Final Audit Report of the 

Commission on the Republican 

Party of Iowa 

(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 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.' 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 Committee (p. 3) 

The Republican Party of lowa is a state party committee 

headquartered in Des Moines, Iowa. For more information, 

see chart on Committee Organization, p. 3. 

Financial Activity (p. 3) 

• Receipts 

o Contributions from Individuals 

o Contributions from Other 

Political Committees 

o Transfers from Political 

Committees 

o Non-federal Transfers 

o Other Receipts 

Total Receipts 

• Disbursements 

o Operating Expenditures 

o Federal Election Activity 

o Allocated Federal/Non-federal 

Expenditures 

o Coordinated Expenditures 

o Other Disbursements 

Total Disbursements 

$ 1,130,254 

489,716 

633,129 

325,042 

164,904 

$ 2,743,045 

$ 953,976 

526,610 

931,448 

276,578 

54,736 

$ 2,743,348 

Commission Findings (p. 4) 

• Recordkeeping for Employees (Finding I) 

• Failure to Itemize Debts & Obligations (Finding 2) 

Additional Issue (p. 4) 

• Recordkeeping for Employees 

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

Commission on the Republican 

Party of Iowa 

(January 1, 2009 - December 31, 2010) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Commission Guidance 1 

Audit Hearing 2 

Part II. Overview of Committee 

Committee Organization 3 

Overview of Financial Activity 3 

Part III. Summaries 

Commission Findings 4 

Additional Issue 4 

Part IV. Commission Findings 

Finding 1. Recordkeeping for Employees 6 

Finding 2. Failure to Itemize Debts & Obligations 8 

Part V. Additional Issue 

Recordkeeping for Employees 10 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the Republican Party of lowa (RPIA), 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: 

the receipt of excessive contributions and loans; 

the disclosure of individual contributors' occupation and name of employer; 

the consistency between reported figures and bank records; 

the disclosure of disbursements, debts, and obligations; 

the completeness of records; and 

other committee operations necessary to the review. 

Commission Guidance 

Request for Early Commission Consideration of a Legal Question 

Pursuant to the Commission's "Policy Statement Establishing a Program for Requesting 

Consideration of Legal Questions by the Commission," several state party committees 

unaffiliated with RPIA requested early consideration of a legal question raised during an 

audit. Specifically, the Commission addressed whether monthly time logs under 11 CFR 

§ 106.7(d)(1) were required for employees paid with 100 percent federal funds. 

The Commission concluded, by a vote of 5-1, that 11 CFR § 106.7(d)(1) does require 

committees to keep a monthly log for employees paid exclusively with federal funds. 

Exercising its prosecutorial discretion, however, the Commission decided it will not 

pursue recordkeeping violations for the failure to keep time logs or to provide affidavits 

to account for employee salaries paid with 100 percent federal funds and reported as 

such. Audit staff informed RPIA representatives of the payroll log requirement and of 

the Commission's decision not to pursue recordkeeping violations for failure to keep 

payroll logs for salaries paid and correctly reported as 100 percent federal. Finding 1, 

Recordkeeping for Employees, of this audit report does not include RPIA employees paid 

with 100 percent federal funds and reported as such. 
Audit Hearing 

RPIA declined the opportunity for a hearing before the Commission on matters presented 

in this report. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration October 14, 1975 

• Audit Coverage January 1,2009 - December 31,2010 

Headquarters Des Moines, Iowa 

Bank Information 

• Bank Depositories One 

• Bank Accounts Four federal, one Non-federal, and one 

building fund account 

Treasurer 

• Treasurer When Audit Was Conducted Craig Williams 7/9/10-6/15/12 

• Treasurer During Period Covered by Audit Gopal Krishna 6/24/08-1/26/09 

Matt Randall 1/27/09-7/08/10 

Management Information 

• Attended Commission Campaign Finance No 

Seminar 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand ^ January 1,2009 $ 218,208 

Receipts 

o Contributions from Individuals 1,130,254 

o Contributions from Other Political 

Committees 489,716 

o Transfers from Political Committees 633,129 

o Non-federal Transfers 325,042 

o Other Receipts 164,904 

Total Receipts $ 2,743,045 

Disbursements 

o Operating Expenditures 953,976 

o Federal Election Activity 526,610 

o Allocated Federal/Non-federal Expenditures 931,448 

o Coordinated Expenditures 276,578 

o Other Disbursements 54,736 

Total Disbursements $ 2,743,348 

Cash-on-hand @ December 31,2010 $ 217,905 
Part III 

Summaries 

Commission Findings 

Finding 1. Recordkeeping for Employees 

During audit fieldwork, the Audit staff determined that RPIA did not maintain monthly 

payroll logs, as required, to track the percentage of time each employee spent on federal 

election activity. For 2009 and 2010 the Audit staff determined that the amount of 

payroll for which logs were required was $476,442. This consisted of $334,580 reported 

as allocated between federal and non-federal funds and $141,862 paid from an 

exclusively non-federal account. Subsequent to the exit conference, RPIA 

representatives provided the Audit staff with affidavits from two employees attesting to 

the percentage of time spent on federai election activity. 

In response to the Interim Audit Report recommendation, RPIA stated that it has 

implemented a plan to keep a monthly log of all work performed by staff for federal 

election activity. 

The Commission approved a finding that RPIA failed to keep monthly time-logs for the 

$336,569 in payroll allocated between federal and non-federal funds. The Commission 

did not approve a finding for the payroll paid exclusively with non-federal funds and as 

such these expenses are presented as an "Additional Issue". (For more detail, see p. 6.) 

Finding 2. Failure to Itemize Debts & Obligations 

During audit fieldwork, the Audit staff noted that RPIA had failed to disclose debts and 

obligations totaling $179,856. In response to the Interim Audit Report recommendation, 

RPIA filed amended reports to correctly disclose these debts and obligations. 

The Commission approved a finding that RPIA failed to itemize debts and obligations 

totaling $179,856. (For more detail, see p. 8.) 

Additional Issue 

Recordkeeping for Employees 

As detailed in Finding 1 above, RPIA did not maintain monthly payroll logs to track the 

percentage of time each employee spent on federal election activity. For 2009 and 2010, 

the amount of payroll for which the Audit staff determined that logs were required, was 

$476,442. This consisted of $334,580 reported as allocated between federal and nonfederal funds and $141,862 paid from an exclusively non-federal account during certain 

months. 

In response to the Interim Audit Report recommendation, RPIA stated that it has 

implemented a plan to keep a monthly log of all work performed by staff for federal 

election activity. 
The Commission did not approve by the required four votes the Audit staffs 

recommended finding that RPIA failed to keep monthly time logs for the $141,066 in 

payroll paid from an exclusively non-federal account during certain months. 

Pursuant to Commission Directive 70^, this matter is discussed in the "Additional Issue' 

section and the payroll expenditures of $141,066 are not included in Finding 1. (For 

more detail, see p. 10.) 

Available at http://www.fec.gov/directives/directive_70.pdf. 
Part IV 

Commission Findings 

Finding 1. Recordkeeping for Employees 

Summary 

During audit fieldwork, the Audit staff determined that RPIA did not maintain monthly 

payroll logs, as required, to track the percentage of time each employee spent on federal 

election activity. For 2009 and 2010 the Audit staff determined that the amount of 

payroll for which logs were required was $476,442. This consisted of $334,580 reported 

as allocated between federal and non-federal funds and $141,862 paid from an 

exclusively non-federal account. Subsequent to the exit conference, RPIA 

representatives provided the Audit staff with affidavits from two employees attesting to 

the percentage of time spent on federal election activity. 

In response to the Interim Audit Report recommendation, RPIA stated that it has 

implemented a plan to keep a monthly log of all work performed by staff for federal 

election activity. 

The Commission approved a finding that RPIA failed to keep monthly time-logs for the 

$336,569 in payroll allocated between federal and non-federal funds. The Commission 

did not approve a finding for the payroll paid exclusively with non-federal funds and as 

such these expenses are presented as an "Additional Issue". 

Legal Standard 

Maintenance of Monthly Logs. Party committees must keep a monthly log of the 

percentage of time each employee spends in connection with a federal election. 

Allocations of salaries, wages, and fringe benefits are to be undertaken as follows: 

• employees who spend 25 percent or less of their compensated time in a given 

month on federal election activities must be paid either from the federal account 

or be allocated as administrative costs; 

• employees who spend more than 25 percent of their compensated time in a given 

month on federal election activities must be paid only from a federal account; and, 

• employees who spend none of their compensated time in a given month on federal 

election activities may be paid entirely with funds that comply with state law. 11 

CFR § 106.7(d)(1). 

Facts and Analysis 

A. Facts 

During fieldwork, the Audit staff reviewed disbursements made to employees totaling 

$476,442^ for which RPIA did not provide monthly payroll logs to document the 

^ This total does not include payroll for employees paid with 100 percent federal funds and reported as 

such (see Part I, Background, Commission Guidance, Request for Early Commission Consideration of a 

Legal Question, page 1). Payroll amounts are stated net of taxes and fringe benefits. 
percentage of time the employee spent in connection with federal election activity. Logs 

are required to document the proper allocation of federal and non-federal funds used to 

pay these workers. The total of $476,442 consisted of $334,580 reported as allocated 

between federal and non-federal funds, and $141,862 that was paid from an exclusively 

non-federal account. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the recordkeeping issue with RPIA representatives during audit 

fieldwork and at the exit conference. While the representatives did not address logs or 

other documentation to support the payroll recordkeeping requirements, they pointed out 

that RPIA Counsel had drafted affidavits to document the work performed by RPIA 

employees. Subsequently, RPIA provided affidavits from two employees who attested to 

the percentage of time they had spent in connection with federal election activity. These 

documents, however, do not resolve the recordkeeping finding because RPIA provided 

the affidavits only afier notification of the audit. As such, RPIA did not appear to satisfy 

the requirement to maintain and provide payroll records during or prior to audit 

fieldwork. 

The Interim Audit Report recommended that RPIA provide evidence that it maintained 

monthly time logs to document employees' time spent on federal election activity, or, 

that it had implemented a plan to maintain monthly payroll logs to track the percentage of 

time each employee spends on federal election activity. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, RPIA stated that it has 

implemented a plan to keep a monthly log of all work performed by staff for federal 

election activity. RPIA further stated that a log is kept and completed by the Executive 

Director of RPIA and shared with the Treasurer of RPIA. Upon discussion and 

agreement by these RPIA officials, the log is then saved as both an electronic and paper 

copy in a secure location. This plan is consistent with Commission guidance with respect 

to payroll logs. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that RPIA agreed to maintain logs to track 

federal election activity for non-federal payroll and payroll allocated between federal and 

non-federal activity. 

E. Committee Response to the Draft Final Audit Report 

RPIA's response to the Draft Final Audit Report provided no additional comments. 

Commission Conclusion 

On January 30,2014, the Commission considered the Audit Division Recommendation 

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

finding that RPIA failed to maintain logs to document the time employees spent on 

federal election activity totaling $476,442. 
8 

The Commission approved a finding that RPIA failed to keep monthly time-logs for the 

$336,569^ in payroll allocated between federal and non-federal funds. The Commission 

did not approve a finding for the payroll paid exclusively with non-federal funds during a 

given month and as such the matter is presented as an "Additional Issue". 

I Finding 2. Failure to Itemize Debts & Obligations 

Summary 

During audit fieldwork, the Audit staff noted that RPIA had failed to disclose debts and 

obligations totaling $179,856. In response to the Interim Audit Report recommendation, 

RPIA filed amended reports to correctly disclose these debts and obligations. The Audit 

staff considers this matter resolved. 

The Commission approved a finding that RPIA failed to itemize debts and obligations 

totaling $179,856. 

Legal Standard 

A. Continuous Reporting Required. A political committee must disclose the amount 

and nature of outstanding debts and obligations until those debts are extinguished. 

2 U.S.C §434(b)(8) and 11 CFR §§ 104.3(d) and 104.11(a). 

B. Itemizing Debts and Obligations. 

• A debt of $500 or less must be reported once it has been outstanding 60 days from 

the date incurred (the date of the transaction); the committee reports it on the next 

regularly scheduled report. 

• A debt exceeding $500 must be disclosed in the report that covers the date on 

which the debt was incurred. 11 CFR §104.11(b). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff used available disbursement records to reconcile 

the accounts^ for two RPIA vendors. These vendors provided RPIA with fundraising, 

telemarketing, phone services and direct mail. The debt balances owed were outstanding 

in almost every reporting period throughout the period covered by the audit. As 

described below, the Audit staff identified debts and obligations totaling $179,856 that 

were not disclosed on Schedule D (Debts and Obligations). This figure was adjusted 

from the Interim Audit Report amount of $186,515. 

The difference between the Audit-recommended amount ($334,580) and the Commission-approved 

amount ($336,569) is $ 1,989. This amount relates to an employee that was paid from both a federal 

account and a non-federal account in the same month. The Commission approved the finding to include 

the $1,989 in the total amount of payroll requiring monthly logs. 

The reconciliation consisted of calculating invoiced and paid amounts for individual reporting periods in 

the 2009-2010 election cycle. The Audit staff then determined whether any outstanding debts were 

correctly disclosed on Schedule D. Each debt amount was counted once, even if it required disclosure 

over multiple reporting periods. 
The Audit staff reviewed invoiced information and identified debt and obligations to one 

of these vendors totaling $166,890 that were previously not reported. This unreported 

debt represents 93 percent of total reportable debt by RPIA. 

In addition to the unreported debt discussed above, RPIA under-reported debt totaling 

$12,966^ to another vendor. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to RPIA representatives at the exit conference and 

provided schedules detailing the unreported debts for each reporting period for the 

audited cycle. 

The Interim Audit Report recommended that RPIA provide documentation demonstrating 

that these expenditures did not require reporting on Schedule D. Absent such 

documentation, the Interim Audit Report further recommended that RPIA amend its 

reports to disclose the unreported debts totaling $166,890 and to correct the underreported debt totaling $12,966. 

C. Committee Response to the Interim Audit Report 

In response to the Interim Audit Report recommendation, RPIA said it had addressed this 

issue by working with its attorneys, accountants and compliance team. RPIA amended 

its reports and correctly disclosed the debts and obligations. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that RPIA amended its reports and correctly 

disclosed the debts and obligations. 

E. Committee Response to the Draft Final Audit Report 

RPIA's response to the Draft Final Audit Report provided no additional comments. 

Commission Conclusion 

On January 30, 2014, the Commission considered the Audit Division Recommendation 

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

finding that RPI A had failed to disclose debts and obligations totaling $179,856. 

The Commission approved the Audit staffs recommendation. 

^ The total amount reportable to this vendor was $16,039. RPIA reported only $3,073 on its 2009 and 

2010 disclosure reports. The under-reported amount was calculated as follows: $16,039 - $3,073 = 

$12,966. 
10 

Part V 

Additional Issue 

Recordkeeping for Employees 

Summary 

As detailed in Finding 1 above, RPIA did not maintain monthly payroll logs to track the 

percentage of time each employee spent on federal election activity. For 2009 and 2010, 

the Audit staff determined that the amount of payroll for which logs were required, was 

$476,442. This consisted of $334,580 reported as allocated between federal and nonfederal funds and $141,862 paid from an exclusively non-federal account during certain 

months. 

In response to the Interim Audit Report recommendation, RPIA stated that it has 

implemented a plan to keep a monthly log of all work performed by staff for federal 

election activity. 

The Commission did not approve by the required four votes the Audit staffs 

recommended finding that RPIA failed to keep monthly time logs for the $141,862 in 

payroll paid from an exclusively non-federal account during certain months. 

Pursuant to Commission Directive 70, this matter is discussed in the "Additional Issue" 

section. 

Legal standard 

The legal standard in Finding 1 is incorporated herein. 

Facts and Analsrsis 

A. Facts 

During fieldwork, the Audit staff reviewed disbursements made to employees totaling 

$476,442^, for which RPIA did not provide monthly payroll logs to document the 

percentage of time the employee spent in connection with federal election activity. Logs 

are required to document the proper allocation of federal and non-federal funds used to 

pay these workers. The total of $476,442 consisted of $334,580 allocated between 

federal and non-federal activity, and $141,862 that was paid from an exclusively nonfederal account during certain months. 

B. Interim Audit Report & Audit Division Recommendation 

The.Audit staff discussed the recordkeeping issue with RPIA representatives during audit 

fieldwork and at the exit conference. While the representatives did not address logs or 

other documentation to support the payroll recordkeeping requirements, they pointed out 

^ This total does not include payroll for employees paid with 100 percent federal funds and reported as 

such (see Part I, Background, Commission Guidance, request for Early Commission Consideration of a 

Legal Question, page 1). Payroll amounts are stated net of taxes and fringe benefits. 
11 

that RPIA Counsel had drafted affidavits to document the work performed by RPIA 

employees. Subsequently, RPIA provided affidavits from two employees who attested to 

the percentage of time they had spent in connection with federal election activity. These 

documents, however, do not resolve the recordkeeping finding because RPIA provided 

the affidavits only after notification of the audit. As such, RPIA did not appear to satisfy 

the requirement to maintain and provide payroll records during or prior to audit 

fieldwork. 

The Interim Audit Report recommended that RPIA provide evidence that it maintained 

monthly time logs to document employees' time spent on federal election activity, or, 

that it had implemented a plan to maintain monthly payroll logs to track the percentage of 

time each employee spends on federal election activity. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, RPIA said that it has 

implemented a plan to keep a monthly log of all work performed by staff for federal 

election activity. RPIA further stated that a log is kept and completed by the Executive 

Director of RPIA and shared with the Treasurer of RPIA. Upon discussion and 

agreement by these RPIA officials, the log is then saved as both an electronic and paper 

copy in a secure location. This plan is consistent with Commission guidance with respect 

to payroll logs. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that RPIA agreed to maintain logs to track 

federal election activity for non-federal payroll and payroll allocated between federal and 

non-federal activity. 

E. Committee Response to the Draft Final Audit Report 

RPIA's response to the Draft Final Audit Report provided no additional comments. 

Commission Conclusion 

On January 30,2014, the Commission considered the Audit Division Recommendation 

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

finding that RPIA failed to maintain logs to document the time employees spent on 

federal election activity totaling $476,442. 

The Commission did not approve by the required four votes the Audit staffs 

recommended finding that RPIA failed to keep monthly time logs for the $141,066* in 

payroll paid exclusively from the non-federal funds. Some Commissioners voted to 

approve the Audit Division's recommendation. Others did not, citing to the position of 

three Commissioners in the Final Audit Report of the Commission on the Georgia 

Federal Elections Committee in support of the proposition that the Commission lacks 

The difference between the Audit-recommended amount ($141,862) and the amount discussed in the 

"Additional Issue" section ($141,066) is $796. The reduction of the additional issue amount relates to 

payroll to an employee that was paid separately from a federal account and a non-federal account in the 

same month. The Commission approved this amount to be included in Finding 1 as requiring a monthly 

timesheet. 
12 

jurisdiction to impose recordkeeping and documentation requirements on exclusively 

non-federal activity. 

This matter is discussed in this "Additional Issue" section pursuant to Commission 

Directive 70.