j|^CFC*s reconl^In response to the Literim 

Audit Report, NCFC filed amended repBlbiBclude the n^Bi^nformation. 

(For more detail, see p. 6) 

Findings. Dis 

Committees 

During audit field^o: 

to federal candidates th^ 

sought, st^ 

hiterim 

info: 

(Fof m( 

to Candidate 

f disbursemSlp^dentified 80 percent of contributions 

requjRd disclosure information, such as office 

lose^RH^Pct candidate information. In response to the 

ended reports to include the missing or corrected 
Part IV 

Findings and Reconmiendations 

I Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of NCFC's reported figures with its bank records 

indicated that in 2009, NCFC understated receipts and disbursements by $10,770 and 

$806, respectively, and overstated ending cash by $5,133. In 2^^R^CFC overstated 

beginning cash by $13,000 and disbursements by $6,500. Inj^monse to the Interim 

Audit Report, NC^FC filed amended disclosure reports to (^^Bh e misstatements. 

Legal standard 

Contents of Reports. Each report must disclose 

• the amount of cash-on-hand at the begi 

• the total amount of receipts for the rq 

• the total amount of disbursements for the 

year; and 

• certain transactions that requiiW^nization on 

Schedule B (Itemized Disburse^R^^^U.S.C. 

Facts and Analysis 

A. Facts 

During auditfield^^Lthe Ai 

with its bank recora^^salenc 

discrepancies for the rec 

2010. Sucfiitfii^ii;agra{ 

of the repcM 

for the calei 

d and for tUE calendar 

A (Itemized Receipts) or 

,(2), (3), (4) and (5). 

jstaff reconSbd NCFC's reported financial activity 

(years 2009 a9UX)10. The following charts outline the 

Its agnending cash balances for 2009 and 

Idres^Hlfl^ns for the misstatements. 

20(w4kty 

Reported Bank Records Discrepancy 

Beginning ^^^alance • 

@ January 1,2l^^ M 

f $44,630 $44,630 $0 

Receipts ^^^^^ $43,485 $54,255 $10,770 

Understated 

Disbursements ^ $60,887 $61,693 $806 

Understated 

Ending Cash Balance 

©December 31,2009 

$42,326^ $37,193 $5,133 

Overstated 

^ The amount in this column cannot be calculated accurately due to numerous discrepancies diroughout 

2009 between amounts reported for ending cash and the beginning cash in the subsequent period. 
hi 2009, NCFC understated receipts by $10,770 as a result of failing to report any of its 

July receipts. 

The understatement of disbursements was due to the following: 

• Disbursements supported by check/debit, not reported 

• December 2009 disbursement, reported June 2010 

• Disbursements reported, not supported by check/debit 

• Disbursement incorrectly reported 

Net Understatement of Disbursements 

$ 5,601 

1,500 

(3,500) 

(2,795) 

$ m 

NCFC overstated the beginning cash balance for 2010 by $^H^ for the above reasons 

and because NCFC reported an increase in the beginnin^lsh^H|ce of $7,877 

($50,193 - $42,326) as of January 1,2010. The diffe^C^jn the^fe|^nding cash and 

the 2010 beginning cash illustrates NCFC's failureJ^Misistently r^^y^^S^^^^S ^^^^ 

balances that equaled ending cash balances from^K previous period.' 

2010 Activity 

Beginning Cash Balance 

@ January 1,2010 

Receipts 

Disbursements 

Ending Cash Bal 

©December 31,2010 

The over 

mrsements s 

DSIW3er 2009 di 

DisbuAnents rep< 

Net OvS^temei 

$1,000 

Understated 

$6,500 

Overstated 

$1 

Overstated 

Its was due to the following: 

irted byRieck/debit, not reported 

rsem&t, reported June 2010 

;d not supported by check/debit 

^of Disbursements 

3,000 

(1,500) 

(8.000) 

$ (6.500) 

B. Interim Audit IHbrt & Audit Division Recommendation 

At the end of audit fieldwork. Audit staff discussed this matter with NCFC 

representatives at the exit conference. NCFC representatives acknowledged the 

discrepancies in the reports and indicated that NCFC would file corrective amendments. 

^ NCFC failed to carry over the correct ending cash balance to the subsequent report for all but one of its 

reports filed between May 2009 and Year-End 2010. The Reports Analysis Division sent 19 Requests for 

Additional Information concerning this issue to NCFC during the period covered by the audit. 

* This column does not total due to numerous discrepancies throughout 2010 between amounts reported for 

ending cash and the subsequent period's beginning cash, these numbers do not foot. 
The Interim Audit Report recommended that NCFC amend its reports to correct the 

misstatements noted above. 

C. Committee's Response to Interim Audit Report 

NCFC filed amended reports to materially correct the misstatement of receipts, 

disbursements and ending cash-on-hand for 2009 and beginning cash-on-hand and 

disbursements for 2010. 

I Finding 2. Disclosure of Occupation/Name of Employer | 

Summary 

During audit fieldwork, a review of itemized contributionsj^j^individuals indicated that 

57 percent of the contributions failed to include adequatOMSclS^kfor occupation and 

name of employer. The Audit staff found that the reaju^i^mformlH^as available for 

89 percent of the itemized contributions in NCFC's^c^s. In respS^Lo the Interim 

Audit Report, NCFC filed amended reports to wmade the missing infoi 

Legal standard 

A. Required Information for Contributions from 

contribution from an individual, tH^ipmmittee must 

information: 

• the contributor's full name ani 

• the contributor's occupation ana we n 

• the date of recekfltt|edate the co: 

• the amount Q^necflBbution; and 

• the cale^(^iil^^^-to-d9 total of all 

2 U.S.C. § 43l^G)(iHuid 11 CFR 

iduals. For each itemized 

dde the following 

Juding ziSITde); 

T employer; 

tee rec€KS the contribution); 

triputions from the same individual. 

00.12 and 104.3(a)(4)(i). 

B. Best^ffnn^^j^Col 

shoHsthat the coHBjtee us 

lation requlBlby the 

consiOBd in complia^Awith^ 

ice. wnen the treasurer of a political conimittee 

^st efforts (see below) to obtain, maintain, and submit 

Tthe committee's reports and records will be 

le Act. 2 U.S.C. § 432(i) and 11 CFR §104.7(a). 

C. DefinitionvB^t EffAs. The treasurer and the conunittee will be considered to 

have used "besKfog^if the conunittee satisfied all of the following criteria. 

• All written^Hcitations for contributions included: 

o a clem request for the contributor's full name, mailing address, occupation, 

and name of employer; and 

o the statement that such reporting is required by Federal law. (Note that the 

request and statement must appear in a clear and conspicuous maimer on 

any response material included in a solicitation.) 

• Within 30 days of receipt of the contribution, the treasurer made at least one 

effort to obtain the missing information, in either a written request or a 

documented oral request. 

• The treasurer reported any contributor information that, although not initially 

provided by the contributor, was obtained in a follow-up conununication or was 
contained in the committee's records or in prior reports that the committee filed 

during the same two-year election cycle. 11 CFR § 104.7(b). 

Facts and Analysis 

A. Facts 

During audit fieldwork, a review of NCFC's itemized contributions from individuals for 

disclosure of occupation and name of employer indicated that NCFC failed to disclose 

the required information for 57 percent of contributions itemized. In a review of NCFC's 

records, the Audit staff noted that NCFC had the required informakon for 89 percent of 

the itemized contributions reviewed. NCFC failed to include io^f^taprts the 

information it had in its possession. 

B. Interim Audit Report & Audit Division Recommdnation^ 

The Audit staff presented this matter to NCFC reprwKl|(i^es at th^ 

treasurer stated that NCFC would, using the cont|||Ritor infonnation all 

amend the reports to disclose occupation and oALof emolover. 

The Interim Audit Report recommended that NCF( 

occupation and name of employer foi^^ntributions frdl 

C. Committee's Response to Interinn 

NCFC filed amended reports to materiallmcorre 

disclosure infonnation for occupation anovm^Tf ei 

from individuals. 

Si 

DuriflgMdit fieldwork,^ 

to federa^^^idates that 

sought, stat^^Ldistrict, o] 

Interim Audit R^brt. NC] 

information. 

^conference. The 

obtained. 

ended reports to disclose the 

ividuals. 

eqi^Re and/or missing 

for itemized contributions 

tions to Candidate 

ursements identified 80 percent of contributions 

elude required disclosure information, such as office 

isclosed inconect candidate information. In response to the 

filed amended reports to include the missing or conected 

Legal Standard 

Reporting Contributions to Candidate Committees. When operating expenditures to 

the same person exceed $200 in a calendar year, the committee must report: 

• the amount of the expenditures; 

• the date when the expenditures were made; 

• the name and address of the payee; 

• the purpose of the expenditures (2 U.S.C. § 434(b)(5)(A) and 11 CFR §§ 

104.3(b)(3)(i)); and 
• the candidate's name and office sought (including the state and, if applicable. 

Congressional district) (11 CFR §104.3(b)(3)(v)). 

Facts and Analsrsis 

A. Facts 

During audit fieldwork, the Audit staff reviewed the committee's contributions to 

candidate conmiittees. The review indicated that NCFC failed to conectly disclose 

candidate information such as state, office sought and, if applicable, congressional district 

for 80 percent of the contributions. 

B. Interim Audit Report & Audit Division Recommend 

The Audit staff presented this matter to NCFC represent^#es 

treasurer stated that NCFC would amend its reports tq^ra^erly 

information for each contribution. 

The Interim Audit Report reconunended that 

disclose the candidate information, such as oifici 

applicable, congressional district for its contributioil! 

C. Committee's Response to Intei 

NCFC filed amended reports to materia 

disclosure infonnation for contributions 

exit conference. The 

>e candidate 

it Report 

nded reports 

idate state anJ^f 

didate committees. 

d/or incorrect