FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

Apri l 15/ 2011 

MEMORANDUM 

TO: Joseph F. Stoltz 

Assistant Staff Director 

FROM: Christopher Hughey 

Acting General Counsel \ 

Lawrence L. Calvert, Jr. /^W^/ ^ 

Associate General COUHSA / I ( 

Lorenzo Holloway ^H^TT^ 

Assistant General Counsel 

For Public Finance and Audit Advice 

DanitaC.Leeiijd 

Attorney 

Allison T. Steinle /(tS 

Attorney 

SUBJECT: Interim Audit Report - Democratic Executive Committee of Florida 

(LRA805) 

I. INTRODUCTION 

The Office of the General Counsel has reviewed the proposed Interim Audit 

Report ("lAR") on the Democratic Executive Committee of Florida ("DECF*).* Our 

comments in this memorandum focus on Finding 2 (Excessive Coordinated Party 

Expenditures), Finding 4 (Allocation of Expenditures) and Finding 6 (Disclosure of 

Disbursements). We concur with any findings not specifically discussed in this 

memorandum. If you have any questions, please contact Danita Lee or Allison Steinle, 

the attorneys assigned to this audit. 

' We recommend that die Commission consider this document in Executive Session because the 

Commission may eventually decide to pursue an investigation of matters contained in the proposed Report. 

11C.F.R. §§ 2.4(a) and (b)(6). 
Memorandum to Joseph F. Stoltz 

Interim Audit Report - Democratic Executive Committee of Florida 

(LRA 805) 

Page 2 

II. EXCESSIVE COORDINATED PARTY EXPENDITURES (Finding 2) 

A. Background 

The DECF made disbursements totaling $95,108 on behalf of congressional 

candidate Annette Taddeo. Two disbursements for media ads totaled $82,400. Two 

disbursements for direct mail pieces totaled $12,708. The coordinated party expenditure 

limit in tiie 2008 U.S. House of Representatives election in Florida was $42,100. The 

Democratic Congressional Campaign Committee ("DCCC") authorized the DECF to 

spend $17,900 of its limit. Thus, the auditors determined that DECF's total coordinated 

party expenditure limit for Taddeo was $60,000. The auditors concluded tiiat the DECF 

exceeded its coordinated party expenditure limit with respect to Taddeo by $35,108. 

Consequently, the auditors found that the DECF made an excessive in-kind contribution 

to Taddeo. The DECF states that its disbursements for tiie two direct mail pieces 

(totaling $12,708) should not be counted towards the coordinated party expenditure limit 

because the disbursements qualify for the volunteer materials exemption. The DECF also 

states that it did not make an excessive in-kind contribution because it received additional 

coordinated spending authority from the DCCC. 

Finding 2 presents three issues which we discuss below. The first issue is 

whether the DECF disbursements for two direct mail pieces qualify for the volunteer 

materials exemption. If the expenditures qualify for the exemption then the coordinated 

party expenditures issue would be immaterial pertaining to those disbursements. The 

second issue we discuss is whether the DECF made excessive coordinated party 

expenditures resulting in an excessive in-kind contribution to Taddeo. The third issue 

that we address is whether DECF received an assignment of the Democratic 

Congressional Campaign Committee's ("DCCC") coordinated party expenditure 

authority. 

B. Direct Mail Expenditures May Qualify for Volunteer 

Materials Exemption 

The proposed lAR finds that the DECF exceeded the coordinated party 

expenditure limitation, in part, because it paid $12,708 for direct mail supporting Taddeo, 

which the auditors contend meets the standards for coordinated expenditures. See 11 

C.F.R. §§ 109.37 and 109.21. The auditors conclude tiiat tiie DECF's disbursements for 

the direct mail were excessive coordinated expenses because the disclaimers indicate that 

the mailers were paid for by the DECF and emails associated with invoices seeking 

approval of the direct mailers were copied to the Taddeo committee. The DECF states 

that the expenditures qualify for the volunteer materials exemption.^ 

' The only information addressing the volunteer materials exemption that die auditors possess is an 

email reply from the DECF's counsel. Counsel responded to a request for legal approval of die mailers 

stating, "OK as volunteer exempt." No other information or documentation was provided to support diis 

statement. 
Memorandum to Joseph F. Stoltz 

Interim Audit Report - Democratic Executive Committee of Florida 

(LRA 805) 

Pages 

Recently, the Commission addressed the applicability of the volunteer materials 

exemption in the Final Audit Report on the Tennessee Republican Party Federal Election 

Account. The Commission concluded that there exists a "lack of clarity regarding the 

amount of volunteer involvement needed to qualify for the volunteer materials 

exemption." While there exists a lack of clarity regsuxling the amount of volunteer 

involvement, we believe that some showing of volunteer involvement is necessary. 

Consequently, we conclude that tiie unsupported statement from the DECF's counsel 

does not entitle the DECF to the volunteer materials exemption. We recommend that die 

Audit Division give tiie DECF an opportunity to present information and/or 

documentation supporting its assertion that the direct mailers qualify for the volunteer 

materials exemption. 

C. Committee Made Excessive Coordinated Party Expenditures 

The proposed lAR found that the DECF made a total of four disbursements 

totaling $95,108 ($82,400 for media (television) ads + $12,708 for direct mailers) on 

behalf of Taddeo. The DECF's coordinated party expenditure limit for Taddeo was 

$60,000 (discussed in detail below). Thus, tiie auditors concluded that tiie DECF 

exceeded its coordinated spending limit by $35,108. As previously discussed, however, 

we believe tiiat the direct mail costs totaling $12,708 may or may not qualify for the 

volunteer materials exemption. Therefore, we conclude that the issue is whether the 

DECF exceeded its coordinated spending limit by $35,108 if the direct mailers do not 

qualify for the volunteer materials exemption or whether the DECF exceeded its 

coordinated spending limit by $22,400 if the direct mailers qualify for the volunteer 

materials exemption. 

Between October 28,2008 and October 30,2008, tiie DECF paid a total of 

$82,400 for tiie cost of media ads. Candidate Taddeo appears in both media ads. The ad 

entitled "Two Peas" opens with an image of Taddeo and her voice-over stating, "I'm 

Annette Taddeo and I approve tiiis message." The ad continues with a male voice-over 

speaker discussing the voting record of Taddeo's opponent on health care and taxes. The 

ad concludes witii three unidentified individuals stating that: Taddeo's opponent **b2& let 

us down;" "Bush is leaving;" and Taddeo's opponent "needs to go, too." In the ad 

entitled "My Father," Taddeo speaks directiy into the camera and says, "I'm Annette 

Taddeo and I approve tiiis message." She then discusses affordable health care and 

insurance. The ad also displays the address of her website: www.voteforTaddeo.com. 

Both ads also include the disclaimer statements: 'Taid for by Florida Democratic Party 

and Taddeo for Congress. Approved by Annette Taddeo." ^ 

' The proposed lAR states dial an email attached to the invoice for the media ads requested approval 

from the Taddeo campaign. The auditors, however, were not able to provide ttiis Office widi a copy of the 

email communication. We recommend that the proposed lAR remove the reference to the email if die 

auditors do not have or cannot obtain a copy of the email communication. 
Memorandum to Joseph F. Stoltz 

Interim Audit Report - Democratic Executive Committee of Florida 

(LRA 805) 

Page 4 

If the direct mailers do not qualify for the volunteer materials exemption, we must 

analyze whether they were coordinated party expenditures. Between September 30,2008 

and October 14,2008, tiie DECF paid a total of $12,708 for tiie costs of two direct mail 

pieces. One of the direct mailers was in English and the other in Spanish. The first part 

of the English-language mailer (Part A) states, "Inside: Aimette Taddeo and Ileana RosLehtinen Go Head-to-Head on the Economy. We can't change Washington unless we 

change who we send to Congress." It also displays images of stock maiket-type figures, 

a gas pump and a dollar bill. Part A of the mailer also states: "Economic Crisis, High 

Gas P^ces, Rising Healthcare Costs. In These Tougjh Times, to Tum Our Economy 

Around?" The second side of the English-language mailer (Part B) features a photo of 

Taddeo and includes die statement, "Annette Taddeo, Business Leader, Real Life 

Experience." It includes the statement, "Annette Taddeo for Congress. For a New 

Beginning." Part B of tiie mailer also lists Taddeo's business accomplishments and 

position on several political issues. The mailer lists her q)ponent's voting record and 

states, "Vote NO on Ileana Ros-Lehtinen." The mailer states that it was **paid for by tiie 

Florida Democratic Party." The auditors provided this Ofitice with what appears to be 

Part B of the Spanish-language version of the mailer. The auditors informed this Office 

that it does not possess Part A of the mailer. We believe that Part 6 of ttie Spanishlanguage mailer is the Spanish translation of the English version because the mailer is 

identical in layout, images and content.^ Email communications from the vendor to the 

DECF entitied *Taddeo Mail Piece-for Approval" were copied to the Taddeo campaign. 

The email states, "we will need approval so it can be translated into Spanish." The email 

communications do not include a response horn the Taddeo campaign. 

A State committee of a political party may make coordinated party expenditures 

in connection with the general election campaign of a candidate for Federal office in tiiat 

State who is affiliated witii tiie party. 11 C.F.R. § 109.32(b)(1). The coordinated party 

expenditures shall not exceed the coordinated party expenditure limit. 11 C.F.R. 

§ 109.32(b)(1). A coordinated party expenditure qualifying as an in-kind contribution 

must satisfy title three-prong test set fortii in the Commission regulations at 11 C.F.R. 

§ 109.37(a)(l)-(3). The first prong is that expenditures must be paid for by a political 

party committee or its agent. 11 C.F.R. § 109.37(a)(1). The second prong requires a 

communication that satisfies a content standard, and it must consist of either (I) an 

electioneering communication; (2) a public communication that republishes campaign 

materials; (3) a public communication that contains express advocacy; or (4) a public 

communication that refers to a clearly identified candidate for Federal office or political 

party that is distributed in that jurisdiction within either 90 or 120 days of an election. 11 

C.F.R. § 109.37(a)(2). The tiiird prong, tiie conduct standard, is satisfied if: (1) tiie 

communication was created, produced, or distributed at the request/suggestion of the 

* The Spanish-language version states: "Adentro: Annette Taddeo e Ileana Ros-Lehtinen se 

enfrentan en la economia. No podemos cambiar Washington a menos que cambiemos a quienes enviamos 

alCongreso. Crisis economia. Altos precios de la gasoline. Costos de atencion medicia por las nubes. En 

esto tiempos dificiles, para lograr encaminar nuestra economia por el rumbo correcto? Pargado por el 

partido democrata de Florida." A Google Thuislate search on this text, while in^recise, indicates (hat die 

text is extremely sinjilar to the Eqglish version. 
Memorandum to Joseph F. Stoltz 

Interim Audit Report - Democratic Executive Committee of Florida 

(LRA 805) 

Page 5 

candidate, authorized committee, or political party committee; (2) there was material 

involvement; (3) there was substantial discussion between those paying for the 

conmiunication and the candidate, authorized committee, or political party committee; (4) 

a common vendor was used; or (5) a former employee or independent contractor paid for 

the communication. 11 C.F.R. § 109.37(a)(3). 

The DECF paid for two media ads and two du'ect mail pieces on behalf of 

Taddeo. Thus, the expenditures satisfy the payment prong for coordinated activity. 11 

C.F.R. § 109.37(a)(1). The media ads and direct mail also satisfy the content prong for 

coordinated activity because they were public communications referring to clearly 

identified Federal candidates and were distributed within the 120 day period in which 

they were required to be distributed to qualify. 11 C.F.R. § 109.37(a)(2)(i) and (ii). A 

public communication is a communication by means of any broadcast, cable, or satellite 

communication, newspaper, magazine, outdoor advertising facility, mass mailing, or 

telephone bank to the general public or any other form of general public political 

advertising. 11 C.F.R. § 100.26. The media ads referred to clearly identified candidates 

for Federal office and were broadcast. The direct mail also referred to clearly identified 

candidates for Federal office and were mass mailed.^ The media ads and direct mail also 

satisfy the conduct prong because their disclaimers indicate that the communications 

were "approved by Annette Taddeo." Given that the media ads and mailers meet the 

three-prong test for coordination, we concur that the DECF's disbursements totaling 

$95,108 for the media ads and direct mail were coordinated party expenditures (so long 

as the direct mail pieces do not qualify for the volunteer materials exemption) and tiiat 

the DECF exceeded its coordinated party spending limit by $35,108. As we noted, even 

if the mailers qualify for the volunteer materials exemption, DECF still exceeded the 

coordinated party expenditure limit by $22,400. 

D. Committee Did Not Have Additional Coordinated Party Spending 

Authority 

The DECF states that tiie DCCC autiiorized additional spending totaling $22,400 

in addition to $17,900 in coordinated party spending that it had previously authorized on 

behalf of Taddeo. The DECF states tiiat witii tiie DCCC's added spending autiiority of 

$22,400, its total coordinated party expenditure limit for Taddeo was $84,200. The 

DECF asserts tiiat it did not make an excessive in-kuid contribution to Taddeo because it 

spent only a total of $82,400 on behalf of the candidate.^ The DCCC reported spending a 

' Mass mailing means a mailing by United States mail or fiicsimile of more dian 500 pieces of mail 

matter of an identical or substantially sintilar nature widiin any 30-day period: 11 C.F.R. § 100.27. The 

DECF sent by U.S. postal service a total of 16,553 of the English and Spanish-language mail pieces within 

a two-week period. 

* The DECF did not include its disbursements totaling S12,708 for direct mail pieces on behalf of 

Taddeo in diis amount because it believed the disbursements qualified for the volunteer materials 

exemption. 
Memorandum to Joseph F. Stoltz 

Interim Audit Rqiort - Democratic Executive Committee of Florida 

(LRA 805) 

Page 6 

total of $1,754 of its coordinated party spending authority. The DECF did not provide 

the auditors with written documentation showing that the DCCC transfenred to it an 

additional $22,400 in coordinated party spending authority. 

A political party committee may assign its coordinated party expenditure 

authority to another political party committee as long as tiie assignment is made in 

writing, states the amount of autiiority assigned and is received by tiie assignee 

committee before any coordinated party expenditure is made pursuant to the assignment. 

11 C.F.R. § 109.33(a). A political party committee that is assigned authority to make 

coordinated party expenditures must maintain the written assignment for at least three 

years. 11 C.F.R. § 109.33(c). The DECF provided tiie auditors witii written 

documentation showing tiiat tiie DCCC autiiorized tiie DECF to spend $17,900 of tiie 

DCCC's coordinated party expenditure limit. A letter firom the DCCC's Chief C>perating 

Officer to tiie DECF's Executive Director, dated October 28,2008, assigns tiie DECF up 

to $17,900 of its coordinated spending autiiority. The letter states that it, "sets forth in 

full the agreement... concerning [the assigned coordinated party spending authority]." 

The DCCC Chief Operating Officer asks tiie DECF's Executive Director to confirm tiie 

agreement by signing two copies of the letter and returning one to the DCCC. The 

DECF's Executive Director signed and dated tiie letter on November 6,2008. The DECF 

did not provide any documentation showing that the DCCC authorized additional 

spending authority in tiie amount of $22,400. Rather, tiie DECF stated only that it 

believed tiiat it had additional spending authority because it had been coordinating with 

the DCCC and because the DCCC had spent only $1,754 of its coordinated party 

expenditure limit. 

A committee must show, in writing, that it received an assignment of spending 

autiiority. 11 C.F.R. § 109.33(a). If an assignment letter between tiie DCCC and the 

DECF existed but the DECF failed to keep its own copy, then this might be an issue of 

inadequate recordkeqring. The Explanation and Justification for section 109.33 notes 

that '^recordkeeping [rather than reporting] is less burdensome for political party 

committees and should provide sufficient documentation of assignments of coordinated 

party expenditure authority should questions arise...." Explanation and Justification for 

11 C.F.R. § 109.33 (May a Political Party Committee Assign Its Coordinated Party 

Expenditure Authority to Anotiier Political Party Committee?), 68 Fed. Reg. 445 (Jan. 3, 

2003). In this case, however, there is at present no information suggesting that DECF 

had a record of the additional spending authority that it failed to keep. Rather, its own 

statements indicate that it apparentiy assumed that it had additional spending authority 

because tiie DCCC had spent so littie. The content of the only written record presented 

(the October 28,2008 letter) makes clear that the DECF was autiiorized to spend only 

$17,900 while also noting that the authorization letter represented the full agreement 

between the two committees. We believe that a portion of the DECF's coordinated 

expenditures, up to $84,200, would have been permissible if the DECF had received a 

valid assignment of the DCCC's coordinated party expenditure authority. 11 C.F.R. 

§ 109.33(a). We concur that the DECF's coordinated party expenditure limit totaled 
Memorandum to Joseph F. Stoltz 

Interim Audit Report - Democratic Executive Committee of Florida 

(LRA 805) 

Page 7 

$60,000 m the absence of written authorization from the DCCC increasing the DECF's 

coordinated party expenditure limit. 

ni. ALLOCATION OF EXPENSES (Finding 4) 

A. Background 

The proposed lAR found that the DECF's non-federal account overfunded its 

share of allocable activity by $106,299. The auditors conclude that the DECF improperly 

made expenditures directly from its non-federal account and that some other activity was 

improperly allocated. We discuss audit's findings on the: (1) "absentee chase ballot;" (2) 

consulting fee invoice; (3) rent; and (4) employee time logs. 

B. ** Absentee Chase Ballot" Must Be Paid With Federal Funds 

The auditors indicate that the DECF improperly paid with non-Federal funds 

$3,745 for a mailer containing a clearly identified candidate for Federal office. Side One 

of the mailer includes a photograph of President Bush and Vice President Cheney with a 

caption stating, "We can't afford more of the same." Side Two of the mailer contains the 

caption, "Send the Republicans a Message - You Can Make the Difference." Side Two 

also states, "Vote Democrat" and lists a total of ten candidates for Federal, State, and 

municipal offices. An email from the Chair of the Leon County Democratic Executive 

Committee C*Leon County") to the DECF's Executive Director identifies the mailer as a 

"slate mailer." The DECF states that the mailer represents non-Federal activity but does 

not provide any additional information or explanation supporting its statement. The 

email between the Leon County C^ r and the DECF, however, indicates that the DECF's 

payment of $3,745 was for the *Tederal candidates' portion of [the] mailer."^ 

The payment by a State party committee of tiie costs of preparation, display, or 

mailing or other distribution that it incurs witii respect to a printed slate card, sample 

ballot, pahn card, or otiier printed listing(s) of three or more candidates for any public 

office for which an election is held in the State is not a contribution or expenditure. 11 

C.F.R. §§ 100.80,100.140. Mailers that criticize incumbent officials, however, do not 

fall within the slate card exemption. Advisory Opinion 2008-06 (Democratic Party of 

Virginia) and Advisory Opinion 1978-89 (Withers for Congress). The mailer criticizes 

incumbents Bush and Cheney with the statement tiiat, "We can't afford more of the 

same." We conclude, therefore, that the mailer is not an exempt slate card. 

We conclude tiiat the DECF's payment totaling $3,745 should have been paid 

witii Federal fimds because the email between the Leon County Chair and the DECF 

makes clear that the DECF's expenditure was in connection with a Federal election. All 

^ The auditors determined that the Leon County committee paid the balance of the cost of die mailer 

totaling $7,490. We note, however, diat our analysis does not address any payments made for the mailer by 

die Leon County committee or the State and local candidates as diey are not subject to diis audit 
Memorandum to Joseph F. Stoltz 

Interim Audit Report - Democratic Executive Committee of Florida 

(LRA 805) 

Page 8 

disbursements, contributions, and expenditures made wholly or in part by any State, 

district, or local party organization or committee in connection witii a Federal election 

must be paid &om either a Federal account or a separate allocation account. 11 C.F.R. 

§ 300.30(b)(3)(iii). The auditors traced tiie DECF's payment for die mailer to its nonFederal account. Thus, we concur witii tiie proposed lAR tiiat the DECF improperly paid 

with non-Federal funds its portion of the mailer and that the Federal account must 

reimburse the non-Federal account $3,745. 

C. Consulting Fee Invoice Does Not Demonstrate Non-Federal Activity 

The proposed lAR identified an invoice for activity described as "Consulting Fee 

for Creole Translators/Haitian American G.O.T.V." The invoice for $17,240 also had an 

email communication attached. Neither the invoice nor the email set fortii the specific 

services or product provided. The DECF stated tiiat the $17,240 expenditure was for 

non-Federal activity. It did not, however, provide a copy of any particular item that was 

translated or any otiier description of the work performed. Absent a printed copy of the 

item translated or other documentation regarding the services associated with the invoice, 

the auditors conclude that the expenditure was for a Federal purpose because the invoice 

describing the service indicates tiiat it was for get-out-the-vote activity ("GOTV") and, 

therefore, the auditors conclude that it must be paid with Federal funds. 11 

C.F.R. § 300.33(c). We concur with the auditors so long as the activity represented by 

the invoice was a public communication that named a clearly identified Federal 

candidate. If the activity represented by the invoice did not name a clearly identified 

Federal candidate but was for GOTV and occurred within the FEA time period, tiie 

DECF could have allocated the expenditure between its Federal and Levin funds. 11 

C.F.R. § 300.33(a)(2). We note, however, tiiat the only way tiie DECF could have 

permissibly paid tiie costs associated with the invoice with 100% non-Federal funds (as 

the DECF reported), was if the invoiced activity named only non-Federal candidates and 

was not GOTV. Therefore, we recommend that the auditors provide the DECF with an 

opportunity to demonstrate that the invoiced activity named only a non-Federal candidate 

and was not GOTV. We further recommend that if the DECF is unable to make such a 

showing, the DECF be asked to produce a copy of the specific communications translated 

or describe the services provided to enable the Commission to determine whether the 

activity should have been paid with allocated or 100% Federal funds. 

D. DECF Improperly Allocated Rent 

The proposed lAR found that die DECF paid rent on its headquarters totaling 

$212,313. The DECF paid 50% of tiie rent (or $106,156.50) witii a check drawn on its 

non-Federal account. The DECF paid tiie remaining 50% of tiie rent ($106,156.50) witii 

a check drawn on its Federal account but as an allocated payment containing 28% Federal 

funds and 72% non-Federal funds. The auditors conclude that 100% of the rent (or 

$212,313) should be allocated 28% Federal and 72% non-Federal because the entire 

building is used by the DECF for botii Federal and non-Federal activity. During tiie exit 

conference, tiie DECF explained that it allocated the rent in this fashion because one-half 
Memorandum to Joseph F. Stoltz 

Interim Audit Report - Democratic Executive Committee of Florida 

(LRA 805) 

Page 9 

of the building is used by the State House and Senate Caucus C*Caucus"). In its exit 

conference response, the DECF said that the House and Senate caucuses are campaign 

committees that are "dedicated exclusively to the election and re-election of State 

Legislators" and that they deposit their income into the DECF's non-Federal account. 

The auditors sougiht additional infonnation on the Caucus' activities. In response, DECF 

counsel stated that the Caucus is "considered an autonomous project of the state party... 

they do not have a separate legal entity. Therefore, they did not sign the lease [to the 

DECF headquarters building]." Counsel also said that *the [C]aucus employees are on 

the payroll of the state party, so I would say that they would technically qualify as 

employees of the party." We do not have any other information regarding the specific 

activities of the Caucus. 

A State party committee may either pay administrative costs, including rent, from 

its Federal account, or allocate such expenses between its Federal and non-Federal 

accounts, except that any such expenses directiy attributable to a clearly identified 

Federal candidate must be paid only from the Federal account. 11 C.F.R. 

§ 106.7(c)(2). The DECF tents tiie building tiiat houses its headquarters. The DECF's 

rent payments for its headquarters are an administrative cost. A state party committee's 

rent payments are explicitly enumerated in the regulations as an allocable administrative 

cost. Id, Therefore, the DECF's rent payments must be allocated. 

We recognize that one of the DECF's projects is tiie Caucus. The DECF provides 

ofiice space in its headquarters building for Caucus activity. The Caucus engages in 

activity supporting the election and reelection of its State legislators. The DECF pays 

DECF staff to work on Caucus activities. In tiie Explanation and Justification for section 

106.7(c), however, the Commission already recognizes that state party committees 

engage in multiple non-Federal activities, but the Commission determined tiiat the 

administrative costs underlying a state party committee's activities should be allocated. 

The Explanation and Justification states that *Vhile the Commission recognizes that nonFederal activity consumes a large portion of State party time and finances, there is no 

doubt that Federal candidates benefit from such party committees' efforts to reach and 

motivate potential voters. Therefore, tiie [regulations] require allocation of 

administrative costs." Explanation and Justification for Allocation of Expenses between 

Federal and Non-Federal Accounts by Party Conunittees, Other Than for Federal 

Election Activities, 67 Fed. Reg. 49,078 (July 29,2002). Thus, we concur witii tiie 

auditors tiiat the DECF fiuled to properly allocate the rent for its headquarters resulting in 

the non-Federal account overpaying its share of die rent by $28,482. 

E. Employee Time Logs Provide Sufficient Verification for Salary Payments 

The proposed lAR found tiiat tiie DECF allocated as a shared administrative 

• expense salary payments for a total of nine employees. The DECF allocated the salary 

payment as 28% Federal and 72% non-Federal with $23,172 representing the non-Federal 

portion of tiie salary expenses. The proposed lAR states tiiat tiie DECF failed to produce 

montiily time logs for the nine employees to document their time spent on Federal and 
Memorandum to Joseph F. Stoltz 

Interim Audit Report - Democratic Executive Committee of Florida 

(LRA 805) 

Page 10 

non-Federal activities. The auditors, therefore, concluded that the portion the DECF paid 

with non-Federal fUnds (totaling $23,172) should have been paid with 100% Federal 

funds. 

The auditors subsequentiy clarified with this Office that the DECF failed to 

submit any infonnation (e.g., time logs, affidavits, declarations) addressing the 

Federal/non-Federal activities of six employees to support the allocation. The auditors 

concluded that in the absence of documentation, the salary expenses for the six 

employees should have been paid with 100% Federal funds. The auditors also clarified 

that tiie DECF only submitted partial information addressing tiie activities of three other 

employees. Specifically, the auditors indicated that the declarations the DECF submitted 

for three of its employees identified specific months within which each respective 

employee stated that he or she did not spend more than 25% of his or her time on 

"working on activity directiy in connection with a federal election or federal election 

activities." The auditors determined tiiat the DECF properly allocated salary expenses 

for the tiiree employees during the time periods set forth in the declarations. However, 

the auditors determined that the salary payments to tiie three employees should have been 

made with Federal funds for the time periods the employees did not address in their 

respective declarations - time periods for which tiie auditors verified tiiat the employees 

were on DECF's payroll. 

Committees must keep a monthly log of the percentage of time each employee 

spends in connection with a Federal election. 11 C.F.R. § 106.7(d)(1). Salaries paid for 

employees who spend 25% or less of their compensated time in a given month on Federal 

elections must eitiier be paid only from the Federal account or be allocated as 

administrative costs. 11 C.F.R. § 106.7(d)(l)(i). In the past, the Commission has 

accepted declarations and affidavits fixmi employees and supervisors attesting to the 

amount of time an employee spent on Federad elections. See Audit Report of the 

Missouri Democratic State Committee (2003-2004) (Commission accepted declaration 

from supervisor). In all cases in which the committee has agreed or reported that its 

employees worked at least some time on Federal election activity or activity in 

connection with a Federal election, the Commission has required some form of written 

statement or documentation from the committee to support its assertion that it permissibly 

treated its salary expenses as allocable administrative costs. Therefore, we concur with 

the auditors that, in the absence of documentation supporting the DECF's assertion that 

its salary payments were allocable, the DECF should have paid its salary expenses 

entirely with Federal funds. 

IV. DISCLOSURE OF DISBURSEMENTS (Finding 6) 

The proposed lAR identifies $7,300,000 in disclosure errors due to inadequate or 

incorrect puq)oses. The auditors do not elaborate on why tiie purposes were inadequate 

or incorrect. Nor do the auditors provide examples. We recommend that the proposed 

lAR include more detail about the errors making clear whetiier items were misstated, 

incorrect or merely provided inadequate descriptions.